10-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

For the fiscal year ended December 31, 2021

For the transition period from to .

Commission file number 001-39787

BIOATLA, INC.

(Exact name of registrant as specified in its charter)

(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 TradingSymbol(s) Name of each exchangeon which registered

Common Stock, $0.0001 par value per share BCAB The Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ or No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ or No ☒

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 ☒ or 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

As of June 30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $1.0 billion based on the closing sales price of $42.38 per share as reported on the Nasdaq Global Select Market.

As of February 25, 2022, the number of shares of the registrant’s common stock outstanding was 35,829,127 and the number of shares of the registrant’s Class B common stock outstanding was 1,492,059.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference certain information from the registrant’s definitive proxy statement (the “Proxy Statement”) relating to its 2022 Annual Meeting of Stockholders. The Proxy Statement will be filed with the United States Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

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BIOATLA, INC.

Annual Report on Form 10-K

For the Fiscal Year Ended December 31, 2021

TABLE OF CONTENTS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

PART I

Item 1. Business 2

Item 1A. Risk Factors 43

Item 1B. Unresolved Staff Comments 81

Item 2. Properties 81

Item 3. Legal Proceedings 81

Item 4. Mine Safety Disclosures 81

PART II

Item 6. Selected Financial Data 83

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 93

Item 8. Financial Statements and Supplementary Data 94

Item 9A. Controls and Procedures 123

Item 9B. Other Information 125

PART III

Item 10. Directors, Executive Officers and Corporate Governance 126

Item 11. Executive Compensation 126

Item 14. Principal Accountant Fees and Services 126

PART IV

Item 15. Exhibits and Financial Statement Schedules 127

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PART I

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements. We may, in some cases, use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” set forth in Part I, Item 1A of this Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission (the “SEC”). It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Annual Report on Form 10-K may not occur, and actual results may differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about:

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our ability to develop and advance our current product candidates and programs into, and successfully complete, clinical trials;

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the ability of our clinical trials to demonstrate safety and efficacy of our product candidates and other positive results;

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the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting;

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our manufacturing, commercialization and marketing capabilities and strategy;

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our plans and strategies to develop and commercialize our CAB antibodies;

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our plans to further develop our technology platform and expand our pipeline of product candidates;

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the potential benefits and advantages of our current and future product candidates that we may develop from our patented technology platform;

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the impact of the COVID-19 pandemic on our business, financial condition, results of operations, and prospects;

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the timing or likelihood of regulatory filings and approvals for our product candidates;

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regulatory developments in the United States and Europe and other foreign countries;

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our expectations and plans to obtain funding for our operations, including from our existing and potential future collaboration and licensing agreements;

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our expectations regarding our ability to obtain and maintain intellectual property protection for our technology platform and product candidates;

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the potential benefits of our strategic relationships and our plans to pursue additional strategic relationships;

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our continued reliance on third parties to conduct additional clinical trials of our product candidates and for the manufacture of our product candidates for preclinical studies and clinical trials; and

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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Annual Report on Form 10-K.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we do not intend to update any of these forward-looking statements after the date of this Annual Report on Form 10-K or to conform these statements to actual results or revised expectations.

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You should read this Annual Report on Form 10-K with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

This Annual Report on Form 10-K contains estimates, projections and other information concerning our industry, our business and the markets for our product candidates. We obtained the industry, market and similar data set forth in this report from our own internal estimates and research and from academic and industry research, publications, surveys and studies conducted by third parties, including governmental agencies. 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 that are assumed in this information. While we believe that the data we use from third parties are reliable, we have not separately verified these data. Further, while we believe our internal research is reliable, such research has not been verified by any third party. You are cautioned not to give undue weight to any such information, projections and estimates.

Unless the context requires otherwise, references in this Annual Report on Form 10-K to “BioAtla,” “we,” “us” and “our” refer, prior to the LLC conversion discussed below, to BioAtla, LLC and, after the conversion, to BioAtla, Inc.

ITEM 1. Business

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 conditionally active biologics (“CAB” or “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 cancer 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.

The broad applicability of our CAB technology allows us to develop a wide array of product candidate modalities, such as monoclonal antibodies, antibody-drug conjugates, or ADCs, T cell-engaging bispecific antibodies and chimeric antigen receptor T cells, or CAR-T cells. A key advantage of our application of the CAB technology to antibodies is that it allows us to selectively target antigens on tumor cells and minimizes or eliminates binding to these antigens on normal cells, which reduces the toxicity associated with traditional approaches. We have initiated potentially registration-enabling Phase 2 trials for our two latest stage CAB ADC product candidates targeting multiple cancer indications with mecbotamab vedotin (BA3011) targeting AXL in sarcoma and NSCLC and ozuriftamab vedotin (BA3021) targeting ROR2 in non-small cell lung cancer (NSCLC), melanoma, and head and neck cancer (SCCHN). The U.S. Food and Drug Administration, or the FDA, has reviewed the trial designs, but has not yet opined on whether the Phase 2 clinical trials will be sufficient to support regulatory approval. However, we intend to ask the FDA to consider this further at the upcoming interim data review point or points for these trials and indications. While we cannot assure you that the FDA will agree that the current clinical plan will be sufficient to support approval, the trial has been designed to allow us to adjust the clinical plan, if needed, after the interim read-out in order to better align with any potential FDA requirements. We are also supporting investigator-initiated trials for both mecbotamab vedotin and ozuriftamab vedotin in platinum-resistant ovarian cancer. We have observed encouraging initial clinical signs of response to treatment and a wide therapeutic window for a range of dosage and duration. Mecbotamab vedotin and ozuriftamab vedotin have the potential to address large unmet medical needs in indications that together account for more than 350,000 new cases of solid tumor cancers and 150,000 deaths per year in the United States alone. Additionally, we have initiated Phase 1 trials for multiple cancer indications in 2021 with dosing expect in the first half of 2022 for our CAB immuno-oncology antibody BA3071 targeting CTLA-4. BA3071 is designed to overcome the toxicity limitations of the currently approved anti-CTLA-4 antibodies and to improve patient outcomes. We also have several candidates in our IND-enabling preclinical pipeline that include CAB bispecific and ADC antibodies targeting unmet medical needs in multiple types of solid tumors.

Our goal is to develop well-tolerated, novel cancer therapies that provide cures or extended survival to ensure patients’ improved quality of life. Studies have shown that, as a drug class, antibodies have transformed oncology treatment and include some of the best-selling therapies on the biopharmaceutical market. While therapeutic antibodies have emerged as one of the most successful strategies for both solid and blood-based, or hematologic, malignancies, toxicity has narrowed the therapeutic window and ultimate potential of impacting disease, as many of the key targets on tumor cells are also prevalent on normal cells. The biology of tumor formation, or tumorigenesis, yields a unique microenvironment consisting of a complex mixture of tumor cells, stromal fibroblasts, endothelial cells and immune cells like microglia, macrophages and lymphocytes and the non-cellular components of extracellular matrix such as collagen, fibronectin, hyaluronan and laminin, among others. The process of tumor formation creates an altered, unique microenvironment in and around the tumor that is also physically and chemically distinct from healthy tissue, with regard to temperature, pressure, chemical composition and especially the acidity or pH. The tumorigenesis-driven shifts in microenvironment conditions further weaken the immune response and promote tumor growth. We have created and patented our CAB technology to enable the development of antibodies that are active in the tumor microenvironment, but inactive under normal physiological conditions, while ensuring target-specific binding on cancer cells. Our CAB technology aims to uniquely exploit the fundamental pH differences between the tumor and healthy tissue, increasing antibody binding selectivity and thereby potentially eliminating or greatly reducing healthy cell on-target, off-tumor toxicity. This enhanced selectivity has the potential to greatly improve the benefit-risk ratio for the patient and allows us to deliver desired drug levels either as monotherapy or utilizing unique multi-targeted or combination therapies that are currently difficult or impossible to develop. Additionally, the combination of reversible binding with the selective, precision capability of our CAB technology enables both increased antibody potency and reduced toxicity. By exploiting our novel understanding of tumor biology, we believe that our proprietary CAB technology has the potential to transform antibody-based cancer therapy.

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Initially, we applied the reversible binding and precision capability of our CAB technology to develop next-generation ADC therapies. Traditional ADCs are a class of biologic drugs that are designed by attaching a toxic small molecule payload to an antibody, which then targets a specific antigen expressed on the target cell, but unfortunately, in most cases, this target is also present on normal tissue. Binding to the target on normal tissue leads to high on-target, off-tumor toxicity, which reduces the utility of traditional ADCs. Our CAB ADCs are designed to selectively bind to the antigens found in acidic pH conditions found in the tumor microenvironment, which has the potential to reduce off-tumor toxicity and related consequences. In addition, we developed CAB antibodies to immuno-oncology targets such as CTLA-4 for antitumor activity. We believe that our CAB technology can reduce the limitations resulting from systemic toxicities and expand the utility of this immuno-oncology therapy. We are also creating bispecific, T cell engaging, CAB antibodies that are comprised of two different binding specificities, which allows the antibody to bind to two specific targets at the same time, generally one target on the tumor cell and one target on an immune system cell. This is a powerful approach to harness cytotoxic T cells to directly kill tumor cells with reduced toxicity.

Our pipeline

We believe that there is significant potential to improve therapeutics for our patients with our proprietary CAB antibody technology across well-validated oncology targets in solid tumors. The following table summarizes our current product candidate pipeline.

Mecbotamab vedotin (BA3011): Our lead product candidate, mecbotamab vedotin, or BA3011, is a CAB ADC that targets AXL, a protein kinase receptor that is highly expressed on the surface of many tumors. AXL is considered to be a driver of many cellular processes that are critical for the development, growth and spread of tumors, including proliferation, invasiveness and migration, stemness, which is related to core stem cell properties such as self-renewal and differentiation, angiogenesis, or the growth of blood vessels, and immune modulation. In preclinical studies, we have observed that BA3011 binds to AXL under conditions that reflect those in tumors. AXL has also been shown to be involved in the epithelial-mesenchymal transition, or EMT, a process by which epithelial cells lose their cell polarity and cell-cell adhesion, and gain migratory and invasive properties to become mesenchymal stem cells, or MSCs. MSCs are home to developing aggressive tumors, where they exacerbate cancer cell proliferation, motility, invasion and metastasis, foster angiogenesis, promote tumor fibrosis and suppress antitumor immune responses. Multiple therapeutic agents that target AXL have been developed and investigated in clinical trials. A number of small-molecule AXL kinase inhibitors have been developed; however, the majority of these inhibitors, including one that has been approved, are not highly selective for AXL. Although other non-CAB anti-AXL antibodies and ADCs have shown encouraging clinical signs of antitumor activity; adverse events, such as high-grade constipation and peripheral neuropathy, were particularly pronounced and led to discontinuation of clinical development of some candidates.

Mecbotamab vedotin is an ADC consisting of a CAB humanized immunoglobulin G, or IgG1, anti-AXL monoclonal antibody. The core antibody is conjugated using a cleavable linker attached to the well-known and proven toxin monomethyl auristatin E, or MMAE. Mecbotamab vedotin is designed to specifically and reversibly bind to AXL in conditions found within the tumor microenvironment, thus conferring a selectivity binding advantage for tumors over normal cells. Upon binding of mecbotamab vedotin to AXL on the surface of tumor cells, it is internalized and the MMAE cytotoxin is released, thus killing the cancer cell.

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We have developed a biomarker assay that quantifies the AXL Tumor membrane Percent Score (0-100%), or TmPS. The TmPS measures the percentage of cancer cells within the tumor that expresses the AXL target expression generally on the tumor membrane which, consistent with industry standard, we use to identify those patients who we believe will be the most likely to respond to our product candidates. We believe that the larger percentage of cells expressing the target on the tumor membrane, the more likely it is that our product candidates may have the potential to provide clinical benefit.

We are developing mecbotamab vedotin as a potential therapeutic for multiple solid tumor types, including soft tissue and bone sarcoma, non-small cell lung cancer (NSCLC) and ovarian cancer, with other potential indications in the future. The Office of Orphan Drug Products (OODP) at the FDA granted Orphan Drug Designation to mecbotamab vedotin for the treatment of soft tissue sarcoma, and Phase 1 results in sarcoma patients were presented at the Connective Tissue Oncology Society (CTOS) 2021 Annual Meeting. Mecbotamab vedotin was generally well tolerated in this refractory sarcoma population. In the Phase 1 study, few patients discontinued due to an adverse event (two patients out of 26 or 7.7%) compared to discontinuation rates in most other clinical trials of ADCs. No clinically meaningful on-target toxicity to normal AXL-expressing tissue was observed over baseline levels. Dose-limiting toxicities were limited to free circulating MMAE payload-associated toxicity at the highest dose tested, including reversible neutropenia. Higher levels of AXL tumor membrane expression correlated with response to treatment. Of the seven sarcoma patients who had an AXL TmPS of greater than or equal to 70%, four of these obtained a confirmed partial response, including patients with leiomyosarcoma, undifferentiated pleomorphic sarcoma, and Ewing sarcoma. Prolonged response to therapy was observed in this ongoing study with the duration of response ranging from 33 to more than 60 weeks. Overall, we believe mecbotamab vedotin has the potential for a favorable benefit-risk profile, and importantly this is one of the few studies employing a putative biomarker which is not only highly expressed in sarcomas, but also may help select patients across multiple sarcoma subtypes who may benefit from therapy. In the ongoing potentially registration-enabling sarcoma Phase 2 study, patients are enrolled for therapy by prescreening for AXL expression. We are also conducting a Phase 2 study (BA3011-002) in AXL high NSCLC patients who have previously progressed on PD-1/L1, EGFR, or ALK inhibitor therapy. Planned interim analyses in the sarcoma and NSCLC trials are anticipated at the end of the first quarter and in the second quarter of 2022, respectively. In both Phase 2 indications, we are enrolling patients either as a monotherapy or in combination with a PD-1 inhibitor. In addition, a multi-center investigator-initiated Phase 2 clinical trial of mecbotamab vedotin in combination with a PD-1 inhibitor in patients with platinum-resistant ovarian cancer has begun enrollment and is expected to enroll approximately 20 patients.

Ozuriftabmab vedotin (BA3021): We are developing our second product candidate, ozuriftamab vedotin or BA3021, a CAB antibody drug conjugate directed against ROR2, or Receptor Tyrosine Kinase Like Orphan Receptor 2. ROR2 is overexpressed across many different solid tumors, including breast, lung, pancreatic, renal, ovarian, and colorectal cancers, squamous cell cancer of the head and neck, or SCCHN, and melanoma; its tumoral expression is further enhanced among those treated with PD-1 checkpoint inhibitors. Cancer cell expression of ROR2 has been associated with enhanced cancer cell migration, EMT, increased associated risk for relapse, metastasis and unfavorable prognosis. In breast cancer, for example, ROR2 was found to be expressed in the majority of patient samples, with those expressing ROR2 having decreased overall survival. A similar correlation between ROR2 expression level and overall survival was observed in NSCLC and metastatic melanoma. Genetic inactivation of ROR2 in metastatic melanoma cells was shown to prevent metastases of these tumor cells in mice. ROR2 also has essential roles in normal cells and in early development. Inactivation of ROR2 is lethal in mice with defects observed in the heart, nervous system and skeleton. Less severe mutations in ROR2 in humans is associated with skeletal diseases Robinow syndrome and brachydactyly type B.

Employing a similar approach as with mecbotamab vedotin, we developed a TmPS quantitative assay based on ROR2 tumor membrane expression that we use to identify those patients who we believe will be the most likely to respond to our product candidates.

Ozuriftamab vedotin is a CAB anti-ROR2 ADC consisting of a CAB anti-ROR2 humanized IgG1 monoclonal antibody conjugated to MMAE using a cleavable linker. Ozuriftamab vedotin is designed to specifically and reversibly bind to ROR2 in conditions found within the tumor microenvironment, thus conferring a selectivity binding advantage for tumors over normal cells. Upon binding of ozuriftamab vedotin to ROR2 on the surface of tumor cells, it is internalized and the MMAE cytotoxin is released, thus killing the cancer cell.

We are developing ozuriftamab vedotin as a potential therapeutic for multiple solid tumor types, including NSCLC, melanoma, and ovarian cancer. Based on Phase 1 data, we believe ozuriftamab vedotin has broad potential as a cancer therapy for patients with advanced solid tumors who have experienced prior failure of PD-1 blockade. We are enrolling a Phase 2 trial of ozuriftamab vedotin monotherapy or in combination with a PD-1 inhibitor in patients with ROR2 high melanoma who have previously progressed on PD-1/L1 inhibitor and patients with ROR2 high NSCLC who have previously progressed on PD-1/L1, EGFR or ALK inhibitor therapy. A Phase 2 study in patients with ROR2 high SCCHN is anticipated to begin dosing patients in first half of 2022. In addition, a multi-center investigator-initiated Phase 2 clinical trial of ozuriftamab vedotin in combination with a PD-1 inhibitor in patients with platinum-resistant ovarian cancer has begun enrollment.

BA3071: Our third product candidate, BA3071, is a CAB anti-CTLA-4 antibody that is being developed as an immuno-oncology agent with the goal of delivering at least the efficacy of approved CTLA-4 antibodies, such as ipilimumab, but with lower toxicity rate as a result of the CAB’s unique tumor microenvironment-restricted binding. CTLA-4, or cytotoxic T-lymphocyte-associated antigen 4, is an immune checkpoint involved in regulating T-cell activation. The primary role of immune checkpoints is to prevent autoimmune attacks against normal tissue in the body; however, cancer cells often take advantage of this pathway to prevent immune destruction of the tumor. Ipilimumab currently is the only anti-CTLA-4 monoclonal antibody approved by the FDA. It is approved in combination with an anti-PD-1 antibody, nivolumab, for the treatment of multiple solid tumors, including melanoma, RCC, colorectal cancer and NSCLC. Patients treated with ipilimumab face a risk of a number of adverse events associated with inappropriate activation of the immune system beyond the tumor site including severe and sometimes fatal enterocolitis, hepatitis, dermatitis, neuropathy and endocrinopathy. The usage and dosage of ipilimumab is highly limited due to its safety profile, resulting in the average number of cycles on therapy not exceeding four cycles.

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We are developing BA3071 as a potential therapeutic for multiple solid tumor indications, possibly including renal cell carcinoma, NSCLC, small cell lung cancer, hepatocellular carcinoma, melanoma, bladder cancer, gastric cancer and cervical cancer. We have initiated a Phase 1/2 dose-escalation trial of BA3071 as monotherapy and in combination with an anti-PD-1 antibody with expansion cohorts to be enrolled upon identification of the recommended dose.

Bispecific antibody programs: We have also leveraged our CAB technology to develop bispecific antibodies, which bind both a tumor-specific antigen and a T cell receptor using CAB antigen-binding domains. A bispecific antibody is a type of engineered antibody that can simultaneously bind two separate and unique antigens, unlike conventional monospecific antibodies that only bind to one type of target.

A common design feature for a bispecific antibody is to include a T cell engager component (i.e., CD3 receptor), such that one antigen-binding domain recognizes a surface-expressed tumor antigen and the other antigen-binding domain binds to and activates CD3+ T cells. With this design, bispecific antibodies can induce potent T cell responses against tumors expressing the tumor target antigen in a simplified manner relative to even off-the-shelf or allogeneic CAR-T therapies. The first FDA approved bispecific antibody was a T cell engager, blinatumomab, which contained antigen-binding domains for CD19, an antigen found on B-cell leukemias, and CD3, a T cell activating receptor.

There are multiple structural variants of antibodies and other antigen-binding domains being used by others to construct bispecific product candidates, some of which are being tested clinically. However, similar to CAR-T cells and blinatumomab, many of these bispecific product candidates have increased risks of generating life-threatening cytokine release syndrome due to systemic immune activation.

We have applied our CAB antibody technology to develop bispecific CAB antibodies in which one or both antigen-binding domains are active only in the tumor microenvironment. An example of this approach is our EpCAM x CD3 bispecific. EpCAM, or epithelial cell adhesion molecule, is a protein that is over-expressed in many cancers including carcinomas derived from colon, intestine, breast, lung and prostate. Expression of EpCAM has been extensively associated with cell growth and proliferation of both healthy and cancer cells.

EpCAM was one of the first cancer-associated antigens discovered, however in the forty years since, its clinical impact as a target for therapeutic antibodies in cancer has been limited. One of the problems with targeting EpCAM is its broad expression in the basolateral membranes of normal epithelial cells. Conventional approaches of avoiding systemic toxicities including deliberately selecting antibodies with low affinity for EpCAM with the intention of generating some degree of selectivity for tumors that express very high levels of EpCAM, have not been successful. Bispecific constructs targeting EpCAM have also not lived up to expectations. Solitomab, an EpCAM x CD3 bispecific led to over 95% of patients in a Phase 1 dose-escalation trial to experience at least one Grade 3 or above adverse event. Over 20% of patients experienced dose-limiting toxicities and there was only one unconfirmed partial response observed among 65 patients at these low doses.

We have shown in preclinical experiments that our CAB bispecific molecules meet or exceed the activity of conventional bispecifics and reduce systemic activation of potentially fatal immune responses. We are conducting IND-enabling studies for two CAB bispecific antibody product candidates, EpCAM/CD3 and B7-H3/CD3, and one next-generation CAB ADC, Nectin-4. We presently plan to file INDs in 2022 for EpCAM/CD3 and in 2023 for Nectin-4 and B7-H3/CD3. We also are evaluating additional candidates including EGFR/CD3 bispecific and B7-H4 as a next-generation CAB ADC candidate. Overall, we are advancing multiple pre-clinical assets and expect to file one IND in 2022, with the potential to submit up to three additional US INDs in 2023 for our CAB bispecific or ADC molecules.

Our strategy

Our mission is to develop and commercialize innovative antibody-based therapeutics for the treatment of solid tumors that are designed to bind depending on the physical and chemical properties of tumors and their microenvironment. Our CAB technology enables us to generate antibodies that bind to their targets under conditions found in the tumor, but not in healthy tissue. Therefore, we are able to generate antibodies to targets that to this point have been undruggable due to the lack of sufficient therapeutic window with existing antibody technologies. We are also able to use these antibodies to engage targets that exist not only in tumors, but in healthy tissue as well. This has the potential to reduce side effects and toxicity, one of the fundamental challenges of cancer therapies today, thereby expanding the realm of potential therapeutic antibodies. We believe that our proprietary technology and approach have the potential to transform cancer therapy by decreasing systemic toxicities and improving efficacy. Our strategy to achieve this mission is as follows:

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Advance mecbotamab vedotin through regulatory approval and commercialization. Clinical data from our Phase 1 trial with mecbotamab vedotin are supportive of its development in sarcomas, a set of cancers with a high unmet clinical need. We have initiated a potentially registration-enabling Phase 2 trial for mecbotamab vedotin in treatment refractory sarcoma patients (12 years of age or older), with an AXL TmPS of 50%, patients with an AXL TmPS equal or greater to 70% as the group for the primary analyses, and, if successful, we believe we can further advance mecbotamab vedotin through regulatory approval and commercialization. In addition, we have initiated a potentially registration-enabling Phase 2 trial in NSCLC using a primary AXL TmPS of 1%. We are using a quantitative biomarker assay/TmPS score to identify likely responders and to help enrich our clinical trial programs.

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Advance ozuriftamab vedotin in PD-1/L1 refractory tumors through regulatory approval and commercialization. We have observed antitumor activity in PD-1 refractory NSCLC and melanoma patients in our Phase 1 trial and have initiated a Phase 2 trial of ozuriftamab vedotin in each of these indications. We are using a quantitative biomarker assay/TmPS score to identify and stratify based the TmPS score the likely responders and to help enrich our clinical trial programs.

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Advance BA3071 as a CAB- anti CTLA-4 immune checkpoint inhibitor to restrict T-cell activation to the tumor microenvironment. The design of BA3071 is to provide the efficacy of ipilimumab, the only anti-CTLA-4 monoclonal antibody approved by the FDA, but with a significantly enhanced safety profile. This may allow for patients to be treated at higher dosage and/or for more cycles of treatment in combination with an anti-PD-1 antibody that may lead to better therapeutic results.

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Advance into clinical development multiple CAB bispecific and next generation CAB ADC candidates to further address areas of high unmet needs in treating solid tumors. We believe that our next generation CAB-ADC platform further widens that therapeutic window by enhancing the linker-payload system. In addition, our first CAB EpCAM/CAB CD3 bispecific has recently demonstrated IND-enabling studies with a more than 80-fold improvement in the therapeutic window. Combining our CAB technology with our newly developed next generation CAB-ADC platform replaces the traditional peptide linker with a novel sugar-based linker to deliver the MMAE payload. It is expected that this new CAB ADC system will further reduce off-target, off-tumor toxicity and thereby expand the therapeutic window.

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Maintain and strengthen our intellectual property portfolio. As of December 31, 2021, we had a total of 584 patents and patent applications with 319 issued patents, 8 allowed applications and 257 pending applications covering our CAB technology and product candidates. This broad patent coverage was designed such that protection of our product candidates is not dependent on any single patent but rather, each product candidate provides multiple layers of protection. We plan to continue to maintain, monitor, enforce and defend our intellectual property.

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Selectively enter into collaborations to maximize the value of our platform and pipeline. Given the potential of our technology to generate novel product candidates addressing a wide variety of solid tumors, we may opportunistically enter into strategic collaborations around specific geographic regions, indications, combinations and companion diagnostics. We may also explore collaboration arrangements to commercialize any product candidates where we believe the resources and expertise of the third party could be beneficial. These collaborations could advance and accelerate our programs to maximize their market potential and expand the worldwide commercial potential of our CAB technology and assets.

Our technology

Challenges in developing antibody-based therapies for solid tumors

Monoclonal antibody therapeutics have been approved for over 30 targets for multiple diseases, most commonly cancer. Antibodies have become the new backbone of the pharmaceutical industry, which previously relied on small molecules. Treatment with monoclonal antibodies has established itself as one of the most successful therapeutic strategies for both hematologic malignancies and solid tumors. Oncology targets of safe, effective antibodies fall into two broad categories:

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Antibodies targeting antigens, usually proteins, preferentially expressed on the surface of cancer cells, against which antibodies are used to directly bind and inhibit or destroy these cells; and

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Antibodies targeting antigens affecting directly or indirectly tumor cells and non-tumor cells that activate the immune system or induce other changes in the tumor, such as limiting the growth of tumor-related blood vessels.

There are significant limitations of targeting important antigens with traditional antibodies that can result in reduced efficacy, difficulties related to dosing, decreased durability, and drug-related toxicities, all of which significantly limit the potential for cures with traditional antibodies:

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Increased toxicity: Antigens are typically expressed in many normal tissues, which for traditional antibodies, including ADCs, could lead to significant on-target, off-tumor toxicity reducing dosing and durability.

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Target-mediated drug disposition limitation: Target-mediated drug disposition, or TMDD, is the phenomenon in which a drug binds somewhat indiscriminately to its pharmacological target on normal tissue as well as on the intended diseased tissue, thereby causing the antibody to be depleted more rapidly from circulation. As a consequence, the pharmacokinetic characteristics of the drug can be adversely impacted, leading to reduced half-life, lower tumor exposure, which requires more frequent or higher dosing that increases toxicity and ultimately can result in undesirable side-effects, patient treatment-related inconveniences and greater costs.

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Immunogenicity: Antibodies also can be sensitive to modifications that can lead to immunogenicity, or a strong negative immune system response from the body, which can induce anti-drug antibodies that can reduce efficacy or lead to severe infusion reactions, thereby restricting the potential improvements that could be made with emerging technologies.

The fundamental specificity challenge with traditional monoclonal antibody-based therapy is that there are few known antigens that are specific to tumors and absent in non-cancerous tissues. Drug developers might develop an antibody that is exquisitely specific against its target, but due to the expression of the target on non-tumor cells, systemic administration can result in dose-limiting toxicities from on-target, off-tumor activity. For example, cetuximab targets an antigen that is highly expressed in colorectal cancer, but this antigen is also expressed in epidermal cells throughout the body. Consequently, treatment with cetuximab results in over 80% of patients developing skin toxicities that can severely impact patients’ physical, psychological and social well-being and can lead to treatment discontinuation and dose reduction.

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These examples, however, only represent antibodies where the therapeutic benefit clearly outweighs the consequences associated with the adverse events. There are many potential protein targets that do not offer such clear-cut therapeutic windows. The majority of anticancer antibody-based drug products are consequently limited to a small subset of potential tumor antigens. We believe that our novel approach to increase the selectivity of antibody-based therapeutics while maintaining their potency may have the potential to fundamentally transform the development of anticancer therapeutics and expand the universe of targets for novel antibody-based therapies.

CAB leverages the low pH found in the tumor microenvironment

The tumor microenvironment has been widely implicated in tumorigenesis because it harbors tumor cells that interact with surrounding cells through the circulatory and lymphatic systems to influence the development and progression of cancer. The tumor microenvironment has conditions distinct from the normal cellular and extracellular environments found in non-cancerous tissue, blood or other parts of a normal body. It has been long appreciated that the extracellular milieu inside and surrounding the growing tumor mass is distinct and unique. One of the most profound physicochemical differences between the tumor microenvironment and normal cellular environment is an increase in lactic acid and an associated decrease in pH in the tumor microenvironment from the normal physiological pH of about 7.4 or higher.

While the tumor is acidic, some of the most acidic regions of tumors can be observed at the edge of the tumors, just at the interface with the surrounding tissue or blood, according to a paper published in 2019 in the journal Cancer Research. In this study, pH low insertion peptide, or pHLIP, a peptide that is taken up by cells at a pH below 6.5, was injected into human tumor-bearing mice. While nearly all tumor cells took up this peptide, normal tissue cells did not take up this peptide except in the liver and kidney, which was expected in a pH-independent manner in order to be metabolized and excreted. As shown in the figure described below, certain regions within the tumor and in the cells at the edge of tumors took up some of the highest concentration of the probe, indicating that these areas had pH substantially lower than 6.5. These findings are important when considering the design of therapies for solid tumors because they point to the fact that while the overall tumor is acidic, the most accessible and rapidly growing portions of tumors are likely to have some of the lowest pHs.

Shown below is a tumor “heat” map identifying the tumor cells that are surrounded by an acid microenvironment. Exploiting the established ability of pHLIP to label the membrane of cells exclusively under acidic conditions (≤ pH 6.5) in vivo, the cells within the acidic areas of the tumor in vivo can be identified at the histological level. Mice harboring human breast tumor xenografts were administered Cy7-labeled, or dyed, pHLIP peptide and the tumor tissues were later removed and processed for imaging. Shown on the left is a micrograph of the tumor with the cell-based segmentation data overlayed, including positional information relative to tumor edge. The degree of positivity generated in the above analysis was used to identify a 0-3+ positive cells. Note that the acidic areas extend beyond the traditional hypoxic core of the tumor into the aerobic and oxygenated cells at the invasive fronts at the tumor–stroma interface in vivo. Shown on the right is the breakdown of cancer cells types that are identified by pHLIP acidic cell staining in vivo. A majority of the cells identified are oxygenated and actively replicating tumor cells, and even the non-dividing cancers cells still maintain an acidic environment.

Tumor “Heat” Map

Tumors are highly acidic based on the uptake of pHLIP, a pH-sensitive probe. While the entire tumor is acidic, the lowest pH cells are observed in the replicating cells, which are glycolytic and often oxygenated, i.e., the Warburg Effect.

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One reason for the low pH in tumors compared to normal cells is that there are distinct differences in the metabolic processes found in normal and cancer cells. Normal cells generate the energy they need primarily through the oxygen-dependent process called oxidative phosphorylation. In comparison, cancer cells have switched their mechanism of energy production preferentially to the non-oxygen-dependent process known as glycolysis, even in the presence and availability of oxygen. This process switch was first described nearly a century ago and is the basis of modern tumor screening technologies. The dependence of a tumor cell on glycolysis results in the tumor cell metabolizing up to 200 times more glucose than a healthy cell and causing the secretion of significant levels of lactic acid into the tumor microenvironment. This inherent buildup of lactic acid in the tumor microenvironment has been shown to reduce immune cell function and modulate other defense mechanisms of the body, promoting tumor growth and tumor survival. The presence of lactic acid in the tumor microenvironment causes it to have a distinctly acidic pH of less than 6.8 and even lower at the tumor cell surface, a pH so low that it is rarely found in the body except in organs designed for low pH, such as the stomach, where antibodies in the blood do not access, and in special circumstances, such as cancer. In some cancers, the pH goes as low as 5.8, an extremely low level given the normal, slightly alkaline, pH in the body. The body's blood holds its pH within a tight range around a pH of 7.4, with normal tissue typically being even more alkaline, even in the non-cancerous regions of tissues afflicted with cancer.

These pH differences provide a clear correlation between low pH and cancer, one that is borne out in the aforementioned experiments that measure the uptake by cells of the peptide pH tracer pHLIP. These cells are found to have high levels of lactate dehydrogenase, an enzyme that produces the sugar lactate, i.e., lactic acid. Lactate production and secretion are well-known features of glycolysis. Similarly, there is a strong correlation between the uptake of pHLIP and the expression of markers of aggressive tumor growth such as Ki67.

Tumors not only have characteristically low pH, which assists them in reducing the body’s immune defenses, along with acidity they also generate other aberrant conditions and secrete other chemicals and proteins into the tumor microenvironment that may stimulate tumor growth, promote the development of new blood vessels or angiogenesis, degrade surrounding tissues allowing the tumor to spread or metastasize or actively suppress detection and destruction by the immune system. In view of our preclinical studies and clinical trial results and the substantial supporting scientific literature, we believe that there is an opportunity to develop cancer therapies with improved selectivity for tumors by taking advantage of changes in pH, as do our initial product candidates, as well as in the conditions and levels of temperature, pressure and chemical composition in the tumor microenvironment.

Our CAB technology

Our CABs are based on our patented protein discovery and engineering technology. We invented, developed and refined this technology, which we believe selectively activates the binding of proteins and antibodies to targeted cells in the tumor microenvironment based on differences in local conditions such as pH, temperature, pressure or chemical composition compared to normal healthy tissue. We have shown that activity of our CAB biologics is reversible; not only are they active due to the low pH levels of the tumor microenvironment, but also, unlike prodrugs, they are reversibly inactive when they leave the tumor microenvironment and are in a normal physiological environment.

Our CAB technology capitalizes on the well-established Warburg Effect that through a glycolytic process leads to an acidic external tumor microenvironment. Extracellular pH levels in tumors have been measured to be as low as pH 5.8 compared to the tightly controlled, alkaline, pH7.4 of blood, with even higher pH in healthy tissues. Glycolytic metabolism is also the basis of the established PET scanning technology for detection of cancerous tumors. CAB proteins have increased binding activity as the pH in the microenvironment becomes acidic, while being inactive in normal physiological environments. We discovered a novel chemical switch mechanism that underpins this binding activity that involves physiological-occurring chemicals, such as bicarbonate and hydrogen sulfide. These molecules are negatively charged at physiological conditions and interact with positive charged areas on the protein surface. Under acidic conditions found in the tumor microenvironment, these charged molecules are neutralized by the H+ ions and released from the protein surface, uniquely allowing CAB antibodies to bind to their target and attack the tumor cell. We refer to this novel physiological mechanism, used for generating CABs, as Protein-associated Chemical Switch(es)TM or PaCSTM mechanism. The ability to design conditionally active therapeutics with strong selectivity over narrower pH ranges using the PaCS mechanism, offers the opportunity to greatly enhance both the safety and potency of future therapies for solid tumors.

We have used and continue to leverage our patented CAB technology to screen antibody candidates for multiple characteristics. By doing so, we can evolve specific regions on the antibody that will only bind in response to environmental conditions, either enhancing or eliminating binding. Our CAB technology allows us to select antibodies that preferentially bind to the target under the conditions of interest, such as high local acidity (i.e. low pH). CAB antibodies have human or humanized antibody sequences, a characteristic that reduces the risk of immunogenicity compared to emerging technologies in the field, which is supported by both our preclinical and clinical data.

Our CAB antibodies have been designed to be active in the acidic, lower pH of the tumor microenvironment and inactive under the alkaline pH’s of 7.4 and above found in normal physiological conditions. In a quantitative in vitro binding assay, we compared a CAB antibody and a non-CAB antibody that both bind to the target AXL with matched strength of binding to the target, or affinities, when measured at pH 6.0. As shown in the figure below, binding of the CAB antibody was highly sensitive to pH with binding becoming much weaker as it approached pH 7.0 and almost undetectable at a physiological pH of 7.4. In contrast, a non-CAB antibody to AXL showed indiscriminate and experimentally equivalent binding across the entire pH range tested, including at pH 7.4 of normal cells. Our CAB development process is capable of identifying CAB antibodies with a range of sensitivities to pH.

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pH-dependent binding of CAB AXL antibodies vs. non-CAB AXL antibodies

CAB antibodies have pH-dependent binding. Traditional antibodies do not have pH-dependent binding in the pH range tested.

Low pH-dependent CAB antibodies are far less likely to bind to targets outside of tumors, resulting in a number of potential advantages over traditional antibodies:

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Wide therapeutic window. Reduced binding to target antigens outside of the tumor has the potential to reduce toxicities that arise from systemic exposure. We believe this may enable higher doses or increased potency to be safely delivered to patients with the potential for increased efficacy.

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Opportunity to increase tumor-specific killing. The wide therapeutic window imparted by tumor-specific targeting enables CAB antibodies to be modified with cytotoxic drugs to create ADCs. Similarly, bispecific antibodies can be developed using CAB antibody domains targeting pairs of targets that direct T cells to attack the tumor, which may exhibit unacceptable toxicities such as cytokine release syndrome and neurological toxicity if constructed using traditional antibody domains.

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Increased drug exposure to tumors. Limited binding to targets outside of tumors allows more of the administered CAB antibodies to be available to bind to target sites in the tumor, potentially increasing the concentrations and exposure of these antibodies in tumors.

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Improved pharmacokinetics. Limited binding to targets outside of tumors effectively increases their half-life in plasma. The phenomenon of TMDD is a well-known limitation facing the development of many biologics which CAB antibodies can significantly reduce.

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Broader universe of tumor-specific antigens that can be targeted. There are few highly prevalent tumor-specific antigens expressed on solid tumors that are not expressed at some level in normal tissues, particularly for solid tumors, which represent approximately 90% of tumor types. While some targets, such as EGFR, can be targeted by traditional antibodies with some acceptable level of toxicity in a subset of patients, many other potential targets cannot. CAB antibodies with pH-dependent binding have the potential to significantly reduce the potential risk of systemic toxicities caused by expression of targets on normal tissues.

An important emerging class of antibodies is ADCs. An ADC is a modified antibody that generally has a chemotherapy agent attached to the antibody to enable more targeted chemotherapy treatment of a tumor.

Unfortunately, ADCs frequently bind to targets on normal cells and can lead to severe toxicities. In order to evaluate the CAB technology’s ability to eliminate the on-target, off-tumor toxicities, we generated two ADCs during our preclinical testing: one using a CAB antibody to AXL and another using a traditional non-CAB AXL antibody. Within three days of dosing non-human primates with the traditional non-CAB ADC, the levels of alanine aminotransferase, or ALT, a sign of liver toxicity, increased sharply. Dosing with the CAB ADC resulted in minimal increase in ALT, supporting that on-target, off-tumor toxicity is reduced with the CAB ADC.

We also observed that the plasma concentration and half-life of the CAB ADC were higher than that of the traditional non-CAB ADC. We demonstrated a dose dependency of this observation, which indicates that the primary driver of this absence of TMDD effect with CAB ADC is due to the reduced binding of the CAB ADC to AXL outside of the tumor microenvironment.

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Our CAB technology was studied in robust Phase 1 clinical trials for our two leading clinical programs, which have shown the following:

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Objective antitumor responses: We observed multiple confirmed partial clinical responses (at least 30% reduction in tumor size for at least two consecutive time points) in our Phase 1 data for both mecbotamab vedotin and ozuriftamab vedotin, including in one patient tumor volume shrinkage of more than 90% and another with a complete response (CR), and several patients who remain without tumor progression for more than one year.

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Antitumor activity correlates with a proprietary biomarker: The presence of the relevant target on a high percentage of tumor cells appeared to correlate with increased antitumor activity.

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Safety and tolerability: Mecbotamab vedotin and ozuriftamab vedotin were generally well-tolerated at the recommended Phase 2 dose range, which is positively differentiated from both preclinical and cross-trial trial results for a similar non-CAB ADC. Side- effects have been generally manageable with our CAB ADC product candidates, with some patients able to receive more than a year of treatment.

Through the use of our proprietary technology, we have developed CAB antibodies, which we believe have specificity for tumors, while avoiding binding to the same antigen target expressed on many normal tissues. This allows us to develop therapeutics against targets that are expressed at high levels on tumors cells but are also present on normal cells and tissues, without the toxicities associated with traditional antibodies. While our lead product candidates primarily exploit the differences in pH between the tumor microenvironment and healthy tissue, there is a potential for other yet to be identified PaCS molecules in disease related microenvironments, whether controlled through pH, concentration, or other molecular characteristics (intra- or intermolecularly) for enhancing a drug’s therapeutic index. Potential new therapeutic candidates addressing these opportunities are not limited to antibodies, but may also include small molecules, encompassing lipids, sugars and nucleic acid-based agents or drugs. Further, it is expected that PaCS protein-chemical systems are important naturally occurring regulatory systems linked to a range of disease-related microenvironments, including cancer, inflammation and cellular senescence.

Clinical trials

Mecbotamab Vedotin (BA3011)

Phase 1 clinical trial

We have completed a Phase 1 trial of mecbotamab vedotin in patients with advanced solid tumors, including sarcoma, pancreatic cancer and NSCLC who were refractory or resistant to standard therapies. In the Phase 1 trial, a total of 60 patients, including 26 patients with sarcoma, were treated with doses of mecbotamab vedotin ranging from 0.3 mg/kg to 3 mg/kg once every three weeks (Q3W) or doses ranging from 1.2 mg/kg to 1.8 mg/kg twice every three weeks on days 1 and 8 (2Q3W). The Phase 1 sarcoma patients on average had received four or more prior lines of therapy. The solid tumor types enrolled in this study were: soft tissue sarcoma (22 subjects), pancreatic (12 subjects), NSCLC (4 subjects), colorectal (4 subjects), melanoma (3 subjects), bladder (2 subjects), endometrial (2 subjects), Ewing sarcoma (2 subjects), non-TNBC, osteosarcoma, chondrosarcoma, myoepithelial carcinoma, adenoid cystic carcinoma, small cell lung, renal cell carcinoma and mesothelioma of the pleura (1 subject each).

The main goals of this trial were to evaluate the safety, tolerability, antitumor activity, pharmacokinetics and immunogenicity of BA3011 in solid tumor patients. Based upon the overall safety and response rates, the recommended Phase 2 dose was determined to be 1.8 mg/kg delivered every two weeks (Q2W).

Antitumor activity

We evaluated overall response (OR), one of our secondary endpoints, and observed five confirmed partial responses (a reduction of at least 30% in the size of the tumor), four in patients with sarcomas and one with NSCLC. These responses have been shown to be durable (8-15 months in sarcoma patients; duration of response, or DoR, is one of our secondary endpoints). Further, additional patients have experienced prolonged progression-free intervals, a period of time where the existing tumor did not measurably increase in size by more than 20% and no new tumors were known to develop. The toxicities observed were consistent with those described with MMAE-based ADCs and were well-tolerated at the exposure subsequently employed for Phase 2. Importantly we have not observed adverse events that appeared to be related to on-target injury of normal, AXL expressing tissues, i.e., on-target, off-tumor toxicity, consistent with the increase in tumor selectivity from the CAB technology.

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Antitumor response over time by AXL expression for evaluable sarcoma patients enrolled in Phase 1 trial at all BA3011 doses tested

We developed and validated, as required by CLIA (the Clinical Laboratory Improvement Amendments, or CLIA, which establishes federal quality standards for laboratory testing), an AXL immunohistochemical assay to quantify the level of target expression on the tumor membrane and cytoplasm. An independent board-certified pathologist scored all samples according to this TmPS scoring scheme determined by us during the clinical validation phase, as well as during the Phase 1 trial.

We observed that approximately 57% of sarcoma patients screened for enrollment had an AXL TmPS of 70% or above. In addition, we identified a correlation between the expression of AXL on the membrane of tumor cells and the observed antitumor clinical response as shown in the figure below. Four of seven sarcoma patients with a confirmed AXL TmPS of 70% or above who were dosed with 1.8 mg/kg of BA3011 Q3W or 2Q3W achieved a confirmed partial response.

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Change in sum of target lesions (best response) by AXL TmPS category for Phase 1 evaluable patients at all BA3011 doses tested

Focusing on the subset of sarcoma patients who were dosed with 1.8 mg/kg Q3W or 2Q3W of BA3011 with TmPS of 70%, we observed a correlation of the AXL TmPS and antitumor response. As shown below, five out of six patients with multiple subtypes of sarcoma experienced reductions in tumor volume and four of these five patients achieved confirmed partial responses (observed response for at least two consecutive time points). We are confirming this observed correlation and the TmPS cut-off of 70% or more in our ongoing Phase 2 studies.

Best response for sarcoma patients with confirmed TmPS of 70% or above administered 1.8mg/kg Q3W or 2Q3W

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One patient with leiomyosarcoma who had experienced failure of multiple prior treatments had a 37% reduction in tumor volume while receiving 1.8 mg/kg Q3W BA3011, as shown in the figure below. After over a year of treatment with BA3011, the residual tumor mass was reduced to a sufficient degree, enabling a successful surgical resection.

CT scan of leiomyosarcoma patient after BA3011 treatment

CT scan of a 70 mm leiomyosarcoma tumor which decreased in size with BA3011 treatment (confirmed PR) and after a year of therapy was removed by surgical resection.

Of the four patients with NSCLC enrolled in our Phase 1 clinical trial, two were AXL negative with a TmPS of 0%, one was not evaluable, and one was AXL positive with a TmPS of 80%. Prior to BA3011 treatment, the AXL positive patient with stage IV adenocarcinoma experienced failure from prior treatments, including treatment with a PD-1 inhibitor (pembrolizumab). As shown below, this patient experienced a partial response characterized by approximately 70% tumor shrinkage with BA3011 delivered at 1.8 mg/kg on days 1 and 8, every three weeks (2Q3W).

One of four NSCLC patients enrolled in Phase 1 BA3011 trial was the only patient with an AXL TmPS >=70%.and had a partial response.

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Safety

Mecbotamab vedotin was generally well-tolerated. We have not observed adverse events that appear to be related to on-target injury of normal, AXL-expressing tissues. We believe that toxicities observed at the maximally tolerated dose and lower were manageable and off-target effects of free MMAE were consistent with those described with other marketed MMAE-based ADCs. The estimated half-life of mecbotamab vedotin was approximately four days, which is twice the 1.9-day half-life reported for enapotamab vedotin, a non-CAB ADC targeting AXL. We believe this difference may be due to the decreased TMDD resulting from the lack of binding of mecbotamab vedotin to AXL outside of tumors.

In the Phase 1 trial, the Grade 3 or greater adverse events, or AEs, or serious adverse events, or SAEs, deemed related to mecbotamab vedotin were consistent with MMAE-based toxicity and could generally be classified as either reversible myelosuppression (AEs: neutropenia and anemia), transient liver enzyme elevations (AEs: AST/ALT increased) or metabolic disturbances (AEs: hyponatremia, hypokalemia). There were 24 (37.5%) subjects who reported a serious TEAE (SAE), and in 7 (10.9%) of those subjects that serious TEAE was considered related to treatment.. At the anticipated Phase 2 exposure level (1.8mg/kg Q2W), BA3011 was generally well-tolerated. For 1.8 mg 1Q3W there were 2 subjects (22% ; 2/9) who experienced treatment related Grade 3-4 AEs (, vomiting and neutrophil count decrease);for 1.8 mg 2Q3W there were 13 subjects (52%;13/25) who experienced treatment related Grade 3-4 AEs ( neutropenia (x3), hypokalemia (x3), , anemia, nausea, febrile neutropenia, fatigue, lymphocyte count decrease, blood bilirubin increase and lipase increase)For 1.8mg/kg Q3W, there were 4 subjects who experienced an SAE (44%; neutrophil count decrease, intestinal obstruction, lower limb fracture, and sepsis caused by E. coli); for 1.8mg/kg 2Q3W there were11 subjects who experienced an SAE (44%; nausea, pyrexia, lipase increased, hyponatremia, syncope, corneal perforation, hypercalcaemia, gastritis, pneumonia, hepatic encephalopathy, and edema of lower extremities) and of these SAEs, fewer were deemed related to treatment by the investigator (for 1.8mg/kg Q3W: 1 SAE (11.1%; neutrophil count decrease); 1.8mg/kg 2Q3W: 3 SAEs (12%; hepatic encephalopathy, lipase increased and gastritis). For 1.8mg/kg 2Q3W, 2 related AEs led to treatment discontinuation (Grade 2 peripheral neuropathy and Grade 2 fatigue). No AEs led to treatment discontinuation for 1.8mg/kg Q3W.

Overview of adverse events in mecbotamab vedotin (BA3011) Phase 1 trial for patients administered 1.8mg/kg Q3W (d1) or 2Q3W (d1,8) (safety population)

Any related serious AEs2 1 (11%) 3 (12%)

AEs leading to death 1 (11%) 0

Related AEs leading to death2 0 0

Related AEs leading to treatment discontinuation2 0 2 (8%)

CTCAE: Common Terminology Criteria for Adverse Events. The NCI Common Terminology Criteria for Adverse Events is a descriptive terminology which is utilized for AE reporting. A grading (severity) scale is provided for each AE term.

As assessed by the investigator. Missing responses are counted as related.

We believe that our CAB AXL ADC, mecbotamab vedotin, compares favorably to enapotamab vedotin, a non-CAB AXL ADC with regard to safety and key pharmacokinetic properties. Comparing across the two Phase 1 trials, both ADCs: (i) were designed to deliver 4 MMAE molecules per antibody (DAR4 loading), (ii) employed similar ADC doses and (iii) enrolled comparable patients with advanced cancer who had experienced treatment failure of prior regimens (see figure below). As a key difference, mecbotamab vedotin was designed to only bind to the AXL target expressed by tumor while enapotamab vedotin would be anticipated to bind to the AXL target throughout the body.

Notably, the estimated half-life of mecbotamab vedotin was approximately four days, which is twice the 1.9-day half-life reported for enapotamab vedotin. We believe this difference may be due to the decreased TMDD resulting from the lack of binding of mecbotamab vedotin to AXL outside of tumors. With respect to reported toxicity comparisons, constipation is believed to be an on-target delivery of MMAE to normal gut tissues that express the AXL target. Despite including a risk mitigation plan in enapotamab vedotin’s trial protocol (a prophylactic stool-softener medication in all patients), the clinical data presented at ASCO 2019 showed that AEs of constipation Grade 1-2 were reported in 49% of the patients and Grade 3-4 in 9% of patients. The rate of constipation reported with mecbotamab vedotin (26% Grade 1-2 and 43% Grade 3-4) was approximately 2 or 3-fold lower for Grade 1-2 and Grade 3-4 TAEs, respectively. We believe the lower observed rates of constipation observed among the mecbotamab vedotin treated patients were typical for an advanced cancer population who commonly receive pain medications that can also cause constipation. While supportive of a reduced toxicity benefit from CAB technology, these comparisons are derived from cross-trial analyses, and would not be included as part of our labeling.

Adverse events, such as peripheral neuropathy, are commonly seen with other ADCs and may be due to free circulating MMAE. Clinical data presented at ASCO 2019 for enapotamab vedotin showed that 38% of the patients had peripheral neuropathy (all Grades) with 2 patients reporting Grade 3-4 AEs. The rate of peripheral neuropathy (all Grade; no Grade 3-4) reported for mecbotamab vedotin (28%) was meaningfully lower than the rate reported with enapotamab vedotin and is believed to be due to the advantageous pharmacokinetic characteristics of a CAB ADC vs. a non-CAB ADC.

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At a dose of 2.4 mg/kg Q3W mecbotamab vedotin, two patients experienced dose-limiting toxicities: one with Grade 3 febrile neutropenia and the other with Grade 4 hyperglycemia. Dosing continued at the 2.4 mg/kg with prophylactic administration of pegfilgrastim without any additional dose limiting toxicities. Dosing above 2.4 mg/kg was terminated due to one patient who experienced Grade 4 febrile neutropenia and cardio-respiratory arrest at 3 mg/kg likely related to delayed hepatic and renal excretion of MMAE.

Phase 2 clinical trial

We are conducting a Phase 2, potentially registration-enabling trial with mecbotamab vedotin, enrolling 90 soft-tissue and bone sarcoma patients, with interim analysis anticipated in early 2022 and the complete data set expected in 2023. In addition, we have initiated a Phase 2 trial in NSCLC with mecbotamab vedotin as monotherapy and in combination with an anti-PD-1 agent in patients who have experienced prior disease progression on a PD-1/L1 inhibitor and have a TmPS of 1% or greater. The FDA has reviewed the trial designs, but has not opined on whether Phase 2 clinical trials will be sufficient to support regulatory approval. However, we intend to ask the FDA to consider this further at the planned interim data review point or points for each clinical trial. We cannot assure you that the FDA will agree that such data will be sufficient to support approval. A summary of our clinical development plan for mecbotamab vedotin is below.

Additionally, a multi-center investigator-initiated trial of mecbotamab vedotin led by the Canadian Cancer Trials Group, or CCTG, in platinum-resistant ovarian cancer patients has begun enrollment.

Clinical development plan for mecbotamab vedotin (BA3011), which includes multiple Phase 2 trials

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Sarcoma Phase 2 trial:

This Phase 2 trial is an open-label trial to evaluate the efficacy and safety of mecbotamab vedotin alone and in combination with an anti-PD-1 agent in adult and adolescent patients with AXL-expressing TmPS >= 70%, and advanced, refractory sarcoma who have measurable disease by RECIST Version 1.1 criteria and have documented progression according to RECIST Version 1.1 criteria within the six months prior to enrollment. In addition, there is an exploratory cohort of patients with AXL-expressing TmPS of 50-69%. To enroll, patients either had to be ineligible for chemotherapy or had received at least one regimen containing anthracycline and a maximum of three previous lines of systemic therapy for metastatic disease (no more than two lines of combination regimens), including pazopanib, trabectedin, eribulin mesylate or tazemetostat, if applicable, per regional prescribing information. Patients who met the enrollment criteria were assigned to receive either mecbotamab vedotin alone or in combination with an anti-PD-1 agent (for patients 18 years old and above: 240 mg every two weeks (Q2W); for patients 12-17 years old: 3 mg/kg Q2W IV infusion). Patients with tumors showing B-cell infiltration (per immunohistochemistry, or IHC, assay) are preferentially assigned to receive mecbotamab vedotin in combination with an anti-PD-1 agent. Based on data from the Phase 1 part of the trial, the dose of mecbotamab vedotin for Phase 2 is 1.8 mg/kg Q2W.

In Part 1 of this Phase 2 trial, seven cohorts of approximately 10 patients per sarcoma subtype in the monotherapy arm are enrolled:

Soft tissue sarcoma:

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Leiomyosarcoma

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Synovial sarcoma

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Liposarcoma

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All other soft tissue sarcomas, except gastro intestinal stromal tumors, dermatofibrosarcoma protuberans, inflammatory myofibroblastic tumor and malignant mesothelioma

Bone sarcoma:

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Osteosarcoma

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Ewing sarcoma

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Other bone sarcomas, including undifferentiated pleomorphic sarcoma, malignant fibrous histiocytoma, and chondrosarcoma

In addition, two combination cohorts (mecbotamab vedotin with an anti-PD-1 agent) are enrolling up to approximately 10 patients each, of any sarcoma subtype. Patients in one arm will have a tumor showing B-cell infiltration and patients in the other arm will not.

Tumor assessment occurs approximately every 6 weeks from cycle 1 day 1 of treatment, or C1D1, until 12 weeks, and every 8 weeks thereafter. Pharmacokinetic, pharmacodynamic, immunogenicity and biomarker assessments will also be performed at various time points.

An interim analysis is conducted for each subtype or treatment after approximately 10 patients in the subtype or treatment have been followed for at least 12 weeks after the initiation of treatment. Following interim analysis, accrual to the subtype or to a treatment (i.e., mecbotamab vedotin alone or in combination with an anti-PD-1 agent) may proceed to Part 2 of the trial if one or more patients with a response (i.e., confirmed or unconfirmed complete response or partial response) or progression-free rate at 12 weeks is >= 40%. Several cohorts already have qualified to proceed to this Part 2 of the trial. Approximately 150 additional patients may be enrolled for sarcoma subtypes that meet the threshold. The accrual of patients to a specific subtype or to one or both treatment regimen(s) (i.e., mecbotamab vedotin alone and/or mecbotamab vedotin in combination with an anti-PD-1 agent) can be put on hold at any time based on evaluation of available data or by the Independent Data Monitoring Committee, or IDMC, at any time upon review of safety data. Treatment for all enrolled patients will continue until disease progression, unacceptable toxicity, or other reason for treatment discontinuation.

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NSCLC Phase 2 trial:

This is a multi-center, open-label, Phase 2 study designed to evaluate the efficacy and safety of mecbotamab vedotin alone and in combination with an anti-PD-1 agent in patients with AXL-expressing TmPS >=1%, metastatic NSCLC who have measurable disease by RECIST v1.1 criteria and have documented progression according to RECIST v1.1 criteria within the 6 months prior to enrollment. To enroll, patients must have prior disease progression on a PD-1/L-1 inhibitor (either monotherapy or in combination with another therapy such as ipilimumab). Patients with EGFR or anaplastic lymphoma kinase (ALK) genomic tumor aberrations should have had disease progression on FDA-approved therapy for these aberrations.

Patients who meet enrollment criteria will be assigned to receive either mecbotamab vedotin alone or in combination with an anti-PD-1 agent (240 mg every 2 weeks (Q2W)). For the first 20 patients (Part 1), treatment assignment will be determined by the sponsor and the medical monitor based on the patient’s prior experience with PD-1/L1 treatment. To be eligible for the PD-1 combination arm, patients must have acceptably tolerated prior PD-1/L1 treatment. In Part 2, up to approximately 200 additional patients may be enrolled depending on observed efficacy at interim analysis. If both monotherapy and combination therapy are further pursued post interim analysis, patients that have acceptably tolerated prior PD-1/L1 treatment will be randomized 1:1 to receive either mecbotamab vedotin alone or mecbotamab vedotin in combination with an anti-PD-1 agent. Randomization will be stratified according to histology (squamous vs. non-squamous) and the number of prior systemic regimens (< 2 vs. < 3). Patients that have not acceptably tolerated prior PD-1/L1 treatment will be assigned to the mecbotamab vedotin monotherapy arm of the study. Based on data from the Phase 1 study, the dose of mecbotamab vedotin for Phase 2 is 1.8 mg/kg Q2W. A dose reduction to 1.5 mg/kg Q2W may be implemented if deemed warranted by the IDMC.

Tumor assessment will occur approximately every 6 weeks from C1D1 until 12 weeks, and every 8 weeks thereafter. Pharmacokinetic, pharmacodynamic, immunogenicity and biomarker assessments will be performed at various time points.

An interim analysis will be conducted after approximately 20 patients (e.g. 10 patients on mecbotamab vedotin monotherapy arm and 10 patients in the mecbotamab vedotin and anti-PD-1 agent combination arm) have the potential to be followed for at least 12 weeks after the initiation of investigational product. Following interim analysis, accrual to a treatment (i.e., mecbotamab vedotin alone or in combination with an anti-PD-1 agent) may be put on hold if the number of patients with a response (i.e., confirmed or unconfirmed complete response, partial response or stable disease) are below a pre-defined threshold. Depending on observed efficacy at the interim analysis, additional NSCLC patients may be enrolled for a total of up to approximately 200 patients (100 patients in each of the 2 treatment groups) with AXL-expressing, metastatic NSCLC. The accrual of patients to one or both treatment regimen(s) (i.e., mecbotamab vedotin alone and/or mecbotamab vedotin in combination with an anti-PD-1 agent) can be put on hold at any time based on evaluation of available data. Treatment for all enrolled patients will continue until disease progression, unacceptable toxicity, or other reason for treatment discontinuation.

Ozuriftamab Vedotin (BA3021)

Phase 1 clinical trial

We have completed the dose escalation part of a Phase 1 clinical trial of ozuriftamab vedotin in patients with locally advanced unresectable or metastatic solid tumors including NSCLC and melanoma, who were refractory or resistant to standard therapies. As shown below, cohorts were treated with doses of ozuriftamab vedotin ranging from 0.3 mg/kg to 3.3 mg/kg once every three weeks (Q3W) or doses ranging from 1.5 mg/kg to 1.8 mg/kg twice every three weeks on days 1 and 8 (2Q3W). In Phase 1, 60 subjects were enrolled into 9 dose cohorts: 0.3 mg/kg Q3W (1 subject), 0.6 mg/kg Q3W (1 subject), 1.2 mg/kg Q3W (1 subject), 1.8 mg/kg Q3W (3 subjects), 2.4 mg/kg Q3W (16 subjects), 3.0 mg/kg Q3W (19 subject), 3.3 mg/kg Q3W (5 subjects), 1.2 mg/kg 2Q3W (3 subjects), 1.5 mg/kg 2Q3W (3 subjects), and 1.8 mg/kg 2Q3W (8 subjects). The solid tumor types enrolled in this study were: soft tissue sarcoma (40 subjects), NSCLC (6 subjects), melanoma (2 subjects), pancreatic (2 subjects), non-TNBC (2 subjects), TNBC (2 subjects), colorectal, GIST, urachus, ampulla of vatter, rectal carcinoid and head and neck (1 subject each).

The main goal of this trial was to evaluate the safety, tolerability, antitumor activity, pharmacokinetic and immunogenicity of ozuriftamab vedotin in solid tumor patients. Based upon the overall safety and response rates, the recommended Phase 2 dose is 1.8 mg/kg delivered every two weeks (Q2W). The trial’s objectives were the following:

Primary

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To define the safety profile, including DLT, and determine the MTD and/or RP2D and other safety parameters for ozuriftamab vedotin in patients with advanced solid tumors.

Secondary

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To assess antitumor activity of ozuriftamab vedotin including endpoints such as OR, DoR, disease control, time-to-response, and ORR, according to RECIST Version 1.1.

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To assess the pharmacokinetics of ozuriftamab vedotin.

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To evaluate the immunogenicity of ozuriftamab vedotin.

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Antitumor activity

We evaluated OR, one of our secondary endpoints, as shown in the figure below. At various dose levels, treatment with ozuriftamab vedotin has resulted in a complete response in one patient with metastatic melanoma. This patient remains progression free more than two years after initiating therapy. In addition, two patients with NSCLC (~31% and ~49% tumor reduction) and one patient with advanced head and neck cancer (~54% tumor reduction) were partial responses.

Of the six NSCLC patients enrolled in the dose escalation phase, two patients achieved a durable partial response (duration of response is one of our secondary endpoints) and a third experienced tumor reduction to a lesser degree (change from baseline in tumor size is one of our secondary endpoints, as shown below). Similar to the observed correlation of antitumor activity with higher levels of tumoral membrane AXL expression, as shown below, the two NSCLC patients with partial responses to ozuriftamab vedotin had ROR2 TmPS of at least 70%. We were not able to characterize ROR2 TmPS for the third patient who also experienced tumor shrinkage. Another patient with late stage NSCLC and bone metastases and a ROR2 TmPS of 100%, treated with a suboptimal dose of ozuriftamab vedotin (1.2mg/kg 2Q3W), experienced tumor shrinkage prior to progression of their metastatic bone lesions. All NSCLC patients who enrolled in this trial had previously been treated with PD-1 therapy.

NSCLC patients enrolled in ozuriftamab vedotin (BA3021) Phase 1 trial by ROR2 TmPS. Tumor membrane ROR2 expression was associated with antitumor response in two of the five NSCLC patients with evaluable ROR2 TmPS

Two metastatic melanoma patients were enrolled in the initial part of the trial, as shown below. The ROR2 positive patient achieved a significant durable partial response (duration of response is one of our secondary endpoints). Furthermore, this patient, who had previously experienced failure of both nivolumab and nivolumab plus ipilimumab, achieved complete response and remains without disease progression more than two years after initiating ozuriftamab vedotin.

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All evaluable metastatic melanoma patients enrolled in ozuriftamab vedotin (BA3021) Phase 1 trial by ROR2 TmPS

The metastatic melanoma patient who achieved a complete response experienced clearance of metastatic lung lesions. Illustrated below is one of the two lung lesions that cleared. Moreover, a pretreatment biopsy of an involved, abnormally enlarged cervical lymph node showed active melanoma. Subsequently, an on-treatment biopsy of the same node demonstrated no evidence of melanoma.

Clearance of lung lesions in metastatic melanoma patient who received ozuriftamab vedotin (BA3021)

Pre-treatment and post-treatment CT scans of one of two lung lesions that were both cleared in a metastatic melanoma patient who received ozuriftamab vedotin (BA3021)

In addition, one head and neck cancer patient achieved a partial response with a 54% reduction in tumor size.

Safety

Similar to mecbotamab vedotin, ozuriftamab vedotin was generally well-tolerated. We have not observed adverse events that appear to be related to on-target injury of normal, ROR2-expressing tissues. We believe that reported toxicities were consistent with off-target effects of free MMAE consistent with those described with other marketed MMAE-based ADCs.

In the Phase 1 trial, the Grade 3 or greater AEs or SAEs deemed related to ozuriftamab vedotin were consistent with MMAE-based toxicity and could generally be classified as either reversible myelosuppression (AEs: neutropenia, anemia), transient liver enzyme elevations (AEs: AST/ALT increased) or metabolic disturbances (AEs: hyponatremia, hypokalemia). There were a total of 24 (40%) patients who experienced an SAE, 12 (20%) of which were serious TEAEs that were considered related to treatment. At the Phase 2 exposure levels (1.8mg/kg Q2W), ozuriftamab vedotin was generally well tolerated. For 1.8 mg 1Q3W33.3% (1/3) of subjects experienced treatment-related Grade 3-4 AEs (anemia) and 0% had an SAEs (0); for 1.8 mg 2Q3W:62% (5/8) of subjects experienced treatment-related Grade 3-4 AEs (fatigue, hyponatremia, multiorgan failure, peripheral neuropathy and hyperglycemia) and 50% experienced an SAEs (4/8%; infected biloma, pyrexia, multiorgan failure and hyperglycemia). Three of these SAEs, were deemed related to treatment by the investigator (37.5%; pyrexia, multiorgan failure and hyperglycemia). For 1.8mg/kg 2Q3W, one subject (12.5%) experienced a TEAE that led to death and was considered potentially related to study treatment.

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The subject was a 47-year-old female with a history of metastatic TNBC previously treated with bilateral mastectomy, radiotherapy, doxorubicin + cyclophosphamide + paclitaxel, capecitabine, nab-paclitaxel, atezolizumab, and sacituzumab govitecan. According to the investigator, no clear etiology of the subject’s signs and symptoms was identified. The investigator was unable to identify another clear-cut cause of the subject’s medical deterioration; however, as these events were temporally following her infusion of study drug, the investigator was unable to rule out that the events were not related. Given the widespread metastatic tumor and that the measured free MMAE levels were within the range observed in other patients treated at the same dose level, the Investigator could not conclude these events were definitely related to the study drug.

For 1.8mg/kg Q3W, none of the related AEs or SAEs led to treatment discontinuation. For 1.8mg/kg 2Q3W, one (12.5%) of the related AEs or SAEs (multiorgan failure) led to treatment discontinuation.

Overview of adverse events in ozuriftamab vedotin (BA3021) Phase 1 trial for patients administered 1.8mg/kg Q3W (d1) or 2Q3W (d1,8) (safety population)

Related AEs with CTCAE Grade 3 or 41 1 (33%) 5 (62%)

Any related serious AEs1 0 3 (37.5%)

Related AEs leading to death1 0 1 (12.5%)

Related AEs leading to treatment discontinuation1 0 1 (12.5%)

As assessed by the investigator. Missing responses are counted as related.

At a dose of 3mg/kg Q3W, two patients experienced dose-limiting toxicities: one with Grade 3 dyspnea (self-resolved without intervention) and the other with Grade 4 febrile neutropenia (in a subject that did not receive prophylactic pegfilgrastim as directed) which resolved on day 2 of hospitalization.

Clinical development plans

We are conducting a potentially registration-enabling Phase 2 trial for ozuriftamab vedotin monotherapy or in combination with a PD-1 inhibitor in melanoma and NSCLC patients that have experienced prior disease progression on a PD1/L1 inhibitor and have a ROR2 TmPS of 1% or more. However, we have not discussed with the FDA whether the Phase 2 clinical trials will be sufficient to support regulatory approval and we cannot assure you that the FDA will agree that such data will be sufficient to support approval. We intend to perform an interim analysis when up to approximately 20 evaluable patients in each indication have the potential to be followed for at least 12 weeks, which we expect to occur in the second half of 2022. Results from these analyses will drive the decision to expand enrollment in each indication to up to 200 patients, and we expect final data in 2024.

We have initiated a Phase 2 clinical trial for ozuriftamab vedotin in head and neck squamous cell carcinoma (SCCHN). In the dose escalation part of the ozuriftamab vedotin Phase 2 trial, we observed a partial response (PR) in one ROR2 positive SCCHN patient (TmPS=16%) who was refractory to four prior lines of therapy including treatment with cetuximab and pembrolizumab. The Phase 2 trial studying SCCHN will enroll 40 patients who had experienced prior failure of PD-1 therapy. Dosing in the first half of 2022, the patients will receive ozuriftamab vedotin monotherapy. Additionally, a multi-center investigator-initiated trial of ozuriftamab vedotin led by CCTG in platinum-resistant ovarian cancer patients has begun enrollment.

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Phase 2 clinical development plan for ozuriftamab vedotin (BA3021) for multiple indications

NSCLC and Melanoma Phase 2 trial

This Phase 2 trial is an open-label trial to evaluate the efficacy and safety of ozuriftamab vedotin alone and in combination with an anti-PD-1 agent in patients with ROR2-expressing (TmPS >1%) and metastatic NSCLC or melanoma who have measurable disease by RECIST Version 1.1 criteria and have documented progression according to RECIST v1.1 criteria within the 6 months prior to enrollment.

Enrolled patients are assigned to receive either ozuriftamab vedotin alone or in combination with an anti-PD-1 agent (240 mg every 2 weeks (Q2W)). For the first 20 patients (10 patients in each of the 2 indications) (Part 1), treatment assignment is determined by the sponsor and the medical monitor based on the patient’s prior experience with PD-1/L1 treatment. To be eligible for the PD-1 combination arm, patients must have acceptably tolerated prior PD-1/L1 treatment. In Part 2, up to approximately 200 additional patients per indication may be enrolled depending on observed efficacy at interim analysis. For each indication, if both monotherapy and combination therapy are further pursued post interim analysis, patients that have acceptably tolerated prior PD-1/L1 treatment will be randomized 1:1 to receive either ozuriftamab vedotin alone or ozuriftamab vedotin in combination with an anti-PD-1 agent. For the NSCLC indication, randomization will be stratified according to histology (squamous vs. non-squamous) and the number of prior systemic regimens (< 2 vs. < 3). For the melanoma indication, randomization will be stratified according to Eastern Cooperative Oncology Group performance status 0 vs. 1 and the number of prior systemic regimens (< 2 vs. < 3). For both indications, patients that have not acceptably tolerated prior PD-1/L1 treatment will be assigned to the ozuriftamab vedotin monotherapy arm of the study. Based on data from the Phase 1 part of the study, the dose of ozuriftamab vedotin for Phase 2 is 1.8 mg/kg Q2W. A dose reduction to 1.5 mg/kg Q2W may be implemented if deemed warranted by the IDMC.

For each indication, an interim analysis will be conducted after up to approximately 20 patients (e.g.10 patients in each treatment group) have the potential to be followed for at least 12 weeks after the initiation of investigational product. Following interim analysis, accrual to a treatment (i.e., ozuriftamab vedotin alone or in combination with an anti-PD-1 agent) may be put on hold if the number of patients with a response (i.e., confirmed or unconfirmed complete response or partial response) are below a pre-defined threshold. Depending on observed efficacy at the interim analysis, additional NSCLC and/or melanoma patients may be enrolled for a total of up to approximately 200 patients (100 patients in each of the 2 treatment groups) with ROR2-expressing, metastatic NSCLC and a total of up to approximately 200 patients with ROR2-expressing, metastatic melanoma. The accrual of patients to a treatment regimen(s) (i.e., ozuriftamab vedotin alone and/or ozuriftamab vedotin in combination with an anti-PD-1 agent) can be put on hold by the sponsor at any time based on evaluation of available data or by the IDMC at any time upon review of safety data. Treatment for all enrolled patients will continue until disease progression, unacceptable toxicity or other reason for treatment discontinuation.

BA3071

Preclinical studies

In a mouse colon adenocarcinoma, or MC38, xenograft model in which the human CTLA-4 gene had been introduced, we found that BA3071 had similar antitumor efficacy as a traditional anti-CTLA-4 antibody that is an analog of ipilimumab, or an Ipi-analog. As shown below, BA3071 led to equivalent tumor regression to ipilimumab out of eight treated mice and in two instances we saw a complete response, or no detectable tumor remaining.

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Efficacy in human CTLA-4 engineered mouse model

BA3071 had potent antitumor activity and led to two complete responses in an MC38 tumor cell line model in mice containing the human CTLA-4 gene.

As shown below, examination of the immune cell composition of treated tumors found that those treated with BA3071 antibodies had increased numbers of CD8 T cells than IgG control mice. CD8 T cells are effector cells that mediate tumor cell killing. These levels were similar to those observed in tumors treated with the ipilimumab analog.

Tumor infiltrating lymphocytes of human CTLA-4 engineered mice

BA3071 functioned similar to ipilimumab in stimulating CD8 T cells in tumors

In contrast, BA3071 antibodies did not lead to changes in the T cell subsets in peripheral blood, as set forth in the figure below. The percentage of CD4 effector cells in CAB-treated mice were similar to those observed with the controls. The percentage of CD4 effector cells in ipilimumab analog-treated mice more than doubled, consistent with systemic inhibition of the CTLA-4 checkpoint. We believe that the observed tumor-restricted activity of BA3071 will be associated with fewer systemic target-based toxicities.

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Normal peripheral blood lymphocytes of human CTLA-4 engineered mice

Unlike the ipilimumab analog, BA3071 did not lead to stimulation of T cells in peripheral blood

Safety

Our preclinical toxicity study of BA3071 in non-human primates compares its safety profile to that of ipilimumab. Specifically, as shown in the figure below, we examined the gastrointestinal toxicities associated with combination therapy with nivolumab. To examine toxicities, these animals were dosed with high levels of both agents. Dosing of non-human primates with BA3071 in combination with nivolumab was associated with fewer occurrences of events associated with gastrointestinal toxicity than the combination of ipilimumab and nivolumab. These animals received 20 mg/kg nivolumab, which represents 12 times the human dose, and either 15 mg/kg of ipilimumab or 15 mg/kg of BA3071, which we estimate is 45 to 60 times the current human dose. There were 33 gastrointestinal events such as liquid feces, non-formed feces and other gastrointestinal symptoms in the ipilimumab plus nivolumab combination across 29 days and five animals. There was only a single case of liquid feces in one animal on one day in the BA3071 plus nivolumab treatment group.

Toxicity study of BA3071 comparing its safety profile to ipilimumab

Treatment of non-human primates with a combination of BA3071 and nivolumab resulted in fewer gastrointestinal adverse events than treatment with ipilimumab and nivolumab.

These results were consistent with the preclinical results shown two and three figures above that demonstrated that CAB anti-CTLA-4 antibodies had insignificant target-based activity outside of tumors. We believe that this non-human primate study provides support for assessing the safety and tolerability of BA3071 in clinical trials. We anticipate that BA3071 will have a wider therapeutic window than ipilimumab, which may enable it to be better tolerated when used in combination with an anti-PD-1 antibody with the potential to further increase efficacy by allowing administration of higher doses and longer duration of treatment.

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Clinical Development Plans

We initiated a Phase 1 dose-escalation trial of BA3071 in advanced solid tumor patients in 2021 and expect our first enrolled patient in the first half of 2022. We expect this trial will examine the safety and tolerability of BA3071 at doses ranging from 7mg Q3W to 700mg Q3W (equivalent to 10mg/kg of ipilimumab) as monotherapy and in combination with an anti-PD-1 antibody.

BA3361: CAB-Nectin-4-ADC

Nectin-4 is widely expressed and has adhesive roles in normal tissues. The CAB selectivity to target Nectin-4 in the tumor microenvironment is critical in providing the necessary safety to deliver the drug conjugate selectively to cancerous tissue. A clinical candidate was selected from a set of lead molecules that were characterized by multiple assays including functional assays. In addition to the assay performance, the lead candidate demonstrated high binding under tumor conditions and little to no binding under normal physiological conditions. The candidate is in cell line development and a new, highly stable linker was successfully tested in vitro and in vivo.

BA3151: CAB-B7-H4-ADC

B7-H4 is highly expressed on numerous tumor tissues and the expression level directly correlates with adverse clinical and pathological features. A set of lead molecules were characterized in vitro including functional assays and in vivo efficacy models. Selection of the lead candidate was based on criteria including high binding activity under tumor conditions and low binding activity under normal physiological conditions.

Bispecific candidates

BA3182: EpCAM x CD3

We have developed and conducted preclinical studies of an EpCAM x CD3 bispecific candidate, BA3182, with an EpCAM binding domain and a CD3 binding domain , both binding domains with CAB activity (Dual-CAB). Dosage was 1mg per kilogram twice per week in mice, which is roughly equivalent to 0.25 mg per kilogram in non-human primates. As shown below, we found this construct had a potent antitumor activity in a HCT116, a human colorectal carcinoma cell line, xenograft model in mice with a humanized immune system.

Safety

While there was no observable difference in antitumor efficacy between antibodies with CAB domains and those with conventional non-CAB antigen-binding domains, a conventional EpCAM x CD3 bispecific antibody led to a much higher level of undesirable systemic immune activation than the CAB EpCAM x CAB CD3 bispecific antibody in non-human primates.

BA3142: B7-H3 x CD3

Our second bispecific product candidate, BA3142, is a dual-CAB T-cell engager targeting B7-H3, a protein expressed on many solid tumors. The lead molecule was characterized by multiple assays including functional assays, and by efficacy studies in a xenograft model of human pharyngeal cancer using mice with a humanized immune system. The lead molecule showed antitumor activity comparable to a non-CAB antibody, while demonstrating lower binding and functional activity under physiological conditions, as expected for a CAB bispecific antibody.

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BA3311: EGFR x CD3

Targeting EGFR with a CAB bispecific antibody is expected to provide benefit since the target is widely expressed in healthy tissue, such as skin, which would otherwise result in on-target, off-tumor toxicity if targeted by a non-CAB antibody. A set of lead molecules were characterized by multiple assays including functional assays and all demonstrated high activity at acidic pH with little to no activity under physiological conditions. Studies, using a colorectal cancer model to select the clinical lead, are in progress and are expected to be completed in the first quarter of 2022.

Clinical Development Plans

We believe that our CAB technology opens up the opportunity for the creation of a broad set of bispecific product candidates with antitumor potential. Through these CAB bispecific antibodies, we believe we can activate T cells directly in tumors using CAB domains targeting tumor-specific antigens. Our CAB bispecific antibodies are not expected to lead to systemic immune activation, which we believe may allow for increased efficacy through more potent T cell activation, higher doses or administration in combination with other immuno-oncology therapies, such as checkpoint inhibitors.

We have shown in preclinical experiments that our CAB bispecific molecules meet or exceed the activity of conventional bispecifics and reduce systemic activation of potentially fatal immune responses. We have advanced two CAB bispecific antibody product candidates, BA3182 (EpCAM x CD3) and BA3142 (B7H3 x CD3) into preclinical studies, and BA3311 (EGFR x CD3) is a current subject of IND enabling studies. We believe that our CAB technology opens up the opportunity for the creation of a broad set of bispecific product candidates with antitumor potential. Through these CAB bispecific antibodies, we believe we can activate T cells directly in tumors using CAB domains targeting tumor-specific antigens. Our CAB bispecific antibodies are not expected to lead to systemic immune activation, which we believe may allow for increased efficacy through more potent T cell activation, higher doses or administration in combination with other immuno-oncology therapies, such as checkpoint inhibitors.

Competition

The biotechnology and biopharmaceutical industries, including the oncology subsector, are characterized by rapid evolution of technologies, competition and strong defense of intellectual property. Any product candidates that we successfully develop and commercialize may have to compete with existing therapies and new therapies that may become available in the future. While we believe that our patented technology platform, intellectual property, know-how and scientific expertise in the field of biologics and immuno-oncology provide us with certain competitive advantages, including the ability of our product candidates to be active under conditions representative of the tumor microenvironment and not in normal cell conditions, we face potential competition from a wide variety of institutions, including large biopharmaceutical companies, specialty biotechnology companies, academic research departments and public and private research institutions. In immuno-oncology, we face substantial competition in the form of competing approaches to targeted antibody therapy in general, as well as competing treatments for the same types of cancer that we would plan to address with our pipeline of product candidates.

There are numerous companies in various stages of clinical development of ADCs, one of the key feature of our product candidates mecbotamab vedotin and ozuriftamab vedotin. Currently, there are multiple approved ADCs and many more in clinical development, the vast majority of which were being developed for the treatment of cancer. Certain other companies are also pursuing antibody therapies in immuno-oncology, such as Seattle Genetics. Although we do not believe competing companies have selective CAB technology, there is a wide array of activity in multiple areas of immune-based cellular therapies for oncology.

In addition, if any of our product candidates are approved in oncology indications such as pancreatic, breast and other cancers, they may compete with existing biologics and small molecule therapies or may be used in combination with existing therapies. There are also many other therapies under development that are intended to treat the same cancers that we are targeting or, although yet to be identified, may target with our CAB technology platform, including through approaches that could prove to be more effective, have fewer side effects, be cheaper to manufacture, be more convenient to administer or have other advantages over any products resulting from our technology.

Many of our competitors, either alone or with strategic partners, have substantially greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Accordingly, our competitors may be more successful than us in obtaining approval for treatments and achieving widespread market acceptance, rendering our treatments obsolete or non-competitive. Accelerated merger and acquisition activity in the biotechnology and biopharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. These companies also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials and acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. The level of generic competition and the availability of reimbursement from government and other third-party payors will also significantly affect the pricing and competitiveness of our products. In addition, our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

Manufacturing

Our CAB antibodies are designed and produced using our patented Comprehensive Integrated Antibody OptimizationTM, or CIAO!TM, technology. The successful evolution, design, and development of a CAB antibody with specific characteristics and qualities require that the

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development and manufacturing processes result in the CAB antibody with the desired properties. We have developed our patented process of CIAO! that integrates into the design process the critical features for subsequent development steps and manufacturing. A key element of the CIAO! process is that all design and development of the antibody is conducted in a mammalian cell line such as Chinese hamster ovary. This host cell is essentially identical to that used for manufacturing the majority of antibodies. This integrated and efficient approach is designed to provide consistency of the folding, glycosylation and other critical features throughout the development and commercialization process for improved activity, selectivity and yields in manufacturing.

We currently do not own or operate any manufacturing facilities. We rely, and expect to continue to rely for the foreseeable future, on third-party contract manufacturing organizations to produce our product candidates for preclinical and clinical testing, as well as for commercial manufacture if our product candidates receive marketing approval. We also expect to rely on third parties for the design, development and manufacture of companion diagnostic tests for our product candidates that require such tests. Furthermore, the raw materials for our product candidates may be sourced, in some cases, from a single-source supplier. As part of the manufacture and design process for our product candidates, we rely on internal, scientific and manufacturing know-how and trade secrets and the know-how and trade secrets of third-party manufacturers. We also contract with additional third parties for the filling, labeling, packaging, storage and distribution of investigational drug products. We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment and personnel while also enabling us to focus our expertise and resources on the development of our product candidates. We maintain agreements with our manufacturers that include confidentiality and intellectual property provisions to protect our proprietary rights related to our product candidates. We have personnel with significant technical, manufacturing, analytical, quality, including current good manufacturing practices, or cGMPs, and project management experience to oversee our third-party manufacturers and to manage manufacturing and quality data and information for regulatory compliance purposes.

Collaborations

We intend to selectively enter into collaborations to maximize the value of our platform and pipeline.

License Agreements

Global Co-Development and Collaboration Agreement with BeiGene, Ltd.

In April 2019, we entered into a Global Co-Development and Collaboration Agreement with BeiGene, Ltd. which, as amended in December 2019 and October 2020, provided for the development, manufacturing and commercialization of BioAtla’s investigational CAB CTLA-4 antibody, BA3071. Under the terms of our BeiGene collaboration, BeiGene was generally responsible for developing the CAB-CTLA-4 antibody and for global regulatory filings and commercialization. Subject to the terms of the agreement, BeiGene held an exclusive license with BioAtla to develop and manufacture the product candidate globally. BeiGene was responsible for all costs of development, manufacturing and commercialization globally. At the time of execution of the BeiGene collaboration, we received a $20 million upfront payment and in December 2019, we received an additional $5 million for the reimbursement of manufacturing costs. We were eligible to receive subsequent development and regulatory milestones globally and commercial milestones in the BeiGene territory, together with tiered royalties on sales worldwide.

On November 19, 2021, we entered into Amendment No. 3 to the Global Co-Development and Collaboration Agreement ( “Amendment No.3”) Under Amendment No. 3, the collaboration agreement was terminated, subject to survival of certain provisions, and BeiGene handed back rights to certain know-how and materials received under the collaboration agreement and we assumed responsibility for the development and commercialization of BA3071, in addition to other standard provisions. As consideration for Amendment No.3, we 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 BA3071.

Exclusive License Agreement with Inversagen, LLC

In March 2019, we entered into an Exclusive License Agreement with Inversagen, LLC, as amended in July 2020. Under the terms of the agreement, we granted Inversagen an exclusive, worldwide, royalty-bearing license under certain patents and know-how controlled by us to develop, make, have made, sell, have sold, offer for sale and import CAB-antibodies for the field of diseases associated with aging, outside of cancer, and an immuno-oncology antibody. We may perform development services under the agreement and will be reimbursed by Inversagen for our costs. Commencing on the first commercial sale of the CAB-antibodies and immuno-oncology antibody subject to the agreement, Inversagen will pay us royalties in the mid-single digits, which represents a variable interest held by us. We have an option for a period of 10 years to acquire the sole and exclusive rights solely to develop, make, have made, use, sell, have sold, offer for sale and import the immuno-oncology antibody in the field worldwide (except for the People’s Republic of China, Hong Kong, Taiwan and Macau) in return for royalty payments in the low-single digits during the applicable royalty term. For both royalties paid to us by Inversagen and, upon exercise of our option, royalties paid to Inversagen by us, the royalty term, on a product-by-product basis, is the period of time commencing on the first commercial sale of such product in a country and ending upon the later to occur of (i) expiration of the last-to-expire valid claim of the patent rights controlled by us or by Inversagen covering the manufacture, use, sale, offer for sale or import of such product, (ii) 10 years following the first commercial sale of such product in such country and (iii) the expiration of regulatory exclusivity for such product in such country. Unless earlier terminated, the agreement continues in effect so long as Inversagen or any of its affiliates, licensees or sublicensees are developing or commercializing the CAB-antibodies or immuno-oncology antibody in the field or we or any of our affiliates, licensees or sublicensees are developing or commercializing the CAB-antibodies or immuno-oncology antibody outside the field. We can also terminate the agreement with 30 days prior written notice for Inversagen’s failure to pay. No payments have been made to date.

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Amended and Restated Exclusive Rights Agreement with Himalaya Therapeutics SEZC

In January 2020, we entered into an Amended and Restated Exclusive Rights Agreement with Himalaya Therapeutics SEZC. Under the terms of the agreement, we granted Himalaya Therapeutics SEZC an exclusive, sublicensable license under certain patents and know-how controlled by us to develop, manufacture, conduct clinical trials, obtain regulatory approval of and commercialize 10 CAB-antibodies for the territory of the People's Republic of China, Macao, Hong Kong and Taiwan and a CAB-HER2-bispecific-antibody worldwide, in each case in the field of the treatment of cancer in humans. We also granted Himalaya Therapeutics SEZC an exclusive, sublicensable license under certain patents and know-how controlled by us to develop, manufacture, conduct clinical trials, obtain regulatory approval of and commercialize an IL-22 non-CAB-antibody worldwide, which option rights are subject to certain co-development plans in the agreement for the joint development and commercialization of the IL-22 non-CAB-antibody by Himalaya Therapeutics SEZC and us. The term of the agreement continues unless terminated by mutual written consent of the parties and also contains customary provisions for termination by either party. Payments to us may include upfront payments, milestone payments and royalties equal to the lower of (i) the low teens of annual net sales and (ii) the mid-twenties of the royalties and other comparable payments received by Himalaya Therapeutics SEZC from third parties, which represent a variable interest held by us, but no payments have been made to date. The royalty term, on a product-by-product and country-by-country basis, is the period of time commencing on the first commercial sale of such product in such country and expiring upon the latest of (i) the expiration of the last valid claim in a patent covering the composition of matter or method of use for such product licensed under the agreement in such country, (ii) the expiration of any other exclusivity protection of such licensed product in such country, and (iii) the 15th anniversary of the date of first commercial sale of such product in such country. We are eligible to receive up to $77.5 million in upfront payments and potential milestones.

Exclusive License Agreement with BioAtla Holdings, LLC

In January 2020, we entered into an Exclusive License Agreement with BioAtla Holdings, LLC, as amended in July 2020. Under the terms of the agreement, we granted BioAtla Holdings an exclusive, worldwide license under certain patents and know-how controlled by us to develop, make, have made, use, sell, have sold, offer for sale and import CAB antibodies for certain targets in the field of Adoptive Cell Therapy, or ACT (CAR-T). Commencing on the first commercial sale of the CAB antibodies subject to the agreement, BioAtla Holdings will pay us royalties in the mid-single digits, which represents a variable interest held by us. We have an option for a period of 10 years to acquire the sole and exclusive rights solely to develop, make, have made, use, sell, have sold, offer for sale and import the ACT preparations and ACT treatments in the ACT field worldwide (except for the People’s Republic of China, Hong Kong, Taiwan and Macau) in return for royalty payments in the low-single digits during the applicable royalty term. For both royalties paid to us by BioAtla Holdings and, upon exercise of our option, royalties paid to BioAtla Holdings by us, the royalty term, on a product-by-product basis, is the period of time commencing on the first commercial sale of such product in a country and ending upon the expiration of the last-to-expire valid claim of the patent rights controlled by us or by BioAtla Holdings covering the manufacture, use, sale, offer for sale or import of such product. We will not owe BioAtla Holdings any milestone or royalty payments unless we exercise our option to acquire the rights to the ACT preparations and ACT treatments. During the term of the agreement, we agreed not to develop, make, have made, use, sell, have sold, offer for sale or import any CAB ACT treatment in the field of ACT. Unless earlier terminated, the agreement continues in effect so long as BioAtla Holdings or any of its affiliates, licensees or sublicensees are developing or commercializing the ACT preparations and treatments in the ACT field or we or any of our affiliates, licensees or sublicensees are developing or commercializing any CAB non-ACT product for any indication outside the ACT field. The agreement may be terminated only by the mutual written agreement of the parties. No payments have been made to date.

In addition, effective January 2020, we entered into a Royalty Sharing Agreement whereby we agreed to share with BioAtla Holdings 50% of the royalties we receive under the license agreement with EXUMA Biotech Corp. (formerly F1 Oncology, Inc.) described below.

Amended and Restated Exclusive License Agreement with EXUMA Biotech Corp

In May 2016, we entered into an Exclusive License Agreement with EXUMA Biotech Corp. (“EXUMA”, formerly F1 Oncology, Inc.) and its affiliates, which, as amended in July 2016 and November 2017 and as amended and restated in November 2019, granted an exclusive, worldwide, sublicensable license under certain patents and know-how controlled by us to develop, manufacture and commercialize four CAB ACT (CAR-T) preparations and treatments for cancer. EXUMA granted us an exclusive, worldwide, royalty free, fully paid-up, sublicensable license under certain patents and know-how controlled by EXUMA and EXUMA’s interest in technology jointly developed under the agreement to develop, manufacture and commercialize non-ACT CAB products for any indication.

EXUMA is obligated to pay us during the royalty term, on a product-by-product basis and country-by-country basis, mid-single-digit royalties based on annual net sales of certain EXUMA ACT products, subject to certain adjustments. The term during which EXUMA is obligated to pay royalties under the agreement with respect to any particular product in any particular country, will begin on the first commercial sale of such product in such country and will end on the date of expiration of the last-to-expire of certain product-related patent rights in such country.

Unless earlier terminated, the agreement continues in effect so long as EXUMA or any of its affiliates, licensees or sublicensees are developing or commercializing any EXUMA products in the ACT field or we or any of our affiliates, licensees or sublicensees are developing or commercializing any CAB products for any indication outside the ACT field. The agreement may be terminated only by the mutual written agreement of the parties.

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In connection with the agreement, we received common and preferred stock of EXUMA. These holdings of EXUMA common and preferred stock were retained by BioAtla Holdings in connection with the LLC Division.

In November 22, 2019, we entered into an Amended and Restated Exclusive License Agreement with EXUMA, which curtailed the rights to certain CAB intellectual property previously licensed to EXUMA in exchange for a one-time, non-refundable, non-creditable license fee of $10,000, but does not change EXUMA’s obligation to pay us royalties on licensed products. In connection with the Amended and Restated Exclusive License Agreement, BioAtla Holdings sold its EXUMA common and preferred holdings back to EXUMA for consideration of $25,000.

CHO-S Cell Line License Agreement with Life Technologies Corporation

On June 28, 2018, we entered into the CHO-S Cell Line License Agreement with Life Technologies Corporation. Under the terms of the agreement, Life Technologies Corporation provides and grants to us a worldwide, non-exclusive, royalty-free, non-sublicensable license to use certain CHO-S cells to make, or have made, recombinant proteins for clinical or commercial purposes and to seek regulatory approval for the sale of such recombinant proteins in exchange for a one-time, non-refundable, non-creditable license fee of $400,000. No royalties are due by us to Life Technologies Corporation under the agreement. Additional specific lots of Life Technologies Corporation’s recombinant proteins may be ordered by us for an additional fee of $50,000 per lot. The term of the agreement continues in perpetuity unless terminated by either party.

Intellectual property

Since inception, we have recognized the value of strong, defensible and relevant intellectual property protection. We seek to protect our technologies and products and the potential market for such technologies and products. To accomplish this goal, we apply for patents covering our processes and compositions. We also apply for patents covering developments and technologies for purpose of preventing third parties from developing competing products. Inventions related to various aspects of our core technologies have already been protected by issued and pending patent applications. As of December 31, 2021, we had 584 patents and patent applications with 319 issued, 8 allowed applications and 257 pending applications.

The objectives of our IP strategy are to increase shareholder value by adequately protecting our platform technologies and compositions of matter, discerning and maximizing the value of our patent portfolio, providing a flexible portfolio that is aligned with our business model and maintaining a cost-effective strategy. We achieve these goals by creating a defensible patent shield, employing most-likely-to-succeed strategies, patenting strategically to reinforce the value of our IP and to minimize costs related to patenting while maximizing value, and by understanding the technology landscape to ensure patentability and freedom to operate. For our CAB products, we act strategically to maximize patent term by timely filing our patent applications.

We recognize that the ability to obtain patent protection and the degree of such protection depends on a number of factors, including the extent of the prior art, the novelty of the invention, the obviousness of the invention and the ability to satisfy the enablement and written description requirements of the patent laws. We file all relevant types of patent applications to protect our intellectual property, including patent applications with claims directed to our processes and products, and applications and uses thereof.

We file our applications with the U.S. Patent and Trademark Office to establish a priority filing date. Generally, we initially file provisional applications. Provisional applications are designed to provide a lower-cost first patent application filing in the United States. Corresponding non-provisional patent applications must be filed not later than 12 months after the filing date of the first provisional application filed for an invention. In some cases, multiple provisional applications have been filed within a 12-month period to capture incremental developments within the 12-month priority period while obtaining an early filing date for each development. The corresponding non-provisional patent applications benefit from the provisional applications(s) since the priority date(s) of the these non-provisional patent applications is/are the earlier provisional application filing date(s), and because the patent term of the finally issued patents are calculated from the later, non-provisional patent application filing dates. This system allows us to obtain an early priority date, add material to the patent application(s) during the priority year, obtain a later start to the patent term and delay prosecution costs, which may save costs in the event that we decide not to pursue examination in an application.

Subsequently, when appropriate, we pursue patent applications in foreign countries. The PCT system for filing international patent applications is used. This system allows a single application to be filed within 12 months of the original priority date of the patent application designating all 153 PCT member states (including countries in South, Central and North America, Africa, Europe, Asia and Australia) in which national/regional patent applications can later be pursued based on the international patent application filed under the PCT. The PCT searching authority performs a patentability search and issues a non-binding patentability opinion which can be used to evaluate the chances of success for future the national/regional patent applications in foreign countries prior to having to incur the filing and translation costs for such applications. At the end of a period of 2 1/2 years from the first priority date of the PCT patent application, separate patent applications can be pursued in any of the 153 PCT member states either by direct national filing or, in some cases, by filing through a regional patent organization such as the European Patent Organization. The PCT system delays expenses, allows a limited evaluation of the chances of success for national/regional patent applications and enables substantial cost savings where applications are abandoned within the first 2 1/2 years of filing.

For all patent applications, we determine the claiming strategy on a case-by-case basis. Advice of counsel and our business model and needs are always considered. We file patents containing claims for protection of all useful applications of our proprietary technologies and any products, as well as all new applications or uses we discover for existing technologies and products, assuming these are strategically valuable. We continuously reassess the number and type of patent applications, as well as the pending and issued patent claims to ensure that maximum patent coverage and value are obtained for our processes, and compositions, given existing patent office rules and regulations. Further, pending patent claims may be modified during patent prosecution to meet our intellectual property and business needs.

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We are attentive to the need to avoid the unauthorized use of patented technology belonging to third parties. We perform non-infringement searches and analyses for our existing technologies and will continue to do so for future commercial processes and products. For our new developments, we regularly perform expert searches and reviews, and monitor patents and patent applications by third-party competitors. Our policy of avoiding patent infringement is diligently executed. To the best of our knowledge as of the date of this prospectus, we have freedom to operate on all of our technologies and product candidates.

The patent positions of biotechnology and biopharmaceutical companies like ours are generally uncertain and involve complex legal, scientific and factual issues. In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and the scope of an issued patent can be reinterpreted or further altered even after patent issuance. Consequently, we may not obtain or maintain adequate patent protection for any of our product candidates or for our technology platform. We cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient proprietary protection from competitors. Any patents that we hold may be challenged, circumvented or invalidated by third parties. For a more comprehensive discussion of the risks related to our patents, please see “Risk factors—Risks related to our intellectual property.”

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application related to the patent. A U.S. patent may be accorded a patent term adjustment, or PTA, under certain circumstances to compensate for delays in granting the patent caused by the United States Patent and Trademark Office. In some instances, such a PTA may result in a U.S. patent term extending beyond 20 years from the earliest date of filing a non-provisional patent application related to the U.S. patent. In addition, in the United States, the term of a U.S. patent that covers an FDA-approved drug may be eligible for a patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review. Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug. In the future, if and when our products receive regulatory approval, we expect to apply for patent term extensions on patents covering those products. We plan to seek patent term extensions to any of our issued patents in any jurisdiction where these are available; however, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and, if granted, the length of such extensions.

We further own trade secrets relating to our technology platform and product candidates, and we maintain the confidentiality of proprietary information to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. Although we take steps to protect our proprietary information and trade secrets, including through contractual means with our employees and consultants, third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology. Thus, we may not be able to meaningfully protect our trade secrets. It is our policy to require our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual during the course of the individual’s relationship with us are to be kept confidential and not disclosed to third parties except in specific circumstances. Our agreements with employees and consultants also provide that all inventions conceived by the employee in the course of employment or work with us or from the employee’s or consultant’s use of our confidential information are our exclusive property. For a more comprehensive discussion of the risks related to our trade secrets, please see “Risk factors—Risks related to our intellectual property.”

Company-owned patents

Mecbotamab vedotin is covered by a number of filings, including a published PCT application filed in 2017 that entered the national phase in 2018. National phase applications have been granted in Australia, Israel, Japan, and the United States and are pending in 13 jurisdictions, including most major market countries. Composition of matter claims issuing from this application would not expire before 2037.

Ozuriftamab vedotin is covered by a number of filings, including a published PCT application filed in 2017 that entered the national phase in 2018. National phase applications are pending in 14 jurisdictions in addition to the United States, including most major market countries. Composition of matter claims issuing from this application would not expire before 2037.

BA3071 is covered by a number of filings, including a published PCT application filed in 2019 that entered the national phase in 2021. In addition to filings made in the non-PCT countries of Argentina and Taiwan, national phase applications are pending in 15 jurisdictions in addition to the United States, including most major market countries. Composition of matter claims issuing from this application would not expire before 2039.

Our pre-clinical stage CAB antibody programs, including CAB-anti-EpCAM antibodies and CAB-anti-Nectin-4 antibodies, are covered by a number of filings. As of December 31, 2021, CAB-anti-EpCAM antibodies are covered by 10 national phase filings, including the United States, and a non-PCT filing in Taiwan. CAB-anti-Nectin-4 antibodies are covered by a PCT application and an application in Taiwan. Composition of matter claims issuing from these applications would not expire before either 2040 or 2041.

Core components of our product candidates are protected by company-owned platform applications directed to novel methods of protein evolution, methods of making conditionally active biologics, integrated selection and evolution of antibodies and proteins in expression production hosts, multi-specific antibodies and methods of making, modified antibody regions, conditionally active biological proteins, proteins targeting orthologs, discovery of and production of conditionally active biologic proteins in eukaryotic cell production hosts, conditionally active

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chimeric antigen receptors for modified T-cells, diagnostics using conditionally active antibodies, conditionally active polypeptides, antibodies targeted to senescent cells, conditionally active proteins for neurodegenerative diseases, and conditionally active proteins with pH selectivity. We also have 15 issued U.S. patents covering various aspects of the manufacturing methods used to generate CAB antibodies that have patent terms expiring from 2030 to 2036. We also have an issued patent in the U.S. protecting our method of manufacturing conditionally active multi-specific antibodies that has a patent term expiring in 2033.

Out-licensed patents

Himalaya Therapeutics SEZC has exclusive rights to patents/patent applications in China, Macao, Hong Kong and Taiwan relating to ROR2 (Patent applications 2017800294276 (China), and patent application 106115891 (Taiwan), both titled Anti-ROR2 antibodies and their immunoconjugates and uses thereof) and relating to AXL (Patent applications 201780023876X (China), and patent application 106112687 (Taiwan), both titled Anti-AXL antibodies and their immunoconjugates and uses thereof). Additionally, Himalaya Therapeutics SEZC has exclusive worldwide rights to patents/patent applications relating to IL-22 (Patent applications 108119613 and PCT/US19/35395, both titled Anti-IL-22 antibodies, antibody fragments and their immunoconjugates and uses thereof) and relating to HER2 (Patent application USP 62/964,747 titled Conditionally active anti-HER2 antibodies).

BioAtla Holdings, LLC has exclusive worldwide rights to all patents for the field of ACT (CAR-T), excluding the targets licensed to EXUMA Biotech Corp (“EXUMA”).

Inversagen, LLC has exclusive worldwide rights to all patents solely in the field of diseases associated with aging (outside of cancer), diagnostics related thereto and an immuno-oncology antibody.

EXUMA has an exclusive worldwide license to all patents solely to develop, make, have made, use, sell, have sold, offer for sale and import adoptive cell therapy (CAR-T) products to four named targets for the treatment of cancer. EXUMA’s rights under the agreement exclude the right to grant sublicenses to third parties to discover, develop or manufacture any CAB ACT or any component of our CAB ACT technology, except as used in or incorporated into EXUMA’s ACTs for cancer.

Government regulation and product approval

Government authorities in the United States, at the federal, state and local level and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of biological product candidates such as those we are developing. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources and we may not be able to obtain the required regulatory approvals.

Licensure and regulation of biologics in the United States

In the United States, the FDA regulates biologic products under the Federal Food, Drug, and Cosmetic Act, or the FDCA, the Public Health Service Act, or the PHSA, and regulations and guidance implementing these laws. The FDCA, PHSA and their corresponding regulations govern, among other things, the testing, manufacturing, safety, purity, potency, labeling, packaging, storage, record keeping, distribution, post-approval monitoring and reporting, import, export, advertising and other promotional practices involving biologic products. Biological products used for the prevention, treatment or cure of a disease or condition of a human being are subject to regulation under the FDCA, except the section of the FDCA that governs the approval of new drug applications, or NDAs. Biological products are approved for marketing under provisions of the PHSA, via a Biologic License Application, or BLA. However, the application process and requirements for approval of BLAs are very similar to those for NDAs, and biologics are associated with similar approval risks and costs as drugs. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as clinical hold, FDA refusal to approve pending NDAs or BLAs, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.

U.S. biologic products development process

Biological product candidates must be approved by the FDA pursuant to a BLA before they may be legally marketed in the United States. The process generally involves the following:

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Completion of extensive preclinical laboratory tests and in vivo studies in accordance with the FDA’s current good laboratory practice, or GLP, regulations and applicable requirements for the humane use of laboratory animals or other applicable regulations;

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Submission to the FDA of an IND, which must become effective before clinical trials may begin;

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Approval by an independent institutional review board, or IRB, reviewing each clinical site before each clinical trial may be initiated;

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Performance of adequate and well-controlled clinical trials in accordance with the FDA’s IND regulations, GCP requirements, and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed biologic product candidate for its intended use;

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Preparation and submission to the FDA of a BLA for marketing approval that includes substantial evidence of safety, purity and potency from results of nonclinical testing and clinical trials;

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A determination by the FDA within 60 days of its receipt of a BLA to file the application;

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Satisfactory completion of FDA pre-approval inspections of the manufacturing facility or facilities where the biologic product candidate is produced to assess compliance with cGMPs and to assure that the facilities, methods and controls are adequate to preserve the biologic product candidate’s identity, safety, strength, quality, potency and purity;

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Satisfactory completion of any potential FDA audits of the nonclinical and clinical trial sites that generated the data in support of the BLA to assure compliance with GCPs and integrity of the clinical data;

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Payment of user fees for FDA review of the BLA;

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Review of the product by an FDA advisory committee, if applicable;

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FDA review and approval of the BLA.

Preclinical studies

Before testing any biologic product candidate in humans, the product candidate must undergo rigorous preclinical testing. Preclinical tests, also referred to as nonclinical studies, include laboratory evaluations of product chemistry, toxicity and formulation, as well as in vivo studies to assess the potential safety and activity of the product candidate and to establish a rationale for therapeutic use. The conduct of the preclinical tests must comply with federal regulations and requirements including GLPs.

The clinical trial sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, among other things, to the FDA as part of an IND. An IND is a request for authorization from the FDA to administer an investigational product to humans and must become effective before human clinical trials may begin. Some preclinical testing may continue even after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to a proposed clinical trial and places the trial on clinical hold, including concerns that human research subjects will be exposed to unreasonable health risks. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Accordingly, submission of an IND may or may not result in the FDA allowing clinical trials to commence.

Clinical trials under an IND

Clinical trials involve the administration of the biologic product candidate to healthy volunteers or patients under the supervision of qualified investigators, who are generally physicians not employed by, or under, the control of the trial sponsor. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with GCPs, an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors and (iii) under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated in the trial. Further, each clinical trial must be reviewed and approved by an IRB at or servicing each institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of trial participants and considers items such as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the form and content of the informed consent that must be signed by each clinical trial subject, or his or her legal representative, reviews and approves the study protocol, and must monitor the clinical trial until completed.

Clinical trials typically are conducted in three sequential phases that may overlap or be combined:

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Phase 1. The biologic product candidate initially is introduced into a small number of healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution or excretion. If possible, a Phase 1 clinical trial may also seek to gain an early understanding of the product candidate’s effectiveness. In the case of some product candidates for severe or life-threatening diseases, especially when the product candidate may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.

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Phase 2. The biologic product candidate is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product candidate for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

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Phase 3. The biologic product candidate is administered to an expanded patient population at multiple sites to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval and labeling. In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of a biologic.

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These phases may overlap or be combined. For example, a Phase 1/2 clinical trial may contain both a dose-escalation stage and a dose-expansion stage, the latter of which may confirm tolerability at the recommended dose for expansion in future clinical trials (as in traditional Phase 1 clinical trials) and provide insight into the antitumor effects of the investigational therapy in selected subpopulation(s).

Typically, during the development of oncology therapies, all subjects enrolled in Phase 1 clinical trials are disease-affected patients and, as a result, considerably more information on clinical activity may be collected during such trials than during Phase 1 clinical trials for non-oncology therapies. A single Phase 3 or Phase 2 trial may be sufficient in rare instances, including (i) where the trial is a large, multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (ii) when in conjunction with other confirmatory evidence. Approval on the basis of a single trial may be subject to the requirement of additional post-approval studies.

Phase 1, Phase 2, Phase 3 and other types of clinical trials may not be completed successfully within any specified period, if at all. The FDA, the IRB, or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including non-compliance with regulatory requirements or a finding that the patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug or biologic has been associated with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether a trial may move forward at designated checkpoints based on access to certain data from the trial.

Concurrent with clinical trials, companies usually must complete some long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, and must also develop additional information about the chemistry and physical characteristics of the drug or biologic and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product and, among other things, the manufacturer must develop methods for testing the identity, strength, quality, potency and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product does not undergo unacceptable deterioration over its shelf life.

There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries. Sponsors of clinical trials of FDA-regulated products, including biologics, are required to register and disclose certain clinical trial information, which is publicly available at www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.

U.S. review and approval processes

FDA approval of a BLA must be obtained before commercial marketing of the biologic product. The results of the preclinical tests and clinical trials, together with detailed information relating to the product’s CMC and proposed labeling, among other things, are submitted to the FDA as part of the BLA requesting approval to market the product for one or more indications.

BCAB US Equity

BCAB · 10-K · period ended 2021-12-31

ITEM 1. Business

BCAB US Equity☆

BCAB · 10-K · period ended 2021-12-31

ITEM 1. Business

BCAB US Equity