(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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

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

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

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

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

As of ~~July 17,~~October 14, 2020, there were ~~32,127,020~~38,525,561 shares of common stock outstanding.

	June 30,			December 31,			September 30,			December 31,
	2020			2019			2020			2019
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash	$	125,417		$	180,460		$	188,258		$	180,460
Prepaid expenses and other current assets		2,391			3,468			2,469			3,468
Total current assets		127,808			183,928			190,727			183,928
Property and equipment, net		1,742			1,663			2,397			1,663
Right-of-use lease assets		1,469			1,581			4,160			1,581
Restricted cash		714			714			714			714
Other		994			941			994			941
Total assets	$	132,727		$	188,827		$	198,992		$	188,827
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	15,066		$	15,583		$	14,024		$	15,583
Accrued expenses		10,205			8,881			13,991			8,881
Lease liabilities, current portion		285			315			520			315
Total current liabilities		25,556			24,779			28,535			24,779
Lease liabilities, less current portion		1,623			1,748			4,856			1,748
Total liabilities		27,179			26,527			33,391			26,527
Commitments and contingencies (Note 5)
Stockholders' equity:
Common stock, $0.01 par value—100,000,000 shares authorized; 32,110,650 and 32,050,906 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		301			300
Common stock, $0.01 par value—100,000,000 shares authorized; 38,525,561 and 32,050,906 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively								366			300
Additional paid-in capital		408,911			402,077			499,376			402,077
Accumulated deficit		(303,664	)		(240,077	)		(334,141	)		(240,077	)
Total stockholders' equity		105,548			162,300			165,601			162,300
Total liabilities and stockholders' equity	$	132,727		$	188,827		$	198,992		$	188,827

	Three Months Ended						Six Months Ended						Three Months Ended						Nine Months Ended
	June 30,						June 30,						September 30,						September 30,
	2020			2019			2020			2019			2020			2019			2020			2019
Operating expenses:
Research and development	$	30,777		$	26,453		$	58,724		$	53,084		$	28,242		$	25,097		$	86,966		$	78,181
General and administrative		2,751			2,783			5,625			5,374			2,408			2,666			8,033			8,040
Total operating expenses		33,528			29,236			64,349			58,458			30,650			27,763			94,999			86,221
Loss from operations		(33,528	)		(29,236	)		(64,349	)		(58,458	)		(30,650	)		(27,763	)		(94,999	)		(86,221	)
Other income, net		104			534			762			1,111			173			1,136			935			2,247
Net loss	$	(33,424	)	$	(28,702	)	$	(63,587	)	$	(57,347	)	$	(30,477	)	$	(26,627	)	$	(94,064	)	$	(83,974	)
Net loss per share:
Basic and diluted	$	(1.09	)	$	(1.15	)	$	(2.07	)	$	(2.31	)	$	(0.93	)	$	(0.88	)	$	(3.00	)	$	(3.15	)
Weighted-average shares outstanding:
Basic and diluted		30,681,604			24,893,232			30,646,150			24,788,404			32,821,835			30,268,295			31,376,672			26,635,107

	Common Stock					Additional Paid-in		Accumulated			Total Stockholders'			Common Stock					Additional Paid-in		Accumulated			Total Stockholders'
	Shares			Amount		Capital		Deficit			Equity			Shares			Amount		Capital		Deficit			Equity
Balance at December 31, 2019		32,050,906		$	300	$	402,077	$	(240,077	)	$	162,300			32,050,906		$	300	$	402,077	$	(240,077	)	$	162,300
Issuance of common stock under employee stock plans		27,532			1		520		-			521			27,532			1		520		-			521
Forfeiture of common stock underlying incentive units		(2,343	)		-		-		-			-			(2,343	)		-		-		-			-
Equity-based compensation expense		-			-		2,586		-			2,586			-			-		2,586		-			2,586
Net loss		-			-		-		(30,163	)		(30,163	)		-			-		-		(30,163	)		(30,163	)
Balance at March 31, 2020		32,076,095			301		405,183		(270,240	)		135,244			32,076,095			301		405,183		(270,240	)		135,244
Issuance of common stock under employee stock plans		58,412			-		1,133		-			1,133			58,412			-		1,133		-			1,133
Forfeiture of common stock underlying incentive units		(23,857	)		-		-		-			-			(23,857	)		-		-		-			-
Equity-based compensation expense		-			-		2,595		-			2,595			-			-		2,595		-			2,595
Net loss		-			-		-		(33,424	)		(33,424	)		-			-		-		(33,424	)		(33,424	)
Balance at June 30, 2020		32,110,650		$	301	$	408,911	$	(303,664	)	$	105,548			32,110,650			301		408,911		(303,664	)		105,548
Issuance of common stock, net of issuance costs															6,456,141			65		87,319		-			87,384
Issuance of common stock under employee stock plans															50,041			-		805		-			805
Forfeiture of common stock underlying incentive units															(91,271	)		-		-		-			-
Equity-based compensation expense															-			-		2,341		-			2,341
Net loss															-			-		-		(30,477	)		(30,477	)
Balance at September 30, 2020															38,525,561		$	366	$	499,376	$	(334,141	)	$	165,601

	Common Stock					Additional Paid-in		Accumulated			Total Stockholders'			Common Stock					Additional Paid-in		Accumulated			Total Stockholders'
	Shares			Amount		Capital		Deficit			Equity			Shares			Amount		Capital		Deficit			Equity
Balance at December 31, 2018		26,747,438		$	244	$	252,012	$	(128,252	)	$	124,004			26,747,438		$	244	$	252,012	$	(128,252	)	$	124,004
Issuance of common stock under employee stock plans		10,606			-		159		-			159			10,606			-		159		-			159
Forfeiture of common stock underlying incentive units		(5,618	)		-		-		-			-			(5,618	)		-		-		-			-
Equity-based compensation expense		-			-		2,925		-			2,925			-			-		2,925		-			2,925
Net loss		-			-		-		(28,645	)		(28,645	)		-			-		-		(28,645	)		(28,645	)
Balance at March 31, 2019		26,752,426			244		255,096		(156,897	)		98,443			26,752,426			244		255,096		(156,897	)		98,443
Issuance of common stock, net of issuance costs		4,750,000			48		117,655		-			117,703			4,750,000			48		117,655		-			117,703
Issuance of common stock under employee stock plans		18,502			-		427		-			427			18,502			-		427		-			427
Forfeiture of common stock underlying incentive units		(45,938	)		-		-		-			-			(45,938	)		-		-		-			-
Equity-based compensation expense		-			-		2,990		-			2,990			-			-		2,990		-			2,990
Net loss		-			-		-		(28,702	)		(28,702	)		-			-		-		(28,702	)		(28,702	)
Balance at June 30, 2019		31,474,990		$	292	$	376,168	$	(185,599	)	$	190,861			31,474,990			292		376,168		(185,599	)		190,861
Issuance of common stock, net of issuance costs															712,500			7		17,385		-			17,392
Issuance of common stock under employee stock plans															75,358			1		1,794		-			1,795
Forfeiture of common stock underlying incentive units															(178,857	)		-		-		-			-
Equity-based compensation expense															-			-		2,780		-			2,780
Net loss															-			-		-		(26,627	)		(26,627	)
Balance at September 30, 2019															32,083,991		$	300	$	398,127	$	(212,226	)	$	186,201

	Six Months Ended						Nine Months Ended
	June 30,						September 30,
	2020			2019			2020			2019
Cash flows from operating activities:
Net loss	$	(63,587	)	$	(57,347	)	$	(94,064	)	$	(83,974	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity-based compensation expense		5,181			5,915			7,522			8,695
Depreciation and amortization		147			180
Depreciation								318			318
Non-cash lease expense								282			456
Loss on disposal of property and equipment		83			-			83			-
Changes in operating assets and liabilities:
Prepaid expenses and other assets		1,024			(2,253	)		904			(3,313	)
Accounts payable		(606	)		(2,822	)		(1,559	)		2,186
Accrued expenses		1,280			5,995			5,110			4,020
Lease liabilities								(225	)		(505	)
Net cash used in operating activities		(56,478	)		(50,332	)		(81,629	)		(72,117	)
Cash flows from investing activities:
Purchases of property and equipment		(219	)		(103	)		(416	)		(164	)
Net cash used in investing activities		(219	)		(103	)		(416	)		(164	)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs		-			117,703			87,384			135,095
Proceeds from issuance of common stock under employee stock plans		1,654			586			2,459			2,381
Net cash provided by financing activities		1,654			118,289			89,843			137,476
Net (decrease) increase in cash and restricted cash		(55,043	)		67,854
Net increase in cash and restricted cash								7,798			65,195
Cash and restricted cash, beginning of period		181,174			139,301			181,174			139,301
Cash and restricted cash, end of period	$	126,131		$	207,155		$	188,972		$	204,496
Supplemental disclosure of cash flow information:
Initial recognition of right-of-use lease assets							$	2,861		$	2,215
Tenant improvement allowance							$	719		$	-
Property and equipment purchases included in accounts payable and accrued expenses	$	133		$	7		$	-		$	1
Initial recognition of right-of-use lease assets	$	-		$	2,215

Odonate Therapeutics, Inc. (“Odonate” or the “Company”) is a pharmaceutical company dedicated to the development of best-in-class therapeutics that improve and extend the lives of patients with cancer. The Company’s initial focus is on the development of tesetaxel, an investigational, orally administered chemotherapy agent that belongs to a class of drugs known as taxanes, which are widely used in the treatment of cancer. Tesetaxel has several pharmacologic properties that make it unique among taxanes, including: oral administration with a low pill burden; a long (~8-day) terminal plasma half-life in humans, enabling the maintenance of adequate drug levels with relatively infrequent dosing; no history of hypersensitivity (allergic) reactions; and significant activity against chemotherapy-resistant tumors. In patients with metastatic breast cancer (“MBC”), tesetaxel was shown to have significant, single-agent antitumor activity in two multicenter, Phase 2 studies. The Company is currently conducting three studies in breast ~~cancer, including~~cancer. In August 2020, the Company announced positive top-line results from a multinational, multicenter, randomized, Phase 3 study of tesetaxel in ~~patients with~~ MBC, known as CONTESSA. The Company’s goal for tesetaxel is to develop an effective chemotherapy choice for patients that provides quality-of-life advantages over current alternatives.

On September 1, 2020, the Company closed an underwritten public offering of 5,614,036 shares of common stock at a public offering price of $14.25 per share (collectively with the underwriters’ option, the “September 2020 Offering”). The underwriters exercised in full their option to purchase 842,105 additional shares of common stock. The aggregate gross proceeds from the September 2020 Offering were $92.0 million, and the net proceeds were $87.4 million after deducting underwriting discounts and commissions and offering costs.

As of ~~June~~September 30, 2020, the Company had ~~$125.4~~$188.3 million in cash. The Company has incurred operating losses and negative cash flows from operations since inception. Management believes that the Company’s existing cash will be sufficient to meet the Company’s anticipated cash requirements through at least one year from the date this Quarterly Report on Form 10-Q is filed with the U.S. Securities and Exchange Commission (the “SEC”).

The Company’s condensed financial statements contained in this Quarterly Report on Form 10-Q have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, certain information and disclosures required by GAAP for annual financial statements have been omitted. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Interim financial results are not necessarily indicative of results anticipated for the full year. These condensed financial statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The preparation of the Company’s condensed financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed financial statements and accompanying notes. The most significant estimates and assumptions in the Company’s condensed financial statements relate to accrued expenses and equity-based compensation expense. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these

estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

During the ~~six~~nine months ended ~~June~~September 30, 2020, there were no changes to the Company’s significant accounting policies as described in Note 2 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The Company has considered all recently issued accounting pronouncements and has concluded that there are no recently issued accounting pronouncements that may have a material impact on its results of operations, financial condition or cash flows based on current information.

Basic net loss per share is calculated by dividing net loss by the weighted-average common shares outstanding during the period, without consideration of common stock equivalents. The basic net loss per share calculation excludes ~~1,400,231~~1,245,685 and ~~1,896,695~~1,550,643 outstanding shares of common stock held by Odonate Holdings, LLC (“Odonate Holdings”) as of ~~June~~September 30, 2020 and 2019, respectively, to be used to settle incentive units previously issued under the Odonate Management Holdings Equity Incentive Plan (the “Management Plan”). These shares of common stock are subject to transfer to the Company and cancellation until such incentive units are vested and exercised and, as such, are considered common stock equivalents. Therefore, the shares of common stock held by Odonate Holdings are excluded from the basic net loss per share calculation until the incentive units are exercised.

Diluted net loss per share is calculated by adjusting the weighted-average common shares outstanding for the dilutive effect of common stock equivalents outstanding for the period. Common stock equivalents, which consist of shares of common stock underlying incentive units and vested stock options, were excluded from the calculation of diluted net loss per share because they were anti-dilutive.

	June 30,			December 31,			September 30,			December 31,
	2020			2019			2020			2019
Leasehold improvements	$	1,205		$	1,113		$	1,955		$	1,113
Office equipment		756			698			776			698
Furniture and fixtures		501			420			514			420
Software		130			130			130			130
Total gross property and equipment		2,592			2,361			3,375			2,361
Less accumulated depreciation		(850	)		(698	)		(978	)		(698	)
Property and equipment, net	$	1,742		$	1,663		$	2,397		$	1,663

Depreciation expense was $0.1 million and ~~$0.2~~$0.3 million for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively, and for the same periods in 2019.

	June 30,		December 31,		September 30,		December 31,
	2020		2019		2020		2019
Accrued clinical development costs	$	6,253	$	6,667	$	8,191	$	6,667
Accrued compensation and related expenses		3,678		2,122		5,714		2,122
Other accrued expenses		274		92		86		92
Total accrued expenses	$	10,205	$	8,881	$	13,991	$	8,881

In March 2018, the Company entered into an agreement to lease office space in San Diego, California (the “San Diego Lease”) with aggregate payments of approximately $0.8 million over the term of the lease. The San Diego Lease originally provided for expiration on December 31, 2019. In August 2019, the Company entered into a First Amendment to the San Diego Lease to extend the term of the lease through the commencement of the New San Diego Lease (defined below). The San Diego Lease is classified as an operating lease.

In October 2019, the Company entered into an agreement to lease office space in San Diego, California (the “New San Diego Lease”) with aggregate payments of approximately ~~$4.3~~$4.1 million over the 7.5-year term of the lease. The New San Diego Lease commenced in July 2020. The Company has an option to extend the New San Diego Lease for an additional 5 years at the end of the initial term. Further, the Company provided a standby letter of credit of $0.5 million as a security deposit during the term of the lease, subject to certain reductions beginning 4 years after the lease commencement. As of ~~June~~September 30, 2020, $0.5 million was pledged as collateral for the letter of credit and recorded as restricted cash. The New San Diego Lease ~~will be~~is classified as an operating lease.

In February 2018, the Company entered into an agreement to lease office space in New York, New York (the “New York Lease”) with aggregate payments of approximately $2.8 million over the 7-year term of the lease. The Company has an option to extend the New York Lease for an additional three years at the end of the initial term. Further, the Company provided a standby letter of credit of $0.3 million in lieu of a security deposit during the term of the lease, subject to a reduction 3.5 years after the lease commencement. As of ~~June~~September 30, 2020, $0.3 million was pledged as collateral for the letter of credit and recorded as restricted cash. The New York lease is classified as an operating lease.

~~Future minimum lease payments under the New York Lease as of June 30, 2020 are as follows (in thousands):~~

The Company recorded lease liabilities and right-of-use lease assets for the ~~New York Lease~~operating leases based on the present value of lease payments over the expected lease term, discounted using the Company’s incremental borrowing rate. The ~~option~~options to extend the ~~New York Lease was~~operating leases were not recognized as part of the Company’s lease ~~liability~~liabilities and right-of-use lease ~~asset.~~assets. As of September 30, 2020, the weighted-average remaining lease term and the weighted-average discount rate for the operating leases was 6.6 years and 4.0%, respectively. Rent expense under leases was $0.2 million and ~~$0.4~~$0.6 million for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively, and for the same periods in 2019. Cash paid for amounts included in the measurement of lease liabilities was $0.1 million and $0.3 million for the three and nine months ended September 30, 2020, respectively, and for the same periods in 2019.

Future minimum lease payments under operating leases as of September 30, 2020 are as follows (in thousands):

The Company enters into contracts in the normal course of business with third-party contract research organizations, contract development and manufacturing organizations and other service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.

From time to time, the Company may become subject to claims and litigation arising in the ordinary course of business. ~~The~~Other than as described below, the Company is not a party to any material legal proceedings, nor is it aware of any material pending or threatened litigation.

On September 16, 2020, a putative class action lawsuit was filed against the Company and the Company’s Chief Executive Officer, as well as the current and former Chief Financial Officers. The complaint was filed in the United States District Court for the Southern District of California and alleges that the Company made material misrepresentations and omissions regarding the safety and tolerability of tesetaxel in the Company’s public statements in violation of federal securities laws. The lawsuit seeks damages allegedly sustained by the class and an award of plaintiffs’ costs and attorney fees. The Company believes the complaint is without merit, and it has substantive defenses to the claims of liability and damages. The Company plans to respond accordingly. Due to the early stage of this matter, the Company is unable to estimate the possible loss or range of loss, if any, that may result from this matter.

On June 28, 2019, the Company closed an underwritten public offering ~~(the “June 2019 Offering”)~~ of 4,750,000 shares of common stock at a public offering price of $26.00 per ~~share.~~share (collectively with the underwriters’ option, the “June 2019 Offering”). On July 2, 2019, the underwriters exercised in full their option to purchase 712,500 additional shares of common stock. The aggregate gross proceeds from the June 2019 Offering were $142.0 million, and the net proceeds were $135.1 million after deducting underwriting discounts and commissions and offering costs.

A total of 6,300,000 shares of common stock have been reserved for issuance under the Odonate Therapeutics, Inc. 2017 Stock Option Plan (the “2017 Plan”). As of ~~June~~September 30, 2020, ~~1,663,402~~1,763,645 shares of common stock remained available for future grants under the 2017 Plan.

A total of 500,000 shares of common stock have been reserved for issuance under the Odonate Therapeutics, Inc. 2017 Employee Stock Purchase Plan (the “ESPP”). As of ~~June~~September 30, 2020, ~~439,459~~430,650 shares of common stock remained available for future grants under the ESPP.

The Company issued an aggregate of 2,931,402 incentive units under the Management Plan. Following the Company’s initial public offering in December 2017, the Company has not granted, and will no longer grant, any incentive units. As of ~~June~~September 30, 2020, ~~1,400,231~~1,245,685 outstanding shares of common stock were held by Odonate Holdings to be used to settle incentive units previously issued under the Management Plan.

The activity related to equity awards, which are comprised of stock options and incentive units, during the ~~six~~nine months ended ~~June~~September 30, 2020 is summarized as follows:

	Equity Awards			Weighted- average Exercise Price per Share		Weighted- average Remaining Contractual Term⁽¹⁾ (years)		Aggregate Intrinsic Value⁽²⁾ (millions)		Equity Awards			Weighted- average Exercise Price per Share		Weighted- average Remaining Contractual Term⁽¹⁾ (years)		Aggregate Intrinsic Value⁽²⁾ (millions)
Outstanding at December 31, 2019		5,972,765		$	18.46						5,972,765		$	18.46
Granted		252,833		$	31.66						293,447		$	29.67
Exercised		(106,922	)	$	13.71						(251,184	)	$	14.50
Cancelled/forfeited		(279,568	)	$	21.83						(471,941	)	$	21.61
Outstanding at June 30, 2020		5,839,108		$	18.96		8.6	$	136.5
Exercisable at June 30, 2020		2,285,545		$	11.29		8.1	$	71.0
Outstanding at September 30, 2020											5,543,087		$	18.96		8.5	$	11.8
Exercisable at September 30, 2020											2,347,091		$	11.49		8.0	$	11.1

⁽¹⁾ Represents the weighted-average remaining contractual term of stock options. The incentive units have no expiration.

⁽²⁾ Aggregate intrinsic value represents the product of the number of equity awards outstanding or equity awards exercisable multiplied by the difference between the Company’s closing stock price per share on the last trading day of the period, which was ~~$42.34~~$13.43 as of ~~June~~September 30, 2020, and the exercise price.

The total intrinsic value of equity awards exercised during the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 was ~~$1.6~~$4.6 million and ~~$2.9~~$7.9 million, respectively. The total fair value of equity awards vested during the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 was ~~$6.9~~$9.5 million and ~~$4.7~~$9.1 million, respectively.

For the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, the weighted-average grant-date fair value per share was ~~$25.71~~$24.02 and ~~$13.32,~~$17.67, respectively. The Company estimated the fair value of each stock option on the grant date using the Black-Scholes option-pricing model with the following assumptions:

Six Months Ended

Nine Months Ended

June 30,

September 30,

2020

2019

2020

2019

Expected volatility

81–82%

74–75%

81–82%

74–77%

Expected life

10 years

6 years

10 years

6–10 years

Risk-free interest rate

0.6–1.9%

2.4–2.5%

0.6–1.9%

1.9–2.5%

Expected dividend yield

Under the ESPP, eligible employees may purchase shares of the Company’s common stock twice per month at a price equal to 85% of the closing price of shares of the Company’s common stock on the date of each purchase. The benefit received by the employees, which is equal to a 15% discount on the shares of the Company’s common stock purchased, is recognized as equity-based compensation expense on the date of each purchase.

The classification of equity-based compensation expense is summarized as follows (in thousands):

	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
	2020		2019		2020		2019		2020		2019		2020		2019
Equity-based compensation expense:
Research and development	$	2,311	$	2,573	$	4,613	$	5,073	$	2,059	$	2,421	$	6,672	$	7,494
General and administrative		284		417		568		842		282		359		850		1,201
Total equity-based compensation expense	$	2,595	$	2,990	$	5,181	$	5,915	$	2,341	$	2,780	$	7,522	$	8,695

As of ~~June~~September 30, 2020, total unrecognized compensation cost related to unvested equity awards was ~~$58.8~~$54.9 million, which is estimated to be recognized over a weighted-average period of ~~2.8~~2.7years. As of ~~June~~September 30, 2020, there was 0 unrecognized compensation cost related to shares of common stock issued under the ESPP.

For the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, the Company did 0t recognize a provision for income taxes due to having recorded a full valuation allowance against its deferred tax assets. As of ~~June~~September 30, 2020 and December 31, 2019, the Company established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets. As of ~~June~~September 30, 2020 and December 31, 2019, the Company had 0 unrecognized tax benefits. The Company does not anticipate there will be a significant change in unrecognized tax benefits within the next 12 months.

In 2013, the Company licensed rights to tesetaxel in all major markets from Daiichi Sankyo Company, Limited (“Daiichi Sankyo”), the original inventor of the product. Under the Daiichi Sankyo license agreement, the Company is obligated to use commercially reasonable efforts to develop and commercialize tesetaxel in the following countries: France, Germany, Italy, Spain, the United Kingdom and the U.S. The Company is required to make aggregate future milestone payments of up to $31.0 million, contingent on attainment of certain regulatory milestones. Additionally, the Company is obligated to pay Daiichi Sankyo a tiered royalty that ranges from the low- to high-single digits, depending on annual net sales of tesetaxel.

Item 2. 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 condensed financial statements and accompanying notes included in this Quarterly Report on Form 10-Q and our audited financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2019.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the federal securities laws, and such statements may involve substantial risks and uncertainties. All statements, other than statements of historical facts included in this Quarterly Report on Form 10-Q, including, but not limited to, statements ~~concerning~~concerning: expectations regarding the outcome of CONTESSA, our Phase 3 study of tesetaxel in patients with metastatic breast cancer; expectations regarding the enrollment, completion and outcome of our other clinical studies; expectations regarding the timing for our planned New Drug Application submission for tesetaxel; expectations regarding our ability to obtain regulatory approval of tesetaxel; the unpredictable relationship between preclinical study results and clinical study results; our plans, objectives, goals, strategies, future events, future revenues or performance, future expenses, financing needs, plans or intentions relating to acquisitions, and business ~~trends~~trends; and other information referred to under this section titled “Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operations,” are forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan,” “anticipate,” “target,” “forecast” or the negative of these terms and similar expressions intended to identify forward-looking statements. Forward-looking statements are not historical facts and reflect our current views with respect to future events. Forward-looking statements are also based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Such risks, uncertainties and other factors are described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 and under “Risk Factors” in Item 1A of this Quarterly Report on Form 10-Q. We caution you that these risks, uncertainties and other factors may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. All forward-looking statements in this Quarterly Report on Form 10-Q apply only as of the date made and are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

We are a pharmaceutical company dedicated to the development of best-in-class therapeutics that improve and extend the lives of patients with cancer. Our initial focus is on the development of tesetaxel, an investigational, orally administered chemotherapy agent that belongs to a class of drugs known as taxanes, which are widely used in the treatment of cancer. Tesetaxel has several pharmacologic properties that make it unique among taxanes, including: oral administration with a low pill burden; a long (~8-day) terminal plasma half-life in humans, enabling the maintenance of adequate drug levels with relatively infrequent dosing; no history of hypersensitivity (allergic) reactions; and significant activity against chemotherapy-resistant tumors. In patients with metastatic breast cancer (“MBC”), tesetaxel was shown to have significant, single-agent antitumor activity in two multicenter, Phase 2 studies. We are currently conducting three studies in breast cancer, as shown in the following ~~table,~~ table. In August 2020, we announced positive top-line results from~~including~~ a multinational, multicenter, randomized, Phase 3 study of

tesetaxel in ~~patients with~~ MBC, known as CONTESSA. E~~nrollment~~We plan to submit a New Drug Application (“NDA”) for tesetaxel to the U.S. Food and Drug Administration (“FDA”) in ~~CONTESSA is complete, and we expect to~~ ~~report top-line results from this study in the third quarter of 2020.~~mid-2021. Our goal for tesetaxel is to develop an effective chemotherapy choice for patients that provides quality-of-life advantages over current alternatives.

CONTESSA is a multinational, multicenter, randomized, Phase 3 study of tesetaxel, an investigational, orally administered taxane, in patients with MBC. CONTESSA is comparing tesetaxel dosed orally at 27 mg/m² on the first day of each ~~21-day~~21 day cycle plus a reduced dose of capecitabine (1,650 mg/m²/day dosed orally for 14 days of each ~~21-day~~21 day cycle) to the approved dose of capecitabine alone (2,500 mg/m²/day dosed orally for 14 days of each 21-day cycle) in ~~approximately 600~~685 patients randomized 1:1 with human epidermal growth factor receptor 2 (“HER2”) negative, hormone receptor (“HR”) positive MBC previously treated with a taxane in the neoadjuvant ~~(prior to surgery)~~ or adjuvant ~~(immediately following surgery)~~ setting. Capecitabine is an oral chemotherapy agent that is considered a ~~standard-of-care~~standard of care treatment in MBC. Where indicated, patients must have received endocrine therapy with or without a ~~cyclin-dependent~~cyclin dependent kinase (“CDK”) 4/6 inhibitor. ~~Patients with central nervous system (“CNS”) metastases are eligible.~~ The primary endpoint is progression-free survival (“PFS”) as assessed by an Independent Radiologic Review Committee (“IRC”). The secondary efficacy endpoints are overall survival (“OS”), objective response rate (“ORR”) as assessed by the IRC, and disease control rate (“DCR”) as assessed by the IRC.

In ~~June 2019,~~August 2020, we announced ~~that~~positive top-line results from CONTESSA. CONTESSA met the ~~Independent Data Monitoring Committee (the “IDMC”)~~primary endpoint of improved PFS as assessed by the IRC. Median PFS was 9.8 months for ~~CONTESSA recommended that~~tesetaxel plus a reduced dose of capecitabine versus 6.9 months for the ~~study continue~~approved dose of capecitabine alone, an improvement of 2.9 months. The risk of disease progression or death was reduced by 28.4% [hazard ratio=0.716 (95% confidence interval: 0.573-0.895); p=0.003] for patients who received tesetaxel plus a reduced dose of capecitabine versus patients who received the approved dose of capecitabine alone.

Tesetaxel plus capecitabine was associated with ~~no modifications following a planned interim efficacy futility analysis. The interim efficacy futility analysis was based on a pre-specified analysis of the first approximate 100 PFS~~what we believe are manageable side effects consistent with findings from previous clinical studies. Grade ≥3 treatment-emergent adverse events (“TEAEs”) that occurred in ~~the study. The purpose~~≥5% of ~~the interim efficacy futility analysis was to facilitate the early termination of the study if the IDMC determined that achieving a positive outcome on the primary endpoint would be futile.~~patients were: neutropenia (71.2% for tesetaxel plus capecitabine vs. 8.3% for capecitabine alone); diarrhea (13.4% for tesetaxel plus capecitabine vs. 8.9% for capecitabine alone); hand foot syndrome (6.8% for tesetaxel plus capecitabine vs. 12.2% for capecitabine alone);

febrile neutropenia (12.8% for tesetaxel plus capecitabine vs. 1.2% for capecitabine alone); fatigue (8.6% for tesetaxel plus capecitabine vs. 4.5% for capecitabine alone); hypokalemia (8.6% for tesetaxel plus capecitabine vs. 2.7% for capecitabine alone); leukopenia (10.1% for tesetaxel plus capecitabine vs. 0.9% for capecitabine alone); and anemia (8.0% for tesetaxel plus capecitabine vs. 2.1% for capecitabine alone).

~~In October 2019, we announced that enrollment~~Adverse events resulting in treatment discontinuation in ≥1% of patients were: neutropenia or febrile neutropenia (4.2% for tesetaxel plus capecitabine vs. 1.5% for capecitabine alone); neuropathy (3.6% for tesetaxel plus capecitabine vs. 0.3% for capecitabine alone); diarrhea (0.9% for tesetaxel plus capecitabine vs. 1.5% for capecitabine alone); and hand-foot syndrome (0.6% for tesetaxel plus capecitabine vs. 2.1% for capecitabine alone). Treatment discontinuation due to any adverse event occurred in 23.1% of patients treated with tesetaxel plus capecitabine versus 11.9% of patients treated with capecitabine alone.

Grade 2 alopecia (hair loss) occurred in 8.0% of patients treated with tesetaxel plus capecitabine versus 0.3% of patients treated with capecitabine alone. Grade ≥3 neuropathy occurred in 5.9% of patients treated with tesetaxel plus capecitabine versus 0.9% of patients treated with capecitabine alone.

While OS data are immature, a recent interim analysis indicated the absence of an adverse effect on OS for tesetaxel plus a reduced dose of capecitabine. A protocol-specified final analysis of OS is expected to occur in 2022.

The results of CONTESSA ~~was complete. We expect~~have been selected for an oral presentation at the 2020 San Antonio Breast Cancer Symposium, to ~~report top-line results from CONTESSA in the third quarter of~~be held virtually December 8-11, 2020.

CONTESSA 2 is a multinational, multicenter, Phase 2 study of tesetaxel, an investigational, orally administered taxane, in patients with MBC. CONTESSA 2 is investigating tesetaxel dosed orally at 27 mg/m² on the first day of each 21-day cycle plus a reduced dose of capecitabine (1,650 mg/m²/day dosed orally for 14 days of each 21-day cycle) in approximately 125 patients with HER2 negative, HR positive MBC not previously treated with a taxane. Capecitabine is an oral chemotherapy agent that is considered a standard-of-care treatment in MBC. Where indicated, patients must have received endocrine therapy with or without a CDK 4/6 inhibitor. ~~Patients with CNS metastases are eligible.~~ The primary endpoint is ORR as assessed by an IRC. The secondary efficacy endpoints are duration of response (“DoR”) as assessed by the IRC, PFS as assessed by the IRC, DCR as assessed by the IRC and OS.

CONTESSA TRIO is a multi-cohort, multicenter, Phase 2 study of tesetaxel, an investigational, orally administered taxane, in patients with MBC.

Research and development expense consists primarily of ~~costs~~expense associated with the development of ~~our product candidates~~tesetaxel and ~~includes:~~includes non-personnel-related and personnel-related expense. Non-personnel-related expense includes expense related to: (i) clinical study site payments; (ii) acquiring clinical study materials and the clinical study supply chain; (iii) manufacturing development and scale-up, including manufacturing registration and validation batches of tesetaxel; (iv) clinical and quality systems; and (v) regulatory submissions. Personnel-related expense includes expense related to salaries, benefits ~~travel,~~and equity-based compensation ~~expense and facility-related expense~~ for personnel engaged in research and development functions; (ii) expense incurred under agreements with contract research organizations (“CROs”), investigative sites and consultants that conduct our nonclinical and clinical studies; (iii) manufacturing development and scale-up expense and the cost of acquiring and manufacturing clinical study materials and commercial materials, including manufacturing registration and validation batches; (iv) payments to consultants engaged in the development of our product candidates, including travel and other expense; and (v) costs related to compliance with quality and regulatory requirements.functions.

Research and development expense is charged to operations as incurred when the expenditures relate to our research and development efforts and have no alternative future use. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

All of our research and development expense incurred to date has been incurred in connection with the development of tesetaxel. We do not expect our research and development expense to ~~increase~~change significantly in the near ~~term in connection with the development of tesetaxel.~~term.

General and administrative expense ~~consists primarily of salaries, benefits, travel, equity-based compensation~~includes non-personnel and personnel-related expense. Non-personnel-related expense ~~and facility-related~~includes expense ~~for personnel engaged in finance and administrative functions. General and administrative expense also includes~~related to: (i) professional fees for legal, patent, consulting, accounting and audit ~~services~~services; (ii) facilities and ~~other~~information technology; and (iii) insurance. Personnel-related expense includes expense related ~~costs.~~to salaries, benefits and equity-based compensation for personnel engaged in finance and administrative functions. We do not expect our general and administrative expense to change significantly in the near term.

Other income, net consists primarily of interest income generated from cash held in savings accounts. Other income, net also includes losses on disposal of property and equipment and gains and losses on foreign currency transactions.

The following table summarizes our results of operations for each of the periods below (in thousands):

	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
	2020		2019		2020		2019		2020		2019		2020		2019
Research and development expense	$	30,777	$	26,453	$	58,724	$	53,084	$	28,242	$	25,097	$	86,966	$	78,181
General and administrative expense	$	2,751	$	2,783	$	5,625	$	5,374	$	2,408	$	2,666	$	8,033	$	8,040
Other income, net	$	104	$	534	$	762	$	1,111	$	173	$	1,136	$	935	$	2,247

The following table summarizes our research and development expense for each of the periods below (in thousands):

	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
	2020		2019		2020		2019		2020		2019		2020		2019
Non-personnel expense:
Clinical development	$	19,542	$	16,571	$	36,077	$	32,919	$	17,293	$	15,158	$	53,370	$	48,077
Other		664		466		1,149		1,110		404		502		1,553		1,612
Total non-personnel expense		20,206		17,037		37,226		34,029		17,697		15,660		54,923		49,689
Personnel expense:
Salaries, bonuses and benefits		8,260		6,843		16,885		13,982		8,486		7,016		25,371		20,998
Equity-based compensation expense		2,311		2,573		4,613		5,073		2,059		2,421		6,672		7,494
Total personnel expense		10,571		9,416		21,498		19,055		10,545		9,437		32,043		28,492
Total research and development expense	$	30,777	$	26,453	$	58,724	$	53,084	$	28,242	$	25,097	$	86,966	$	78,181

Research and development expense was ~~$30.8~~$28.2 million and ~~$58.7~~$87.0 million for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively, compared to ~~$26.5~~$25.1 million and ~~$53.1~~$78.2 million, respectively, for the same periods in 2019. The increase in research and development expense was due primarily to increased activities and headcount in connection with our tesetaxel clinical development program.

The following table summarizes our general and administrative expense for each of the periods below (in thousands):

	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
	2020		2019		2020		2019		2020		2019		2020		2019
Non-personnel expense	$	1,486	$	1,331	$	2,928	$	2,449	$	1,110	$	1,277	$	4,038	$	3,726
Personnel expense:
Salaries, bonuses and benefits		981		1,035		2,129		2,083		1,016		1,030		3,145		3,113
Equity-based compensation expense		284		417		568		842		282		359		850		1,201
Total personnel expense		1,265		1,452		2,697		2,925		1,298		1,389		3,995		4,314
Total general and administrative expense	$	2,751	$	2,783	$	5,625	$	5,374	$	2,408	$	2,666	$	8,033	$	8,040

General and administrative expense of ~~$2.8~~$2.4 million and ~~$5.6~~$8.0 million for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively, remained consistent compared to ~~$2.8~~$2.7 million and ~~$5.4~~$8.0 million, respectively, for the same periods in 2019.

Other income, net was ~~$0.1~~$0.2 million and ~~$0.8~~$0.9 million for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively, compared to ~~$0.5~~$1.1 million and ~~$1.1~~$2.2 million, respectively, for the same periods in 2019. The decrease in other income, net was due primarily to decreased interest income.

On September 1, 2020, we closed an underwritten public offering of 5,614,036 shares of common stock at a public offering price of $14.25 per share (collectively with the underwriters’ option, the “September 2020 Offering”). The underwriters exercised in full their option to purchase 842,105 additional shares of common stock. The aggregate gross proceeds from the September 2020 Offering were $92.0

million, and the net proceeds were $87.4 million after deducting underwriting discounts and commissions and offering costs.

As of ~~June~~September 30, 2020 and December 31, 2019, we had cash in the amount of ~~$125.4~~$188.3 million and $180.5 million, respectively. We believe that our existing cash will be sufficient to meet our anticipated cash requirements through at least one year from the date this Quarterly Report on Form 10-Q is filed with the U.S. Securities and Exchange Commission (the “SEC”).

We have incurred losses in each year since our inception. Our net loss was ~~$33.4~~$30.5 million and ~~$63.6~~$94.1 million for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively, compared to ~~$28.7~~$26.6 million and ~~$57.3~~$84.0 million, respectively, for the same periods in 2019. As of ~~June~~September 30, 2020 and December 31, 2019, we had an accumulated deficit of ~~$303.7~~$334.1 million and $240.1 million, respectively. Substantially all of our operating losses resulted from expenses incurred in connection with advancing tesetaxel through development activities and general and administrative costs associated with our operations.

To date, we have funded our operations through the sale of equity securities. Since our inception, we have raised ~~$378.7~~$466.9 million in net proceeds from the sale of equity securities.

The following table summarizes our net cash flow activity for each of the periods below (in thousands):

	Six Months Ended						Nine Months Ended
	June 30,						September 30,
	2020			2019			2020			2019
Net cash (used in) provided by:
Operating activities	$	(56,478	)	$	(50,332	)	$	(81,629	)	$	(72,117	)
Investing activities		(219	)		(103	)		(416	)		(164	)
Financing activities		1,654			118,289			89,843			137,476
Net (decrease) increase in cash and restricted cash	$	(55,043	)	$	67,854
Net increase in cash and restricted cash							$	7,798		$	65,195

Net cash used in operating activities was ~~$56.5~~$81.6 million and ~~$50.3~~$72.1 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively. Net cash used in operating activities was primarily the result of our net loss and change in working capital, partially offset by equity-based compensation expense, depreciation expense and ~~depreciation and amortization~~non-cash lease expense.

Net cash used in investing activities was ~~$0.2~~$0.4 million and ~~$0.1~~$0.2 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively. Net cash used in investing activities was the result of purchases of property and equipment.

Net cash provided by financing activities was ~~$1.7~~$89.8 million and ~~$118.3~~$137.5 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively. For the ~~six~~nine months ended ~~June~~September 30, 2020 ~~net cash provided by financing activities was the result of proceeds from the issuance of common stock under employee stock plans. For the six months ended June 30,~~and 2019, net cash provided by financing activities was primarily the result of net proceeds from the sale of common stock in an underwritten public ~~offering.~~offerings.

Until such time as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic partnerships and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic partnerships or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, associated intellectual property, our other technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we are unable to raise

additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidate even if we would otherwise prefer to develop and market such product candidate ourselves.

Although the ongoing Coronavirus Disease 2019 (“COVID-19”) pandemic did not have a material impact on our results of operations, financial condition or clinical studies during the ~~six~~nine months ended ~~June~~September 30, 2020, we are unable to accurately predict the full impact that the COVID-19 pandemic will have on our business in the future due to numerous factors that are not within our control, including its duration and severity.

In March 2018, we entered into an agreement to lease office space in San Diego, California (the “San Diego Lease”) with aggregate payments of approximately $0.8 million over the term of the lease. The San Diego Lease originally provided for expiration on December 31, 2019. In August 2019, the Company entered into a First Amendment to the San Diego Lease to extend the term of the lease through the commencement of the New San Diego Lease (defined below).

In October 2019, we entered into an agreement to lease office space in San Diego, California (the “New San Diego Lease”) with aggregate payments of approximately ~~$4.3~~$4.1 million over the 7.5-year term of the lease. The New San Diego Lease commenced in July 2020. We have an option to extend the New San Diego Lease for an additional 5 years at the end of the initial term. Further, we provided a standby letter of credit of $0.5 million as a security deposit during the term of the lease, subject to certain reductions beginning 4 years after the lease commencement. As of ~~June~~September 30, 2020, $0.5 million was pledged as collateral for the letter of credit and recorded as restricted cash.

In February 2018, we entered into an agreement to lease office space in New York, New York (the “New York Lease”) with aggregate payments of approximately $2.8 million over the 7-year term of the lease. We have an option to extend the New York Lease for an additional three years at the end of the initial term. Further, we provided a standby letter of credit of $0.3 million in lieu of a security deposit during the term of the lease, subject to a reduction 3.5 years after the lease commencement. As of ~~June~~September 30, 2020, $0.3 million was pledged as collateral for the letter of credit and was recorded as restricted cash.

We enter into contracts in the normal course of business with ~~CROs,~~ contract development and manufacturing organizations and other service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.

In 2013, we licensed rights to tesetaxel in all major markets from Daiichi Sankyo Company, Limited (“Daiichi Sankyo”), the original inventor of the product. Under the Daiichi Sankyo license agreement, we are obligated to use commercially reasonable efforts to develop and commercialize tesetaxel in the following countries: France, Germany, Italy, Spain, the United Kingdom and the U.S. We are required to make aggregate future milestone payments of up to $31.0 million, contingent on attainment of certain regulatory milestones. Additionally, we are obligated to pay Daiichi Sankyo a tiered royalty that ranges from the low- to high-single digits, depending on annual net sales of tesetaxel.

During the periods presented, we did not have, nor do we currently have, any off–balance sheet arrangements as defined under the rules of the SEC.

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under this act, an emerging growth company can delay the adoption of new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this

exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. However, we intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended. We will remain an emerging growth company until December 31, 2023 unless, prior to that time, we: (i) have more than $1.07 billion in annual gross revenue; (ii) have a market value for our common stock held by non-affiliates of more than $700 million as of the last day of our second quarter of any year; or (iii) issue more than $1.0 billion of non-convertible debt over a three-year period.

We believe the estimates, assumptions and judgments involved in the accounting policies described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2019 are most critical to understanding and evaluating our reported financial results. During the ~~six~~nine months ended ~~June~~September 30, 2020, there were no changes to our critical accounting policies and estimates as described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2019.

See Note 2 to our condensed financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

We are a smaller reporting company, as defined by Rule 12b-2 under the Securities and Exchange Act of 1934 and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures. Based on that evaluation of our disclosure controls and procedures as of ~~June~~September 30, 2020, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and our

management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

There was no change in our internal control over financial reporting that occurred during our most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we may become subject to claims and litigation arising in the ordinary course of business. WeOther than as described below, we are not a party to any material legal proceedings, nor are we aware of any material pending or threatened litigation.

On September 16, 2020, a putative class action lawsuit was filed against us and our Chief Executive Officer, as well as our current and former Chief Financial Officers. The complaint was filed in the United States District Court for the Southern District of California and alleges that we made material misrepresentations and omissions regarding the safety and tolerability of tesetaxel in our public statements in violation of federal securities laws. The lawsuit seeks damages allegedly sustained by the class and an award of plaintiffs’ costs and attorney fees. We believe the complaint is without merit, and we have substantive defenses to the claims of liability and damages. We plan to respond accordingly.

Our business is subject to various risks, including those described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019. There have been no material changes from the risk factors disclosed in Item 1A of our Annual Report on Form 10-K, except for the additional risk factor set forth below.

The ongoing COVID-19 pandemic may disrupt our operations and affect our ability to successfully conduct clinical studies.

We are unable to accurately predict the full impact that the ongoing Coronavirus Disease 2019 (“COVID-19”) pandemic will have on our results from operations, financial condition and clinical studies due to numerous factors that are not within our control, including its duration and severity. Stay-at-home orders, business closures, travel restrictions, supply chain disruptions and employee illness or quarantines could result in disruptions to our operations, which could adversely impact our results from operations and financial condition. In addition, the COVID-19 pandemic has resulted in ongoing volatility in financial markets. If our access to capital is restricted or associated borrowing costs increase as a result of developments in financial markets relating to the COVID-19 pandemic, our operations and financial condition could be adversely impacted.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per share	ODT	Nasdaq Global Select Market

		Page

	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Balance Sheets as of ~~June~~September 30, 2020 (Unaudited) and December 31, 2019	3
	Condensed Statements of Operations for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2020 and 2019 (Unaudited)	4
	Condensed Statements of Stockholders’ Equity for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2020 and 2019 (Unaudited)	5
	Condensed Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2020 and 2019 (Unaudited)	67
	Notes to Condensed Financial Statements (Unaudited)	78
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1314
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2021
Item 4.	Controls and Procedures	2021

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	2223
Item 1A.	Risk Factors	2223
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2223
Item 3.	Defaults upon Senior Securities	2223
Item 4.	Mine Safety Disclosures	2223
Item 5.	Other Information	2223
Item 6.	Exhibits	2324
	SIGNATURES	2425

2020	$	189
2021		386
2022		401
2023		428
2024		439
Thereafter		362
Total future minimum lease payments		2,205
Less discount		(297	)
Total lease liabilities	$	1,908

2020	$	96
2021		859
2022		935
2023		980
2024		1,010
Thereafter		2,252
Total future minimum lease payments		6,132
Less discount		(756	)
Total lease liabilities	$	5,376


Exhibit No.		Description

3.1		Certificate of Incorporation of Odonate (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-221533), as filed with the SEC on November 27, 2017)

3.2		First Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on June 24, 2019)

31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934

31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934

32.1#		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(b) or 15d-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☒


	Odonate Therapeutics, Inc.

Date: ~~July 30,~~October 28, 2020	By:	/s/ Kevin Tang
		Kevin Tang
		Chairman and Chief Executive Officer
		(principal executive officer)

		/s/ Michael Hearne
		Michael Hearne
		Chief Financial Officer
		(principal financial and accounting officer)