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Item 1. Business

2023-03-15 compared with 2022-03-23 · 396 added, 416 removed, 483 unchanged (63% of the section changed)

We are a clinical-stage biotechnology company leveraging our novel targeted oncology platform to develop a potential new standard of care across multiple cancer indications, with an initial focus on ocular and urologic oncology.

We are a clinical-stage biotechnology company envisioning a new way to treat cancer.

Leveraging our novel targeted oncology platform, we have the goal to develop a new standard of care across multiple cancer indications.

Our initial focus is on ocular and urologic oncology where the disease is diagnosed early and there is a high unmet medical need for targeted local therapies.

Our proprietary platform enables the targeting of a broad range of solid tumors using Virus-like Particles, or VLPs, that can be conjugated with drugs or loaded with nucleic acids to create Virus-like Drug Conjugates, or VDCs.

Our VDCs are largely agnostic to tumor type and can recognize a surface marker, known as heparan sulfate proteoglycans, or HSPGs, that are specifically modified and broadly expressed on many tumors.

AU-011, our first VDC candidate, is being developed for the first line treatment of primary choroidal melanoma, a rare disease with no drugs approved.

We have completed a Phase 1b/2 trial using intravitreal administration that has demonstrated a statistically significant growth rate reduction in patients with prior active growth and high levels of tumor control with visual acuity preservation in a majority of patients, as assessed using clinical endpoints in alignment with the feedback from U.S.

Food and Drug Administration, or the FDA.

These data supported advancement into a Phase 2 dose escalation trial, where we are currently evaluating suprachoroidal, or SC, administration of AU-011.

We plan to present six to twelve month safety and efficacy data from this trial in 2022 and, take a decision on the route of administration to, initiate a pivotal trial in the second half of 2022.

We are also developing AU-011 for additional ocular oncology indications and plan to file an IND in the United States in the second half of 2022 for choroidal metastases.

Leveraging our VDCs’

broad tumor targeting capabilities, we also plan to initiate a Phase 1a trial in non-muscle invasive bladder cancer, or NMIBC, our first non-ophthalmic solid tumor indication, in the second half of 2022 and present Phase 1a data from this trial in 2023.

Our VDCs are largely agnostic to tumor type and can recognize a subset of modified tumor associated glycosaminoglycans, or GAGs, that are part of the heparan sulphate chain of HSPGs expressed on the cell surface of many tumor cells and in the tumor microenvironment.

Bel-sar, our first VDC candidate, is being developed for the first-line treatment of early-stage choroidal melanoma, a rare disease with no drugs approved where the standard of care leaves many patients with blindness.

We have received orphan drug designation for the treatment of uveal melanoma from the U.S Food and Drug Administration, or FDA, and the European Medicines Agency, or EMA, and fast track designation from the FDA for the treatment of choroidal melanoma.

We have completed a Phase 1b/2 trial using intravitreal administration that has demonstrated clinical proof of concept, assessed using endpoints in alignment with the feedback from the FDA.

We are currently evaluating suprachoroidal, or SC, administration of bel-sar in a Phase 2 study.

In February 2023 we presented average nine-month interim safety and efficacy data from this ongoing trial at Macula Society’s Annual Meeting which demonstrated a favorable safety profile with no posterior inflammation and no treatment-related serious adverse events, or SAEs, reported as of January 10, 2023.

The results, with an average of nine months of follow up in patients who received a therapeutic regimen with three cycles of therapy, and who match the criteria for the planned global Phase 3 trial (n=8), showed a statistically significant reduction in the tumor growth rate (-0.289 mm/yr, p = <0.0001) compared to each patient’s documented growth rate at study entry, and a 100% (8/8) tumor control.

In addition, the visual acuity preservation in the group of patients was 88% (7/8), with the majority of patients being at high-risk for vision loss with tumors close to fovea or optic disk.

We have selected the SC route to conduct our global Phase 3 trial in alignment with regulatory agencies.

We are currently conducting start up activities for the global Phase 3 study with the goal to dose our first patient in the first half of 2023.

We are also developing bel-sar for additional ocular oncology indications and have an open IND in the United States for choroidal metastasis, supporting the potential of bel-sar to provide a novel treatment option that preserves vision for these patients.

Choroidal metastasis is a high unmet medical need and the most common intraocular malignancy that is caused by multiple primary cancers in the body that metastasize to the eye (e.g., breast and lung cancer).

These patients are treated by the same ocular oncologists that treat choroidal melanoma and there are no drugs approved that can treat the lesion in the eye and preserve vision.

We received fast track designation from the FDA’s Division of Oncology and plan to initiate a Phase 2 study in this indication in the second half of 2023.

In addition to our ocular oncology franchise, we are leveraging our targeted oncology platform to develop bel-sar in the field of urologic oncology with an initial indication for the treatment of non-muscle invasive bladder cancer, or NMIBC, where we received fast track designation by the FDA’s Division of Oncology.

We initiated enrollment in a Phase 1 trial and we plan to present initial data from this trial in the second half of 2023.

VDCs are a novel class of drugs with a dual mechanism of action that promotes cancer cell death by both the delivery of the cytotoxic payload to generate acute necrosis and by activating a secondary immune mediated response.

VDCs are analogous to ADCs, another technology that employs a targeting moiety and a cytotoxic payload.

In contrast to the limited tumor specificity of individual ADCs, the tumor targeting specificity of VDCs is driven by the selective binding of the VLPs to modified HSPGs expressed on the tumor cell membrane.

The tumor targeting specificity of VDCs is driven by the selective binding of the VLPs to a subset of modified tumor associated GAGs that are part of the heparan sulphate chain of HSPGs expressed on the tumor cell membrane.

This targeting mechanism enables the delivery of multiple types of cytotoxic payloads directly to a wide range of solid tumors.

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The cytotoxic drug payload is covalently bound to the VLP to form the VDC.

The capsid proteins that make up the VLP can recognize HSPGs modified by tumor cells and function analogously to the antibody of an ADC.

The capsid proteins that make up the VLP can recognize a subset of modified tumor associated GAGs that are part of the heparan sulphate chain of HSPGs providing a highly selective tumor binding.

We believe that our VDC platform has the potential to serve as a backbone for a broad portfolio of targeted oncology therapeutics and has the following potential key advantages:

A single VDC can deliver hundreds of cytotoxic molecules conjugated to its capsid proteins.

Based on the ability of VLPs to selectively recognize specifically modified and overexpressed HSPGs present on a large number of tumor types, VDCs have the potential to be used broadly across a wide range of cancers with limited off-target toxicity.

The VDCs have a high number of HSPG binding sites and this multi-valency permits the strong and selective binding to tumor cells.

Based on the ability of VLPs to selectively recognize a subset of modified tumor associated GAGs that are part of the heparan sulphate chain of HSPGs present on a large number of tumor types, VDCs have the potential to be used broadly across a wide range of cancers with limited off-target toxicity.

The VDCs have a high number of tumor associated GAG binding sites and this multi-valency permits the strong and selective binding to tumor cells.

VDCs have a dual mechanism of action, first by acute necrosis of the tumor cells, and subsequently by creating a highly immunogenic milieu that induces an antitumor specific immune response potentially leading to a more robust and durable therapy.

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Our next area of focus, bladder cancer, is one of the most expensive cancers to treat on a per patient basis, and the global market for bladder cancer is expected to reach $4.0 billion by 2028 across the United States, EU5 and Japan.

To date, we have produced a VDC, AU-011, that we are advancing in multiple indications, as shown in the pipeline below.

We are initially developing AU-011 for the treatment of primary choroidal melanoma, a vision- and life-threatening ocular cancer for which there are currently no drugs approved.

Choroidal melanoma is the most common intraocular cancer in adults, with an incidence of 11,000 patients/year in the United States and Europe.

To date, we have produced a VDC, bel-sar, that we are advancing in multiple indications, as shown in the pipeline below.

We are initially developing bel-sar for the treatment of primary choroidal melanoma, a vision- and life-threatening ocular cancer for which there are currently no drugs approved.

Choroidal melanoma is the most common primary intraocular cancer in adults, with an incidence of 11,000 patients/year in the United States and Europe.

It is estimated that 96% of patients are diagnosed early without clinical evidence of metastatic disease.

However, despite the current treatments with radiotherapy the long-term prognosis is poor with death occurring in more than 50% of cases and irreversible vision loss within 5 to 10 years in approximately 70% of cases.

We intend to develop AU-011 as a first line therapy to treat early-stage disease which includes small melanomas and indeterminate lesions representing approximately 9,000 patients/year in the United States and Europe.

AU-011 has also been granted Orphan Drug designation for treatment of uveal melanoma by the EMA.

AU-011 consists of an HPV-derived VLP conjugated to hundreds of infrared laser-activated molecules.

The VDC is designed in a way that prevents the conjugation from interfering with tumor binding enabling its selectivity to specifically modified HSPGs on tumor cells but not to normal cells.

Laser activation of AU-011 is designed to result in precise tumor cell killing with minimal damage to surrounding healthy tissues.

In the absence of AU-011 activation or binding to the tumor cell membrane, there is no cytotoxic effect.

Multiple laser treatments, following a single dose of AU-011, increase antitumor activity because of the reoxygenation of the tumor and the photostability of AU-011.

We intend to develop bel-sar as a first line therapy to treat early-stage disease which includes small melanomas and indeterminate lesions representing approximately 9,000 patients/year in the United States and Europe.

Bel-sar has also been granted Orphan Drug designation for treatment of uveal melanoma by the EMA.

Bel-sar consists of an HPV-derived VLP conjugated to hundreds of infrared laser-activated molecules.

The VDC is designed in a way that prevents the conjugation from interfering with tumor binding enabling its selectivity to tumor cells but not to normal cells.

Laser activation of bel-sar is designed to result in precise tumor cell killing with minimal damage to surrounding healthy tissues.

In the absence of bel-sar activation or binding to the tumor cell membrane, there is no cytotoxic effect.

Multiple laser treatments, following a single dose of bel-sar, increase antitumor activity because of the reoxygenation of the tumor and the photostability of bel-sar.

Finally, acute necrosis triggers immunogenic cell death leading to the generation of an adaptive, long-term antitumor immune response.

In our completed Phase 1b/2 trial, AU-011, administered by intravitreal injection, was well-tolerated and demonstrated high levels of local tumor control while preserving vision at twelve months in patients that had prior active tumor growth.

The therapeutic regimen of AU-011 achieved tumor shrinkage or a near-zero growth rate in the majority of patients and was associated with preservation of visual acuity in 71% of patients at twelve months.

We are currently conducting a Phase 2 dose escalation trial of AU-011 with SC administration.

We intend to initiate the first pivotal trial in the second half of 2022.

Because our mechanism of action preserves key ocular structures, we also intend to develop AU-011 for additional ocular oncology indications, beginning with choroidal metastases.

In addition, we are developing AU-011 for the treatment of NMIBC.

We have completed a Phase 1b/2 trial using intravitreal administration that has demonstrated clinical proof of concept, assessed using endpoints in alignment with the feedback from the FDA.

We are currently evaluating suprachoroidal (SC) administration of bel-sar in a Phase 2 study.

The average nine-month interim data, in patients that are similar to our planned Phase 3 criteria and received the therapeutic regimen with three cycles of therapy, also continued to show 88% visual acuity preservation and tumor control of 100% including patients whose tumors were close to the fovea and optic nerve, with a highly statistically significant growth rate reduction (p = <0.0001).

Based on these data we have selected the SC route to conduct our pivotal program in alignment with global regulatory agencies.

We are currently conducting start up activities for the global Phase 3 trial with the goal to dose our first patient in the first half of 2023.

In addition, we are developing bel-sar for the treatment of NMIBC.

Bladder cancer is the most common malignancy involving the urinary system and is the eighth most common cause of cancer death in men in the United States.

While metastatic bladder cancer has several approved therapies, there are very limited options for the treatment of high-risk NMIBC.

We are planning to initiate clinical development of AU-011 with intramural administration, a novel route of administration, for the treatment of patients with intermediate high-risk NMIBC.

This novel route of administration is intended to place high levels of the drug at the base of the tumor where laser activation of AU-011 can cause necrosis and prevent residual tumor cells from further growth and recurrence.

We have generated preclinical in vivo data that supports that our dual mechanism of action can lead to cytotoxicity and long-term antitumor immunity which may further reduce the risk of metastases.

We believe this immune response can play an even larger role in bladder cancer, given that bladder cancer has a well-documented response to immune activation.

We are conducting IND-enabling studies with AU-011 and intend to begin clinical trials in the second half of 2022 and present Phase 1a data from this trial in 2023.

While metastatic bladder cancer has several approved therapies, there are very limited options for the treatment of intermediate and high-risk NMIBC.

We have initiated clinical development of bel-sar with intramural administration, a novel route of administration, for the treatment of patients with intermediate and high-risk NMIBC.

This novel route of administration is intended to place high levels of the drug at the base of the tumor where laser activation of bel-sar can cause necrosis and prevent residual tumor cells from further growth and recurrence.

We have generated nonclinical in vivo data that supports that our dual mechanism of action can lead to cytotoxicity and long-term antitumor immunity which may further reduce the risk of metastases and it is highly synergistic with checkpoint inhibitors.

We believe this immune response can play an important role in bladder cancer, given that bladder cancer has a well-documented response to immune activation.

We initiated enrollment in a Phase 1 trial and plan to present initial data from this trial in 2023.

Our team consists of biopharmaceutical experts who have extensive experience in the development of drugs in oncology and ophthalmology.

Our CEO and founder, Elisabet de los Pinos, PhD, MBA, was previously part of the marketing team that led the European commercialization of Alimta ® for the treatment of lung cancer at Eli Lilly.

Cadmus Rich, MD, MBA, CPE, our Chief Medical Officer, an ophthalmologist, has extensive experience in leading ophthalmology research and development at companies including Inotek, IQVIA and Alcon/Novartis.

He has led or participated in over 75 development programs including the submission and approval over ten devices and pharmaceutical products in the United States, Europe, China, Japan and Latin America.

Cadmus Rich, MD, MBA, CPE, our Chief Medical Officer, an ophthalmologist, has extensive experience in leading research and development at companies including Inotek, IQVIA and Alcon/Novartis.

He has led or participated in over 75 development programs including the submission and approval of over ten devices and pharmaceutical products in the United States, Europe, China, Japan and Latin America.

Julie Feder, our CFO, previously served as CFO at Verastem Oncology, the Clinton Health Access Initiative and was instrumental in the integration of Genzyme and Sanofi.

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De Rosch also led Regulatory Affairs at Nightstar Therapeutics, a gene therapy company developing treatments for inherited retinal diseases prior to Nightstar’s acquisition by Biogen in 2019.

Christopher Primiano, our CBO, led multiple strategic transactions during his prior tenure as CBO and General Counsel at Karyopharm Therapeutics, Inc., a commercial oncology company.

The Chairman of our Board of Directors is David Johnson, a biopharmaceutical business leader with more than 25 years of experience in drug development and the former Chief Executive Officer at VelosBio Inc., a clinical-stage oncology company developing novel ADCs and bispecific antibodies that was acquired by Merck in 2020 for $2.75 billion.

The Chairman of our Board of Directors, or the Board, is David Johnson, a biopharmaceutical business leader with more than 25 years of experience in drug development and the former Chief Executive Officer at VelosBio Inc., a clinical-stage oncology company developing novel ADCs and bispecific antibodies that was acquired by Merck in 2020 for $2.75 billion.

Prior to founding VelosBio Inc.

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The key elements of our strategy include:

Advance AU-011 through late-stage clinical development and, if approved, commercialization for the first line treatment of primary choroidal melanoma.

In our Phase 1b/2 trial for AU-011 using intravitreal administration, we observed in patients that had prior active tumor growth high levels of local tumor control while preserving vision at twelve months.

We are currently evaluating SC administration of AU-011 in a Phase 2 trial in patients with choroidal melanoma and we plan to present the six to 12 month safety and efficacy data from this trial in 2022 at the American Academy of Ophthalmology Annual Meeting.

We believe SC administration will increase tumor exposure to the drug while reducing exposure in the vitreous.

We expect to take a decision on the route of administration and decide on either the IVT or SC route of administration to initiate a pivotal trial by the end of 2022.

We have received orphan drug designation for treatment of uveal melanoma and fast track designation from the FDA for the treatment of choroidal melanoma and have aligned with FDA, EMA and the UK MHRA on the design and endpoints of this trial.

Advance bel-sar through Phase 3 clinical development and, if approved, commercialization for the first line treatment of early-stage choroidal melanoma.

We have completed a Phase 1b/2 trial using intravitreal administration that has demonstrated clinical proof of concept, assessed using endpoints in alignment with feedback from the FDA.

We are currently evaluating SC administration of bel-sar in a Phase 2 trial in patients with choroidal melanoma and we presented average nine-month interim safety and efficacy data from this trial in February 2023 at Macula Society’s Annual Meeting.

Based on the positive data from the Phase 2 SC study, we are proceeding with the SC route of administration and have started activities for the initiation of a global Phase 3 trial in early-stage CM in the first half of 2023.

We have received orphan drug designation for treatment of uveal melanoma from FDA and EMA, and fast track designation from the FDA for the treatment of choroidal melanoma and have aligned with FDA, EMA and the United Kingdom, or UK, MHRA on the design and endpoints of the global Phase 3 trial.

If approved, this would represent the first therapy for primary choroidal melanoma as a first-line treatment option for early-stage disease, reserving radiotherapy for a second-line treatment option.

If approved, we intend to independently commercialize AU-011 in ocular cancers using a limited sales force to target the approximately 50 ocular oncologists in the United States and approximately 50 ocular oncologists in Europe, who are a focused call point that treat most patients.

Continue developing AU-011 for additional ocular oncology indications, starting with choroidal metastases .

We intend to be at the forefront of ocular oncology innovation and believe we can apply our mechanism of action for AU-011, which has the potential to treat tumors while preserving key ocular structures, to multiple other ocular oncology indications.

Beyond small primary choroidal melanoma and indeterminate lesions, we intend to develop AU-011 in multiple other ocular oncology indications, starting with choroidal metastases.

We plan to file an IND with the FDA in the second half of 2022 for choroidal metastases.

In addition, we plan to develop AU-011 for tumors of the ocular surface, including both melanomas and squamous cell carcinomas.

Every year, approximately 4,500 patients are diagnosed with cancers of the ocular surface.

If approved, we intend to independently commercialize bel-sar in ocular cancers using a limited sales force to target the approximately 50 ocular oncologists in the United States and approximately 50 ocular oncologists in Europe, who are a focused call point that treat most patients.

Continue developing bel-sar for additional ocular oncology indications, starting with choroidal metastasis .

We intend to be at the forefront of ocular oncology innovation and believe we can apply bel-sar's mechanism of action, which has shown the potential to treat tumors while preserving key ocular structures, to other cancers.

Beyond early-stage choroidal melanoma, we intend to develop bel-sar in choroidal metastasis and multiple other ocular oncology indications.

We plan to initiate a clinical trial in this indication in the second half of 2023.

In addition, we plan to develop bel-sar for tumors of the ocular surface, including both melanomas and squamous cell carcinomas.

We plan to leverage the sales force infrastructure we intend to build for primary choroidal melanoma for these additional ocular oncology indications.

Pursue development of AU-011 for our first non-ophthalmic solid tumor indication in NMIBC.

Our novel approach has the potential benefit of treating early-stage solid tumors, particularly NMIBC, while generating long-term antitumor immunity to prevent metastasis.

We believe that local administration into the bladder, and the ability to use a focused laser to activate AU-011, provides the opportunity to apply our technology platform to this area of high unmet medical need.

Bladder cancer represents an attractive indication given its sensitivity to immune response, high unmet medical need and expense in treating.

AU-011’s pro-immunogenic mechanism of action has shown robust activity in preclinical models as a single agent and synergy with checkpoint inhibitors in this indication.

Our preclinical data supports initiation of a Phase 1 clinical trial, which we expect to begin in the second half of 2022, subject to FDA acceptance of our IND, with plans to present Phase 1 data from this trial in 2023.

Pursue development of bel-sar for our first non-ophthalmic solid tumor indication in NMIBC.

Our novel approach has the potential benefit of treating early-stage local tumors, particularly NMIBC, while generating long-term antitumor immunity to prevent metastasis.

We believe that local administration into the bladder, and the ability to use a focused laser to activate bel-sar, provides the opportunity to apply our technology platform to this area of high unmet medical need.

Bladder cancer represents an attractive indication given its sensitivity to immune response and high unmet medical need.

Bel-sar’s pro-immunogenic mechanism of action has shown robust activity in nonclinical models as a single agent and synergy with checkpoint inhibitors in this indication.

We have received fast track designation from the FDA’s Division of Oncology and we are currently enrolling patients in an ongoing Phase 1 study in NMIBC.

We plan to present early data from this study in the second half of 2023.

Broaden the application of our proprietary technology platform to expand our pipeline of product candidates.

Due to the expression of specifically modified HSPGs across a wide range of solid tumors, we plan to evaluate our technology platform in other oncology indications.

We also plan to expand the use of our proprietary technology platform by continuing to explore the potential to deliver other therapeutic agents, including nucleic acid therapies and non-light activated molecules, to broadly treat solid tumors.

Evaluate and selectively enter into strategic collaborations to maximize the potential of our pipeline and accelerate the development of our programs.

While we continue to retain worldwide rights to AU-011, we may opportunistically evaluate and enter into strategic collaborations around AU-011 or future product candidates, geographies, or disease areas.

We believe our technology platform has the potential to enable the development of a broad scope of product candidates that reaches beyond AU-011.

By selectively entering into collaborations, we believe our potential to expand and accelerate the development of our programs and maximize worldwide commercial potential may be enhanced.

Due to the expression of tumor–modified HSPGs across a wide range of solid tumors, we plan to broadly evaluate our technology platform in other oncology indications.

In addition, we plan to explore the possibility of delivering other therapeutic agents, including nucleic acid therapies and non-light activated molecules, to expand the potential of our technology platform across multiple solid tumors.

Targeting a broad range of solid tumors with our proprietary technology platform

Our technology platform represents a novel approach of targeting a broad range of solid tumors using VLPs that can be loaded or conjugated with drugs creating a new class of targeted therapies.

Our VDCs are analogous to ADCs, another technology that employs a targeting moiety and a payload.

ADCs typically utilize a monoclonal antibody to traffic a cytotoxic payload preferentially to tumor cells.

There are currently 11 FDA-approved ADCs, six of which have gained regulatory approval since 2019.

The class achieved approximately $4 billion in sales in 2020 and is expected to garner over $27 billion in sales in 2026.

Despite the successful adoption of this modality, there remains room for improvement.

Key challenges related to ADCs include the limited number of payloads that can be conjugated onto the ADC along with toxicities that have been reported.

Only two to five toxin drug conjugate molecules per antibody can be delivered, potentially reducing potency, which can necessitate higher doses of toxic drug to be delivered.

These higher doses and the expression of ADC target receptors on healthy tissue can lead to systemic toxicity.

We believe our VDCs can expand upon the foundation built by ADCs, given VDCs are endowed with specific attributes designed to overcome the shortcomings of ADCs.

The key finding that launched our technology development efforts was the observation that human papilloma virus, or HPV, binds to specifically modified HSPGs on the tumor cell membrane.

HSPGs are a large family of molecules found in the extracellular matrix and on the membranes of cells.

Tumors cells specifically modify HSPGs with key sulfation modifications that provide high binding specificity to a number of ligands.

The key finding that launched our technology development efforts was the observation that human papilloma virus, or HPV, binds to modified tumor associated GAGs that are part of the heparan sulphate chain of HSPGs on the tumor cell membrane.

GAGs are a large family of molecules found in the extracellular matrix and on the membranes of cells.

Tumor cells specifically-modify GAGs that are part of the heparan sulphate chain of HSPGs with key sulfation modifications that provide high binding specificity to a number of ligands.

Tumor-modified HSPGs regulate many aspects of tumor progression, including proliferation, invasion, angiogenesis and metastases.

Our scientific founder, John Schiller, PhD, and his colleagues at the National Institutes of Health, or NIH, identified that these specific modifications enable HSPG-selective binding of HPV on tumor cells, as illustrated below.

VDCs bind to specifically modified HSPGs on the tumor cell surface with multivalent binding and do not bind to normal healthy cells.

This NIH team discovered that HSPG-selective binding of HPV was determined by the properties of the proteins that make up the viral capsid, or shell, not by the nucleic acids contained within the shell.

Our scientific founder, John Schiller, PhD, and his colleagues at the National Institutes of Health, or NIH, identified that these specific modifications enable the selective binding of HPV on tumor cells, as illustrated below.

VDCs bind to modified tumor associated GAGs that are part of the heparan sulphate chain of HSPGs on the tumor cell surface with multivalent binding and do not bind to normal healthy cells.

This NIH team discovered that selective binding of HPV was determined by the properties of the proteins that make up the viral capsid, or shell, not by the nucleic acids contained within the shell.

Schiller pioneered the development of VLPs into a highly effective HPV vaccine to prevent cancer, work for which he received the Lasker-DeBakey Clinical Medical Research Award.

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VLPs have also demonstrated the ability to deliver nucleic acids, potentially expanding our platform on which to base a novel class of oncology therapies.

We believe that our technology platform has the potential to serve as a backbone for a broad portfolio of therapeutics.

There are four key potential advantages of VDCs compared to ADCs:

A single VDC can deliver hundreds of cytotoxic molecules conjugated to its capsid proteins.

The VDCs have a high number of HSPG binding sites and, it is this multi-valency that permits the strong binding of the VDCs with tumor cells.

Tumor treatment with VDCs results in a dual mechanism of action, both directly with acute necrosis of the tumor cells, and indirectly by creating a highly immunogenic milieu inducing an antitumor specific immune response leading to a more robust and durable therapy.

Choroidal melanoma overview

Choroidal melanoma is the most common intraocular cancer in adults, with an incidence of 11,000 patients/year in the United States and Europe.

Choroidal melanoma is the most common primary intraocular cancer in adults, with an incidence of 11,000 patients/year in the United States and Europe.

This comprises approximately 90% of all cases of uveal melanoma, consisting of melanomas in the choroid, ciliary body and iris, which are collectively referred to as the uvea.

It is estimated that 96% of patients are diagnosed early without clinical evidence of metastatic disease.

It is estimated that 96% of patients are diagnosed without clinical evidence of metastatic disease.

There are approximately 2,000 new cases treated each year in the United States and 1,600 new cases treated each year in Europe.

However, despite the current treatments with radiotherapy, the long-term prognosis is poor with death occurring in more than 50% cases and irreversible vision loss within 5 to 10 years in approximately 70% of cases.

Most cases are found in adults with a median age of 55, light eye color and fair skin.

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Benign choroidal nevi are found in approximately 5% of adults in the United States 40 years or older.

There are 3,900 patients every year in the United States that are diagnosed with indeterminate melanocytic lesions that have risk factors and that are referred to the ocular oncologist.

Our goal is to develop AU-011 as a first line treatment option that can enable early treatment intervention of primary choroidal melanoma while preserving vision and reserving radiotherapy for a second line treatment option.

There are 3,900 patients every year in the United States who are diagnosed with indeterminate melanocytic lesions that have risk factors and that are referred to the ocular oncologist.

Our goal is to develop bel-sar as a first line treatment option that can enable early-stage treatment of choroidal melanoma while preserving vision and reserving radiotherapy for a second line treatment option.

Earlier diagnosis and early treatment intervention of lesions in the eye before the onset of metastatic disease may dramatically change outcomes for patients.

Current treatment options for choroidal melanoma

There are no FDA-approved therapies for choroidal melanoma.

There are three primary treatments that are routinely used for local control of choroidal melanoma:

Current treatment options for primary choroidal melanoma

There are no FDA-approved therapies for primary choroidal melanoma.

There are three common treatments that are routinely used for local control of choroidal melanoma:

plaque brachytherapy;

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Because choroidal melanoma tends to metastasize early, even with radical treatments such as enucleation, metastatic disease still occurs, which results in a high degree of mortality.

We believe that there is an urgent unmet medical need for an effective vision preserving therapy and that the availability of such a therapy may encourage treatment of early stage ocular lesions and increase the awareness of the importance of early diagnosis for this life-threatening disease.

Our solution AU-011

AU-011 is a VDC consisting of an HPV-derived VLP and IRDye 700DX, a laser activated cytotoxic payload.

Our VLP was created using the capsid proteins of HPV that have been genetically modified to avoid cross-reactivity with pre-existing immunity against the virus and bind with high affinity to specifically modified HSPGs found on the surface of tumors cells, including ocular melanoma cells.

AU-011, administered by intraocular injection, binds to tumor cells.

We believe that there is an urgent unmet medical need for an effective vision preserving therapy and that the availability of such a therapy may encourage treatment of early-stage CMs and increase the awareness of the importance of early diagnosis for this life-threatening disease.

Our solution bel-sar

Bel-sar is a VDC consisting of an HPV-derived VLP and a phthalocyanine dye, a laser activated cytotoxic payload.

Our VLP was created using the capsid proteins of HPV that have been genetically modified to avoid cross-reactivity with pre-existing immunity against the virus and bind with high affinity to modified tumor associated GAGs that are part of the heparan sulphate chain of HSPGs surface of tumors cells, including ocular melanoma cells.

Bel-sar, administered by intraocular injection, binds to tumor cells.

Activation using an ophthalmic laser leads to rupture of the tumor cell membrane, acute necrosis and a secondary immune activation leading to long term antitumor immunity.

Goal of Treatment with AU-011

In ocular oncology, the goal of early stage local treatment is to achieve tumor control—to prevent the tumor from growing further while preserving the delicate ocular structures such as the retina.

Goal of Treatment with Bel-sar

In ocular oncology, the goal of early-stage local treatment is to achieve a local cure and prevent the tumor from growing further which is defined as tumor control while preserving the delicate ocular structures such as the retina.

We believe that treatment early in the disease course can also limit the risk of metastasis for patients.

After treatment, if tumors do not have an increase in thickness by ultrasound or an increase in diameter as evaluated with digital photography, it is believed that the malignant cells have been killed, tumor control has been achieved and the treatment is considered successful.

Ocular oncologists measure the antitumor activity after plaque brachytherapy by evaluating tumor control as well as systemic disease to detect the presence of metastasis.

Goal of treatment with AU-011 is local tumor control with targeted killing of melanoma cells.

We believe that patients with earlier stage tumors stand to derive the most benefit from AU-011.

These tumors are not only the most likely to respond to our therapy but, based on historic data, these patients also have the highest likelihood of not having already developed life-threatening metastatic disease, and as such, AU-011 has the potential to confer the greatest long-term benefit.

Phase 1b/2 demonstrated robust antitumor activity

A total of 56 patients out of 57 patients enrolled with a clinical diagnosis of choroidal melanoma were treated with AU-011, due to one patient not having met predefined active growth criteria.

Tumor growth measurements were obtained by one centralized reading center.

The tumor control rate at twelve months across all treatment doses and initial tumor sizes was 54% based on the predefined criteria of tumor control failure as an increase in thickness of greater than 0.5 mm or an increase in diameter of more than 1.0 mm.

The key two subgroups were patients with well-documented active growth (n=20) and those with well-documented active growth treated at the highest therapeutic regimen (n=14).

The 20 patients with well-documented active growth treated at all doses had a tumor control rate of 60%.

The 14 patients with well-documented active growth treated at the highest therapeutic regimen had a tumor control rate of 64%.

When compared to each patient’s rate of tumor growth within the prior two years before enrollment, the growth rate after treatment with AU-011 at any dose demonstrated a statistically significant reduction both when assessing all patients with active growth as well as patients on the maximum therapeutic regimen.

Phase 1b/2 demonstrated preservation of visual acuity

We believe that showing preservation of visual acuity will be critical in our application for regulatory approval of AU-011 to show that it can both halt tumor growth and preserve visual acuity.

Visual acuity was measured at regular intervals as a key efficacy endpoint.

In the Phase 1b/2 trial we defined the loss of visual acuity as the loss of three lines of vision, or 15 letters, using best corrected visual acuity, or BCVA, which the FDA considers a clinically meaningful vision loss.

We found moderate loss of visual acuity immediately following treatment, which we believe was associated with short-term reversible adverse events such as ocular inflammation and corneal abrasions.

Upon resolution of the short-term adverse events, visual acuity recovered in the majority of patients, and we observed a vision preservation rate of 86% across all 56 treated patients in the trial over the twelve months follow up period and 71% for the 14 patients enrolled with active growth and treated with two cycles of AU-011 therapy.

Only four out of 14 patients with small tumors with active growth had a long-term loss of more than 15 letters of vision that did not recover back to less than the 15 letters at 12 months.

These were related to persistent adverse events, such as pigmentary changes, macular edema or subretinal fluid.

Of the four patients that had persistent vision loss, two lost greater than 30 letters and the other two had a loss of 17 and 18 letters which is close to the threshold of 15 letters.

Importantly, 17 of the 20 patients with small tumors with active growth had tumors close to the fovea or optic nerve and were considered high risk for severe vision loss with radiotherapy.

In this patient population, the vision preservation rate was 76% (13/17 patients) highlighting a potential important benefit AU-011 may have over the current standard of care.

Phase 1b/2 safety and tolerability data

Treatment with AU-011 was generally reported to be well-tolerated at all doses including when two cycles of therapy were administered.

Goal of treatment with bel-sar is local tumor control with targeted killing of melanoma cells.

We believe that patients with early-stage choroidal melanoma stand to derive the most benefit from bel-sar.

These tumors are not only the most likely to respond to our therapy but, based on historic data, these patients also have the highest likelihood of not having already developed life-threatening metastatic disease, and as such, bel-sar has the potential to confer the greatest long-term benefit.

Phase 1b/2 demonstrated proof of concept as assessed by meaningful clinical endpoints:

tumor control and visual acuity preservation

A total of 56 patients enrolled with a clinical diagnosis of primary choroidal melanoma were treated with bel-sar using an intravitreal route of administration.

The data at 12 months demonstrated a clear dose response between patients treated at sub-therapeutic doses/regimens with a tumor control rate of 44% and those treated at the therapeutic regimen with two cycles of therapy at the highest dose which achieved a tumor control rate of 70%.

In addition, this robust tumor control was accompanied by a high rate of visual acuity preservation of >70% including a high percentage of patients with tumors close to the fovea or optic disk considered at high risk for vision loss.

Treatment with bel-sar was generally reported to be well-tolerated at all doses including the highest treatment regimen with two cycles of therapy.

Adverse events were generally mild or moderate, transient and manageable with standard of care treatments in most patients.

Expected AEs of vitreous inflammation, anterior chamber inflammation and increased intraocular pressure were manageable with steroid treatment and ocular antihypertensives.

Intraocular inflammation represented the most common treatment related AE, which was expected given the viral-like component of our drug and the pro-immunogenic mechanism of action.

These inflammatory events included anterior chamber inflammation in approximately 71% of patients and posterior inflammation in 91% of patients.

Posterior inflammation originated in and around the tumor, suggesting that this inflammation may, at least in part, be related to potential antitumor activity of AU-011.

This inflammation was not prophylactically treated, which allowed the immune response to initiate before starting steroid therapy.

Cases of anterior inflammation were treated with topical steroid drops, while posterior inflammation was treated with topical, oral, intravitreal or periocular steroids.

Approximately 46% of patients also had transient increases in intraocular pressure that were managed with topical anti-hypertensives.

One patient had a Grade III vitreous opacity that was removed with surgery.

Adverse events of pigmentary changes around the tumor margin were reported in approximately 38% of patients and were the cause of the only two drug-related serious adverse events, or SAEs, of vision loss.

In these two subjects the edge of the tumor was within 1.0 mm of the fovea and the pigmentary changes occurred in the fovea causing the vision loss of greater than 30 letters.

Two SAEs that were not related to treatment were reported in two patients, one event each of papillary renal cell carcinoma and diverticulitis.

A high proportion of patients (43/56;

77%) in the trial were at high risk for vision loss with radiotherapy because their tumors were close to the fovea or optic disk (<3.0 mm).

If these patients had been treated with radiotherapy, historical studies suggest that a large proportion would have a worse visual acuity prognosis, with many having vision of <20/200 or legal blindness within five years.

Approximately 90 percent of high-risk patients with tumors near the fovea or optic nerve had a significant vision loss with plaque brachytherapy as the plaque led to irreversible damage to the fovea or optic nerve.

In contrast, most of the high-risk patients in our trial were successfully treated with AU-011 without a significant impact on their visual acuity, highlighting the potential benefit relative to the current standard of care.

We believe that AU-011 has the potential to deliver meaningful clinical benefit to patients with early-stage choroidal melanoma as a first-line treatment while decreasing the likelihood of irreversible loss of visual acuity and other severe comorbidities that are often associated with radiotherapy.

There were only two drug-related SAEs of vision loss related to pigmentary changes around the edge of the tumor.

Suprachoroidal delivery

As part of our overall development strategy, we are evaluating and developing the SC route of administration to optimize the delivery of AU-011 to the choroid where the tumor is located.

The suprachoroidal space, or SCS, is a potential space bound between the external surface of the choroid and the internal surface of the sclera and encompasses the full circumference of the full posterior segment of the eye.

As part of our overall development strategy, we are evaluating and developing the SC route of administration to optimize the delivery of bel-sar to the choroid where the tumor is located.

Suprachoroidal administration with SCS Microinjector TM .

Our preclinical data supports the SCS as an attractive site for intraocular drug delivery for choroidal melanoma as it provides an optimization of the therapeutic index due to increased bioavailability at the tumor and lower exposure to key ocular structures.

Based on our nonclinical data, we believe SC administration of bel-sar can result in a better target product profile with reduced inflammation because of significantly lower exposure of the drug to the vitreous and potentially higher clinical activity than intravitreal administration because of increased drug exposure to the tumor in the choroid.

Phase 2 suprachoroidal administration trial

We are currently conducting a Phase 2 dose escalation trial of AU-011 with SC administration in 22 patients with choroidal melanoma.

The primary objective of this portion of the trial is to determine the maximum tolerated dose and treatment regimen.

We believe SC administration can result in a better target product profile with reduced inflammation because of significantly lower exposure of the drug to the vitreous and potentially higher clinical activity than intravitreal administration because of increased drug exposure to the tumor in the choroid.

The results from the initial patient cohorts with an average of six months follow-up demonstrated that SC administration was generally well tolerated with no serious treatment related adverse events reported.

To date, drug and laser related adverse events have included four patients with mild anterior uveitis, two patients each with both punctate keratitis and eye pain, and one patient each with conjunctiva hyperemia, conjunctival edema, cystoid macular edema, eyelid edema, pupils unequal retinal pigment epitheliopathy, salivary gland enlargement and vision blurred.

One moderate adverse event of anterior scleritis related to the injection procedure was also observed.

All of the events resolved spontaneously or with standard of care treatment.

Of note, no inflammation in the vitreous has been observed in this trial through the two cycles of the highest tested dose (40 µg).

Given the tolerability profile with the 40 µg dose, we increased the highest dose to 80 µg per treatment and plan to explore a new treatment regimen with three cycles of treatment.

Currently 2 cycles of 80 µg have been confirmed to be safe and the third cycle of treatment is underway.

We plan to present the six to 12 month safety and efficacy data from this trial in the second half of 2022.

We are currently conducting a Phase 2 dose-escalation trial of bel-sar with SC administration in up to 22 patients with choroidal melanoma.

The primary objective of this trial is to determine the maximum tolerated dose and treatment regimen.

The safety and tolerability data as of the January 10, 2023 data cutoff (n=20) demonstrated that SC administration was generally well tolerated.

In addition, the tolerability profile was substantially improved versus the safety profile observed in the phase 1b/2 study using IVT administration, with no dose limiting toxicities or serious treatment related adverse events reported.

No deaths have been reported in any of the trials to date.

As summarized in Figure 7 below, drug and laser related adverse events have been mild and only five patients had anterior chamber cells and/or inflammation, which resolved spontaneously or with standard of care treatment.

Four moderate adverse events are not listed in the table and were related to the injection procedure, with one each of anterior scleritis, subconjunctival hemorrhage, conjunctival edema and eye irritation.

Of note, no inflammation in the vitreous has been observed in this trial with up to three cycles of the highest tested dose (80 µg with 2 laser applications).

A total of 6 SAEs unrelated to treatment have been reported in 3 patients:

1 unrelated SAE of retinal detachment in 1 patient, 1 unrelated SAE of retinal vein occlusion in 1 patient and 4 unrelated SAEs of sarcoma, seizure, brain abscess and deep vein thrombosis in 1 patient.

Given the generally favorable tolerability profile we increased the treatment regimen to three cycles of treatment which was one cycle more than the highest regimen in the IVT trial.

The preliminary safety and tolerability of 3 cycles has been evaluated, and based on the data observed to date, additional patients in this cohort may be enrolled.

We plan to present an average of 12-month safety and efficacy data from this trial in the second half of 2023.

Adverse events among the 20 patients enrolled in the Phase 2 suprachoroidal trial to date.

Pivotal trial plan in choroidal melanoma

In alignment with the FDA and EMA, we plan on conducting two pivotal trials with AU-011.

We anticipate to start the first pivotal trial in the second half of 2022 in patients with high-risk indeterminate lesions and small choroidal melanoma who have active growth prior to enrollment.

We intend to randomize a minimum of 70 patients in this trial to three arms 2:1:2 to receive therapeutic regimen AU-011, low dose regimen AU-011 or a sham control.

Patients will be selected based on having a small amount of active growth within two years of trial enrollment, and a tumor size of 0.5 mm to 3.0 mm in thickness and less than 10 mm in diameter.

Pivotal Trial

Preliminary design of the pivotal trial.

The key primary endpoint agreed with the FDA is contemplated to be the tumor thickness growth rate over 12 months, comparing the growth rates between the AU-011 high dose group and the sham group .

The first key secondary endpoint will be a composite time to event analysis that will evaluate the number of events of disease progression or visual acuity failure between the AU-011 high dose group and the sham group.

We will also evaluate time to disease progression and change from baseline in BCVA letter score.

There will be a minimum follow up for all patients of 12 months.

The trial has a power of >95% to meet the primary and the first key secondary endpoint.

Since there is no drug approved for the treatment of choroidal melanoma, we have agreed with FDA that a statistically significant difference on these endpoints will provide support from a regulatory perspective to meet the requirement of clinical effectiveness.

Given that choroidal melanoma is a rare disease and, based on the limited natural history data of the growth rate of these early-stage tumors, this trial will follow an adaptive design with the ability to perform a sample size re-estimation.

With this adaptive design, the sample size will be increased if either (1) the observed growth rate in the sham arm is lower than assumed or (2) the estimated treatment effect comparing the sham arm and the high dose arm is less than expected.

With this strategy, we believe we will improve the probability of success of the trial.

We also plan to conduct a second pivotal trial, which will be a Phase 3 randomized trial, that is expected to start enrolling when the first pivotal trial completes enrollment.

This Phase 3 trial is planned to be an identical design to the Phase 2b pivotal trial described above with the same primary and secondary endpoints.

The final sample size of this second pivotal trial will be determined by the final sample size of the Phase 2b pivotal trial.

If warranted by the data, we plan to submit the results of the first pivotal trial to support approval of AU-011 for the treatment of primary indeterminate lesions and small choroidal melanoma.

Based on the results of the first pivotal trial, if positive, and the fact that there are no therapies approved for the treatment of this rare disease, the FDA and EMA may agree to grant approval based on the first pivotal trial with the condition that the second Phase 3 pivotal trial should be completed as a post-approval commitment.

However, the FDA and/or EMA may require both trials for approval, which will be addressed subsequent to submission of the data from the first pivotal trial.

Registry Trial

We have agreement with the FDA that we will monitor all patients for a total of five years after dosing to evaluate the long-term tumor response, visual acuity preservation and safety, as well as the risk of metastatic disease and mortality, which we are doing in a Phase 4 registry trial.

To date, all 57 patients in the Phase 1b/2 trial with intravitreal administration have completed the Phase 1b/2 trial and 41 (72%) have entered the registry trial.

There are also 7 patients from the Ph2a portion of the SC trial that have entered the registry trial.

The data collected with an average follow up of more than two years from initial enrollment in the Phase 1b/2 trial or the Phase 2 SC trial and follow up in the registry demonstrates durability of tumor control, visual acuity preservation and related safety profile from treatment of AU-011.

All subjects in the registry trial treated only with AU-011 had stable vision and only 2 local progressions of disease after more than two years of average follow-up.

For those patients who progressed in tumor size in the Phase 1b/2 trial and who received standard of care with radiotherapy, two patients lost visual acuity and one additional patient had to have their eye enucleated because of tumor recurrence after radiotherapy, reaffirming our belief that there is a high unmet medical need in this patient population.

Only one of 40 patients in the registry had onset of metastatic disease which is an encouraging result as usually the metastatic risk for small melanomas is approximately 12% up to 10 years’

The data from the ongoing Phase 2 study using suprachoroidal administration was presented at Macula Society’s 46th Annual Meeting in February 2023 and continued to demonstrate a robust dose response between the subtherapeutic dose regimens (20% tumor control) and the therapeutic dose regimens with three cycles of therapy (89% tumor control) (Figure 8).

In addition, the safety profile to date has been favorable with no treatment related SAEs or significant AEs, which is encouraging given that the majority of these patients had tumors close to the fovea or optic disk.

The longer follow up (average of nine months) and the consistency of response in the planned Phase 3 patient population with 100% tumor control and 90% visual acuity preservation strongly support the assumptions for the success of the global Phase 3 trial which is on track to enroll the first patient in the first half of 2023.

The vision preservation rates were 88% or better in all subgroups, including patients assigned to the highest dose regimens.

Seven of the 8 patients assigned to the highest dose regimens were at high risk for vision loss if treated with radiotherapy (tumors ≤3 mm from the fovea or optic disc) (Figure 9).

Dose Response and Interim Tumor Control Rates Demonstrate Meaningful Clinical Benefit

High Vision Preservation Rates with 8-9 Months of Follow Up.

Global Phase 3 trial plan in choroidal melanoma

In alignment with the FDA, EMA and MHRA, we initiated activities of our Phase 3 trial AU-011-301.

This is a randomized, adaptive, sham-controlled, patient, assessor, and sponsor-masked trial to evaluate the efficacy and safety of bel-sar treatment via SC administration in patients with early-stage choroidal melanoma to support potential marketing authorization (Figure 10).

We intend to randomize a minimum of 85 patients in this trial to three arms 2:1:2 to receive therapeutic regimen bel-sar, low dose regimen bel-sar or a sham control.

We will use an enrichment strategy and plan to enroll patients based on having a small amount of active growth within two years prior to trial enrollment.

This will ensure that patients have actively growing lesions allowing for a reduction in the variability of timing and event rates of selected endpoints being used to establish the efficacy of bel-sar treatment.

The trial will utilize an adaptive design with the ability to perform a sample size re-estimation.

With this adaptive design, there will be an interim analysis approximately one month before the last patient is enrolled and the sample size could be increased from 85 patients up to 105 patients if either (1) the overall observed event rate is lower than assumed or (2) if the estimated ratio of events between the arms is slightly different than the current assumptions.

Phase 3 Adaptive Design Showing Interim Analysis and Potential Sample Size

Re-estimation from 85 Patients to 105 Patients.

The regimen of three cycles in the 80 µg bel-sar arm is based on preliminary safety data observed with this regimen, which was the highest tested in the Phase 2 AU-011-202 trial with no dose-limiting toxicities, treatment related severe AEs, or treatment related SAEs reported, as well as supportive preliminary efficacy data observed with this regimen.

The principal objective of the inclusion of the 40 µg bel-sar treatment arm is to minimize bias and improve masking of the 80 µg bel-sar treatment arm as requested by the FDA and is not powered for statistical comparison.

However, summary statistics will be reported for the 40 µg bel-sar treatment arm using the primary, key secondary, and selected additional endpoints.

A dose of 40 µg and 2 laser applications with the same regimen of 3 cycles was chosen for the second bel-sar treatment arm as this was the second highest dose/regimen tested in the Phase 2 SC trial (Cohort 5) and we believe it may have a therapeutic potential.

The trial will be patient, assessor (VA examiners and IRC readers) and sponsor-masked.

Masked readers at the IRC will assess the imaging data-based efficacy assessments including tumor thickness and largest basal, diameter, or LBD, during the trial.

Best corrected visual acuity will be assessed using the ETDRS protocol by masked, certified, VA examiners.

All measures will be taken to mask the patients during their trial participation period including the use of sham SC injections and sham laser on assigned treatment days.

Any patient in the trial who meets the tumor progression definition will be treated with SoC therapies as rescue treatment per Investigator judgment.

SoC therapies will include, but are not limited to, brachytherapy and proton beam therapy.

This will ensure that no patient has a delayed treatment if the tumor is progressing, and importantly, that all of the sham patients receive their SoC treatment in a timely manner and no later than in the regular clinical practice.

The primary endpoint for the Phase 3 trial will be a composite time to event analysis that will evaluate the number of events of tumor progression or visual acuity failure between the high dose bel-sar group and the sham group using a log rank test.

The first key secondary endpoint will be the time to tumor progression.

And we will also evaluate the tumor thickness growth rate over 52 weeks and visual acuity failure up to 52 weeks There will be a minimum follow up for all patients of 12 months.

The trial has a power of >90% to meet the primary endpoint.

Since there is no drug approved for the treatment of choroidal melanoma, we have aligned with FDA that a statistically significant difference on the primary endpoint will provide support from a regulatory perspective to meet the requirement of clinical effectiveness.

If warranted by the data, we plan to submit the results of the Phase 3 trial to support approval of bel-sar for the treatment of primary indeterminate lesions and small choroidal melanoma.

Based on the results of the Phase 3 trial, if positive, and the fact that there are no therapies approved for the treatment of this rare disease and that the standard of care with radiotherapy leaves patients with irreversible vision loss, the FDA and EMA may agree to grant approval based on a single Phase 3 trial.

However, the FDA and/or EMA may require two Phase 3 trials for approval, which will be addressed subsequent to reviewing the data from the Phase 3 trial with the regulators.

Registry Study

We have agreement with the FDA, EMA, and MHRA that we will monitor all patients for a total of five years after start of dosing to evaluate the metastatic and mortality risks as well as the long-term tumor response, visual acuity preservation and safety, which we are doing in a Phase 4 Registry study.

As of January 11 th , 2023, all 57 patients in the Phase 1b/2 trial (AU-011-101) with intravitreal administration have completed the trial and 45/57 have entered the Registry study.

In addition, 14/20 patients from the ongoing Phase 2 trial (AU-011-202) with SC administration have also entered the Registry study.

The data collected in the Registry is intended to assess the long-term (5 total years) safety, rate of metastatic disease, mortality, tumor control, and visual acuity preservation from bel-sar treatment.

Matched case control studies

The ability to demonstrate tumor control with long term visual acuity preservation could provide a favorable benefit-risk profile of AU-011 for the first line treatment of patients with early-stage choroidal melanoma compared to an invasive radiotherapy procedure.

To demonstrate the long-term value of visual acuity preservation for patients treated with AU-011, we are conducting two Matched Case Control, or MCC, studies that will provide data comparing AU-011 to radiotherapy.

A retrospective MCC study has been performed to provide an estimate of the vision benefit of AU-011 versus radiotherapy and to help estimate the treatment effect and powering of the prospective MCC study that was initiated in 2021.

The ability to demonstrate tumor control with long-term visual acuity preservation supports the potential of bel-sar to become the standard of care for the first-line treatment of patients with early-stage choroidal melanoma compared to an invasive radiotherapy procedure that leaves most patients with irreversible vision loss and other long-term comorbidities.

To demonstrate the long-term value of visual acuity preservation for patients treated with bel-sar, we are conducting two retrospective Matched Case Control, or MCC, studies that will provide data comparing bel-sar to brachytherapy.

The first retrospective MCC study has been performed to provide an estimate of the vision benefit of bel-sar, with IVT administration versus brachytherapy and a second retrospective MCC study with SC administration to support the overall visual results is planned once the AU-011-301 trial is completed.

These studies are discussed below.

Retrospective matched case control study analysis

To estimate the vision preservation of AU-011 compared to radiotherapy we are conducting a retrospective MCC analysis comparing the group of patients in our Phase 1b/2 trial who had tumors at high risk for vision loss due to its location close to the fovea or optic disk and were treated with AU-011 (n=43) to patients with tumors of similar size and location previously treated with radiotherapy at the Wills Eye Hospital Ocular Oncology Service led by Dr.

Retrospective matched case control study with intravitreal administration

To assess the vision preservation benefit of bel-sar compared to brachytherapy we are conducting a retrospective MCC analysis comparing the group of patients in our Phase 1b/2 trial who had tumors at high risk for vision loss due to its location close to the fovea or optic disk and were treated with bel-sar (n=43) to patients with tumors of similar size and location previously treated with brachytherapy at the Wills Eye Hospital Ocular Oncology Service led by Dr.

Carol Shields.

This analysis will match up to 5:1 patients using the key baseline characteristics that impact long term visual acuity –

This study matched patients up to 5:1 using the key baseline characteristics that impact long-term visual acuity –

tumor location, tumor size and baseline visual acuity –

and will compare the visual acuity after treatment with each therapy in terms of a change from baseline in vision and absolute vision at years one, two and three.

Results from our Phase 1b/2 trial with intravitreal administration show visual acuity preservation in a majority of patients after two cycles of treatment with AU-011 at twelve months.

In addition, data from our ongoing registry trial to date do not show a change or decline in vision for patients treated with AU-011 with long term follow up, while two patients that failed treatment with AU-011 and were treated with radiotherapy are having vision loss.

We believe that the results of the retrospective study will further validate these results and strengthen our thesis that the mechanism of AU-011 enables durable preservation of visual acuity providing an important advantage to radiotherapy.

The results of the retrospective study are expected to be published with Dr.

Carol Shields in the first half of 2022 and will be used to estimate the assumptions to power a prospective Matched Case Control study that we plan to start shortly thereafter.

Prospective matched case control study

Based on the results of the retrospective MCC analysis we are initiating a prospective matched case control trial where we will compare, after one, two, and three years, the visual acuity of patients treated with AU-011 versus patients treated with radiotherapy.

Like the retrospective MCC analysis, patients will be matched based on similar tumor size, location, and baseline vision at the beginning of the trial.

Matched case control prospective trial comparing visual acuity outcomes after treatment with AU-011 or plaque radiotherapy.

The patients are planned to be matched on average 3:1 (Radiotherapy:

AU-011) to increase the power.

The matching and analysis will be masked and performed independently.

The objective is to show the vision benefit of AU-011 compared to radiotherapy using prospective data for both groups.

Based on initial results in the retrospective MCC study, we believe these results may support the benefit/risk discussion of our regulatory submission and to serve as support for pricing and reimbursement discussions.

Choroidal metastases from other tumors

We can apply our mechanism of action for AU-011, which we believe has the ability to preserve key ocular structures, in multiple other ocular oncology indications.

Beyond primary choroidal melanoma, we are developing AU-011 in additional ocular oncology indications, starting with choroidal metastases.

Choroidal metastases are a common intraocular malignancy that are caused by multiple primary cancers in the body that metastasize to the eye due to the high blood flow and perfusion that provides an environment receptive to metastases and tumor growth.

Approximately 22,000 patients have choroidal metastases globally every year.

and approximately half (~47%) of the patients with choroidal metastases have primary breast tumors.

and we are comparing the visual acuity after treatment with each therapy in terms of a change from baseline in vision and absolute vision every year for up to 5 years.

As shown in Figure 11, the initial trial results showed a statistically significant vision preservation benefit for bel-sar compared to brachytherapy at year 2.

Importantly, the data showed that vision after treatment with bel-sar remained stable through the first and second year demonstrating the long-term visual acuity benefit of the treatment with bel-sar.

In the current analysis the vision results from year 2 with bel-sar were extrapolated to compare against the vision data with brachytherapy through year 5 (Figure 11).

By year 5 there was over an 8-line benefit (>0.8 logMAR difference) of vision preservation comparing bel-sar (orange bar) to brachytherapy (blue bar).

Comparison of visual acuity outcomes (logMAR Vision) after treatment with bel-sar versus treatment with Brachytherapy

We believe that the results of this retrospective study validate and strengthen our data supporting that the treatment with bel-sar results in durable preservation of visual acuity which provides an important advantage to brachytherapy as a first line treatment option for early-stage disease.

We look forward to publishing these results with Dr.

Carol Shields/Wills Eye Hospital in the second half of 2023 and to continue to analyze the data up to year five.

Retrospective matched case control study with suprachoroidal administration

Based on the positive results from the IVT rMCC study we are going to conduct a second retrospective MCC study in lieu of a prospective study.

We will compare the visual acuity of patients treated with bel-sar with SC administration from both the Phase 2 and Phase 3 studies versus the visual acuity of patients treated with plaque brachytherapy.

Choroidal metastasis from other tumors

We can apply our mechanism of action for bel-sar, which we believe has the ability to preserve key ocular structures, in multiple other ocular oncology indications.

Beyond primary choroidal melanoma, we are developing bel-sar in additional ocular oncology indications, starting with choroidal metastasis.

Choroidal metastasis is a common intraocular malignancy that is caused by multiple primary cancers in the body that metastasize to the eye due to the high blood flow and perfusion that provides an environment in the choroid receptive to metastases and tumor growth.

Approximately 22,000 patients have choroidal metastasis globally every year and approximately half (~47%) of the patients with choroidal metastasis have primary breast tumors.

Other common primary cancers include lung (approximately 21%), gastrointestinal (4%), kidney (2%), cutaneous melanoma (2%) and prostate cancer (2%), and approximately 17% of cases with an unknown primary tumor type.

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Given their poor prognosis, the quality of life and, in particular, maintenance of vision, for patients with metastatic cancer is critical and as such there is a significant unmet need for an effective vision sparing ocular treatment that enables patients to avoid additional surgical interventions.

We are planning to initiate clinical development in this indication in the second half of 2022, subject to FDA acceptance of an IND.

AU-011 for the treatment of non-muscle-invasive bladder cancer

We are developing AU-011 for the treatment of non-muscle-invasive bladder cancer, or NMIBC.

We are planning to initiate clinical development with AU-011 with intramural administration, a novel route of administration for the treatment of patients with intermediate and high-risk bladder cancer lesions.

This novel route of administration is based on the direct administration of AU-011 into the lamina propria of the bladder wall at the tumor edge.

It is intended to place high levels of AU-011 at the base of the tumor where laser activation can cause localized necrosis preventing residual tumor cells from further growth and recurrence.

We are conducting IND-enabling studies with AU-011 to demonstrate the feasibility of this approach and intend to begin clinical trials in the second half of 2022.

The IND has been opened with the FDA, where we received fast track designation, and we plan to initiate a Phase 2 clinical trial in choroidal metastasis in the second half 2023.

Non-muscle-invasive bladder cancer

We are developing bel-sar for the treatment of NMIBC utilizing an intramural route of administration for the treatment of patients with intermediate and high-risk bladder cancer.

This novel route of administration is based on the direct administration of bel-sar into the lamina propria of the bladder wall at the tumor edge.

It is intended to place high levels of bel-sar at the base of the tumor where laser activation can cause localized necrosis preventing residual tumor cells from further growth and potentially solving tumor recurrence, which is one of the highest unmet medical needs in this disease.

We began a Phase 1 trial in late 2022 and the trial is currently enrolling.

Bladder cancer disease background

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Delays in diagnosis can lead to a worsened prognosis due to the presence of more advanced stage disease by the time a confirmation of bladder cancer is made.

Our solution AU-011

We are currently developing AU-011 for the treatment of NMIBC with IND-enabling studies and plan to initiate a Phase 1a trial in the second half of 2022, subject to FDA acceptance of an IND, to evaluate the feasibility of intramural administration and to assess distribution, safety and initial proof of mechanism with evaluation of local acute cellular necrosis after laser activation.

We believe AU-011 represents a potential targeted therapy that can be activated using a similar laser as that currently utilized in our choroidal melanoma program, following a well-characterized approach with commercially available devices used by urologists.

AU-011 has been observed to be highly selective, through both its specific binding to modified HSPGs on cancer cells, combined with focused laser activation leading to cytotoxicity and subsequent immune activation.

Our solution bel-sar

We are currently developing bel-sar for the treatment of NMIBC and have initiated a Phase 1 trial to evaluate the feasibility of intramural administration and to assess distribution, safety and proof-of-mechanism with evaluation of local acute cellular necrosis after laser activation.

We believe bel-sar represents a potential targeted therapy that can be activated using a similar laser as that currently utilized in our choroidal melanoma program, following a well-characterized approach with commercially available devices used by urologists.

Bel-sar has been observed to be highly selective, through both its specific binding to a subset of modified GAGs that are part of the heparan sulphate chain of HSPGs on cancer cells, combined with focused laser activation leading to cytotoxicity and subsequent immune activation.

We believe the immune response could play an even larger role in bladder cancer, given that bladder cancer has a well-documented response to immune activation.

This immune sensitivity is substantiated by the effectiveness of immune modulatory agents like BCG.

We have observed in preclinical experiments that AU-011 was able to target bladder cancer cells in both in vitro and in vivo tumor models.

Laser activation of AU-011 resulted in cell killing of bladder tumor cells while sparing other normal surrounding cells as a single agent.

This cell killing induced a pro-immunogenic antitumor response that resulted in complete elimination of tumors in a mouse xenograft model and durable responses as well as the prevention of tumor re-implantation.

This highlights the value of AU-011 to generate antitumor immunity and prevent tumor recurrence.

Based on our preclinical data, AU-011 was also observed to be highly synergistic with checkpoint inhibitors that have already been approved for the treatment of a subset of NMIBC and metastatic bladder cancer patients.

Overview of AU-011’s dual mechanism of action with acute tumor cell necrosis and secondary antitumor immunity.

This immune sensitivity is substantiated by the effectiveness of immune modulatory agents like Bacillus Calmette-Guérin, or BCG.

We have observed in nonclinical experiments that bel-sar was able to target bladder cancer cells in both in vitro and in vivo tumor models.

Laser activation of bel-sar resulted in cell killing of bladder tumor cells while sparing other normal surrounding cells as a single agent.

This cell killing induced a pro-immunogenic antitumor response that resulted in complete and durable tumor regressions in mouse xenograft models as well as the prevention of tumor re-implantation.

This highlights the value of bel-sar to generate antitumor immunity and prevent tumor recurrence.

Based on our nonclinical data, bel-sar was also observed to be highly synergistic with checkpoint inhibitors that have already been approved and are in development for the treatment of NMIBC and metastatic bladder cancer patients.

Overview of bel-sar’s dual mechanism of action with acute tumor cell necrosis and secondary antitumor immunity.

Clinical plans in NMIBC

We intend to conduct a Phase 1 trial in intermediate and high risk NMIBC patients that are either candidates for TURBT or cystectomy beginning in the second half of 2022, subject to FDA acceptance of our IND.

We plan to evaluate the safety, tolerability and feasibility of AU-011 using the intramural route of administration.

After removal of the tumors, we plan to further assess the tumor tissue with histopathology to evaluate the presence of acute cellular necrosis as an early sign of antitumor response.

We are currently enrolling a Phase 1 trial in intermediate and high-risk NMIBC patients that are either candidates for transurethral resection of the bladder tumor, or TURBT, or cystectomy.

The trial design is presented in Figure 13 below.

Phase 1 window of opportunity trial to establish route of administration and tumor necrosis.

In this Phase 1 trial, we intend to evaluate the tumor distribution of AU-011 after intramural administration in intermediate to high-risk subjects with NMIBC.

In cohort 1, we will assess AU-011 local and systemic exposure without laser activation.

In cohorts 2 and 3 we will assess AU-011 and laser activation in patients with intermediate risk that are planned to receive TURBT and high risk patients that are unresponsive to BCG and that are planned to receive cystectomy.

In these cohorts, we plan to administer AU-011 followed by laser activation, and one week later the tumor will be removed by TURBT (cohort 2) or the entire bladder by cystectomy (cohort 3), and we will assess tumor response in the form of necrosis and the immune response by pathology and immunohistochemistry.

This Phase 1a trial is planned to be conducted in association with the National Cancer Institute at approximately three selected private sites in the United States and is planned to be initiated in the second half of 2022.

Shortly after this initial trial, we are planning to conduct a Phase 1b/2 dose escalation and expansion trial in the treatment of NMIBC.

We believe this Phase 1b/2 trial will help establish the treatment regimen and we are planning to involve multiple leading sites in the treatment of bladder cancer.

In this Phase 1 trial, we intend to evaluate the tumor distribution of bel-sar after intramural administration in intermediate to high-risk patients with NMIBC undergoing TURBT or cystectomy.

In cohorts 1a and 1b, we are assessing bel-sar local and systemic exposure without laser activation.

In cohorts 2, 3 and 4 we are assessing bel-sar plus laser activation in patients with intermediate risk that are planned to receive TURBT and high-risk patients that are unresponsive to BCG and that are planned to receive cystectomy.

In these cohorts, we plan to administer bel-sar followed by laser activation, and one week later the tumor will be removed by TURBT (cohorts 2 and 4) or the entire bladder will be removed by cystectomy (cohort 3), and we will assess tumor response in the form of necrosis and the immune response by pathology and immunohistochemistry.

This Phase 1 trial is being conducted at approximately 10 sites in the United States.

Other HSPG-Expressing Tumors

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Accordingly, we believe we may be able treat a broad spectrum of solid tumors.

We plan to select our next solid tumor indication for clinical development with AU-011 based on its status as a tumor type with high HSPG expression, such as cutaneous melanoma and head and neck cancer.

We plan to select our next solid tumor indication for clinical development with bel-sar based on its status as a tumor type with high HSPG expression, such as cutaneous melanoma and head and neck cancer.

The biotechnology and pharmaceutical industries are characterized by rapid innovation of new technologies, fierce competition and strong defense of intellectual property.

While we believe that AU-011 and our knowledge, experience and scientific resources provide us with competitive advantages, we may face competition from major pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others.

While we believe that bel-sar and our knowledge, experience and scientific resources provide us with competitive advantages, we may face competition from major pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others.

We compete in the segments of the pharmaceutical, biotechnology, and companies focusing on developing therapies in the oncology field.

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Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy, safety and convenience of our products.

Our competitors may obtain regulatory approval of their products more rapidly than we may or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize AU-011 and any future product candidates.

Our competitors may also develop drugs that are more effective, more convenient, more widely used and less costly or have a better safety profile than our products and these competitors may also be more successful than us in manufacturing and marketing their products.

Ocular oncology

Currently we are not aware of any other company that has a drug in clinical development for the treatment of primary choroidal melanoma or for the treatment of choroidal metastases, which are our first two planned ocular oncology indications.

Currently we are not aware of any other company that has a drug in clinical development for the treatment of early-stage disease, which includes indeterminate lesions and small choroidal melanomas, or for the treatment of choroidal metastasis, which are our first two planned ocular oncology indications.

The standard of care as a first line treatment for patients is plaque brachytherapy or proton beam therapy.

Verteporfin (Visudyne) is currently used off label in some cases of early-stage disease alone or in combination with transpupillary thermotherapy.

It is possible that there may be other companies with compounds in pre-clinical development but we are not aware of any data that has been published or presented at any conference.

It is possible that there may be other companies with compounds in preclinical development but we are not aware of any data that has been published or presented at any conference.

Given our stage of development, we believe we are the furthest along in development.

Our focus in ocular oncology is the treatment of the primary cancer in the eye before it metastasizes.

Immunocore Holdings PLC, or Immunocore, recently received FSA approval for KIMTRAK® (tebentafusp-tebn) injection for metastatic uveal melanoma.

Our focus in ocular oncology is the early treatment of the primary cancer in the eye before it metastasizes.

Immunocore Holdings PLC, or Immunocore, recently received FDA approval for KIMMTRAK® (tebentafusp-tebn) injection for metastatic uveal melanoma.

Immunocore’s drug is indicated for the treatment of HLA-A*02:01-positive adult patients with unresectable or metastatic uveal melanoma and has not been developed to treat the early-stage disease in the eye.

Ideaya Biosciences is in Phase 2 clinical development to treat metastatic uveal melanoma.

In addition, they have initiated a study with neoadjuvant treatment in patients that are selected to receive enucleation or radiotherapy with the goal of either preserving the eye or reducing the dose of radiotherapy.

Urologic oncology

There are multiple companies that have drugs in clinical development for the treatment of intermediate and high risk NMIBC patients that are unresponsive to BCG.

There are multiple companies that have drugs in clinical development for the treatment of intermediate and high-risk NMIBC patients that are unresponsive to BCG and several trials ongoing in BCG naïve patients.

Ferring Pharmaceuticals has recently obtained FDA approval for ADSTILADRIN for the treatment of adult patients with high-risk BCG-unresponsive NMIBC with carcinoma in situ, or CIS, with or without papillary tumors.

ImmunityBio, Inc.

has presented Phase 2/3 data for their drug Anktiva in combination with BCG in patients with BCG unresponsive high grade NMIBC and they plan to submit a BLA in 2022.

Sesen Bio, Inc.

presented Phase 3 data for their lead candidate, Viceneum, as a treatment for BCG-unresponsive NMIBC, but in August 2021 the FDA sent Sesen Bio, Inc.

a Complete Response Letter, indicating that the agency would not approve the application.

The agency recommended additional clinical and statistical data analyses, and had concerns related to the company's Chemistry, Manufacturing and Controls (CMC).

FerGene, Inc.

announced positive data of their pivotal Phase 3 clinical trial evaluating nadofaragene firadenovec (rAd-IFN/Syn3), an investigational gene therapy, for the treatment of high-grade, BCG-unresponsive NMIBC, however, they have announced delays due to chemistry, manufacturing and controls problems, so it is uncertain when they marketing application will be submitted (last update on BLA filing was May 2020).

has presented Phase 2/3 data for their drug Anktiva in combination with BCG in patients with BCG unresponsive high grade NMIBC and has submitted a BLA with a PDUFA date of May 23, 2023.

UroGen Pharma Ltd.

has a drug Jelmyto, a gel reformulation of mytomicin that is currently approved to treat low grade upper tract urothelial cancer, which is currently in Phase 3 development for the treatment of NMIBC.

CG Oncology, Inc.

has a drug (CG0070) that is being investigated in a global Phase 3 clinical trial as a monotherapy for the treatment of BCG-unresponsive NMIBC.

CG Oncology’s cretostimogene grenadenorepvec (CG0070) is being investigated in a global Phase 3 clinical trial as a monotherapy for the treatment of BCG-unresponsive NMIBC and in combination with KEYTRUDA in a Phase 2 trial in the same indication.

Asieris Pharmaceuticals has APL-1202 in development for NMIBC as a monotherapy and in combination with other therapies.

Pembrolizumab has been approved for or the treatment of BCG-unresponsive NMIBC with CIS (with or without papillary tumors) for patients who are unfit or unwilling to undergo radical cystectomy.

In addition, there are several additional immune checkpoint inhibitors, or ICIs, in development as a monotherapy and there are a number of combination trials with ICIs in an effort to improve efficacy and durability of response.

In addition, there are several early-stage treatments entering the clinic such as Protara Therapeutics, Inc.’s TARA-200.

Our License Agreements

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Additionally, our payment obligations to NIH are subject to an annual minimum royalty payment of low five figures.

As of December 31, 2021, we have paid NIH approximately $0.4 million in aggregate milestones under the NIH License Agreement.

We recognized no milestones related to this agreement and related amendments for the years ended December 31, 2022 and 2021.

In addition to milestones under the agreement, we reimburse the NIH for any patent prosecution costs incurred.

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The expiry of the last to expire patent licensed under the agreement is September 2034.

During the years ended December 31, 2021 and 2020, we paid $0.03 million and $0.02 million, respectively, in fees associated with the NIH License Agreement.

LI-COR Exclusive License and Supply Agreement

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Intellectual property

Our success depends in part on our abilities to (1) obtain and maintain proprietary protection for our lead virus-like drug conjugate product candidate belzupacap sarotalacan (AU-011), (2) defend and enforce our intellectual property rights, in particular, our patent rights, (3) preserve the confidentiality of our know-how relating to, for example, certain manufacturing steps, material components and characteristics of our formulations, and (4) operate without infringing valid and enforceable intellectual property rights of others.

We seek to protect our proprietary position by, among other things, exclusively licensing United States and certain foreign patents and patent applications and filing United States and certain foreign patent applications related to AU-011, where patent protection is available.

Our success depends in part on our abilities to (1) obtain and maintain proprietary protection for our lead virus-like drug conjugate product candidate bel-sar, (2) defend and enforce our intellectual property rights, in particular, our patent rights, (3) preserve the confidentiality of our know-how relating to, for example, certain manufacturing steps, material components and characteristics of our formulations, and (4) operate without infringing valid and enforceable intellectual property rights of others.

We also rely on know-how, continuing technological innovation and confidential information as well as pursue licensing opportunities to develop and maintain our proprietary position and protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

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Our patent portfolio includes a combination of issued patents and pending patent applications that are owned by us, co-owned by us or licensed by us from third parties.

As of January 19, 2022, we have an exclusive license (with regard to ocular cancers) and a non-exclusive license (with regard to solid tumors in humans for a specific indication) from LI-COR under one issued United States patent;

As of February 13, 2023, we have an exclusive license (with regard to ocular cancers) and a non-exclusive license (with regard to solid tumors in humans for a specific indication) from LI-COR under one issued United States patent;

an exclusive license from NIH under four issued United States patents and three issued foreign patents;

an exclusive license from INSERM-TRANSFERT (Inserm) under three issued United States patents, and six granted foreign patents;

and exclusive rights under a Cooperative Research and Development Agreement (CRADA) with the United States Department of Health and Human Services (DHHS), as represented by the National Cancer Institute, and Institute, Center, or Division of the NIH, under three issued United States patents, three pending non-provisional United States patent applications, eight foreign patents, and eleven pending foreign patent applications.

In addition, as of January 19, 2022, we solely own four issued United States patents, one pending non-provisional United States patent application, six pending foreign patent applications, and one pending United States provisional application.

We intend to pursue, when possible, additional patent protection, including composition of matter, method of use and process claims related to AU-011.

an exclusive license from INSERM-TRANSFERT, or Inserm, under three issued United States patents, and six granted foreign patents;

and exclusive rights under a Cooperative Research and Development Agreement, or CRADA, with the United States Department of Health and Human Services, or DHHS, as represented by the National Cancer Institute, and Institute, Center, or Division of the NIH, under three issued United States patents, three pending non-provisional United States patent applications, eight foreign patents, and eleven pending foreign patent applications.

In addition, as of February 13, 2023, we solely own four issued United States patents, one pending non-provisional United States patent application, six pending foreign patent applications, and one pending United States international Patent Cooperation Treaty, or PCT, application.

We intend to pursue, when possible, additional patent protection, including composition of matter, method of use and process claims related to bel-sar.

Patent families

We license one patent family from LI-COR and one patent family from the NIH, co-own and license one patent family from Inserm, co-own two patent families with DHHS/NIH and have exclusive rights under a CRADA, and solely own two patent families, all of which are generally directed to the AU-011 product and related methods of use and production.

We license one patent family from LI-COR and one patent family from the NIH, co-own and license one patent family from Inserm, co-own two patent families with DHHS/NIH and have exclusive rights under a CRADA, and solely own two patent families, all of which are generally directed to the bel-sar product and related methods of use and production.

The first family, licensed from LI-COR, includes one issued United States patent.

This patent includes claims directed to (1) fluorescent phthalocyanine dyes and (2) processes for making the dyes (e.g., the IRDye 700DX ® dye molecules used in AU-011).

This patent includes claims directed to (1) fluorescent phthalocyanine dyes and (2) processes for making the dyes (e.g., the IRDye 700DX ® dye molecules used in bel-sar).

This patent has a standard expiration date of October 23, 2023, subject to potential extensions.

The second family, licensed from NIH, includes four issued United States patents, one issued European patent, and one issued patent in each of Australia and Canada.

Patents in this family include claims directed to (1) methods for inhibiting the proliferation of and/or killing cancer cells using a therapeutic agent formulated with a papilloma virus-like particle, (2) methods that include administering to a subject (e.g., a subject having a melanoma) a papilloma virus-like particle having a fluorescent dye and exposing the dye to an excitation wavelength of light, and (3) methods for detecting cancer cells using a papilloma virus-like particle having a detectable label.

Patents in this family include claims directed to (1) methods for inhibiting the proliferation of and/or killing cancer cells using a therapeutic agent formulated with a papilloma virus-like particle, (2) methods that include administering to a patient (e.g., a patient having a melanoma) a papilloma virus-like particle having a fluorescent dye and exposing the dye to an excitation wavelength of light, and (3) methods for detecting cancer cells using a papilloma virus-like particle having a detectable label.

This patent has a standard expiration date of May 1, 2028, subject to potential extensions.

The third family, which we co-own with and license from Inserm, includes three issued United States patents, two issued European patents, an issued patent in each of Canada, Hong Kong, India and Japan.

Patents in this family include claims directed to (1) a modified papillomavirus (HPV16) L1 protein having reduced immunogenicity relative to wild-type HPV16 L1 protein and an FG loop having the specific amino acid sequence that is present in AU-011, (2) nanoparticles comprising the modified L1 protein, (3) methods of using the modified L1 protein to deliver therapeutic agents, and/or (4) methods of producing nanoparticles comprising the modified L1 protein.

Patents in this family include claims directed to (1) a modified papillomavirus (HPV16) L1 protein having reduced immunogenicity relative to wild-type HPV16 L1 protein and an FG loop having the specific amino acid sequence that is present in bel-sar, (2) nanoparticles comprising the modified L1 protein, (3) methods of using the modified L1 protein to deliver therapeutic agents, and/or (4) methods of producing nanoparticles comprising the modified L1 protein.

This patent has a standard expiration date of July 24, 2029, subject to potential extensions.

The fourth patent family, which we own, includes four issued United States patents.

Patents in this family include claims directed to (1) codon-optimized nucleic acids having the particular nucleotide sequence that encodes the modified papillomavirus (HPV16) L1 protein present in AU-011, (2) methods of producing nanoparticles that include the modified HPV16 L1 protein encoded by the codon-optimized nucleic acids, and (3) methods of using the nanoparticles that include the modified HPV16 L1 protein encoded by the codon-optimized nucleic acids to deliver a therapeutic agent to a subject having cancer.

Patents in this family include claims directed to (1) codon-optimized nucleic acids having the particular nucleotide sequence that encodes the modified papillomavirus (HPV16) L1 protein present in bel-sar, (2) methods of producing nanoparticles that include the modified HPV16 L1 protein encoded by the codon-optimized nucleic acids, and (3) methods of using the nanoparticles that include the modified HPV16 L1 protein encoded by the codon-optimized nucleic acids to deliver a therapeutic agent to a patient having cancer.

This patent has a standard expiration date of February 7, 2033, subject to potential extensions.

The fifth patent family, which we co-own with DHHS/NIH and have exclusive rights under a CRADA, includes three issued United States patents, one issued European patent, an issued patent in each of Australia, Canada, Hong Kong, Republic of Korea and Mexico, two issued patents in Japan, and two pending patent applications in the United States, and one pending patent application in each of Australia, Brazil, China and Europe.

The fifth patent family, which we co-own with DHHS/NIH and have exclusive rights under a CRADA, includes three issued United States patents, two issued patents in each of Europe, Australia, and Japan, an issued patent in each of Canada, Hong Kong, Republic of Korea and Mexico, two pending patent applications in the United States, and one pending patent application in each of Australia, Brazil, China and Europe.

Patents in this family include claims directed to (1) tumor-targeting papilloma virus-like particles containing near infrared phthalocyanine dye molecules that become toxic or produce a toxic molecule upon light activation, (2) methods that include delivering the papilloma virus-like particles to an ocular tumor, and/or (3) methods of producing tumor-targeting bioconjugates that include the papilloma virus-like particles and near infrared phthalocyanine dye molecules.

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Patents issuing from this family would have a standard expiration date of April 11, 2038, subject to potential extensions.

The eighth patent family, which we own, includes a pending United States provisional application with claims directed to a method for treating a bladder tumor by administering a therapeutic agent to a region of the lamina propria of the bladder wall that is proximate to the bladder tumor.

Patents issuing from applications claiming priority to this provisional application would have a standard expiration date of September 2042 (assuming an international PCT application claiming priority to this U.S.

provisional application is filed in September 2022).

The eighth patent family, which we own, includes a pending international PCT application with claims directed to a method for treating a bladder tumor by administering a therapeutic agent to a region of the lamina propria of the bladder wall that is proximate to the bladder tumor.

Patents issuing from applications claiming priority to this international PCT application would have a standard expiration date of September 7, 2042.

Government Regulation

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Biologics are also subject to other federal, state and local statutes and regulations.

Our product candidate, AU-011, has not been approved by the FDA for marketing in the United States.

Our product candidate, bel-sar, has not been approved by the FDA for marketing in the United States.

The process required by the FDA before any product candidates we develop are approved for therapeutic indications and may be marketed in the United States generally involves the following:

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FDA review and approval of the BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the biologic in the United States.

Preclinical and clinical trials for biologics

Before testing any drug or biologic in humans, the product candidate must undergo rigorous preclinical testing.

Preclinical studies include laboratory evaluations of chemistry, formulation and stability, as well as in vitro and animal studies to assess safety and in some cases to establish the rationale for therapeutic use.

The conduct of preclinical studies is subject to federal and state regulations and requirements, including GLP requirements for safety and toxicology studies.

The results of the preclinical studies, together with manufacturing information and analytical data must be submitted to the FDA as part of an IND.

Nonclinical studies and clinical trials for biologics

Before testing any drug or biologic in humans, the product candidate must undergo rigorous nonclinical testing.

Nonclinical studies include laboratory evaluations of chemistry, formulation and stability, as well as in vitro and animal studies to assess safety and in some cases to establish the rationale for therapeutic use.

The conduct of nonclinical studies is subject to federal and state regulations and requirements, including GLP requirements for safety and toxicology studies.

The results of the nonclinical studies, together with manufacturing information and analytical data must be submitted to the FDA as part of an IND.

An IND is a request for authorization from the FDA to administer an investigational product to humans, and it must become effective before clinical trials may begin.

The central focus of an IND submission is on the protocol(s) for the initial clinical study and the general investigational plan.

The central focus of an IND submission is on the protocol(s) for the initial clinical trial and the general investigational plan.

The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product;

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Information about applicable clinical trials, including clinical trials results, must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website.

While we plan to conduct any international clinical trials under our INDs, a sponsor who wishes to conduct a clinical trial outside of the United States under its IND may need to obtain waivers for certain regulatory compliance requirements such as those requiring IRB review and approval.

A sponsor who wishes to conduct a clinical trial outside of the United States under its IND may need to obtain waivers for certain regulatory compliance requirements such as those requiring IRB review and approval.

However, the FDA does not require that all foreign clinical trials be conducted under United States INDs.

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In addition, under the Pediatric Research Equity Act, or PREA, a BLA or supplement to a BLA must contain data to assess the safety and effectiveness of the biological product candidate 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.

A sponsor who is planning to submit a marketing application for a biological product that includes a new clinically active component, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan (PSP) within sixty days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.

A sponsor who is planning to submit a marketing application for a biological product that includes a new clinically active component, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan, or PSP, within sixty days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.

Unless otherwise required by regulation, PREA does not apply to any biological product for an indication for which orphan designation has been granted.

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Accelerated approval is usually contingent on a sponsor’s agreement to conduct additional post-approval studies to verify and describe the product’s clinical benefit.

The FDA may withdraw approval of a drug or biologic approved under Accelerated Approval if, for example, the sponsor fails to conduct the confirmatory trials in a timely manner or the confirmatory trial fails to verify the predicted clinical benefit of the product.

Under the Food and Drug Omnibus Reform Act of 2022, or FDORA, the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.

Sponsors are also required to send updates to the FDA every 180 days on the status of such studies, including progress toward enrollment targets, and the FDA must promptly post this information publicly.

Under FDORA, the FDA has increased authority for expedited procedures to withdraw approval of a drug or indication approved under accelerated approval if, for example, the sponsor fails to conduct such studies in a timely manner and send the necessary updates to the FDA, or if a confirmatory trial fails to verify the predicted clinical benefit of the product.

In addition, unless otherwise informed by the FDA, the FDA currently requires, as a condition for accelerated approval, that all advertising and promotional materials that are intended for dissemination or publication within 120 days following marketing approval be submitted to the agency for review during the pre-approval review period, and that after 120 days following marketing approval, all advertising and promotional materials must be submitted at least 30 days prior to the intended time of initial dissemination or publication.

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For example, the FDA may require post-market testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

In addition, drug and biologics manufacturers and their subcontractors involved in the manufacture and distribution of approved products are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP, which impose certain procedural and documentation requirements upon us and our contract manufacturers.

In addition, drug and biologics manufacturers and their subcontractors involved in the manufacture and distribution of approved products, including those supplying products, ingredients, and components of such products, are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP, which impose certain procedural and documentation requirements upon us and our contract manufacturers.

Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented.

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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.

Further, due to the COVID-19 pandemic, millions of individuals have lost/will be losing employer-based insurance coverage, which may adversely affect our ability to commercialize our products.

It is unclear what effect, if any, the American Rescue Plan will have on the number of covered individuals.

Factors payors consider in determining reimbursement are based on whether the product is:

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Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs.

In addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.

The requirements governing drug pricing vary widely from country to country.

For example, the European Union, or EU, provides options for its Member States to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost effectiveness of a particular product candidate to currently available therapies.

A Member State may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.

There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates.

Historically, products launched in the EU do not follow price structures of the U.S.

and generally prices tend to be significantly lower.

Health Care Laws and Regulations

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A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

the federal false claims and civil monetary penalties laws, including the False Claims Act and Civil Monetary Penalties Law, prohibit individuals or entities from knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.

Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs.

In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act or federal civil monetary penalties;

the federal false claims and civil monetary penalties laws, including the False Claims Act, prohibit individuals or entities from knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.

In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false of fraudulent claim for purposes of the False Claims Act.

Manufacturers can be held liable under the federal False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause”

the submission of false or fraudulent claims.

The federal False Claims Act also permits a private individual acting as a “whistleblower”

to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery;

the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for, among other things, executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services.

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the federal physician payment transparency requirements, sometimes referred to as the “Sunshine Act”

under the ACA require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or the Children’s Health Insurance Program to report to HHS information related to physician (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) payments and other transfers of value and the ownership and investment interests of such physicians and their immediate family members.

Effective January 1, 2022, these reporting obligations will extend to include payments and other transfers of value made in the previous year to certain nonphysician providers, including physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives;

under the ACA require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or the Children’s Health Insurance Program to report to HHS information related to payments and other transfers of value made to physician (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners and teaching hospitals;

as well as the ownership and investment interests of such physicians and their immediate family members;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and its implementing regulations, which also imposes obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, as well as their covered subcontractors, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.

HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’

fees and costs associated with pursuing federal civil actions.

In addition, there may be additional federal, state and non-U.S.

laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;

analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and may be broader in scope than their federal equivalents;

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In particular, in 2010, the ACA was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars;

addressed 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;

increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program;

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subjected manufacturers to new annual fees and taxes for certain branded prescription drugs;

created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, effective as of January 1, 2019) point-of-sale discounts 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;

created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts 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;

and provided incentives to programs that increase the federal government’s comparative effectiveness research.

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

On June 17, 2021, the U.S.

Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states on procedural grounds without specifically ruling on the constitutionality of the ACA.

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

Prior to the Supreme Court’s decision, President Biden issued an Executive Order that initiated a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

The Executive Order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

It is possible that the ACA will be subject to judicial or Congressional challenges in the future.

It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, to challenge repeal or replace the ACA, will impact our business.

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.

A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.

This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year and, due to subsequent legislative amendments, will remain in effect through 2030 unless additional Congressional action is taken.

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, as well as subsequent legislation, these reductions have been suspended from May 1, 2020 through December 31, 2021 due to the COVID-19 pandemic.

This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year.

Subsequent legislation extended the 2% payment reduction which remains in effect through 2031.

Under current legislation the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester.

Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021, and subsequent legislation, Medicare payments to providers will be further reduced starting in 2025 absent further legislation.

American Taxpayer Relief Act of 2012 further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Further, on May 30, 2018, the Right to Try Act was signed into law.

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There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.

Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices.

Specifically, there have been several recent Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drugs.

For example, at the federal level, in a recent executive order, the Biden administration expressed its intent to pursue certain policy initiatives to reduce drug prices.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological 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, designed to encourage importation from other countries and bulk purchasing.

Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

Regulation in the European Union

Additionally, there has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices.

Specifically, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S.

Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, and review the relationship between pricing and manufacturer patient programs.

President Biden has issued multiple executive orders that have sought to reduce prescription drug costs.

Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the Biden administration may reverse or otherwise change these measures, both the Biden administration and Congress have indicated that they will continue to seek new legislative measures to control drug costs.

The Inflation Reduction Act of 2022, or IRA includes several provisions that may impact our business to varying degrees, including provisions that reduce the out-of-pocket cap for Medicare Part D beneficiaries to $2,000 starting in 2025;

impose new manufacturer financial liability on certain drugs under Medicare Part D, allow the U.S.

government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition, require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation, and delay the rebate rule that would limit the fees that pharmacy benefit managers can charge.

Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one rare disease designation and for which the only approved indication is for that disease or condition.

If a product receives multiple rare disease designations or has multiple approved indications, it may not qualify for the orphan drug exemption.

The effects of the IRA on our business and the healthcare industry in general is not yet known.

Regulation in the EU

Drug Development

In the European Union, our product candidates may be subject to extensive regulatory requirements.

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

Similar to the United States, the various phases of preclinical and clinical research in the European Union are subject to significant regulatory controls.

Although the EU Clinical Trials Directive 2001/20/EC, or the Directive, has sought to harmonize the EU clinical trials regulatory framework, setting out common rules for the control and authorization of clinical trials in the European Union, the EU Member States have transposed and applied the provisions of the Directive differently.

This has led to significant variations in the Member State regimes.

Under the current regime, before a clinical trial can be initiated it must be approved in each of the EU countries where the trial is to be conducted by two distinct bodies:

the national competent authority, or CA, and one or more independent ethics committees, or ECs.

Under the current regime, all suspected unexpected serious adverse reactions to the investigated drug that occur during the clinical trial have to be reported to the CA and ECs of the Member State where they occurred.

The EU clinical trials legislation currently is undergoing a transition process mainly aimed at harmonizing and streamlining clinical trial authorization, simplifying adverse-event reporting procedures, improving the supervision of clinical trials and increasing their transparency.

In April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 536/2014, or the Regulation, which is set to replace the current Clinical Trials Directive 2001/20/EC.

It is expected that the new Regulation will become fully applicable at the end of January 2022.

The new Regulation will be directly applicable in all Member States (and so does not require national implementing legislation in each Member State), and aims at simplifying and streamlining the approval of clinical studies in the EU, for instance by providing for a streamlined application procedure via a single point and strictly defined deadlines for the assessment of clinical study applications.

We are in the process of applying to renew our status with EMA as a small and medium-sized enterprise, or SME.

If we obtain SME status with EMA, it will provide access to administrative, regulatory and financial support, including fee reductions for scientific advice and regulatory procedures.

Much like the Anti-Kickback Statue prohibition in the United States, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the European Union.

The provision of benefits or advantages to induce or reward improper performance generally is usually governed by the national anti-bribery laws of European Union Member States, and the Bribery Act 2010 in the UK.

In the EU our product candidates may be subject to extensive regulatory requirements.

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

Similar to the United States, the various phases of preclinical and clinical research in the EU are subject to significant regulatory controls.

In April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 536/2014, which replaced the Clinical Trials Directive 2001/20/EC on January 31, 2022.

The Clinical Trials Regulation is directly applicable in all Member States (and so does not require national implementing legislation in each Member State), and aims at simplifying and streamlining the approval of clinical studies in the EU.

For example, a single application is now made through the Clinical Trials Information System, or CTIS, for clinical trial authorization in up to 30 EU or additional Member States of the European Economic Area (Iceland, Liechtenstein and Norway), or EEA, countries at the same time and with a single set of documentation.

The assessment of applications for clinical trials is divided into two parts (Part I contains scientific and medicinal product documentation and Part II contains the national and patient-level documentation).

Part I is assessed by a coordinated review by the competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted (Member States concerned) of a draft report prepared by a Reference Member State.

Part II is assessed separately by each Member State concerned.

The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the concerned EU Member State, however overall related timelines are defined by the Clinical Trials Regulation.

The new Clinical Trials Regulation also provides for simplified reporting procedures for clinical trial sponsors.

We have a SME status with the EMA as a small and medium-sized enterprise.

This enables us to continue to have access to administrative, regulatory and financial support, including fee reductions for scientific advice and regulatory procedures.

Much like the Anti-Kickback Statute prohibition in the United States, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the EU.

The provision of benefits or advantages to induce or reward improper performance generally is usually governed by the national anti-bribery laws of EU Member States, and the Bribery Act 2010 in the UK.

Infringement of these laws could result in substantial fines and imprisonment.

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This provision has been transposed into the Human Medicines Regulations 2012 and so remains applicable in the UK despite its departure from the EU.

Payments made to physicians in certain European Union Member States must be publicly disclosed.

Payments made to physicians in certain EU Member States must be publicly disclosed.

Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual EU Member States.

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Drug Review and Approval

In the European Economic Area, or EEA, which is comprised of the Member States of the European Union together with Norway, Iceland and Liechtenstein, medicinal products can only be commercialized after obtaining a marketing authorization, or MA.

There are two types of marketing authorizations.

The centralized MA is issued by the European Commission through the centralized procedure, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the EMA, and is valid throughout the entire territory of the EEA.

The centralized procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, advanced-therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines) and medicinal products containing a new active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions and viral diseases, and we therefore consider our product candidates would fall within the mandatory scope of the centralized procedure.

The centralized procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the European Union.

Under the centralized procedure the maximum timeframe for the evaluation of a MA application by the EMA is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP.

Clock stops may extend the timeframe of evaluation of a MA application considerably beyond 210 days.

Where the CHMP gives a positive opinion, the EMA provides the opinion together with supporting documentation to the European Commission, who make the final decision to grant a marketing authorization, which is issued within 67 days of receipt of the EMA’s recommendation.

In the EU, medicinal products can only be commercialized after obtaining an MA.

There are two types of MAs.

The centralized procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, advanced therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines) and medicinal products containing a new active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions and viral diseases.

We therefore consider our product candidates would fall within the mandatory scope of the centralized procedure.

The centralized procedure is optional for products containing a new active substance not yet authorized in the EU, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU.

Under the centralized procedure, the maximum timeframe for the evaluation of an MA application by the EMA is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP.

Clock stops may extend the timeframe of evaluation of an MA application considerably beyond 210 days.

Where the CHMP gives a positive opinion, the EMA provides the opinion together with supporting documentation to the European Commission, who makes the final decision to grant an MA, which is issued within 67 days of receipt of the EMA’s recommendation.

Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view of therapeutic innovation.

The timeframe for the evaluation of a MA application under the accelerated assessment procedure is of 150 days, excluding stop-clocks, but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application is no longer appropriate to conduct an accelerated assessment.

The timeframe for the evaluation of an MA application under the accelerated assessment procedure is 150 days, excluding clock stops, but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application is no longer appropriate to conduct an accelerated assessment.

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 products not falling within the mandatory scope of the centralized procedure.

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As part of its marketing authorization process, the EMA may grant MAs for certain categories of medicinal products on the basis of less complete data than is normally required, where the benefit of immediate availability of the medicine outweighs the risk inherent in the fact that additional data are still required or in the interests of public health.

In such cases, it is possible for the CHMP to recommend the granting of an MA, subject to certain specific obligations to be reviewed annually, which is referred to as a conditional marketing authorization.

This may apply to medicinal products for human use that fall under the jurisdiction of the EMA, including those that aim at the treatment, the prevention, or the medical diagnosis of seriously debilitating or life-threatening diseases.

A conditional marketing authorization may be granted when the CHMP finds that, although comprehensive clinical data referring to the safety and efficacy of the medicinal product have not been supplied, all the following requirements are met:

In such cases, it is possible for the CHMP to recommend the granting of an MA, subject to certain specific obligations to be reviewed annually, which is referred to as a conditional MA.

This may apply to medicinal products for human use that fall under the jurisdiction of the EMA, including those that are aimed at the treatment, the prevention, or the medical diagnosis of seriously debilitating or life-threatening diseases.

A conditional MA may be granted when the CHMP finds that, although comprehensive clinical data referring to the safety and efficacy of the medicinal product have not been supplied, all the following requirements are met:

the risk-benefit balance of the medicinal product is positive;

it is likely that the applicant will be in a position to provide the comprehensive clinical data post-authorization;

unmet medical needs will be fulfilled;

the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data is still required.

The granting of a conditional marketing authorization is restricted to situations in which only the clinical part of the application is not yet fully complete.

the medicinal products fulfils an unmet medical need;

the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required.

The granting of a conditional MA is restricted to situations in which only the clinical part of the application is not yet fully complete.

Incomplete preclinical or quality data may only be accepted if duly justified and only in the case of a product intended to be used in emergency situations in response to public health threats.

Conditional marketing authorizations are valid for one year, on a renewable basis.

Conditional MAs are valid for one year, on a renewable basis.

The MA holder will be required to complete ongoing trials or to conduct new trials with a view to confirming that the benefit-risk balance is positive.

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New Chemical Entity Exclusivity

In the EEA, new chemical entities (including both small molecules and biological medicinal products), sometimes referred to as new active substances, qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity.

The data exclusivity, if granted, prevents generic or biosimilar applicants from referencing the innovator’s pre-clinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization, for a period of eight years from the date on which the reference product was first authorized in the EU.

During the additional two-year period of market exclusivity, a generic or biosimilar marketing authorization can be submitted, and the innovator’s data may be referenced, no generic or biosimilar product can be marketed until the expiration of the market exclusivity period.

The overall ten-year period will be extended to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are determined to bring a significant clinical benefit in comparison with currently approved therapies.

Even if an innovative medicinal product gains the prescribed period of data exclusivity, another company may market another version of the product if such company obtained a marketing authorization based on an application with a complete and independent data package of pharmaceutical tests, preclinical tests and clinical trials.

In the EU, innovative medicinal products approved on the basis of a complete and independent data package qualify for eight years of data exclusivity upon the grant of an MA and an additional two years of market exclusivity.

The data exclusivity, if granted, prevents generic or biosimilar applicants from referencing the innovator’s pre-clinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar MA, for a period of eight years from the date on which the reference product was first authorized in the EU.

During the additional two-year period of market exclusivity, a generic or biosimilar MA can be submitted and authorized, and the innovator’s data may be referenced, but no generic or biosimilar product can be placed on the EU market until the expiration of the market exclusivity period.

The overall ten-year period will be extended to a maximum of 11 years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are determined to bring a significant clinical benefit in comparison with currently approved therapies.

Even if an innovative medicinal product gains the prescribed period of data exclusivity, another company may market another version of the product if such company obtained an MA based on an application with a complete and independent data package of pharmaceutical tests, preclinical tests and clinical trials.

Orphan Designation and Exclusivity

In the EEA, the EMA’s Committee for Orphan Medicinal Products grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions with either (i) affect not more than 5 in 10,000 persons in the European Union, or (ii) where it is unlikely that the marketing of the medicine would generate sufficient return in the EU to justify the necessary investment in its development.

In each case, no satisfactory method of diagnosis, prevention or treatment of the condition must have been authorized (or, if such a method exists, the product in question would be of significant benefit to those affected by the condition).

In the EEA, orphan drug designation entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity is granted following marketing approval for the orphan product.

This period may be reduced to six years if, at the end of the fifth year, it is established that the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

During the period of market exclusivity, marketing authorization may only be granted to a “similar medicinal product”

In the EU, the European Commission grants an orphan designation in respect of a product if its sponsor can establish that the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition and either (i) such condition affects no more than 5 in 10,000 persons in the EU when the application is made, or (ii) without incentives, it is unlikely that the marketing of the medicine would generate sufficient return in the EU to justify the necessary investment in its development.

In each case, there must be no satisfactory method of diagnosis, prevention or treatment of the condition which has been authorized (or, if such a method exists, the product in question would be of significant benefit to those affected by the applicable condition).

In the EU, orphan designation entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity is granted following the grant of an MA for the orphan product.

This period may be reduced to six years if, at the end of the fifth year, it is established that the orphan designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

During the period of market exclusivity, an MA may only be granted to a “similar medicinal product”

for the same therapeutic indication if:

(i) a second applicant can establish that its product, although similar to the authorized product, is safer, more effective or otherwise clinically superior;

(ii) the marketing authorization holder for the authorized product consents to a second orphan medicinal product application;

or (iii) the marketing authorization holder for the authorized product cannot supply enough orphan medicinal product.

(ii) the MA holder for the authorized product consents to a second orphan medicinal product application;

or (iii) the MA holder for the authorized product cannot supply enough orphan medicinal product.

A “similar medicinal product”

is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication.

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

Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

Orphan designation must be requested before submitting an application for an MA.

Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

Pediatric Investigation Plan

In the EEA, companies developing a new medicinal product must agree upon a pediatric investigation plan, or PIP, with the EMA’s Pediatric Committee, or PDCO, and must conduct pediatric clinical trials in accordance with that PIP, unless a waiver applies.

The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which marketing authorization is being sought.

In the EU, companies developing a new medicinal product must agree upon a pediatric investigation plan, or PIP, with the EMA’s Pediatric Committee, or PDCO, and must conduct pediatric clinical trials in accordance with that PIP, unless the EMA has granted a product-specific waiver, a class waiver, or a deferral for one or more of the measures included in the PIP.

This requirement also applies when a company wants to add a new indication, pharmaceutical form or route of administration for a medicine that is already authorized.

The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the product for which an MA is being sought.

The PDCO can grant a deferral of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults.

Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when this data is not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients.

Products that are granted a marketing authorization with the results of the pediatric clinical trials conducted in accordance with the PIP (even where such results are negative) are eligible for six months’

Products that are granted an MA with the results of the pediatric clinical trials conducted in accordance with the PIP (even where such results are negative) are eligible for six months’

supplementary protection certificate, or SPC, extension, provided an application for such extension is made at the same time as filing the SPC application for the product, or at any point up to two years before the SPC expires.

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In March 2016, the EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist.

The PRIority MEdicines, or PRIME, scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation, where the marketing authorization application will be made through the centralized procedure.

Eligible products must target conditions for which where is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the European Union or, if there is, the new medicine will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones.

The PRIority MEdicines, or PRIME, scheme is intended to encourage product development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation, where the MA application will be made through the centralized procedure.

Eligible products must target conditions for which where is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the EU or, if there is, the new medicine will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones.

Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies.

Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated marketing authorization application assessment once a dossier has been submitted.

Importantly, a dedicated contact and rapporteur from the EMA’s CHMP or Committee for Advanced Therapies are appointed early in PRIME scheme facilitating increased understanding of the product at EMA’s Committee level.

Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated MA application assessment once a dossier has been submitted.

Importantly, a dedicated contact and rapporteur from the EMA’s CHMP or Committee for Advanced Therapies are appointed early in the PRIME scheme facilitating increased understanding of the product at the EMA’s Committee level.

A kick-off meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.

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Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the Member States.

The holder of a MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system.

The holder of an MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system.

Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.

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All advertising and promotional activities for the product must be consistent with the approved summary of product characteristics, and therefore all off-label promotion is prohibited.

Direct-to-consumer advertising of prescription medicines is also prohibited in the European Union.

Although general requirements for advertising and promotion of medicinal products are established under European Union directives, the details are governed by regulations in each Member State and can differ from one country to another.

Direct-to-consumer advertising of prescription medicines is also prohibited in the EU.

Although general requirements for advertising and promotion of medicinal products are established under EU directives, the details are governed by regulations in each Member State and can differ from one country to another.

The aforementioned EU rules are generally applicable in the EEA.

Pricing and Reimbursement

In the European Union, pricing and reimbursement schemes vary widely from country to country.

The delivery of healthcare in the European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than European Union, law and policy.

In the EU, pricing and reimbursement schemes vary widely from country to country.

The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy.

National governments and health service providers have different priorities and approaches to the delivery of healthcare and the pricing and reimbursement of products in that context.

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Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies (so-called health technology assessments) in order to obtain reimbursement or pricing approval.

The European Union provides options for its Member States to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

European Union Member States may approve a specific price for a product or may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market.

The EU provides options for its Member States to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

EU Member States may approve a specific price for a product or may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market.

Other Member States allow companies to fix their own prices for products but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions.

Recently, many countries in the European Union have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the European Union.

The downward pressure on health care costs in general, particularly prescription products, has become intense.

Recently, many countries in the EU have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the EU.

The downward pressure on healthcare costs in general, particularly prescription products, has become intense.

As a result, increasingly high barriers are being erected to the entry of new products.

Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained.

Reference pricing used by various European Union Member States and parallel trade (arbitrage between low-priced and high-priced Member States) can further reduce prices.

Special pricing and reimbursement rules may apply to orphan drugs.

Inclusion of orphan drugs in reimbursement systems tend to focus on the medical usefulness, need, quality and economic benefits to patients and the healthcare system as for any drug.

Reference pricing used by various EU Member States and parallel trade (arbitrage between low-priced and high-priced Member States) can further reduce prices.

Special pricing and reimbursement rules may apply to orphan medicinal products.

Inclusion of orphan medicinal products in reimbursement systems tend to focus on the medical usefulness, need, quality and economic benefits to patients and the healthcare system as for any medicinal product.

Acceptance of any medicinal product for reimbursement may come with cost, use and often volume restrictions, which again can vary by country.

In addition, results-based rules of reimbursement may apply.

European Union Data Collection

The collection and use of personal data, including clinical trial data, in the European Economic Area, or the EEA, governed by the GDPR, which became effective May 25, 2018.

The GDPR applies to any company established in the EEA and to companies established outside the EEA that process personal data in connection with the offering of goods or services to data subjects in the EU or the monitoring of the behavior of data subjects in the European Union.

The GDPR enhances data protection obligations for data controllers of personal data, including stringent requirements relating to the consent of data subjects, expanded disclosures about how personal data is used, requirements to conduct privacy impact assessments for “high risk”

European Data Collection

The collection, use, or other processing of personal data, including clinical trial data, regarding individuals in the EEA is governed by the EU General Data Protection Regulation, or GDPR, and similar processing of personal data regarding individuals in the UK, is governed by the UK General Data Protection Regulation, or UK GDPR, and the UK Data Protection Act 2018.

In this document, “GDPR”

refers to both the EU GDPR and the UK GDPR, unless specified otherwise.

The GDPR applies to any company established in the EEA/UK and to companies established outside the EEA/UK that process personal data in connection with the offering of goods or services to, or the monitoring of the behavior of data subjects in the EEA/UK.

The GDPR enhances data protection obligations for companies processing personal data, including stringent requirements relating to the consent of data subjects, expanded disclosures about how personal data is used, requirements to conduct privacy impact assessments for “high risk”

processing, limitations on retention of personal data, special provisions for “sensitive information”

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requirements and direct obligations on service providers acting as data processors.

The GDPR also imposes strict rules and restrictions on the transfer of personal data outside of the EEA to countries that do not ensure an adequate level of protection, like the United States.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EEA Member States may result in fines up to 20 million euros or 4% of a company’s global annual revenues for the preceding financial year, whichever is higher.

Moreover, the GDPR grants data subjects the right to request deletion of personal information in certain circumstances, and claim material and non-material damages resulting from infringement of the GDPR.

Regulation in the United Kingdom

Brexit and the Regulatory Framework in the United Kingdom

The UK’s withdrawal from the EU on January 31, 2020, commonly referred to as Brexit, has created significant uncertainty concerning the future relationship between the UK and the EU.

The impact of Brexit on the ongoing validity in the UK of current EU authorizations for medicinal products, whether granted through the centralized procedure, decentralized procedure or mutual recognition, and on the future process for obtaining marketing authorization for pharmaceutical products manufactured or sold in the UK remains uncertain.

On December 24, 2020, the EU and UK reached an agreement in principle on the framework for their future relationship, the EU-UK Trade and Cooperation Agreement, or the Agreement.

The Agreement primarily focuses on ensuring free trade between the EU and the UK in relation to goods, including medicinal products.

Although the body of the Agreement includes general terms which apply to medicinal products, greater detail on sector-specific issues is provided in an Annex to the Agreement.

The Annex provides a framework for the recognition of GMP inspections and for the exchange and acceptance of official GMP documents.

The regime does not, however, extended to procedures such as batch release certification.

Among the changes that will now occur are that Great Britain (England, Scotland and Wales) will be treated as a third country.

Northern Ireland will, with regard to EU regulations, continue to follow the EU regulatory rules.

As part of the Agreement, the EU and the UK will recognize Good Manufacturing Practice (GMP) inspections carried out by the other party and the acceptance of official GMP documents issued by the other party.

The Agreement also encourages, although it does not oblige, the parties to consult one another on proposals to introduce significant changes to technical regulations or inspection procedures.

Among the areas of absence of mutual recognition are batch testing and batch release.

The UK has unilaterally agreed to accept EU batch testing and batch release for a period of at least two years until January 1, 2023.

However, the EU continues to apply EU laws that require batch testing and batch release to take place in the EU territory.

This means that medicinal products that are tested and released in the UK must be retested and re-released when entering the EU market for commercial use.

As regards marketing authorizations, Great Britain will have a separate regulatory submission process, approval process and a separate national MA.

Northern Ireland will, however, continue to be covered by the marketing authorizations granted by the European Commission.

The GDPR also imposes strict rules and restrictions on the transfer of personal data outside of the EEA/UK to countries that do not ensure an adequate level of protection, like the United States.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EEA Member States/UK may result in fines up to 20 million euros (£17.5 million under the UK GDPR) or 4% of a company’s global annual revenues for the preceding financial year, whichever is higher.

The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from infringement of the GDPR.

Regulation in the UK

Brexit and the Regulatory Framework in the UK

The UK formally left the EU on January 31, 2020, and the UK and the EU have concluded a trade and cooperation agreement or TCA, which was provisionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021.

The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not provide for wholesale mutual recognition of UK and EU pharmaceutical regulations.

At present, Great Britain has implemented EU legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the EU regulatory framework continues to apply in Northern Ireland).

Except in respect of the new Clinical Trials Regulation, the regulatory regime in Great Britain therefore aligns with current EU medicines regulations, however it is possible that these regimes will diverge more significantly in future now that Great Britain’s regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.

However, notwithstanding that there is no wholesale recognition of EU pharmaceutical legislation under the TCA, under the new framework mentioned below which will be put in place by the MHRA from January 1, 2024, the MHRA has stated that it will take into account decisions on the approval of MAs from the EMA (and certain other regulators) when considering an application for a Great Britain MA.

Clinical Trials

The UK has implemented Directive 2001/20/EC into national law through the Medicines for Human Use (Clinical Trials) Regulations 2004 (as amended), and therefore UK legislation currently is broadly aligned with the position in the European Union, where Member State regimes are derived from Directive 2001/20/EC.

The extent to which the regulation of clinical trials in the UK will mirror the new European Union Regulation once that comes into effect is unknown at present.

The UK has implemented the now-repealed Clinical Trials Directive 2001/20/EC into national law through the Medicines for Human Use (Clinical Trials) Regulations 2004 (as amended).

The extent to which the regulation of clinical trials in the UK will mirror the new Clinical Trials Regulation now it has come into effect is not yet known, but the MHRA opened a consultation on a set of proposals designed to improve and strengthen the UK clinical trials legislation.

Such consultation took place from January 17, 2022 until March 14, 2022, and the MHRA is currently analyzing feedback.

Great Britain Marketing Authorizations

As a result of the Northern Irish Protocol, centralized European Union MAs will continue to be recognized in Northern Ireland.

As a result of the Northern Ireland Protocol, centralized MAs continue to be recognized in Northern Ireland.

A separate MA is, however, required in order to place medicinal products on the market in Great Britain.

On January 1, 2021, all medicinal products with a current centralized MA were automatically converted to Great Britain MAs.

For a period of two years from January 1, 2021, the Medicines and Healthcare products Regulatory Agency, or MHRA, the UK medicines regulator, may rely on a decision taken by the European Commission on the approval of a new marketing authorization in the centralized procedure, in order to more quickly grant a new Great Britain MA.

On January 1, 2021, all medicinal products with a centralized MA were automatically converted to Great Britain MAs.

For a period of three years from January 1, 2021, the Medicines and Healthcare products Regulatory Agency, or MHRA, the UK medicines regulator, may rely on a decision taken by the European Commission on the approval of a new MA in the centralized procedure, in order to more quickly grant a new Great Britain MA.

This is known as the EC Decision Reliance Procedure, or ECDRP.

Under the ECDRP, submission of an MA application can be submitted to the MHRA at any time after the approval of a European Union MA;

Under the ECDRP, an MA application can be submitted to the MHRA at any time after the approval of an EU MA;

however, a delay in submission may affect the delivery of a decision within the specified timelines.

Where a submission is made within five days of a positive opinion issued by the CHMP, the MHRA will aim to determine the Great Britain MA as soon as possible after European Commission approval, and by day 67 at the latest, provided that the European Commission decision has been received.

On January 24, 2023, the MHRA announced that a new international recognition framework will be put in place from January 1, 2024, which will have regard to decisions on the approval of MAs made by the EMA and certain other regulators when determining an application for a new Great Britain MA.

The MHRA also offers a 150-day assessment timeline for all high quality applications for a UK, Great Britain or Northern Ireland MA.

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Orphan Designation

Since January 1, 2021, a separate process for orphan drug designation to the European Union process has applied Great Britain.

There is now no pre-marketing authorization orphan designation (as there is in the European Union) in Great Britain and the application for orphan designation will be reviewed by the MHRA at the time of an application for a UK or Great Britain MA.

The criteria for orphan designation remain the same as in the European Union, save that they apply to Great Britain only (e.g.

there must be no satisfactory method of diagnosis, prevention or treatment of the condition concerned in Great Britain, as opposed to the European Union).

Since January 1, 2021, a separate process for orphan designation to the EU process has applied in Great Britain.

There is now no pre-MA orphan designation (as there is in the EU) in Great Britain and the application for orphan designation will be reviewed by the MHRA at the time of an application for a UK or Great Britain MA.

The criteria for orphan designation are the same as in the EU, save that they apply to Great Britain only (e.g.

there must be no satisfactory method of diagnosis, prevention or treatment of the condition concerned in Great Britain, as opposed to the EU, and the prevalence of the condition must be no more than 5 in 10,000 persons in Great Britain).

Data Privacy and Security Laws and Regulations

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Certain of these laws may be more stringent or broader in scope, or offer greater individual rights, with respect to sensitive and personal information than federal, international or other state laws, and such laws may differ from each other.

Employees and human capital resources

As of February 28, 2022, we had 52 full-time employees, of which 14 have M.D.

Human capital

As of February 28, 2023, we had 70 full-time employees and 2 part-time employees, of which 13 have M.D.

(or its equivalent) Ph.D.

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The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

Available Information

Our Internet address is www.aurabiosciences.com.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available through the “Investors & Media”

portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Information on our website is not part of this Annual Report or any of our other securities filings unless specifically incorporated herein by reference.

We have included our website address in this Annual Report solely as an inactive textual reference.

Our filings with the SEC may be accessed through the SEC’s website at www.sec.gov.

All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

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