Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this report and the audited financial statements and related notes contained in our Annual Report on Form 10-K for the year ended December 31, 2024. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below and in the forward-looking statements. Factors that could cause or contribute to these differences include, without limitation, those discussed in this Management's Discussion and Analysis of Financial Condition and Results of Operations, those listed under "Summary Risk Factors," and those discussed in the section titled "Risk Factors" included in Part II, Item 1A. of this report. All dollar amounts in the below Management's Discussion and Analysis of Financial Condition and Results of Operations are presented in U.S. dollars, and all dollar and share amounts are presented in thousands, unless otherwise noted or the context otherwise provides.

Overview

BioXcel Therapeutics, Inc. (Nasdaq: BTAI, "the Company") is a biopharmaceutical company built on artificial intelligence ("AI") to develop transformative medicines in neuroscience. Our wholly owned subsidiary, OnkosXcel Therapeutics, is focused on the development of medicines in immuno-oncology. We utilize cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients' lives. We developed a proprietary AI platform to reduce therapeutic development costs and potentially accelerate development timelines. Our approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indications. We believe this differentiated approach has proven its potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs.

Our Business

Our most advanced neuroscience candidate is BXCL501. In indications other than those approved by the U.S. Food and Drug Administration (FDA) as IGALMI^®, BXCL501 is an investigational, proprietary, orally dissolving sublingual film formulation of dexmedetomidine in development for the treatment of agitation associated with psychiatric and neurological disorders. Our most advanced immuno-oncology asset, BXCL701, is an investigational oral innate immune activator from OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors.

​

On April 6, 2022, we announced that the FDA approved IGALMI^® (dexmedetomidine) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults. IGALMI^® is approved to be self-administrated by patients under the supervision of a health care provider. On July 6, 2022, we announced that IGALMI^® was commercially available in doses of 120 and 180 micrograms ("mcg").

​

We have recently completed our SERENITY At-Home pivotal Phase 3 safety trial intended to support a supplemental new drug application ("sNDA") submission to potentially expand the label of IGALMI^® into the outpatient or at-home setting. On September 5, 2024, we announced the initiation of the trial, a double-blind, placebo-controlled study to evaluate the safety of a 120 mcg dose of BXCL501 in 200 patients for acute treatment of agitation associated with bipolar disorders or schizophrenia in the outpatient or at-home setting.

On August 27, 2025 we announced that the SERENITY At-Home Pivotal Phase 3 trial evaluating the safety of BXCL501, as an acute treatment for agitation associated with bipolar disorders or schizophrenia in the at-home setting, met its primary endpoint. The data from this successful study will form the basis of the sNDA submission for label expansion of IGALMI^® in the at-home setting planned for early first quarter of 2026.

​

On September 10, 2025 we further announced positive topline exploratory efficacy data from the SERENITY At-Home Pivotal Phase 3 safety trial, which demonstrated BXCL501 had continued effects and consistent benefit with repeat dosing.

​

On October 10, 2025 we announced positive results from the correlation study related to exploratory efficacy outcomes from the SERENITY At-Home trial. The results demonstrated a strong correlation between the clinician assessments and the patient or caregiver (informant) assessments. The results, along with the data from the SERENITY At-Home trial, are expected to be included in the planned sNDA submission.

​

Our TRANQUILITY program is designed to evaluate BXCL501 as a potential treatment option for agitation associated with Alzheimer's dementia in the outpatient or at-home setting and in-care facilities. We have had several FDA meetings to discuss the development program, and the FDA has commented on the proposed protocol for our TRANQUILITY In-Care Phase 3 trial, which is designed to evaluate the efficacy and safety of a 60 mcg dose of BXCL501 for agitation associated with Alzheimer's dementia. The Company is advancing plans for initiation of the trial upon funding. See further discussion in "Our Neuroscience Clinical Programs" below.

​

As described further below, we have deprioritized the development of BXCL501 for certain other proposed indications.

​

Our most advanced immuno-oncology candidate, BXCL701, is an investigational oral innate immune activator from OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors. As described further below, we have deprioritized the development of our BXCL701 programs, except as noted under "Immuno-Oncology" below.

​

2024 Clinical Prioritization

​

On May 8, 2024 the Company took actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs. The Company reduced its workforce by approximately 15% and notified impacted employees on May 8, 2024. All related restructuring costs were paid in the second quarter of 2024.

​

On September 17, 2024, the Company reduced its workforce by an additional 28% to extend its cash runway and prioritize clinical development of BXCL501. The Company completed the Clinical Prioritization in October 2024, paid $475 of the related costs during the first quarter of 2025, and paid the remaining $128 during the second quarter of 2025.

​

In the quarter ended September 30, 2025, we also reduced our investment in and utilization of our proprietary AI platform until additional funding is available.

​

IGALMI^® Commercialization Strategy

​

We are continuing to supply IGALMI^® through existing distribution channels. At the same time, while seeking potential commercial partners, we are maintaining IGALMI's market presence with minimal commercial resources following our Clinical Prioritization in 2024. Our commercialization efforts are designed to build the foundation to launch additional potential follow-on indications. If IGALMI^® would be approved outside the U.S., we would consider launching the product through collaborations with third parties. However, no foreign applications have been made at this time.

Our Neuroscience Clinical Programs and Investigator-Sponsored Trials

​

The following is a summary of the status of our major neuroscience clinical development programs and investigator-sponsored trials as of the date of this Quarterly Report on Form 10-Q.

​

​

About BXCL501

BXCL501 is our most advanced neuroscience clinical candidate. In indications other than those approved by the FDA as IGALMI^®, BXCL501 is an investigational, proprietary, orally dissolving sublingual film formulation of dexmedetomidine, a selective alpha-2 receptor agonist, targeting symptoms from stress-related behaviors such as agitation. BXCL501 is currently being evaluated for the acute treatment of agitation related to bipolar disorders or schizophrenia in the outpatient or at-home setting.

As a selective adrenergic agent with sublingual or buccal administration, BXCL501 is designed to be easily administered and has shown a relatively rapid onset of action in multiple clinical trials, including those studying patients with bipolar disorders, schizophrenia, and Alzheimer's disease. We believe results from these studies suggest that BXCL501 has the potential to reduce agitation without producing excessive sedation. We also believe BXCL501 is highly differentiated from antipsychotics and benzodiazepines, which are currently used as first-line standard-of-care treatment for agitation despite often producing unwanted side effects such as excessive sedation or extra pyramidal motor effects. Managing patient agitation in neuropsychiatric and neurodegenerative disorders represents a significant challenge for physicians and caregivers. We believe BXCL501 has the potential to address these challenges and, if approved for the respective indications, has the potential to become the standard of care for the acute treatment of agitation associated with these disorders.

In addition, based on its mechanism of action, we believe BXCL501 has the potential to address some symptoms of several additional diseases or conditions, including opioid use disorder ("OUD"), acute stress disorder ("ASD") and post-traumatic stress disorder ("PTSD"). BXCL501 is currently being evaluated for treatment of patients with those conditions in clinical trials sponsored by leading academic research institutions. See Government-Supported Investigator-Sponsored Trials ("ISTs") below.

BXCL501 Late-Stage Clinical Programs

SERENITY Program: Acute Treatment of Agitation Associated with Bipolar I or II Disorder or Schizophrenia

Under our SERENITY program, we are focused on the continued development of BXCL501 (currently marketed and commercialized as IGALMI^®) as a potential treatment option for agitation associated with bipolar I or II disorder or schizophrenia in the outpatient or at-home setting. The Company has completed its SERENITY At-Home pivotal Phase 3 trial, which is designed as a double-blind, placebo-controlled study to evaluate the safety of a 120 mcg dose of BXCL501 in over 200 patients for acute treatment of agitation associated with bipolar disorders or schizophrenia in the outpatient or at-home setting.

On August 18, 2025 we announced that the Company had received positive pre-sNDA meeting responses from the U.S. Food and Drug Administration (FDA). Based on the FDA's feedback, the Company believes that the planned sNDA regulatory package will be sufficient to support the sNDA submission, which remains on track for early first quarter of 2026.

The primary purpose of the planned meeting was to gain alignment with the FDA regarding the content and format of the Company's planned sNDA submission for the at-home (outpatient) use of BXCL501, including the clinical, nonclinical, and chemistry and manufacturing and controls (CMC) requirements. The Company concludes that the objectives of the pre-sNDA meeting have been accomplished based on the FDA's written responses and has determined that the meeting, originally scheduled for August 20, 2025, was no longer required. The pre-sNDA preliminary meeting comments received from FDA on August 14, 2025, will serve as the official record. Acceptance of the sNDA will be subject to the FDA's review of the complete filing.

On August 27, 2025 we announced that the SERENITY At-Home Pivotal Phase 3 trial evaluating the safety of BXCL501, the Company's proprietary, sublingual film formulation of dexmedetomidine, as an acute treatment for agitation associated with bipolar disorders or schizophrenia in the at-home setting, met its primary endpoint. The data from this successful study will form the basis of the sNDA submission for label expansion of IGALMI^® in the at-home setting.

SERENITY At-Home Topline Summary

​

SERENITY AT-Home Primary Endpoint Data

The 120 mcg dose of BXCL501 was well-tolerated in patients with episodes of agitation in the outpatient setting and met the primary objective. This tolerability outcome was observed across repeat dosing and through the duration of the trial.

​

BXCL501 120 mcg Tolerability Profile Consistent with IGALMI^® Label

​

¹SERENITY I and II evaluated a single agitation episode in patient in clinic. SERENITY AT-Home evaluated 2437 episodes in 208 patients. Adverse events are presented on an episode basis as each episode was evaluated as an independent event. Only AEs observed in Serenity At-Home Pivotal Phase 3 trial are listed

² AEs within 24 hours following dosing

³ Includes fatigue

​

BXCL501 Tolerability Profile Consistent with Repeat Dosing¹

​

¹Adverse events are presented on an episode basis

²AEs within 24 hours following dosing

³ Includes fatigue

​

BXCL501 Tolerability Profile Consistent over the Trial Duration

​

​

¹Adverse events are presented for agitation episodes in the weeks indicated

²AEs within 24 hours following dosing

³ Includes fatigue

​

On September 10, 2025, we announced positive topline exploratory efficacy data from the SERENITY At-Home Pivotal Phase 3 safety trial, which demonstrated BXCL501 had continued effects and consistent benefit with repeat dosing. The trial in the home setting evaluated 120 mcg dose of BXCL501, the Company's proprietary, sublingual film formulation of dexmedetomidine, IGALMI^®, for treatment of agitation associated with bipolar disorders or schizophrenia. While this trial was not powered for efficacy assessments, continued effects and consistent benefits with repeat dosing seen in the trial further support the potential of BXCL501 for use in the outpatient setting.

​

Effect Across Total Number of Agitation Episodes

​

Across 2,433 treated episodes in the trial, BXCL501 demonstrated a significant mean reduction in the modified Clinical Global Impression-Severity (mCGI-S) score from baseline compared to placebo at 2 hours (p<.05).

​

Effect Across Severity of Agitation Episodes

​

Patients experienced a complete resolution of agitation symptoms measured by mCGI-S at significantly higher rates with BXCL501 compared to placebo across severity of agitation episodes, with an overall resolution of 50% in the BXCL501 arm, compared to 33% on placebo (p <.0001). Severe agitation episodes fully resolved (no agitation) in 61% of episodes in the BXCL501 arm, compared to 18% on placebo (p <.0001). Moderate agitation episodes fully resolved in 43% of cases for patients in the BXCL501 arm, compared to 34% on placebo (p <.0005). Mild agitation episodes fully resolved in 60% of cases for patients in the BXCL501, compared to 40% on placebo (p <.0001). In sum, complete resolution of agitation was significantly higher with BXCL501 compared to placebo regardless of agitation episode severity.

​

Effect Across Number of Treated Agitation Episodes

​

The mean reduction in agitation symptoms experienced by patients following administration of BXCL501 was maintained throughout repeated dosing in the trial. There was a mean reduction in mCGI-S score of 1.2 following the first 12 doses and a mean reduction of 1.4 following 13 or more doses of BXCL501. This underscores the potential of BXCL501 to continue to provide benefit across repeated dosing.

​

Efficacy Across Duration of the Trial

​

The reduction in agitation symptoms experienced by patients following administration of BXCL501 was also maintained throughout the trial's duration. Evaluating the 12-week trial period on a time-based scale, agitation episodes treated with BXCL501 during weeks 1-4, 5-8 and 9-12 all had a mean reduction in mCGI-S score of 1.3. This underscores the potential of BXCL501 to maintain a sustained benefit across longer treatment durations.

​

On October 14, 2025 We announced positive results from the correlation study related to exploratory efficacy outcomes from the SERENITY At-Home trial. The results, along with the data from the SERENITY At-Home trial, are expected to be included in the planned sNDA submission.

​

The standard method for measuring acute agitation associated with schizophrenia and bipolar disorder is the Positive and Negative Syndrome Scale - Excited Component (PEC) administered by a trained clinician, which was used in the Serenity I & II Pivotal Trials. In order to evaluate BXCL501 for continued clinical effect with repeat dosing in the at-home setting using an exploratory efficacy measurement, the Company, in consultation with FDA, developed the modified CGI-S (mCGI-S) scale, which can be scored by patients and/or caregivers. The study assessed the correlation between PEC and mCGI-S in this prospective, open label, in-clinic trial in 33 patients.

​

The results demonstrated a strong correlation between the clinician assessments and the patient or caregiver (informant) rated outcomes, providing support for using mCGI-S to assess efficacy in the outpatient setting. A statistically significant and strong correlation between the PEC and mCGI-S with a correlation of ρ=0.89; p<0.0001 for patients and ρ=0.88; p<0.0001 for informants was observed.

​

TRANQUILITY Program: Acute Treatment of Agitation Associated with Dementia due to Probable Alzheimer's Disease ("AAD")

Under our TRANQUILITY program, we are evaluating BXCL501 as a potential treatment option for the acute treatment of agitation associated with Alzheimer's dementia ("AAD"). On June 29, 2023, we announced positive topline results from our TRANQUILITY II Phase 3 trial. The randomized, double-blind, placebo-controlled, parallel group trial evaluated the safety and efficacy of BXCL501 for the acute treatment of AAD in adults 65 years and older with mild to moderate dementia in assisted living facilities and residential care settings who required minimal assistance with activities of daily living.

On June 29, 2023, we also announced that we had learned that an investigator in the TRANQUILITY II study engaged in misconduct. Since that time, we have taken steps to further investigate and evaluate the conduct of the trial at the investigator's clinical site. On October 25, 2023, we announced that an independent third-party audit of data integrity at the trial site did not identify any findings that they believed impacted the data reliability or integrity, nor did they find any evidence of additional misconduct or fraud. On March 3, 2025, we announced that the FDA concluded that the inspection of the single site in the trial was closed under 21 C.F.R.20.64(d)(3) and released the Establishment Inspection Report, designating "Voluntary Action Indicated" for the site. Based on these steps to date, we believe that there have been no further instances of misconduct or fraud or other findings that adversely impact the data integrity or reliability of the eligibility, safety, and efficacy data obtained at the clinical trial site in question.

Based on subsequent meetings with and feedback from the FDA, we plan to generate additional Phase 3 efficacy and safety data, in relevant care-facility settings and across severity of dementia, in our TRANQUILITY In-Care trial. On September 5, 2024, we submitted to the FDA the proposed protocol for the trial, a double-blind, placebo-controlled study to evaluate the efficacy and safety of a 60 mcg dose of BXCL501 for acute treatment of AAD in the care setting. On November 12, 2024, we announced that we had received FDA feedback on the proposed protocol. The Company is advancing plans for initiation of the trial upon funding and has received proposals from CROs to prepare for trial initiation. At a future meeting with the FDA, we plan to further discuss our trial design and the details of the requirement for long-term safety data.

Pediatric Study

In June 2021, we initiated a clinical trial designed to evaluate the safety and efficacy of BXCL501 in the acute treatment of agitation associated with pediatric schizophrenia or bipolar disorders to fulfill pediatric study requirements agreed to with the FDA in connection with the approval of IGALMI^®. The trial protocol has been reviewed and agreed to by the FDA, to fulfill the commitment to study BXCL501 in pediatric patients ages 13 to 17 with schizophrenia and ages 10 to 17 with bipolar disorders. This double-blind, placebo-controlled study is ongoing. Approximately 63% of the 150 total subjects have been enrolled in the U.S. and 95 of such subjects have completed the clinical trial. Similar to our registration trials in schizophrenia and bipolar disorder (SERENITY I and II), the primary endpoint is the change from baseline PEC total score at two hours.

​

In October 2024, we submitted a request to the FDA for a deferral extension to complete enrollment requirements for pediatric patients with schizophrenia or schizoaffective disorder. The FDA granted a 3-year extension to complete the study.

​

IGALMI^® Post-Marketing Requirement Study

On June 25, 2024, we announced topline results from our post-marketing requirement study evaluating whether tolerance, tachyphylaxis, or withdrawal occur following repeat dosing of IGALMI^®. During the single-arm, open-label study, 28 inpatient adults with frequent episodes of agitation associated with bipolar disorders or schizophrenia self-administered 180 mcg dose of IGALMI^® as needed over seven days. A total of 83 episodes were treated. There was no evidence of tachyphylaxis, tolerance, or withdrawal, and IGALMI^® was generally well tolerated.

​

Additional Neuroscience Opportunities

BXCL501 Pipeline Opportunities for Franchise Expansion

Based on its potential mechanism of action, we believe BXCL501 has the potential for broad applicability across several indications where agitation is a symptom of a condition or underlying disease. Research published in the journal Frontiers in Pharmacology showed that BXCL501 caused a significant reduction in behaviors induced by stress in translatable behavioral models related to psychiatric disorders, providing further support for the drug's mechanism of action and potential suitability for broadly addressing stress-related disorders in addition to agitation.

Government-Supported Investigator-Sponsored Trials ("ISTs")

​

Our research partners have been awarded grants for the development of BXCL501 in alcohol use disorder ("AUD") with comorbid post-traumatic stress disorder ("PTSD"), opioid use disorder ("OUD"), and acute stress disorder ("ASD"). The Company is providing, or has provided, regulatory and operational support and investigational product for these development opportunities, which are being funded through Cooperative Agreements with the U.S. Department of Defense Congressionally Directed Medical Research Program and National Institute on Drug Abuse ("NIDA"). Clinical and regulatory responsibilities are led by clinical researchers and regulatory staff at the Veterans Affairs Connecticut Healthcare System, Yale University Medical School, RTI International, Columbia University New York State Psychiatric Institute, and University of North Carolina at Chapel Hill.

​

Opioid Use Disorder ("OUD")

​

As the Company previously announced, NIDA awarded a grant to Columbia University to fund clinical testing of BXCL501 as a potential treatment for mitigation of opioid withdrawal symptoms in patients diagnosed with OUD. The original 160-patient, three-site, four-arm study is a randomized, double-blind, double-dummy inpatient study comparing BXCL501 (180 mcg and 240 mcg BID), lofexidine (as a positive control), and placebo. The study's goal is to evaluate the safety and efficacy of BXCL501 relative to lofexidine and placebo in subjects with OUD. A majority of OUD patients participating in the study are anticipated to be exposed tofentanyl adulterated or associated with xylazine. To date, four differentsites have recruited, enrolled, and dosed patients diagnosed with OUD who are physically dependent on opioids, including prescription opioids. The Company is supplying BXCL501 for the study, which is sponsored by Columbia University. The study was subsequently stopped at 80 patients, or approximately one-half the original total, and the results are currently being analyzed. We expect that the results from the current study will read out in the fourth quarter of 2025.

​

Alcohol Use Disorder ("AUD") with Comorbid Post-traumatic Stress Disorder ("PTSD")

​

In December 2020, the Veterans Affairs Connecticut Healthcare System and Yale University Medical School were awarded a grant by the U.S. Department of Defense's Congressionally Directed Medical Research Program with the overall objective to evaluate BXCL501 in patients who suffer from AUD with comorbid PTSD. The Company provided BXCL501 for the inpatient Alcohol Interaction Study, which has been completed. Yale has received approval from the Institutional Review Board ("IRB") and allowance from the FDA to proceed with a trial to evaluate the effects of up to

80 mcg BID of BXCL501 per day for 28 days on alcohol consumption, PTSD symptoms, cognitive function, memory, sleep, and mood in patients diagnosed with mild, moderate, or severe AUD and who meet Criterion A for comorbid PTSD. The outpatient study has received funding approval from the Pharmacotherapies for Alcohol and Substance Use Disorders Alliance (funded through a Cooperative Agreement between the U.S. Department of Defense Congressionally Directed Medical Research Program and RTI International). Patient screening and enrollment is expected to begin in 2025, with the study expected to begin before the end of 2025. Study results may be used to inform a Phase 3 study in patients diagnosed with PTSD intended to commence with support by the Department of Defense Congresionally Directed Medical Research Program.

​

Acute Stress Disorder ("ASD")

​

On October 15, 2024, we announced a U.S. Department of Defense grant to the University of North Carolina at Chapel Hill ("UNC") through award contract HT94252411108 to fund a study of BXCL501 for treating ASD. The award provides approximately $2,827 to the UNC Institute for Trauma Recovery from September 15, 2024 through September 14, 2026 to evaluate the potential efficacy of BXCL501 to reduce ASD symptom severity and/or posttraumatic neuropsychiatric symptoms. The double-blind, placebo-controlled trial is expected to enroll 100 patients experiencing ASD resulting from motor vehicle collisions beginning in the second half of 2025, with BXCL501 supplied by the Company.

BXCL502

We identified a second neuropsychiatric drug candidate, BXCL502 − Latrepirdine (Dimebon) − through our AI-based platform. We had planned to evaluate BXCL502 initially as a monotherapy and possibly in combination with BXCL501 for the chronic treatment of agitation in patients with dementia and acute stress disorder. The active pharmaceutical ingredient ("API") underlying BXCL502 affects serotonergic signaling in the brain. Our preclinical data suggests BXCL502 has the potential to treat stress-related neuropsychiatric symptoms in dementia and other stress-related disorders. In previously published third-party clinical trial data, daily administration of the API of BXCL502 demonstrated improvement in behaviors using a well-established, clinically validated symptom scale. Formulation and further clinical development planning for BXCL502 was paused as part of the Reprioritization.

Additional Product Candidates Identified Leveraging our AI Platform

Our AI platform is comprised of a series of customized and specific AI applications aimed at identifying, predicting efficacy and testing of late-stage assets with known mechanisms of action and associated pharmacology and safety data. We target neuropsychiatric and neurological rare disorders, where the compounds are either disease-modifying or symptom-mitigating. Compounds are tested in relevant models of disease and rank-ordered based on the potential to enter the clinic and ease of development. Disease areas of interest are stress-related such as agitation, or neuropsychiatric symptoms associated with dementia and responsible for increased levels of healthcare burden. For example, our pipeline concepts BXCL503 and BXCL504 putatively have the potential to address apathy and aggression in dementia, respectively. Further development of these concepts is currently paused and investment in our AI capabilities have been reduced.

Neuroscience Intellectual Property

Our policy is to protect and enhance the proprietary technologies, inventions, and improvements that are commercially important to our business by filing patent applications in the U.S. and other jurisdictions related to our proprietary technology, inventions, improvements, and product candidates. We also rely on trademarks, trade secrets, and know-how relating to our proprietary technologies and product candidates, continuing innovation, and in-licensing technology and products. This reliance is expected to develop, maintain, and strengthen our proprietary position for novel therapeutics and novel formulations of existing therapeutics across multiple therapeutic areas. We also plan to rely on data exclusivity, market exclusivity, and patent term extensions when available.

​

We have multiple patent families filed to protect our neuroscience program, including BXCL501. As of November 1, 2025, our neuroscience patent portfolio included three Patent Cooperation Treaty ("PCT") applications not yet in national phase, 11 U.S. utility applications, 17 issued U.S. utility patents, 46 pending non-U.S. utility applications, 26

allowed or granted non-U.S. patents (including four in Japan), one pending U.S. design patent application, and two registered design patents in Japan. Fourteen U.S. utility patents, directed to our proprietary sublingual film formulation of dexmedetomidine and methods of treating agitation, are listed in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the "Orange Book") for IGALMI^® with expiration dates between 2037 and 2043. In the formulation family, we have granted or allowed patents in China, Europe, Eurasia, Japan, Mexico, and the U.S., and pending applications in the U.S., China, and other major markets. We expect that patents issued in this family will expire no earlier than 2039. We have also filed applications in additional patent families that are relevant to BXCL501. We have one granted European patent and applications pending in the U.S. and Japan directed to methods of treating insomnia using sublingual dexmedetomidine. We expect that patents issued from these applications will expire no earlier than 2035. We also have granted patents and pending applications filed in major markets, including the U.S., Europe, Japan, and China, directed to methods of treating agitation. We expect that patents issued from these applications will expire between 2039 and 2043. We also have three PCT applications directed to treating mania, depression, stress, and agitation. If patents are issued from those cases, we expect them to expire no earlier than 2044.

​

The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the U.S., the patent term is 20 years from the earliest filing date of a non-provisional patent application. Depending upon the timing, duration, and specifics of FDA approval of our product candidates, a U.S. patent that we own or license may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (a.k.a., the "Hatch-Waxman Act"). The act permits a patent restoration term of up to five years as compensation for patent term lost during product development and the drug approval regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product's approval date. The patent term restoration period is generally one-half the time between the effective date of an IND, and the submission date of a new drug application ("NDA"), plus the time between the submission date of an NDA and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension, and the application for extension must be made prior to patent expiration. The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we intend to apply for restorations of patent term for some of our currently owned or licensed patents to add patent life beyond their current expiration date, depending on the expected length of clinical trials and other factors involved in the submission of the relevant NDA.

The term of a patent can also be extended by PTA established in 35 U.S.C. 154(b). The intention of the PTA is to accommodate for delays caused by the USPTO during the prosecution of a U.S. utility or plant patent application. Under PTA, the USPTO delay is divided into three types: type A (delays after 14 months from the filing date of the application until the USPTO issues a first Office Action and delays after four months from the filing of certain actions by the applicant until the USPTO responds to such actions); type B (delays after three years from the earliest effective filing date until a patent is granted); and type C (delays due to interferences, secrecy orders, and successful appeals). The total amount of PTA is calculated by adding the types A, B, and C delays, and then subtracting any delay that is overlapped among three types or that is attributable to the applicant.

The term of a patent can also be shortened by a terminal disclaimer. A terminal disclaimer is a statement filed by a patent owner in which the owner disclaims or dedicates to the public the terminal part of the term of a patent. Often, the terminal disclaimer is filed in cases where at least one claim of a pending application would have been obvious in light of at least one claim in an earlier-filed patent, (or non-statutory obviousness-type double patenting rejection).

The patent positions of companies such as ours are generally uncertain and involve complex legal and factual questions. No consistent policy regarding the scope of claims allowable in patents in the field of method of use patents or reformulation patents has emerged in the U.S. patent laws and their interpretation outside of the U.S. are also uncertain. Changes in either the patent laws or their interpretation in the U.S. and other countries may diminish our ability to protect our technology or product candidates and enforce the patent rights that we license and also could affect the value of such intellectual property. In particular, our ability to stop third parties from making, using, selling, offering to sell, or importing products that infringe our intellectual property will depend in part on our success in obtaining and enforcing patent claims that cover our technology, inventions, and improvements. With respect to both licensed and company owned intellectual property, we cannot guarantee that patents will be granted with respect to any

of our pending patent applications or with respect to any patent applications we may file in the future, nor can we be sure that any patents that may be granted to us in the future will be commercially useful in protecting our products, the methods of use, or the manufacture of those products. In addition, if a pending patent application is granted, it is possible that only a subset of the claims that are currently contained in the pending patent application will be issued. Further, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. Patent and other intellectual property rights in the pharmaceutical and biotechnology space are evolving and involve many risks and uncertainties. For example, third parties may have blocking patents that could be used to prevent us from commercializing our product candidates and practicing our proprietary technology, and the issued patents that we in-license and those that may issue in the future may be challenged, invalidated, or circumvented, which could limit our ability to stop competitors from marketing related products or could limit the term of patent protection that otherwise may exist for our product candidates. In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies outside the scope of the rights granted under any issued patents that we own or exclusively in license. For these reasons, we may face competition with respect to our product candidates. Moreover, because of the extensive time required for development, testing, and regulatory review of a potential product, it is possible that, before any particular product candidate can be commercialized, any patent protection for such product may expire or remain in force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides. For additional information regarding intellectual property regulations and risks, see below under "Immuno-Oncology Intellectual Property" and Part II, Item 1A, "Risk Factors - Risks Related to Our Intellectual Property" elsewhere in this Quarterly Report on Form 10-Q.

​

Immuno-Oncology

On April 19, 2022, we announced the formation of a wholly owned subsidiary, OnkosXcel Therapeutics ("OnkosXcel") to develop potentially transformative medicines in oncology. OnkosXcel uses proprietary AI capabilities to drive the capital-efficient development of innovative anti-cancer therapeutics. The Company is continuing to evaluate strategic options for OnkosXcel and further work on the immuno-oncology programs described below has been paused.

Our approach to drug discovery leverages the application and methodology of our proprietary AI-based research and development platform with the aim of efficiently identifying and developing immuno-oncology product candidates. We believe that BXCL701 reflects the potential of this discovery approach in immuno-oncology. BXCL701 is an investigational, oral innate immune activator which demonstrated a 25% composite response rate in a Phase 2a clinical trial to treat patients with small cell neuroendocrine carcinoma ("SCNC") phenotype metastatic castration-resistant prostate cancer ("mCRPC"). On February 12, 2024, the Company announced that the FDA designated as a Fast Track development program the investigation of BXCL701 in combination with a checkpoint inhibitor for the treatment of patients with metastatic SCNC with progression on chemotherapy and no evidence of microsatellite instability. We have finalized a potential registrational trial design in mCRPC patients with SCNC phenotype. However due to our Clinical Prioritization, further planning on the trial has been paused.

mCRPC is often characterized as a "cold" tumor, which is a tumor with an immunosuppressive tumor microenvironment ("TME") and poor immune cell infiltration. Currently approved checkpoint inhibitors ("CPIs") that target programmed cell death 1 ("PD-1") or cytotoxic T-lymphocyte-associated protein 4 ("CTLA-4") have failed to demonstrate meaningful single-agent activity against such difficult-to-treat tumor types, including mCRPC. BXCL701 is designed to promote an immune-induced inflammatory response in the TME primarily via inhibition of dipeptidyl peptidases ("DPP") 8 and 9, which we believe can provide enhanced CPI therapeutic utility. We believe BXCL701 can potentially provide significant benefits for the approximately 20% of the estimated 299,010 men diagnosed with prostate cancer in the U.S. in 2024 and who we are expected to progress to the more aggressive mCRPC form of the disease, including approximately 20%, or 11,960, of those patients expected to develop the SCNC phenotype, for which there are currently limited treatment options. While CPIs have proven to be a significant advancement in cancer therapy, those currently approved by the FDA do not produce meaningful results in a majority of patients, as the clinical benefit is generally viewed to be limited to between 13% and 30% of cancer patients, and the duration of response is relatively short.

We believe the limited efficacy of approved CPIs results primarily from their intervention at later stages of the immune response. As a result, other targets and pathways can be exploited by the tumor to create a TME that can evade the enhanced immunological response enabled by approved CPIs. While numerous agents designed to target the earlier stages of an immune response are in development for use in combination with CPIs, their activity is restricted to a single component of the immune response. In contrast, we have developed BXCL701 to simultaneously address multiple components of the immune response, including:

Accordingly, we believe BXCL701 may have utility in stimulating increased activation, proliferation, and infiltration of tumor cells by immune effector cells, enabling its potential application in combination with currently approved CPIs, across a range of solid tumors and hematological malignancies, to potentially:

Central to our drug discovery initiatives are proprietary, AI-driven platform technologies we employ to identify novel therapeutic uses for approved therapeutics and candidates in clinical evaluation. The first and most advanced of our AI-driven discovery programs is our innate immune modulation program, which supported the pursuit of BXCL701 as a development candidate. We believe the application of this program provides us actionable insights into the inflammasome, a component of the innate immune system responsible for activation of the inflammatory response.

Our Immuno-Oncology Programs and Investigator-Sponsored Trials

Below is a summary of the status of our immuno-oncology clinical development programs as of the date of this Quarterly Report on Form 10-Q. We believe our product candidates, if successfully developed and approved, have the potential to become compelling treatment options for their respective indications. However, further work on our immuno-oncology programs has been paused, other than as noted below.

​

Immuno-Oncology Clinical Trials

Leveraging the insights enabled by the application and methodology of our proprietary AI-based platform which was used to identify novel therapeutic uses for our approved therapeutics and product candidates in clinical evaluation, and our industry expertise, we are pursuing two proprietary discovery programs to advance our goal of developing anti-cancer therapeutics. The first program, which encompasses BXCL701 across a range of indications, is based on the application of innate immune modulation technology. This program has been constructed to embrace key distinguishing characteristics of the innate immune system and we believe it is supported by our development efforts. This approach has driven the development of BXCL701, as a potential treatment for mCRPC with either SCNC or adenocarcinoma phenotype. Fundamental to the innate immune modulation program is BXCL701's potential to:

BXCL701 as a Potential Treatment for mCRPC

We believe BXCL701 may have utility in stimulating increased activation, proliferation, and infiltration of tumor cells by immune effector cells, enabling its potential use in combination with currently approved CPIs to treat cold tumors, such as mCRPC. We elected to pursue mCRPC as an indication for BXCL701 due to its enrichment for DPP mutations, which are especially prevalent in tumors with SCNC phenotype.

We received initial comments from the FDA on our proposed clinical development plan and received positive feedback regarding dose-optimization around the recommended Phase 2 dose ("RP2D") for use in future studies. However, the start of any such additional trial is paused following the Company's Reprioritization

The Phase 2a portion of the trial was segregated into two 28-patient trial cohorts, one cohort consisting of mCRPC patients with SCNC phenotype and a second cohort consisting of mCRPC patients with adenocarcinoma phenotype. Initially, we focused on mCRPC with SCNC phenotype as the primary patient population for BXCL701, since DPP9 is amplified in approximately 17% of treatment-emergent mCRPC with SCNC phenotype, compared to 5% or less in the broader prostate cancer population. However, we also observed responses in mCRPC patients with adenocarcinoma phenotype who were microsatellite stable in the Phase 1b portion of the trial. On this basis, we widened our Phase 2a

trial to include relapsed mCRPC patients with either SCNC or adenocarcinoma phenotype. Both cohorts employed a Simon two-stage trial design of 15 trial participants followed by 13 additional patients. The primary endpoint of the Phase 2a portion of this trial was a composite response rate, determined as either a RECIST 1.1 response (defined as a reduction in RECIST score of 30% or more), and/or a reduction in prostate specific antigen ("PSA") level of 50% or more, and/or a conversion in circulating tumor cells ("CTCs") from 5 or more CTCs/7.5 milliliter ("ml") to less than 5 CTCs/7.5 ml. Secondary endpoints included duration of response, progression-free survival, overall survival, changes in circulating cytokines, and certain disease-specific biomarkers.

We believe the results observed in the Phase 2a trial of BXCL701 administered in combination with pembrolizumab support further development.

We were particularly encouraged by the results observed in the cohort consisting of mCRPC patients with SCNC phenotype. Updated Phase 2a results for the SCNC cohort were presented at the 30^th Annual Prostate Cancer Foundation Scientific Retreat (PCF 2023). BXCL701 in combination with pembrolizumab demonstrated a 25% (seven out of 28 evaluable patients) composite response rate in mCRPC patients with SCNC phenotype, for whom there is no standard of care. As of a data cutoff of September 6, 2023, five of these responders were RECIST 1.1 responders (four confirmed responses and one unconfirmed response) with decreases in tumor size ranging from -45% to -67% and a median duration of response of 7.6 months. Overall survival (OS) results from the Phase 2a portion of the trial in SCNC patients. BXCL701 in combination with pembrolizumab demonstrated a compelling median OS and 12-month survival rate.

The most frequently observed TEAEs (≥15% of patients) that appear to be related to talabostat included Fatigue, Hypotension, Dizziness, Nausea, and Pruritus. The events have generally been manageable and reversible. When combined with the immune checkpoint inhibitor pembrolizumab, the most frequently reported talabostat-related TEAEs (≥15% of patients) have been Fatigue, Hypotension, Pruritus, Dizziness, Nausea and Diarrhoea.

​

The Phase 2a trial has also been completed for the adenocarcinoma cohort. The CRR was 18.2% (n = 6). In 29 patients with disease evaluable for response, the confirmed ORR per RECIST 1.1 per investigator assessment was 13.8% (n = 4). Decreases in tumor size ranged from -67% to -90%. Two patients had an unconfirmed RECIST 1.1 response, 5 patients had a PSA₅₀ response, and 2 patients had a CTC response.

The median OS of evaluable patients was 12.1 months (95% CI 5.5 - 16.4) and the 12-month survival rate was 53.4%. Median rPFS was 1.9 months and the 6-month rPFS rate was 16.8%.

​

The most frequently observed TEAEs >15% of patients that appear to be related to talabostat included Fatigue, Nausea, Hypotension, Platelet count decreased, Vomiting, Dizziness, White blood cell count decreased and decreased appetite. The events have generally been manageable and reversible. When combined with the immune checkpoint inhibitor pembrolizumab, the most frequently reported talabostat-related AEs have been Fatigue, Nausea, Vomiting, Hypotension, Platelet count decreased, Pruritus, Dizziness, White blood cell count decreased, Diarrhoea and Decreased appetite.

​

BXCL701 as a Potential Treatment for Small Cell Lung Cancer ("SCLC")

We are encouraged by the therapeutic potential of BXCL701 for SCLC given the activity it has demonstrated in the SCNC clinical trial. We have prepared a robust synopsis for a Phase 1b/2 trial design to be a dose-escalation safety lead-in to establish a RP2D in combination with atezolizumab, a CPI approved for SCLC. However, the start of any such trial has been paused.

​

BXCL701 as a Potential Treatment for Other Cancers

In addition to its potential use in combination with CPIs to treat mCRPC, an immunologically cold tumor, we are developing BXCL701 as a therapeutic for pancreatic cancer, and other solid tumors with greater, or "non-cold," immunological activity that are nonetheless regarded as difficult-to-treat, and hematological malignancies. We believe the synergistic potential of BXCL701 and CPIs, when administered in combination, could increase cancer cell susceptibility to an enhanced immune response, potentially increasing the clinical benefit of CPIs, whose single-agent

efficacy in treating these tumor types is generally viewed to be limited to between 13% and 30% of cancer patients and the duration of response to treatment is often short. As such, we envision the potential therapeutic benefit of BXCL701 increasing the sensitivity of cold tumors to CPI therapy, enabling the potential treatment of a range of cancers including pancreatic cancer, breast cancer, colorectal cancer, and ovarian cancer, as well as enhancing the depth of response to CPIs in other cancers. Based on the preclinical observation that BXCL701 showed direct cytotoxic activity against certain leukemic cells, an investigator sponsored trial was pursued at the Dana Farber Cancer Institute.

Pancreatic Cancer

The American Cancer Society estimated that in 2024, approximately 66,000 cases of pancreatic cancer were expected to be diagnosed in the U.S. We are supporting a Phase 2 investigator-sponsored trial ("IST") sponsored by Georgetown Lombardi Comprehensive Cancer Center ("Georgetown Lombardi"), designed to evaluate the use of BXCL701 along with pembrolizumab to treat pancreatic cancer. Few therapeutic options are available for patients with this disease, which has a five-year survival rate of less than 10%, among the lowest of all cancers. Pancreatic cancer has among the highest levels of overexpression and amplification of DPPs. Preclinical models demonstrated synergy between DPP inhibition with BXCL701 and anti-PD-1 antibody in the pancreatic cancer tumor microenvironment. Based on these preclinical observations, Georgetown Lombardi has initiated a Phase 2 IST to assess the safety of BXCL701 when administered in combination with pembrolizumab (safety lead-in), as well as to estimate the 18-week progression-free survival rate (primary objective of the efficacy phase) in previously treated metastatic pancreatic ductal adenocarcinoma. This trial started in the third quarter of 2023. On February 6, 2024, we announced the completion of patient enrollment in the safety lead-in portion of the trial. As part of the trial's safety lead-in, the first six patients have been enrolled and will be observed for a six-week safety window period. The trial is then expected to enroll approximately 39 patients in its efficacy phase in a Simon 2-stage single-arm, open-label design (19 patients in stage 1 and 20 patients in stage 2). Patients will be monitored radiographically and by tumor markers for response assessment. Tumor biopsies and blood samples will also be collected over the course of treatment to better understand the potential mechanism of action for the combination. As 6 or fewer patients achieved progression free responses out of 19 at 18 weeks, the study is now closed and will be amended for futility.

Relapsed or Refractory AML

The American Cancer Society estimated that in 2024, approximately 21,000 new cases of AML were expected to be diagnosed in the U.S. We are supporting a Phase 1b IST sponsored by the Dana-Farber Cancer Institute ("Dana-Farber") designed to evaluate the use of BXCL701, along with the current standard of care to treat relapsed or refractory AML. We believe that pyroptosis triggered by BXCL701 may provide potent single agent cytotoxicity directed towards AML. We also believe that DPP9 copy number may provide an actionable biomarker, as high copy number has been observed to correlate with BXCL701 toxicity in human AML cell lines. DPP8/9 inhibition has been shown to be cytotoxic to THP-1 cells, monocytic cancer cells cultured from a patient with AML, but not other cell lines, suggesting a specific vulnerability of AML to these inhibitors which we believe can be exploited for therapeutic benefit. Based on these preclinical observations, Dana-Farber has initiated a Phase 1b trial to assess the safety of BXCL701 and to determine the maximum tolerated dose or the RP2D of BXCL701 as a single agent in AML. This trial started in the first quarter of 2023. The study was closed on August 31, 2025. At the time of study closure, the final cohort (BXCL701 0.4 mg BID;0.8 mg total daily dose) had been open since January 2025 and had enrolled two-thirds of patients. PK/PD analysis of samples is being pursued to see if the higher doses were delivered using this new dosing schedule.

Other Potential Anti-cancer Programs

We believe BXCL701 may have potential application in breast cancer, as its use in combination with monoclonal antibody therapy generated encouraging in vivo data in a preclinical disease model where enhanced antibody-dependent cellular cytotoxicity was observed.

The FDA has granted BXCL701 orphan drug designation for the treatment of AML, stage IIb to IV melanoma, pancreatic cancer, and soft tissue sarcoma. As we consider BXCL701's mechanistic potential to be combined with other CPIs for additional indications that represent unmet medical needs we may be able to apply for additional orphan drug

designations for BXCL701 plus CPI combinations. However, all BXCL701 ongoing development activity has been paused.

Immuno-Oncology Intellectual Property

Intellectual property is of vital importance in our field and in biotechnology generally. We seek to protect and enhance proprietary technology, inventions, and improvements that are commercially important to the development of our business by seeking, maintaining, enforcing, and defending patent and other intellectual property rights, whether developed internally or licensed from third parties. We will also seek to rely on regulatory protection afforded through inclusion in expedited development and review, data exclusivity, market exclusivity, and patent term extensions where available.

​

As of July 28, 2025, we have multiple patent families filed to protect our immuno-oncology program, including our core patent family directed to methods of using BXCL701 with immune checkpoint inhibitors, which is granted in the U.S., Japan, Canada, China, India, Taiwan, Mexico, Europe, and United Arab Emirates. Additional applications in this family are pending in major markets. Patents issued from this family are expected to expire no earlier than 2036. We have an additional patent issued in the U.S. directed to a method of selecting patients based on a biomarker and methods of treating certain cancers, with an expected expiration date no earlier than 2039. A corresponding European Patent case directed to selecting patients is issued and is expected to expire no earlier than 2038.

​

Additional applications are directed to administering BXCL701 in combination with various other molecules, biomarkers, and dosing regimens. We also have three PCT applications directed to novel formulations of BXCL701, various dosing regimens, methods of use, combination therapies, and to methods of treating small cell lung cancer. We expect that any patents issuing from the PCT and provisional applications will expire no earlier than 2043 to 2044.

​

We expect to file additional patent applications in support of current and new immuno-oncology clinical candidates as well as new platform and core technologies. For additional information regarding intellectual property regulations and risks, see above under "Neuroscience Intellectual Property" and Part II, Item 1A, "Risk Factors - Risks Related to Our Intellectual Property" elsewhere in this Quarterly Report on Form 10-Q.

​

Basis of Presentation

The Company's condensed consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles.

Components of Our Results of Operations

Product Revenue, Net

Revenue relates to sales of IGALMI^® and reflect limited market access since commercial launch in July 2022. The revenues are net of rebates, chargebacks, discounts, and other adjustments. During the fourth quarter of 2022, we began contracting directly with intermediaries such as GPOs.

Operating Costs and Expenses

Cost of Goods Sold

Cost of goods sold primarily relates to the costs of producing, packaging, and delivering our product to customers, as well as costs related to excess or obsolete inventory.

Research and Development

Our research and development expenses reflect costs associated with the identification of our preclinical and clinical product candidates. Expenditures primarily consist of salary, benefits and non-cash stock-based compensation for our research and development personnel, costs incurred under agreements with contract research organizations and sites that conduct our non-clinical studies and clinical trials, costs of outside consultants engaged in research and

development activities, travel expenses, the cost of acquiring, developing and manufacturing preclinical and clinical trial materials and lab supplies, and depreciation and other expenses. Payments to BioXcel LLC are also included in research and development expenses. Costs associated with third parties that provide non-clinical services such as toxicology, pharmacology, research and discovery, biomarker studies and similar services are included in the professional fees category of research and development expenses.

We expense research and development costs as incurred.

Our research and development costs by program for the three and nine months ended September 30, 2025 and 2024 were as follows:

​

Selling, General and Administrative

Selling, general and administrative expenses primarily consist of salaries, benefits and non-cash stock-based compensation for our sales, executive and administrative personnel. Selling, general and administrative expenses also include legal expenses to pursue patent protection of our intellectual property and other corporate matters, professional fees for audit and tax services and insurance charges. We may also incur increased costs to comply with corporate governance, internal controls, investor relations and disclosures and similar requirements applicable to public companies.

As a result of our restructuring activities completed during 2024, we expect that our selling, general and administrative expenses will decline due to IGALMI^®'s restructured commercialization plan and reduced personnel costs. However, we may also experience increased selling, general and administrative expenses due to higher fees for outside consultants, attorneys, and accountants.

Restructuring Costs

2023 Strategic Reprioritization

On August 8, 2023, our Board of Directors approved a broad-based strategic reprioritization (the "Reprioritization"). We took actions to reduce certain operational and workforce expenses that were no longer deemed core to ongoing operations in order to extend our cash runway and drive innovation and growth in high potential clinical development and value creating opportunities. These actions included a shift in commercial strategy for IGALMI^® in the institutional setting, a reduction of in-hospital commercialization expenses, a suspension of programs no longer determined to be core to ongoing operations, and a prioritization of at-home treatment setting opportunities for BXCL501.

As part of this strategy, the Company's Board of Directors approved a reduction of approximately 60% of the Company's workforce. The Company notified impacted employees on August 14, 2023. The Reprioritization was

substantially complete as of December 31, 2023, and the remaining restructuring costs were paid during the first quarter of 2024.

2024 Clinical Prioritization

On May 8, 2024 the Company took actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs. The Company reduced its workforce by approximately 15% and notified impacted employees on May 8, 2024. All related restructuring costs were paid in the second quarter of 2024.

​

On September 17, 2024, the Company reduced its workforce by an additional 28% to extend its cash runway and prioritize clinical development of BXCL501. The Company completed the Clinical Prioritization in October 2024, paid $475 of the related costs during the first quarter of 2025, and paid the remaining $128 during the second quarter of 2025.

​

Management believes that, after giving effect to the Reprioritization and additional restructuring activities completed, the Company's cash, cash equivalents and restricted cash of $37,320 as of September 30, 2025 and proceeds subsequently raised pursuant to the ATM Program, will allow the Company to fund its operations and meet its liquidity requirements into the first quarter of 2026.

​

Other Expense (Income)

Other (income) expense primarily consists of interest costs associated with the Credit Agreement the Company entered into in April 2022, changes in fair value of derivative financial instruments, and interest income earned on cash and cash equivalents that were comprised primarily of money market funds. Interest expense may increase in the future if we meet required milestones, and we are able to draw down additional funds under the Credit Agreement.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements is set forth in Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

Product Revenue, Net

Commercial sales of IGALMI^® launched in July 2022. As part of the Company's Reprioritization, the IGALMI^® commercial team shifted focus to a hospital/contracting strategy with a Corporate Account Director ("CAD") team. The goal of the realigned CAD team is to work with large hospital/Integrated Delivery Network ("IDN") and drive sales utilizing a top-down approach, allowing the Company to continue to make inroads into the institutional market in a more cost-efficient manner. IGALMI^® product revenue, net was $98 and $214 in the three months ended September 30, 2025 and 2024, respectively. The decrease in sales was primarily due to a reduction in bulk sales to existing customers, an increase in GPO discounts, and a reduction in commercial activities due to the Clinical Prioritization in May 2024 and September 2024.

Cost of Goods Sold

Cost of goods sold for the three months ended September 30, 2025 and 2024, were $11 and $1,170, respectively. Cost of goods sold is related to the costs to produce, package and deliver IGALMI^®to customers, as well as costs related to excess or obsolete inventory. We entered into a commercial supply agreement with ARx, LLC ("ARx") pursuant to which ARx has agreed to exclusively manufacture and supply us with all of our worldwide demand of film formulation of Dex to be used for the commercial supply of IGALMI^®and for ongoing clinical trials of our product candidate BXCL501, subject to certain alternative supply provisions. The decrease in Cost of goods sold for the three months ended September 30, 2025 is the result of lower charges for reserves for excess or obsolete inventory compared

to the same period in 2024. Charges for reserves for excess or obsolete inventory were $0 and $1,157 in the three months ended September 30, 2025 and 2024, respectively.

Research and Development Expense

Research and development expenses for the three months ended September 30, 2025 and 2024 were as follows:

​

The overall increase of $3,639 for the three months ended September 30, 2025 relative to the same period in 2024 was primarily attributable to:

Following IGALMI^®'s approval by the FDA, we capitalize costs related to commercial production of IGALMI^® as inventory and expense those CMC costs related to clinical trials.

Selling, General and Administrative Expense

Selling, general and administrative expenses for the three months ended September 30, 2025 and 2024 were as follows:

​

The overall decrease of $2,302 for the three months ended September 30, 2025, relative to the same period in 2024 was primarily attributable to:

Other Expense (Income)

Interest expense increased to $4,373 for the three months ended September 30, 2025 from $3,790 in the same period in 2024 primarily due to higher debt balances and interest rates under the Credit Agreement. The expense was partially offset by lower interest income earned on lower levels of cash and cash equivalents that were held primarily in short-term money market funds. Interest income decreased to $236 for the three months ended September 30, 2025 compared to $616 for three months ended September 30, 2024, due to lower average cash balances during the year. Other (income) expense, net is primarily associated with changes in fair value of derivative financial instruments for the period, which relate to instruments associated with the Credit Agreement and the Company's registered direct equity offerings.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Product Revenue, Net

IGALMI^® product revenue, net was $386 and $1,900 in the nine months ended September 30, 2025 and 2024, respectively. The decrease in sales was primarily due to a reduction in bulk sales to existing customers, an increase in GPO discounts, and a reduction in commercial activities due to the Clinical Prioritization in May 2024 and September 2024.

Cost of Goods Sold

Cost of goods sold for the nine months ended September 30, 2025 and 2024, were $132 and $1,311, respectively. Cost of goods sold is primarily related to the costs to produce, package and deliver IGALMI^® to customers, as well as costs related to excess or obsolete inventory. The decrease in Cost of goods sold for the nine months ended September 30, 2025 is the result of lower charges for reserves for excess or obsolete inventory compared to the same period in 2024. Charges for reserves for excess or obsolete inventory were $95 and $1,202 in the nine months ended September 30, 2025 and 2024, respectively.

Research and Development Expense

Research and development expenses for the nine months ended September 30, 2025 and 2024 were as follows:

​

The overall decrease of $984 for the nine months ended September 30, 2025 relative to the same period in 2024 was primarily attributable to:

Following IGALMI^®'s approval by the FDA, we capitalize costs related to commercial production of IGALMI^® as inventory and expense those CMC costs related to clinical trials.

Selling, General and Administrative Expense

Selling, general and administrative expenses for the nine months ended September 30, 2025 and 2024 were as follows:

​

The overall decrease of $13,709 for the nine months ended September 30, 2025, relative to the same period in 2024 was primarily attributable to:

Other Expense (Income)

Interest expense increased to $12,588 for the nine months ended September 30, 2025 from $11,097 in the same period in 2024 primarily due to higher debt balances and interest rates under the Credit Agreement. The expense was partially offset by lower interest income earned on lower levels of cash and cash equivalents that were held primarily in short-term money market funds. Interest income decreased to $745 for the nine months ended September 30, 2025 compared to $2,234 for nine months ended September 30, 2024, due to lower average cash balances during the year. Other (income) expense, net is primarily associated with changes in fair value of derivative financial instruments for the period, which relate to instruments associated with the Credit Agreement and the Company's registered direct equity offerings.

Inflation

Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation has had a material effect on our results of operations during the periods presented. For a discussion of inflationary risks to our future revenues under the Inflation Reduction Act, see "Health care reform measures could hinder or prevent our product candidates' commercial success." in Part II, Item 1A, "Risk Factors" elsewhere in this Quarterly Report on Form 10-Q.

Reverse Stock Split

On February 10, 2025, the Company effected a 1-for-16 reverse stock split of its issued and outstanding common stock (the "Reverse Stock Split"). As a result of the Reverse Stock Split, each 16 shares of common stock issued and outstanding immediately prior to February 10, 2025 were automatically converted into 1 share of common stock. The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock. All outstanding convertible notes, stock options and RSUs entitling their holders to purchase or obtain or convert into shares of our common stock were adjusted, as required by the terms of these securities. All applicable common share and per share amounts have been retrospectively restated to show the effect of the reverse stock split.

Liquidity and Capital Resources

As of September 30, 2025, we had cash, cash equivalents and restricted cash of $37,320, working capital of $6,599 and stockholders' deficit of $88,919. Net cash used in operating activities was $43,405 and $57,218 for the nine months ended September 30, 2025 and 2024, respectively. We incurred losses of approximately $57,352 and $48,740 for the nine months ended September 30, 2025 and 2024, respectively. We will need to generate significant product revenues to achieve profitability. Our history of significant losses, negative cash flows from operations, potential near-term increased covenant-driven amortization payments or full repayment obligations under our Credit Agreement, the regulatory event of default triggers under the Credit Agreement, other funding requirement covenants under the Credit Agreement, limited liquidity resources currently on hand, and dependence on our ability to obtain additional financing to fund our operations after the current resources are exhausted, about which there can be no certainty, have resulted in

management's assessment that there is substantial doubt about our ability to continue as a going concern for a period of at least 12 months from the issuance date of the financial statements included in this Quarterly Report on Form 10-Q.

Successful completion of the Company's development programs and, ultimately, the attainment of profitable operations are dependent upon future events, including obtaining adequate financing to support the Company's cost structure and operating plan. Management's plans to improve the Company's liquidity and reduce its operating expenses and capital requirements include, among other things, pursuing one or more of the following steps to raise additional capital, none of which can be guaranteed or are entirely within the Company's control:

●raise funding through the sale of the Company's equity securities;

●raise funding through third-party investments in or other strategic options for OnkosXcel;

●raise funding through debt financing and/or restructuring of its existing Credit Agreement;

●establish collaborations with potential partners to advance the Company's product pipeline;

●establish collaborations with potential marketing partners;

●reduce overhead and headcount to focus on core priorities, and/or

●any combination of the foregoing.

​

To date, we have continued research and development activities while managing our cash position. However, we require additional funding to continue as a going concern. There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly when there is market uncertainty or an economic downturn or if other events make investment in our securities less appealing. If we are unable to secure adequate additional funding as and when needed on acceptable or commercially reasonable terms, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more product candidates. In addition, there are various macro-economic trends affecting the financing markets whose impact on our liquidity and future funding requirements are uncertain as of the filing date of this Quarterly Report on Form 10-Q. We will need substantial additional funding, and if we are unable to raise capital when needed, we could be compelled to pursue alternative options, including, without limitation, implementing further workforce reductions, reducing or ceasing product development programs and advancement of our clinical trials and product candidates, selling our assets or seeking other strategic alternatives. See "Risks Related to Financial Position and Need for Additional Capital - We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts or otherwise seek strategic alternatives." in Part II. Item 1A., "Risk Factors" elsewhere in this Quarterly Report on Form 10-Q.

Sources of Liquidity

We have primarily focused our efforts on raising capital and building the products in our pipeline, and, although we generate revenue from sales of IGALMI^®, we do not expect to generate positive cash flows from operations in the near term. Since our inception, our operations have been financed primarily from proceeds from the sale of equity securities, including our initial public offering, private placements of our common stock, registered offerings of our common stock, an Open Market Sale Agreement (as amended, supplemented and/or restated from time to time, the "Sale Agreement") with Jefferies LLC ("Jefferies"), an Equity Distribution Agreement with Canaccord Genuity LLC ("Canaccord"), and borrowings under our Credit Agreement (as described below). We have not yet established an ongoing source of revenue sufficient to cover our operating costs and will need to do so in future periods.

Financing Agreements

On April 19, 2022, we entered into two financing agreements: the Credit Agreement and the RIFA. Pursuant to the Credit Agreement, the Lenders originally agreed to provide up to $135,000 in senior secured term loans to us. On April 28, 2022, we borrowed the first $70,000 tranche of loans under the Credit Agreement. Pursuant to the RIFA, the Purchasers agreed to provide us with up to $120,000 in financing for our near-term commercial activities of IGALMI^®, development and commercialization of BXCL501 and other general corporate purposes. On July 8, 2022, we drew down the first tranche of $30,000 under the RIFA. In connection with the Credit Agreement, we granted to the Lenders (i) warrants to purchase up to 17 shares of our common stock (the "Closing Date Warrants"), (ii) rights to purchase up

to $5,000 of our common stock and (iii) warrants to purchase up to 175 individual ownership units (i.e., not in thousands) in OnkosXcel (the "OnkosXcel Warrants").

On November 13, 2023, we, the Lenders and OFA entered into a Waiver and First Amendment to Credit Agreement and Guaranty (the "First Amendment") that provided for, among other things, a waiver and a modification to the covenant in the Credit Agreement regarding investments in OnkosXcel, pursuant to which we were permitted to invest up to a maximum of $30,000 at any time outstanding in OnkosXcel, increased from the $25,000 at any time outstanding. The First Amendment waived any defaults or events of default arising under the Credit Agreement due to a breach prior to the date of the First Amendment of the OnkosXcel investment covenant, or a breach of our obligation to notify OFA of such default, including our investment in an amount in excess of what was previously permitted under the OnkosXcel investment covenant. In connection with the First Amendment, we paid to the Lenders a fee of $180 (representing 0.25% of the loans outstanding under the Credit Agreement on the date of the First Amendment) and agreed to pay to the Lenders an exit fee equal to 0.25% of the loans under the Credit Agreement repaid upon maturity or prepayment of the loans.

On December 5, 2023, we entered into the Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement (the "Second Amendment") with the Lenders and OFA, as administrative agent. The Second Amendment terminated the RIFA and converted the financing previously provided to us thereunder to term loans under the Credit Agreement. In addition, the Second Amendment replaced the Credit Agreement's existing "Tranche B" and "Tranche C" term loan opportunities with three new tranches aggregating up to $100,000 in potential funding:

As of September 30, 2025, $80,000 remains available for borrowing if the milestones above are met.

The Second Amendment also modified the interest rate of the loans provided under the Credit Agreement to be a floating rate per annum equal to the secured overnight financing rate ("SOFR") (subject to a SOFR floor of 2.5% and a cap of 5.5%) plus 7.5%.

Following the Second Amendment, we were required to comply with certain covenants under the Credit Agreement, including a financial covenant that requires we maintain a minimum cash liquidity amount of $15,000 (or higher upon certain events) and a modified minimum revenue requirement measured on a quarterly basis based on the revenue attributable to BXCL501 for the six consecutive month period ending on the last day of the relevant quarter

(the "Revenue Covenant"), subject to cure payments of not less than $1,000 if we failed to meet the minimum revenue requirement.

In connection with the closing of the Second Amendment, we amended and restated the Closing Date Warrants granted to the Lenders on April 19, 2022 to purchase up to 17 shares of the Company's common stock at an exercise price of $320.64 per share. Pursuant to the amendment and restatement of the Closing Date Warrants, dated December 5, 2023 (the "Amended and Restated Closing Date Warrants"), the exercise price of the Closing Date Warrants was reduced to $58.3232 per share, which represented the arithmetic average of the volume-weighted average price of the Company's common stock on the Nasdaq Capital Market during the 30 trading days preceding the Second Amendment Effective Date. In addition, the Company granted new warrants to the Lenders to purchase up to 4 shares of the Company's common stock (the "2023 Warrant Shares") at an exercise price of $58.3232 per share (the "2023 Warrants"). The Amended and Restated Closing Date Warrants and the 2023 Warrants will expire on April 19, 2029 and may be net exercised at the holder's election.

On February 12, 2024 (the "Third Amendment Effective Date"), we entered into the Third Amendment to Credit Agreement and Guaranty (the "Third Amendment"), pursuant to which the Lenders agreed to waive the covenant that we shall not receive a report and opinion from our independent auditors that contains a "going concern" or like qualification or exception or emphasis of matter of going concern footnote with respect to our financial statements for the fiscal year ended December 31, 2023 and, as a result, such event shall not be an event of default. As a condition to the effectiveness of the Third Amendment, among other things, we shall have received at least $40,000 in gross proceeds from a registered public sale of the Company's common stock, warrants and/or pre-funded warrants on or before February 20, 2024. We did not meet this condition and therefore the Third Amendment did not become effective.

On March 20, 2024, we entered into the Fourth Amendment to the Credit Agreement ("the Fourth Amendment"), pursuant to which the Lenders waived the Credit Agreement's covenant that the report and opinion the Company received from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2023 not contain a "going concern" or similar qualification.

The Fourth Amendment included covenants that we receive, (i) after the effective date of the Fourth Amendment and on or before April 15, 2024, at least $25,000 in gross proceeds from the issuance of our common stock, warrants and/or pre-funded warrants, and/or in non-refundable cash consideration from partnering transactions entered into after the effective date of the Fourth Amendment (so long as such partnering transactions would not require us or any of our subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), and (ii) after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 (for the avoidance of doubt, inclusive of amounts previously counted toward the preceding clause (i)) in gross proceeds from the issuance of our common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent (as defined in the Credit Agreement) in its sole discretion ) from partnering transactions entered into after the effective date of the Fourth Amendment. Failure to perform this covenant would constitute (A) a default under the Credit Agreement and (B) an event of default under the Credit Agreement, subject to a cure period, in the case of clause (i) of the preceding sentence, until May 15, 2024 (for the avoidance of doubt, failure to perform clause (ii) would constitute an immediate event of default under the Credit Agreement without any cure or grace period).

In addition, the Fourth Amendment provided that if we had not, after the Effective Date and on or before September 30, 2024, received at least $40,000 in gross proceeds from the issuance of our common stock, warrants and/or pre-funded warrants, and/or cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the effective date of the Fourth Amendment, the "Minimum Liquidity Amount" (as defined in the Credit Agreement) that we are required to maintain at all times will increase to $25,000 from $15,000, unless and until we had received, after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 in gross proceeds from the issuance of our common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair

market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the effective date of the Fourth Amendment.

In connection with the Fourth Amendment, on the effective date of the Fourth Amendment, we granted new warrants to the Lenders to purchase up to 6 shares of our common stock (the "2024 Warrant Shares") at an exercise price of $49.1568 per share (the "2024 Warrants"), which represents a 10% premium over the arithmetic average of the volume-weighted average price of our common stock on the Nasdaq Capital Market during the 30 trading days preceding the Effective Date. The 2024 Warrants will expire on April 19, 2029 and may be net exercised at the holder's election.

On November 21, 2024, the Company entered into the Fifth Amendment to Credit Agreement and Guaranty and First Amendment to Fourth Amendment to Credit Agreement and Guaranty (the "Fifth Amendment").

​

Pursuant to the Fifth Amendment, the Lenders agreed to, among other things, (i) waive the Credit Agreement's covenant that the report and opinion the Company will receive from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2024 will not contain a "going concern" or similar qualification, (ii) permanently waive the Credit Agreement's minimum revenue covenant, and (iii) waive the Fourth Amendment's requirement that the Company raise, after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 in gross cash proceeds from the issuance of its common stock, warrants, and/or pre-funded warrants, and/or in cash and/or non-cash consideration from newly entered-into partnering transactions.

​

The Fifth Amendment included a new capital raising covenant requiring that the Company receive (A) after the effective date of the Fifth Amendment and on or prior to November 27, 2024, at least $7,000 in gross cash proceeds from the issuance of the Company's common stock, warrants and/or pre-funded warrants("Raise 1"), (B) after the effective date of the Fifth Amendment and on or before March 15, 2025 (provided that the Company was required to use its commercially reasonable efforts to satisfy the requirement by February 15, 2025), at least $18,000 in net cash proceeds (including the proceeds of Raise 1) from (i) the issuance of the Company's common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions entered into after the effective date of the Fifth Amendment (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), (iii) the issuance of the Company's subordinated debt (subject to terms set forth in the Fifth Amendment), and/or (iv) asset sales permitted pursuant to the Credit Agreement or consented to by the Lenders (such capital raise, "Raise 2"), and (C) after the effective date of the Fifth Amendment and on or prior to the earlier of (x) August 15, 2025 and (y) the date that is 30 days after the final data readout of the SERENITY At-Home Phase 3 trial, at least $29,000 in net cash proceeds (including the proceeds from Raise 1 and Raise 2) from the same permitted capital raising activities listed in the preceding clause (B) ("Raise 3").

​

In connection with the Fifth Amendment and the required capital raises described in the preceding paragraph, the Lenders agreed to modify the Credit Agreement's minimum liquidity covenant to require minimum cash liquidity of $7,500 (instead of $25,000) from and after the closing of Raise 1 until March 30, 2025. On March 31, 2025, the minimum liquidity amount increased to $10,000 and on September 30, 2025, the minimum liquidity amount increased to $15,000.

​

In connection with the Fifth Amendment, the Company made the required one-time amortization payment of $2,500 principal amount, together with accrued and unpaid interest and a portion of the prepayment fee and other fees payable by December 31, 2024.

​

The Fifth Amendment also modified the interest rate of the loans provided under the Credit Agreement from a floating rate of Term SOFR plus 7.50% per annum, to a fixed rate of 13% per annum, retroactive to and effective as of September 30, 2024. For the quarterly payment dates ending December 31, 2024, March 31, 2025, and June 30, 2025, the Company had the ability to make interest payments of up to 10% per annum "in-kind" by capitalizing and adding such interest to the outstanding principal amount of the loans under the Credit Agreement. In addition, pursuant to the

Fifth Amendment, the Company will be required to make quarterly amortization payments equal to 5.0% of the principal amount of funded loans, together with applicable prepayment fees, beginning on March 31, 2026.

​

On the effective date of the Fifth Amendment and as a condition to effectiveness thereof, the Company's wholly owned subsidiaries OnkosXcel Therapeutics, LLC and OnkosXcel Employee Holdings, LLC (collectively, "OnkosXcel"), which previously provided unsecured guarantees of the Company's obligations under the Credit Agreement, granted security interests in substantially all of their assets to support such obligations.

​

The Fifth Amendment amended the negative covenants under the Credit Agreement to remove flexibility the Company and its subsidiaries previously had thereunder to undertake various transactions, including, without limitation, with respect to potential dispositions of OnkosXcel or out-licenses by OnkosXcel of its intellectual property.

​

Pursuant to the Fifth Amendment, the Company committed to appoint a new independent board director (subject to customary background checks, applicable law, confirmation of independence and Nasdaq rules), and to provide the independent director with various privileges and committee memberships on the board of directors of the Company (including the appointment of such director on committee to be formed to focus on capital raising and evaluate strategic options). The Company also agreed to engage an investment banker reasonably acceptable to OFA and the Lenders to assist the Company and its board of directors with evaluating and exploring strategic options.

​

The Company also agreed to covenants requiring that the Company's cash expenditures be monitored by the Lenders according to a board-approved budget provided to the Lenders prior to the signing of the Fifth Amendment, which cash budget will be updated on a bi-weekly basis going forward. The Company will not be permitted to make disbursements for any two-week period in excess of 115% of the aggregate budgeted amount of disbursements for the applicable period. Finally, pursuant to the Fifth Amendment, the Company is restricted from paying cash bonuses its employees or executives during the fiscal years 2024 and 2025 without OFA's consent or increasing the cash compensation for fiscal year 2025 for certain senior officers of the Company from their compensation for fiscal year 2024.

​

On March 4, 2025, the Company entered into the Sixth Amendment to our Credit Agreement (the "Sixth Amendment"), pursuant to which the Lenders agreed to, among other things, delay the date on which we are required to engage an investment banker (which date has been subsequently extended to July 31, 2025). The Company retained an investment broker on July 29, 2025.

​

As of September 30, 2025, we had aggregate principal indebtedness of $112,156 outstanding under the Credit Agreement.

​

Company Warrants and Registration Rights Agreement

​

Prior to the Fifth Amendment, pursuant to the Credit Agreement, the Lenders had the right to purchase shares of our common stock, so long as borrowings under the Credit Agreement are outstanding, for a purchase price of $5,000 at a price per share equal to a 10% premium to the volume-weighted average price of the common stock over the 30 trading days prior to the Lenders' election to proceed with such equity investment (the "Equity Investment Right"). The Equity Investment Right was terminated as part of the Fifth Amendment. Also, in connection with the closing of the Fifth Amendment, the Company agreed to, substantially concurrently with the closing of Raise 1, grant new warrants to the Lenders to purchase an aggregate of 313 shares of common stock, at an exercise price of $0.16 per share (the "New Warrants"). During the the nine months ended September 30, 2025, the Company issued 284 shares of Common Stock in connection with the cashless exercises of the 313 New Warrants.

In addition, the Company agreed to, substantially concurrently with the closing of Raise 1, amend and restate all warrants to purchase stock of the Company issued to the Lenders prior to the effective date of the Fifth Amendment, to revise the exercise price thereunder to an exercise price equal to the lower of (i) the price per share of the common stock of the Company issued in Raise 1 and (ii) arithmetic average of the volume-weighted average price of the Company's common stock on the Nasdaq Capital Market during the 30 trading days preceding Raise 1 (such existing warrants, as amended and restated, the "Original Warrants"). The Original Warrants provide the Lenders with the right to purchase a total of 28 shares of common stock of the Company.

​

We entered into a registration rights agreement with the Lenders in connection with the original closing of the Credit Agreement, which has been amended and restated since in connection with each issuance of additional warrants to the Lenders, including most recently, in connection with the Fifth Amendment (as so amended and restated the "Amended and Restated Registration Rights Agreement"). Pursuant to the Amended and Restated Registration Rights Agreement, we have filed registration statements on Form S-3 to register the shares issuable upon exercise of the Original Warrants and the New Warrants for resale. The maximum shares of our common stock issuable under the Original Warrants and the New Warrants is 366.

​

As part of entering into the Credit Agreement, OnkosXcel, a wholly owned subsidiary of BTI, granted the OnkosXcel Warrants to the Lenders to purchase 175 individual limited liability company units. The strike price of the OnkosXcel Warrants is formulaic based on the value of OnkosXcel at the time of exercise and can only be exercised upon occurrence of an equity related liquidity event for OnkosXcel of at least $20,000. The exercise price per unit of the OnkosXcel Warrants will be set upon the earlier of the closing of the next sale (or series of related sales) by OnkosXcel of equity securities of OnkosXcel with aggregate proceeds of not less than $20,000 to unrelated third parties (the "Next Equity Financing") at an exercise price per unit equal to a 10% premium over the price per unit of the equity securities sold by OnkosXcel in such Next Equity Financing or, in the event of a sale of OnkosXcel prior to the Next Equity Financing or an initial public offering constituting the Next Equity Financing, the lesser of (x) 75% of the fair value of the consideration to be paid for a unit upon the consummation of such transaction and (y) 150% of the valuation applicable to the initial profits units issued by OnkosXcel after the closing of the Credit Agreement. The OnkosXcel Warrants are transferable with approval from BTI, which cannot be unreasonably withheld, expire on April 19, 2029, and may be net exercised at the holder's election.

​

See Note 9, Debt and Credit Facilities included elsewhere in this Quarterly Report on Form 10-Q for additional information relating to the Credit Agreement and RIFA, including applicable interest rates, payment obligations and certain restrictive and financial covenants thereunder. As of September 30, 2025, we were in compliance with all restrictive and financial covenants under the Credit Agreement.

ATM Program - Jeffries

In May 2021, we entered into the Sale Agreement with Jefferies pursuant to which we could offer and sell shares of our common stock, having an aggregate offering price of up to $100,000, from time to time, through an "at the market offering" program under which Jefferies will act as sale agent. On November 1, 2023, we entered into an amendment to the Sale Agreement with Jefferies to increase the size of the "at the market offering" program; pursuant to the Sale Agreement, as amended, we can offer and sell shares of our common stock having an aggregate offering price of up to $150,000 (excluding any shares of common stock already sold in the "at the market offering" program prior to the date of the amendment), from time to time, through an "at the market offering" program under which Jefferies will act as sale agent. We terminated the Sales Agreement with Jefferies on March 26, 2025. There were no sales of the Company's common stock under the Sale Agreement for the three and nine months ended September 30, 2025. For the three months ended September 30, 2024, the Company sold 22 shares under the Sale Agreement for gross proceeds of $467 and received proceeds of $453, net of issuance costs of $14. For the nine months ended September 30, 2024, the Company sold 240 shares under the Sale Agreement for gross proceeds of $7,682 and received proceeds of $7,451, net of issuance costs of $231.

ATM Program - Canaccord

In April 2025, we entered into an Equity Distribution Agreement with Canaccord to sell shares of the Company's common stock, with aggregate gross sales proceeds of up to $8,135, from time to time, through an "at the market" equity offering program under which Canaccord will act as sales agent. For the three months ended September 30, 2025, the Company sold 4,627 shares of its common stock for a gross amount of $7,991, incurred issuance costs of $240, and received net proceeds of $7,751. For the nine months ended September 30, 2025, the Company sold 4,724 shares of its common stock for a gross amount of $8,130, incurred issuance costs of $244, and received net proceeds of $7,886.

In August 2025, the Company increased the maximum amount of shares that are eligible to be sold pursuant to the Equity Distribution Agreement to allow for the offer and sale of up to $3,500 of its common stock. For the three and nine months ended September 30, 2025, the Company sold 1,050 shares for gross proceeds of $3,500 and received proceeds of $3,395, net of issuance costs of $105. Following the sale of common stock, the Company raised sufficient net proceeds to satisfy the Raise 3 requirement under the Fifth Amendment to the Credit Agreement.

In August, 2025, the Company filed a prospectus supplement with the Securities and Exchange Commission for the offer and sale of up to $80,000 shares of common stock pursuant to the Equity Distribution Agreement. For the three and nine months ended September 30, 2025, the Company sold 3,984 shares for gross proceeds of $17,082 and received proceeds of $16,740, net of issuance costs of $342.

Cash Flows

​

Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2025 was $43,405 and was primarily attributable to our net loss of $57,352, in part offset by $5,434 in payable in kind interest on our credit agreement, a $5,319 decrease in the change in the fair value of our derivative liability, $2,317 in non-cash stock-based compensation, and $1,183 in accretion of debt discount and amortization of financing costs.

Net cash used in operating activities for the nine months ended September 30, 2024 was $57,218 and was primarily attributable to our net loss of $48,740, a $736 decrease in accrued interest, a $997 decrease in accounts payable, accrued expenses, due to related parties and other current liabilities a $1,017 increase in prepaid expenses, other current assets and other assets, and a $16,884 change in the fair value of derivative liabilities, partially offset by a $466 decrease in inventory, a $68 decrease in accounts receivable, $6,355 of non-cash stock-based compensation, and $3,821 of payable-in-kind interest.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2025 and 2024 was $0 and $0, respectively.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2025, was $50,871 and was primarily attributable to net proceeds of $12,957 received from the March 2025 registered direct offering, net proceeds from the sale of common stock under the Equity Distribution Agreement with Canaccord of $27,886, and net proceeds from the exercise of warrants of $9,660.

Net cash provided by financing activities for the nine months ended September 30, 2024, was $32,384 and was attributable to $25,000 in proceeds received from the March 2024 registered direct offering and net proceeds received from the sale of common stock under the Sale Agreement with Jefferies of $7,451.

Operating Capital and Capital Expenditure Requirements

We expect to continue to incur significant and increasing operating losses at least for the next several years as we commercialize IGALMI^®and as we expand our clinical trials of and seek marketing approval focused on BXCL501 while pursuing development of additional product candidates for BXCL502, BXCL701 and BXCL702. We expect to continue to incur net losses in the near term. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials and our expenditures on other research and development activities.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development, and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. We anticipate that our expenses will increase substantially as we:

​

We believe that our existing cash and cash equivalents as of September 30, 2025 will not be sufficient to enable us to fund operating expenses and capital expenditure requirements for at least the next 12 months from the date of the issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, including funding our ongoing research and development and commercialization efforts. In particular, we believe that our cash, cash equivalents and restricted cash of $37,320 as of September 30, 2025 plus the additional capital raised subsequent to September 30, 2025 will allow us to fund our operations and meet our liquidity requirements into the first quarter of 2026, assuming we are able to comply with the covenants under our Credit Agreement. We expect that we will need to obtain substantial additional funding to fund our ongoing operations. To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, the ownership interests of our existing stockholders may be materially diluted, and the terms of these securities could include liquidation or other preferences that could adversely affect the rights of our existing stockholders. In addition, debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends, which could adversely impact our ability to conduct our business. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. If we are unable to raise capital when needed or on attractive terms, we could be forced to significantly delay, scale back or discontinue the development or commercialization of our product candidates, seek collaborators at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available, and relinquish or license, potentially on unfavorable terms, our rights to our product candidates that we otherwise would seek to develop or commercialize ourselves. To date, we have continued research and development activities while managing our cash position. However, we can provide no assurance that will be successful in obtaining additional necessary resources and, if we are unable to fund our operations, including our clinical trials, we may need to focus on advancing fewer of our product candidates or otherwise consider strategic alternatives.

Contractual Obligations and Commitments

In July 2024, the Company signed an amendment to its commercial supply agreement that requires minimum annual payments for the first five years of the agreement ending in 2026 that in aggregate total $10,000. The Company has met the minimum requirements for the first 3 years ending in 2024. The remaining minimum commitments for years 4 and 5 (2025 and 2026) is $2,000 each year.

In February 2022, we signed a distribution agreement with a third-party to distribute product related to BXCL501 in the U.S. The distributor will be paid defined fees for its services under the agreement, which can be terminated by either party for cause. The distribution agreement can also be terminated by us without cause, subject to payment of agreed upon termination fees.

BTI leases office space for its corporate headquarters at 555 Long Wharf Drive, New Haven, Connecticut (the "HQ Lease"). The HQ Lease expires in February 2026. The Company has an option to renew the HQ Lease for one additional five-year term. Payments under the HQ Lease are fixed. The Company has approximately $163 of payments remaining under the HQ Lease. For additional details, see Note 13, Leases in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information relating to the Company's leases.

In addition, we are obligated to make quarterly interest payments under our Credit Agreement. For additional details, see Note 9, Debt and Credit Facilities in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information relating to the Company's debt payment obligations.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. We have reviewed and determined that those critical accounting policies and estimates remain our critical accounting policies and estimates as of and for the nine months ended September 30, 2025. No material changes were made to our existing critical accounting policies and estimates during the period presented. Refer to Note 3, Summary of Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements elsewhere in this Form 10-Q.

​