Overview
We are a clinical-stage pharmaceutical company striving to transform patient
lives by developing innovative and differentiated prescription therapeutics for
the treatment of autoimmune, inflammatory, and other debilitating diseases. Our
pipeline consists of several development-stage candidates and a cutting-edge
platform with broad potential in autoimmune and inflammatory disorders. Our
executive management team and board of directors bring extensive experience in
product development and global commercialization, having served in leadership
roles at large global pharmaceutical companies and biotechs that have developed
and/or launched successful products, including several that were first-in-class
and/or achieved iconic status, such as Cialis®, Taltz®, Gemzar®, Prozac®,
Cymbalta®, and Juvederm®. Our strategy is to leverage this experience to
in-license, acquire, develop, and commercialize innovative pharmaceutical
products that we believe can meaningfully benefit patients who are suffering
from chronic, debilitating diseases that are underserved by available therapies.
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The following image summarizes our pipeline and corresponding development
programs:
[[Image Removed: bbi-20220331_g1.jpg]]
Research & Development Programs
BBI-02: A Potential First-in-Class Oral DYRK1A Inhibitor for the Treatment of
Autoimmune and Inflammatory Diseases
In August 2021, we entered into a License and Development Agreement (the
"Voronoi License Agreement") with Voronoi Inc. ("Voronoi"), pursuant to which we
acquired exclusive, worldwide rights to research, develop, and commercialize
BBI-02, a potential first-in-class oral DYRK1A inhibitor that aims to restore
immune balance in patients whose immune systems have become dysregulated. Based
on the promising preclinical efficacy data generated to date, we believe BBI-02
has the potential to be a first-in-class, potent therapy for the treatment of a
wide array of debilitating autoimmune and inflammatory diseases.
Our lead development-stage program, BBI-02, is a Phase 1-ready, highly
selective, and orally bioavailable DYRK1A inhibitor that has demonstrated
promising results in various preclinical models, including atopic dermatitis
("AD") and rheumatoid arthritis. In these models, BBI-02 showed encouraging
decreases in disease severity and reduction of pro-inflammatory cytokines
compared to current standard-of-care agents, such as Janus kinase (JAK)
inhibitors and anti-tumor necrosis factor ("TNF") biologics. Notably, many
current therapies for autoimmune disorders are broadly immunosuppressant, which
may lead to severe side effects, such as increased infection risk. Preclinical
data have shown BBI-02 to drive regulatory T-cell differentiation while
dampening pro-inflammatory TH17 cells and MyD88/IRAK4-related signaling
pathways. Regulatory T-cells serve to maintain tolerance and keep the
autoreactive, pro-inflammatory T-cells in check, thus inhibiting autoimmune
disease and limiting chronic inflammation. The myeloid differentiation primary
response 88 ("MyD88") protein is normally spliced into a long form and a short
form. DYRK1A inhibition shifts the balance to produce more MyD88 short form,
which leads to IRAK4, a protein kinase involved in signaling immune responses
from toll-like receptors, not being phosphorylated and so appears to deactivate
downstream cascades of certain pro-inflammatory cytokines. Based on current
understanding, this inhibition of the release of excess cytokines can be
achieved by re-establishing the role of MyD88 short form as a negative regulator
of this pathway. Unlike many existing therapies, as well as those currently
being investigated, BBI-02 may have the ability to target both the adaptive and
innate immune imbalance simultaneously, potentially resulting in, or
substantially achieving, restoration of immune homeostasis that, if proven,
would represent a paradigm shift in the treatment of certain autoimmune and
inflammatory diseases.
We plan to initiate a Phase 1 clinical trial for BBI-02 ("BBI-02-101") in Canada
in the second quarter of 2022. BBI-02-101 is a randomized, double-blind,
placebo-controlled study designed to evaluate the safety,
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tolerability, pharmacokinetics, and pharmacodynamics of BBI-02 capsules in both
healthy subjects and patients with AD. Part 1A of the study will be a single
ascending dose ("SAD") assessment of BBI-02 capsules or placebo in up to 56
healthy subjects across seven cohorts at one study center. Part 1B of the study
will be a multiple ascending dose ("MAD") assessment of BBI-02 capsules or
placebo administered once daily for 14 days. The MAD part of the study is
expected to enroll a total of 33 healthy subjects across three cohorts at one
study center. Part 2 of the study will compare BBI-02 to placebo in AD patients
over 28 days of dosing. Part 2 is expected to enroll approximately 40 patients
with moderate-to-severe AD at up to 12 study centers and will include a
preliminary assessment of efficacy. Topline results from the Phase 1 SAD and MAD
trials (Parts 1A and 1B) are expected to be announced by early 2023.
Additionally, we plan to prepare and file an investigational new drug (IND)
application with the FDA for further research and development of BBI-02 in the
U.S.
BBI-02 is covered by a composition of matter patent issued in the U.S., Japan,
China, and other key countries through at least 2038, subject to patent term
extensions and adjustments that may be available depending on how this
early-stage asset is developed, as well as a pending Patent Cooperation Treaty
("PCT") application, and other foreign and U.S. applications for BBI-02, as of
the date of this Quarterly Report.
BBI-10: A Covalent STING Inhibitor for the Potential Treatment of Autoimmune,
Inflammatory, and Rare Genetic Diseases
In February 2022, we entered into an Exclusive License Agreement (the "Carna
License Agreement") with Carna Biosciences, Inc. ("Carna"), pursuant to which we
acquired exclusive, worldwide rights to research, develop, and commercialize
Carna's portfolio of novel, preclinical stage oral Stimulator of Interferon
Genes ("STING") inhibitors. STING is a well-known mediator of innate immune
responses. Excessive signaling through STING is linked to numerous high unmet
need diseases, ranging from autoimmune disorders, such as systemic lupus
erythematosus, to interferonopathies, which are a set of rare genetic conditions
characterized by interferon overproduction and could have orphan drug potential.
STING is a key component of the cyclic GMP-AMP synthase ("cGAS")-STING pathway,
which plays an important role in the activation of innate immunity. cGAS acts as
a DNA sensor, detecting DNA from sources such as invading bacteria, viruses, and
cellular debris that can arise from aging and tissue damage. Upon DNA binding,
cGAS produces the secondary messenger molecule cyclic GMP-AMP ("cGAMP"), which
binds to STING. STING then undergoes the post-translational modification called
palmitoylation, a step essential to the activation of STING. Activated STING
then in turn activates the recruitment of kinases that phosphorylate IRF3 and
I?B?. Phosphorylated IRF3 leads to activation of the type I interferon response,
while phosphorylated I?B? activates NF?B and increases the secretion of
pro-inflammatory cytokines such as IL-6 and TNF?, resulting in inflammation.
While the innate immune response is an important defense mechanism, a
dysregulated type I interferon response and overproduction of pro-inflammatory
cytokines also represents a driving cause of multiple autoimmune and
inflammatory diseases. As such, targeting the cGAS-STING pathway may be a novel
approach to treating these diseases.
BBI-10, our lead early-stage STING inhibitor candidate, is a novel, potent, and
orally available covalent STING inhibitor that specifically targets the
palmitoylation site of STING. This allows it to inhibit both wild-type STING and
gain-of-function mutants without competing with cGAMP binding, thus deactivating
downstream signaling through IRF3 and I?B? and ultimately suppressing
inflammation. BBI-10 has exhibited strong proof-of mechanism and a promising
profile in initial pharmacokinetics, toxicology, and safety pharmacology
studies. In addition, in vitro studies show that BBI-10 more potently blocks the
STING pathway compared to other known STING palmitoylation inhibitors, and that
mice treated with BBI-10 demonstrate significant decreases in pro-inflammatory
cytokine production following stimulation of STING. Nonclinical development
activities for BBI-10 are currently underway, and we expect to conduct
experimental characterization of the STING inhibitor library throughout 2022.
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For BBI-10, as of the date of this Quarterly Report, we currently have one
pending PCT application and one pending priority patent application. We possess
an exclusive license directed to a library of compounds targeting/inhibiting
STING, pharmaceutical compositions containing the same, and methods of their
use, which are being evaluated.
Next-Generation Kinase Inhibitors: A Cutting-Edge Platform with Potential to
Produce Treatments for Autoimmune, Inflammatory, and Other Debilitating Diseases
As part of the Voronoi License Agreement, in August 2021 we acquired exclusive
global rights to a cutting-edge platform of next-generation kinase inhibitors.
This library of new chemical entities includes next-generation DYRK1A
inhibitors, as well as other molecules that specifically inhibit CDC2-like
kinase ("CLK"), Leucine-Rich Repeat Kinase 2 ("LRRK2") and TTK (also known as
Monopolar spindle 1 (Mps1)) kinases. A number of these drug candidates have the
potential to penetrate the blood brain barrier, presenting an opportunity to
address neuroinflammatory conditions of high unmet need such as Down Syndrome,
Alzheimer's Disease, and Parkinson's Disease, while other peripherally acting
novel LRRK2, TTK, and CLK kinase inhibitors could be developed in additional
therapeutic areas within autoimmunity, inflammation, and oncology. We are
currently engaged in research to identify both brain penetrant and non-brain
penetrant new chemical entities from this next-generation kinase inhibitor
platform.
Compounds from the next-generation kinase inhibitor platform are covered by U.S.
and foreign composition of matter patent applications, as well as other
applications, that are currently pending in global prosecution based on our
exclusive license from Voronoi related to DYRK1A, LRRK2, TTK, and CLK kinases.
Strategic, Licensing, and Other Arrangements
Exclusive License and Development Agreement with Carna
In February 2022, we entered into the Carna License Agreement with Carna,
pursuant to which we acquired exclusive, worldwide rights to research, develop,
and commercialize Carna's portfolio of novel STING inhibitors. In accordance
with the terms of the Carna License Agreement, in exchange for the licensed
rights, we made a one-time cash payment of $2.0 million, which was recorded as
research and development expenses in the condensed consolidated statements of
operations during the three months ended March 31, 2022.
The Carna License Agreement provides that we will make success-based payments to
Carna of up to $258.0 million in the aggregate contingent upon achievement of
specified development, regulatory, and commercial milestones. Further, the Carna
License Agreement provides that we will pay Carna tiered royalty payments
ranging from mid-single digits up to 10% of net sales. All of the contingent
payments and royalties are payable in cash in U.S. Dollars. Under the terms of
the Carna License Agreement, we will be responsible for, and bear the future
costs of, all development and commercialization activities, including patenting,
related to all the licensed compounds. As of March 31, 2022 and through the date
of this Quarterly Report, we have not yet made any payments or recorded any
liabilities related to the specified development, regulatory, and commercial
milestones or royalties on net sales pursuant to the Carna License Agreement.
License and Development Agreement with Voronoi
In August 2021, we entered into the Voronoi License Agreement with Voronoi,
pursuant to which we acquired exclusive, worldwide rights to research, develop,
and commercialize BBI-02, a novel, Phase 1-ready, potential first-in-class
DYRK1A inhibitor, and other next-generation therapeutics developed from
Voronoi's proprietary kinase inhibitor platform. In accordance with the terms of
the Voronoi License Agreement, in exchange for the licensed rights, we made a
one-time payment of $2.5 million in cash and issued $2.0 million, or 2,816,901
shares, of our common stock to Voronoi.
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With respect to BBI-02, the Voronoi License Agreement provides that we will make
payments to Voronoi of up to $211.0 million in the aggregate contingent upon
achievement of specified development, regulatory, and commercial milestones.
With respect to the next-generation compounds arising from the novel kinase
inhibitor platform, we will make payments to Voronoi of up to $107.5 million in
the aggregate contingent upon achievement of specified development, regulatory,
and commercial milestones. Further, the Voronoi License Agreement provides that
we will pay Voronoi tiered royalty payments ranging from low-single digits up to
10% of net sales of products arising from the DYRK1A inhibitor programs and
next-generation kinase inhibitor platform. All of the contingent payments and
royalties are payable in cash in U.S. Dollars, except for $1.0 million of the
development and regulatory milestone payments, which amount is payable in
equivalent shares of our common stock. Under the terms of the Voronoi License
Agreement, we will be responsible for, and bear the future costs of, all
development and commercialization activities, including patenting, related to
all the licensed compounds. As of March 31, 2022 and through the date of this
Quarterly Report, we have not yet made any payments or recorded any liabilities
related to the specified development, regulatory, and commercial milestones or
royalties on net sales pursuant to the Voronoi License Agreement.
Asset Purchase Agreement with Botanix
On May 3, 2022 (the "Effective Date"), we and Brickell Subsidiary, Inc.
("Brickell Subsidiary") entered into an Asset Purchase Agreement (the "Asset
Purchase Agreement") with Botanix SB Inc. ("Botanix") and Botanix
Pharmaceuticals Limited, pursuant to which Botanix acquired all rights, title,
and interests to assets primarily related to sofpironium bromide that were owned
and/or licensed by us or Brickell Subsidiary (the "Assets"). In accordance with
the terms of the Asset Purchase Agreement, in exchange for the Assets, we (i)
received an upfront payment at closing in the amount of $3.0 million, (ii) are
to be reimbursed for certain recent development expenditures in advancement of
the Assets, and (iii) will receive contingent near-term milestone payments of up
to $6.0 million (subject to, first, the submission of a new drug application
("NDA") and, second, receipt of marketing approval in the U.S. for sofpironium
bromide gel, 15%, both over the next 18 months) from Botanix. We also are
eligible to receive additional success-based regulatory and sales milestone
payments of up to $168 million. Further, we will receive tiered earnout payments
ranging from high-single digits to mid-teen digits on net sales of sofpironium
bromide gel (the "Earnout Payments"). Certain of these amounts are subject to
payments by us to our former licensor, Bodor Laboratories, Inc. ("Bodor"), as
further described under "Agreements with Bodor-Rights Agreement" below. All
amounts due to us from Botanix in respect of the contingent payments are subject
to certain reductions, credits, and offsets, as applicable, as described in the
Asset Purchase Agreement. The sale of the Assets pursuant to the Asset Purchase
Agreement closed on the Effective Date.
Botanix will be responsible for all further research, development, and
commercialization of sofpironium bromide globally and will replace Brickell
Subsidiary as the exclusive licensee of Bodor. Pursuant to the Asset Purchase
Agreement, we have agreed to issue $1.0 million in shares of our common stock to
Bodor if a certain contingent regulatory milestone is met, as required by the
existing amended and restated license agreement with Bodor (the "Amended and
Restated License Agreement"). The Asset Purchase Agreement contains customary
representations, warranties, and covenants, and mutual indemnification
provisions.
Pursuant to the Asset Purchase Agreement, the License, Development, and
Commercialization Agreement with Kaken, dated as of March 31, 2015 (as amended
in May 2018, the "Kaken Agreement"), by and between Brickell Subsidiary and
Kaken was also assigned to Botanix. The Asset Purchase Agreement provides that
Botanix will pay to us a portion of the sales-based milestone payments and
royalties that Botanix receives from Kaken under the Kaken Agreement.
Transition Services Agreement with Botanix
In connection with the sale of the Assets, on the Effective Date, we and Botanix
entered into a transition services agreement (the "TSA") whereby we will provide
consulting services as an independent contractor to
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Botanix in support of and through submission and potential approval of the U.S.
NDA for sofpironium bromide gel, 15%. In accordance with the terms of the TSA,
in exchange for providing these services, we will receive from Botanix, (i)
prior to the filing of such NDA, a fixed monthly amount of $71 thousand, and
(ii) after the filing of such NDA, a variable amount based upon actual hours
worked, in each case plus related fees and expenses of our advisors (plus a 5%
administrative fee) and our out-of-pocket expenses.
Agreements with Bodor
Rights Agreement
In connection with the sale of the Assets, on the Effective Date, we, Brickell
Subsidiary and Bodor entered into an agreement (the "Rights Agreement") to
clarify that we and Brickell Subsidiary have the power and authority under the
Amended and Restated License Agreement to enter into the Asset Purchase
Agreement and the TSA, and that Botanix will assume the Amended and Restated
License Agreement pursuant to the Asset Purchase Agreement. The Rights Agreement
includes a general release of claims and no admission of liability between the
parties. Pursuant to such Rights Agreement, we have agreed to pay Bodor (i) 18%
of the amount of each payment actually received by us from Botanix for upfront
and milestone payments under the Asset Purchase Agreement, as well as (ii)
certain tiered payments, set as a percentage ranging from mid-single digits to
low-teen digits, of the actual amount of each applicable Earnout Payment
actually receive received by us from Botanix.
Amended and Restated License Agreement
On May 3, 2022, Botanix assumed the Amended and Restated License Agreement
pursuant to the Asset Purchase Agreement. Pursuant to the Asset Purchase
Agreement, we have agreed to issue $1.0 million in shares of our common stock to
Bodor if a certain contingent regulatory milestone is met, as required by the
Amended and Restated License Agreement. No research and development expenses
associated with milestones were incurred during the three months ended March 31,
2022 and 2021, but we paid Bodor the applicable amounts with respect to the
royalties we received from Kaken for sales of sofpironium bromide gel, 5%
(ECCLOCK®) in Japan during those periods.
Collaboration with Kaken in Asia
Under the Kaken Agreement, we granted to Kaken an exclusive right to develop,
manufacture, and commercialize our sofpironium bromide compound in the
Territory. In exchange, Kaken paid non-refundable upfront fees and funding of
certain research and development activities. Pursuant to the Asset Purchase
Agreement, the Kaken Agreement was assigned to Botanix, and Botanix will pay to
us a portion of the sales-based milestone payments and royalties that Botanix
receives from Kaken under the Kaken Agreement.
In September 2020, Kaken received regulatory approval in Japan to manufacture
and market ECCLOCK for the treatment of primary axillary hyperhidrosis, and as a
result, we began recognizing royalty revenue earned on a percentage of net sales
of ECCLOCK in Japan during the fourth quarter of 2020. During the three months
ended March 31, 2022 and 2021, we recognized royalty revenue of $92 thousand and
$17 thousand, respectively.
Significant Financing Arrangements
This section sets forth our recent and ongoing financing arrangements, all of
which involve our common stock. As previously disclosed, we have received
notices of noncompliance with the minimum closing bid price requirement for
continued listing on The Nasdaq Capital Market, the most recent of which granted
us until June 13, 2022 to regain compliance with that requirement. We included
the reverse stock split proposal in the proxy statement for our 2022 annual
meeting as a potential means to regain compliance with the Nasdaq requirement,
but have had to adjourn the annual meeting to attempt to obtain sufficient
stockholder votes to approve that
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proposal. While we are continuing to pursue that route as well as other
potential avenues to regain compliance, we may not be successful in those
efforts.
If our common stock is delisted from Nasdaq, we and our stockholders could face
significant material adverse consequences, including limited availability of
market quotations for our common stock; substantially decreased trading in our
common stock; decreased market liquidity of our common stock as a result of the
loss of market efficiencies associated with Nasdaq and the loss of federal
preemption of state securities laws; an adverse effect on our ability to issue
additional securities or obtain additional financing in the future on acceptable
terms, if at all; potential loss of confidence by investors, suppliers,
partners, and employees and fewer business development opportunities; and
limited news and analyst coverage. Specifically, we would not be permitted to
deliver a purchase notice to Lincoln Park Capital Fund, LLC ("Lincoln Park")
pursuant to the purchase agreement entered into in February 2020 (the "Purchase
Agreement"), and Oppenheimer & Co. Inc. ("Oppenheimer") and William Blair &
Company, L.L.C. ("William Blair") would have no obligation to make sales of our
common stock pursuant to the ATM Agreements (as defined below). Any inability to
raise funds pursuant to the Purchase Agreement and the ATM Agreements would
significantly impair our ability to access the substantial additional capital we
will need prior to the regulatory approval and commercialization of any of our
product candidates.
Public Offerings of Common Stock and Warrants
In October 2021, we completed the sale of 30,263,400 shares of our common stock
(the "October 2021 Offering"). The October 2021 Offering resulted in net
proceeds of approximately $10.3 million, after deducting the underwriting
discount and offering expenses payable by us.
In July 2021, we completed the sale of 12,983,871 shares of our common stock
(the "July 2021 Offering"). The July 2021 Offering resulted in net proceeds of
approximately $7.3 million, after deducting underwriting discounts and
commissions and offering expenses payable by us.
In October 2020, we completed the sale of 19,003,510 shares of our common stock,
and, to certain investors, pre-funded warrants to purchase 1,829,812 shares of
our common stock, and accompanying common stock warrants to purchase up to an
aggregate of 20,833,322 shares of our common stock (the "October 2020
Offering"). The October 2020 Offering resulted in net proceeds of approximately
$13.7 million to us after deducting underwriting commissions and discounts and
other offering expenses payable by us of $1.3 million and excluding the proceeds
from the exercise of the warrants. During the three months ended March 31, 2021,
12,427,387 common warrants associated with the October 2020 Offering were
exercised at a weighted-average exercise price of $0.72 per share, resulting in
aggregate proceeds of approximately $8.9 million.
In June 2020, we completed the sale of 14,790,133 shares of our common stock,
and, to certain investors, pre-funded warrants to purchase 2,709,867 shares of
our common stock, and accompanying common warrants to purchase up to an
aggregate of 17,500,000 shares of our common stock (the "June 2020 Offering").
The June 2020 Offering resulted in approximately $18.7 million of net proceeds
after deducting underwriting commissions and discounts and other offering
expenses payable by us of $1.4 million and excluding the proceeds from the
exercise of the warrants. During the three months ended March 31, 2021, 17,500
common warrants associated with the June 2020 Offering were exercised at a
weighted-average exercise price of $1.25 per share, resulting in aggregate
proceeds of approximately $22 thousand.
We have used and continue to use the remaining net proceeds from our common
stock offerings for research and development, including clinical trials, working
capital, and general corporate purposes. For additional information regarding
the offerings described above, see Note 7. "Capital Stock" of the notes to our
condensed consolidated financial statements included in this Quarterly Report.
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At Market Issuance Sales Agreements
In March 2021, we entered into an At Market Issuance Sales Agreement (the "2021
ATM Agreement") with Oppenheimer and William Blair as our sales agents (the
"Agents"). Pursuant to the terms of the 2021 ATM Agreement, we may sell from
time to time through the Agents shares of our common stock having an aggregate
offering price of up to $50.0 million. Such shares are issued pursuant to our
shelf registration statement on Form S-3 (Registration No. 333-254037). Sales of
shares are made by means of ordinary brokers' transactions on The Nasdaq Capital
Market at market prices or as otherwise agreed by us and the Agents. Under the
terms of the 2021 ATM Agreement, we may also sell the shares from time to time
to an Agent as principal for its own account at a price to be agreed upon at the
time of sale. Any sale of the shares to an Agent as principal would be pursuant
to the terms of a separate placement notice between us and such Agent. During
the three months ended March 31, 2022 and 2021, no sales of common stock under
the 2021 ATM Agreement occurred. As of March 31, 2022, approximately
$46.0 million of shares of common stock were remaining, but had not yet been
sold under the 2021 ATM Agreement.
In April 2020, we entered into an At Market Issuance Sales Agreement (the "2020
ATM Agreement" and, together with the 2021 ATM Agreement, the "ATM Agreements")
with Oppenheimer as our sales agent. Pursuant to the terms of the 2020 ATM
Agreement, we may sell from time to time through Oppenheimer shares of our
common stock having an aggregate offering price of up to $8.0 million. Such
shares are issued pursuant to our shelf registration statement on Form S-3
(Registration No. 333-236353). Sales of the shares are made by means of ordinary
brokers' transactions on The Nasdaq Capital Market at market prices or as
otherwise agreed by us and Oppenheimer. Under the terms of the 2020 ATM
Agreement, we may also sell the shares from time to time to Oppenheimer as
principal for its own account at a price to be agreed upon at the time of sale.
Any sale of the shares to Oppenheimer as principal would be pursuant to the
terms of a separate placement notice between us and Oppenheimer. During the
three months ended March 31, 2021, we sold 1,083,548 shares of our common stock
under the 2020 ATM Agreement at a weighted-average price of $1.55 per share, for
aggregate net proceeds of approximately $1.6 million, after giving effect to a
3% commission to Oppenheimer as agent. During the three months ended March 31,
2022, no sales of common stock under the 2020 ATM Agreement occurred. As of
March 31, 2022, approximately $2.6 million of shares of common stock were
remaining, but had not yet been sold under the 2020 ATM Agreement.
We are subject to the SEC's "baby shelf rules," which prohibit companies with a
public float of less than $75 million from issuing securities under a shelf
registration statement in excess of one-third of such company's public float in
a 12-month period. These rules may limit future issuances of shares by us under
the ATM Agreements or other common stock offerings.
Private Placement Offerings
In February 2020, we and Lincoln Park entered into (i) a securities purchase
agreement (the "Securities Purchase Agreement"); (ii) the Purchase Agreement;
and (iii) a registration rights agreement (the "Registration Rights Agreement").
Pursuant to the Securities Purchase Agreement, Lincoln Park purchased, and we
sold, (i) an aggregate of 950,000 shares of common stock (the "Common Shares");
(ii) a warrant to initially purchase an aggregate of up to 606,420 shares of
common stock at an exercise price of $0.01 per share (the "Series A Warrant");
and (iii) a warrant to initially purchase an aggregate of up to 1,556,420 shares
of common stock at an exercise price of $1.16 per share (the "Series B Warrant"
and, together with the Series A Warrant, the "Warrants"). The aggregate gross
purchase price for the Common Shares and the Warrants was $2.0 million.
Under the terms and subject to the conditions of the Purchase Agreement, we have
the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is
obligated to purchase, up to $28.0 million in the aggregate of shares of our
common stock. In order to retain maximum flexibility to issue and sell up to the
maximum of $28.0 million of our common stock under the Purchase Agreement, we
sought and, at our annual meeting on April 19, 2021, received, stockholder
approval for the sale and issuance of common stock in
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connection with the Purchase Agreement under Nasdaq Listing Rule 5635(d). Sales
of common stock by us will be subject to certain limitations, and may occur from
time to time, at our sole discretion, over the 36-month period commencing on
August 14, 2020 (the "Commencement Date").
Following the Commencement Date, under the Purchase Agreement, on any business
day selected by us, we may direct Lincoln Park to purchase up to 100,000 shares
of our common stock on such business day (each, a "Regular Purchase"), provided,
however, that (i) the Regular Purchase may be increased to up to 125,000 shares,
provided that the closing sale price of the common stock is not below $3.00 on
the purchase date; and (ii) the Regular Purchase may be increased to up to
150,000 shares, provided that the closing sale price of the common stock is not
below $5.00 on the purchase date. In each case, Lincoln Park's maximum
commitment in any single Regular Purchase may not exceed $1,000,000. The
purchase price per share for each such Regular Purchase will be based on
prevailing market prices of common stock immediately preceding the time of sale.
In addition to Regular Purchases, we may direct Lincoln Park to purchase other
amounts as accelerated purchases or as additional accelerated purchases if the
closing sale price of the common stock exceeds certain threshold prices as set
forth in the Purchase Agreement. In all instances, we may not sell shares of our
common stock to Lincoln Park under the Purchase Agreement if it would result in
Lincoln Park beneficially owning more than 9.99% of the outstanding shares of
our common stock. During the three months ended March 31, 2022 and 2021, no
sales of common stock under the Purchase Agreement occurred. As of March 31,
2022, approximately $26.9 million of shares of common stock were remaining, but
had not yet been sold under the Purchase Agreement.
We agreed with Lincoln Park that we will not enter into any "variable rate"
transactions with any third party, subject to certain exceptions, for a period
defined in the Purchase Agreement. We have the right to terminate the Purchase
Agreement at any time, at no cost or penalty.
Financial Overview
Our operations to date have been limited to business planning, raising capital,
developing and entering into strategic partnerships for our pipeline assets,
identifying and in-licensing product candidates, conducting clinical trials, and
other research and development activities.
To date, we have financed operations primarily through funds received from the
sale of common stock and warrants, convertible preferred stock, debt and
convertible notes, and payments received under license, collaboration, and other
agreements. Other than through arrangements as they relate to sales of ECCLOCK
in Japan, none of our product candidates has been approved for sale and we have
not generated any product sales. Since inception, we have incurred operating
losses. We recorded a net loss of $9.4 million and $9.0 million for the three
months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, we had
an accumulated deficit of $154.8 million. We expect to continue incurring
significant expenses and operating losses for at least the next several years as
we:
•initiate and execute a Phase 1 clinical trial, along with other nonclinical
development activities, for BBI-02;
•conduct preclinical development activities for BBI-10 and experimental
characterization of the STING inhibitor library;
•engage in research to identify both brain penetrant and non-brain penetrant
kinase inhibitors from the next-generation kinase inhibitor platform;
•advance research and development-related activities to develop and expand our
product pipeline;
•maintain, expand, and protect our intellectual property portfolio for all our
assets;
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•hire additional staff, including clinical, regulatory, quality, alliance
management, scientific, and management personnel; and
•add operational and finance personnel to support product and business
development efforts.
We do not expect to generate significant revenue unless and until we
successfully complete development of, obtain marketing approval for, and
commercialize product candidates, either alone or in collaboration with third
parties. We expect these activities may take several years and our success in
these efforts is subject to significant uncertainty. We expect we will need to
raise substantial additional capital prior to the regulatory approval and
commercialization of any of our product candidates. Until such time, if ever,
that we generate substantial product revenue, we expect to finance our
operations through public or private equity or debt financings, collaborations
or licenses, or other available financing transactions. However, we may be
unable to raise additional funds through these or other means when needed.
Key Components of Operations
Revenue
Revenue generally consists of revenue recognized under our strategic
collaboration agreements for the development and commercialization of our
product candidates. Our strategic collaboration agreements generally outline
overall development plans and include payments we receive at signing, payments
for the achievement of certain milestones, and royalties. For these activities
and payments, we utilize judgment to assess the nature of the performance
obligations to determine whether the performance obligations are satisfied over
time or at a point in time and, if over time, the appropriate method of
measuring progress for purposes of recognizing revenue. Prior to 2020, we had
not recognized any royalty revenue from any collaboration arrangement. Beginning
in the fourth quarter of 2020, pursuant to the Kaken Agreement, we recognized
royalty revenue earned on a percentage of net sales of ECCLOCK in Japan, and we
expect to continue to recognize a portion of such royalties going forward
pursuant to the terms of the Asset Purchase Agreement. Other than the revenue we
may generate in connection with the Asset Purchase Agreement, we do not expect
to generate any revenue from any product candidates that we developed or develop
unless and until we obtain regulatory approval and commercialize our products or
enter into other collaboration agreements with third parties.
Research and Development Expenses
Research and development expenses principally consist of payments to third
parties known as clinical research organizations ("CROs") and upfront
in-licensing fees of development-stage assets. CROs help plan, organize, and
conduct clinical and nonclinical studies under our direction. Personnel costs,
including wages, benefits, and share-based compensation, related to our research
and development staff in support of product development activities are also
included, as well as costs incurred for supplies, preclinical studies and
toxicology tests, consultants, and facility and related overhead costs.
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Below is a summary of our research and development expenses related to our
programs by categories of costs for the periods presented.
Three Months Ended
March 31,
2022 2021
(in thousands)
Direct program expenses related to
Sofpironium bromide (1) $ 2,168 $ 5,436
DYRK1A inhibitor program (2) 728 -
STING inhibitor platform (3) 2,010 -
Personnel and other expenses (4)
Salaries, benefits, and stock-based compensation 752 476
Regulatory and compliance 281 127
Other expenses 74 13
Total research and development expenses $ 6,013 $ 6,052____________
(1)Sofpironium bromide. We expect our research and development expenses related
to sofpironium bromide to decrease in future periods given the completion of our
Phase 3 clinical trials for sofpironium bromide, 15% in the fourth quarter of
2021. Additionally, on May 3, 2022, we sold the assets primarily related to
sofpironium bromide that we previously owned and/or licensed to Botanix, which
is responsible for all further research, development, and commercialization of
sofpironium bromide.
(2)DYRK1A inhibitor program. In August 2021, we acquired the DYRK1A inhibitor
program targeting autoimmune and inflammatory diseases. We plan to progress
BBI-02 into a Phase 1 clinical trial in Canada in the second quarter of 2022. We
are also engaged in research to identify new chemical entities from our
next-generation kinase inhibitor platform. As a result, in the following years,
we expect to incur research and development expenses for these programs at
levels consistent with expenditures for development of early-stage assets.
(3)STING inhibitor platform. In February 2022, we acquired a portfolio of novel,
potent, and orally available STING inhibitors that has broad potential in
autoinflammatory diseases. To date, the expenses associated with our STING
inhibitor platform primarily relate to upfront in-licensing fees. Nonclinical
development activities for our lead early-stage STING inhibitor candidate,
BBI-10, are currently underway, and we expect to conduct experimental
characterization of the STING inhibitor library throughout 2022. As a result, in
the following years, we expect to incur research and development expenses for
this program at levels consistent with expenditures for development of
early-stage assets.
(4)Personnel and other expenses. Personnel and other expenses include
operational expenses related to research and development activities not
specifically attributable to a specific program. Other expenses include travel,
lab and office supplies, clinical trial management software, license fees, and
other miscellaneous expenses.
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General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs,
including wages, benefits, and share-based compensation, related to our
executive, sales, marketing, finance, and human resources personnel, as well as
professional fees, including legal, accounting, and sublicensing fees.
Critical Accounting Estimates
We have prepared the condensed consolidated financial statements in accordance
with accounting principles generally accepted in the United States of America
("U.S. GAAP"). The preparation of these condensed consolidated financial
statements requires us to make estimates, assumptions, and judgments that affect
the reported amounts of assets, liabilities, expenses, and related disclosures
at the date of the condensed consolidated financial statements, and the reported
amounts of revenue and expenses during the reporting period. On an ongoing
basis, management evaluates its critical estimates, including those related to
revenue recognition and accrued research and development expenses. We base our
estimates on our historical experience and on assumptions that we believe are
reasonable; however, actual results may differ materially from these estimates
under different assumptions or conditions.
There were no changes during the three months ended March 31, 2022 to our
critical accounting estimates as disclosed in our 2021 Annual Report on Form
10-K. For information on our significant accounting policies, please refer to
Note 2 of the notes to our condensed consolidated financial statements included
elsewhere in this Quarterly Report.
Recent Accounting Pronouncements
Unless otherwise discussed elsewhere in this Quarterly Report, we believe that
the impact of recently issued guidance, whether adopted or to be adopted in the
future, is not expected to have a material impact on our condensed consolidated
financial statements upon adoption.
Results of Operations
Comparison of the Three Months Ended March 31, 2022 and 2021
Three Months Ended
March 31,
2022 2021
(in thousands)
Revenue $ 92 $ 17
Research and development expenses (6,013) (6,052)
General and administrative expenses (3,486) (2,967)
Total other expense, net (3) (3)
Net loss $ (9,410) $ (9,005)
Revenue
Revenue increased by $75 thousand for the three months ended March 31, 2022,
compared to the three months ended March 31, 2021. Revenue in both periods
consisted of royalty revenue recognized related to sales of ECCLOCK in Japan by
Kaken.
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Research and Development Expenses
Research and development expenses for the three months ended March 31, 2022,
compared to the three months ended March 31, 2021, were relatively consistent.
During the three months ended March 31, 2022, we incurred $3.3 million in lower
clinical costs related to our U.S. Phase 3 pivotal clinical program for
sofpironium bromide gel, 15%, which was completed in the fourth quarter of 2021.
This decrease was almost fully offset by increases of $2.0 million in upfront
costs related to the acquisition of our STING inhibitor platform, $0.7 million
in development costs related to our DYRK1A inhibitor program, and $0.4 million
in personnel and other expenses.
General and Administrative Expenses
General and administrative expenses increased by $0.5 million for the three
months ended March 31, 2022, compared to the three months ended March 31, 2021.
The increase was primarily due to higher compensation-related expenses of
$0.2 million, professional fees of $0.2 million, and insurance and other
miscellaneous expenses of $0.1 million.
Liquidity and Capital Resources
We have incurred significant operating losses and have an accumulated deficit as
a result of ongoing efforts to in-license and develop our product candidates,
including conducting preclinical and clinical trials and providing general and
administrative support for these operations. For the three months ended
March 31, 2022 and 2021, we had a net loss of $9.4 million and $9.0 million,
respectively. As of March 31, 2022, we had an accumulated deficit of
$154.8 million. As of March 31, 2022, we had cash and cash equivalents of
$17.3 million compared to $26.9 million as of December 31, 2021. Since
inception, we have financed our operations primarily through funds received from
the sale of common stock and warrants, convertible preferred stock, debt, and
convertible notes, and payments received under license and collaboration
agreements.
We believe that our cash and cash equivalents as of March 31, 2022, combined
with $3.0 million in upfront fees we received from Botanix on May 3, 2022, and
other expected near-term payments under the Asset Purchase Agreement, will be
sufficient to fund our operations for at least the next 12 months. However, it
is difficult to predict our spending for our product candidates prior to
obtaining FDA approval. Moreover, changing circumstances may cause us to expend
cash significantly faster than we currently anticipate, and we may need to spend
more cash than currently expected because of circumstances beyond our control.
We expect to continue to incur additional substantial losses in the foreseeable
future as a result of our research and development activities. Additional
funding will be required in the future to continue with our planned development
and other activities. However, we may be unable to raise additional funds, which
would have a negative impact on our business, financial condition, and our
ability to develop our pipeline. To the extent that additional funds are raised
through the sale of equity, the issuance of securities will result in dilution
to our stockholders.
Additionally, we are subject to the SEC's "baby shelf rules," which prohibit
companies with a public float of less than $75 million from issuing securities
under a shelf registration statement in excess of one-third of such company's
public float in a 12-month period. These rules may limit our future issuances of
shares under the ATM Agreements or other common stock offerings.
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Cash Flows
Since inception, we have primarily used our available cash to fund expenditures
related to product discovery and development activities. The following table
sets forth a summary of cash flows for the periods presented:
Three Months Ended
March 31,
2022 2021
(in thousands)
Net cash provided by (used in):
Operating activities $ (9,540) $ (5,891)
Investing activities - (40)
Financing activities (55) 10,597
Total $ (9,595) $ 4,666
Operating Activities
Net cash used in operating activities of $9.5 million during the three months
ended March 31, 2022 increased compared to $5.9 million during the three months
ended March 31, 2021, which was primarily attributable to an increase in cash
used to support our operating activities, including but not limited to, our
clinical trials, research and development activities, and general working
capital requirements. The $3.6 million increase was impacted by the net effect
of changes in working capital of $3.3 million and an increase in net loss of
$0.4 million, partially offset by an increase in non-cash operating expenses of
$0.1 million.
Investing Activities
Net cash used in investing activities during the three months ended March 31,
2022 decreased by $40 thousand compared to the three months ended March 31,
2021. The decrease in net cash used in investing activities was the result of
decreased purchases of property and equipment.
Financing Activities
Net cash from financing activities during the three months ended March 31, 2022
decreased by $10.7 million compared to the three months ended March 31, 2021.
The decrease primarily resulted from net proceeds received during the three
months ended March 31, 2021 of $9.0 million from the exercise of warrants and
$1.6 million in sales of our common stock under the 2020 ATM Agreement. No
similar proceeds were received during the three months ended March 31, 2022.
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