10-Q 1 btai-20210331x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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 March 31, 2021

OR

◻	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: 001-38410

BioXcel Therapeutics, Inc.

(Exact name of registrant as specified in its charter)



Delaware	82-1386754
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

555 Long Wharf Drive
New Haven, CT	06511
(Address of principal executive offices)	(Zip Code)

(475) 238-6837

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)



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, $0.001 par value per share	BTAI	Nasdaq Capital 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, a 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.

Large accelerated filer ◻	Accelerated filer ◻

Non-accelerated filer ⌧	Smaller reporting company ⌧

	Emerging growth company ⌧

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 ⌧

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding at May 5, 2021 was 24,631,989.

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		Page
PART I - FINANCIAL INFORMATION

	Forward Looking Statements	3
	Summary Risk Factors	4
Item 1.	Financial Statements (Unaudited)	6
	Balance Sheets as of March 31, 2021 and December 31, 2020	6
	Statements of Operations for the three months ended March 31, 2021 and 2020	7
	Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2021 and 2020	8
	Statements of Cash Flows for the three months ended March 31, 2021 and 2020	9
	Notes to Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33

PART II OTHER INFORMATION

Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	79
Item 3.	Defaults Upon Senior Securities	79
Item 4.	Mine Safety Disclosures	79
Item 5.	Other Information	79
Item 6.	Exhibits	80
Signatures		81

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

●

our plans relating to clinical trials for BXCL501, BXCL701 and our other product candidates;

●

our plans for 505(b)(2) regulatory path approval;

●

our plans to research, develop and commercialize our current and future product candidates;

●

our plans to seek to enter into collaborations for the development and commercialization of certain product candidates;

●

the potential benefits of any future collaboration;

●

the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;

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the rate and degree of market acceptance and clinical utility of any products for which we receive marketing approval;

●

our commercialization, marketing and manufacturing capabilities and strategy;

●

our intellectual property position and strategy;

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our estimates regarding expenses, future revenue, capital requirements and need for additional financing;

●

developments relating to our competitors and our industry;

●

the impact of government laws and regulations;

●

the impact of COVID-19 on our business, including our preclinical studies and clinical trials: and

●

our relationship with BioXcel LLC.

These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Summary Risk Factors” Part II, Item 1A. “Risk Factors,” and Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not rely on these forward-looking statements as predictions of future events. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

As used in this Quarterly Report on Form 10-Q, unless otherwise specified or the context otherwise requires, the terms “we,” “our,” “us,” the “Company” or “BTI” refer to BioXcel Therapeutics, Inc. and “BioXcel” or “Parent” refer to the Company’s parent company, BioXcel LLC and its predecessor, BioXcel Corporation. All brand names or trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

We may use our website as a distribution channel of material information about the Company. Financial and other important information regarding the Company is routinely posted on and accessible through the Investors sections of its website at www.bioxceltherapeutics.com. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” option under the News / Events menu of the Investors section of ours website at www.bioxceltherapeutics.com.

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SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our common stock. The principal risks and uncertainties affecting our business include the following:

●

We have a limited operating history and have never generated any product revenues, which may make it difficult to evaluate the success of our business to date and to assess our future viability.

●

We have incurred significant operating losses since inception and anticipate that we will continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability.

●

We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

●

We have limited experience in drug discovery and drug development, and we have never had a drug approved.

●

In the near term, we are dependent on the success of BXCL501 and BXCL701. If we are unable to complete the clinical development of, obtain marketing approval for or successfully commercialize BXCL501, BXCL701 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.

●

Interim “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

●

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming, expensive and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

●

Clinical trials are expensive, time-consuming and difficult to design and implement, and involve an uncertain outcome.

●

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

●

BioXcel’s approach to the discovery and development of product candidates based on EvolverAI is novel and unproven, and we do not know whether we will be able to develop any products of commercial value.

●

If we are required by the FDA or similar regulatory authorities to obtain approval (or clearance, or certification) of a companion diagnostic device in connection with approval of one of our product candidates, and we do not obtain or face delays in obtaining FDA approval (or clearance, or certification) of a companion diagnostic device, we will not be able to commercialize the product candidate and our ability to generate revenue will be materially impaired.

●

Even if we obtain regulatory approval for BXCL501, BXCL701 or any product candidate, we will still face extensive and ongoing regulatory requirements and obligations and any product candidates, if approved, may face future development and regulatory difficulties.

●

If our products do not gain market acceptance, our business will suffer because we might not be able to fund future operations.

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●

Even if we obtain regulatory approvals to commercialize BXCL501, BXCL701 or our other product candidates, our product candidates may not be accepted by physicians or the medical community in general.

●

We continue to depend on BioXcel to provide us with certain services for our business.

●

We are substantially dependent on third parties for the manufacture of our clinical supplies of our product candidates, and we intend to rely on third parties to produce commercial supplies of any approved product candidate. Therefore, our development of our products could be stopped or delayed, and our commercialization of any future product could be stopped or delayed or made less profitable if third party manufacturers fail to obtain approval of the FDA or comparable regulatory authorities or fail to provide us with drug product in sufficient quantities or at acceptable prices.

●

Our failure to find third party collaborators to assist or share in the costs of product development could materially harm our business, financial condition and results of operations.

●

It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection. If our patent position does not adequately protect our product candidates, others could compete against us more directly, which would harm our business, possibly materially.

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PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

BIOXCEL THERAPEUTICS, INC.

BALANCE SHEETS

(amounts in thousands)


	March 31,		December 31,
	2021		2020
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	194,015	$	213,119
Prepaid expenses and other current assets		2,768		3,946
Total current assets		196,783		217,065
Property and equipment, net		1,533		1,273
Operating lease right-of-use asset		1,440		1,511
Other assets		633		87
Total assets	$	200,389	$	219,936

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	5,310	$	3,979
Accrued expenses		6,528		7,469
Due to Parent		211		157
Other current liabilities		275		237
Total current liabilities		12,324		11,842
Long-term portion of operating lease liability		1,328		1,398
Total liabilities		13,652		13,240

Commitments and contingencies (Note 11)
Stockholders' equity
Common stock, $0.001 par value, 50,000 shares authorized; 24,631 and 24,417 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		25		24
Preferred stock, $0.001 par value, 10,000 shares authorized; no shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		—		—
Additional paid-in-capital		351,945		345,529
Accumulated deficit		(165,233)		(138,857)
Total stockholders' equity		186,737		206,696
Total liabilities and stockholders' equity	$	200,389	$	219,936

The accompanying notes are an integral part of these financial statements.

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BIOXCEL THERAPEUTICS, INC.

STATEMENTS OF OPERATIONS

(amounts in thousands, except per share amounts)

(unaudited)


	Three Months Ended March 31,
	2021		2020
Revenues	$	—	$	—

Operating expenses
Research and development		14,741		12,371
General and administrative		11,638		2,625
Total operating expenses		26,379		14,996
Loss from operations		(26,379)		(14,996)
Other income (expense)
Interest income		10		91
Interest expense		(7)		(6)
Net loss and comprehensive loss	$	(26,376)	$	(14,911)
Basic and diluted net loss per share attributable to common stockholders	$	(1.08)	$	(0.79)
Weighted average shares outstanding - basic and diluted		24,524		18,968

The accompanying notes are an integral part of these financial statements.

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BIOXCEL THERAPEUTICS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(amounts in thousands)

(unaudited)


				Additional
	Common Stock			Paid in		Accumulated
	Shares	Amount		Capital		Deficit		Total
Balance as of December 31, 2019	18,087	$	18	$	83,565	$	(56,688)	$	26,895
Issuance of common stock, net of issuance costs of $4,789	2,300		2		68,809		—		68,811
Purchase and cancellation of shares from BioXcel Corporation	(300)		—		(9,024)		—		(9,024)
Stock-based compensation	—		—		776		—		776
Exercise of stock options	95		—		39		—		39
Net loss	—		—		—		(14,911)		(14,911)
Balance as of March 31, 2020	20,182	$	20	$	144,165	$	(71,599)	$	72,586

				Additional
	Common Stock			Paid in		Accumulated
	Shares	Amount		Capital		Deficit		Total
Balance as of December 31, 2020	24,417	$	24	$	345,529	$	(138,857)	$	206,696
Stock-based compensation	—		—		5,565		—		5,565
Exercise of stock options	214		1		851		—		852
Net loss	—		—		—		(26,376)		(26,376)
Balance as of March 31, 2021	24,631	$	25	$	351,945	$	(165,233)	$	186,737

The accompanying notes are an integral part of these financial statements.

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BIOXCEL THERAPEUTICS, INC.

STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)


	Three months ended March 31,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(26,376)	$	(14,911)
Reconciliation of net loss to net cash used in operating activities
Depreciation and amortization		65		47
Stock-based compensation expense		5,565		776
Changes in operating assets and liabilities:
Prepaid expenses, other assets and right of use assets		703		(1,838)
Accounts payable, accrued expenses, lease liabilities and other liabilities		403		3,769
Net cash used in operating activities		(19,640)		(12,157)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements		(316)		(16)
Net cash used in investing activities		(316)		(16)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net of issuance costs		—		68,811
Purchase and cancellation of shares from BioXcel Corporation		—		(9,024)
Exercise of stock options		852		39
Net cash provided by financing activities		852		59,826

Net increase (decrease) in cash and cash equivalents		(19,104)		47,653
Cash and cash equivalents, beginning of the period

SEC Form 10-Q filed by BioXcel Therapeutics, Inc.