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Item 1. Business

2022-03-15 compared with 2021-02-25 · 374 added, 349 removed, 483 unchanged (60% of the section changed)

Altimmune, Inc.

is a clinical stage biopharmaceutical company focused on developing intranasal vaccines, immune modulating therapies and treatments for liver disease.

Our diverse pipeline includes proprietary intranasal vaccines for COVID-19 (AdCOVID), anthrax (NasoShield) and influenza (NasoVAX);

an intranasal immune modulating therapeutic for COVID-19 (T-COVID);

and next generation peptide therapeutics for non-alcoholic steatohepatitis (“NASH”) (ALT-801) and chronic hepatitis B (HepTcell).

is a clinical stage biopharmaceutical company focused on developing treatments for obesity and liver diseases.

Our lead product candidate, pemvidutide (proposed INN, formerly known as ALT-801), is a GLP-1/glucagon dual receptor agonist that is being developed for the treatment of obesity and non-alcoholic steatohepatitis (“NASH”).

In addition, we are developing HepTcell, an immunotherapeutic agent designed to achieve a functional cure for chronic hepatitis B.

Our business is the result of a merger between PharmAthene, Inc.

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Except where the context indicates otherwise, references to “we,” “us,” “our,” “Altimmune” or the “Company” refer, for periods prior to the completion of the Mergers, to Private Altimmune and its subsidiaries, and for periods following the completion of the Mergers to the combined company and its subsidiaries.

AdCOVID is an intranasal COVID-19 vaccine candidate designed to guard the respiratory tract from viral invasion and to provide downstream protection against viral spread through stimulation of both mucosal and systemic antibodies (IgA and IgG) as well as cell-mediated immunity.

By stimulating mucosal immunity in the nasal cavity, a key point of entry and replication for the SARS-CoV-2 virus, AdCOVID has the potential to defend against both the infection and spread of the virus to others.

AdCOVID’s intranasal delivery method provides an easier route of administration than an injection and may eliminate the need for administration by trained medical personnel.

We believe nasal mucosal immunity has the potential to provide an effective protection at the site of viral entry and early replication, and may block transmission by shed virus.

We believe AdCOVID has the potential to meet most of the World Health Organization’s published preferred attributes for a COVID-19 vaccine, including single dose, rapid onset of protection, immunity lasting one year, non-injected and temperature stability.

In particular, data from our NasoVAX clinical trials demonstrated a strong serological response at two weeks that remained unchanged at 400 days, after a single dose.

In addition, since it is expected to have extended stability at room temperature, AdCOVID may avoid the need for costly cold chain logistics.

During 2020, we completed initial preclinical mouse studies in collaboration with the University of Alabama at Birmingham (“UAB”), and began manufacturing AdCOVID during the third quarter of 2020.

We submitted an Investigation New Drug application (“IND”) with the U.S.

Food and Drug Administration (“FDA”) in the fourth quarter of 2020 and received clearance from the FDA in February 2021 to initiate a Phase 1 clinical trial of AdCOVID.

The Phase 1 clinical trial is currently enrolling and will evaluate the safety and immunogenicity of AdCOVID in up to 180 healthy adult volunteers between the ages of 18 and 55, with data expected in the second quarter of 2021.

T-COVID is an intranasal immune modulating therapeutic candidate based on the same replication-deficient adenovirus 5 (“RD-Ad5”) vector technology behind our other intranasal vaccine candidates, but it acts through a different mechanism.

In preclinical studies sponsored by the National Institute of Allergy and Infectious Diseases, intranasal administration of RD-Ad5 vectors modulated the innate immune response to lethal challenge with a respiratory virus in mice and protected them from death.

The immunomodulatory effects resulted in significantly decreased cellular inflammation and lower concentrations of IL-6 and other inflammatory cytokines in the lungs of treated animals compared to controls.

Excessive production of inflammatory cytokines like IL-6 has been associated with the lung pathology and death in COVID-19.

The protective effects were independent of any specific immunity or vaccine effects against the challenge virus.

These protective effects were only observed with intranasal administration of RD-Ad5, and intramuscular administration provided no survival benefit.

With the support of the U.S.

Army Medical Research & Development Command in collaboration with the Medical Technology Enterprise Consortium, we initiated a placebo-controlled Phase 1/2 double-blind clinical trial to evaluate the potential of T-COVID to prevent clinical worsening in patients with early COVID-19 during 2020.

The trial is expected to enroll 96 community-based patients who are 18 years and older that present with fever, cough, or shortness of breath, with onset of symptoms within 48 hours, and a diagnosis of COVID-19 within 24 hours.

The trial consists of three cohorts of increasing age and risk for complications of COVID-19, and patients are randomized 1:1 to NasoVAX or placebo administered as a single 0.5ml nasal spray within 24 hours of diagnosis.

The primary endpoint of the trial is the proportion of patients with clinical worsening, defined as a 4% decrease in pulse oxygen saturation, or the need for hospitalization.

Secondary endpoints will measure the average decrease in resting pulse oxygen saturation, average

increase in resting pulse rate and proportion of patients requiring oxygen supplementation and mechanical ventilation.

In order to expedite the study, we have been permitted by the FDA to use existing lots of NasoVAX, which is an identical vector to T-COVID, in lieu of newly manufactured T-COVID.

The protocol was recently amended such that 40% of patients in the final cohort, in which efficacy will primarily be assessed, to be either 65 years and older or have risk for complications of COVID-19.

Based on these protocol changes, we expect to receive results from the Phase 1/2 trial in the second quarter of 2021 .

NasoShield is an anthrax vaccine product candidate designed to provide rapid and stable protection after a single intranasal administration.

It is being developed with the support of the U.S.

Biomedical Advanced Research and Development Authority (“BARDA”) for post-exposure prophylaxis against anthrax following exposure to aerosolized B.

anthracis spores.

After an individual has been exposed to the spores that cause anthrax, B.

anthracis bacteria multiply and release toxins within the host.

Although antibiotic therapy is effective at eliminating the actively growing bacteria, vaccination is necessary to protect against the germination of dormant spores after the cessation of antibiotic therapy.

Because NasoShield is intended to protect against anthrax after a single intranasal dose, we believe it may be a convenient and simple alternative to the only approved vaccine, which must be given as a series of three injections over 1 month.

We believe the simplified immunization route and schedule, together with the reliable stability at ambient temperature may allow NasoShield to be deployed in an anthrax event more easily and faster than the currently approved vaccine.

We commenced a Phase 1b trial of NasoShield in adults in 2020 which builds on the Phase 1a trial completed in 2018 and evaluates the effect of modified methods of intranasal dosing on NasoShield safety and immunogenicity.

Results are expected in the first quarter of 2021.

NasoVAX is a recombinant intranasal vaccine product candidate that is being developed for both seasonal and pandemic use.

NasoVAX is believed to simultaneously activate the humoral, mucosal and cellular immune arms which may enable a more comprehensive immune response.

The data from our Phase 2a trial with a monovalent NasoVAX vaccine indicated that NasoVAX was generally well-tolerated and achieved 100% seroprotection with serum antibody responses, which was comparable to published results of a licensed injected influenza vaccine.

Statistically significant increases in mucosal antibody were noted as well as a robust T cell response directed against influenza.

Approximately half of the subjects from the highest dose were evaluated between 12 and 14 months after initial dosing for additional immunogenicity assessment.

The durability data show that the immune response elicited by NasoVAX was stable with no overall change in the antibody titer or level of seroprotection over an average of 13 months.

The combination of serum antibody, mucosal antibody and T-cell response in combination with the durability data provides the potential for improved protection against influenza and suggests that NasoVAX could have a great impact on flu symptoms and shedding of the influenza virus.

We are currently evaluating the development path of NasoVAX.

We completed an acquisition in July 2019 of all of the equity interests of Spitfire Pharma, Inc.

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Spitfire was a privately held, preclinical pharmaceutical company with the primary asset being a novel peptide-based dual GLP-1/glucagon receptor agonist for the treatment of NASH.

We refer to this product candidate as ALT-801, and it is designed to treat the obesity and metabolic dysfunction that causes NASH.

NASH, the most severe form of non-alcoholic fatty liver disease (“NAFLD”), involves multiple metabolic pathways leading to the abnormal accumulation of liver fat, toxic lipid metabolites, and inflammation, leading to fibrosis or eventually liver cancer.

NAFLD is present in up to 90% of obese patients, and approximately 20% of NAFLD patients progress to NASH.

We refer to this product candidate as pemvidutide, and it is designed to treat obesity and the metabolic dysfunction that causes NASH.

Obesity is a significant burden to the global healthcare systems and is implicated in two-thirds of the leading causes of death from non-communicable diseases worldwide.

Some of the leading co-morbidities of obesity include high blood pressure, high cholesterol, type 2 diabetes, coronary heart disease, stroke, gallbladder disease, osteoarthritis, sleep apnea and breathing problems, certain cancers and NASH.

According to the Center for Disease Control and Prevention, total obesity related medical care in the U.S.

is estimated to be $147.0 billion per annum.

Globally, the market size for weight loss alone was $8.36 billion in 2020 and is estimated that it will reach $27.1 billion by 2028.

Previous approaches to the treatment of obesity have been associated with safety concerns, limiting the success of those approaches.

NASH involves multiple metabolic pathways leading to the abnormal accumulation of liver fat, toxic lipid metabolites, and inflammation, leading to fibrosis or eventually liver cancer.

Non-alcoholic fatty liver disease (“NAFLD”), the fatty liver precursor to NASH, is present in up to 90% of obese patients, and approximately 20% of NAFLD patients progress to NASH.

In addition, up to 40% of NASH patients develop NAFLD recurrence one year after liver transplant, which we believe indicates that the underlying metabolic disease is still present after transplant.

We believe the treatment of obesity is the cornerstone of treating NASH and the principal morbidities of NASH.

ALT-801’s dual agonist mechanism of action is designed to combine the activity of GLP-1 for the reduction of appetite and inflammation, with the direct activity of glucagon on the liver, including increased energy expenditure, adipose browning, lipolysis and mobilization of the liver fat.

ALT-801 incorporates the EuPort domain, which is designed to enhance pharmacokinetics for tolerability in the gastrointestinal tract and permit weekly dosing.

As observed in a well-established preclinical model of the disease, ALT-801 is capable of inducing significant weight loss with concomitant decreases in liver fat, inflammation and fibrosis, with superior results compared to elafibranor and semaglutide.

In addition, ALT-801 demonstrated improved metabolic function and exhibited pleiotropic effects in our preclinical testing across multiple metabolic pathways that are involved in NASH.

We also observed in preclinical studies that ALT-801 resulted in more profound suppression of genes associated with steatosis, inflammation and stellate cell fibrosis by RNA sequencing compared to elafibranor and semaglutide.

We commenced a Phase 1 clinical trial in Australia in overweight and obese adult volunteers in the fourth quarter of 2020.

The trial is expected to have both single-ascending and multiple-ascending dose arms over a 6-week treatment duration, with data readouts planned for each arm in the second quarter of 2021.

The endpoints of the Phase 1a trial are expected to be safety, tolerability and pharmacokinetics, with a preliminary readout on weight loss, resting energy expenditure, liver fat by MRI-PDFF and glucose homeostasis.

Pending interim results of the single-

ascending dose arms, we intend to extend the multiple-ascending dose arms by 6 weeks for a twelve-week, parallel-dosing Phase 1b clinical trial.

The endpoints of the Phase 1b trial are expected to be safety, tolerability, pharmacokinetics, weight loss, decrease in liver fat (as measured by the MRI-PDFF standard) and lean body mass, as well as other metabolic biomarkers.

If successful, we expect data from the Phase 1b study Q3 2021.

Pemvidutide’s dual agonist mechanism of action is designed to combine the activity of GLP-1 for the reduction of appetite and inflammation, with the direct activity of glucagon on the liver, including increased energy expenditure, adipose browning, lipolysis and mobilization of the liver fat.

Pemvidutide incorporates a proprietary side chain, referred to as the EuPort domain, which is designed to enhance pharmacokinetics for tolerability in the gastrointestinal tract and permit weekly dosing.

As observed in a well-established preclinical model of the disease, pemvidutide is capable of inducing significant weight loss with concomitant decreases in liver fat, inflammation and fibrosis.

In addition, pemvidutide demonstrated improved metabolic function and exhibited pleiotropic effects in our preclinical testing across multiple metabolic pathways involved in NASH.

We also observed in these studies that pemvidutide resulted in profound suppression of genes associated with steatosis, inflammation and stellate cell fibrosis by RNA sequencing.

Clinical Trial Results – Obesity

In September 2021, we announced the completion of a 12-week Phase 1 clinical trial of pemvidutide in Australia under a clinical trial application.

The trial was a first-in-human, randomized, placebo-controlled, single-ascending and multiple-ascending dose (“MAD”) study in overweight and obese volunteers.

The endpoints of the Phase 1 trial were to assess the safety, tolerability and pharmacokinetics of pemvidutide, with primary readouts on safety, pharmacokinetics and weight loss.

Additional readouts included metabolic and lipid profile, cardiovascular measures and glucose homeostasis.

At 12 weeks, subjects receiving pemvidutide showed mean weight losses of 4.9%, 10.3% and 9.0% at the 1.2 mg, 1.8 mg and 2.4 mg doses, respectively, while the placebo group experienced a mean weight loss of 1.6%, and in the absence of caloric restriction or lifestyle modification.

Weight loss occurred rapidly and consistently over 12 weeks.

Summary of 12-week MAD weight loss findings

Characteristic

Pooled Placebo

Baseline demographics

Body weight (kg)

BMI (kg/m 2 )

Weight loss (kg)

Weight loss (%)

-10.3 (3.4) %**

-9.0 (3.3) %*

*p < .01, **p < .005, compared to placebo

The 1.8 mg dose cohort experienced the highest weight loss, with 100% of the subjects losing at least 5% of body weight and 55% of subjects losing at least 10% of body weight.

The amounts of weight loss at the 1.8 mg and 2.4 mg doses were similar given the sample size and overlapping confidence intervals.

No correlation was found between the magnitude of weight loss and either age or baseline body mass index (“BMI”).

Favorable or statistically significant trends were observed in secondary measures, including reductions in systolic and diastolic blood pressure, serum lipids and HOMA-IR (a measure of insulin resistance).

In addition, a rise in ketone bodies was observed, consistent with the effects of glucagon on fat metabolism.

Side effects in this study were mild to moderate, with no serious or severe treatment-emergent adverse events reported.

No discontinuations due to adverse events were reported.

Summary of 12-week MAD safety findings

Characteristic

Pooled Placebo

Discontinuations due to adverse events (n)

Early withdrawal (n)

Gastrointestinal adverse events

Other adverse events (n)

Unlike the majority of other clinical trials with agents within the GLP-1 class, including dual agonists and tri-agonists, a gradual increasing of dose within a subject over a period of weeks to months to improve tolerability was not used in the pemvidutide trial.

Even without that so called dose titration, the symptoms experienced by subjects who received pemvidutide 1.2 mg and 1.8 mg were predominantly mild, did not require treatment and were consistent with known effects of GLP-1-based therapies.

Tolerability was observed to decrease at the highest dose level.

One subject receiving placebo and one subject receiving pemvidutide 1.8 mg had a 3 to 5-fold elevation in alanine aminotransferase (“ALT”) levels over baseline that resolved rapidly after a pause in dosing.

In this trial, no perturbations of glucose control, as assessed by fasting glucose and hemoglobin A1c, were observed in subjects with obesity/overweight with pre-diabetes;

in fact, a reduction of insulin resistance was observed, as expected when significant weight loss is experienced.

We are currently conducting a Phase 1 trial to establish the effects of pemvidutide on glucose control and confirm the reduction in insulin resistance in patients with Type 2 diabetes.

Clinical Trial Results – Liver Fat Content

While the trial inclusion criteria did not pre-specify a minimum liver fat content (“LFC”), the trial did enroll a number of subjects with measurable LFC as determined by magnetic resonance imaging – proton density fat fraction (“MRI-PDFF”).

A post-hoc analysis of the trial data through 6 weeks showed that 8 subjects had hepatic steatosis, defined as liver fat content greater than or equal to 5% (LFC range from 5.5% to 19.5%), at baseline.

LFC fell below the limit of detection (“LOD”), or less than 1.5%, within 6 weeks of treatment in all subjects with steatosis receiving the 1.8 mg or 2.4 mg dose of pemvidutide, representing a greater than 90% reduction in the liver fat content (see chart below).

These findings reinforce the results from preclinical studies of pemvidutide, in which we observed statistically greater reductions in liver fat than an equivalent dose of semaglutide.

We believe these findings support the potential combined beneficial effects of weight loss and glucagon agonism on liver fat content.

Images of Representative MRI-PDFF Images at Baseline and Week 6

The chart below displays the changes in liver fat content at Week 6 compared to baseline in the 8 subjects with steatosis at baseline:

Treatment Group

Weight Loss (%) at Week 6

Absolute ∆ at Week 6 (%)

Relative ∆ at Week 6 (%)

LOD (limit of detection) = 1.5%;

for absolute and relative ∆, values < LOD are set at 0.75%

Clinical Development Plan

We submitted an Investigational New Drug application (“IND”) for evaluation of pemvidutide in obesity to the U.S.

Food and Drug Administration (“FDA”) in December 2021 and we announced on January 31, 2022 that we had received FDA clearance for a Phase 2 trial in this indication.

We expect to initiate this 48-week Phase 2 obesity trial in the first half of 2022.

The readouts of that study will include safety, weight loss and other metabolic measures.

The study will include a 24-week interim analysis of safety and weight loss that we expect will read out in the fourth quarter of 2022.

We are currently conducting a 12-week Phase 1b trial of pemvidutide in patients with NAFLD at multiple sites in the United States.

This double-blind, randomized, placebo-controlled study will enroll approximately 72 diabetic and non-diabetic overweight and obese adult patients with a liver fat content greater than 10% as measured by MRI-PDFF.

The primary efficacy endpoint is the change in liver fat content from baseline, with a secondary endpoint of weight loss.

The study is expected to read out topline results in the third quarter of 2022.

We expect to initiate a 12-week double-blind, placebo-controlled extension study which, combined with the 12-week Phase 1b NAFLD trial, will allow patients to receive up to a total of 24 weeks of continuous pemvidutide or placebo treatment and provide a read out on weight loss after 24 weeks of treatment, which is expected in the fourth quarter of 2022.

Based on the findings of the NAFLD study and evaluation of other priorities, we intend to initiate a 52-week biopsy-driven Phase 2 NASH study in 2022.

HepTcell is an immunotherapeutic product candidate for patients chronically infected with the hepatitis B virus (“HBV”).

Approximately 300 million people worldwide live with chronic HBV infection, including approximately 2.2 million in the United States.

Approximately 300 million people worldwide live with chronic HBV infection, including approximately 2.2

million in the United States.

Chronic HBV infection can lead to serious complications, including cirrhosis and liver cancer.

Approximately 780,000 people die per year worldwide due to cirrhosis and liver cancer.

Current antivirals prevent disease progression but rarely clear chronic infection.

HepTcell is designed to drive CD4+ and CD8+ T-cell responses against all HBV genotypes in patients of all ethnic backgrounds.

Stimulating T-cell responses in chronically infected HBV patients has been challenging because chronic infection with HBV and elevated hepatitis B surface antigen (HBsAg) levels strongly diminishes T-cell immunity directed against the virus.

HepTcell focuses the immune system on discrete highly conserved regions of the HBV proteome.

Stimulating T-cell responses in chronically infected HBV patients has been challenging because chronic infection with HBV strongly suppresses T-cell immunity directed against the virus.

HepTcell focuses the T cell response on discrete, highly conserved regions of the HBV proteome.

We believe our approach allows HepTcell to break immune tolerance by activating T-cells against critical viral sequences with decreased probability of immune escape due to viral mutation.

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The HepTcell Phase 1 trial was a double-blinded, placebo-controlled, randomized, dose-escalation study that enrolled 61 subjects with chronic HBV who were HBeAg-negative and well-controlled on licensed antivirals.

A total of 41 patients received one of two dose levels of HepTcell, with and without IC31 TM , a depot-forming TLR9 adjuvant developed by Valneva SE, while 20 control patients received either placebo or IC31 alone.

Patients received three injections each 28 days apart and were followed for six months after the final dose.

All dose combinations showed excellent tolerability and met the primary endpoint of safety.

A total of 41 patients received one of two dose levels of HepTcell, with and without IC31™, a depot-forming TLR9 adjuvant developed by Valneva SE, while 20 control patients received either IC31 alone or placebo.

Patients received three injections 28 days apart and were followed for six months after the final dose.

All dose combinations were generally well-tolerated and met the primary endpoint of safety.

In the two adjuvanted HepTcell arms, T-cell responses against HBV markedly increased over baseline compared to placebo.

The table below presents the immunogenicity against hepatitis B epitopes that was demonstrated in our Phase 1 clinical trial:

We initiated a Phase 2 study during Q4 2020 in the United States, Canada and Europe that is a double-blind, randomized, placebo-controlled study of 80 adult patients with HBeAg-negative inactive CHB and HBsAg ≤ 100 IU/mL.

HepTcell will be administered in 6 doses at 4-week intervals for 24 weeks, and patients will be followed for one year to evaluate safety and durability of response.

The primary efficacy endpoint is virological response, defined as a 1-log reduction in HBsAg levels from baseline at 24 weeks.

Secondary efficacy endpoints include reactivation of anti-HBV T cell responses, HBsAg clearance, and other assessments of virologic response.

We expect data from this study in the first quarter of 2022.

Patients with HBsAg ≤ 100/mL are more likely to mount effective T cell responses against HBV than those with higher levels.

The vision is that HepTcell could be used in combination with newer direct acting agents that may be more effective than nucleosides in reducing HBsAg to this level.

HepTcell is being administered in 6 doses at the low dose level of HepTcell plus IC31™ at 4-week intervals for 24 weeks, and patients will be followed for one year to evaluate safety and durability of response.

The primary efficacy endpoint is virological response, defined as a 1-log reduction in HBsAg levels from baseline or HBsAg clearance at 24 weeks.

Secondary efficacy endpoints include reactivation of anti-HBV T cell responses and other assessments of virologic response.

We expect data from this study in the first half of 2023.

A follow-up phase will assess the safety and durability of response one year after completion of treatment.

Discontinued Programs

AdCOVID was an intranasal COVID-19 vaccine candidate designed to guard the respiratory tract from viral invasion and to provide protection against viral spread through stimulation of both mucosal and systemic antibodies (IgA

and IgG) as well as cell-mediated immunity.

By stimulating mucosal immunity in the nasal cavity, a key point of entry and replication for the SARS-CoV-2 virus, we believed that AdCOVID had the potential to defend against both the infection and spread of the virus to others.

We submitted an IND to the FDA in the fourth quarter of 2020 and received clearance from the FDA in February 2021 to initiate a Phase 1 clinical trial of AdCOVID.

The Phase 1 clinical trial evaluated the safety and immunogenicity of AdCOVID in 92 healthy adult volunteers between the ages of 18 and 55.

In June 2021, we announced the discontinuation of the development program for AdCOVID following our review of findings from the Phase 1 clinical trial and in consideration of the highly competitive COVID-19 landscape.

In the study, the tolerability of AdCOVID was similar to placebo, but the immunogenicity data demonstrated lower than expected immune responses for each of the immune parameters tested.

T-COVID was an intranasal immune modulating therapeutic candidate based on the same replication-deficient adenovirus 5 (“RD-Ad5”) vector technology behind our other intranasal vaccine candidates, but it acted through a different mechanism that may have involved the innate immune system.

With the support of the U.S.

Army Medical Research & Development Command in collaboration with the Medical Technology Enterprise Consortium, during 2020, we initiated a placebo-controlled Phase 1/2 double-blind clinical trial to evaluate the potential of T-COVID to prevent clinical worsening in patients with early COVID-19.

The trial was expected to enroll 96 community-based patients who were 18 years and older that present with fever, cough, or shortness of breath, with onset of symptoms within 48 hours, and a diagnosis of COVID-19 within 72 hours.

The primary endpoint of the trial was the proportion of patients with clinical worsening, defined as a 4% decrease in pulse oxygen saturation, or the need for hospitalization.

Secondary endpoints measured the average decrease in resting pulse oxygen saturation, average increase in resting pulse rate and proportion of patients requiring oxygen supplementation and mechanical ventilation.

However, the effective rollout in the U.S.

of authorized COVID-19 vaccines and decreasing incidence of disease significantly reduced the number of patients meeting our enrollment criteria, and we had been unable to enroll subjects in the final cohort, the cohort most likely to benefit from T-COVID.

As a result of enrollment challenges, we decided to terminate further enrollment and have terminated the development of T-COVID.

NasoShield was an anthrax vaccine product candidate designed to provide rapid and stable protection after a single intranasal administration.

It was being developed with the support of the U.S.

Biomedical Advanced Research and Development Authority (“BARDA”) for post-exposure prophylaxis against anthrax following exposure to aerosolized B.

anthracis spores.

We commenced a Phase 1b trial of NasoShield in adults in 2020 which builds on the Phase 1a trial completed in 2018 and evaluated the effect of modified methods of intranasal dosing on NasoShield safety and immunogenicity.

The trial enrolled 42 healthy subjects who received intranasally administered NasoShield or saline placebo and were then monitored for 6 months post-dosing.

The primary endpoint was the safety and tolerability of NasoShield.

The primary immunogenicity readouts included the serum binding antibody to protective antigen and anthrax toxin blocking antibody responses at 28- and 56-days post-dose administration.

Stimulation of the mucosal IgA immune response in the nasal cavity was also assessed.

In April 2021, we received clinical data from the Phase 1b trial that showed positive immunogenicity results and a NasoShield tolerability profile similar to placebo.

On December 31, 2021, the development support from BARDA ended and we have discontinued further development of the program.

NasoVAX was a recombinant intranasal vaccine product candidate that was being developed for both seasonal and pandemic use.

We believed NasoVAX could simultaneously activate the humoral, mucosal and cellular immune arms which may enable a more comprehensive immune response.

The data from our Phase 2a trial with a monovalent NasoVAX vaccine indicated that NasoVAX achieved 100% seroprotection based on serum antibody responses, which was comparable to published results of a licensed injected influenza vaccine.

Statistically significant increases in mucosal antibody were noted as well as a robust T cell response directed against influenza.

The tolerability profile of NasoVAX was similar to placebo.

Approximately half of the subjects from the highest dose were evaluated between 12 and 14 months after initial dosing for additional immunogenicity assessment.

The durability data show that the immune response elicited by NasoVAX was stable with no overall change in the antibody titer or level of seroprotection over an average of

After evaluating the development path of NasoVAX, we have discontinued further development of the program.

Key elements of our strategy include the following:

Apply our RespirVec platform technologies to design and develop vaccines and therapeutics tailored to address a wide range of infectious diseases, including COVID-19, anthrax, and influenza;

Apply our EuPort platform technologies to design and develop treatments for NASH, obesity, and other metabolic diseases;

Apply our Densigen platform technologies to design and develop immunotherapeutic products tailored to address acute and chronic infections;

● Apply our EuPort platform technologies to design and develop treatments for obesity, NASH and other metabolic diseases;

● Strategically partner or out-license certain product candidates at later stages of development to focus our efforts on early to mid-stage product development;

In-license or acquire complementary immunotherapeutic technologies and product candidates that are either synergistic or complementary to our capabilities to expand our pipeline.

● In-license or acquire complementary metabolic or immunotherapeutic technologies and product candidates that are either synergistic or complementary to our capabilities to expand our pipeline.

Our Technology Platforms

Certain product candidates are based on our proprietary platform technologies as described below:

Intranasal Vaccines - RespirVec

NasoShield, NasoVAX, AdCOVID and T-COVID, our respiratory anti-infective product candidates, are derived from our RespirVec platform, which is designed to elicit rapid and long-term immune protection by intranasal delivery of adenovectored pathogen sequences.

We believe that our RespirVec technology may be particularly well-suited for pandemic response to respiratory pathogens as a result of its ability to stimulate mucosal immunity in the nasal cavity, a site of viral attack.

RespirVec is designed to stimulate serum neutralizing antibody and cellular immune response for a broad immune response and is stable at room temperature

for several months.

We believe that the favorable stability profile of RespirVec vaccines, when combined with the simple intranasal route of administration, has the potential for efficient and inexpensive distribution of the vaccine in a pandemic.

RespirVec technology is comprised of intranasal delivery of replication-deficient adenoviruses and is protected by patents that we own or license.

Key aspects of our RespirVec technology, supported by findings in our preclinical studies and clinical trials, include its potential to:

enable intracellular expression of the vaccine antigen for authentic immune presentation;

mobilize the innate, cellular and mucosal immune systems, not just the antibody-based response triggered by conventional injectable vaccines;

elicit a more durable antibody response than typical licensed injectable vaccines;

provide a self-adjuvanting adenovector delivery system with the potential to improve immunogenicity;

allow a rapid production cycle at anticipated lower costs.

Incretin-based Peptide Technology – EuPort

EuPort is a platform technology exclusively licensed by us and comprises a hydrophobic domain (e.g., substituted or unsubstituted alkyl chain) and a hydrophilic group (e.g., saccharide) conjugated to a non-terminal amino acid of the peptide.

Pursuant to a license agreement between the Company and Mederis Diabetes, LLC (“Mederis”) (the “Mederis IP License Agreement”), we are the exclusive licensee of patent rights owned by Mederis to develop and commercialize surfactant functionalized (“EuPort domain”) incretin-based peptide therapeutics, including GLP-1, Glucagon, Oxyntomodulin, and variants thereof, for any indication, and Mederis has certain patent rights granted back to it for the use of the EuPort technology outside of the Company’s exclusive field of incretin-based peptide therapeutics.

ALT-801, our GLP-1/ Glucagon dual agonist, was developed using the EuPort technology and is based on peptides at least four amino acids in length that bind receptors for Glucagon and/or GLP-1, conjugated to an alkyl saccharide surfactant, including an alkyl glycoside surfactant.

EuPort is a platform technology that comprises a hydrophobic domain (e.g., substituted or unsubstituted alkyl chain) and a hydrophilic group (e.g., saccharide) conjugated to a non-terminal amino acid of the peptide.

The technology, on which pemvidutide is based, allows the peptide to bind extensively to albumin, an abundant protein in the blood, slowing the elimination of the peptide and increasing its serum half-life, allowing for weekly instead of daily dosing, for example.

EuPort technology may also slow the entry of the peptide into the circulation following subcutaneous injection which may lead to improvements in tolerability or other characteristics of the peptide as have been observed with pemvidutide.

We have license rights to develop incretin-based peptide therapeutics based on EuPort technology for any indication.

Key aspects of our EuPort technology, supported by findings in our preclinical studies, include its potential to:

Induce significant weight loss;

Enhance pharmacokinetics for gastrointestinal tract tolerability;

Improve metabolic function and exhibit pleiotropic effects, including suppression of genes associated with steatosis, inflammation and stellate cell fibrosis by RNA sequencing.

● increase the serum half-life of the peptide allowing for extended dosing intervals;

● slow the entry of the peptide into the circulation, increasing the Tmax of the peptide, and potentially improving the tolerability of the peptide.

Synthetic Peptide Technology - Densigen

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● prompt a stronger immune response than naked peptides due to depot effect caused by attaching a biologically inert fluorocarbon chain to each peptide.

The biopharmaceutical industry and the vaccine market are intensely competitive and are characterized by rapid technological progress.

Intranasal Vaccines – RespirVec

Our RespirVec platform is designed to elicit rapid and long-term immune protection by intranasal delivery of adenovectored pathogen sequences.

We believe that our RespirVec technology may be particularly well-suited for respiratory pathogens as a result of its ability to stimulate mucosal immunity in the nasal cavity, a site of viral attack.

RespirVec is designed to stimulate serum neutralizing antibody and cellular immune response for a broad immune response and is stable at room temperature for several months.

RespirVec technology is comprised of intranasal delivery of replication-deficient adenoviruses and is protected by patents that we own or license.

Key aspects of our RespirVec technology, supported by findings in our preclinical studies and clinical trials, include its potential to:

● enable intracellular expression of the vaccine antigen for authentic immune presentation;

● mobilize the innate, cellular and mucosal immune systems, not just the antibody-based response triggered by conventional injectable vaccines;

● elicit a more durable antibody response than typical licensed injectable vaccines;

● provide a self-adjuvanting adenovector delivery system with the potential to improve immunogenicity;

● allow a rapid production cycle at anticipated lower costs.

The biopharmaceutical industry is intensely competitive and is characterized by rapid technological progress.

In general, competition among pharmaceutical products is based in part on product efficacy, safety, reliability, availability, price and patent position.

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Accordingly, the speed with which we can develop products, complete the clinical trials and approval processes and supply commercial quantities of the products to the market is an important competitive factor.

Our competitive position also depends upon our ability to show differentiation with a product that is more efficacious, particularly in the relevant target populations, and/or be less expensive and quicker to manufacture.

Our competitive position also depends upon our ability to show differentiation with a product that is either more efficacious, particularly in the relevant target populations, offers a better safety or tolerability profile, is less expensive or quicker to manufacture, or represents a combination of these advantages.

We also depend upon our ability to attract and retain qualified personnel, obtain patent protection or otherwise develop proprietary products or processes and secure sufficient capital resources for the often substantial period between technological conception and commercial sale.

Large and established companies such as Roche, Novartis, Pfizer and Sanofi Pasteur, among others, compete in the same market as our product candidates.

Large and established companies such as Eli Lilly, Roche, Novo Nordisk and Pfizer, among others, compete in the same market as our product candidates.

These companies compete with us with their greater experience and resources to support their research and development efforts, conduct testing and clinical trials, obtain regulatory approvals to market products, manufacture such products on a broad scale and market approved products.

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We also face competition from smaller companies who, like us, rely on investors to fund research and development and compete for co-development and licensing opportunities from large and established pharmaceutical companies.

We face competition from multiple biotechnology and bio-pharmaceutical companies, such as Pfizer, Moderna, AstraZeneca, Regeneron and Johnson & Johnson, that are in the process of developing vaccines and therapeutics against COVID-19.

Certain of these vaccine and therapeutic technologies are being developed at a faster rate than AdCOVID and T-COVID or have superior immunogenicity or manufacturability attributes.

We face competition for NasoShield, our single dose intranasal anthrax vaccine product candidate, from Emergent Biosolutions which manufactures the existing anthrax vaccine.

Additionally, we generally face substantial competition for government funding from companies that develop products with government contracts and grants.

We face competition for NasoVAX, our intranasal influenza candidate from Novavax, which is developing an influenza vaccine;

and a number of companies of varying sizes are also pursuing the development of a “universal” flu vaccine.

We face competition for ALT-801, our dual GLP-1/glucagon dual agonist for the treatment of NASH, from companies such as Intercept Pharmaceuticals, which is developing a farnesoid X receptor agonist;

Madrigal Pharmaceuticals, which is developing an orally administered, small-molecule, liver-directed, thyroid hormone receptor (THR) β-selective agonist;

and, Akero Therapeutics, which is developing a fibroblast growth factor 21 analog.

Finally, we face competition for HepTcell, our immunotherapeutic HBV product candidate, from companies such as Transgene which is developing an adenovirus-based vaccine;

Arrowhead Pharmaceuticals, which is developing an HBV therapeutic vaccine;

and Inovio, which is developing a DNA vaccine delivered by in vivo electroporation.

Any of these companies may develop competing products more rapidly than we do.

We face competition for pemvidutide, our dual GLP-1/glucagon dual agonist for the treatment of obesity and NASH.

For obesity, we face competition from companies such as Novo Nordisk, whose GLP-1 agonist, brand named Wegovy, or compound name semaglutide, was approved in June 2021.

Other companies with potentially competitive candidates in development, include Eli Lilly with GLP-1/glucose-dependent insulinotropic polypeptide receptor (“GIP”)

dual agonists;

Boehringer Ingelheim, Merck/Hamni Pharmaceutical, AstraZeneca, Innovent Biologics/Eli Lilly and D&D Pharma, with GLP-1/glucagon receptor dual agonists;

Hanmi Pharmaceutical and Eli Lilly with GLP-1/glucagon/GIP triple agonists;

and Novo Nordisk with Amylin and Amylin-GLP-1 combination candidates.

We face competition in NASH from companies such as Intercept Pharmaceuticals, which is developing a farnesoid X receptor (“FXR”) agonist;

Madrigal Pharmaceuticals and Viking Therapeutics, which are developing orally administered, thyroid hormone receptor (“THR”) β-selective agonist;

Akero Therapeutics, 89Bio, Novo Nordisk and Roche, which are developing fibroblast growth factor 21 analogs;

Novo Nordisk, which is developing a GLP-1 agonist;

Eli Lilly which is developing a GLP-1/GIP dual receptor agonist;

Merck, which is developing a GLP-1/glucagon dual receptor agonist;

Hanmi Pharmaceutical, which is developing a GLP-1/glucagon receptor/GIP receptor triple agonist;

and, Inventiva, which is developing a pan-peroxisome proliferator-activated receptor (“PPAR”) agonist.

Finally, we face competition for HepTcell, our immunotherapeutic HBV product candidate, from companies such as Janssen, Vaccitech and VBI Vaccines, all of which are developing a therapeutic vaccine against chronic HBV infection.

In addition, many other companies are developing direct acting antivirals against HBV.

Intellectual Property

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Immunotherapy for Respiratory Pathogens — Intranasal Application of Adenoviral Vector Vaccines

We are developing a rapid and prolonged immunologic-therapeutic technology, for which we have a patent issued or allowed in the United States, Europe, South Korea and Japan for respiratory pathogens including influenza, coronavirus and anthrax;

We have developed a rapid and prolonged immunologic-therapeutic technology, for which we have a patent issued or allowed in the United States, Europe, South Korea and Japan for respiratory pathogens including influenza, coronavirus and anthrax;

and pending applications in the United States, Europe, Japan and other commercially relevant jurisdictions.

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The patent and, if issued, the patent(s) resulting from the pending applications have an expiration date no earlier than March 2032, not giving effect to any potential extensions and assuming payment of all associated fees.

We are also developing methods of administering and dosing the intranasal adenoviral vector vaccine compositions, for which we have an international (PCT) patent application filed, with expectation that in due course in jurisdictions of commercial consideration (e.g., United States, Europe, Japan) there will be national or regional patent applications based on the PCT.

We have also developed methods of administering and dosing the intranasal adenoviral vector vaccine compositions, for which we have an international (“PCT”) patent application filed, with expectation that in due course in jurisdictions of commercial consideration (e.g., United States, Europe, Japan) there will be national or regional patent applications based on the PCT.

The claims are directed to transmucosal administration of our respiratory anti-infective product candidates based on our RespirVec platform technology.

The patent(s), if issued, resulting from the pending application have an expiration date of no earlier than August 2040, not giving effect to any potential extensions and assuming payment of all associated fees.

The patent(s), if issued, resulting from the pending

application have an expiration date of no earlier than August 2040, not giving effect to any potential extensions and assuming payment of all associated fees.

PER.C6 Cell Line — In-Licensed from Janssen Vaccines & Prevention B.V.

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Under the amended license agreement, we obtained a non-exclusive, worldwide license (with the right to sublicense) under certain patent rights and know-how to use Janssen’s proprietary cell line to develop, manufacture and commercialize vaccines to prevent and/or treat influenza virus and anthrax infection in humans.

In consideration for the license, we paid an up-front license fee, issued equity shares, and agreed to pay certain development-based milestone payments through approval of licensed products by the Food and Drug Administration (“FDA”), up to an aggregate amount of approximately $2.5 million.

In consideration for the license, we paid an up-front license fee, issued equity shares, and agreed to pay certain development-based milestone payments through approval of licensed products by the FDA, up to an aggregate amount of approximately $2.5 million.

We also agreed to pay royalty payments as a percentage of net sales of products in any country where the manufacture of such product is covered by a valid claim of any licensed patent or uses licensed know-how, subject to a royalty stacking reduction and minimum annual royalty payments, until the expiration of the term of the amended agreement.

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We additionally entered into Amendment No.

4, 5 and 6 throughout

2020 to add additional manufacturing partners related to manufacturing AdCOVID .

As of December 31, 2020 , we have paid Janssen $2.

7 million in cash and equity under the amended agreement.

4, 5 and 6 throughout 2020 to add additional manufacturing partners related to manufacturing AdCOVID.

As of December 31, 2021, we have paid Janssen $2.9 million in cash and equity under the License Agreement.

Patent Rights Related to our EuPort Platform Technology

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The EuPort domain comprises a hydrophobic domain (e.g., substituted or unsubstituted alkyl chain) and a hydrophilic group (e.g., saccharide) conjugated to a non-terminal amino acid of the peptide.

Patents under Mederis IP License Agreement have been granted in the United States and Korea, and applications pending in the United States, Japan as well as other commercially relevant jurisdictions.

Patents under Mederis IP License Agreement have been granted in the United States, Japan and Korea, and applications pending in the United States, Japan as well as other commercially relevant jurisdictions.

The claims are directed to peptides (at least four amino acids in length), including peptides that bind receptors for Glucagon and/or GLP-1, conjugated to an alkyl saccharide surfactant, including an alkyl glycoside surfactant.

The patents and, if issued, the patent(s) resulting from the pending application(s) have an expiration date of no earlier than May 2032, not giving effect to any potential extensions and assuming payment of all associated fees.

Patents subject to the Mederis IP License Agreement have also been granted in the United States, and Japan, and applications pending in the United States, Europe, Japan, China and other commercially relevant jurisdictions, wherein the claims are directed to specific GLP-1 and/or Glucagon peptides conjugated to the EuPort domain.

Patents subject to the Mederis IP License Agreement have also been granted in the United States, Australia, Israel and Japan, and applications pending in the United States, Europe, Japan, China and other commercially relevant jurisdictions, wherein the claims are directed to specific GLP-1 and/or Glucagon peptides conjugated to the EuPort domain.

The patents and, if issued, the patent(s) resulting from the pending application(s) have an expiration date of no earlier than May 2035.

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Formulation of Antigen Delivery Vectors — Manufacturing Process for the Final Formulation of the Antigen Delivery Vectors

We are developing a manufacturing process for solubilizing certain fluorocarbon peptides and final lyophilized compositions thereof that are soluble in an aqueous solution, for which we have a patent issued in the United States, Europe and Japan and patent applications pending in the United States and Japan, as well as other commercially relevant jurisdictions.

We are developing a manufacturing process for solubilizing certain fluorocarbon peptides and final lyophilized compositions thereof that are soluble in an aqueous solution, for which we have patents issued in the United States, Europe, Korea and Japan and patent applications pending in the United States and Japan, as well as other commercially relevant jurisdictions.

The claims are directed to methods of solubilizing certain fluorocarbon antigen peptides using acetic acid formulations and manufactured lyophilized compositions thereof that are soluble in an aqueous solution.

The patent and, if issued, the patent(s) resulting from the pending patent applications are expected to have an expiration date no earlier than December 2031, not giving effect to any potential extensions and assuming payment of all associated fees .

The patents and, if issued, the patent(s) resulting from the pending patent applications, are expected to have an expiration date no earlier than December 2031, not giving effect to any potential extensions and assuming payment of all associated fees.

Patent Rights Related to Our Product Candidates

AdCOVID, COVID-19 Vaccines

We are developing an intranasal COVID-19 vaccine candidate based on our replication-deficient adenoviral vectored RespirVec platform technology, for which we have a patent application filed in the United States, Taiwan, Argentina and an international (PCT) patent application filed, with expectation that in due course in jurisdictions of commercial consideration (e.g., Europe, Japan) there will be national or regional patent applications based on the PCT.

The claims are directed to the AdCOVID vaccine composition and its method of use.

If issued, patent(s) resulting from the pending application(s) have an expiration date of no earlier than February 2041, not giving effect to any potential extensions and assuming payment of all associated fees.

AdCOVID is further covered by our patent rights related to our RespirVec platform technology, for which we have patent applications pending in the US, Europe and Japan.

The claims are directed to a method of inducing an innate immune response against coronavirus following intranasal administration of an effective amount of E1 and/or E3 deleted adenovirus expressing a coronavirus antigen.

The patent application(s), if issued, would have an expiration date no earlier than March 2032, not giving effect to any potential extensions and assuming payment of all associated fees.

Use and dosing of AdCOVID is further covered by an international (PCT) patent application, from which we expect to file national and regional applications in the U.S., Europe and other commercially

relevant jurisdictions.

The claims are directed to transmucosal administration of our respiratory anti-infective product candidates, including AdCOVID.

If issued, the patents resulting from the pending applications have an expiration date of no earlier than August 2040, not giving effect to any potential extensions and assuming payment of all associated fees .

T-COVID, COVID-19 Therapeutic

We are developing an intranasal COVID-19 therapeutic candidate based on our replication-deficient adenoviral vectored RespirVec platform technology, for which we have a patent application filed in the United States, Taiwan, Argentina and an international (PCT) patent application filed, with expectation that in due course in jurisdictions of commercial consideration (e.g., Europe, Japan) there will be national or regional patent applications based on the PCT.

The claims are directed to the T-COVID therapeutic composition and its method of use.

T-COVID is further covered by our patent rights related to our RespirVec platform technology, for which we have a granted patent in Europe and have recently received a Notice of Allowance from the United States Patent and Trademark Office (“USPTO”) for claims directed to a method of inducing an innate immune response against coronavirus.

That patent, once issued, will have an expiration date of no earlier than March 2032.

Use and dosing of T-COVID is further covered by an international (PCT) patent application, from which we expect to file national and regional applications in the U.S., Europe and other commercially relevant jurisdictions.

The claims are directed to transmucosal administration of our respiratory anti-infective product candidates, including T-COVID.

If issued, patent(s) resulting from the pending application(s) have an expiration date of no earlier than August 2040, not giving effect to any potential extensions and assuming payment of all associated fees.

NasoShield, Anthrax Vaccine

We are developing a rapid and prolonged immunologic-therapeutic technology for anthrax (NasoShield), for which we have a patent granted in the United States, Canada, Europe and Japan.

Additional patent applications are pending in the United States, Europe, Japan and other commercially relevant jurisdictions.

The issued and pending claims are directed to methods for inducing a rapid protective response against anthrax, comprising intranasal administration of an effective amount of E1 and/or E3-deleted adenovirus expressing a Bacillus anthracis antigen.

The patent, if issued, resulting from the pending applications are expected to have an expiration date no earlier than March 2032, not giving effect to any potential extensions and assuming payment of all associated fees.

NasoShield is further covered by an issued and pending U.S.

The issued claims are directed to methods of inducing a protective immune response against inhalation anthrax, comprising intranasal administration of an adenoviral vector expressing anthrax protective antigen.

The patent has an expiration date no earlier than July 2024, not giving effect to any potential extensions and assuming payment of all associated fees.

Use and dosing of NasoShield is further covered by an international (PCT) patent application, from which we expect to file national and regional applications in the US, Europe and other commercially relevant jurisdictions.

The claims are directed to transmucosal administration of our respiratory anti-infective product candidates, including NasoShield.

If issued, the patent(s) resulting from the pending application(s) have an expiration date of no earlier than August 2040, not giving effect to any potential extensions and assuming payment of all associated fees.

NasoVAX, an Influenza Vaccine

We are developing a rapid and prolonged immunologic-therapeutic technology for influenza, for which we have a patent issued in the United States, Europe and Japan for influenza and patent applications pending in the United States, Canada, Europe and Japan, as well as other commercially relevant jurisdictions.

The issued and pending claims are directed to methods for inducing a rapid protective response against influenza, comprising intranasal administration of an effective amount of E1 and/or E3 deleted adenovirus.

The patent and, if issued, the patent(s) resulting from the pending applications are expected to have an expiration date no earlier than March 2032, not giving effect to any potential extensions and assuming payment of all associated fees.

Use and dosing of NasoVAX is further covered by an international (PCT) patent application, from which we expect to file national and regional applications in the U.S., Europe and other commercially relevant jurisdictions.

The claims are directed to transmucosal administration of our respiratory anti-infective product candidates, including NasoVAX.

The patents, if issued, resulting from the pending application have an expiration date of no earlier than August 2040, not giving effect to any potential extensions and assuming payment of all associated fees.

Single dose NasoVAX formulations and their use for inducing a combined mucosal, humoral and T cell immune response against influenza virus is further covered by an international (PCT) patent application, from which we expect to file national and

regional applications in commercially relevant jurisdictions, and a pending U .

patent application.

The claims are directed to a single dose NasoVAX intranasal formulation and its use for inducing a combined immune response in humans providing durable immunity against influenza.

If issued, patent(s) resulting from the pending application(s) have an expiration date of no earlier than April 2040, not giving effect to any potential extensions and assuming payment of all associated fees .

ALT-801, Dual GLP-1/Glucagon Dual Agonist for NASH

Pemvidutide, Dual GLP-1/Glucagon Dual Agonist for NASH

We are the exclusive licensee of patent rights owned by Mederis Diabetes, LLC (“Mederis”) to develop and commercialize surfactant functionalized GLP-1/Glucagon/Oxyntomodulin-based peptide therapeutics, and variants thereof, for any use including the treatment of obesity, metabolic syndrome, insulin resistance, diabetes and cardiovascular disease.

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The claims are directed to GLP-1/glucagon dual agonist peptides conjugated to a surfactant and their use to treat metabolic syndrome, obesity and other related diseases.

The patents and, if issued, the patent(s) resulting from the pending application(s) have an expiration date of no earlier than May 2032 and extending to May 2035, not giving effect to any potential extensions and assuming payment of all associated fees.

Use of ALT-801 for treating NASH is further covered by, and subject to the Mederis IP License Agreement, pending applications in the U.S., Europe, Japan and other commercially relevant jurisdictions.

The patents and, if issued, the

patent(s) resulting from the pending application(s) have an expiration date of no earlier than May 2032 and extending to May 2035, not giving effect to any potential extensions and assuming payment of all associated fees.

Use of pemvidutide for treating NASH is further covered by, and subject to the Mederis IP License Agreement, pending applications in the U.S., Europe, Japan and other commercially relevant jurisdictions.

If issued, the patent(s) resulting from the pending application(s) have an expiration date of no earlier than January 2039, not giving effect to any potential extensions and assuming payment of all associated fees.

Use of ALT-801 in methods with improved tolerability, dosing and therapeutic regimens is further covered in two pending U.S.

provisional patent applications owned by us and not subject to the Mederis IP License Agreement, and from which we expect to file U.S.

and international patent applications.

The claims are directed to the use of ALT-801 in a therapeutic dosing regimen with improved tolerability.

If issued, the patent(s) resulting from the pending application(s) have an expiration date of no earlier than February 2041 and December 2041, respectively, not giving effect to any potential extensions and assuming payment of all associated fees.

Use of pemvidutide in methods with improved tolerability, dosing and therapeutic regimens is further covered in a U.S.

patent application and PCT patent application owned by us and not subject to the Mederis IP License Agreement, and from which we expect to file National Phase patent applications in commercially relevant jurisdictions.

The claims are directed to the use of pemvidutide in a therapeutic dosing regimen with improved tolerability.

If issued, the patent(s) resulting from the pending application(s) have an expiration date of no earlier than February 2041 not giving effect to any potential extensions and assuming payment of all associated fees.

Use of pemvidutide in methods for inducing weight loss is further covered in a U.S.

patent application and corresponding PCT patent application owned by us and not subject to the Mederis IP License Agreement, and from which we expect to file National Phase patent applications in commercially relevant jurisdictions.

The claims are directed to the use of pemvidutide in a therapeutic dosing regimen for chronic weight management.

If issued, the patent(s) resulting from the pending application(s) have an expiration date of no earlier than December 2041, not giving effect to any potential extensions and assuming payment of all associated fees.

HepTcell, Chronic Hepatitis B Immunotherapy

We are developing an HBV immunotherapy technology directed to compositions comprising fluorocarbon constructs with specific peptide HBV antigen sequences.

We have an issued patent for this technology in the United States, and pending applications in the United States, Europe, Japan, China and Korea, as well as other commercially relevant jurisdictions.

We have an issued patent for this technology in the United States, Europe, Japan and Korea and pending applications in the United States, Europe, Japan, China and Korea, as well as other commercially relevant jurisdictions.

The claims are directed to HBV antigen peptide sequences comprising T-cell epitopes linked to fluorocarbon chains and compositions comprising a combination of HBV antigen peptide sequences.

If issued, the patent(s) resulting from the pending patent applications are expected to have an expiration date no earlier than December 2033, not giving effect to any potential extensions and assuming payment of all associated fees.

The patents, and if issued, the patent(s) resulting from the pending patent applications, are expected to have an expiration date no earlier than December 2033, not giving effect to any potential extensions and assuming payment of all associated fees.

HepTcell is also covered by the patents and patent applications relating to our Densigen platform technology.

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MTEC COVID-19 Contract

We are funding our Phase 1/2 clinical trial of T-COVID with a $4.7 million grant from the U.S.

We funded our Phase 1/2 clinical trial of T-COVID with a $4.7 million grant from the U.S.

Army Medical Research & Development Command (“USAMRDC”).

The competitive award was granted by USAMRDC in collaboration with the Medical Technology Enterprise Consortium (“MTEC”), a 501(c)(3) biomedical technology consortium working in partnership with the Department of Defense (“DoD”).

Under the contract, MTEC pays us a firm fixed fee based on achieving certain milestones for conduct and completion of a Phase 1/2 study.

As of December 31, 2020, we have collected an aggregate of approximately $1.1 million in receivables under the contract.

Under the contract, MTEC paid us a firm fixed fee based on achieving certain milestones for conduct and completion of a Phase 1/2 study.

Through December 31, 2021, we have collected an aggregate of approximately $4.7 million in cash under the contract.

We own the intellectual property rights to inventions made by us in the performance of work under the MTEC contracts provided that we disclose such inventions to the U.S.

government and notifies the U.S.

government and notify the U.S.

government of our election to retain title.

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BARDA Anthrax Contract

We are developing our NasoShield anthrax vaccine pursuant to a contract with BARDA that commenced in July 2016.

Under this contract, BARDA pays us a fixed fee and reimburses certain of our costs for the research and development of an Ad5-vectored, protective antigen-based intranasal anthrax vaccine through current good manufacturing practice (“cGMP”) manufacture and conduct of a Phase 1 clinical trial dose ranging assessment of safety and immunogenicity.

The contract consists of an initial base performance period providing approximately $27.8 million in funding for the period July 2016 through June 2021.

BARDA has seven options to extend the contract to fund certain continued development and manufacturing activities for the anthrax vaccine, including Phase 2 clinical studies for a three-year period.

Each option, if exercised by BARDA, would provide additional funding ranging from approximately $1.1 million to $34.4 million, providing a total contract potential of $133.7 million.

As of December 31, 2020, we have collected an aggregate of approximately $24.7 million in receivables under the current BARDA contract.

We have been audited by BARDA through 2016 and have agreed on final indirect rates with the Defense Contract Audit Agency (“DCAA”) through 2016.

We were developing our NasoShield anthrax vaccine pursuant to a contract with BARDA that commenced in July 2016.

Under this contract, BARDA paid us a fixed fee and reimburses certain of our costs for the research and development of an Ad5-vectored, protective antigen-based intranasal anthrax vaccine through current good manufacturing practice (“cGMP”) manufacture and conduct of a Phase 1 clinical trial dose ranging assessment of safety and immunogenicity.

The contract consisted of an initial base performance period providing approximately $30.9 million in funding for the period July 2016 through December 2021.

BARDA had seven options to extend the contract to fund certain continued development and manufacturing activities for the anthrax vaccine, including Phase 2 clinical studies for a three-year period.

Each option, if exercised by BARDA, would have provided additional funding ranging from approximately $1.1 million to $34.4 million, providing a total contract potential of $136.8 million.

Through December 31, 2021, the end of the contract, we have collected an aggregate of approximately $29.2 million in cash under the current BARDA contract.

We have been audited by BARDA through 2019 and have agreed on final indirect rates with BARDA through 2019.

We own the intellectual property rights to inventions made by us in the performance of work under the BARDA contracts, provided that we disclose such inventions to the U.S.

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government of our election to retain title.

government will have a non-exclusive, non-transferable, irrevocable, paid-up license to practice, or have practiced for or on our behalf, such inventions throughout the world, in addition to other rights customarily reserved by the U.S.

government will have a non-exclusive, non-transferable, irrevocable, paid-up license to

practice, or have practiced for or on our behalf, such inventions throughout the world, in addition to other rights customarily reserved by the U.S.

government for intellectual property generated using government funds.

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government acting through BARDA, may terminate, modify or amend our contract, in whole or in part, for nearly any reason or no reason.

NIAID Anthrax Contract

Through the third quarter of 2019, we were developing our SparVax-L anthrax vaccine pursuant to a contract with the National Institute of Allergy and Infectious Diseases (“NIAID”).

SparVax-L, a recombinant protein-based anthrax vaccine, was designed to

require fewer doses and have a longer shelf life than the only currently licensed anthrax vaccine.

We demonstrated a significant improvement in shelf life (two years at room temperature and six years at refrigerated temperatures) with a lyophilized formulation.

Preclinical experiments showed it to be 100% protective with a two-dose regimen (administered on study Days 0 and 14 days) with higher protective (toxin neutralizing) antibodies than the currently licensed vaccine administered under the same schedule.

Activities under this contract were completed during the quarter ended September 30, 2019 and no further funding is expected for this program.

As a result of the contract completion and the U.S.

government’s funding prioritization of only single dose anthrax vaccine candidates, we abandoned the project and impaired the $1.0 million net book value of the SparVax-L IPR&D asset in 2019.

United States Government Regulation

Biological products, such as our product candidates, are subject to regulation under the Federal Food, Drug, and Cosmetic Act (“FD&C Act”), the Public Health Service (“PHS Act”), the FDA regulations under Title 21 of the Code of Federal Regulations (21 CFR), as well as other federal, state and local statutes and regulations.

Both the FD&C Act and the PHS Act and their corresponding regulations govern, among other things, the testing, research, manufacturing, approval, safety, efficacy, labeling, packaging, storage, record keeping, distribution, import, export, reporting, sale, advertising and other promotional practices involving biological products.

An investigational new drug (“IND”) application must be in effect before clinical testing of biological products can begin.

FDA approval must be obtained before biological products can be marketed.

The FDA regulates drugs and biological products under the Federal Food, Drug, and Cosmetic Act (“FD&C Act”), the Public Health Service Act (“PHS Act”), the FDA regulations under Titles 21 and 42 of the Code of Federal Regulations (21 CFR and 42 CFR), as well as other federal, state and local statutes and regulations.

The FD&C Act and the PHS Act and their corresponding regulations govern, among other things, the testing, research, manufacturing, approval, safety, efficacy, labeling, packaging, storage, record keeping, distribution, import, export, reporting, sale, advertising and other promotional practices involving drugs and biological products.

An IND application must be in effect before clinical testing of drugs and biological products can begin.

FDA approval must be obtained before drugs and biological products can be marketed.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources, and each process may take several years to complete, although certain expedited programs potentially applicable to our product candidates, such as FDA fast track designation for certain new drugs with the potential to address unmet medical needs for certain serious or life-threatening conditions, may potentially expedite development and/or approval processes.

Certain federal incentive programs are also potentially applicable to our product candidates, such as for “orphan drugs” that treat rare conditions, and programs supporting the development of bioterrorism medical countermeasures.

Certain federal incentive programs are also potentially applicable to our product candidates, such as for “orphan drugs” that treat rare conditions.

Data obtained from clinical activities is not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval.

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In addition, our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could adversely affect our ability to commercialize our product candidates.

Biological Products Development Process

The process required by the FDA before a biological product may be marketed in the United States generally involves the following:

Drug and Biological Products Development Process

The process required by the FDA before a drug or biological product may be marketed in the United States generally involves the following:

● completion of preclinical laboratory tests and animal studies according to applicable good laboratory practices (“GLP”), applicable requirements for the humane use of laboratory animals, such as the Animal Welfare Act or other applicable regulations;

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● obtaining approval by an independent Institutional Review Board (“IRB”) at each clinical site before a clinical trial may be initiated at that site;

performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinical practices (“GCP”) and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed biological product for its intended use;

submission to the FDA of a biologics license application (“BLA”) for marketing approval that includes substantial evidence of safety, purity and potency from results of clinical trials, as well as the results of preclinical testing, detailed information about the chemistry, manufacturing and controls, and proposed labeling and packaging for the product candidate;

● performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinical practices (“GCP”) and any additional requirements for the protection

of human research subjects and their health information, to establish the safety and efficacy of the proposed product for its intended use;

● submission to the FDA of a new drug application (“NDA”) or biologics license application (“BLA”) for marketing approval that includes substantial evidence of safety, purity and potency from results of clinical trials, as well as the results of preclinical testing, detailed information about the chemistry, manufacturing and controls, and proposed labeling and packaging for the product candidate;

● review of the product candidate by an FDA advisory committee, if applicable;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product candidate is produced to assess compliance with cGMP and to confirm that the facilities, methods and controls are adequate to assure the biological product candidate’s identity, strength, quality and purity ;

satisfactory completion of potential FDA audits of the preclinical study and clinical trial sites that generated the data in support of the BLA;

FDA review and approval, or licensure, of the BLA, including agreement on post-marketing commitments, if applicable.

Before testing any biological product candidate in humans, the product candidate enters the preclinical study stage.

● satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the product candidate is produced to assess compliance with cGMP and to confirm that the facilities, methods and controls are adequate to assure the product candidate’s identity, strength, quality and purity;

● satisfactory completion of potential FDA audits of the preclinical study and clinical trial sites that generated the data in support of the NDA or BLA;

● FDA review and approval, or licensure, of the NDA or BLA, including agreement on post-marketing commitments, if applicable.

Before testing any drug or biological product candidate in humans, the product candidate enters the preclinical study stage.

Preclinical studies include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the product candidate.

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In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

Even after the IND has gone into effect and clinical testing has begun, the FDA may also impose clinical holds on clinical trials due to safety concerns or non-compliance.

If the FDA imposes a clinical hold, studies may not recommence without FDA authorization and then only under terms authorized by the FDA.

Even after the IND has gone into effect and clinical testing has begun, the FDA may also impose a partial or complete clinical hold on clinical trials due to safety concerns or non-compliance.

A partial clinical hold would limit a trial, for example, to certain doses or for a certain length of time or to a certain number of subjects.

A complete clinical hold order issued by the FDA would delay a proposed clinical study or cause suspension of an ongoing study until all outstanding concerns have been adequately addressed and the FDA has notified the company that investigations may proceed or resume.

Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once the trials have begun, issues will not arise that suspend or terminate such studies.

Clinical trials involve the administration of the biological product candidate to healthy volunteers or patients under the supervision of qualified investigators.

Clinical trials involve the administration of the product candidate to healthy volunteers or patients under the supervision of qualified investigators.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety, including stopping rules that assure a clinical trial will be stopped if certain adverse events (“AEs”) should occur.

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

The biological product is initially introduced into a small group of healthy human subjects (e.g., 10 to 20 volunteers) and tested for safety and to develop detailed profiles of its pharmacological and pharmacokinetic actions, determine side effects associated with increasing doses, and, if possible, gain early evidence of effectiveness.

The drug or biological product is initially introduced into a small group of healthy human subjects (e.g., 10 to 20 volunteers) and tested for safety and to develop detailed profiles of its pharmacological and pharmacokinetic actions, determine side effects associated with increasing doses, and, if possible, gain early evidence of effectiveness.

In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.

The biological product is evaluated in a larger but limited patient population (e.g., a few hundred patients) to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule.

The drug or biological product is evaluated in a larger but limited patient population (e.g., a few hundred patients with the disease or conduction under study) to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule.

These clinical trials are undertaken to further evaluate dosage, clinical efficacy, potency and safety in an expanded patient population (e.g., several hundred to several thousand patients) at geographically dispersed clinical trial sites.

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The sponsor must submit an IND safety report within 15 calendar days after the sponsor determines that the information qualifies for reporting.

The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information.

The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within 7 calendar days after the sponsor’s initial receipt of the information.

Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all.

The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk.

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the biological product has been associated with unexpected serious harm to patients .

In limited circumstances, FDA also permits the administration of investigational biological products to patients under its expanded access regulatory authorities.

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug or biological product has been associated with unexpected serious harm to patients.

In limited circumstances, FDA also permits the administration of investigational small molecule drug or biological products to patients under its expanded access regulatory authorities.

Under the FDA’s expanded access authority, patients who are not able to participate in a clinical trial may be eligible for accessing investigational products, including through individual compassionate or emergency use in concert with their requesting physician.

For medical countermeasure (“MCM”) focused products, in particular, FDA has recently indicated that its expanded access authorities may be important in enabling quicker access to investigational products intended for MCM uses in the COVID-19 pandemic.

Concurrent with clinical trials, companies usually complete additional animal studies, develop additional information about the physical characteristics of the biological product candidate and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

Concurrent with clinical trials, companies usually complete additional animal studies, develop additional information about the physical characteristics of the drug or biological product candidate and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

To help reduce the risk of the introduction of adventitious agents with use of biological products, the PHS Act emphasizes the importance of manufacturing controls for products whose attributes cannot be precisely defined.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the sponsor must develop methods for testing the identity, strength, quality, potency and purity of the final biological product.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptable deterioration over its shelf life.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

Certain FDA programs are available to facilitate and expedite the development and review of new drugs intended to address unmet needs in the treatment of serious or life-threatening conditions.

These expedited programs include fast track designation, breakthrough therapy designation, priority review, and accelerated approval.

These expedited programs include fast

track designation, breakthrough therapy designation, priority review and accelerated approval.

Each of these programs has its own features and qualifying criteria.

A sponsor must submit a request for fast track designation, breakthrough therapy designation, or priority review, which may or may not be granted by the FDA.

For fast track and breakthrough therapy designations, FDA may later decide the product no longer meets the conditions for designation and may rescind the designation.

For accelerated approval, a sponsor generally discusses the possibility of accelerated approval with the FDA during development, and the FDA may or may not agree that accelerated approval is an appropriate pathway for a particular drug.

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Review and Approval Processes

After the completion of clinical trials of a biological product candidate, the FDA’s approval of a BLA must be obtained before commercial marketing of the biological product may begin.

The BLA must include results of product development, laboratory and animal studies, human studies, information on the manufacture and composition of the product, proposed labeling and other relevant information.

In addition, under the Pediatric Research Equity Act, as amended, a BLA or supplement to a BLA generally must contain data to assess the safety and effectiveness of the biological product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

After the completion of clinical trials of a drug or biological product candidate, the FDA’s approval of an NDA or BLA must be obtained before commercial marketing of the product may begin.

The NDA or BLA must include results of product development, laboratory and animal studies, human studies, information on the manufacture and composition of the product, proposed labeling and other relevant information.

In addition, under the Pediatric Research Equity Act, as amended, an NDA or BLA or supplement to an NDA or BLA generally must contain data to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The FDA may grant deferrals for submission of data or full or partial waivers depending on the designated pathway for submission.

The testing and approval processes require substantial time and effort and there can be no assurance that the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all.

Under the Prescription Drug User Fee Act (“PDUFA”), as amended, each BLA must be accompanied by a significant user fee.

The testing and approval processes require substantial time and effort and there can be no assurance that the FDA will accept the NDA or BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all.

Under the Prescription Drug User Fee Act (“PDUFA”), as amended, each NDA or BLA must be accompanied by a significant user fee.

PDUFA also imposes an annual prescription drug product program fee for biologics.

Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business.

Following submission of the application, the FDA reviews the BLA to determine if it is substantially complete before the agency accepts it for filing.

The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information.

In this event, the BLA must be resubmitted with the additional information.

Following submission of the application, the FDA reviews the NDA or BLA to determine if it is substantially complete before the agency accepts it for filing.

The FDA may refuse to file any NDA or BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information.

In this event, the NDA or BLA must be resubmitted with the additional information.

The resubmitted application also is subject to review before the FDA accepts it for filing.

Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the BLA.

FDA performance goals generally provide for action on a BLA within 10 months of the 60-day filing date, or within 12 months of its submission.

Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the NDA or BLA.

FDA performance goals generally provide for action on an NDA or BLA within 10 months of the 60-day filing date, which would be within 12 months of its submission.

That deadline can be extended under certain circumstances, including by the FDA’s requests for additional information.

The targeted action date can also be shortened to 6 months of the 60-day filing date, or 8 months after submission, for products that are granted priority review designation because they are intended to treat serious or life-threatening conditions and demonstrate the potential to address unmet medical needs.

The FDA reviews the BLA to determine, among other things, whether the proposed product is safe and potent, or effective, for its intended use, has an acceptable purity profile, and whether the product is being manufactured in accordance with cGMP to assure the product’s identity, safety, quality, potency and purity.

The FDA may refer applications for novel biological products or biological products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions.

The FDA reviews the NDA or BLA to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMP to assure the product’s identity, safety, quality, potency and purity.

The FDA may refer applications for drugs or biological products that are novel or that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

During the BLA review process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy (“REMS”) is necessary to assure the safe use of the biological product.

If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS;

the FDA will not approve the BLA without a REMS, if required.

Before approving a BLA, the FDA will inspect the facilities at which the product is manufactured.

The FDA will not approve the BLA unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with IND study requirements and GCP requirements.

During the NDA or BLA review process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy (“REMS”) is necessary to assure the safe use of the drug or biological product.

If the FDA concludes a REMS is

needed, the sponsor of the NDA or BLA must submit a proposed REMS;

the FDA will not approve the NDA or BLA without a REMS, if required.

A REMS could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products.

Before approving an NDA or BLA, the FDA will inspect the facilities at which the product is manufactured.

The FDA will not approve the NDA or BLA unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with IND study requirements and GCP requirements.

To assure cGMP and GCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production and quality control.

Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the BLA does not satisfy its regulatory criteria for approval.

Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the NDA or BLA does not satisfy its regulatory criteria for approval.

Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than how we interpret the same data.

If the agency decides not to approve the BLA in its present form, the FDA will issue a complete response letter that usually describes all of the specific deficiencies in the BLA identified by the FDA.

If the agency decides not to approve the NDA or BLA in its present form, the FDA will issue a complete response letter that usually describes all of the specific deficiencies in the NDA or BLA identified by the FDA.

The deficiencies identified may be minor, for example, requiring labeling changes;

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Additionally, the complete response letter may include recommended actions that the applicant may take for the FDA to reconsider the application.

If a complete response letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the complete response letter, or withdraw the application.

If a complete response letter is issued, the applicant may either resubmit the NDA or BLA, addressing all of the deficiencies identified in the complete response letter, or withdraw the application.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product.

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The FDA may impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a REMS, or otherwise limit the scope of any approval.

In addition, the FDA may require post-marketing clinical trials, sometimes referred to as Phase 4 clinical trials, designed to further assess a biological product’s safety and effectiveness, and testing and surveillance programs to monitor the safety of approved products that have been commercialized.

Post-approval modifications to a drug product, such as changes in indications, labeling or manufacturing processes or facilities, may require development and submission of additional information or data in a new or supplemental BLA, which would also require prior FDA approval.

In addition, the FDA may require post-marketing clinical trials, sometimes referred to as Phase 4 clinical trials, designed to further assess a product’s safety and effectiveness, and testing and surveillance programs to monitor the safety of approved products that have been commercialized.

Post-Approval Requirements

After regulatory approval of a product is obtained, products are subject to continuing extensive regulation and post-approval requirements.

For example, as a condition of approval of a BLA, the FDA may require post-marketing testing and surveillance to monitor the product’s safety or efficacy.

In addition, holders of an approved BLA are required to submit annual reports, keep extensive records, to report certain adverse reactions and production problems to the FDA, to provide updated safety and efficacy information and to comply with requirements concerning advertising and promotional labeling for their products.

Also, quality control and manufacturing procedures must continue to conform to cGMP regulations and practices, as well as the manufacturing conditions of approval set forth in the BLA.

After regulatory approval of a product is obtained, products are subject to extensive continuing regulation and post-approval requirements.

For example, as a condition of approval of an NDA or BLA, the FDA may require post-marketing testing and surveillance to monitor the product’s safety or efficacy.

In addition, holders of an approved NDA or BLA are required to keep extensive records, submit annual reports, report certain adverse reactions and production problems to the FDA, provide updated safety and efficacy information, and comply with requirements concerning advertising and promotional labeling for their products.

Also, quality control and manufacturing procedures must continue to conform to cGMP regulations and practices, as well as the manufacturing conditions of approval set forth in the NDA or BLA.

The FDA periodically inspects manufacturing facilities to assess compliance with cGMP, which imposes certain procedural, substantive and recordkeeping requirements.

Accordingly, manufacturers must continue to expend time,

money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

If, after receiving approval, a company makes a material change in manufacturing equipment, location, or process (all of which are, to some degree, incorporated in the BLA), additional regulatory review and approval may be required .

Future FDA inspections may identify cGMP compliance issues at manufacturer facilities or at the facilities of third-party suppliers that may disrupt production or distribution or require substantial resources to correct and prevent recurrence of any deficiencies and could result in fines or penalties by regulatory authorities.

In addition, discovery of problems with a product or the failure to comply with applicable requirements may result in restrictions on a product, manufacturer or holder of an approved BLA, including withdrawal or recall of the product from the market or other voluntary, FDA-initiated or judicial action, including warning letters, fines, injunctions, civil penalties, license revocations, seizure, total or partial suspension of production or criminal penalties, any of which could delay or prohibit further marketing.

Manufacturers and other parties involved in the drug supply chain for prescription drug products also must comply with product tracking and tracing requirements and notify the FDA of counterfeit, diverted, stolen and intentionally adulterated products or products that are otherwise unfit for distribution in the United States.

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

If, after receiving approval, a company makes a material change in manufacturing equipment, location, or process (all of which are, to some degree, incorporated in the NDA or BLA), additional regulatory review and approval may be required.

recurrence of any deficiencies, and could result in fines or penalties by regulatory authorities.

In addition, discovery of problems with a product or the failure to comply with applicable requirements may result in restrictions on a product, manufacturer or holder of an approved NDA or BLA, including withdrawal or recall of the product from the market or other voluntary, FDA-initiated or judicial action, including warning letters, fines, injunctions, civil penalties, license revocations, seizure, total or partial suspension of production or criminal penalties, any of which could delay or prohibit further marketing.

Newly discovered or developed safety or efficacy data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications.

Regulatory Incentives and Other Programs

Priority Rule Voucher (PRV)

The 21st Century Cures Act (“Cures Act”), which was signed into law on December 13, 2016, established a new priority review voucher (“PRV”) program for material threat MCMs.

Upon approval of a material threat MCM application, the FDA will award a PRV provided certain criteria are met.

A PRV voucher can be used to obtain priority review for a subsequent marketing application that would not otherwise have met the criteria for priority review.

When a marketing application receives priority review, the FDA’s goal is to take action on that application within 6 months of the filing date.

To be considered a material threat MCM application, the application must be:

(i) intended for use to prevent or treat harm from a chemical, biological, radiological, or nuclear (“CBRN") agent (or intended to mitigate, prevent or treat harm caused by an MCM used against such agent) determined by the Department of Homeland Security to be a material threat;

(ii) eligible for priority review;

(iii) approved after the date of enactment of the Cures Act;

and (iv) for a drug for which an active ingredient has not been previously approved by the FDA.

Although the material threat MCM PRV program is separate and distinct from the FDA’s other PRV programs, FDA intends to implement the law consistently with implementation of the other PRV programs.

Animal Rule and Project BioShield Emergency Use Authorization

In 2002, the FDA amended its requirements applicable to BLAs to permit the approval of certain biologics that are intended to treat or prevent serious or life-threatening conditions caused by exposure to lethal or permanently disabling toxic CBRN substances based on evidence of safety from trial in healthy human subjects and animal studies, and effectiveness from appropriate animal studies when human efficacy studies are not ethical or feasible.

These regulations, also known as the “Animal Rule,” and published in the Code of Federal Regulations (21 CFR 601 Subpart H), authorize the FDA to rely on evidence from animal studies to provide evidence of a product’s effectiveness under circumstances where there is a reasonably well-understood mechanism for the toxicity of the agent and its prevention or substantial reduction by the biological product, the effect is demonstrated in more than one animal species expected to react with a response predictive for humans, the animal study endpoint is clearly related to the desired benefit in humans, and the data or information on the kinetics and pharmacodynamics of the product or other relevant data or information, in animals and humans, allows selection of an effective dose in humans.

Under these requirements, and with FDA’s prior agreement, biologics used to reduce or prevent the toxicity of CBRN substances may be approved for use in humans based on evidence of effectiveness derived from appropriate animal studies and any additional supporting data.

Products evaluated for effectiveness under this rule are evaluated for safety under preexisting requirements for establishing the safety of new drug and biological products, including Phase 1 through Phase 2 clinical trials.

Under certain circumstances a single animal species may be acceptable if that animal model is sufficiently well-characterized for predicting a response in humans.

The Animal Rule also requires post-marketing studies, such as field studies, to verify and describe the product’s clinical benefit and assess its safety should an exigency exist that leads to the product being used in humans;

the nature of these studies will be discussed with the FDA as part of the BLA process.

Products approved under the Animal Rule are subject to additional requirements, such as restrictions imposed on distribution or labeling requirements to inform patients that the product’s approval was based on efficacy studies conducted in animals alone.

The Animal Rule drug development pathway typically involves costs and time for nonclinical studies and animal models in excess of what would be expended in conducting human vaccine clinical trials not requiring compliance with the Animal Rule.

Under the Project BioShield Act of 2004 and subsequent amendments by the Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 (“Project Bioshield”), the Secretary of HHS may, with the concurrence of the Secretary of the Department of Homeland Security (“DHS”), and upon the approval of the President, contract to purchase unapproved MCMs for the Strategic National Stockpile (“SNS”), in specified circumstances.

Congress is notified of a recommendation for a stockpile purchase after Presidential approval.

Project BioShield specifies that a company supplying the countermeasure to the SNS is paid on delivery of a substantial portion of the countermeasure.

To be eligible for purchase under these provisions, the Secretary of HHS must

determine that there are sufficient and satisfactory clinical results or research data, including data, if available, from preclinical studies and clinical trials, to support a reasonable conclusion that the countermeasure will qualify for FDA approval or licensing within eight years.

The legislation also allows unlicensed products to be procured for the SNS so that they are available at the time an emergency is declared .

Project BioShield also allows the Secretary of HHS to authorize the emergency use of unapproved medical products or an unapproved use of an approved medical product under certain emergency circumstances (“Emergency Use Authorization”).

To exercise this authority, the FDA must conclude that:

the CBRN agent for which the countermeasure is designed to treat can cause serious or life-threatening disease;

based on the totality of scientific evidence available to the FDA, including data from adequate and well-controlled clinical trials, if available, it is reasonable to believe that the product may be effective in diagnosing, treating or preventing the disease;

the known and potential benefits of the product outweigh its known and potential risks;

there is no adequate, approved, and available alternative to the product for diagnosing, preventing, or treating such disease or condition.

Some product candidates may be eligible both for consideration for procurement into the SNS and for Emergency Use Authorization, although there is no guarantee that our product candidates will meet the criteria set forth by HHS or the FDA for procurement and Emergency Use Authorization, respectively.

Marketing Exclusivity for Reference Biological Products

As part of the ongoing efforts of governmental authorities to lower health care costs by facilitating generic competition to pharmaceutical products, the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Care Reform Law”), created a new abbreviated regulatory approval pathway in the United States for biological products that are found to be “biosimilar” or “interchangeable” with a biological “reference product” previously licensed under a BLA.

Marketing Exclusivity and Patent Term Restoration

The Drug Price Competition and Patent Term Restoration Act of 1984, also referred to as the Hatch-Waxman Amendments, established certain periods of marketing exclusivity for new drugs approved by the FDA, including a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity.

A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.

During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (“ANDA”) or a 505(b)(2) NDA submitted by another applicant for such drug where the applicant does not own or have a legal right of reference to the data required for approval.

However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement.

The Hatch-Waxman Amendment also established a three-year period of marketing exclusivity for an NDA, 505(b)(2) NDA, or supplement to an NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application (e.g., new indications, dosages or strengths of an approved drug).

This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the active ingredient for other conditions of use.

For biological products, the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Care Reform Law”), created an abbreviated regulatory approval pathway in the United States for biological products that are found to be “biosimilar” to (and in some instances “interchangeable” with) a biological “reference product” previously licensed under an NDA or BLA.

This abbreviated approval pathway is intended to permit a biosimilar to come to market more quickly and less expensively by relying to some extent on the data generated by the reference product’s sponsor and the FDA’s previous review and approval of the reference product.

Under the BPCIA, a biosimilar sponsor’s ability to seek or obtain approval through the abbreviated pathway is limited by periods of exclusivity granted by the FDA to the holder of the reference product’s BLA, and no biosimilar application may be accepted by the FDA for review until 4 years after the date the reference product was first licensed by the FDA, and no biosimilar application, once accepted, may receive final approval until 12 years after the reference product was first licensed by the FDA.

While we would expect to be granted this 12-year period of exclusivity for our product candidates, if approved, notably, this period of reference product market exclusivity applies only to the biosimilar pathway and will not, for example, provide protection against any biological product for a similar indication that achieves FDA approval under a traditional BLA based on the sponsor’s own research data.

In general, no biosimilar application may be accepted by the FDA for review until 4 years after the date the reference product was first licensed by the FDA, and no biosimilar application, once accepted, may receive final approval until 12 years after the reference product was first licensed by the FDA.

While we would expect to be granted this 12-year period of exclusivity for our applicable product candidates, if approved, this period of reference product market exclusivity applies only to the biosimilar pathway and will not, for example, provide protection against any biological product for a similar indication that achieves FDA approval under a traditional NDA or BLA based on the sponsor’s own research data.

There is also risk that the 12-year period of biological reference product exclusivity could be shortened due to congressional action, or that the FDA will not consider our product candidates, if they are approved, to be reference products for competing products, potentially creating the opportunity for competition sooner than anticipated.

Once approved, biosimilars likely would compete with, and in some circumstances may be deemed under the law to be interchangeable with, the previously approved reference product.

The extent to which a biosimilar, once approved, will be substituted for any one of our product candidates, if approved, in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

Although there is uncertainty regarding the impact of this program, there is risk that the approval of a biosimilar competitor to one of our products, if approved, could have an adverse impact on our business.

The extent to which a biosimilar, once approved, would be substituted for any one of our product candidates, if approved, in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

Given this uncertainty, there is risk that, if approved, a biosimilar competitor to one of our products could have an adverse impact on our business.

In particular, a biosimilar could be significantly less costly to bring to market and priced significantly lower than our product, if approved by the FDA.

Additionally, products approved under an NDA or BLA may qualify for the restoration of a portion of the patent term lost during product development and FDA review of the application, if approval of the application is the first permitted commercial marketing of a drug containing the active ingredient.

The patent term restoration period is generally one-half the time between the effective date of the IND or the date of patent grant (whichever is later) and the date of submission of the NDA or BLA, plus the time between the date of submission of the NDA or BLA and the date of FDA approval of the product.

The maximum period of restoration is five years, and the patent cannot be extended to more than 14 years from the date of FDA approval of the product.

Only one patent claiming each approved product is eligible for restoration and the patent holder must apply for restoration within 60 days of approval.

The USPTO, in consultation with the FDA, reviews and approves the application for patent term restoration.

Pediatric Exclusivity

Biologics, such as our product candidates, may be eligible for pediatric exclusivity, an incentive intended to encourage medical product research for children.

Pediatric exclusivity, if granted, adds six months to existing exclusivity periods applicable to biological products — namely, the four-year period during which the FDA will not consider an application for a biosimilar product, and the 12-year period during which the FDA will not approve a biosimilar application.

This six-month exclusivity, which runs from the end of these exclusivity protection periods, may be granted based on the completion of one or more pediatric trials in response to a Written Request from the FDA.

It is possible, but not assured, that certain of our current or future product candidates may be targeted to pediatric populations, such as our influenza vaccine candidate.

Drugs and biological products, such as our product candidates, may be eligible for pediatric exclusivity, an incentive intended to encourage medical product research for children.

Pediatric exclusivity, if granted, may add six months to certain patents or regulatory exclusivity periods applicable to an approved drug and six months to regulatory exclusivity periods applicable to an approved biological product.

This additional six months of exclusivity may be granted based on the completion of one or more pediatric trials in response to a Written Request from the FDA.

It is possible, but not assured, that certain of our current or future product candidates may be targeted to pediatric populations.

Orphan Drug Designation

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Orphan drug designation must be requested before submitting an application for marketing approval.

Orphan drug designation can provide opportunities for grant funding towards clinical trial costs, tax advantages and FDA user fee exemptions.

Orphan drug designation can provide opportunities for grant funding toward clinical trial costs, tax advantages and FDA user fee exemptions.

In addition, if a product that has an orphan drug designation subsequently receives FDA approval for the indication for which it has such designation, the product may be entitled to orphan drug exclusivity, which means the FDA would not approve any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity.

It is possible, but not assured, that certain of our current or future product candidates may be targeted to rare diseases or conditions.

It is possible, but not assured, that certain of our current or future product candidates may target rare diseases or conditions.

Regulations Affecting Health Care Companies

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federally funded health care programs such as Medicare and Medicaid are subject to so-called fraud and abuse laws including false claims and anti-kickback laws.

The federal Anti-Kickback Law prohibits anyone from, among other things, knowingly and willingly, directly or indirectly, soliciting, receiving, offering, or paying any remuneration with the intent of (or in return for) generating referrals of individuals or purchases, orders, or recommendations for services or items reimbursable by federal health care programs like Medicare and Medicaid.

The federal Anti-Kickback Law prohibits anyone from, among other things, knowingly and willingly, directly or indirectly, soliciting, receiving, offering, or paying any remuneration with the intent of (or in return for) generating referrals of individuals or purchases, leases, orders, or arranging for the purchase, lease, or order of any healthcare item or service reimbursable by federal health care programs like Medicare and Medicaid.

Courts have interpreted this law very broadly, including by holding that a violation has occurred if one purpose of the remuneration is to generate referrals even if there are other lawful purposes.

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Moreover, there are no safe harbors for many common practices, such as educational and research grants, charitable donations, product support and patient assistance programs.

Violations of the Anti-Kickback Law may be punished by civil and criminal penalties, damages, fines, or exclusion from participation in federal health care programs like Medicare and Medicaid.

Violations of the Anti-Kickback Law may be punished by civil and criminal penalties, damages, fines, or exclusion from participation in

federal health care programs like Medicare and Medicaid.

Many states have enacted similar laws, some of which apply regardless of payer.

The Federal civil False Claims Act (“FCA”) prohibits any person from, among other things, knowingly presenting or causing to be presented a false or fraudulent claim for payment of government funds, or making, or causing to be made, a false statement material to a false or fraudulent claim, or knowingly concealing or knowingly and improperly avoiding, or decreasing an obligation to pay or transmit money or property to the government.

The FCA is commonly used to sue those who submit allegedly false Medicare or Medicaid claims, as well as those who induce or assist others to submit a false claim.

The Federal civil False Claims Act (“FCA”) prohibits any person from, among other things, knowingly presenting or causing to be presented a false or fraudulent claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim to the federal government, or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay or transmit money or property to the government.

The FCA is commonly enforced against those who submit allegedly false Medicare or Medicaid claims, as well as those who induce or assist others to submit a false claim.

“False claims” can result not only from non-compliance with the express requirements of applicable governmental reimbursement programs, such as Medicaid or Medicare, but also from non-compliance with other laws, such as the Anti-Kickback Law or laws that require quality care in service delivery.

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We cannot predict whether changes in applicable law, or interpretation of laws, or changes in our services or marketing practices in response to changes in applicable law or interpretation of laws, could have a material adverse effect on our business.

In addition to the above, several other laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements

Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.

For example, the federal Health Insurance Portability and Accountability Act of 1996, and its implementing regulations (collectively, “HIPAA”), created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.

Some state laws restrict whether and when pharmaceutical companies may provide meals to health care professionals or engage in other marketing-related activities;

some states require certain compliance program elements and disclosures;

and certain states and cities require identification or licensing of sales representatives.

For example, the federal Health Insurance Portability and Accountability Act of 1996, and its implementing regulations (collectively, “HIPAA”), prohibits knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.

Similar to the Anti-Kickback Law, a person or entity can be found guilty of violating the HIPAA fraud statute without actual knowledge of the statute or specific intent to violate it.

Violations of HIPAA fraud provisions may result in criminal, civil and administrative penalties, fines and damages, including exclusion from participation in federal healthcare programs.

In the U.S., we may be subject to data privacy and security laws and regulations by both the federal government and the states in which we conduct our business.

The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which may affect our business.

Numerous federal and state laws and regulations, including state data breach notification laws, state health information and/or genetic privacy laws and federal and state consumer protection laws (e.g., Section 5 of the FTC Act and the California Consumer Privacy Act (“CCPA”)), govern the collection, use, disclosure, and protection of health-related and other personal information.

related and other personal information.

Many of these laws differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

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Although we are not directly subject to HIPAA other than with respect to providing certain employee benefits, we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

In addition, the CCPA became effective on January 1, 2020 and establishes certain requirements for data use and sharing transparency, and provides California residents certain rights concerning the use, disclosure, and retention of their personal data.

In addition, the CCPA establishes certain requirements for data use and sharing transparency, and provides California residents certain rights concerning the use, disclosure and retention of their personal data.

The CCPA and its implementing regulations have already been amended multiple times since their enactment.

In November 2020, California voters approved the California Privacy Rights Act (“CPRA”) ballot initiative which introduced significant amendments to the CCPA and established and funded a dedicated California privacy regulator, the California Privacy Protection Agency (“CPPA”).

The amendments introduced by the CPRA go into effect on January 1, 2023, and new implementing regulations are expected to be introduced by the CPPA.

Failure to comply with the CCPA may result in, among other things, significant civil penalties and injunctive relief, or statutory or actual damages.

In addition, California residents have the right to bring a private right of action in connection with certain types of incidents.

These claims may result in significant liability and damages.

Similarly, there are a number of legislative proposals in the United States, at both the federal and state level, that could impose new obligations or limitations in areas affecting our business.

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Outside the U.S., the legislative and regulatory landscape for privacy and data security continues to evolve.

There has been increased attention to privacy and data security issues that could potentially affect our business, including the EU General Data Protection Regulation, which entered into effect on May 25, 2018 and imposes penalties up to 4% of annual global turnover.

There has been increased attention to privacy and data security issues that could potentially affect our business, including the EU General Data Protection Regulation imposes fines of up to EUR 20 million or 4% of the annual global revenue of a noncompliant company, whichever is greater.

In addition, laws and regulations enacted in the United States, Europe, Asia and Latin America increases potential enforcement and litigation activity.

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The Health Care Reform Law substantially changed the way health care is financed by both governmental and commercial payers and significantly impacts the pharmaceutical industry.

The Health Care Reform Law contains provisions that may reduce the profitability of drug products, including, for example, by increasing the minimum rebates owed by manufacturers under the Medicaid Drug Rebate Program, extending the rebate program to individuals enrolled in Medicaid managed care plans, addressing a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, and imposing certain annual fees based on pharmaceutical companies’ share of sales to federal health care programs .

extending the rebate program to individuals enrolled in Medicaid managed care plans, addressing a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, and imposing certain annual fees based on pharmaceutical companies’ share of sales to federal health care programs.

The Health Care Reform Law established and provided significant funding for a new Patient-Centered Outcomes Research Institute to coordinate and fund comparative effectiveness research.

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Further, the Bipartisan Budget Act of 2018 among other things, amended the Medicare statute, effective January 1, 2019, to reduce the coverage gap in most Medicare prescription drug plans, commonly known as the “donut hole,” by raising the manufacturer discount under the Medicare Part D coverage gap discount program to 70%.

Additional legislative changes, regulatory changes and judicial challenges related to the Health Care Reform Law remain possible.

It is unclear how the Health Care Reform Law and its implementation, as well as efforts to repeal, replace or otherwise modify, or invalidate, the Health Care Reform Law, or portions thereof, will affect our business.

Additional legislative changes, regulatory changes and judicial challenges related to the Health Care Reform Law remain possible, but the nature and extent of such potential changes or challenges are uncertain at this time.

It is unclear how the Health Care Reform Law, its implementation, efforts to repeal, replace or otherwise modify, or invalidate, the Health Care Reform Law, or portions thereof, and other health care reform measures that may be adopted in the future will affect our business.

Another provision of the Health Care Reform Law, generally referred to as the Physician Payment Sunshine Act or Open Payments Program, requires manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held in the company by physicians and their immediate family members.

Effective January 1, 2022, these reporting obligations will extend to include transfers of value made (starting in 2021) to certain non-physician providers such as physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives.

Effective January 1, 2022, these reporting obligations extend to include transfers of value made (starting in 2021) to certain non-physician providers such as physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and certified nurse-midwives.

CMS publishes information from these reports on a publicly available website.

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In addition, other legislative changes have been proposed and adopted since the Health Care Reform Law was enacted.

For example, the Budget Control Act of 2011, as amended by the American Taxpayer Relief Act of 2012, among other things led to aggregate reductions in Medicare payments for all items and services, including prescription drugs and biologics, to service providers of, on average, 2% per fiscal year beginning April 1, 2013, and, due to subsequent legislation, will continue until 2030 (with the exception of a temporary suspension from May 1, 2020, through March 31, 2021) unless Congress takes additional action.

On December 10, 2021, President Biden signed a law that provides for 1% Medicare sequestration in the second quarter of 2022 and allows the full 2% sequestration thereafter until 2030.

To offset the temporary suspension during the COVID-19 pandemic, in 2030, the sequestration will be 2.25% for the first half of the year, and 3% in the second half of the year.

As another example, for calendar quarters beginning January 1, 2022, manufacturers will be required to report the average sales price for certain drugs under the Medicare program regardless of whether we participate in the Medicaid Drug Rebate Program.

Previously, such reporting was only required for manufacturers that participated in that program.

Starting in 2023, manufacturers must pay refunds to Medicare for single source drugs or biologicals, or biosimilar biological products, reimbursed under Medicare Part B and packaged in single-dose containers or single-use packages, for units of discarded drug reimbursed by Medicare Part B in excess of 10% of total allowed charges under Medicare Part B for that drug.

Manufacturers that fail to pay refunds could be subject to civil monetary penalties of 125% of the refund amount.

Additional legislative changes, regulatory changes or guidance could be adopted, which may impact the marketing approvals and reimbursement for our product candidates.

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For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020.

And, on November 20, 2020, CMS issued an interim final rule to implement a “Most Favored Nation” demonstration project to test Medicare Part B reimbursement of certain separately payable drugs and biologicals based on international reference prices.

The rule has become subject to judicial challenges, and federal courts have enjoined the rule at this time.

If the rule survives judicial scrutiny, the Most Favored Nation model will subject certain drugs or biologicals identified by CMS as having the highest annual Medicare Part B spending to an alternative payment methodology based on international reference prices, with the list of products to be updated annually to add more products and products not to be removed absent limited circumstances.

There has also been legislation that would establish an international reference price-based Medicare Part B drug and biological payment methodology.

It is possible that the Health Care Reform Law, as currently enacted or may be amended or otherwise modified in the future, as well as other health care reform measures that may be adopted in the future, may result in additional reductions in Medicare payment and other health care financing, more rigorous coverage criteria, and new payment methodologies and in additional downward pressure on coverage and payment and the price that we receive for any approved product.

For example, Congress could enact Medicare Part B and Part D inflation rebates, under which manufacturers would owe additional rebates if the average sales price of a drug were to increase faster than the pace of inflation.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.

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● the level of taxes that we are required to pay.

Congress also could enact additional changes that affect our overall rebate liability and the information we report to the government as part of price reporting calculations.

In addition, Congress could enact a drug price negotiation program under which the prices for certain high Medicare spend single source drugs would be capped by reference to the non-federal average manufacturer price.

This or any other legislative change could impact the market conditions for our products.

We further expect continued scrutiny on government price reporting and pricing more generally from Congress, agencies, and other bodies.

Coverage and Reimbursement

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There is also significant uncertainty related to the insurance coverage and reimbursement of newly approved products and coverage may be more limited than the purposes for which the medicine is approved by the FDA or comparable foreign regulatory authorities.

In the United States, the principal decisions about reimbursement for new medicines are typically made by CMS.

CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree.

In the United States, the principal decisions about reimbursement for new medicines may be made by CMS.

CMS decides whether and to what extent certain new medicines will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree.

Environmental Regulations

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There have been a number of federal and state legislative changes made over the last few years regarding the pricing of pharmaceutical and biological products, government control and other changes to the health care system of the United States.

Concerns about drug pricing have been expressed by members of Congress and prior presidential administrations.

Concerns about drug pricing continue to be expressed by members of Congress and prior presidential administrations.

It is uncertain how such legislative changes will be adopted or what actions federal, state or private payers for medical goods and services may take in response to such legislation.

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European Drug Development

Our products will also be subject to extensive regulatory requirements in the European Union.

Our products will also be subject to extensive regulatory requirements in the European Union (“EU”).

As in the United States, medicinal products can only be marketed if a marketing authorization from the competent regulatory agencies has been obtained.

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Under the current regime, before a clinical trial can be initiated it must be approved in each of the European Union countries where the trial is to be conducted by the relevant National Competent Authority (“NCA”), and one or more Ethics Committees (“ECs”), and a Clinical Trial Authorization must be obtained.

As of January 31, 2022, the new EU Clinical Trials Regulation 536/2014 will apply.

The Clinical Trials Regulation will repeal and replace the Clinical Trials Directive, introduces a complete overhaul of the existing regulation of clinical trials for medicinal products in the EU, including a new coordinated procedure for authorization of clinical trials that will be conducted in multiple EU Member States, and increased obligations on sponsors to publish clinical trial results.

Similar to the FDA, Europe’s Committee for Medicinal Products for Human use (“CHMP”) has adopted ICH S6 as a guideline governing preclinical testing of biologics.

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Safety pharmacology studies, which evaluate the product’s functional effects on major body systems and specific organs, and local tolerance testing can be done separately or subsumed in toxicity testing.

Sponsors also usually conduct single- and multiple-dose pharmacokinetic (“PK”) and/or toxicokinetic studies to assess absorption, disposition, exposure and clearance (in particular, antibody-mediated clearance), and explore dose-response relationships.

Sponsors also usually conduct single- and multiple-dose pharmacokinetic (“PK”) and/or toxicokinetic studies to assess absorption, disposition, exposure and clearance (in

particular, antibody-mediated clearance), and explore dose-response relationships.

This information is used to predict margins of safety for human studies.

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The trial may begin only if (i) the ethics committee has issued a favorable opinion and (ii) no competent authority has informed the applicant of grounds for non-acceptance.

Under the Clinical Trials Regulation 536/2014, applicable to new clinical trials as of January 31, 2022, authorization of clinical trials will take place through an EU portal resulting in approval for the various relevant EU Member States.

Different timelines than those described above under the Clinical Trials Directive will apply to the new assessment procedure under the Clinical Trials Regulation.

Under the Clinical Trials Regulation, ethics committee approval will continue to be required in accordance with the laws of the relevant EU Member States.

Good Clinical Practices and Other Considerations for Clinical Trials

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and specific rules on safety reporting and long-term follow-up.

Under the Clinical Trials Directive, special requirements apply to clinical trials conducted on minors and other persons not able to give informed legal consent.

Under the Clinical Trials Directive and under the Clinical Trials Regulation, special requirements apply to clinical trials conducted on minors and other persons not able to give informed legal consent.

These requirements are intended to preserve the dignity of the trial subjects, confirm that the benefits of the trial outweigh the risks and ensure that subjects’ representatives give consent with as much involvement of the subject as possible.

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CHMP has issued a guideline on quality requirements during the clinical trial period for investigational medicinal products containing biological or biotechnology-derived substances.

The guideline describes quality documentation that should be submitted to the competent authority as part of the sponsor’s investigational

medicinal product dossier (“IMPD”).

The guideline describes quality documentation that should be submitted to the competent authority as part of the sponsor’s investigational medicinal product dossier (“IMPD”).

The IMPD should include, among other things, (i) an adequate description of the process and process controls, including a flow chart of all successive steps and details of in-process testing and (ii) a description and justification of “any reprocessing during manufacture of the drug substance.” The guideline also recognizes that sponsors will improve and optimize their manufacturing processes during clinical development and describes the steps sponsors should take following these changes.

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European Marketing Authorization

In the European Economic Area (“EEA”), which includes the 27-member states of the European Union plus Norway, Iceland and Liechtenstein, medicinal products can only be placed on the market after approval of a Marketing Authorization Application, or

The MA is based on the results of pharmaceutical tests, preclinical tests and clinical trials conducted on the medicinal product in question.

There are two types of MAs:

The Centralized MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the CHMP and which is valid throughout the entire territory of the EEA.

Authorization Application, or MAA.

The MAA is based on the results of pharmaceutical tests, preclinical tests and clinical trials conducted on the medicinal product in question.

There are two types of MAAs:

● The Centralized MAA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the CHMP and which is valid throughout the entire territory of the EEA.

The Centralized Procedure is mandatory for certain types of drugs, such as biotechnology medicinal products, orphan medicinal products, and medicinal products containing new active substances indicated for certain diseases.

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In all cases, to find out whether a product can be evaluated via the Centralized Procedure, applicants must always submit an eligibility request.

National MAs, which are issued by the competent authorities of the member states of the EEA and only cover their respective territory, are available for drugs not falling within the mandatory scope of the Centralized Procedure.

Where a drug has already been authorized for marketing in a member state of the EEA, this National MA can be recognized in other member states through the Mutual Recognition Procedure.

If the drug has not received a National MA in any member state at the time of application, it can be approved by multiple member states in parallel through the Decentralized Procedure.

Under the above described procedures, before granting the MA, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the drug on the basis of scientific criteria concerning its quality, safety and efficacy.

● National MAAs, which are issued by the competent authorities of the member states of the EEA and only cover their respective territory, are available for drugs not falling within the mandatory scope of the Centralized Procedure.

Where a drug has already been authorized for marketing in a member state of the EEA, this National MAA can be recognized in other member states through the Mutual Recognition Procedure.

If the drug has not received a National MAA in any member state at the time of application, it can be approved by multiple member states in parallel through the Decentralized Procedure.

Under the above described procedures, before granting the MAA, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the drug on the basis of scientific criteria concerning its quality, safety and efficacy.

The Marketing Authorization Application:

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Effective September 19, 2018, sponsors applying for Orphan Designation must use EMA’s secure online IRIS platform.

However, sponsors of orphan medicinal products are eligible to benefit from a number of incentives offered, including certain assistance with development of the medicinal product, reduced fees for MA applications and protection from market competition once the medicinal product is authorized, as below.

Where an MA in respect of an orphan medicinal product is granted, the European Commission, EMA and the competent authorities of the member states shall not, for a period of ten years, accept another application for an MA, or grant an MA or accept an application to extend an existing MA, for the same therapeutic indication, in respect of a similar medicinal product, unless:

(i) the holder of the MA for the original orphan medicinal product has given its consent to the second applicant;

(ii) the holder of the MA for the original orphan medicinal product is unable to supply sufficient quantities of the medicinal product;

However, sponsors of orphan medicinal products are eligible to benefit from a number of incentives offered, including certain assistance with development of the medicinal product, reduced fees for MAA applications and protection from market competition once the medicinal product is authorized, as below.

Where an MAA in respect of an orphan medicinal product is granted, the European Commission, EMA and the competent authorities of the member states shall not, for a period of ten years, accept another application for an MAA, or grant an MAA or accept an application to extend an existing MAA, for the same therapeutic indication, in respect of a similar medicinal product, unless:

(i) the holder of the MAA for the original orphan medicinal product has given its consent to the second applicant;

(ii) the holder of the MAA for the original orphan medicinal product is unable to supply sufficient quantities of the medicinal product;

or (iii) the second applicant can establish the second medicinal is safer, more effective or otherwise clinically superior.

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To date, we have obtained materials for clinical trials and non-clinical studies from third-party manufacturers who are suppliers to us.

For our product candidates, we intend to identify and qualify additional contract manufacturers to provide commercial scale manufacturing prior to submission of a BLA to the FDA.

For our product candidates, we intend to identify and qualify additional contract manufacturers to provide commercial scale manufacturing prior to submission of an NDA or BLA to the FDA.

Employees and Human Capital Management

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degrees and 18 of whom hold other advanced degrees.

In light of the COVID-19 pandemic, our headcount has grown by 72% in the past year in order to support our pipeline of research programs and product candidates.

Of our total workforce, 29 are engaged primarily in research and development activities and 18 are engaged primarily in executive, finance and accounting, and administrative functions.

As of December 31, 2020, 42 employees are in the United States and one employee in the United Kingdom.

As of December 31, 2021, 45 employees are located in the United States and two employees in the United Kingdom.

Of our employees, 53% are female and 47% are male.

None are represented by labor unions or covered by collective bargaining agreements.

We consider our relations with our employees to be good.

Corporate Culture

Our values – compliance, collaboration, integrity and high performance – are built on the foundation that the employees we hire and the way we treat one another promote creativity, innovation and productivity, which spur our success.

This culture depends in large part on our ability to attract, retain and develop a diverse population of talents and high-performing employees at all levels of our organization.

Providing market competitive pay and benefit programs, opportunities to participate in the success they help create, while engaging employees in important dialogue regarding organization performance, we create a culture of inclusion in which all colleagues have the opportunity to thrive.

The success of our business is fundamentally connected to the well-being of our employees.

Compensation and Benefits Program

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We provide employees with what we consider to be a very competitive mix of compensation and insurance benefits for all our employees, as well as participation in our equity programs.

Diversity and Inclusion

We believe that an equitable and inclusive environment with diverse teams produces more creative solutions, results in better, more innovative products and services and is crucial to our efforts to attract and retain key talent.

Hybrid Culture and COVID-19

Like other companies, we have learned to adapt during the COVID-19 pandemic.

We have prioritized employee safety and transparency during the pandemic and continue to do so, ensuring all employees are set up to work remotely and providing clarity on office closures and evolving guidelines, where possible.

Like other companies, we have learned to adapt during the ongoing COVID-19 pandemic.

In the second quarter of 2020, we made the decision to move to a hybrid workplace model, which means that certain of our employees will have the option to be 100% remote, work full-time in our office, or have the flexibility to work between office and remotely until the pandemic is resolved.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business