BioAtla, Inc. [BCAB] Filings

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Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

10-Q 1 bcab-20240630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39787

BIOATLA, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	85-1922320
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11085 Torreyana Road, San Diego, California	92121
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 558-0708

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Common Stock, $0.0001 par value per share

    BCAB

    The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 2, 2024, the number of shares of the registrant’s common stock outstanding was 48,335,737 and the number of shares of the registrant’s Class B common stock outstanding was 0.

BIOATLA, INC.

Quarterly Report on Form 10-Q

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements:	1
	Condensed Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	1
	Condensed Statements of Operations and Comprehensive Loss (unaudited) for the three and six months ended June 30, 2024 and 2023	2
	Condensed Statements of Stockholders’ Equity (unaudited) for the three and six months ended June 30, 2024 and 2023	3
	Condensed Statements of Cash Flows (unaudited) for the six months ended June 30, 2024 and 2023	5
	Notes to Condensed Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
PART II.	OTHER INFORMATION	21
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	65
Item 6.	Exhibits	66
SIGNATURES		67

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BioAtla, Inc.

Condensed Balance Sheets

(in thousands, except par value and share amounts)


	June 30, 2024			December 31, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	61,662		$	111,471
Prepaid expenses and other current assets		4,831			4,935
Total current assets		66,493			116,406
Property and equipment, net		1,134			1,603
Operating lease right-of-use asset, net		1,011			1,495
Other assets		—			154
Total assets	$	68,638		$	119,658
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	15,800		$	26,720
Operating lease liabilities		1,662			1,624
Total current liabilities		17,462			28,344
Operating lease liabilities, less current portion		—			836
Liability to licensor		19,806			19,806
Total liabilities		37,268			48,986
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 200,000,000 shares authorized at June 30, 2024 and December 31, 2023; 0 shares issued and outstanding at June 30, 2024 and December 31, 2023		—			—
Common stock, $0.0001 par value; 350,000,000 shares authorized at June 30, 2024 and December 31, 2023; 48,326,138 and 48,077,599 shares issued and outstanding at June 30, 2024 and December 31, 2023		5			5
Class B common stock, $0.0001 par value; 15,368,569 shares authorized at June 30, 2024 and December 31, 2023; 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		—			—
Additional paid-in capital		491,934			486,930
Accumulated deficit		(460,569	)		(416,263	)
Total stockholders’ equity		31,370			70,672
Total liabilities and stockholders’ equity	$	68,638		$	119,658

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Operating expenses:
Research and development expense	$	16,198		$	30,960		$	35,050		$	52,657
General and administrative expense		5,774			6,241			11,379			13,474
Total operating expenses		21,972			37,201			46,429			66,131
Loss from operations		(21,972	)		(37,201	)		(46,429	)		(66,131	)
Other income:
Interest income		900			1,460			2,123			2,940
Other expense		—			(11	)		—			(21	)
Total other income		900			1,449			2,123			2,919
Net loss and comprehensive loss	$	(21,072	)	$	(35,752	)	$	(44,306	)	$	(63,212	)
Net loss per common share, basic and diluted	$	(0.44	)	$	(0.75	)	$	(0.92	)	$	(1.33	)
Weighted-average shares of common stock outstanding, basic and diluted		48,214,893			47,706,426			48,151,176			47,639,977

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Statements of Stockholders’ Equity

(in thousands, except share amounts)


	Three Months Ended June 30, 2024
	Common Stock				Class B Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance at March 31, 2024		48,106,317	$	5		—	$	—	$	489,208		$	(439,497	)	$	49,716
Stock-based compensation expense		—		—		—		—		2,496			—			2,496
Issuance of common stock under equity incentive plans, net of shares withheld for taxes		28,801		—		—		—		—			—			—
Issuance of common stock for Employee Stock Purchase Plan		191,020		—		—		—		244			—			244
Taxes related to net share settlement of equity awards		—		—		—		—		(14	)		—			(14	)
Net loss		—		—		—		—		—			(21,072	)		(21,072	)
Balance at June 30, 2024		48,326,138	$	5		—	$	—	$	491,934		$	(460,569	)	$	31,370


	Three Months Ended June 30, 2023
	Common Stock				Class B Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance at March 31, 2023		47,637,321	$	5		—	$	—	$	476,683		$	(320,261	)	$	156,427
Stock-based compensation expense		—		—		—		—		3,675			—			3,675
Issuance of common stock under equity incentive plans, net of shares withheld for taxes		90,385		—		—		—		—			—			—
Issuance of common stock for Employee Stock Purchase Plan		56,793		—		—		—		173			—			173
Issuance of common stock for director compensation		18,807		—		—		—		54			—			54
Taxes related to net share settlement of equity awards		—		—		—		—		(61	)		—			(61	)
Net loss		—		—		—		—		—			(35,752	)		(35,752	)
Balance at June 30, 2023		47,803,306	$	5		—	$	—	$	480,524		$	(356,013	)	$	124,516

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Statements of Stockholders’ Equity

(in thousands, except share amounts)


	Six Months Ended June 30, 2024
	Common Stock				Class B Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance at December 31, 2023		48,077,599	$	5		—	$	—	$	486,930		$	(416,263	)	$	70,672
Stock-based compensation expense		—		—		—		—		4,796			—			4,796
Issuance of common stock under equity incentive plans, net of shares withheld for taxes		57,519		—		—		—		—			—			—
Issuance of common stock for Employee Stock Purchase Plan		191,020		—		—		—		244			—			244
Taxes related to net share settlement of equity awards		—		—		—		—		(36	)		—			(36	)
Net loss		—		—		—		—		—			(44,306	)		(44,306	)
Balance at June 30, 2024		48,326,138	$	5		—	$	—	$	491,934		$	(460,569	)	$	31,370


	Six Months Ended June 30, 2023
	Common Stock				Class B Common Stock					Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount		Capital			Deficit			Equity
Balance at December 31, 2022		46,336,166	$	5		1,211,959		$	—	$	473,135		$	(292,801	)	$	180,339
Stock-based compensation expense		—		—		—			—		7,289			—			7,289
Issuance of common stock under equity incentive plans, net of shares withheld for taxes		179,581		—		—			—		—			—			—
Issuance of common stock for Employee Stock Purchase Plan		56,793		—		—			—		173			—			173
Issuance of common stock for director compensation		18,807		—		—			—		54			—			54
Taxes related to net share settlement of equity awards		—		—		—			—		(127	)		—			(127	)
Conversion of Class B common stock		1,211,959		—		(1,211,959	)		—		—			—			—
Net loss		—		—		—			—		—			(63,212	)		(63,212	)
Balance at June 30, 2023		47,803,306	$	5		—		$	—	$	480,524		$	(356,013	)	$	124,516

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)


	Six Months Ended June 30,
	2024			2023
Cash flows from operating activities
Net loss	$	(44,306	)	$	(63,212	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		469			583
Stock-based compensation		4,796			7,289
Changes in operating assets and liabilities:
Prepaid expenses and other assets		258			(1,690	)
Accounts payable and accrued expenses		(10,924	)		10,575
Right-of-use assets and lease liabilities, net		(314	)		(293	)
Net cash used in operating activities		(50,021	)		(46,748	)
Cash flows from investing activities
Purchases of property and equipment		—			(65	)
Net cash used in investing activities		—			(65	)
Cash flows from financing activities
Proceeds from issuance of common stock under Employee Stock Purchase Plan		244			173
Payments for taxes related to net settlement of equity awards		(32	)		(174	)
Net cash provided by (used in) financing activities		212			(1	)
Net decrease in cash and cash equivalents		(49,809	)		(46,814	)
Cash and cash equivalents, beginning of period		111,471			215,507
Cash and cash equivalents, end of period	$	61,662		$	168,693
Supplemental disclosure of non-cash investing and financing activities
Tax related to net settlement of equity awards included in accounts payable and accrued expenses	$	4		$	19

See accompanying notes.

BioAtla, Inc.

Notes to Unaudited Condensed Financial Statements

1. Organization and Summary of Significant Accounting Policies

Organization

BioAtla, LLC was formed in Delaware in March 2007 and was converted to a Delaware corporation in July 2020 and renamed BioAtla, Inc. (the “Company”). The Company has a proprietary platform for creating biologics, including its conditionally active biologics (“CAB” or “CABs”). CABs have been designed to be active only under certain conditions found in diseased tissue, while remaining inactive in normal tissue. The Company is currently in clinical development of several CAB drug candidates including: its two lead CAB antibody drug conjugates (“CAB ADC”), mecbotamab vedotin (BA3011), a CAB ADC targeting AXL and ozuriftamab vedotin (BA3021), a CAB ADC targeting ROR2; evalstotug (BA3071), a CAB anti-CTLA-4 antibody; and BA3182 (CAB-EpCAM x CAB-CD3), a CAB bispecific antibody targeting EpCAM.

Basis of Presentation

The unaudited condensed financial statements as of June 30, 2024, and for the three and six months ended June 30, 2024 and 2023, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial statements. These unaudited condensed financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, consisting of only normal recurring accruals, which in the opinion of management are necessary to present fairly the Company’s financial position as of the interim date and results of operations for the interim periods presented. Interim results are not necessarily indicative of results for a full year or future periods. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2023, included in its Annual Report on Form 10-K filed with the SEC on March 26, 2024.

Liquidity and Going Concern

The Company has incurred cumulative operating losses and negative cash flows from operations since its inception and expects to continue to incur significant expenses and operating losses for the foreseeable future as it continues development of its product candidates. As of June 30, 2024, the Company had an accumulated deficit of $460.6 million. The Company plans to continue to fund its losses from operations and capital funding needs through public or private equity or debt financings, or other sources. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects.

In January 2023, the Company entered into an Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC pursuant to which the Company may, from time to time at its sole discretion, sell shares of the Company’s common stock, with aggregate gross sales proceeds of up to $100.0 million. The Company has not sold any shares of its common stock under the Sales Agreement as of June 30, 2024.

Management is required to perform a two-step analysis of the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (Step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (Step 2). Management’s assessment included the preparation of cash flow forecasts resulting in management’s conclusion that there is not substantial doubt about the Company’s ability to continue as a going concern as its current cash and cash equivalents will be sufficient to fund the Company’s operations for a period of at least one year from the issuance date of these unaudited condensed financial statements.

Use of Estimates

The preparation of the Company’s condensed financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed financial statements and accompanying notes. The most significant estimates in the Company’s condensed financial statements relate to accruals for research and development costs, and equity-based compensation. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue and expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of 90 days or less at the date of purchase to be cash equivalents. Cash equivalents consist of highly rated securities including U.S. Government and U.S. Treasury money market funds, which are unrestricted as to withdrawal or use.

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits and may invest cash that is not required for immediate operating needs in highly liquid instruments that bear minimal risk. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

Stock-Based Compensation

Stock-based compensation expense represents the grant date fair value of equity awards, consisting of stock options, restricted stock units (“RSUs”) and employee stock purchase plan rights, over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company estimates the fair value of stock option grants and employee stock purchase plan rights using the Black-Scholes option pricing model. Prior to the Company’s IPO, the fair value of RSUs was based on the estimated fair value of the underlying common stock on the date of grant and, subsequent to the Company’s IPO, the fair value is based on the closing sales price of the Company’s common stock on the date of grant. Equity award forfeitures are recognized as they occur.

Leases

The Company determines if an arrangement is a lease at inception. An arrangement is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If a lease is identified, classification is determined at lease commencement. Operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company’s leases do not provide an implicit interest rate and therefore the Company estimates its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the interest rate that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term. Operating lease right-of-use (“ROU”) assets are based on the corresponding lease liability adjusted for any lease payments made at or before commencement, initial direct costs, and lease incentives. Renewals or early terminations are not accounted for unless the Company is reasonably certain to exercise these options. Operating lease expense is recognized and the ROU asset is amortized on a straight-line basis over the lease term. Variable lease costs are recognized as incurred and are not included in the calculation of the ROU asset or the related lease liability.

The Company has a single lease agreement with lease and non-lease components, which are accounted for as a single lease component. Payments for short-term leases, defined as leases with a term of twelve months or less, are expensed on a straight-line basis over the lease term. The Company does not currently have any short-term leases.

Operating leases are included in operating lease right-of-use assets, operating lease liabilities, and operating lease liabilities, non-current on the Company’s balance sheets. The Company does not have any finance leases.

Comprehensive Loss

Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources, and consists of net loss and other comprehensive gain (loss). There have been no items qualifying as other comprehensive loss and, therefore, for all periods presented, the Company’s comprehensive loss was the same as its reported net loss.

Net Loss Per Share

Basic net loss per common share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of RSUs, common stock options outstanding under the Company’s stock option plan, and contingently issuable shares under the BioAtla, Inc. Employee Stock Purchase Plan (the “ESPP”).

Potentially dilutive securities not included in the calculation of diluted net loss per common share because to do so would be anti-dilutive are as follows (in common stock equivalents):


	As of June 30,
	2024		2023
Common stock options		6,265,480		6,557,990
Restricted stock units		1,605,982		288,070
ESPP shares		57,683		32,033
Total		7,929,145		6,878,093

Recent Accounting Pronouncements

There were no new accounting standards that had a material impact on the Company’s financial statements during the six months ended June 30, 2024.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its financial statements.

2. Balance Sheet Details

Prepaid expenses and other current assets consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Prepaid research and development	$	3,631	$	4,615
Prepaid insurance		678		—
Other prepaid expenses and current assets		522		320
Total	$	4,831	$	4,935

Property and equipment consist of the following (in thousands):


	Useful life (years)	June 30, 2024			December 31, 2023
Furniture, fixtures and office equipment	3 - 7	$	1,721		$	1,721
Laboratory equipment	5		2,280			2,280
Leasehold improvements	2 - 3		3,680			3,680
			7,681			7,681
Less accumulated depreciation and amortization			(6,547	)		(6,078	)
Total		$	1,134		$	1,603

Accounts payable and accrued expenses consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Accounts payable	$	1,356	$	3,819
Accrued compensation		2,135		3,790
Accrued research and development		11,747		18,246
Other accrued expenses		562		865
Total	$	15,800	$	26,720

3. Fair Value Measurements

The carrying amounts of the Company’s current financial assets and current financial liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments.

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

As of June 30, 2024 and December 31, 2023, the Company had $51.7 million and $50.4 million, respectively, invested in U.S. Government and U.S. Treasury money market funds which are recorded as cash equivalents and represent a Level 1 measurement within the fair value hierarchy.

None of the Company’s non-financial assets and liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

4. Leases

The Company has a single operating lease for its corporate headquarters and laboratory space in San Diego, California. The lease expires in July 2025 and the Company has an option to extend the term of the lease for an additional five years. Additionally, the lease includes certain rent abatement, rent escalations, tenant improvement allowances and additional charges for common area maintenance and other costs.

The components of lease expense included in the Company’s statements of operations and loss include (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease expense	$	261	$	261	$	521	$	521
Variable lease expense		211		107		371		254
Total lease expense, net	$	472	$	368	$	892	$	775

Variable lease costs are primarily related to payments made to lessors for common area maintenance, property taxes, insurance, and other operating expenses. The Company did not have any short-term leases or finance leases for the three and six months ended June 30, 2024 and 2023, respectively.

The weighted average remaining lease term and weighted average discount rate for operating leases were as follows:


	As of June 30,
	2024			2023
Weighted average remaining lease term (in years)		1.00			2.00
Weighted average discount rate percentage		3.50	%		3.50	%

Supplemental cash flow information related to leases under which the Company is the lessee was as follows (amounts in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cash paid for amounts included in the measurement of operating leases	$	279	$	407	$	836	$	814

Maturities of operating lease liabilities as of June 30, 2024 were as follows (in thousands):


	Operating lease
Six months ending December 31, 2024		849
2025		845
Thereafter		—
Total future lease payments		1,694
Less: imputed interest		(32	)
Total operating lease liabilities	$	1,662

5. Commitments and Contingencies

From time to time, the Company may be subject to various claims and suits arising in the ordinary course of business. The Company is not currently a party to any legal proceedings the outcome of which the Company believes, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition.

6. Stockholders’ Equity

2020 Equity Incentive Plan

The Company may grant awards of common stock under the 2020 Equity Incentive Plan (the “2020 Plan”) to the Company’s employees, consultants and non-employee directors pursuant to option awards, stock appreciation rights awards, restricted stock awards, restricted stock unit awards, performance stock awards, performance stock unit awards and other stock-based awards. As of June 30, 2024 and December 31, 2023, the total number of common shares authorized for issuance under the 2020 Plan was 10,735,431 and 9,196,970, respectively. On January 1st of each year, commencing with the first January 1st following the effective date of the 2020 Plan, the shares authorized for issuance under the 2020 Plan shall be increased by a number of shares equal to the lesser of 4% of the total number of shares outstanding on the immediately preceding December 31st and such lesser number of shares determined by the Company’s board of directors. The maximum term of the options granted under the 2020 Plan is no more than ten years. Awards under the 2020 Plan generally vest at 25% one year from the vesting commencement date and ratably each month thereafter for a period of 36 months, subject to continuous service.

On February 26, 2023, the Compensation Committee of the Company’s board of directors approved a modification to the Company’s 2020 Plan to allow vesting of RSUs or stock options, as applicable, subject to the grantee’s continued service to the Company and/or one of its subsidiaries as an employee, non-employee director, or independent contractor. Unvested RSUs totaling 139,730 shares and 574,244 unvested options, which would have been forfeited under the original terms of the 2020 Plan, continued to vest. The Company applied modification accounting to these awards which resulted in a decrease in fair value to these awards. The Company calculated compensation cost for the modified unvested awards of $416,000 related to the RSUs and $962,000 related to the options, and will recognize these amounts over the remaining requisite service periods. The modification also resulted in an increase to the term of 130,699 fully vested options for which $123,000 of incremental compensation cost was immediately recognized on the date of the modification.

Stock-based compensation expense for the three and six months ended June 30, 2024 and 2023 has been reported in the condensed statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Research and development	$	1,164	$	1,550	$	2,243	$	3,001
General and administrative		1,332		2,125		2,553		4,288
Total	$	2,496	$	3,675	$	4,796	$	7,289

Restricted Stock Units

The following table summarizes RSU activity under the 2020 Plan for the six months ended June 30, 2024:


	Number of Shares			Weighted - Average Grant Date Fair Value
Outstanding at December 31, 2023		99,104		$	18.00
Granted		1,598,000		$	2.48
Vested		(74,122	)	$	18.00
Forfeited		(17,000	)	$	2.65
Outstanding at June 30, 2024		1,605,982		$	2.72

As of June 30, 2024, total unrecognized stock-based compensation expense for RSUs was $4.0 million, which is expected to be recognized over a remaining weighted-average period of approximately 3.4 years.

Stock Options

The following table summarizes stock option activity under the 2020 Plan for the six months ended June 30, 2024:


	Number of Options			Weighted - Average Exercise Price Per Share		Weighted -Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value
Balance at December 31, 2023		6,273,507		$	7.62		8.64	$	74,680
Granted		31,000		$	2.89
Forfeited		(35,750	)	$	3.00
Expired		(3,277	)	$	14.28
Balance at June 30, 2024		6,265,480		$	7.62		8.12	$	—
Vested and expected to vest at June 30, 2024		6,265,480		$	7.62		8.12	$	—
Exercisable at June 30, 2024		3,114,628		$	9.83		7.83	$	—

As of June 30, 2024, total unrecognized stock-based compensation cost for unvested common stock options was $11.6 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.44 years. The weighted-average grant date fair value of stock options granted during the six months ended June 30, 2024 was $2.19 per share. The total fair value of options vested during the six months ended June 30, 2024 was $6.2 million. Upon option exercise, the Company issues new shares of its common stock.

The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants were as follows:


	Six Months Ended June 30,
	2024	2023
Expected volatility	88.1%	77.4%
Risk-free interest rate	4.39%	3.86%
Expected dividend yield	0.0%	0.0%
Expected term	6.08 years	6.05 years

Expected volatility. As the Company’s common stock does not have a significant trading history, the expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biotechnology industry.

Risk-free interest rate. The Company bases the risk-free interest rate assumption on the U.S. Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

Expected dividend yield. The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present plans to pay cash dividends.

Expected term. For employees, the expected term represents the period of time that options are expected to be outstanding. Because the Company has minimal historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its vesting period. For nonemployees, the expected term is generally the contractual term of the option.

Employee Stock Purchase Plan (“ESPP”)

The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation. As of June 30, 2024 and December 31, 2023, a total of 2,281,600 shares and 1,737,098 shares, respectively, of common stock were authorized for issuance under the ESPP. The number of shares of common stock authorized for issuance will automatically increase on January 1 of each calendar year, from January 1, 2021 through January 1, 2030 by the least of (i) 1.0% of the total number of common shares of our common stock outstanding on December 31 of the preceding calendar year (calculated on a fully diluted basis), (ii) 929,658 common shares or (iii) a number determined by the Company’s board of directors that is less than (i) and (ii). The Company issued 191,020 and 56,793 shares of common stock under the ESPP during the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, 1,766,284 shares of common stock remained available for issuance under the ESPP. Stock-based compensation expense related to the ESPP for the three and six months ended June 30, 2024 and 2023 was immaterial.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance are as follows in common equivalent shares:


	June 30, 2024		December 31, 2023
Common stock options and restricted stock units issued and outstanding		7,871,462		6,372,611
Awards available for future issuance under the 2020 Plan		956,901		991,413
Awards available for future issuance under the ESPP		1,766,284		1,412,802
Total common stock reserved for future issuance		10,594,647		8,776,826

7. Collaboration, License and Option Agreements

Global Co-Development and Collaboration Agreement with BeiGene

In April 2019, the Company entered into a Global Co-Development and Collaboration agreement (the “BeiGene Collaboration”) with BeiGene, Ltd. and BeiGene Switzerland GmbH (collectively “BeiGene”), for the development, manufacturing and commercialization of evalstotug (BA3071). The BeiGene Collaboration was amended several times between 2019 and 2021 and the Company received a total of $25.0 million in non-refundable payments from BeiGene during that time.

In November 2021, the BeiGene Collaboration was terminated, subject to survival of certain provisions, and BeiGene handed back rights to know-how and materials received under the amended BeiGene Collaboration. As a result, the Company is responsible for the global development and commercialization of evalstotug. As consideration for this amendment, the Company agreed to pay BeiGene mid-single digit royalties on sales worldwide and on a limited basis will share in any upfront and milestone payments received through a sublicense of evalstotug. The Company reclassified its then remaining $19.8 million of deferred revenue as a long-term liability which is expected to settle as licensing payments are made to BeiGene in accordance with the resulting amendment. In the event the license is terminated, the liability will be extinguished with no further payment to BeiGene.

The Company did not recognize any revenue related to the collaboration agreement with BeiGene during the three and six months ended June 30, 2024 and 2023, respectively. The Company had a $19.8 million Liability to Licensor as of June 30, 2024 and December 31, 2023, respectively.

Collaboration and Supply Agreement with Bristol-Myers Squibb

In January 2022, the Company and Bristol-Myers Squibb Company (“BMS”) entered into a clinical trial collaboration and supply agreement (the “BMS Agreement”). Under the terms of the BMS Agreement, BioAtla and BMS collaborate on clinical trials of separate combination therapies using two of BioAtla’s CAB ADCs, mecbotamab vedotin (BA3011) and ozuriftamab vedotin (BA3021), each in combination with Opdivo® (nivolumab), BMS’ proprietary anti-PD-1 monoclonal antibody product. The Company serves as the study sponsor of the scheduled studies and is responsible for costs associated with the trial execution. BMS provides Opdivo® clinical drug supply at no cost for the combination study trials. After the completion of the combination therapy trials, the

Company is obligated to provide BMS with a final report of the data resulting from the trial. The BMS Agreement was amended in October 2022 to include additional territories for our mecbotamab vedotin and ozuriftamab vedotin combination study trials. There was no impact to the Company's financial results for the three and six months ended June 30, 2024 and 2023 as a result of this agreement.

8. Related Party Transactions

Himalaya Therapeutics SEZC

Clinical Trial Services Agreement

In January 2024, the Company entered into an amended Clinical Trial Services Agreement with Himalaya Therapeutics SEZC (as so amended, the “Clinical Trial Services Agreement”). Under the Clinical Trial Services Agreement, BioAtla will pay Himalaya Therapeutics SEZC for the full-time use of two of its personnel and provide services related to the initiation of clinical trials for evalstotug in China for a period of 12 months. For the three and six months ended June 30, 2024, the Company recognized $0.1 million and $0.3 million, respectively, in research and development expense related to the Clinical Trial Services Agreement, compared to $0 and $0.1 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, the Company had $0.1 million due to Himalaya Therapeutics SEZC, related to the Clinical Trial Services Agreement.

9. 401(k) Plan

The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company, at its discretion, may make certain matching contributions to the 401(k) plan. To date, the Company has not made any matching contributions.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis together with our unaudited condensed financial statements and notes thereto included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended December 31, 2023 included in the Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on March 26, 2024. In addition to historical information, this Quarterly Report contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to those set forth under the caption “Risk Factors” in the Annual Report on form 10-K, and the caption “Risk Factors” in this Quarterly Report, as updated by our subsequent filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Furthermore, past operating results are not necessarily indicative of results that may occur in future periods.

Overview

We are a clinical-stage biopharmaceutical company developing our novel class of highly specific and selective antibody-based therapeutics for the treatment of solid tumor cancer. Our CABs capitalize on our proprietary discoveries with respect to tumor biology, enabling us to target known and widely validated tumor antigens that have previously been difficult or impossible to target. Our novel CAB therapeutic candidates exploit characteristic pH differences between the tumor microenvironment and healthy tissue. Unlike healthy tissue, the tumor microenvironment is acidic, and we have designed our antibodies to selectively bind to their targets on tumor cells under acidic pH conditions but not on targets in normal tissues. Our approach is to identify the necessary targeting and potency required for cancer cell destruction, while aiming to eliminate or greatly reduce on-target, off-tumor toxicity—one of the fundamental challenges of existing cancer therapies.

We are a United States-based company with research facilities in San Diego, California and, through our contractual relationship with BioDuro-Sundia, a provider of preclinical development services, in Beijing, China. Since the commencement of our operations, we have focused substantially all of our resources on conducting research and development activities, including drug discovery, preclinical studies and clinical trials of our product candidates, including the ongoing Phase 2 clinical trials of mecbotamab vedotin (BA3011), ozuriftamab vedotin (BA3021), and evalstotug (BA3071), and our Phase 1 clinical trial of BA3182 (CAB-EpCAM x CAB-CD3), establishing and maintaining our intellectual property portfolio, manufacturing clinical and research material through third parties, hiring personnel, establishing product development and commercialization collaborations with third parties, raising capital and providing general and administrative support for these operations. Since 2014, such research and development activities have exclusively related to the research, development, manufacture and Phase 1 and Phase 2 clinical testing of our CAB antibody-based product candidates and the strengthening of our proprietary CAB technology platform and pipeline.

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

We expect our expenses and capital requirements could increase substantially in connection with our ongoing activities as we:

•

advance the clinical development of mecbotamab vedotin;

•

advance the clinical development of ozuriftamab vedotin;

•

advance the clinical development of evalstotug;

•

advance the clinical development of BA3182;

•

expand our pipeline of bispecific and other CAB antibody-based product candidates;

•

continue to invest in our CAB technology platform;

•

maintain, protect and expand our intellectual property portfolio, including patents, trade secrets and know-how;

•

seek marketing approvals for any product candidates that successfully complete clinical trials;

•

establish additional product collaborations and commercial manufacturing relationships with third parties;

•

build sales, marketing and distribution infrastructure and relationships with third parties to commercialize product candidates for which we may obtain marketing approval;

•

continue to expand our operational, financial and management information systems; and

•

attract, hire and retain additional clinical, scientific, management, administrative and commercial personnel.

As a result, we will require substantial additional capital to develop our product candidates and fund operations for the foreseeable future. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings, debt financings, collaborations and other similar arrangements. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our development efforts. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

Because of the numerous risks and uncertainties associated with product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to raise capital, maintain our research and development efforts, expand our business or continue our operations at planned levels, and as a result we may be forced to substantially reduce or terminate our operations.

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

Financial Operations Overview

Revenue

To date, we have not generated any revenue from the sale of products and do not expect to generate meaningful revenue in the near future.

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

Operating Expenses

Research and Development

Research and development expenses consist primarily of costs incurred in the discovery and development of our product candidates.

•

External expenses consist of:

•

Fees paid to third parties such as contractors, clinical research organizations (CROs) and consultants, and other costs related to preclinical and clinical trials;

•

Fees paid to third parties such as contract manufacturing organizations (CMOs) and other vendors for manufacturing research and clinical trial materials; and

•

Expenses related to laboratory supplies and services.

•

Unallocated expenses consist of:

•

Personnel-related expenses, including salaries, benefits and equity-based compensation expenses, for personnel in our research and development functions; and

•

Related equipment and facilities depreciation expense.

We expense research and development costs in the periods in which they are incurred. Nonrefundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and capitalized. The capitalized amounts are then expensed as the related goods are delivered and services are performed.

We expect our research and development expenses to decrease in the near term as we complete enrollment and treatment in certain of our clinical trials and focus development on selected high potential indications. However, research and development could increase upon initiation of new clinical trials, including registrational trials for our lead product candidates. The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. Successful product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Accordingly, to the extent that our product candidates continue to advance into clinical trials, including larger and later-stage clinical trials, our expenses will increase substantially and may become more variable. The actual probability of success for our product candidates may be affected by a variety of factors, including the safety and efficacy of our product candidates, the quality and consistency in their manufacture, investment in our clinical programs and competition with other products. As a result of these variables, we are unable to determine the duration and completion costs of our research and development projects and programs or when and to what extent we will generate revenue from the commercialization and sale of our product candidates. We may never succeed in achieving regulatory approval for any of our product candidates.

General and Administrative

Our general and administrative expenses include personnel-related expenses for personnel in our executive, finance, corporate and other administrative functions, intellectual property and patent costs, facilities and other allocated expenses, other expenses for outside professional services, including legal, human resources, investor relations, audit and accounting services and insurance costs. Personnel-related expenses consist of salaries, benefits and equity-based compensation. We expect our general and administrative expenses to remain flat to moderately increasing in the future to support development of our prioritized CAB programs.

Interest Income

Interest income consists primarily of interest earned on our cash and cash equivalent balances.

Results of Operations

Comparison of the Three Months Ended June 30, 2024 and 2023


	Three Months Ended June 30,
	2024			2023			Change
(in thousands)
Operating expenses:
Research and development	$	16,198		$	30,960		$	(14,762	)
General and administrative		5,774			6,241			(467	)
Total operating expenses		21,972			37,201			(15,229	)
Loss from operations		(21,972	)		(37,201	)		15,229
Other income:
Interest income		900			1,460			(560	)
Other expense		—			(11	)		11
Total other income		900			1,449			(549	)
Net loss and comprehensive loss	$	(21,072	)	$	(35,752	)	$	14,680

Research and Development Expense

The following table summarizes our research and development expenses allocated by CAB program for the periods indicated:


	Three Months Ended June 30,
	2024		2023		Change
(in thousands)
External expenses:
Mecbotamab vedotin, BA3011 (CAB AXL-ADC)	$	3,500	$	6,695	$	(3,195	)
Ozuriftamab vedotin, BA3021 (CAB ROR2-ADC)		2,023		4,504		(2,481	)
Evalstotug, BA3071 (CAB CTLA-4)		2,447		5,633		(3,186	)
BA3182 (CAB EpCAM x CAB CD3)		1,206		765		441
Other CAB Programs		1,629		7,688		(6,059	)
Total external expenses		10,805		25,285		(14,480	)
Personnel and related		3,347		3,066		281
Equity-based compensation		1,164		1,550		(386	)
Facilities and other		882		1,059		(177	)
Total research and development expenses	$	16,198	$	30,960	$	(14,762	)

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

General and Administrative Expense

General and administrative expenses were $5.8 million and $6.2 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of approximately $0.5 million was primarily driven by a $0.8 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, and a $0.2 million decrease in insurance due to a decrease in premiums for our D&O policy, offset by $0.4 million increase in professional services and consulting expenses.

Interest Income

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

Comparison of the Six Months Ended June 30, 2024 and 2023


	Six Months Ended June 30,
	2024		2023		Change
(in thousands)
Operating expenses:
Research and development		35,050	$	52,657	$	(17,607	)
General and administrative		11,379		13,474

BioAtla, Inc. [BCAB] Filings
10-Q	[2024-08-08]
10-Q	[2024-05-14]
10-K	[2024-03-26]
10-Q	[2023-11-07]
10-Q	[2023-08-01]
10-Q	[2023-05-11]
10-K	[2023-03-23]
10-Q	[2022-11-04]
10-Q	[2022-08-09]
10-Q	[2022-05-05]
10-K	[2022-02-28]
10-Q	[2021-11-15]
S-1	[2021-10-22]
10-Q	[2021-08-13]
10-Q	[2021-05-12]
10-K	[2021-03-24]
S-1	[2020-11-13]