UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~September~~March 3031, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-28386

CTI BIOPHARMA CORP.

(Exact name of registrant as specified in its charter)


Delaware						91-1533912
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3101 Western Avenue
Suite 800
Seattle
Washington						98121
(Address of principal executive offices)						(Zip Code)

(206) 282-7100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	CTIC	The Nasdaq Stock Market LLC

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

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

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

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class						Outstanding at ~~October~~May 314, ~~2022~~2023
Common Stock, par value $0.001 per share						~~126~~131,~~894~~880,~~203~~176

CTI BIOPHARMA CORP.

TABLE OF CONTENTS

						PAGE
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements (unaudited)						4
Condensed Balance Sheets						4
Condensed Statements of Operations						5
Condensed Statements of Comprehensive Loss						6
Condensed Statements of Changes in Stockholders' (Deficit) Equity						7
Condensed Statements of Changes in Stockholders’ Deficit						7
Condensed Statements of Cash Flows						98
Notes to Condensed Financial Statements						109
ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations						2019
ITEM 3: Quantitative and Qualitative Disclosures about Market Risk						2927
ITEM 4: Controls and Procedures						2927
PART II - OTHER INFORMATION
ITEM 1: Legal Proceedings						3028
ITEM 1A: Risk Factors						3028
ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds						30
ITEM 3: Defaults upon Senior Securities						30
ITEM 4: Mine Safety Disclosures						3031
ITEM 5: Other Information						3031
ITEM 6: Exhibits						3132
Signatures						3233

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CTI BIOPHARMA CORP.

CONDENSED BALANCE SHEETS

(In thousands, except share amounts)

(unaudited)

	September 30, 2022		December 31, 2021
	March 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	3224,~~048~~209	$	6530,~~446~~420
Short-term investments	4934,~~591~~802		—49,519
Accounts receivable, net	1022,~~592~~957		—15,387
Inventories	~~1,147~~777		—733
Prepaid expenses and other current assets	3,~~557~~708		23,~~933~~337
Total current assets	9686,~~935~~453		6899,~~379~~396
Property and equipment, net	—		176
Intangible assets, net	22,705		23,226
Intangible assets, net	23,757		—
Other assets	3,114		3,303
Other assets	2,774		3,879
Total assets	$	112,272	$	125,925
Total assets	$	123,466	$	72,434
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	2,~~443~~025	$	32,~~891~~008
Accrued expenses	2616,~~574~~306		1229,~~720~~402
Current portion of long-term debt	—48,084		47,~~380~~943
Other current liabilities	~~753~~1,811		21,~~660~~781
Total current liabilities	2968,~~770~~226		6681,~~651~~134
Long-term debt	47,802		—
Royalty financing obligation	68,371		61,134
Royalty financing obligation	60,291		—
Other liabilities	1,022		1,234
Other liabilities	2,440		2,016
Total liabilities	137,619		143,502
Total liabilities	140,303		68,667
Commitments and contingencies
Stockholders' (deficit) equity:
Stockholders’ deficit:
Preferred stock, $0.001 par value per share:
Authorized shares - 33,333 as of September 30, 2022 and December 31, 2021
Authorized shares - 33,333 as of March 31, 2023 and December 31, 2022
Series O Preferred Stock, 0 share and 12,575 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively (Aggregate liquidation preference of $0 and $25,150 as of September 30, 2022 and December 31, 2021, respectively)	—		—
Series X Preferred Stock, 3,047 shares issued and outstanding as of March 31, 2023 and December 31, 2022 (Aggregate liquidation preference of $30,470 as of March 31, 2022 and December 31, 2022)	—		—
Series X Preferred Stock, 3,047 shares and 3,794 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively (Aggregate liquidation preference of $30,470 and $37,940 as of September 30, 2022 and December 31, 2021, respectively.)	—		—
Series X1 Preferred Stock, 600 shares issued and outstanding as of March 31, 2023 and December 31, 2022 (Aggregate liquidation preference of $15,000 as of March 31, 2023 and December 31, 2022)	—		—
Series X1 Preferred Stock, 600 shares issued and outstanding as of September 30, 2022 and December 31, 2021 (Aggregate liquidation preference of $15,000 as of September 30, 2022 and December 31, 2021)	—		—
Common stock, $0.001 par value per share:
Authorized shares - 266,500,000 as of September 30, 2022 and December 31, 2021
Authorized shares - 266,500,000 as of March 31, 2023 and December 31, 2022
Issued and outstanding shares - 126,879,194 and 99,763,922 as of September 30, 2022 and December 31, 2021, respectively	127		100
Issued and outstanding shares - 131,879,976 and 130,747,161 as of March 31, 2023 and December 31, 2022, respectively	132		131
Additional paid-in capital	2,~~484~~506,~~574~~861		2,~~429~~501,~~582~~234
Accumulated other comprehensive loss	(8911)		—(35)
Accumulated deficit	(2,~~501~~532,~~449~~329)		(2,~~425~~518,~~915~~907)
Total stockholders' (deficit) equity	(16,837)		3,767
Total stockholders’ deficit	(25,347)		(17,577)
Total liabilities and stockholders' (deficit) equity	$	123,466	$	72,434
Total liabilities and stockholders’ deficit	$	112,272	$	125,925

See accompanying notes.

CTI BIOPHARMA CORP.

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2022

2021

2022

2021

2023

2022

Net product sales

~~18,241~~

—

3224,~~865~~116

—2,295

Operating costs and expenses:

Cost of sales

~~1,152~~

—

21,~~347~~224

—278

Research and development

~~8,220~~

~~9,717~~

2410,~~973~~211

288,~~454~~048

Selling, general and administrative

~~21,498~~

~~13,664~~

6121,~~134~~913

3118,~~503~~046

Other operating (income) expenses

(411)

—

10,612

—

Other operating expenses

—

11,023

Total operating costs and expenses

~~30,459~~

~~23,381~~

9933,~~066~~348

5937,~~957~~395

Loss from operations

~~(12,218)~~

~~(23,381)~~

(669,~~201~~232)

(5935,~~957~~100)

Non-operating expenses:

Interest expense, net

~~(3,564)~~

~~(653)~~

(94,~~388~~183)

(12,~~007~~063)

Other non-operating income (expenses)

(145)

(156)

Other non-operating expenses

(7)

(12)

Total non-operating expenses

~~(3,487)~~

~~(798)~~

(94,~~333~~190)

(12,~~163~~075)

Net loss

~~(15,705)~~

~~(24,179)~~

(7513,~~534~~422)

(6137,~~120~~175)

Basic and diluted net loss per common share

~~(0.13)~~

~~(0.26)~~

(0.6910)

(0.7037)

Shares used in calculation of basic and diluted net loss per common share

~~121,597~~

~~93,823~~

~~110~~131,~~066~~566

8799,~~574~~834

See accompanying notes.

CTI BIOPHARMA CORP.

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
			Three Months Ended March 31,
	2022		2021		2022		2021
					2023		2022
Net loss	$	~~(15,705)~~	$	~~(24,179)~~	$	(7513,~~534~~422)	$	(6137,~~120~~175)
Other comprehensive loss:
Other comprehensive income:
Change in unrealized loss on marketable securities	(18)		—		(89)		(2)
Change in unrealized gain on marketable securities					24		—
Other comprehensive loss	(18)		—		(89)		(2)
Other comprehensive income					24		—
Comprehensive loss	$	~~(15,723)~~	$	~~(24,179)~~	$	(7513,~~623~~398)	$	(6137,~~122~~175)

See accompanying notes.

CTI BIOPHARMA CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS'’ (DEFICIT~~) EQUITY~~

(In thousands)

(unaudited)

							Additional		Accumulated Other				Total
	Preferred Stock			Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders'’
	Shares	Amount		Shares	Amount		Capital		~~Income (loss)~~Loss		Deficit		~~Equity (~~Deficit)
Balance at January 1, 2022	17	$	—	99,764	$	100	$	2,429,582	$	—	$	(2,425,915)	$	3,767
Balance at January 1, 2023	4	$	—	130,747	$	131	$	2,501,234	$	(35)	$	(2,518,907)	$	(17,577)
Issuance of common stock, net(At-the-market equity facility)	—	—		794	1		3,750		—		—		3,751
Equity-based compensation	—	—		—	—		2,496		—		—		2,496
Equity-based compensation	—	—		—	—		1,679		—		—		1,679
Exercise of stock options	—	—		1,133	1		3,131		—		—		3,132
Exercise of stock options	—	—		60	—		61		—		—		61
Net loss	—	—		—	—		—		—		(13,422)		(13,422)
Net loss	—	—		—	—		—		—		(37,175)		(37,175)
Other comprehensive income	—	—		—	—		—		24		—		24
Balance at March 31, 2022	17	$	—	100,618	$	101	$	2,435,072	$	—	$	(2,463,090)	$	(27,917)
Balance at March 31, 2023	4	$	—	131,880	$	132	$	2,506,861	$	(11)	$	(2,532,329)	$	(25,347)
Issuance of common stock, net(At-the-market equity facility)	—	—		8,587	8		41,459		—		—		41,467
Conversion of Series X preferred stock to common stock	—	—		4,110	4		(4)		—		—		—
Equity-based compensation	—	—		—	—		2,539		—		—		2,539
Exercise of stock options and shares issued under employee stock purchase plan	—	—		816	1		1,361		—		—		1,362
Net loss	—	—		—	—		—		—		(22,654)		(22,654)
Other comprehensive loss	—	—		—	—		—		(71)		—		(71)
Balance at June 30, 2022	17	$	—	114,131	$	114	$	2,480,427	$	(71)	$	(2,485,744)	$	(5,274)
Conversion of Series O preferred stock to common stock	(13)	—		8,383	8		(8)		—		—		—
Conversion of Series X preferred stock to common stock	—	—		3,360	4		(4)		—		—		—
Equity-based compensation	—	—		—	—		2,822		—		—		2,822
Exercise of stock options	—	—		1,005	1		1,337		—		—		1,338
Net loss	—	—		—	—		—		—		(15,705)		(15,705)
Other comprehensive loss	—	—		—	—		—		(18)		—		(18)
Balance at September 30, 2022	4	$	—	126,879	$	127	$	2,484,574	$	(89)	$	(2,501,449)	$	(16,837)


							Additional		Accumulated Other				Total
	Preferred Stock			Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Income (loss)		Deficit		Equity (Deficit)
Balance at January 1, 2022	17	$	—	99,764	$	100	$	2,429,582	$	—	$	(2,425,915)	$	3,767
Issuance of common stock, net (At-the-market equity facility)	—	—		794	1		3,750		—		—		3,751
Equity-based compensation	—	—		—	—		1,679		—		—		1,679
Exercise of stock options	—	—		60	—		61		—		—		61
Net loss	—	—		—	—		—		—		(37,175)		(37,175)

Balance at March 31, 2022	17	$	—	100,618	$	101	$	2,435,072	$	—	$	(2,463,090)	$	(27,917)

							Additional		Accumulated Other				Total
	Preferred Stock			Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Capital		Income (loss)		Deficit		Equity
Balance at January 1, 2021	17	$	—	75,897	$	76	$	2,367,958	$	2	$	(2,328,007)	$	40,029
Issuance of common stock, net(At-the-market equity facility)	—	—		858	1		2,961		—		—		2,962
Equity-based compensation	—	—		—	—		932		—		—		932
Cancellation of restricted stock	—	—		(4)	—		—		—		—		—
Net loss	—	—		—	—		—		—		(17,266)		(17,266)
Other comprehensive loss	—	—		—	—		—		(3)		—		(3)
Balance at March 31, 2021	17	$	—	76,751	$	77	$	2,371,851	$	(1)	$	(2,345,273)	$	26,654
Issuance of common stock and Series X1 preferred stock, net of issuance costs	1	—		16,400	16		53,537		—		—		53,553
Equity-based compensation	—	—		—	—		988		—		—		988
Exercise of stock options and shares issued under employee stock purchase plan	—	—		159	—		185		—		—		185
Net loss	—	—		—	—		—		—		(19,675)		(19,675)
Other comprehensive income	—	—		—	—		—		1		—		1
Balance at June 30, 2021	18	$	—	93,310	$	93	$	2,426,561	$	—	$	(2,364,948)	$	61,706
Conversion of Series X preferred stock to common stock	(1)	—		3,370	4		(4)		—		—		—
Equity-based compensation	—	—		—	—		1,361		—		—		1,361
Net loss	—	—		—	—		—		—		(24,179)		(24,179)
Balance at September 30, 2021	17	$	—	96,680	$	97	$	2,427,918	$	—	$	(2,389,127)	$	38,888

See accompanying notes.

CTI BIOPHARMA CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2022		2021
	2023		2022
Operating activities
Net loss	$	(7513,~~534~~422)	$	(6137,~~120~~175)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity-based compensation	72,~~040~~496		31,~~281~~679
Imputed interest expense on royalty financing obligation	53,~~172~~015		—611
Depreciation and amortization	~~1,419~~520		~~395~~317
Other	(38329)		(5251)
Changes in operating assets and liabilities:
Accounts receivable, net	(107,~~592~~570)		—(2,426)
Inventories	(~~1,147~~43)		—(102)
Prepaid expenses and other assets	~~564~~(189)		~~856~~454
Accounts payable, accrued expenses and other liabilities	7(15,~~432~~576)		16,~~769~~716
Net cash used in operating activities	(6531,~~684~~098)		(5429,~~871~~977)
Investing activities
Milestone payment to S*BIO Pte Ltd.	(25,000)		—
Purchases of short-term investments	(14,745)		—
Purchases of short-term investments	(59,390)		—
Proceeds from maturities of short-term investments	30,000		—
Proceeds from maturities of short-term investments	10,000		12,000
Net cash provided by investing activities	15,255		—
Net cash (used in) provided by investing activities	(74,390)		12,000
Financing activities
Gross proceeds from public offering of common stock and Series X1 preferred stock	—		56,000
Gross proceeds from common stock sales under at-the-market equity facility	—		2,716
Cash paid for offering costs (public offering of common stock and Series X1 preferred stock)	—		(2,447)
Cash paid for issuance costs (at-the-market equity facility)	—		(82)
Gross proceeds from common stock sales under at-the-market equity facility	46,936		3,064
Gross proceeds from DRI Royalty Financing Agreement	6,500		60,000
Cash paid for issuance costs (at-the-market equity facility)	(1,604)		(411)
Cash paid for issuance costs (DRI Royalty Financing Agreement)	—		(1,262)
Gross proceeds from DRI Credit Agreement	—		50,000
Proceeds from stock option exercises	3,132		61
Cash paid for issuance costs - DRI Credit Agreement	—		(1,806)
Net cash provided by financing activities	9,632		61,433
Gross proceeds from DRI Royalty Financing Agreement	60,000		—
Net (decrease) increase in cash and cash equivalents	(6,211)		31,456
Cash paid for issuance costs (DRI Royalty Financing Agreement)	(1,284)		(521)
Cash and cash equivalents at beginning of period	30,420		65,446
Principal payments on Silicon Valley Bank debt	—		(6,329)
Cash and cash equivalents at end of period	$	24,209	$	96,902
Proceeds from stock option exercises	1,877		144
Proceeds from sales of common stock under employee stock purchase plan	751		59
Net cash provided by financing activities	106,676		97,753
Net (decrease) increase in cash and cash equivalents	(33,398)		54,882
Cash and cash equivalents at beginning of period	65,446		40,394
Cash and cash equivalents at end of period	$	32,048	$	95,276
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	41,~~369~~856	$	~~158~~1,250
Supplemental disclosure of noncash activities
Conversion of preferred stock to common stock	$	32,530	$	3,370

See accompanying notes.

CTI BIOPHARMA CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

1. Description of Business and Summary of Significant Accounting Policies

CTI BioPharma Corp., also referred to in these ~~interim~~ financial statements as “we,” “us,” “our,” the “Company” and “CTI,” is a commercial biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies for blood-related cancers where there is a significant unmet medical need. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with partners. We have one commercially approved product, VONJO® (pacritinib), which received ~~accelerated~~Accelerated ~~approval~~Approval on February 28, 2022 from the U.S. Food and Drug Administration, or FDA, in the United States, for the treatment of adult patients with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 x 109/L. We commercially launched VONJO in March 2022. We are conducting the Phase 3 PACIFICA study of VONJO in patients with myelofibrosis and severe thrombocytopenia as a post-marketing requirement.

We operate in a highly regulated and competitive environment. The manufacturing and marketing of pharmaceutical products requires approval from, and is subject to ongoing oversight by, the FDA, the European Medicines Agency, or the EMA, in the EU, and comparable agencies in other countries. Obtaining approval for a new therapeutic product is never certain, may take many years and may involve the expenditure of substantial resources.

On May 10, 2023, CTI entered into an Agreement and Plan of Merger, or the Merger Agreement, with Swedish Orphan Biovitrum AB (publ), a Swedish public limited liability company, or Sobi, and Cleopatra Acquisition Corp., a Delaware corporation and a wholly owned, indirect subsidiary of Sobi, or the Purchaser. For additional information regarding the pending Merger, please see “Note 6. Subsequent Events”.

Basis of Presentation

The accompanying unaudited financial information as of and for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022 has been prepared in accordance with accounting principles generally accepted in the ~~U.S.~~United States, or U.S. GAAP, for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such dates and the operating results and cash flows for such periods. Operating results for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission, or the SEC. These unaudited condensed financial statements and related notes should be read in conjunction with our audited financial statements for the year ended December 31, ~~2021~~2022 included in our Annual Report on Form 10-K filed with the SEC on March 316, ~~2022~~2023.

The condensed balance sheet at December 31, ~~2021~~2022 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures in the condensed financial statements and accompanying notes. Estimates are used for, but not limited to, evaluation of going concern and classification of liabilities, net product sales, clinical accruals, intangible assets, interest expense on royalty financing obligation, income taxes, ~~commitments and contingencies,~~ equity-based compensation and the collectability of receivables. Given the global economic climate ~~and additional or unforeseen effects from the ongoing COVID-19 pandemic~~, these estimates are becoming more challenging, and actual results could differ materially from those estimates. See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” in this Quarterly Report on Form 10-Q for further information.

Liquidity

The accompanying condensed financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the condensed financial statements are issued. Our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

109

~~Based~~one onyear ~~our~~after ~~evaluation~~the ~~completed~~date ~~pursuant~~the tocondensed ~~Accounting~~financial ~~Standards~~statements ~~Update~~are Noissued. ~~2014-15,~~Our ~~Presentation~~management ofevaluates ~~Financial~~whether ~~Statements-Going~~there ~~Concern~~are ~~(Subtopic~~conditions ~~205-40):~~or ~~Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern~~events, weconsidered ~~expect that our present financial resources, along with expected cash receipts from net product sales of VONJO and up to $25.0 million~~ in ~~contractual funding commitments from DRI receivable upon achieving minimum net product sales of VONJO~~aggregate, ~~will~~that beraise ~~sufficient~~substantial todoubt ~~meet~~about our ~~obligations~~ability ~~as they come due and~~ to ~~fund~~continue ~~our~~as ~~operations~~a ~~for~~going atconcern ~~least~~within one year after the date that ~~this~~the ~~Quarterly~~condensed ~~Report~~financial onstatements ~~Form~~are ~~10-Q is filed with the SEC~~issued.

While Wewe ~~expect~~have ~~continued~~seen ~~increases~~strong inrefill demand and expect revenues from VONJO ~~as wholesalers build supply~~ to ~~manage~~be ~~patient~~one ~~refills~~of ~~and~~our ~~new~~primary ~~subscriber~~sources ~~demand.~~of ~~While we have seen strong refill demand~~liquidity, we may not be able to accurately predict the market acceptance or growth trajectory of VONJO'’s revenues. We project operating expenses, when offset against our projected revenues, will result in operating losses for the foreseeable future as we expect to conduct research, development, testing and regulatory compliance activities with respect to other development pathways for pacritinib. We have incurred a net operating loss every year since our formation and expect to continue to incur net losses for the foreseeable future. As of ~~September~~March 3031, ~~2022~~2023, we had an accumulated deficit of $2.5 billion,. ~~and~~Our ~~our~~ available cash, cash equivalents and short-term investments were $8159.60 million as of March 31, 2023. We expect that our present financial resources, together with expected cash receipts from net product sales of VONJO, will be sufficient to meet our obligations as they come due and to fund our operations into the first quarter of 2024. Based on our evaluation completed pursuant to ASC 205-40 Presentation of Financial Statements-Going Concern, these factors raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed financial statements are issued.

~~While~~We ~~we expect to operate as a going concern for at least one year after the date that this Quarterly Report on Form 10-Q is filed with the SEC, we~~ will require additional capital in order to pursue our longer-term strategic objectives. We expect to satisfy our capital needs through existing capital balances, revenues from VONJO, and ~~some~~a combination of public or private equity financings, partnerships, collaborations, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, we have a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing stockholders may result. If we fail to obtain additional capital when needed, our ability to operate as a going concern will be harmed, and we may be required to delay, scale back or eliminate some or all of our research and development programs and commercialization efforts and/or reduce our selling, general and administrative expenses, be unable to attract and retain highly-qualified personnel, be unable to obtain and maintain contracts necessary to continue our operations ~~and~~ at affordable rates with competitive terms, be unable to or elect to refrain from making our contractually required payments when due (including debt payments) and/or be forced to cease operations, liquidate our assets and possibly seek bankruptcy protection.

Our future capital requirements will depend on many factors, including: our ability to generate sales of VONJO; the cost of ongoing organization and maintenance of our commercial infrastructure and distribution capabilities; our ability to reach milestones triggering payments to be made or received under certain of our contractual arrangements; the cost of manufacturing VONJO; the cost of manufacturing clinical supplies of our product candidates or of establishing commercial supplies of any products that we may develop in the future; developments in and expenses associated with our research and development activities; our clinical development plans and any changes that we may initiate or that may be requested by the FDA or other regulators as we seek approval for products that we may develop in the future; acquisitions or collaborations with respect to compounds or other assets; competitive market developments; disruptions or other delays to our business and clinical trials resulting from ongoing worldwide current events; and other unplanned business developments.

In addition, our ability to comply with covenants under our Credit Agreement, or the Credit Agreement, with Drug Royalty III LP 2, or DRI, may be affected by events beyond our control, and we may not be able to meet those covenants. A breach of any of these covenants, including a material adverse change in our business, operations or condition (financial or otherwise), could result in an event of default under the Credit Agreement, which could cause all of the outstanding indebtedness under the facility to become immediately due and payable. The ~~Credit Agreement also contains a minimum liquidity covenant requiring us to maintain at least $10.0 million of unrestricted cash and cash equivalents, subject to certain exceptions. The~~ accompanying condensed financial statements do not include adjustments, if any, that may result from the outcome of this uncertainty. See Part II, Item 8, “Notes to Consolidated Financial Statements, Note 7. Debt Financing Arrangements” of our Annual Report on Form 10-K for the year ended December 31, 2021 for additional information regarding the Credit Agreement with DRI.

Cash, Cash Equivalents and Short-Term Investments

As of ~~September~~March 3031, 2023 and December 31, 2022, our cash, cash equivalents and short-term investments consisted of cash, money market funds and corporate debt securities. ~~As of December 31, 2021, our cash and cash equivalents consisted of cash and money market funds.~~ Cash equivalents and short-term investments are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. There are three levels of inputs used to measure fair value, with Level 1 having the highest priority and Level 3 having the lowest:

•Level 1—Valuations based on unadjusted quoted prices for identical assets and liabilities in active markets.

•Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

•Level 3—Valuations based on unobservable inputs that are supported by little or no market activity, reflecting our own assumptions. These valuations require significant judgment or estimation.

We measure the fair value of money market funds based on the closing price reported by the fund sponsor from an actively traded exchange. We value all other securities using broker quotes that utilize observable market inputs. We did not hold cash, cash equivalents and short-term investments categorized as Level 3 assets as of September 30, 2022 and December 31, 2021. The following table summarizes, by major security type, our cash, cash equivalents and short-term investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): 10

	September 30, 2022				December 31, 2021
	Cost or Amortized Cost		Gross Unrealized Losses		Total Estimated Fair Value		Total Estimated Fair Value
Cash	$	291	$	—	$	291	$	137
Level 1 securities:
Money market funds	31,757		—		31,757		65,309
Level 2 securities:
Corporate debt securities	49,680		(89)		49,591		—
Total cash, cash equivalents and short-term investments	$	81,728	$	(89)	$	81,639	$	65,446

The following table summarizes, by major security type, our cash, cash equivalents and short-term investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):


	March 31, 2023				December 31, 2022
	Cost or Amortized Cost		Gross Unrealized Losses		Total Estimated Fair Value		Total Estimated Fair Value
Financial Assets
Cash	$	167	$	—	$	167	$	337
Level 1 securities:
Money market funds	24,042		—		24,042		30,083

Level 2 securities:

Corporate debt securities	34,813		(11)		34,802		49,519
Total cash, cash equivalents and short-term investments	$	59,022	$	(11)	$	59,011	$	79,939

Concentrations of Credit Risk and Uncertainties

Cash, cash equivalents, short-term investments and accounts receivable are financial instruments that potentially subject us to concentrations of credit risk. All of our accounts receivable relate to VONJO product sales. We have not experienced any significant credit losses on cash, cash equivalents, short-term investments or accounts receivable to date and do not require collateral on accounts receivable. To estimate credit losses for accounts receivable, we consider our historical experience and other currently available information, including customer financial condition, as well as current and forecasted economic conditions affecting our customers. We consider the risk of potential credit losses to be low based on our evaluation of the creditworthiness of our customers who are specialty distributors and specialty pharmacies.

We source our drug products for commercial operations and clinical trials from a concentrated group of third-party suppliers and contractors. If we are unable to obtain sufficient quantities of source materials, manufacture or distribute our products to customers from existing suppliers and service providers, or obtain the materials or services from other suppliers or manufacturers, certain sales and research and development activities may be delayed.

Accounts Receivable

Accounts receivable, net consist of amounts due from customers, net of customer allowances for prompt-pay discounts, chargebacks, rebates and product returns, as well as distribution service fees. Accounts receivable are stated at amortized cost less allowance for credit losses. Our standard credit terms range from 30 days to 66 days, and all arrangements are payable within one year of the transfer of control of the product; as such, we do not adjust our revenues for the effects of a significant financing component. We analyze past due accounts for collectability and periodically evaluate the creditworthiness of our customers. As of ~~September~~March 3031, ~~2022~~2023, we determined that an allowance for credit losses was not required based on our review of customer accounts and individual circumstances.

Inventories

Prior to regulatory approval, we expense costs related to the production of inventories as research and development expenses in the period in which they are incurred because product manufactured prior to regulatory approval may not be sold unless regulatory approval is obtained. Subsequent to regulatory approval, we capitalize costs incurred to manufacture our products as inventories when the related costs are expected to be recoverable through the commercialization of the product. VONJO inventory that is deployed for clinical, research or development purposes is charged to research and development expense.

12As of March 31, 2023, inventories consist of active pharmaceutical ingredients and capitalized shipping, packaging and labeling costs incurred subsequent to FDA approval of VONJO. Inventories are recorded at the lower of cost and net realizable

As of September 30, 2022, inventories consist of active pharmaceutical ingredients and capitalized shipping, packaging and labeling costs incurred subsequent to FDA approval of VONJO. Inventories are recorded at the lower of cost and net realizable value with the cost of inventories determined on a specific identification basis in a manner that approximates the first-in, first-out method. We perform an assessment of the recoverability of capitalized inventory during each reporting period and write down any excess and obsolete inventories to their net realizable value in the period in which the impairment is first identified.11

value with the cost of inventories determined on a specific identification basis in a manner that approximates the first-in, first-out method. We perform an assessment of the recoverability of capitalized inventory during each reporting period and write down any excess and obsolete inventories to their net realizable value in the period in which the impairment is first identified.

Intangible Assets

Intangible assets as of ~~September~~March 3031, ~~2022~~2023 consist of a capitalized milestone payment incurred upon FDA approval and commercialization of VONJO during the first quarter of 2022. ~~See “Note 6. Milestone Payments - S*BIO Pte Ltd.” for additional details.~~ Intangible assets are amortized on a straight-line basis over the patent life of the VONJO product compound, which was 11.9 years upon FDA approval, with a remaining amortization period of 1110.38 years as of ~~September~~March 3031, ~~2022~~2023. For the ~~nine~~three months ended ~~September~~March 3031, 2023 and 2022, we recognized $10.5 million and $0.2 million of amortization expense, respectively, which was included in Cost of sales. The gross carrying amount and accumulated amortization were $25.0 million and $1.2.3 million, respectively, as of ~~September~~March 3031, ~~2022, respectively~~2023.

We review for impairment when events or circumstances indicate that the carrying value of intangible assets may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. Such estimated undiscounted future cash flows are derived from projected sales of VONJO and other competitive factors. The amount of impairment is measured as the difference between the carrying amount and the fair value of the impaired asset.

Credit Agreement

All amounts due under the Credit Agreement with DRI, which include a term loan in the principal amount of $50.0 million and the end-of-facility lender fee of $1.0 million, have been recorded in current liabilities on the condensed balance sheets as of March 31, 2023 and December 31, 2022 due to the considerations discussed in Liquidity above and the assessment that the events of default clause, which includes a material adverse effect provision under the Credit Agreement, is not within our control. We have not been notified of an event of default by DRI as of the date of the filing of this Quarterly Report on Form 10-Q. In addition, the Credit Agreement contains a minimum liquidity covenant requiring us to maintain at least $10.0 million of unrestricted cash and cash equivalents, subject to certain exceptions. See Part II, Item 8, “Notes to Consolidated Financial Statements, Note 8. Debt Financing Arrangements” of our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information regarding the Credit Agreement with DRI. Upon the closing of the pending acquisition by Sobi, the loan under the Credit Agreement will be repaid in full, unless otherwise directed by DRI, including the end-of-facility lender fee of $1.0 million and a prepayment charge of approximately $2.2 million.

Royalty Financing Obligation

In August 2021, we entered into a Purchase and Sale Agreement, or the Royalty Financing Agreement, with DRI. We evaluated the terms of the Royalty Financing Agreement and concluded that the features of the funding from DRI are similar to those of a debt instrument. Accordingly, the funding from DRI is recorded as Royalty financing obligation on our balance sheet. The Royalty Financing Agreement does not contain subjective acceleration clauses or provisions that would require repayment of funding; as such, the funding received under the Royalty Financing Agreement is classified in long-term liabilities. See Part I, Item 1, “Notes to Condensed Financial Statements, Note 5. Royalty Financing Agreement ” of this Quarterly Report on Form 10-Q for additional details.

Revenue Recognition

ASC 606 Revenue from Contracts with Customers applies to all contracts with customers, except for contracts that are within the scope of other authoritative literature. Under ASC 606, we recognize revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to be entitled to in exchange for those goods or services.

To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation. We apply the five-step model to arrangements that meet the definition of a contract under ASC 606, including when it is probable that we will collect the consideration we are entitled to in exchange for goods or services we transfer to the customer. At contract inception, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. Prior to recognizing revenue, we make estimates of the transaction price, including any variable consideration that is subject to a constraint. Variable consideration is included in the transaction price to the extent that it is probable that there will not be a significant reversal in the amount of cumulative revenue recognized and when the uncertainty associated with the variable consideration is subsequently resolved. We recognize revenue for the amount of the transaction price that is allocated to the respective performance obligation as the performance obligation is satisfied.

probable that there will not be a significant reversal in the amount of cumulative revenue recognized and when the uncertainty associated with the variable consideration is subsequently resolved. We recognize revenue for the amount of the transaction price that is allocated to the respective performance obligation as the performance obligation is satisfied.

Net Product Sales

On February 28, 2022, the FDA granted ~~accelerated~~Accelerated ~~approval~~Approval of VONJO for the treatment of adult patients with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 x 109/L. We commercially launched VONJO in March 2022. We entered into a limited number of distribution arrangements with specialty distributors and specialty pharmacies in the United States to distribute VONJO. Our specialty pharmacy customers resell VONJO directly to patients while our specialty distributor customers resell VONJO to healthcare entities, who then resell to patients. Such specialty distributors and specialty pharmacies are referred to as our customers in the context of ASC 606.

We recognize revenue for product sales when our customers obtain control of the product, which generally occurs upon delivery. Upon receipt of the product by our customers, we recognize revenues net of variable consideration, which relates to allowances for customer credits, distribution service fees, product returns, chargebacks, rebates and co-payment assistance programs as discussed below. The reserves for these allowances are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than the customer). Taxes collected from the customer relating to product sales and remitted to governmental authorities are excluded from product sales.

the amount is payable to a party other than the customer). Taxes collected from the customer relating to product sales and remitted to governmental authorities are excluded from product sales.

Customer Credits and Distribution Service Fees: Our customers are offered prompt payment discounts. We expect our customers will pay timely enough to utilize prompt payment discounts and therefore we deduct the full amount of these discounts from total product sales when revenues are recognized. In addition, we pay a fee to our customers for their sales order management, data, and distribution services to us. Distribution service fees are also deducted from total product sales as they are incurred.

Returns: We offer our customers and other indirect purchasers a limited right of return for purchased units of VONJO for damaged, defective, in-dated or expired product beginning six months prior to the product’s expiration date and ending 12 months after the product’s expiration date. We estimate the amount of product returns initially based on data from similar products and other qualitative considerations, such as visibility into the inventory remaining in the distribution channel.

Chargebacks: Chargebacks result from our contractual commitments to provide our product to discount-eligible healthcare entities, group purchasing organizations, 340B eligible covered entities and federal government entities purchasing via the Federal Supply Schedule, at prices lower than the list prices charged to our customers. Our customers charge us back for the discount provided to the contracted entities. Our reserves for chargebacks consist of credits that we expect to issue for units that remain in the distribution channel inventory, which we expect will be sold to the contracted entities, as well as chargebacks that customers have claimed, but for which we have not yet issued a credit. We record reserves for chargebacks based on contractual terms in the same period that the related revenue is recognized.

Rebates: We are subject to discount and rebate obligations under government programs such as the Medicaid Drug Rebate Program, the Medicare Part D Coverage Gap Discounts Program and the 340B Drug Pricing Program, as well as under commercial contracts. Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid. The allowance for rebates is based on statutory or contractual discount rates and expected utilization. Our estimates for the expected utilization of rebates are based on data received from our customers and historical utilization rates observed subsequent to product launch.

Our accrual for these rebates consists of invoices received for claims from prior and current quarters that have not been paid or for which an invoice has not yet been received as well as estimates of claims for the current period's shipment to our customers, which include estimated future claims that will be made for product that has been recognized as revenue but which remains in distribution channel inventories at the end of the reporting period.

Co-payment Assistance: We offer co-payment assistance to patients who have commercial insurance and meet certain eligibility requirements. We accrue a liability for co-payment assistance based on actual program participation and estimates of program redemption based on data provided by the third-party administrator.

Cost of Sales

Cost of sales includes the cost of manufacturing inventories that are related to product sales, including overhead costs, amortization expense for intangible assets, and third-party royalties payable on net product sales. In addition, shipping and handling costs for product shipments are recorded in cost of sales as incurred. Cost of sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs and manufacturing variances. For the three and nine months ended September 30, 2022, cost of sales primarily consisted of amortization expense for intangible assets, shipping and handling costs, and third-party royalty costs. Substantially all of the manufacturing costs of VONJO product sold during the current period were previously expensed as research and development expenses.

~~Equity-Based Compensation~~13

~~Equity-based~~excess ~~compensation~~or ~~expense~~obsolete isinventory ~~recognized~~adjustment ~~over~~charges, ~~the~~abnormal ~~requisite~~costs, ~~service~~unabsorbed ~~periods~~manufacturing onand ~~awards~~overhead ~~ultimately~~costs ~~expected~~and tomanufacturing ~~vest~~variances. WeFor ~~apply estimated forfeiture rates at~~ the ~~time~~three ofmonths ~~grant~~ended ~~and make revisions~~March 31, if2023 ~~necessary, in subsequent periods if actual forfeitures differ from those estimates. For performance-based stock options~~ and ~~restricted stock~~2022, wecost ~~record~~of ~~compensation~~sales ~~expense~~primarily ~~over~~consisted ~~the estimated service period once the achievement~~ of ~~the~~amortization ~~performance-based milestone is considered probable. We recorded equity-based compensation~~ expense ~~of $2.8 million and $1.4 million~~ for ~~the~~intangible ~~three months ended September 30~~assets, ~~2022~~shipping and ~~2021,~~handling ~~respectively~~costs, and ~~$7.0~~third-party ~~million~~royalty ~~and $3~~costs.3 ~~million for the nine months ended September 30, 2022 and 2021, respectively.~~ Substantially all of ~~equity-based~~the ~~compensation~~manufacturing ~~expense~~costs ~~was~~of ~~related~~VONJO toproduct ~~option~~sold ~~awards~~during ~~and~~the ~~was~~periods ~~included~~presented inwere ~~Selling,~~previously ~~general~~expensed ~~and~~as ~~administrative~~research ~~expenses~~and ~~for~~development ~~the periods presented~~expenses.

Equity-Based Compensation Expense

Equity-based compensation expense is recognized over the requisite service periods on awards ultimately expected to vest. We apply estimated forfeiture rates at the time of grant and make revisions, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We recorded equity-based compensation expense of $2.5 million and $1.7 million for the three months ended March 31, 2023 and 2022, respectively. Substantially all of equity-based compensation expense was related to option awards and was included in Selling, general and administrative expenses for the periods presented.

Net Loss per Share

Basic net loss per common share is calculated based on net loss divided by the weighted average number of shares outstanding for the period. The calculation of diluted net loss per common share excludes the potential conversion of all dilutive convertible securities, such as convertible preferred stock, using the if-converted method, and the potential exercise or vesting of other dilutive securities, such as stock awards and warrants, using the treasury stock method, as their inclusion would have an anti-dilutive effect.

Common shares underlying stock awards, warrants and convertible preferred stock aggregating 6558.53 million shares and ~~77.6 million shares for the three months ended September 30, 2022 and 2021, respectively, and 72.0 million shares and~~ 74.3 million shares for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively, were excluded from the calculation of diluted net loss per share because they were anti-dilutive.

Milestone Payment

In October 2016, we entered into the Asset Return and Termination Agreement with Baxalta, pursuant to which, we were required to make a milestone payment to Takeda Pharmaceutical Company Limited, or Takeda, in the amount of approximately $10.3 million, upon the first regulatory approval or any pricing and reimbursement approvals of a product containing pacritinib. See Part II, Item 8, “Notes to Financial Statements, Note 10. Collaboration, Licensing and Milestone Agreements - Baxalta” of our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information. The milestone payment became payable upon FDA approval of VONJO on February 28, 2022 and was included in Accrued expenses as of December 31, 2022. The milestone payment was subsequently made to Takeda in March 2023.

Recently Issued Accounting Standards

In March 2020, the Financial Accounting Standards Board, or FASB, issued accounting guidance to provide temporary optional expedients to ease the potential burden in accounting for reference rate reform. The guidance includes an optional expedient that simplifies accounting for contract modifications to loans receivable and debt, by prospectively adjusting the effective interest rate. ~~The~~In ~~accounting~~December 2022, the FASB issued guidance isto ~~effective~~defer asthe sunset of ~~January~~the 7,reference ~~2021~~rate ~~through~~reform guidance until December 31, ~~2022~~2024. In August 2021, we entered into the Credit Agreement, which has an interest rate referenced to the London Interbank Offered Rate, or LIBOR. We plan to elect the optional expedient for our credit facility by prospectively adjusting the effective interest rate if the cessation of the LIBOR occurs. We do not expect the adoption of this guidance to have a material impact on our condensed financial statements.

Although there were several other new accounting pronouncements issued or proposed by the FASB, we do not believe any of these have had or will have a material impact on our condensed financial statements.

~~Reclassification~~2. Inventories

~~Certain~~Inventories ~~prior~~consisted ~~year~~of ~~items, interest income and interest expense, have been reclassified to conform to~~ the ~~net~~following ~~presentation~~ (in ~~the current year.~~thousands):

~~2. Other Assets~~14


	March 31, 2023		December 31, 2022
Raw materials	$	153	$	156
Work-in-process	537		496
Finished goods	87		81
Total inventories	$	777	$	733

3. Other Assets

Other assets consisted of the following (in thousands):

	September 30, 2022		December 31, 2021
	March 31, 2023		December 31, 2022
Operating lease right-of-use assets	$	21,~~262~~889	$	32,~~109~~078
Clinical trial deposits	512		770
Prepaid manufacturing	855		855
Total other assets	$	2,774	$	3,879
Clinical trial deposits	370		370
Total other assets	$	3,114	$	3,303

34. Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	September 30, 2022		December 31, 2021
	March 31, 2023		December 31, 2022
Operating lease liabilities, non-current	$	1,440	$	2,016
Operating lease liabilities - current	$	811	$	781
End-of-facility lender fee (1)	1,000		—1,000
Total other liabilities	$	2,440	$	2,016
Total other current liabilities	$	1,811	$	1,781

(1) The end-of-facility lender fee ~~as of September 30, 2022~~ represents an amount payable to DRI upon repayment of our secured term loan under the Credit Agreement with DRI.

45. ~~Debt~~Royalty Financing ~~Arrangements~~Agreement

~~Drug~~In August 2021, we entered into the Royalty ~~III~~Financing LPAgreement, 2pursuant to which we sold to DRI the right to receive certain royalty payments from us for a purchase price of up to $85.0 million in cash. Under the Royalty Financing Agreement, DRI is entitled to receive tiered royalties based on net product sales of VONJO in the United States in an amount equal to: (i) 9.60% of annual net sales of VONJO in the United States for annual net sales up to $125 million, (ii) 4.50% of annual net sales of VONJO in the United States for annual net sales between $125 million and $175 million, and (iii) 0.50% of annual net sales of VONJO in the United States for annual net sales between $175 million and $400 million. No royalty payments are payable on annual net sales of VONJO in the United States over $400 million. We are required to make payments of amounts owed to DRI each calendar quarter from and after the first commercial sale of the applicable product in the United States until the patent expiry of the VONJO product compound.

~~Credit~~In ~~Agreement~~March 2022, DRI funded the upfront purchase price of $60.0 million following FDA approval of VONJO in February 2022 and in January 2023, we received $6.5 million in additional funding in connection with the achievement of a certain minimum VONJO sales threshold. DRI will be required to provide up to $18.5 million of additional funding if certain minimum VONJO sales thresholds are met by the end of the third quarter of 2023.

Under the Royalty Financing Agreement, we agreed to specified affirmative and negative covenants, including without limitation covenants regarding periodic reporting of information by us to DRI, obligations to use commercially reasonable efforts to commercialize VONJO in the United States and restrictions on our ability to incur certain indebtedness, which restrictions are eliminated after the earliest of: (a) the date on which the trailing twelve months’ of VONJO sales equals at least $200 million, (b) the date on which the Company’s market capitalization (determined on an as-converted basis) is at least $1.0 billion for 20 consecutive trading days or (c) DRI receiving royalty payments in an amount equal to 100% of their purchase price. The Royalty Financing Agreement also contains representations and warranties, other covenants, indemnification obligations, settlement clauses and other provisions customary for transactions of this nature. The Royalty Financing Agreement does not contain subjective acceleration clauses or provisions that would require repayment of funding.

~~All~~We ~~amounts~~evaluated ~~due~~the ~~under~~terms of the ~~Credit~~Royalty Financing Agreement, ~~which~~and ~~include~~concluded athat ~~term~~the ~~loan~~features inof the ~~principal~~funding ~~amount~~from ofDRI ~~$50.0~~are ~~million~~similar ~~and~~to ~~the~~those ~~end-~~of~~-facility~~ ~~lender~~a ~~fee~~debt ~~of $1~~instrument.0 ~~million~~Accordingly, ~~are~~the ~~classified~~funding from DRI is recorded as ~~long-term~~Royalty ~~liabilities~~financing obligation on ~~the~~our condensed balance sheet. In connection with the Royalty Financing Agreement, we recorded debt issuance costs of $1.8 million, of which $1.7 million remained unamortized as of ~~September~~March 3031, ~~2022~~2023. ~~since~~The weroyalty ~~expect~~financing obligation is amortized over the expected repayment term using an effective interest rate method that is calculated based on the rate that would enable the debt to ~~comply~~be ~~with~~repaid ~~all~~in ~~loan~~full ~~covenants~~over ~~under~~the patent life of the ~~Credit~~VONJO ~~Agreement~~product compound, which was 11.8 ~~See~~years ~~Part~~upon IIfunding, ~~Item~~with a remaining amortization period of 10.8 years as of March 31, ~~“Notes~~2023. toThe ~~Consolidated~~effective ~~Financial~~interest ~~Statements,~~rate ~~Note~~may 7.vary ~~Debt~~during ~~Financing~~the ~~Arrangements”~~term of ~~our~~the ~~Annual~~agreement ~~Report~~depending on ~~Form~~a ~~10-K~~number ~~for~~of factors, including the ~~year~~amount ~~ended~~and ~~December~~timing of forecasted net product sales which affects the repayment timing and ultimate amount of repayment. As of March 31, ~~2021~~2023, ~~for~~the ~~additional~~effective ~~information~~interest ~~regarding~~rate was 18.8%. We will evaluate the ~~Credit~~effective ~~Agreement~~interest rate quarterly based on our current revenue forecasts utilizing the prospective method.

~~Royalty~~The ~~Financing~~activities ~~Agreement~~related to the royalty financing obligation for the three months ended March 31, 2023 were as follows (in thousands):

In August 2021, we entered into the Royalty Financing Agreement, pursuant to which we sold to DRI the right to receive certain royalty payments from us for a purchase price of up to $85.0 million in cash. Under the Royalty Financing Agreement, DRI is entitled to receive tiered royalties based on net product sales of VONJO in the United States in an amount equal to: (i) 9.60% of annual net sales of VONJO in the United States for annual net sales up to $125 million, (ii) 4.50% of annual net sales of VONJO in the United States for annual net sales between $125 million and $175 million, and (iii) 0.50% of annual net sales of VONJO in the United States for annual net sales between $175 million and $400 million. No royalty payments are payable on annual net sales of VONJO in the United States over $400 million.




Royalty financing obligation - beginning balance at January 1, 2023	$	61,134
Additional funding received from DRI upon achievement of a sales milestone	6,500
Accretion of imputed interest on the royalty financing obligation balance	3,015
Amortization of debt issuance costs	37

Less: Royalty payable to DRI (classified in accrued expenses)	(2,315)
Royalty financing obligation - ending balance at March 31, 2023	$	68,371

~~In March 2022, DRI funded the upfront purchase price of $60~~6.0 ~~million~~Subsequent ~~following FDA approval of VONJO in February 2022 and will be required to provide up to $25.0 million of additional funding if certain minimum VONJO sales thresholds are met in 2023, or sooner.~~ Events

WeAgreement ~~are required to make payments of amounts owed to DRI each calendar quarter from~~ and ~~after~~Plan ~~the first commercial sale~~ of ~~the applicable product in the United States until the patent expiry of the VONJO product compound.~~ Merger

~~Under~~On ~~the~~May ~~Royalty~~10, ~~Financing Agreement~~2023, weCTI ~~agreed~~entered tointo ~~specified~~an ~~affirmative~~Agreement and ~~negative~~Plan ~~covenants, including without limitation covenants regarding periodic reporting~~ of ~~information by us to DRI~~Merger, ~~obligations~~or ~~to use commercially reasonable efforts to commercialize VONJO in~~ the ~~United~~Merger ~~States and restrictions on our ability to incur certain indebtedness~~Agreement, ~~which~~with ~~restrictions~~Swedish ~~are~~Orphan ~~eliminated~~Biovitrum ~~after~~AB ~~the earliest of:~~ (apubl), ~~the~~a ~~date~~Swedish onpublic ~~which~~limited ~~the~~liability ~~trailing twelve months’ of VONJO sales equals at least $200 million~~company, ~~(b) the date on which the Company’s market capitalization (determined on an as-converted basis) is at least $1.0 billion for 20 consecutive trading days~~ or ~~(c)~~Sobi, ~~DRI~~and ~~receiving~~Cleopatra ~~royalty~~Acquisition ~~payments in an amount equal to 100% of their purchase price~~Corp. ~~The Royalty Financing Agreement also contains representations and warranties~~, ~~other~~a ~~covenants,~~Delaware ~~indemnification~~corporation ~~obligations, settlement clauses~~ and ~~other~~a ~~provisions~~wholly ~~customary for transactions of this nature. Certain of these provisions would~~owned, ifindirect ~~deemed~~subsidiary ~~probable, result in the recognition~~ of ~~an embedded feature. However~~Sobi, ~~we do not believe such provisions are probable at this time. The Royalty Financing Agreement does not contain subjective acceleration clauses~~ or ~~provisions~~the ~~that would require repayment of funding~~Purchaser.

WePursuant ~~evaluated the terms of the Royalty Financing Agreement and concluded that the features of the funding from DRI are similar~~ to ~~those of a debt instrument. Accordingly,~~ the ~~funding~~Merger ~~from DRI is recorded as Royalty financing obligation on our condensed balance sheet. In connection with the Royalty Financing~~ Agreement, weupon ~~recorded debt issuance costs of $1.8 million, of which $1.7 million remained unamortized as of September 30, 2022. The royalty financing obligation is amortized over~~ the ~~expected~~terms ~~repayment~~and ~~term~~subject ~~using an effective interest rate method that is calculated based on the rate that would enable the debt~~ to ~~be repaid in full over~~ the ~~patent~~conditions ~~life of the VONJO product compound~~thereof, ~~which~~Purchaser ~~was~~will ~~11.8~~commence ~~years upon funding, with~~ a ~~remaining~~tender ~~amortization period of 11.3 years as of September 30~~offer, ~~2022.~~or ~~The effective interest rate may vary during~~ the ~~term of the agreement depending on a number of factors~~Offer, ~~including~~to ~~the~~acquire ~~amount~~all ~~and timing~~ of ~~forecasted net product sales which affects~~ the ~~repayment~~outstanding ~~timing~~shares ~~and ultimate amount~~ of ~~repayment.~~CTI Ascommon ~~of September 30~~stock, ~~2022,~~or the ~~effective~~Shares, ~~interest~~at ~~rate~~an ~~was~~offer ~~15.3%.~~price ~~We recognized non-cash interest expense~~ of $59.210 ~~million~~per ~~related~~Share, net to the ~~royalty~~seller ~~financing~~in ~~obligation for the nine months ended September 30~~cash, ~~2022.~~without ~~We will evaluate the effective~~ interest, ~~rate~~subject ~~quarterly~~to ~~based~~any onapplicable ~~our~~withholding ~~current~~taxes, ~~revenue~~or ~~forecasts utilizing~~ the ~~prospective~~Offer ~~method~~Price.

The ~~activities~~obligation ~~related~~of Purchaser to purchase Shares tendered in the ~~royalty~~Offer ~~financing~~is ~~obligation~~subject ~~for~~to the ~~nine~~satisfaction ~~months~~or ~~ended~~waiver ~~September 30~~of the conditions set forth in Annex I to the Merger Agreement, ~~2022~~including ~~were~~(i) that there shall have been validly tendered and not validly withdrawn that number of Shares that, when added to any Shares then owned by Sobi and its controlled affiliates, represent at least one Share more than half of the sum of (A) all Shares then outstanding as ~~follows~~of the expiration of the Offer, and (B) all Shares that CTI may be required to issue upon the vesting (including vesting solely as a result of the consummation of the Offer), conversion, settlement or exercise of all then-outstanding warrants, options, benefit plans, obligations or securities convertible or exchangeable into Shares or other rights to acquire or be issued Shares (in ~~thousands~~each case other than outstanding shares of CTI preferred stock):, regardless of the conversion or exercise price or other terms and conditions thereof, or the Minimum Condition; (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act, and receipt of clearance, approval or consent under any other applicable antitrust law; and (iii) those other conditions set forth in Annex I to the Merger Agreement.

Following the consummation of the Offer and upon the terms and subject to the conditions of the Merger Agreement, Purchaser will merge with and into CTI, with CTI surviving as a wholly owned, indirect subsidiary of Sobi, or the Merger. In the Merger, each Share issued and outstanding immediately prior to the effective time, or the Effective Time, of the Merger (other than certain excluded Shares as described in the Merger Agreement) will automatically be converted into the right to receive the Offer Price.

In addition, immediately prior to the Effective Time, each unexpired and unexercised option to purchase Shares under any CTI stock plan, or a Company Stock Option, whether or not vested, and that has an exercise price per Share that is less than the Offer Price, shall be cancelled and converted into the right to receive a payment in cash (without interest and less any applicable withholding taxes) equal to the product of (i) the total number of Shares subject to such Company Stock Option immediately prior to such cancellation and (ii) the excess, if any, of the Offer Price over the exercise price per Share subject to such Company Stock Option immediately prior to such cancellation. At the Effective Time, each Company Stock Option that is then outstanding and unexercised, whether or not vested, and that has an exercise price per Share that is equal to or greater than

Royalty financing obligation - initial funding	$	60,000
Less: debt issuance costs	(1,814)
Royalty financing obligation - beginning balance	$	58,186
Accretion of imputed interest on the royalty financing obligation balance	5,172
Amortization of debt issuance costs	88
Less: Royalty payments made to DRI	(1,404)
Less: Royalty payable to DRI (classified in accrued expenses)	(1,751)
Royalty financing obligation - ending balance	$	60,291

the Offer Price shall be cancelled and the holder thereof shall not be entitled to any payment with respect to such cancelled Company Stock Option.

5.In ~~Equity~~addition, ~~Transactions~~each share of CTI preferred stock that is issued and outstanding immediately prior to the Effective Time will be converted into the right to receive $91,000 per share (which is calculated in accordance with CTI’s certificate of designation applicable to such share of CTI preferred stock), without interest, subject to any applicable withholding taxes.

~~At-~~The~~-Market~~ ~~Equity~~Merger ~~Offering~~Agreement includes representations, warranties and covenants of the parties customary for a transaction of this nature. Among other things, until the earlier of the termination of the Merger Agreement or the Effective Time, CTI has agreed to operate its business in the ordinary course consistent with past practice and has agreed to certain other operating covenants, as set forth fully in the Merger Agreement. The Merger Agreement also prohibits CTI’s solicitation of proposals relating to alternative transactions and restricts CTI’s ability to furnish information to, or participate in any discussions or negotiations with, any third party with respect to any such transaction, subject to certain limited exceptions.

InEither ~~January~~CTI ~~2021~~or Sobi may terminate the Merger Agreement in certain circumstances, weincluding ~~entered~~if ~~into~~(i) anthe ~~Open~~Offer ~~Market~~is ~~Sale~~not ~~Agreement℠~~completed ~~with~~by ~~Jefferies~~11:59 ~~LLC~~p.m. Eastern Time on September 11, 2023, subject to automatic extension in the event that antitrust approval has not been obtained, or the ~~2021~~Outside ~~Sale~~Date, ~~Agreement~~(ii) a governmental authority of competent jurisdiction has issued a final, tonon-appealable ~~sell~~judgment ~~shares~~preventing the consummation of ~~our~~the ~~common~~Offer ~~stock~~or ~~having~~the ~~aggregate~~Merger ~~sales~~or ~~proceeds~~any applicable law by such a governmental authority makes consummation of upthe toOffer ~~$50.0~~or ~~million~~the Merger illegal, ~~from~~(iii) ~~time~~the Offer has expired without the acceptance of the Shares for payment or the purchase of Shares validly tendered pursuant to ~~time~~the Offer, ~~through~~in ana ~~“at~~circumstance in which all of the ~~market”~~conditions ~~equity~~to ~~offering~~the ~~program~~Offer ~~under~~have ~~which~~been ~~Jefferies~~satisfied ~~acted~~or aswaived ~~sales~~(other ~~agent.~~than ~~For~~the Minimum Condition) following extension of the ~~nine~~Offer ~~months~~pursuant ~~ended~~to ~~September 30~~the Merger Agreement, ~~2022~~or (vi) prior to the Offer Acceptance Time (as defined in the Merger Agreement) the other party breaches its representations, wewarranties ~~sold~~or ~~9.4~~covenants ~~million~~in ~~shares~~the Merger Agreement in a way that would cause certain conditions of ~~our~~the ~~common~~Offer ~~stock~~not ~~for~~to ~~net~~be ~~proceeds~~satisfied, subject to the right of ~~approximately~~the ~~$45.5~~breaching ~~million~~party ~~under~~to cure the ~~2021~~breach ~~Sale~~as set forth in the Merger Agreement. ~~The~~In ~~$50.0~~addition, ~~million~~CTI ~~facility~~may ~~under~~terminate the ~~2021~~Merger ~~Sale~~Agreement, subject to compliance with specified process and notice requirements, in order to enter into an agreement with a third party who has made a “Superior Offer” (as defined in the Merger Agreement), ~~was~~and ~~fully~~Sobi ~~utilized~~may ~~during~~terminate the ~~second~~Merger ~~quarter~~Agreement if (x) CTI’s board of ~~2022.~~directors has changed its recommendation in favor of the Offer and the Merger, failed to include its recommendation in the Schedule 14D-9, failed to publicly reaffirm its recommendation within five business days when requested by Sobi or has taken certain other specified actions described in the Merger Agreement (each a “Company Adverse Recommendation Change”) or (y) CTI has materially breached its obligations in respect of the non-solicitation provisions in the Merger Agreement.

In ~~August~~the ~~2022,~~event weof ~~entered~~a ~~into~~termination ~~another~~of ~~Open~~the ~~Market~~Merger ~~Sale~~ Agreement℠ ~~with~~under ~~Jefferies,~~certain orspecified ~~the 2022 Sale Agreement~~circumstances, toincluding ~~sell~~(i) ~~shares~~termination ofby ~~our~~CTI ~~common~~to ~~stock~~enter ~~having~~into ~~aggregate~~an ~~sales~~agreement ~~proceeds~~providing offor upa toSuperior ~~$100.0~~Offer ~~million,~~(provided ~~from~~that ~~time~~CTI todid ~~time,~~not ~~through~~materially anbreach ~~“at~~its ~~the~~non-solicitation ~~market”~~obligations ~~equity~~in ~~offering~~any ~~program~~manner ~~under~~that ~~which~~results ~~Jefferies~~in ~~acts~~such asSuperior ~~sales agent. Under the 2022 Sale Agreement~~Offer), we(ii) ~~will~~termination ~~set~~by ~~the~~Sobi ~~parameters~~following ~~for~~a ~~the~~Company ~~sale~~Adverse ofRecommendation ~~shares~~Change, ~~including~~(iii) ~~the~~termination ~~number~~by ofSobi ~~shares~~due to ~~be issued,~~ the ~~time~~CTI ~~period~~board ~~during~~of ~~which~~directors’ ~~sales~~failure ~~are requested~~ to beinclude ~~made,~~its ~~limitation~~recommendation onin the ~~number~~Schedule of14D-9, ~~shares~~(iv) ~~that~~termination ~~may~~by beSobi ~~sold~~because inCTI ~~any~~has ~~one~~materially ~~trading~~breached ~~day~~its ~~and~~obligations ~~any~~in ~~minimum~~respect ~~price~~of ~~below which sales may not be made. Subject to~~ the ~~terms~~non-solicitation ~~and~~provisions ~~conditions~~in of the ~~2022~~Merger ~~Sale~~ Agreement, ~~Jefferies~~or ~~may~~(v) ~~sell~~termination ~~the shares~~ by ~~methods~~either ~~deemed~~CTI toor beSobi anif ~~“at~~ the ~~market~~closing ~~offering”~~of asthe ~~defined~~transactions incontemplated ~~Rule~~by ~~415(a)(4) promulgated under~~ the ~~Securities~~Merger ~~Act~~Agreement ofhas ~~1933,~~not asoccurred ~~amended,~~by ~~including~~the ~~sales~~Outside ~~made~~Date ~~directly on The Nasdaq Capital Market~~ or ontermination ~~any~~by ~~other~~Sobi ~~existing~~prior ~~trading~~to ~~market for~~ the ~~common~~Offer ~~stock.~~Acceptance ~~Jefferies~~Time ~~will~~if ~~use~~CTI ~~commercially~~breaches ~~reasonable efforts in conducting such sales activities consistent with~~ its ~~normal trading and sales practices~~representations, ~~applicable~~warranties ~~state~~or ~~and~~covenants ~~federal~~in ~~laws, rules and regulations and~~ the ~~rules~~Merger ofAgreement ~~The~~in ~~Nasdaq~~a ~~Stock~~way ~~Market~~that ~~LLC.~~would Wecause ~~and~~certain ~~Jefferies~~conditions ~~may~~of ~~each terminate~~ the ~~2022~~Offer ~~Sale~~not ~~Agreement~~to atbe ~~any~~satisfied ~~time~~(subject ~~upon~~to ~~one trading day'~~CTI’s ~~prior~~right ~~notice. We may also sell shares~~ to ~~Jefferies~~cure ~~acting~~the breach as ~~principal~~set ~~for~~forth ~~Jefferies’~~in ~~own~~the ~~account.~~Merger ~~The~~Agreement ~~compensation~~prior to ~~Jefferies~~such ~~for~~time ~~sales~~ of ~~our~~termination), ~~common~~and ~~stock~~(A) ~~will~~a bebona fide an ~~amount~~“Acquisition ~~equal~~Proposal” to(as 3%defined ofin the ~~gross~~Merger ~~proceeds~~Agreement) ofhas ~~any~~been ~~shares~~publicly ofdisclosed ~~our~~after ~~common~~the ~~stock~~date ~~sold~~of ~~under~~ the ~~2022~~Merger ~~Sale~~ Agreement. Weand ~~have~~(B) nowithin ~~obligation~~twelve tomonths ~~sell~~following ~~any~~such ~~shares under the 2022 Sale Agreement~~termination, ~~and~~CTI ~~may~~signs ata ~~any~~definitive ~~time~~agreement ~~suspend~~for ~~solicitation~~an ~~and~~Acquisition ~~offers~~Proposal ~~under~~or ~~the~~consummates ~~2022~~an ~~Sale~~Acquisition ~~Agreement.~~Proposal, Wein ~~had~~each nocase ~~sales~~ of ~~our common stock under~~ the ~~2022~~foregoing ~~Sale~~clauses ~~Agreement for the nine months ended September 30~~(i)-(v), ~~2022.~~CTI Asis ofrequired ~~the~~to ~~filing~~pay ~~date~~Sobi ofa ~~this~~termination ~~Quarterly~~fee ~~Report~~equal ~~on Form 10-Q, the amount of sales subsequent~~ to ~~September 30,~~$59.0 ~~2022 was nominal~~million.

~~Series~~Tender Oand ~~Preferred~~Support ~~Stock~~Agreement

InConcurrently ~~February~~with ~~2018,~~the weexecution ~~issued~~and 12delivery of the Merger Agreement,~~575~~ ~~shares~~certain of ~~our~~CTI’s ~~Series~~stockholders, Oor ~~Preferred~~the ~~Stock~~Tendering toStockholders, ~~BVF~~entered ~~Partners~~into ~~L.P.~~a Tender and Support Agreement, or ~~BVF,~~the anSupport ~~existing~~Agreement, ~~stockholder~~with ofSobi ~~the~~and ~~Company~~Purchaser, pursuant to ~~the~~which ~~stock~~each ~~exchange~~Tendering ~~agreement~~Stockholder ~~between~~agreed, ~~BVF~~among ~~and~~other things, to tender his or its Shares subject to the ~~Company.~~Support ~~Matthew~~Agreement D.pursuant ~~Perry,~~to athe ~~member~~Offer ofand, ~~our~~if ~~Board~~necessary, isvote his or its Shares (i) in favor of (A) the ~~President~~approval and adoption of ~~BVF~~the Merger Agreement and ~~portfolio~~the ~~manager~~transactions ~~for~~contemplated thereunder or any other transaction pursuant to which Sobi proposes to acquire CTI in which CTI’s stockholders would receive aggregate cash consideration per Share equal to or greater than the ~~underlying~~cash ~~funds~~consideration ~~managed~~to be received by such stockholders in the ~~firm.~~Offer ~~See~~and ~~Part~~the IIMerger and, ~~Item~~(B) 8,in ~~“Notes~~the event any vote or consent of CTI’s stockholders is required to ~~Consolidated~~adopt ~~Financial~~the ~~Statements~~Merger Agreement or the transactions contemplated thereby, ~~Note~~any 8.other ~~Equity~~matter ~~Transactions”~~necessary for consummation of ~~our~~the ~~Annual~~transactions ~~Report~~contemplated onby ~~Form~~the ~~10-K~~Merger ~~for~~Agreement, ~~the~~and ~~year~~(ii) ~~ended~~against ~~December~~any 31(A) action or agreement which is intended or would reasonably be expected to impede, ~~2018~~delay, ~~for~~postpone, ~~additional~~interfere ~~information.~~with, ~~During~~nullify or prevent in any material respect the ~~nine~~Offer ~~months~~or ~~ended~~the ~~September 30~~Merger, ~~2022~~(B) Acquisition Proposal or action in furtherance thereof, ~~all~~(C) amendment to CTI’s certificate of ~~the~~incorporation 12or bylaws,~~575~~ ~~shares~~(D) ofmaterial ~~our~~change ~~Series~~to Othe ~~Preferred~~capitalization ~~Stock~~of ~~were~~CTI, ~~converted~~(E) ~~into~~change ~~8.4~~in ~~million~~a ~~shares~~majority of ~~our~~CTI’s ~~common~~board ~~stock.~~of Asdirectors ofor ~~September 30~~(F) action, ~~2022~~proposal, ~~BVF~~transaction ~~beneficially~~or ~~owned~~agreement that would reasonably be expect to result in a ~~total~~breach of ~~28%~~any covenant, representation or warranty or any other obligation of ~~our~~any ~~common~~Tendering ~~stock~~Stockholder ~~and~~under ~~as-converted~~the ~~preferred~~Support ~~stock~~Agreement. ~~outstanding~~In general, ~~which~~no ~~includes~~Tendering 7%Stockholders ~~common~~may ~~stock~~propose, ~~and~~commit ~~21%~~or ~~as-converted~~agree ~~preferred~~to ~~stock,~~take ~~respectively.~~any action inconsistent with any of the foregoing clauses (i) or (ii).

Series X Preferred Stock

In March 2020, we completed a rights offering whereby we issued 15.7 million shares of our common stock and 4,429 shares of our Series X Preferred Stock convertible into our common stock. See Part II, Item 8, “Notes to Consolidated Financial Statements, Note 8. Equity Transactions” of our Annual Report on Form 10-K for the year ended December 31, 2020 for additional information. During the nine months ended September 30, 2022, 747 shares of our Series X Preferred Stock were

~~converted~~Each ~~into~~Tendering ~~7.5~~Stockholder ~~million~~also agrees that, except as provided in the Support Agreements, it will not (i) deposit (or permit the deposit of) any Shares or shares of ~~our~~CTI ~~common~~preferred stock. ~~There~~subject ~~were~~to ~~3,047~~the Support Agreement (including shares of ~~our~~CTI ~~Series~~preferred Xstock ~~Preferred~~that ~~Stock~~are ~~outstanding~~converted asinto Shares after the date of ~~September 30~~the Support Agreement) (collectively, ~~2022~~the “Subject Shares) in a voting trust or grant any proxy or power of attorney or enter into any voting agreement or similar agreement with respect to any of the Subject Shares or otherwise enter into any contract with respect to any transfer or proposed transfer of such Subject Shares or any interest therein, or (ii) take or permit any other action that would in any way restrict, limit or interfere with the performance of such Tendering Stockholder’s obligations under the Support Agreement or otherwise make any representation or warranty of such Tendering Stockholder under the Support Agreement untrue or incorrect.

As of May 4, 2023, approximately 6.7% ~~Milestone~~of ~~Payments~~the outstanding Shares are subject to the Support Agreement. The Support Agreement generally provides for termination upon the earlier of (i) the valid termination of the Merger Agreement, (ii) the effectiveness of the Merger at the Effective Time, (iii) the acquisition by Sobi of all the Subject Shares of the Tendering Stockholders, whether pursuant to the Offer, the Merger or otherwise, (iv) any amendment, change or waiver to the Merger Agreement that is effected without each Tendering Stockholder’s consent that changes the amount, form or timing (except with respect to extensions of the Offer in accordance with the terms of the Merger Agreement) of consideration payable to all of CTI’s stockholders or (v) the mutual written agreement of Sobi and each Tendering Stockholder.

For additional information regarding the agreements discussed below, see Part II, Item 8, “Notes to Consolidated Financial Statements, Note 9. Collaboration, Licensing and Milestone Agreements” of our Annual Report on Form 10-K for the year ended December 31, 2021.

Baxalta

Pursuant to the Asset Return and Termination Agreement, or Baxalta Termination Agreement, entered into with Baxalta in 2016, we are required to make a payment to Takeda in the amount of approximately $10.3 million, upon the first regulatory approval or any pricing and reimbursement approvals of a product containing pacritinib. Baxalta was acquired by Shire plc in 2016, and Shire plc was subsequently acquired by Takeda in 2019. Upon FDA approval of VONJO on February 28, 2022, the $10.3 million payment became payable to Takeda and is included within Accrued expenses as of September 30, 2022. The payment was originally due 60 days following FDA approval; however, the due date was subsequently amended such that the payment is now required to be made in full on or prior to March 15, 2023, subject to our timely payment of monthly interest on the outstanding amount due at an applicable interest rate specified in the amendment. Interest payments on the amount owed were $0.3 million in aggregate as of September 30, 2022. Since the $10.3 million payment does not relate to our intellectual property and arose from a contingency in the Baxalta Termination Agreement that was resolved in the first quarter of 2022, it was recorded in Other operating (income) expenses for the nine months ended September 30, 2022. Under the terms of the Baxalta Termination Agreement, we will have no further obligations to Takeda after settlement of this payment.

S*BIO Pte Ltd.

Under our agreement with S*BIO Pte Ltd., or S*BIO, we are required to make milestone payments to S*BIO up to an aggregate amount of $132.5 million if certain U.S., EU and Japanese regulatory approvals are obtained or if certain worldwide net sales thresholds are met in connection with any pharmaceutical product containing or comprising any compound that we acquired from S*BIO for use for specific diseases, infections or other conditions. S*BIO is also entitled to receive royalty payments from us at incremental rates in the low single-digits based on certain worldwide net sales thresholds on a product-by-product and country-by-country basis. Upon FDA approval of VONJO on February 28, 2022, a $25.0 million milestone payment became payable to S*BIO, which was recorded in Intangible assets, net due to the fact that this payment represents contingent consideration for the acquired pacritinib compound that became marketable and capable of generating cash flows from sales during the first quarter of 2022. The milestone payment was made to S*BIO during the second quarter of 2022. At our election, we may pay up to 50% of any milestone payments to S*BIO through the issuance of shares of our common stock or shares of our preferred stock convertible into our common stock.

7. Contingencies

In April 2009, December 2009 and June 2010, the Italian Tax Authority, or the ITA, issued notices of assessment to CTI - Sede Secondaria, or CTI (Europe), based on the ITA’s audit of CTI (Europe)’s value added tax, or VAT, returns for the years 2003, 2005, 2006 and 2007. The ITA audits concluded that CTI (Europe) did not collect and remit VAT on certain invoices issued to non-Italian clients for services performed by CTI (Europe).

In January 2018, the Italian Supreme Court issued decision No. 02250/2018 regarding the 2005 VAT return, which (i) rejected the April 2013 appeal of the ITA, (ii) confirmed the October 2012 decision of the Regional Tax Court (127/31/2012), which fully accepted the merits of our earlier appeal and confirmed that no penalties could be imposed against us, and (iii) due to the novelty of the arguments at stake, compensated the legal expenses incurred by the parties. The ITA may not use any ordinary means of appeal against the Italian Supreme Court decision, and we have applied for a refund based on the guidance from the ITA.

The assessments, including interest and penalties, for the years 2003, 2006 and 2007 were €0.7 million, €2.8 million and €0.9 million, respectively. We believe that the services invoiced were non-VAT taxable consultancy services and that the VAT returns were correct as originally filed. We appealed all of the assessments and defended ourselves against the assessments both on procedural grounds and on the merits of the cases.

In April 2022, we were notified that the Italian Supreme Court ruled in our favor for the 2006 and 2007 VAT year returns but ruled in the ITA's favor for the 2003 VAT year return. With respect to the 2006 and 2007 VAT year returns, on

March 31, 2022, the Italian Supreme Court issued decision No. 10355/22 which (i) rejected the appeal of the ITA, (ii) confirmed the decision of the Regional Tax Court which ruled fully in our favor, and (iii) due to a change of law, compensated the legal expenses incurred by the parties for the appeals. We have applied for refunds based on the guidance from the ITA. With respect to the 2003 VAT year return, on April 12, 2022, the Italian Supreme Court rejected our arguments both on procedural grounds and on the merits of the case, and accordingly, we accrued a liability of €0.7 million for the 2003 VAT assessment, including interest and penalties. During the three months ended September 30, 2022, the 2003 VAT liability was reduced to approximately €0.3 million based on the application of a €0.4 million deposit made to the ITA in 2014, which was previously written off from the condensed balance sheet. As of and for the nine months ended September 30, 2022, the 2003 VAT liability in the amount of €0.3 million, or approximately $0.3 million converted using the currency exchange rate as of September 30, 2022, was recorded in Accrued expenses and Other operating (income) expenses.

There have been no changes to the status of the legal proceedings surrounding the status of our application for a refund related to the 2005 VAT return for which the court ruled in our favor since the filing of our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical fact in this Quarterly Report are forward-looking statements. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “assume,” “believes,” “continue,” “could,” “estimates,” “expects,” “forecast,” “goal,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “target” or “will” or the negative thereof, variations thereof and similar expressions. These forward-looking statements include, but are not limited to, statements about:

•the proposed commencement of a tender offer by Purchaser to purchase all of the Shares and the subsequent Merger;

•the completion of the Merger in a timely manner or at all, including the satisfaction or waiver of various conditions to the consummation of the Offer and the Merger;

•events that could give rise to the termination of the Merger Agreement;

•our expectations regarding sufficiency of cash resources, cash expenditures, sources of cash flows and other projections, product manufacturing and sales, research and development expenses, selling, general and administrative expenses and additional losses;

•our ability to obtain funding for our operations;

•the continued commercialization of VONJO® (pacritinib) as a treatment for adult myelofibrosis patients with severe thrombocytopenia;

•our ability to develop, commercialize and obtain regulatory approval of pacritinib for other development programs we may pursue in the future;

•the design of our clinical trials and their anticipated enrollment;

•the safety, effectiveness and potential benefits and indications of VONJO and any other product candidates we may develop in the future;

•the rate and degree of market acceptance and clinical utility of VONJO or any other product candidates we may develop in the future;

•the timing of and results from clinical trials and pre-clinical development activities, including those related to VONJO and any other product candidates we may develop in the future;

•our ability to advance product candidates, including VONJO and any other product candidates we may develop in the future, into, and the successful completion of, clinical trials;

•our ability to achieve profitability, including our ability to effectively implement cost reduction strategies and realize anticipated cost savings from those efforts;

•our expectations regarding federal, state and foreign regulatory requirements;

•our and our collaborators’ ability to obtain and maintain regulatory approvals, and the timing of such approvals, for VONJO or any other product candidates we may develop in the future;

•our ability to maintain and establish collaborations;

•our expectations regarding market risk, including interest rate changes and foreign currency fluctuations;

•our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;

•the impact of government laws and regulations, including the Inflation Reduction Act of 2022;

•our ability to negotiate, integrate, and implement collaborations, acquisitions and other strategic transactions;

•our ability to engage and retain the employees required to advance our development activities and grow our business;

•developments relating to our competitors and our industry, including the success of competing therapies that are or become available;

•our expectations regarding business disruptions and related risks resulting from the ongoing worldwide coronavirus pandemic known as COVID-19; and

•other risks and uncertainties, including those listed under the heading Risk Factors and in other filings we periodically make with the U.S. Securities and Exchange Commission, or the SEC.

Such statements are based on management’s current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from those set forth in the forward-looking statements. There can be no assurance that such expectations or any of the forward-looking statements will prove to be correct, and actual results could differ materially from those projected or assumed in the forward-looking statements. We urge you to carefully review the disclosures we make concerning risks and other factors that may affect our business and operating results and cause them to differ materially from our current expectations, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q and those made under Part I, Item 1, “Business,” Part I, Item 1A, “Risk Factors,” Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 and any risk factors contained in our subsequent Quarterly Reports on Form 10-Q that we file with the SEC.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

We do not intend to update any of the forward-looking statements after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or changes in our expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q.

In this Quarterly Report on Form 10-Q, all references to “we,” “us,” “our,” the “Company” and “CTI” mean CTI BioPharma Corp., except where it is otherwise made clear.

OVERVIEW

We are a commercial biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies for blood-related cancers where there is a significant unmet medical need. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with partners. We have one commercially approved product, VONJO® (pacritinib), which has received ~~accelerated~~Accelerated ~~approval~~Approval in the United States byfrom the U.S. Food and Drug Administration, or the FDA, for the treatment of adult patients with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 x 109/L.

Pacritinib is an oral kinase inhibitor with activity against wild type Janus Associated Kinase 2 (JAK2), mutant JAK2V617F form, IRAK1, ACVR1 (ALK2) and FLT3, which contribute to signaling of a number of cytokines and growth factors that are important ~~for~~in ~~hematopoiesis and immune function~~myelofibrosis. At clinically relevant concentrations, pacritinib does not inhibit JAK1. The JAK family of enzymes is a central component in signal transduction pathways, which are critical to normal blood cell growth and development, as well as inflammatory cytokine expression and immune responses. Mutations in these kinases have been shown to be directly related to the development of a variety of blood-related cancers, including myeloproliferative neoplasms, leukemia and lymphoma. Myelofibrosis is often associated with dysregulated JAK2 signaling. In addition to myelofibrosis, the kinase profile of pacritinib suggests its potential therapeutic utility in conditions such as acute myeloid leukemia, or AML, myelodysplastic syndrome, or MDS, chronic myelomonocytic leukemia, or CMML, graft versus host disease, or GvHD, and chronic lymphocytic leukemia, or CLL, due to its inhibition of JAK2, IRAK1, FLT3, ACVR1 (ALK2) and CSF1R. We believe pacritinib has the potential to be delivered as a single agent or in combination therapy regimens.

U.S. FDA Approval of VONJO

In September 2020, we reached an agreement with the FDA to submit a New Drug Application, or NDA, for the potential accelerated approval of VONJO as a treatment for myelofibrosis patients with severe thrombocytopenia, and in March 2021 we completed our rolling NDA submission. The NDA was based on the available data from our completed Phase 3 PERSIST-1 and PERSIST-2 trials and the Phase 2 PAC203 trial. In May 2021, the FDA accepted our NDA and granted pacritinib Priority Review, with the Prescription Drug User Fee Act target action date set for November 30, 2021, which was subsequently extended by three months to February 28, 2022. On February 28, 2022, the FDA granted accelerated approval of VONJO for the treatment of adult patients with intermediate or high-risk primary or secondary (post-polycythemia vera or post-20

On February 28, 2022, the FDA granted Accelerated Approval of VONJO for the treatment of adult patients with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 x 109/L. This indication is approved under FDA Accelerated Approval based on the surrogate endpoint of spleen volume reduction. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial. As agreed with the FDA, the PACIFICA Phase 3 trial will be completed as a post-marketing requirement. On February 7, 2023, VONJO was granted seven years of orphan drug exclusive approval by the FDA for treatment of adults with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 x109/L, pursuant to section 527 of the Federal Food, Drug, and Cosmetic Act, or FDCA (21 U.S.C. 360cc). The seven-year exclusive approval began on February 28, 2022.

essential thrombocythemia) myelofibrosis with a platelet count below 50 x 109/L. This indication is approved under FDA accelerated approval based on spleen volume reduction. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). As agreed with the FDA, the PACIFICA Phase 3 trial will be completed as a post-marketing requirement.

PACIFICA Phase 3 Trial

As part of the ~~accelerated~~Accelerated ~~approval~~Approval of VONJO, we agreed with the FDA to amend the design of PACIFICA to have co-primary endpoints of Spleen Volume Reduction, or SVR, and modified Total Symptom Score, or TSS, with both endpoints being analyzed after the complete enrollment of the study. ToAs ~~ensure~~a ~~sufficient~~result ~~study~~of ~~powering~~ this ~~change~~amendment, ~~resulted~~we inincreased anthe ~~increase in~~ study size to 399 patients to maintain appropriate powering for the endpoints. This change ~~will~~was be implemented in ~~the~~a ~~next~~ study amendment that was submitted on June 30, 2022. In addition to co-primary endpoints SVR and TSS, overall survival is a secondary endpoint. Enrollment in this trial is progressing despite the challenges of conducting clinical trials during the COVID-19 pandemic. Additionally, enrollment at sites in Russia, Ukraine and Belarus has been indefinitely paused in response to the conflict in the region. As agreed with the FDA, following the ~~accelerated~~Accelerated ~~approval~~Approval of VONJO, we plan to complete the PACIFICA Phase 3 trial as a post-marketing requirement, with the expected ~~results~~completion inof ~~mid-2025~~enrollment by the end of 2026. Meeting this timeline is dependent upon the addition of new clinical trial sites.

Patent Term Extension Applications

In February 2022, we filed patent term extension applications for U.S. Patent No. 8,153,632 and U.S. Patent No. 9,573,964. For U.S. Patent No. 8,153,632, we requested five years of extension, which, if granted, would extend the expiration date of that patent from January 2029 to January 2034. For U.S. Patent No. 9,573,964, we requested 1,085 days of extension, which, if granted, would extend the expiration date of that patent from May 2028 to April 2031. The U.S. Patent and Trademark Office, or USPTO, can often take several years to respond to patent term extension applications. If the USPTO determines that both applications are eligible for extension of patent term, we will be required to elect which of these two patents will receive the requested extension of term. We will be required to make this election after we receive notice that the applications are eligible. If we fail to make an election, the USPTO will apply the extension to U.S. Patent No. 8,153,632, the longer of the two extension requests.

Operations

We have historically funded our operations through product sales, the sale of equity securities, debt financing, the sale of certain future royalties and funding received from our licensees and collaborators. We do not expect to achieve or sustain profitability for the foreseeable future. We had a net loss of $1513.74 million ~~and $75.5 million~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023, ~~respectively,~~ and an accumulated deficit of $2.5 billion as of ~~September~~March 3031, ~~2022~~2023, primarily from expenses incurred in connection with our research programs and from selling, general and administrative costs associated with our operations~~. We believe that our cash~~, ~~cash~~partially ~~equivalents~~offset ~~and~~by ~~short-term investments, along with expected cash receipts from net product sales of~~ VONJO ~~and up to $25.0 million in contractual funding commitments from DRI receivable upon achieving minimum net~~ product sales ~~of VONJO, will be sufficient to meet our obligations as they come due and to fund our operations for at least one year after the date that this Quarterly Report on Form 10-Q is filed with the SEC~~.

We have incurred significant operating losses to date and expect to continue to incur significant expenses and operating losses for ~~at least~~ the ~~next~~foreseeable ~~12 to 24 months~~future. We anticipate that our expenses will increase as we:

•continue our commercialization efforts for VONJO;

•continue our research and clinical development of pacritinib;

•seek regulatory and marketing approvals for pacritinib if we successfully complete the remainder of its anticipated clinical development paths; and

•maintain, protect and expand our intellectual property portfolio.

Agreement and Plan of Merger

On May 10, 2023, we entered into the Merger Agreement. Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, Purchaser will commence the Offer to acquire all of the outstanding Shares at the Offer Price. Following the consummation of the Offer and upon the terms and subject to the conditions of the Merger Agreement, Purchaser will merge with and into CTI, with CTI surviving as a wholly owned subsidiary of Sobi. In the Merger, each Share issued and outstanding immediately prior to the Effective Time of the Merger (other than certain excluded Shares as described in the Merger Agreement) will automatically be converted into the right to receive the Offer Price.

convertible or exchangeable into Shares or other rights to acquire or be issued Shares (in each case other than outstanding shares of our preferred stock), regardless of the conversion or exercise price or other terms and conditions thereof, or the Minimum Condition; (ii) the expiration or termination of the waiting period under the HSR Act and receipt of clearance, approval or consent under any other applicable antitrust law; and (iii) those other conditions set forth in Annex I to the Merger Agreement.

The Merger Agreement also includes customary termination provisions for both us and Sobi, and provides that, in connection with the termination of the Merger Agreement under specified circumstances, including termination by us to accept and enter into an agreement with respect to a Superior Proposal, we will pay Sobi a termination fee of $59.0 million.

For more information about the Merger, see Part I, Item 1, “Notes to Condensed Financial Statements, Note 6. Subsequent Events” of this Quarterly Report on Form 10-Q.

Factors Affecting Performance

Product Sales

Following FDA approval of VONJO on February 28, 2022, we commenced shipping of VONJO to a limited number of specialty distributor customers and specialty pharmacy customers in March 2022. Product sales are recognized upon delivery of our product to our customers and are recorded net of applicable deductions, including trade discounts, distribution service fees, product returns, chargebacks and discounts, rebates and other incentives such as co-pay assistance. Our realization of product sales will be dependent, in part, upon our continued commercialization efforts and the market acceptance of VONJO among physicians, patients, healthcare payers and the medical community.

sales will be dependent, in part, upon our commercialization efforts and the market acceptance of VONJO among physicians, patients, healthcare payers and the medical community.

Cost of Sales

Cost of sales for the three ~~and nine~~ months ended ~~September~~March 3031, 2023 and 2022 primarily consisted of shipping and distribution costs of VONJO, amortization expense for intangible assets and third-party royalty costs. Cost of sales includes only a portion of the costs related to the manufacture of VONJO and related materials, since, prior to FDA approval, these costs were expensed as research and development expenses. We expect to utilize zero cost inventory with respect to VONJO for an extended period of time.

Research and Development

We expect to commit significant time and resources to research and development activities relating to our current and any future product candidates. Pacritinib has received ~~accelerated~~Accelerated ~~approval~~Approval for the treatment of adult patients with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 x 109/L and is being marketed as VONJO. However, a confirmatory study, PACIFICA, is ongoing and we expect to continue to devote resources to the completion of this study.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of personnel costs, including related equity-based compensation, expenses for outside consulting and professional services, allocated facilities costs and costs required to support the marketing and sales operations of our commercialized product. ~~Following~~We ~~FDA approval of VONJO in February 2022, we~~ anticipate that selling, general and administrative expenses ~~will~~associated ~~increase~~with asthe wecommercialization ~~expand~~of VONJO, primarily related to our ~~commercial~~sales ~~activities~~force, inmarketing, ~~support~~market ofaccess ~~our~~and ~~expected~~commercial ~~growth~~capabilities, inwill ~~the~~approximate ~~United~~2022 ~~States~~levels during 2023.

Impact of COVID-19

We continue to evaluate and manage the long-term impact of the ~~global~~ COVID-19 pandemic on our operations and the conduct of our clinical trials, including considerations of the vulnerable nature of the patient population participating in our trials, reduced or halted activities at our clinical trial sites, an increase in fatalities or other adverse events due to medical problems related to the COVID-19 pandemic and the benefits of continued patient access to VONJO.

Financial Summary

Our net product sales reflect sales ~~from~~of ~~our product~~ VONJO, which was commercially launched in the United States in March 2022 following FDA approval on February 28, 2022. Net product sales were $1824.21 million and $322.93 million for the three ~~and nine~~ months ended ~~September~~March 3031, 2023 and 2022, respectively. ~~We did not have any product sales for the three and nine months ended September 30, 2021.~~ Loss from operations was $129.2 million and $2335.41 million for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, respectively, and $66.2 million and $60.0 million for the nine months ended September 30,~~ 2022 ~~and 2021~~, respectively. Results of operations may vary substantially from year to year and from quarter ~~to quarter and, as a result, you should not rely on them as being indicative of our future performance.~~

~~As of September 30, 2022, our cash, cash equivalents and short-term investments were $81.6 million.~~ 22

to quarter and, as a result, you should not rely on them as being indicative of our future performance. As of March 31, 2023, our cash, cash equivalents and short-term investments were $59.0 million.

RESULTS OF OPERATIONS

Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022

Net product sales. We began recognizing product sales in March 2022 following FDA approval of VONJO on February 28, 2022 and its subsequent commercial launch in the United States. Net product sales were $1824.21 million and $322.93 million for the three ~~and nine~~ months ended ~~September~~March 3031, 2023 and 2022, respectively. ~~Net~~We ~~product~~expect ~~sales~~total ~~were~~net ~~$2.3~~product ~~million~~sales ~~and~~will ~~$12.3~~increase ~~million~~in ~~for~~2023 ~~the~~over ~~first~~2022 ~~and~~primarily ~~second~~due ~~quarter~~to ofexpected ~~2022~~growth in, ~~respectively.~~and Wethe ~~did~~inclusion ~~not~~of ~~have~~a ~~any~~full ~~product~~year of, sales ~~for~~of ~~the~~VONJO ~~comparable periods~~ in ~~2021~~2023.

The activities and ending reserve balances for significant categories of allowances for VONJO (which constitute variable consideration that is deducted from gross product sales) during the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 were as follows (in thousands):



	Chargebacks and rebates		Service fees, returns, co-pay assistance and other		Total
Balance, January 1, 2023	$	1,845	$	498	$	2,343
Provision related to current year sales	4,666		1,310		5,976
Adjustment for prior year sales	(370)		—		(370)
Payments / credits for current year sales	(2,755)		(527)		(3,282)
Payments / credits for prior year sales	(669)		(626)		(1,295)
Balance, March 31, 2023	$	2,717	$	655	$	3,372

	Chargebacks and rebates		Service fees, returns, co-pay assistance and other		Total
Balance, January 1, 2022	$	—	$	—	$	—
Provision related to current year sales	3,718		1,930		5,648
Payments / credits for current year sales	(2,508)		(1,466)		(3,974)
Balance, September 30, 2022	$	1,210	$	464	$	1,674

Chargebacks and rebates are expected to be the most significant component of our total gross-to-net deductions. Future gross-to-net deductions will fluctuate based on the volume of purchases eligible for government-mandated discounts and rebates as well as changes in the discount percentage which is impacted by external factors. We anticipate that the overall gross-to-net deduction percentage will begin to stabilize during 2023.

Chargebacks and rebates are expected to be the most significant component of our total gross-to-net deductions. Future gross-to-net deductions will fluctuate based on the volume of purchases eligible for government mandated discounts and rebates as well as changes in the discount percentage which is impacted by the rate of inflation and other factors. We expect gross-to-net deductions to increase for the remainder of 2022, driven by anticipated growth in our gross product sales.

Operating Costs and Expenses

Cost of sales. During the three ~~and nine~~ months ended ~~September~~March 3031, 2023 and 2022, we recorded $1.2 million and $20.3 million of cost of sales, respectively, which primarily consisted of amortization expense for intangible assets, shipping and distribution costs as well as third-party royalty costs. ~~We did not have any cost of sales for the comparable periods in 2021.~~ The manufacturing costs for VONJO incurred prior to FDA approval on February 28, 2022 were not capitalized as inventory but were expensed as research and development costs since product manufactured prior to regulatory approval may not be sold unless regulatory approval is obtained. As such, cost of sales reflects only a portion of the costs related to the manufacture of VONJO and related materials. If cost of sales had included such previously-expensed inventory that was sold during the current period, cost of sales for the three and nine months ended September 30, 2022 would have been $1.5 million and $2.9 million, respectively.

The time period over which reduced-cost VONJO inventory is consumed will depend on a number of factors, including the amount of future sales, the ultimate use of this inventory in either commercial sales, clinical development or other research activities, and the ability to utilize inventory prior to its expiration date. At this time, we expect that cost of sales in relation to net product sales will progressively increase towards 2025 as VONJO product manufactured and expensed prior to capitalization is sold.

Research and development expenses. Research and development expenses were $10.2 million and $8.0 million for the three months ended March 31, 2023 and 2022, respectively. Our research and development expenses were asrelated ~~follows~~to (our pacritinib program. The increase between periods was attributable to a $2.1 million increase in ~~thousands):~~product development costs primarily related to clinical research organizations, a $0.6 million increase in additional staffing, personnel and other costs, partially offset by a $0.5 million decrease in professional services. We expect research and development expenses to increase in 2023 compared to 2022 as we continue to conduct additional studies required for VONJO subsequent to its Accelerated Approval from the FDA.

	Three Months EndedSeptember 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Pacritinib	$	5,255	$	7,914	$	16,326	$	23,337
Operating expenses	2,965		1,803		8,647		5,117
Total research and development expenses	$	8,220	$	9,717	$	24,973	$	28,454

Research and development expenses include external direct costs such as principal investigator fees, charges from clinical research organizations, and contract manufacturing fees incurred for preclinical, clinical, manufacturing and regulatory activities associated with preparing the compounds for submissions of NDAs or similar regulatory filings to the FDA, the EMA or other regulatory agencies outside the United States and Europe, as well as upfront license fees for acquired technology. Indirect costs include personnel costs, an allocation of overhead costs and other costs not directly charged to development

Costs for our compound include external direct expenses such as principal investigator fees, charges from contract research organizations, and contract manufacturing fees incurred for preclinical, clinical, manufacturing and regulatory activities associated with preparing the compounds for submissions of NDAs or similar regulatory filings to the FDA, the EMA or other regulatory agencies outside the United States and Europe, as well as upfront license fees for acquired technology. Operating expenses include our personnel costs and an allocation of occupancy, depreciation and amortization expenses associated with developing our compounds. Cumulative to date external direct costs incurred by us through September 30, 2022 were $231.6 million for pacritinib (excluding costs for pacritinib prior to our acquisition of certain assets from S*BIO Pte Ltd. or S*BIO, in May 2012 and $29.1 million of in-process research and development expenses associated with the acquisition of certain assets from S*BIO). 23

~~Research and development expenses were $8~~programs.2 ~~million~~Cumulative ~~and~~to-date ~~$25.0~~external ~~million~~direct ~~for~~costs ~~the~~incurred ~~three~~by ~~and~~us ~~nine~~through ~~months ended September~~March 3031, ~~2022,~~2023 ~~respectively,~~were ~~compared to~~ $9247.71 million ~~and $28.5 million~~ for ~~the~~pacritinib ~~same~~(excluding ~~periods~~costs infor ~~2021.~~pacritinib ~~The~~prior ~~decrease~~to ~~between~~our ~~the~~acquisition ~~three-month~~of ~~periods~~certain ~~ended~~assets ~~September 30,~~from ~~2022~~S*BIO ~~and~~Pte ~~2021 was primarily attributable to a $0~~Ltd.6, ~~million~~or ~~decrease in the PRE-VENT Phase 3 trial~~S*BIO, ~~a $0.5 million decrease~~ in ~~the~~May ~~PACIFICA~~2012 ~~Phase 3 trial~~ and a $129.~~5 million decrease in professional services, partially offset by a $~~1.1 million ~~increase~~of ~~for additional staffing. The decrease between the nine~~in-~~month~~process ~~periods~~research ~~ended September 30, 2022~~ and ~~2021~~development ~~was~~expenses ~~primarily~~associated ~~attributable~~with ~~to a $2.4 million decrease in~~ the ~~PRE-VENT~~acquisition ~~Phase~~of 3certain ~~trial,~~assets afrom $1S*BIO).6

24Selling, general and administrative expenses. Selling, general and administrative expenses were $21.9 million and $18.0 million for the three months ended March 31, 2023 and 2022, respectively. Substantially all of the increase between periods was attributable to activities associated with the ongoing commercialization efforts of VONJO, which consisted of the following: a $1.6 million increase in additional staffing and personnel costs, a $1.1 million increase in professional services, a $0.3 million increase in travel expenses and a $0.9 million increase in other expenses, which included infrastructure and sales related service agreements. We expect selling, general and administrative expenses in 2023 to remain relatively consistent compared to 2022.

~~million~~Other ~~decrease~~operating inexpenses. Other operating expenses for the ~~PACIFICA~~three ~~Phase~~months 3ended ~~trial~~March ~~and~~31, 2022 were attributable to a $310.03 million ~~decrease~~milestone expense relating to resolution of a contingency in ~~professional~~the ~~services~~Baxalta Asset Return and Termination Agreement upon FDA approval of VONJO in February 2022, ~~partially~~as ~~offset~~well byas a $30.57 million ~~increase~~expense relating to the 2003 Italian VAT assessment. There were no such expenses for ~~additional~~the ~~staffing~~three months ended March 31, 2023.

Selling, general and administrative expenses. Selling, general and administrative expenses were $21.5 million and $61.1 million for the three and nine months ended September 30, 2022, respectively, compared to $13.7 million and $31.5 million for the same periods in 2021. Substantially all of the increases between periods were attributable to activities associated with the commercial launch of VONJO. The increase between the three-month periods ended September 30, 2022 and 2021 was primarily attributable to a $6.0 million increase in additional staffing and personnel costs, a $1.1 million increase in professional services, a $0.1 million increase in infrastructure including sales-related service agreements and a $0.6 million increase in travel and other expenses. The increase between the nine-month periods ended September 30, 2022 and 2021 was primarily attributable to a $21.1 million increase in additional staffing and personnel costs, a $5.6 million increase in professional services, a $0.7 million increase in infrastructure including sales-related service agreements and a $2.2 million increase in travel and other expenses.

Other operating (income) expenses. Other operating expenses for the nine months ended September 30, 2022 were attributable to a $10.3 million expense relating to resolution of a contingency in the Baxalta Asset Return and Termination Agreement, which became payable to Takeda upon FDA approval of VONJO, as well as a $0.3 million expense relating to the 2003 Italian VAT assessment. Other operating income for the three months ended September 30, 2022 is related to a $0.4 million reduction to the 2003 Italian VAT assessment liability balance. See Part I, Item 1, “Notes to Condensed Financial Statements, Note 6. Milestone Payments - Baxalta and Note 7. Contingencies” of this Quarterly Report on Form 10-Q for additional information. There were no such income or expenses during the three and nine months ended September 30, 2021.

Non-Operating Expenses

Interest expense, net. Interest expense, net was as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
			Three months ended March 31,
	2022		2021		2022		2021
					2023		2022
Interest income	$	~~435~~	$	9	$	~~662~~866	$	2815
Interest expense	~~(1,533)~~		~~(531)~~		(41,~~369~~856)		(~~644~~1,316)
Imputed interest expense (royalty financing obligation)	~~(2,287)~~		—		(53,~~172~~015)		—(611)
Amortization of debt discount and issuance costs	~~(179)~~		~~(131)~~		(~~509~~178)		(~~391~~151)
Interest expense, net	$	~~(3,564)~~	$	~~(653)~~	$	(94,~~388~~183)	$	(12,~~007~~063)

Interest income was ~~primarily~~ related to our cash equivalent securities and short-term investments. The changes between periods were primarily due to ~~increases~~higher interest rates on cash equivalent securities and an increase in short-term ~~investments~~investment balances during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 as compared to the same ~~periods~~period in ~~2021~~2022.

Interest expense for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022 was primarily related to the $50.0 million Credit Agreement we entered into with Drug Royalty III LP 2, or DRI, in August 2021. The increase between periods primarily resulted from the higher ~~average~~interest ~~loan~~rates ~~principal balance outstanding~~ during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 compared to the same ~~periods~~period in the prior year.

Imputed interest expense (royalty financing obligation) for the three ~~and nine~~ months ended ~~September~~March 3031, 2023 and 2022 was related to non-cash interest expense recognized on the royalty financing obligation for the sale of the right to receive certain royalty payments from us under the Purchase and Sale Agreement ~~entered into in August 2021~~ with DRI, or the Royalty Financing Agreement. The amount of non-cash interest expense that we recognize in future periods will primarily depend on our net sales of VONJO. See Part 1, Item 1, “Notes to Condensed Financial Statements, Note 45. ~~Debt~~Royalty Financing ~~Arrangements~~Agreement ” of this ~~report~~Quarterly ~~for~~Report ~~additional~~on ~~information.~~Form ~~There~~10-Q ~~was no such expense~~ for ~~the~~additional ~~three and nine months ended September 30, 2021~~information.

Amortization of debt discount and issuance costs for the three ~~and nine~~ months ended ~~September~~March 3031, 2023 and 2022 was related to the Credit Agreement and Royalty Financing Agreement with DRI. Amortization of debt discount and issuance costs for the three and nine months ended September 30, 2021 was related to the Credit Agreement with DRI and our term loan with Silicon Valley Bank, which was repaid in full in August 2021.

Other non-operating ~~income (~~expenses). Other non-operating expenses for the three months ended March 31, 2023 and 2022 were asrelated ~~follows~~to ~~(in~~foreign ~~thousands):~~exchange loss.

2524

	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Foreign exchange gain (loss)	$	77	$	(7)	$	55	$	(18)
Loss on extinguishment of debt	—		(138)		—		(138)
Other non-operating income (expenses)	$	77	$	(145)	$	55	$	(156)

Loss on extinguishment of debt for the three and nine months ended September 30, 2021 was related to a loss recognized upon repayment of our secured term loan with Silicon Valley Bank in August 2021. There were no such expenses for the three and nine months ended September 30, 2022.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity

We have historically funded our operations from product sales, proceeds from the sales and the issuance of equity securities, the incurrence of debt, the sale of certain future royalties and payments received pursuant to license and collaboration agreements. As of ~~September~~March 3031, ~~2022~~2023, we had $8159.60 million in cash, cash equivalents and short-term investments.

Product Sales. We commercially launched VONJO in March 2022 following the ~~accelerated~~Accelerated ~~approval~~Approval of VONJO by the FDA on February 28, 2022. We intend to rely on cash flows from product sales as our source of liquidity in the near future as we expand our commercialization efforts with respect to VONJO.

~~Public~~At-The-Market Equity Offering. ofIn ~~Common~~August ~~Stock~~2022, ~~and~~we ~~Series~~entered X1into ~~Preferred~~the ~~Stock.~~2022 InSale ~~April~~Agreement ~~2021~~with Jefferies, weto ~~issued~~sell ~~16.4 million~~ shares of our common stock athaving aaggregate sales proceeds of up to $2100.500 ~~per~~million. ~~share~~For ~~price~~the ~~and~~year ~~600~~ended December 31, 2022, we sold 1.7 million shares of our ~~Series~~common X1stock ~~Preferred~~for ~~Stock~~proceeds atof aapproximately $259.7 million,~~000~~ ~~per~~net ~~share~~of ~~price~~sales agent commission, ~~collecting~~under ~~net~~the ~~proceeds~~2022 Sale Agreement. We had no sales of ~~approximately~~our ~~$53.6~~common ~~million~~stock under the 2022 Sale Agreement for the three months ended March 31, 2023.

~~At-The-Market~~Credit ~~Equity Offering~~Agreement. In ~~January~~August 2021, we entered into anthe ~~Open~~Credit ~~Market~~Agreement ~~Sale~~with ~~AgreementSM~~DRI ~~with~~as ~~Jefferies~~lender ~~LLC~~and administrative agent, orwhich ~~the~~provided ~~2021~~for ~~Sale~~a ~~Agreement,~~loan toin ~~sell~~the ~~shares~~principal amount of ~~our~~$50 ~~common~~million ~~stock~~funded ~~having~~by ~~aggregate~~DRI ~~sales~~at ~~proceeds~~closing. As of upMarch 31, to2023, we had an outstanding principal balance under the Credit Agreement of $50.0 million. We ~~sold~~are ~~0.9~~required ~~million~~to ~~shares~~pay ofquarterly ~~our~~interest-only ~~common~~payments ~~stock~~until ~~for~~August ~~net~~25, ~~proceeds~~2026, ofor ~~approximately~~the ~~$2.7~~maturity ~~million~~date, ~~during~~with the ~~year~~unpaid ~~ended~~principal ~~December~~amount ~~31,~~of ~~2021.~~the ~~For~~outstanding loan due and payable on the ~~nine~~maturity ~~months~~date. ~~ended~~The ~~September 30,~~loan ~~2022,~~bears weinterest ~~sold~~at ~~9.4~~a ~~million~~rate ~~shares~~equal ofto ~~our~~8.25% ~~common~~per ~~stock~~annum, ~~for~~plus ~~net~~the ~~proceeds~~greater of ~~approximately~~(i) ~~$45~~1.575% ~~million~~and ~~under~~(ii) the ~~2021~~three-month ~~Sale~~LIBOR ~~Agreement.~~rate ~~The~~and requires a back-end fee of $501.0 million. ~~facility~~These ~~under~~borrowings ~~the~~are ~~2021~~secured ~~Sale~~by ~~Agreement~~a ~~was~~first ~~fully~~priority ~~utilized~~security ~~during~~interest ~~the~~on ~~second~~substantially ~~quarter~~all of ~~2022~~our assets, subject to certain exceptions. In ~~August~~addition, ~~2022~~the Credit Agreement contains a minimum liquidity covenant requiring us to maintain at least $10.0 million of unrestricted cash and cash equivalents, wesubject ~~entered~~to ~~into~~certain ~~the~~exceptions. ~~2022~~The ~~Sale~~Credit Agreement also requires us to comply with ~~Jefferies~~restrictive covenants, toincluding ~~sell~~those ~~shares~~that oflimit our ~~common~~operating ~~stock~~flexibility ~~having~~and ~~aggregate~~ability ~~sales~~to ~~proceeds~~borrow ofadditional upfunds. A failure to ~~$100.0~~make ~~million.~~a Werequired ~~had~~payment noor ~~sales~~an uncured covenant breach could lead to an event of ~~our~~default, ~~common~~and ~~stock~~in ~~under~~such case, all amounts then outstanding may become due and payable immediately. Upon the ~~2022~~closing ~~Sale~~of ~~Agreement~~the ~~for~~pending acquisition by Sobi, the ~~nine~~loan ~~months~~under ~~ended~~the ~~September 30~~Credit Agreement will be repaid in full, ~~2022~~unless otherwise directed by DRI, including the back-end fee of $1.0 million and a prepayment charge of approximately $2.2 million.

~~Credit~~Royalty Financing Agreement. In ~~August~~connection ~~2021,~~with ~~we entered into~~ the Credit Agreement ~~with~~discussed ~~DRI~~above, aswe ~~lender~~ and ~~administrative~~DRI ~~agent,~~entered ~~which~~into ~~provided~~the ~~for~~Royalty aFinancing ~~loan~~Agreement, inpursuant ~~the~~to ~~principal~~which ~~amount~~we ofsold ~~$50~~to ~~million funded by~~ DRI atthe ~~closing.~~right Asto ofreceive ~~September 30,~~certain ~~2022,~~royalty wepayments ~~had~~from anus ~~outstanding~~for ~~principal~~a ~~balance~~purchase ~~under~~price ~~the~~of ~~Credit~~up ~~Agreement~~to of $5085.0 million. Wein ~~are~~cash. ~~required~~In toMarch ~~pay quarterly interest-only payments until August 25~~2022, ~~2026,~~DRI orfunded the ~~maturity~~upfront ~~date,~~purchase ~~with~~price ~~the unpaid principal amount~~ of ~~the outstanding loan due and payable on the maturity date~~$60.0 ~~The~~million ~~loan~~following ~~bears~~FDA ~~interest~~approval atof aVONJO ~~rate~~in ~~equal~~February ~~to 8~~2022.~~25%~~ ~~per~~In ~~annum~~January 2023, ~~plus~~we ~~the~~received ~~greater of (i) 1.75% and (ii) the three-month LIBOR rate and requires a back-end fee of~~ $16.05 million. ~~These~~in ~~borrowings~~additional ~~are~~funding ~~secured~~in byconnection awith ~~first~~the ~~priority~~achievement ~~security interest on substantially all~~ of ~~our~~a ~~assets,~~certain ~~subject~~minimum toVONJO ~~certain~~sales ~~exceptions~~threshold. InDRI ~~addition,~~will ~~the~~be ~~Credit~~required ~~Agreement~~to ~~contains~~provide aup ~~minimum liquidity covenant requiring us~~ to ~~maintain at least~~ $1018.05 million of ~~unrestricted~~remaining ~~cash~~contractual ~~and~~funding ~~cash~~if ~~equivalents, subject to~~ certain ~~exceptions.~~minimum ~~The~~VONJO ~~Credit~~sales ~~Agreement~~thresholds ~~also~~are ~~requires~~met usby tothe ~~comply~~end ~~with~~of ~~restrictive~~the ~~covenants,~~third ~~including~~quarter ~~those~~of ~~that~~2023. ~~limit~~Under ~~our~~the ~~operating~~Royalty ~~flexibility~~Financing ~~and~~Agreement, ~~ability~~DRI tois ~~borrow~~entitled ~~additional funds. A failure~~ to ~~make~~receive atiered, ~~required~~sales-based ~~payment~~royalties oron annet ~~uncured~~product ~~covenant~~sales ~~breach could lead to an event~~ of ~~default,~~VONJO ~~and~~ in ~~such~~the ~~case,~~United ~~all amounts then outstanding may become due and payable immediately~~States.

Royalty Financing Agreement. In connection with the Credit Agreement discussed above, we and DRI entered into the Royalty Financing Agreement, pursuant to which we sold to DRI the right to receive certain royalty payments from us for a purchase price of up to $85.0 million in cash. In March 2022, DRI funded the upfront purchase price of $60.0 million following the FDA approval of VONJO on February 28, 2022 and will be required to provide up to $25.0 million of additional funding to us if certain minimum VONJO sales thresholds are met in 2023 or sooner. Under the Royalty Financing Agreement, DRI is entitled to receive tiered, sales-based royalties on net product sales of VONJO in the United States.

Historical Cash Flows

26Net cash used in operating activities. Net cash used in operating activities increased to $31.1 million during the three months ended March 31, 2023 compared to $30.0 million for the same period in 2022. The increase was primarily due to a $10.3 million milestone payment made to Takeda during the first quarter of 2023 that became payable in 2022, royalty payments to DRI and S*BIO as well as timing of payments for operating expenses, partially offset by an increase in cash collection for VONJO product sales.

Net cash ~~used~~provided inby ~~operating~~investing activities. Net cash ~~used~~provided inby ~~operating~~investing activities ~~increased to $65.7 million~~ during the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 ~~compared to $54.9 million for the same period in 2021. The increase~~ was ~~primarily~~related ~~due~~ to ~~increases~~the inpurchases ~~payments for selling, general~~ and ~~administrative~~maturities ~~expenses associated with the commercialization~~ of ~~VONJO,~~short-term ~~partially~~investments. ~~offset~~There bywas ~~cash~~no ~~receipts~~net ~~from VONJO product sales. Though~~ cash ~~used~~provided inby ~~operating~~or ~~activities increased compared to 2021, cash~~ used in ~~operating~~investing activities ~~decreased~~during ~~from $30.0 million in~~ the ~~first~~three ~~quarter~~months ofended ~~2022~~March to31, ~~$20.2 million in the second quarter of~~ 2022 ~~and further to $15~~.5 ~~million in the third quarter of 2022, largely due to increases in VONJO product sales.~~

Net cash ~~(used in)~~ provided by ~~investing~~financing activities. Net cash ~~used~~provided inby ~~investing~~financing activities was $9.6 million and $61.4 million during the ~~nine~~three months ended ~~September~~March 3031, 2023 and 2022, respectively. Net cash provided during three months ended March 31, 2023 was attributable to athe ~~$25.0~~additional ~~million~~funding ~~milestone~~received ~~payment~~from toDRI ~~S*BIO~~under ~~and~~the ~~purchases~~Royalty ~~and~~Financing ~~maturity~~Agreement in connection with the achievement of ~~short-term~~a ~~investments.~~certain ~~See~~minimum ~~“Note~~VONJO 6.sales ~~Milestone~~threshold, ~~Payments~~as -well ~~S*BIO~~as ~~Pte~~proceeds ~~Ltd.”~~from ~~for~~stock ~~additional~~option ~~details~~exercises. Net cash provided ~~by investing activities~~ during the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 was ~~related~~primarily attributable to net proceeds from the ~~maturity~~Royalty Financing Agreement and the utilization of ~~short~~the at-~~term~~the-market ~~investments~~equity facility.

Net cash provided by financing activities. Net cash provided by financing activities was $106.7 million and $97.8 million during the nine months ended September 30, 2022 and 2021, respectively. Net cash provided during the nine months ended September 30, 2022 was primarily attributable to net proceeds from the Royalty Financing Agreement with DRI and the utilization of the at-the-market equity facility. Net cash provided during the nine months ended September 30, 2021 was primarily attributable to net proceeds from the public offering of common stock and Series X1 preferred stock and the loan proceeds from Drug Royalty III LP 2. 25

Capital Resources

We have prepared our condensed financial statements assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. WeHowever, we believe that, as of the date of the filing of this Quarterly Report on Form 10-Q, our present financial resources, ~~along~~together with expected cash receipts from net product sales of VONJO, ~~and~~will upbe sufficient to ~~$25.0~~meet ~~million~~our inobligations ~~contractual~~as ~~funding~~they ~~commitments~~come ~~from~~due ~~DRI~~and ~~receivable~~to ~~upon~~fund ~~achieving~~our ~~minimum~~operations ~~net~~into ~~product~~the ~~sales~~first quarter of ~~VONJO,~~2024. ~~will~~This beraises ~~sufficient~~substantial todoubt ~~meet~~about our ~~obligations~~ability to continue as ~~they~~a ~~come~~going ~~due~~concern and we will need to raise substantial additional capital in the near term in order to fund our operations ~~for~~through atand ~~least~~beyond ~~one~~the ~~year~~first ~~after~~quarter ~~the~~of ~~date~~2024 ~~that~~and to continue as a going concern thereafter. See “Part I, Item 1, Notes to Condensed Financial Statements, Note 1. Description of Business and Summary of Significant Accounting Policies - Liquidity” of this Quarterly Report on Form 10-Q isfor ~~filed~~additional ~~with~~information on our assessment. Further, we have incurred net losses since inception and expect to generate losses for the ~~SEC~~foreseeable future. We have historically funded our operations through product sales, equity financings, borrowings, sale of certain future royalties and funds obtained under product collaborations, any or all of which may not be available to us in the future. As of ~~September~~March 3031, ~~2022~~2023, our available cash, cash equivalents and short-term investments totaled $8159.60 million, and we had an outstanding principal balance of $50.0 million under our Credit Agreement with DRI.

Financial resource forecasts are subject to change as a result of a variety of risks and uncertainties. Changes in our commercialization efforts, manufacturing, developments in and expenses associated with our clinical trials and the other factors identified under “Capital Requirements” below may consume capital resources earlier than planned. Due to these and other factors, the foregoing forecast for the period for which we will have sufficient resources to fund our operations may be inaccurate.

Capital Requirements

~~While~~We ~~we expect to operate as a going concern for at least one year from the date of filing of this Quarterly Report on Form 10-Q, we~~ will require additional capital in order to pursue our longer-term strategic objectives. We expect to satisfy our capital needs through existing capital balances, revenues from VONJO and a combination of public or private equity financings, partnerships, collaborations, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, we have a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing stockholders may result. If we fail to obtain additional capital when needed, our ability to operate as a going concern will be harmed, and we may be required to delay, scale back or eliminate some or all of our research and development programs and commercialization efforts and/or reduce our selling, general and administrative expenses, be unable to attract and retain highly-qualified personnel, be unable to obtain and maintain contracts necessary to continue our operations ~~and~~ at affordable rates with competitive terms, be unable to or elect to refrain from making our contractually required payments when due (including debt payments) and/or be forced to cease operations, liquidate our assets and possibly seek bankruptcy protection.

Our future capital requirements will depend on many factors, including: our ability to generate sales of VONJO; the cost of ongoing organization and ~~timing~~maintenance of ~~establishing~~ our commercial infrastructure and distribution capabilities; our ability to reach milestones triggering payments to be made or received under certain of our contractual arrangements; the cost of manufacturing VONJO; the cost of manufacturing clinical supplies of our product candidates or of establishing commercial supplies of any products that we may develop in the future; developments in and expenses associated with our research and development activities; our clinical development plans and any changes that we may initiate or that may be requested by the FDA or other regulators as we seek ~~product~~ approval for products we may develop in the future; acquisitions or collaborations with respect to compounds or other assets; competitive market developments; disruptions or other delays to our business and clinical trials resulting from ongoing worldwide current events; and other unplanned business developments.

with respect to compounds or other assets; competitive market developments; disruptions or other delays to our business and clinical trials resulting from the ongoing worldwide COVID-19 pandemic; and other unplanned business developments.

LICENSE AGREEMENTS AND MILESTONE ACTIVITIES

For information regarding our license agreements and milestone activities, please see Part I, Item 1, “Business – License Agreements” of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures in the preparation of our condensed financial statements and accompanying notes. Our critical accounting policies are those that significantly impact our financial condition and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of this uncertainty, actual results may vary from these estimates. The following estimates are considered material updates to our critical accounting policies and estimates disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2021:

~~Revenue Recognition~~ 26

~~Under Accounting Standards Codification 606, Revenue~~ from ~~Contracts~~these ~~with~~estimates. ~~Customers,~~For ora ~~ASC~~discussion ~~606,~~of ~~we recognize revenue when~~ our ~~customer~~critical ~~obtains~~accounting ~~control~~estimates, ofplease ~~promised~~see ~~goods~~Part orII, ~~services~~Item in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 6067, ~~we perform the following five steps: (i) identify the contract(~~“Management’s) ~~with~~Discussion aand ~~customer;~~Analysis ~~(ii)~~of ~~identify~~Financial ~~the~~Condition ~~performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract;~~ and ~~(v)~~Results ~~recognize~~of ~~revenue~~Operations” ~~when~~of ~~(or~~our ~~as)~~Annual weReport ~~satisfy~~on aForm ~~performance~~10-K ~~obligation. As part of accounting~~ for ~~these~~the ~~arrangements,~~year weended ~~make~~December ~~significant judgments~~31, ~~including~~2022. ~~identifying~~There ~~performance~~have ~~obligations~~been inno ~~the~~material ~~contract,~~changes ~~estimating the amount of variable consideration~~ to ~~include~~our incritical ~~the~~accounting ~~transaction~~policies ~~price~~ and ~~allocating~~estimates ~~the~~discussed ~~transaction price to each performance obligation~~therein.

Reserves for Variable Consideration

Revenues from product sales are recorded at the net sales price (i.e., the transaction price discussed in Revenue Recognition above), which includes estimates of variable consideration. We establish reserves for such variable consideration which results from customer credits, service fees, returns, chargebacks, discounts, rebates and co-pay assistance that are offered within contracts between us and our customers and other indirect healthcare entities relating to our product sales. These reserves are based on the amounts earned or to be claimed on the related sales. Where appropriate, our estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical data, current contractual and statutory requirements, specific known market trends and industry data, and forecasted customer purchase and payment patterns. These reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product sales and earnings in the period such variances become known.

Royalty Financing Obligation

The royalty financing obligation is eligible to be repaid based on royalties from net sales of VONJO. Interest expense is accrued using the effective interest rate method over the estimated repayment period of the obligation. This requires us to estimate the total amount of future royalty payments to be generated from VONJO product sales over the life of the agreement. We impute interest on the carrying value of the royalty financing obligation and record interest expense using an imputed effective interest rate. We will reassess the expected royalty payments at each reporting period and account for any changes through an adjustment to the effective interest rate on a prospective basis. The assumptions used in determining the expected repayment term of the royalty financing obligation require that we make estimates which could impact the carrying value of the liability. A significant increase or decrease in forecasted product sales could materially impact the liability balance, the amount of interest expense and the timing of repayment.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, we are not required to provide the information requested by this item pursuant to Item 305(e) of Regulation S-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Our management, under the supervision and with the participation of our President and Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our President and Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There have been no changes to our internal control over financial reporting that occurred during the ~~third~~first fiscal quarter ended ~~September~~March 3031, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2927

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

~~See Part I, Item 1, “Notes to Condensed Financial Statements, Note 7~~None. ~~Contingencies” of this Quarterly Report on Form 10-Q for information regarding material pending legal proceedings.~~

Item 1A. Risk Factors

Our business is subject to various risks, including those described in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022, ~~There~~as ~~have~~filed ~~been~~with ~~no material changes from~~ the ~~risk~~SEC ~~factors disclosed in Item 1A of our Annual Report~~ on ~~Form~~March ~~10-K~~6, 2023.

This report contains forward-looking statements that involve risks and uncertainties. The occurrence of any of the risks described in our Annual Report on Form 10-K could materially adversely affect our business, financial condition, liquidity, operating results or prospects and the trading price of our securities. Additional risks and uncertainties that we do not presently know or that we currently deem immaterial may also harm our business, financial condition, liquidity, operating results and prospects and the trading price of our securities.

The following risk factors supplement should be read in conjunction with those contained in the risk factors disclosed in the “Risk Factors” section included in our Annual Report on Form 10-K for the year ended December 31, 2022.

The completion of the Offer and the Merger are subject to certain conditions, including regulatory approvals as well as other uncertainties, and there can be no assurances as to whether and when they may be completed.

Completion of the Merger is subject to various closing conditions, including, among other things, consummation of the Offer (as further detailed below), and the receipt of applicable regulatory approvals. Further, if the Merger has not been consummated on or before the Outside Date, then the Merger Agreement may be terminated by either party. There is no assurance that receipt of applicable regulatory approvals will occur, or that all of the other closing conditions will be satisfied (or waived, to the extent permitted by applicable law), or that the Merger will be completed on the terms reflected in the Merger Agreement, within the expected timeframe or at all.

The obligation of Purchaser to purchase Shares tendered in the Offer is subject to the satisfaction or waiver of the conditions set forth in Annex I to the Merger Agreement, including (i) that there shall have been validly tendered and not validly withdrawn that number of Shares that, when added to any Shares then owned by Sobi and its controlled affiliates, represent at least one Share more than half of the sum of (A) all Shares then outstanding as of the expiration of the Offer, and (B) all Shares that CTI may be required to issue upon the vesting (including vesting solely as a result of the consummation of the Offer), conversion, settlement or exercise of all then-outstanding warrants, options, benefit plans, obligations or securities convertible or exchangeable into Shares or other rights to acquire or be issued Shares (in each case other than outstanding shares of CTI preferred stock), regardless of the conversion or exercise price or other terms and conditions thereof (the “Minimum Condition”); (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and receipt of clearance, approval or consent under any other applicable antitrust law; and (iii) those other conditions set forth in Annex I to the Merger Agreement.

The governmental authorities from which authorizations under the HSR Act are required have broad discretion in administering the governing laws and regulations, and may take into account various facts and circumstances in their consideration of the Merger, including other potential transactions in our industry or other industries. These governmental authorities may initiate proceedings seeking to prevent, or otherwise seek to prevent, the Merger. As a condition to authorization of the Merger or related transactions, these governmental authorities also may seek to impose requirements, limitations or costs, require divestitures or place restrictions on the conduct of the combined company’s business after completion of the Merger.

We can provide no assurance that all required approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable) in a timely manner or at all, and, if all required consents and approvals are obtained and all closing conditions are timely satisfied (or waived, if applicable), we can provide no assurance as to the terms, conditions and timing of such consents and approvals or the timing of the completion of the Merger. Many of the conditions to completion of the Merger are not within either our or Sobi’s control, and neither company can predict when or if these conditions will be satisfied (or waived, if applicable). Any delay in completing the Merger could cause us not to realize some or all of the benefits that we expect to achieve if the Merger is successfully completed within its expected timeframe.

Failure to complete the Merger could negatively impact our stock price and future business and financial results.

If the Merger is not completed for any reason, we will remain an independent public company. Our ongoing business may be materially and adversely affected and we would be subject to a number of risks, including the following:

•we may experience negative reactions from the financial markets, including negative impacts on trading prices of our common stock, and from our customers, suppliers, regulators and employees;

•we may be required to pay Sobi a termination fee of $59.0 million if the Merger Agreement is terminated under specified circumstances, including (i) termination by CTI to enter into an agreement providing for a Superior Proposal, (ii) termination by Sobi following a Company Adverse Recommendation Change, (iii) termination by Sobi due to the CTI board of directors’ failure to include its recommendation in the Schedule 14D-9, (iv) termination by Sobi because CTI has violated or breached in any material respect the non-solicitation provision, or (v) termination because (A) after the date of the Merger Agreement an Acquisition Proposal has either been made to CTI or been publicly made directly to CTI’s stockholders; (B)(1) the Outside Date has occurred, (2) the Offer has expired without the acceptance of the Shares for payment or the purchase of Shares validly tendered, or (3) CTI has breached and not cured any representation, warranty or covenant such that a condition to the Offer is not capable of being satisfied; and (C) within twelve months following (B)(1), (2) or (3), CTI or any of its subsidiaries signs a definitive agreement for an Acquisition Proposal or consummates an Acquisition Proposal; and

•matters relating to the Merger (including integration planning) will require substantial commitments of time and resources by our management and the expenditure of significant funds, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to us as an independent company.

Even if successfully completed, there are certain risks to our shareholders from the consummation of the Offer and the Merger, including: the amount of cash to be paid per share of our common stock under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock; receipt of the all-cash per share consideration in an amount equal to the Offer Price is taxable to shareholders that are treated as U.S. holders for U.S. federal income tax purposes; and if the Merger is completed, our shareholders will forego the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent company.

While the Merger is pending, we are subject to business uncertainties and contractual restrictions that could materially adversely affect our operating results, financial position and/or cash flows or result in a loss of employees, customers, or suppliers.

The Merger Agreement includes restrictions on the conduct of our business until the earlier of the completion of the Merger or termination of the Merger Agreement. For example, unless we obtain Sobi’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), we may not, subject to certain exceptions and aggregate limitations, incur additional indebtedness, issue additional shares of our common stock, repurchase our common stock, pay dividends, acquire assets, securities or property, dispose of businesses or assets, enter into, terminate or amend material contracts or make certain additional capital expenditures. We may find that these and other contractual restrictions in the Merger Agreement delay or prevent us from responding, or limit our ability to respond, effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if our management believes they may be advisable. The pendency of the Merger may also divert management’s attention and our resources from ongoing business and operations.

Our employees, customers, and suppliers may experience uncertainties about the effects of the Merger. It is possible that some customers, suppliers and other parties with whom we have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationship with us as a result of the pending Merger. Similarly, current and prospective employees may experience uncertainty about their future roles with us following completion of the Merger, which may materially adversely affect our ability to attract and retain key employees. If any of these effects were to occur, it could materially and adversely impact our operating results, financial position and/or cash flows and/or our stock price.

Lawsuits may be filed against us and/or Sobi challenging the transactions contemplated by the Merger Agreement. An adverse ruling in any such lawsuit may delay or prevent the proposed Merger from being completed.

Lawsuits arising out of or relating to the Merger Agreement and/or the proposed Merger may be filed in the future. One of the conditions to completion of the Merger is the absence of any injunction or other order being in effect that prohibits completion of the Merger. Accordingly, if a plaintiff is successful in obtaining an injunction, then such order may prevent the proposed Merger from being completed, or from being completed within the expected timeframe. In addition, if the Merger is not consummated for any reason, litigation could be filed related to the failure to consummate the Merger.

Regardless of the outcome of any litigation related to the Merger (or the failure of its consummation), such litigation may be time-consuming and expensive, may distract our management from running the day-to-day operations of our business, and

may result in negative publicity or an unfavorable impression of us, any of which could adversely affect the price of our common stock, impair our ability to recruit or retain employees, damage our relationships with our customers, suppliers, and other business partners, or otherwise materially harm our operations and financial performance.

If the Merger is not consummated, we may need to raise additional capital to continue our operations and execute our operating plans.

If the Merger is not consummated, we may need to raise additional capital or we may need to delay, scale back or eliminate some planned operations or reduce expenses to remain a going concern, any of which would have a significant negative impact on our prospects and financial condition, as well as the trading price of our common stock. There can be no assurance that we can raise capital when needed or on terms favorable to us and our stockholders. Macroeconomic conditions and heightened global uncertainties may adversely affect general commercial activity and the U.S. and global economies and financial markets, which increases uncertainty around our ability to access the capital markets when needed and on acceptable terms. Moreover, if we are unable to obtain additional funds on a timely basis, there will be an increased risk of insolvency and up to a total loss of investment by our stockholders.

The Merger Agreement contains provisions that limit our ability to pursue alternatives to the proposed transaction, may discourage certain other companies from making a favorable alternative transaction proposal and, in specified circumstances, could require us to pay the other party a termination fee.

Under the Merger Agreement, we are subject to certain restrictions on our ability to solicit alternative business combination proposals from third parties, engage in discussion or negotiations with respect to such proposals or provide information in connection with such proposals, subject to certain customary exceptions. We may terminate the Merger Agreement and enter into an agreement providing for a superior proposal only if specified conditions have been satisfied, and such a termination would result in us being required to pay Sobi a termination fee equal to $59.0 million. If the Merger Agreement is terminated and we determine to seek another business combination, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the proposed transaction. While we believe these provisions and agreements are reasonable and customary and are not preclusive of other offers, these provisions could discourage a third party that may have an interest in acquiring all or a significant part of us from considering or proposing such acquisition, even if such third party were prepared to pay consideration with a higher value than the merger consideration. These provisions might also result in a potential third party acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.

We and Sobi will incur substantial transaction fees and costs in connection with the proposed transaction.

We and Sobi expect to incur several non-recurring transaction-related costs associated with completing the proposed transaction and achieving desired benefits of the proposed transaction. These fees and costs will be substantial. Non-recurring transaction costs include, but are not limited to, fees paid to legal, financial and accounting advisors, retention, severance, change in control and other integration-related costs, filing fees and printing costs. There can be no assurance that the integration process will deliver all or substantially all of the benefits of the proposed transaction in the near term, the long term or at all. The costs described above and any unanticipated costs and expenses, many of which will be borne by Sobi or us even if the proposed transaction is not completed, could have an adverse effect on Sobi’s or our financial condition and operating results.

Our directors and executive officers have interests in the proposed transaction that may be different from, or in addition to, the interests of our stockholders generally.

Our directors and executive officers have interests in the proposed transaction that may be different from, or in addition to, the interests of our stockholders generally. The interests of our directors and executive officers include, among others, severance rights, vesting protections for equity awards in the event of termination of employment in connection with a change in control, rights to continuing indemnification and directors’ and officers’ liability insurance. Our board of directors was aware of and carefully considered the interests of our respective directors and officers, among other matters, in evaluating the terms and structure, and overseeing the negotiation of the proposed transaction, in approving the Merger Agreement, the Merger and the other transactions contemplated thereby, and the recommendation of our board of directors that our stockholders adopt the Merger Agreement.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None~~On May 9, 2023, CTI’s board of directors approved an amendment to the CTI’s Amended and Restated Bylaws, dated as of April 13, 2020, or the Bylaws, to add a new Article XIII, Section 13.1 forum selection provision, or the Forum Selection Amendment.

30The Forum Selection Amendment provides that, unless CTI consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of CTI; (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) owed by any current or former director, officer, stockholder, employee or agent of CTI to CTI or its stockholders, (iii) any action asserting a claim against CTI or any of its current or former directors, officers, stockholders, employees or agents arising out of or relating to any provision of the General Corporation Law of the State of Delaware, the CTI’s certificate of incorporation or the Bylaws (each, as in effect from time to time), or (iv) any action asserting a claim against CTI or any of its current or former directors, officers, stockholders, employees or agents governed by the internal affairs doctrine of the State of Delaware. In the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the Forum Selection Amendment provides that sole and exclusive forum for such action or proceeding will be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein.

This summary is qualified in its entirety by reference to the Forum Selection Amendment, which is filed as Exhibit 3.1 hereto and incorporated by reference herein.

Item 6. Exhibits

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit Number

Filing Date

10.1

Open Market Sale Agreement℠, dated August 16, 2022, between CTI BioPharma Corp. and Jefferies LLC.

S-3

333-266926

1.2

August 17, 2022

3.1

Amended and Restated Bylaws of CTI BioPharma Corp.

8-K

000-28386

3.1

May 10, 2023

10.1*

Amendment No. 2 to Employment Agreement by and between Adam R. Craig and CTI BioPharma Corp.

Filed herewith.

10.2*

Amendment No. 2 to Severance Agreement by and between James Fong and CTI BioPharma Corp.

Filed herewith.

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

32(1)

Certification of Principal Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Furnished herewith.

101

The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended ~~September~~March 3031, ~~2022~~2023, formatted in Inline XBRL: (i) Condensed Balance Sheets, (ii) Condensed Statements of Operations, (iii) Condensed Statements of Comprehensive Loss, (iv) Condensed Statements of Changes in Stockholders' ~~Equity~~Deficit, (v) Condensed Statements of Cash Flows and (vi) Notes to Condensed Financial Statements, tagged as blocks of text and including detailed tags.

104

Cover page interactive data file (formatted in Inline XBRL and contained in Exhibit 101).

* Indicates management contract or compensatory plan or arrangement.

(1) The certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

3132

SIGNATURES

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:

CTI BIOPHARMA CORP.

(Registrant)

Dated: November 7, 2022

By:

/s/ Adam R. Craig

Dated: May 15, 2023

By:

/s/ Adam R. Craig

Adam R. Craig

President, Chief Executive Officer and Interim Chief Medical Officer

Dated: November 7, 2022

By:

/s/ David H. Kirske

Dated: May 15, 2023

By:

/s/ David H. Kirske

David H. Kirske

Chief Financial Officer

3233

Filing Compare · CTI BIOPHARMA CORP