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Item 1. Business

2025-03-25 compared with 2024-03-29 · 79 added, 130 removed, 449 unchanged (32% of the section changed)

AN2 Therapeutics, Inc.

(also referred to in this document as “AN2,” “we,” the “Company” or the “Registrant”) is a clinical-stage biopharmaceutical company developing treatments for rare, chronic, and serious infectious diseases with high unmet needs.

(also referred to in this document as “AN2,” “we,” the “Company” or the “Registrant”) is a biopharmaceutical company focused on discovering and developing novel small molecule therapeutics derived from our boron chemistry platform.

AN2 has a pipeline of boron-based compounds in development for Chagas disease, non-tuberculous mycobacterial (“NTM”) and melioidosis, along with early-stage programs focused on targets in infectious diseases and oncology.

Our initial candidate is epetraborole, which we are studying as a potential once-daily, oral treatment with a novel mechanism of action for patients with non-tuberculous mycobacterial (“NTM”) lung disease, a rare, chronic and progressive infectious disease caused by bacteria known as mycobacteria, which leads to irreversible lung damage and can be fatal.

In February 2024, we voluntarily paused Phase 3 enrollment in the seamless Phase 2/3 clinical trial (“EBO-301”) evaluating epetraborole in treatment-refractory MAC lung disease, pending further study-data review and discussion with the FDA, due to potentially lower-than-expected efficacy results following a blinded aggregate analysis.

The decision to pause enrollment was not due to safety concerns.

We met with the study’s independent Data Safety Monitoring Board (“DSMB”) in March 2024 and plan to meet with the FDA in the coming months.

In the meantime, patients enrolled in the study before the enrollment pause will continue to be dosed with blinded study drug and undergo all study assessments.

The Phase 2 portion of the trial has completed enrollment, with topline data expected in August 2024.

Epetraborole is designed to produce broad-spectrum antimycobacterial activity through inhibition of an essential and universal step in bacterial protein synthesis.

Its novel mechanism of action is enabled by boron chemistry, our core technology approach.

We in-licensed the exclusive worldwide development and commercialization rights for epetraborole from Anacor, acquired by Pfizer Inc.

(“Pfizer”) in 2019.

We in-licensed the exclusive worldwide development and commercialization rights for epetraborole from Pfizer Inc.

The FDA granted us Fast Track designation to investigate epetraborole for treatment-refractory MAC lung disease, Qualified Infectious Disease Product (“QIDP”) designation for treatment-refractory MAC lung disease, and orphan drug designation for the treatment of infections caused by NTM.

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Based on clinical and preclinical data generated with epetraborole, its novel mechanism of action, and the convenience associated with once-daily, oral dosing, we believe that epetraborole, if approved, has the potential to become an important component of a multi-drug treatment regimen for patients suffering from NTM lung disease.

We are also conducting Investigational New Drug Application (“IND”) enabling studies with AN2-502998 (formerly known as AN15368), an investigational, boron-based small molecule in development for the treatment of chronic Chagas disease.

In October 2023, we announced an exclusive license agreement with the University of Georgia Research Foundation to advance its development.

AN2-502998 was originally discovered by researchers at Anacor, in close collaboration with the University of Georgia.

Epetraborole in NTM

Our lead development target in NTM is treatment-refractory MAC lung disease, a condition with high unmet need where the mycobacterial infection persists despite standard front-line therapies.

These patients represent complex cases for treatment, often presenting with structural lung damage, high levels of resistance to background therapies, and persistent symptoms that can significantly degrade quality of life.

In 2023, the FDA issued a Guidance for Industry entitled, “ Nontuberculous Mycobacterial Pulmonary Disease Caused by Mycobacterium Avium Complex:

Developing Drugs for Treatment Guidance for Industry ,” which among other things, recommended that new potential therapies intended for the treatment of NTM caused by MAC utilize clinical outcome assessments, such as patient-reported outcome ("PRO") measures that assess symptomatic improvement, as primary efficacy endpoints in registrational trials intended to support applications for traditional approval.

To date, no drugs have been approved by FDA based on achievement of an endpoint demonstrating symptom improvement in a treatment refractory population.

The only FDA-approved therapy for treatment-refractory MAC lung disease received accelerated approval based on the surrogate endpoint of sputum culture conversion without having demonstrated symptom improvement.

On August 8, 2024, we announced topline results from the Phase 2 part of EBO-301, a Phase 2/3 study evaluating epetraborole on top of optimized background regimen (“OBR”) in treatment-refractory MAC lung disease ("TR-MAC"), and terminated the Phase 3 portion of the trial early with 97 patients enrolled.

The Phase 2 part of the study met its primary objective of demonstrating the potential validation of a novel PRO tool and a numerically higher PRO-based clinical response rate in the epetraborole + OBR arm (39.5%) vs.

placebo + OBR (25.0%;

treatment difference 13.9%, p=0.19).

However, sputum culture conversion at Month 6, a key secondary endpoint, was similar between treatment arms (13.2% in epetraborole + OBR vs.

10.0% placebo + OBR;

treatment difference 3.4%, p=0.64).

Epetraborole was generally well tolerated in the Phase 2 portion of the trial.

The primary purpose of the Phase 2 part of the EBO-301 study was to test the validity of multiple patient-reported outcome tools in a treatment refractory population, with the goal of identifying a PRO-based primary endpoint for the Phase 3 portion of the trial.

To that end, we recently submitted an amended statistical analysis plan to the FDA selecting the Quality of Life – Bronchiectasis ("QOL-B") respiratory domain patient reported outcome instrument as the primary efficacy endpoint for the Phase 3 part of the EBO-301 trial.

Using QOL-B as a continuous measure of clinical improvement, epetraborole showed nominal statistical superiority versus placebo in change from baseline to month 6 in the Phase 2 portion of the trial (prespecified secondary endpoint, difference in least squares mean change from baseline:

6.90, p=0.0365).

Furthermore, a post-hoc analysis of the MACrO 2 PRO using a 100-point continuous scale similar to QOL-B showed a comparable nominally statistically superior result for the epetraborole arm versus the placebo arm (difference in least squares mean change from baseline:

5.81, p=0.0433).

Blinded psychometric analyses incorporating the data from both treatment arms of the Phase 2 study demonstrated strong evidence for the reliability, validity, ability to detect change (responsiveness), and clinically meaningful within-patient changes in both the QOL-B respiratory domain score and the post-hoc MACrO 2 total scaled score, suggesting that the scores measured from either PRO may be fit-for-purpose in evaluating response to treatment in patients with treatment-refractory NTM lung disease.

Based on the Phase 2 results and subsequent analyses, we believe epetraborole is the first drug candidate to show statistically favorable patient reported outcome-based improvement in a treatment-refractory MAC lung disease population.

We anticipate releasing top-line Phase 3 data from the 97 Phase 3 patients in the second quarter of 2025.

If the Phase 3 data are consistent with [LD1] [JP2] the Phase 2 findings, we plan to meet with FDA to discuss potential registrational pathways in TR-MAC lung disease.

Pipeline Programs

We are also studying epetraborole for the treatment of acute melioidosis.

We completed enrollment in a 200-patient observational trial (non-epetraborole treatment) in October 2024 and expect to announce topline data in the second half of 2025.

These data will inform a potential Phase 2 proof of concept study that is planned to initiate start up activites in the second half of 2025.

Melioidosis is a deadly bacterial infection and global bioterrorism threat with a 90-day mortality rate of approximately 50% using standard of care ("SOC") drugs ceftazidime or meropenem.

The aim of the program is to meaningfully lower the expected mortality rate by dosing epetraborole on top of SOC.

Beyond epetraborole, we are conducting Investigational New Drug Application (“IND") enabling studies with AN2-502998 (formerly known as AN15368), an investigational, boron-based small molecule in development for the treatment of chronic Chagas disease, and have several research programs targeting the development of novel compounds in oncology and infectious disease based on our boron chemistry platform.

In October 2023, we announced an exclusive license agreement with the University of Georgia Research Foundation to advance the development of AN2-502998, originally discovered by researchers at Anacor, in close collaboration with the University of Georgia.

AN2-502998 is the only compound of which we are aware to have demonstrated curative activity in preclinical studies across multiple species, including in non-human primates with long-term, naturally acquired chronic infections of diverse T.

cruzi genetic types.

In addition to these programs, we intend to pursue epetraborole and other compounds for diseases associated with global health initiatives, including melioidosis, tuberculosis and malaria, primarily using non-dilutive funding from sources such as public and private agencies and foundations.

In September 2023 we announced that we received a research grant from the Bill and Melinda Gates Foundation to discover novel, boron containing small molecules for the treatment of tuberculosis and malaria.

We anticipate initiating a Phase 1 study in 2025.

We also anticipate nominating 1 to 2 new development candidates in oncology in 2025.

AN2 is committed to using our boron chemistry platform to address areas of high unmet need in global health, primarily using non-dilutive funding from sources such as public and private agencies and foundations.

In September 2023 we received a research grant from the Bill and Melinda Gates Foundation to discover novel, boron containing small molecules for the treatment of tuberculosis and malaria which was renewed in September 2024.

In 2022 we received a cost-reimbursement contract award from the National Institute of Allergy and Infectious Diseases (“NIAID”), part of the National Institutes of Health (“NIH”), under which we are able to receive up to $17.8 million in cost reimbursements to advance the development of epetraborole for acute systemic melioidosis and other biothreat pathogens.

The status of each of our other programs is listed below:

• Frontline MAC lung disease:

We plan to review Phase 2 clinical data in treatment-refractory MAC lung disease from EBO-301, when available, to inform further investigation of epetraborole as part of a frontline combination regimen in MAC lung disease.

abscessus lung disease :

We intend to pursue development of epetraborole as a first-line therapy in M.

abscessus lung disease, which represents a smaller subset of NTM (~20% of NTM patients) but also has a high unmet need.

We are currently conducting nonclinical studies as part of dose selection to support clinical development of epetraborole in this disease.

Current treatments for M.

abscessus lung disease have poor efficacy (~50%), are often delivered by intravenous infusion and have significant tolerability and safety issues.

We believe that oral epetraborole, in combination with other drugs, has the potential to treat M.

abscessus lung disease based on the in vitro and in vivo potency observed against multiple isolates.

• Melioidosis :

In September 2022 we received a cost-reimbursement contract award from the NIAID under which we are able to receive up to $17.8 million in non-dilutive funding to support preclinical, Phase 1 studies, and other activities to enable advancement of epetraborole into advanced clinical trials for acute systemic melioidosis.

Following contract initiation, we have conducted nonclinical studies to support clinical development of intravenous (IV) epetraborole for acute melioidosis.

We have also initiated CMC studies to manufacture a suitable IV formulation of epetraborole for planned clinical trials.

In 2023, we initiated a prospective observational study in Thailand and Laos to evaluate the clinical characteristics, current practice and outcomes in adult patients with suspected or confirmed acute melioidosis.

• Broad spectrum MAC and M.

abscessus lung disease:

We are conducting research activities to develop novel targets for broad spectrum MAC and M.

abscessus lung disease.

• Tuberculosis and Malaria:

We plan to continue to invest in expanding our pipeline of product candidates.

We have several research programs targeting the development of novel antimicrobial compounds based on our boron chemistry platform.

We believe there is a significant need for novel NTM drugs that improve upon the currently available antibiotics that have variable efficacy, safety and tolerability profiles.

We anticipate that such compounds could have the potential to be developed in combination with epetraborole and other NTM therapies for the treatment of NTM lung disease.

We are also applying our boron research capabilities to discover and develop novel therapeutics for other rare or chronic infectious diseases, including tuberculosis and malaria.

In addition to our internal research efforts, our strategy also includes seeking in-licensing or other acquisitions of other compounds that are complementary to our mission.

Epetraborole Key Attributes

We believe the development of epetraborole in NTM lung disease represents an attractive opportunity for the following reasons:

• Large market opportunity.

Treatment-refractory and frontline MAC lung disease requires long-term, daily antimycobacterial therapy.

There is a high unmet need in NTM lung disease and an opportunity for a safe, tolerable, effective, and oral antibacterial drug that could significantly improve patient outcomes.

• Novel mechanism of action with a broad spectrum of antimycobacterial activity.

Epetraborole has a novel mechanism of action – inhibition of bacterial leucyl-tRNA synthetase, a bacterial target for which there are no approved therapies.

Epetraborole has demonstrated broad antimycobacterial activity in preclinical studies against MAC, including but not limited to M.

intracellulare , and M.

chimaera , which is the most common group of NTM that causes human disease (~80% cases) and is the initial focus of epetraborole’s clinical development.

Furthermore, epetraborole has also shown activity against strains that are resistant to other antibiotics currently used to treat NTM lung disease.

For example, epetraborole has demonstrated potent in vitro activity as compared to M.

abscessus, a rapid-growing NTM species that has a high unmet need for new effective antibiotics.

• Substantial data support ongoing clinical studies.

Epetraborole has been investigated by AN2 in four completed Phase 1 studies and eight additional studies by Anacor and Anacor’s previous partner, GSK.

The Anacor and GSK studies, in intravenous and oral formulations of epetraborole, included six Phase 1 and two truncated Phase 2 clinical trials in over 200 subjects at a wide range of clinical doses.

In 2023, we completed a Phase 1 thorough QT study (EBO-104).

• Compatibility with guideline-based combination treatments.

The current standard of care therapy for NTM lung disease includes administration of three or more antimycobacterial agents, the combination of which improves efficacy, shortens the duration of therapy, and significantly reduces the chance that resistance to individual drugs would develop.

Given epetraborole’s novel mechanism of action and low observed potential for drug-drug interactions with existing antibiotics, we believe epetraborole, if approved, has the potential to become an important component of a multi-drug treatment regimen for patients living with treatment-refractory MAC lung disease.

Additionally, in nonclinical pharmacokinetic models of NTM MAC infection, epetraborole added on top of a triple-drug guideline-based regimen demonstrated significantly improved bacteria reductions vs.

guideline therapy alone.

• Potential for up to twelve years of non-patent regulatory exclusivity in the United States, if approved.

In addition to current and potential future patent protection in the major geographies, epetraborole, if approved for patients with treatment-refractory MAC lung disease, has the potential to receive up to 12 years of post-approval, non-patent regulatory exclusivity in the U.S.

based on its existing QIDP and orphan drug designations.

Epetraborole Mechanism of Action

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Other drugs used in combination with Arikayce as a part of a standard-of-care regimen are not approved to treat MAC lung disease and carry numerous safety and tolerability liabilities of their own.

Epetraborole Development Program

EBO-301 Clinical Trial

In 2023, we initiated enrollment in a Phase 2/3 seamless-design trial to support potential marketing applications in the U.S., Japan, and other countries for epetraborole in treatment-refractory MAC lung disease.

We completed enrollment of the Phase 2 portion of the trial in September 2023 and immediately began enrollment of the Phase 3 portion.

In February 2024, we voluntarily paused Phase 3 enrollment after observing potentially lower-than-anticipated efficacy results in an analysis of blinded aggregate data from the Phase 2 portion, in part because we had experienced rapid enrollment of the Phase 3 portion, where we had enrolled 97 of 234 planned patients.

The aggregate baseline characteristics reveal patients with complex comorbidities, prolonged NTM lung disease, and high levels of cavitary disease, as well as patients who are refractory to Arikayce, the only FDA-approved drug for refractory NTM caused by MAC, as part of their background regimen.

After having met with the study’s DSMB in March 2024, we plan to continue the review of data and meet with the FDA in the coming months.

Patients enrolled before the pause will continue to be dosed with blinded study drug and undergo all study assessments.

Completed Clinical Studies

• In previous development work with epetraborole conducted by Anacor and GSK, its pharmacokinetics were well characterized using substantially higher doses than we are currently evaluating in our ongoing and planned clinical trials.

Results from a previous Phase 1 clinical trial showed the exposures of epetraborole in alveolar (lung) macrophages, the human cells that are infected with mycobacteria in NTM lung disease, were approximately five-fold higher than in plasma.

These results suggest potentially therapeutic exposures of epetraborole could be achieved in these macrophages with orally administered doses that are substantially lower than the maximum tolerated doses and exposures identified in previous trials.

• In 2021, we completed EBO-101, a dose-ranging study in healthy volunteers, which assessed the pharmacokinetics and safety of oral epetraborole doses relevant for treatment-refractory MAC lung disease and administered for 28 days, including a food-effect cohort.

• In 2022, we completed EBO-102, which assessed the pharmacokinetics of epetraborole in subjects with varying degrees of renal function.

• In 2022, we completed EBO-103, which assessed the pharmacokinetics of epetraborole in Japanese subjects to support initiation of clinical trials in Japan.

• In 2023, we completed EBO-104, a Phase 1 thorough QT study.

Completed Non-Clinical Studies

We have completed toxicology and safety pharmacology studies, including chronic toxicology studies by oral administration in both rats (for a period of six months) and non-human primates (for a period of nine months) where epetraborole was tolerated at much higher dose levels compared to the once-daily dose of 500 mg that we are evaluating in treatment-refractory MAC lung disease in our Phase 2/3 pivotal clinical trial.

Additionally, we recently completed the last of the three standard reproductive toxicity studies (segment 3) that we believe are necessary to support regulatory application.

No findings of material concern were identified.

We have completed non-clinical studies to characterize the antimicrobial activity of epetraborole in vitro and in animal models.

In one study, we tested the antimicrobial activity of epetraborole against 51 isolates of MAC compared to clarithromycin and amikacin resulting in an MIC90 of 8 µg/mL.

Furthermore, we completed testing of epetraborole against 110 MAC clinical isolates from Japan and an MIC90 of 4 µg/mL was reported.

These studies demonstrated that, preclinically, epetraborole showed broad anti-mycobacterial activity as compared to MAC isolates both regionally as well as against resistant strains of amikacin and clarithromycin.

In another study, we compared epetraborole to clarithromycin in a chronic model of MAC lung disease in mice.

This study indicated that epetraborole demonstrated improved antibacterial activity at all doses as compared to a 250 mg/day clarithromycin human dose equivalent.

A third study in a mouse model indicated that epetraborole demonstrated a superior decrease in colony forming units as monotherapy and in combination with standard of care versus standard of care alone.

Prior Clinical Experience with Epetraborole

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AN2-502998 was originally discovered by researchers at Anacor, in close collaboration with the University of Georgia, and with grant funding from Wellcome.

IND-enabling studies are well underway using non-dilutive funding from The Wellcome Trust (“Wellcome”).

IND-enabling studies are well underway for this compound.

AN2-502998, previously published under AN15368, is the only compound of which we are aware to have demonstrated curative activity in preclinical studies across multiple species, including in non-human primates with long-term, naturally acquired chronic infections of diverse T.

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pseudomallei ).

This bacterium is also documented as a high priority biothreat pathogen.

This bacterium is also documented as a high priority biothreat pathogen by the U.S.

pseudomallei is endemic to tropical regions of the world with the majority of reported melioidosis cases occurring in South Asia.

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Similar to NTM, B.

pseudomallei can be an intra-cellular pathogen in macrophages, an important element in melioidosis.

pseudomallei can be an intra-cellular pathogen in host cells including macrophages and other cellular components, an important element in melioidosis disease.

The disease can manifest as localized infections causing pain, swelling and ulceration;

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75N93022C00059), resulting in an increase in committed contract funding of $0.7 million, for a total of $5.0 million.

In May 2024, the NIAID exercised a second contract option, resulting in an increase in committed contract funding of $3.8M, for a total of $8.8M.

The project has been funded in whole with nondilutive federal funds from the NIAID, NIH, and the Department of Health and Human Services.

Our work with the NIAID on our melioidosis program has resulted in our partnering with the University of Oxford’s Mahidol Oxford Tropical Medicine Research Unit to conduct a prospective observational study in Thailand and Laos with a projected 200 melioidosis patients (NCTC 06089668).

This trial completed enrollment of 200 patients in October 2024 (NCTC 06089668), and topline data is expected to be available in the second quarter of 2025.

We plan to initiate a Phase 2 study in mellioidosis in the second half of 2025.

We have also partnered with Colorado State University on preclinical research for our melioidosis program.

We believe these partners provide substantial technical and capital resources to advance the melioidosis program and provide scientific, technical, and material benefits to our NTM lung disease program.

We believe these partners provide substantial technical and capital resources to advance the mellioidosis program and provide scientific, technical, and material benefits to our NTM lung disease program.

Manufacturing

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License Agreement with Anacor Pharmaceuticals, Inc.

In November 2019, we entered into a license agreement (the “Anacor Agreement”) with Anacor, pursuant to which we obtained a worldwide exclusive, sublicensable license under certain patent rights of Anacor and a non-exclusive license under certain know-how of Anacor to use, develop, manufacture, commercialize, or otherwise exploit certain compounds and products, including epetraborole, for the treatment, diagnosis, or prevention of all human diseases, and a

worldwide non-exclusive license under certain chiral synthesis intellectual property rights from GSK for the sole purpose of manufacturing such compounds and products.

We granted Anacor a non-exclusive, sublicensable license to develop, manufacture or use (but not commercialize) licensed products under all intellectual property rights that are both (i) related to the licensed products and (ii) conceived or reduced to practice by us, our affiliates, or our sublicensees.

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Upon the occurrence of certain events, including the failure by ourselves to comply with the Global Health Agreement, we must grant Adjuvant a nonexclusive, perpetual, irrevocable, non-terminable, fully-paid up, royalty free license to epetraborole for melioidosis, tuberculosis, and any other mutually agreed-upon products.

Exclusive Patent License Agreement with the University of Georgia Research Foundation, Inc.

In October 2023, we entered into an agreement with the University of Georgia Research Foundation, Inc.

(“UGARF”) pursuant to which UGARF exclusively licensed to us certain patents and applications that were previously licensed to UGARF by Anacor Pharmaceuticals for us to manufacture and commercialize products for the therapeutic, diagnostic and prophylactic treatment of Chagas disease in humans or animals worldwide.

Under the license agreement, we must use commercially reasonable efforts to bring a product in the therapeutic, diagnostic and prophylactic treatment of Chagas disease in humans or animals to market in each territory where there is at least one valid patent claim.

We must also use commercially reasonable efforts to attain certain development and sales milestones.

As consideration for the license from UGARF, we paid UGARF an initial license fee in the low five figures.

We must also pay a yearly maintenance fee in the low four figures until the initiation of the first clinical trial of the first product covered by the licensed patent claims.

Upon achievement of certain development and sales milestones, we are required to make payments of up to approximately $900 million.

Should we commercialize any products covered by the licensed patent claims, we will be obligated to pay UGARF annual royalties in the low single digits.

Should we sublicense the rights granted under this agreement, we will be obligated to pay UGARF a percentage of the amount received for the sublicense ranging from the mid-single digits to low double digits, depending on the development stage of the first product to enter clinical trials.

Should we or a sublicensee transfer or sell to one or more third parties any priority review voucher (or a foreign equivalent) for a product covered by the licensed patent claims, we will be obligated to pay UGARF a percentage of the amount received from such third party ranging from the mid-teens to low double digits, depending on the amount of funding that the third party contributed to develop the product.

The license agreement will terminate on a licensed patent by licensed patent basis until there are no valid claims for a licensed patent.

We can terminate the license agreement for convenience on 30 days prior written notice.

Intellectual Property

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The patent portfolio for our epetraborole product candidate is based upon our in-licensed patent portfolio, which includes patents and patent applications directed generally to compositions of matter, pharmaceutical compositions, and methods of treatment.

As of December 31, 2023, we exclusively licensed three U.S.

We have exclusively licensed three U.S.

patents, along with patents and pending patents in various foreign jurisdictions.

We do not own any issued patents.

We own three pending PCT patent applications, which are not eligible to become issued patents until, among other things, we file a non-provisional patent application with the USPTO or a foreign patent office.

Patents and patent applications, if granted, are expected to expire beginning in 2028, without taking potential patent term extensions or patent term adjustment into account.

We own three pending patent applications for epetraborole.

Patents and patent applications, if granted, are expected to expire between 2028 and 2041, without taking potential patent term extensions or patent term adjustments into account.

Prosecution is a lengthy process, during which the scope of the claims initially submitted for examination by the USPTO and other patent offices may be significantly revised before issuance, if granted at all.

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Other drugs used to treat these patients include generic drugs such as macrolides (clarithromycin and azithromycin), ethambutol, rifabutin, and fluoroquinolones such as levofloxacin, bedaquiline, linezolid, and clofazimine.

There are also a number of product candidates in clinical development by third parties that are intended to treat NTM lung disease, including mid- to late-stage product candidates such as SPR720 from Spero Therapeutics, Inc., omadacycline from Paratek Pharmaceuticals, Inc., and inhaled clofazimine from Mannkind Corporation.

We also expect that epetraborole, if approved, would compete with future and current generic versions of marketed antibiotics.

Government Regulation and Product Approval

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• satisfactory completion of potential inspection of selected clinical investigation sites to assess compliance with GCPs;

• FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.

• the FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.

Once a product candidate is identified for development, it enters the preclinical testing stage.

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The required assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is deemed safe and effective.

The sponsor or FDA may request a deferral of pediatric clinical trials for some or all of the pediatric subpopulations.

The sponsor or the FDA may request a deferral of pediatric clinical trials for some or all of the pediatric subpopulations.

A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin.

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Under the Prescription Drug User Fee Act (“PDUFA”), guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission.

This review typically takes twelve months from the date the NDA is submitted to FDA because the FDA has approximately two months to make a “filing” decision after it the application is submitted.

This review typically takes twelve months from the date the NDA is submitted to the FDA because the FDA has approximately two months to make a “filing” decision after it the application is submitted.

The FDA may refer an application for a novel drug to an advisory committee.

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Fast Track designation, breakthrough therapy designation, priority review, and accelerated approval do not change the standards for approval but may expedite the development or approval process.

Even if a product candidate qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Orphan Drug Designation

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required collection of rebates for drugs paid by Medicaid managed care organizations;

required manufacturers to participate in a coverage gap discount program, under which they must agree to offer point-of-sale discounts (increased to 70 percent, effective as of January 1, 2019) off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;

imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs;

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created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

and established a Center for Medicare and Medicaid Innovation at CMMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

and established a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

Since its enactment, there have been judicial, administrative, executive, and Congressional legislative challenges to certain aspects of the ACA.

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Thus, the ACA will remain in effect in its current form.

Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers, which was temporarily suspended from May 1, 2020 through March 31, 2022, and reduced payments to several types of Medicare providers.

In addition, the American Taxpayer Relief Act of 2021, effective January 1, 2024, eliminated the statutory cap on rebate amounts owed by drug manufacturers under the Medicaid Drug Rebate Program(“MDRP”), which was previously capped at 100% of the AMP for a covered outpatient drug.

Further, based on a recent executive order, the Biden administration expressed its intent to pursue certain policy initiatives to reduce drug prices.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced payments to several types of Medicare providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

In addition, the American Rescue Plan Act of 2021, effective January 1, 2024, eliminated the statutory cap on rebate amounts owed by drug manufacturers under the Medicaid Drug Rebate Program (“MDRP”), which was previously capped at 100% of the AMP for a covered outpatient drug.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products.

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imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);

and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).

and replaces the Part D coverage gap discount program with a new manufacturer discounting program (which began in 2025).

The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations.

HHS has issued and will continue to issue guidance implementing the IRA, although the Medicare drug price negotiation program is currently subject to legal challenges.

HHS has issued and will continue to issue guidance implementing the IRA.

CMS published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and the list of the subsequent 15 drugs that will be subject to negotiation, although the Medicare drug price negotiation program is currently subject to legal challenges.

While the impact of the IRA on our business and the pharmaceutical industry cannot yet be fully determined, it is likely to be significant.

Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing.

Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure, drug price reporting and other transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing.

Some states have enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states.

In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine which drugs and suppliers will be included in their healthcare programs.

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Employees and Human Capital Resources

As of February 29, 2024, we had 41 full-time employees, consisting of clinical operations, clinical development, research, manufacturing, regulatory, quality, finance, and operational personnel.

As of February 28, 2025, we had 22 full-time employees, consisting of research, manufacturing, clinical operations, regulatory, quality, finance, and operational personnel.

None of our employees are subject to a collective bargaining agreement.

We consider our relationship with our employees to be good.

We recognize that our continued ability to attract, retain and motivate exceptional employees is vital to ensuring our long-term competitive advantage.

Our employees are critical to our long-term success and are essential to helping us meet our goals.

Among other things, we support and incentivize our employees in the following ways:

• Talent development, compensation and retention:

We strive to provide our employees with a rewarding work environment, including the opportunity for growth, success and professional development.

We provide a competitive compensation and benefits package, including bonus and equity incentive plans and a 401(k) plan—all designed to attract and retain a skilled and diverse workforce.

• Health and safety:

We support the health and safety of our employees by providing comprehensive insurance benefits, an employee assistance program, company-paid holidays, a personal time-off program and other additional benefits which are intended to assist employees to manage their well-being.

• Inclusion and diversity:

We are committed to efforts to foster an inclusive work environment that supports our workforce.

Corporate Information

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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