Item 1. Business
Item 1. Business.
Overview
We are a clinical-stage
immuno-oncology company developing tumor-targeted therapies that leverage the power of the innate and adaptive immune systems. Our proprietary Boltbody immune stimulating antibody conjugate (ISAC) approach uses immunostimulants to engage
and activate myeloid cells, including macrophages and dendritic cells, that directly kill tumor cells via phagocytosis and expose tumor neoantigens to the adaptive immune system. This leads to recruitment of cytotoxic T cells and additional
tumor-killing myeloid cells thereby converting immunologically cold tumors to hot tumors. We believe that this process leads to the development of systemic immunological memory with epitope spreading to neoantigens that is
critical to achieving a long-term anti-tumor response. Our lead product candidate BDC-1001 is a HER2 Boltbody ISAC comprised of a HER2-targeting biosimilar of trastuzumab conjugated to one of our proprietary
TLR7/8 agonists, for the treatment of patients with HER2-expressing solid tumors, including those with HER2-low tumors. We have demonstrated robust single agent anti-tumor activity in multiple preclinical
models, including elimination of large tumors (~500 mm 3), as well as tumors that are refractory to trastuzumab or ado-trastuzumab emtansine. In our preclinical
safety studies, BDC-1001 was well tolerated and no adverse safety signals were observed. We believe these findings are encouraging for the therapeutic potential of
BDC-1001. We initiated a Phase 1/2 trial of BDC-1001 in the first quarter of 2020 for the treatment of patients with HER2-expressing solid tumors. We are currently in
the dose escalation portion of the trial and expect to move into Phase 2 dose expansions in key solid tumor indications with unmet medical need in 2021. We believe that our preliminary Phase 1/2 data provide us with clinical proof of concept for our
HER2 Boltbody ISAC approach. We are also advancing additional Boltbody ISAC product candidates targeting carcinoembryonic antigen (CEA) and PD-L1, both of which are currently in preclinical
development. We anticipate advancing our CEA Boltbody ISAC BDC-2034 into the clinic in 2022.
Our Boltbody ISAC approach is pioneering a new category of immunotherapies that combines the precision of antibody targeting with the strength
of the innate and adaptive immune systems by activating and recruiting myeloid cells, thereby re-programming the tumor microenvironment to invoke an adaptive immune response. Our Boltbody ISACs are delivered
systemically but act locally through a highly targeted approach that triggers a localized anti-tumor immune cascade through the following Three-Factor Authentication process designed to optimize safety and avoid systemic immune
stimulation.
1.
Tumor antigen recognition: Our selective and specific tumor-targeting Boltbody ISACs recognize and bind
specifically to the target antigen-expressing tumors.
2.
FcR-dependent phagocytosis: Engagement of optimized Fc domains
triggers myeloid-mediated phagocytosis of the Boltbody ISAC-bound tumor cell. This process directly kills antigen-expressing tumor cells and delivers tumor neoantigens to myeloid cells.
3.
TLR-mediated activation: Our proprietary TLR agonist conjugates
activate myeloid cells and enable the presentation of tumor-associated neoantigens to cytotoxic T cells, thereby initiating the bodys adaptive anti-tumor immune response and converting immunologically cold tumors to hot
tumors. Furthermore, these activated myeloid cells also encourage additional myeloid cell-mediated phagocytosis to amplify the innate and adaptive immune responses.
During this Three-Factor Authentication, tumor-associated myeloid cells engulf the Boltbody ISAC-bound tumor cells, become armed
with tumor neoantigens, and migrate to the lymph nodes where they mediate the activation and rapid expansion of tumor-reactive T cells to eliminate tumor cells, including those without the initial target antigen. As a result, the patients
immune system determines which neoantigens are most important to eliminate the target tumors. We believe that this represents the development of systemic immunological memory with epitope spreading to neoantigens that will result in long-term
anti-tumor responses.
Unlike immuno-oncology approaches that solely seek to relieve immune suppression, Boltbody ISACs act by engaging
the immune system at multiple points in the cancer immunity cycle. Boltbody ISACs activate
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tumor-associated myeloid cells, leading to tumor phagocytosis and the presentation of tumor neoantigens to T cells that enable a productive anti-cancer response. The following key features
provide us with the opportunity to develop robust applications across various solid tumors designed to deliver effective and safe therapeutics that provide durable responses.
Ability to address
difficult-to-treat solid tumors including those refractory to current treatments ;
Engaging the bodys innate and adaptive immune responses;
Generation of immunological memory with epitope spreading to provide long-term anti-tumor responses and
protect against recurrence;
Ability to target tumor antigens with less dense cell surface expression;
Capability to modulate myeloid cell activity via TLR potency and selectivity and Fc engineering;
Well tolerated in preclinical studies by avoiding unintended systemic immune stimulation ; and
Potential to benefit patients who have a defective adaptive immune response.
Our lead product candidate, BDC-1001, is currently in clinical development for the treatment of
patients with HER2-expressing solid tumors, including those with HER2-low tumors. We have designed BDC-1001 as a Boltbody ISAC comprised of a HER2-targeting biosimilar
trastuzumab conjugated to one of our proprietary TLR7/8 agonists to maximize the potential anti-tumor response. Through our preclinical studies in mice, we have demonstrated that systemic administration of HER2 Boltbody ISACs exhibited localized
immune activation that resulted in single agent activity that eliminated large (~500 mm 3 ) tumors and generated immunological memory against cancers with epitope spreading. Furthermore, preclinical
data showed anti-tumor activity against established tumors resistant to trastuzumab and ado-trastuzumab emtansine, and immunological memory providing protection against tumor cells that no longer express the
HER2 antigen. Our observed preclinical anti-tumor response coupled with a lack of adverse safety signals in our non-human primate GLP toxicology studies leads us to believe that
BDC-1001 offers the potential for long-term and meaningful response for patients with HER2-expressing cancers, including HER2-low tumors. We initiated a Phase 1/2 trial
of BDC-1001 in the first quarter of 2020 for the treatment of patients with HER2-expressing solid tumors. We are currently in the dose escalation portion of the trial and expect to advance into Phase 2
dose expansions in 2021 in four clinically important and commercially compelling indications. We believe that our preliminary Phase 1/2 data provide us with clinical proof of concept for our HER2 Boltbody ISAC approach.
Our second program, BDC-2034, focuses on CEA, a well-known tumor antigen that is overexpressed in
various solid tumors with significant unmet medical need including, but not limited to, colorectal cancer, non-small cell lung cancer, pancreatic cancer and breast cancer. CEA is upregulated on the cell
surface of these cancers and displays minimal receptor-mediated internalization into the cancer cell. CEA allows us to target these cancers, some of which are immunologically cold. In our preclinical studies, we have observed promising
in vivo and in vitro activity with notable anti-tumor activity in xenograft models. We anticipate advancing BDC-2034 into the clinic in 2022.
Our third program, a PD-L1 Boltbody ISAC, focuses on the treatment of patients with tumors that are
nonresponsive or become refractory to immune checkpoint blockade. This encompasses more than 15 different tumor types impacting the lives of millions of patients yearly. Our PD-L1 program is a trifunctional
therapeutic with the following mechanism: 1) Antibody-dependent cellular phagocytosis of the tumor, 2) Myeloid activation and engagement of an adaptive T cell response, and 3)
PD-L1/PD-1 checkpoint inhibition. In our preclinical studies, we have observed enhanced anti-tumor activity compared to checkpoint inhibition alone, and induced
immunological memory in syngeneic mice models with our PD-L1 Boltbody ISAC.
Our Pipeline
We are leveraging our myeloid biology expertise to build a robust pipeline of immune-stimulating, myeloid-engaging therapeutics. Our current
pipeline is represented in the figure below. In addition to the programs below,
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we are also exploring various well-known targets that have been traditionally difficult to drug and where our myeloid expertise and the Boltbody ISAC approach may unlock the potential of these
promising antigens as viable cancer targets. We hold exclusive worldwide rights to all of the listed programs.
In this graphic, HER2 = human epidermal growth factor receptor 2; CEA = carcinoembryonic antigen; PD-L1 = programmed cell death-ligand 1; TAM1 = tumor-associated macrophage 1 antigen; NSCLC = non-small cell lung cancer; CRC = colorectal cancer; and SCLC = small cell
lung cancer.
Our Corporate History and Team
Our company was founded in 2015 to capture the pioneering work of our founder Dr. Edgar G. Engleman, who is Professor of Pathology
and Medicine at Stanford University School of Medicine and Co-Director of the Immunology and Immunotherapy Program of the Stanford Cancer Institute. Dr. Englemans expertise in translating cancer
immunotherapeutics from bench to bedside includes the discovery of a dendritic cell-based technology that was the basis for the first active immunotherapy approved by the FDA. It was also at the Engleman Laboratory that the promising new
immunotherapy activating dendritic cells in tumors in situ, without requiring their removal and activation in vitro, was discovered in collaboration with Dr. Yaron Carmi and led to the founding of Bolt Biotherapeutics. Continued
research in the Engleman Laboratory led Dr. Michael Alonso, a scientific co-founder, and Dr. Shelley Ackerman along with Dr. Engleman to invent the technology that formed the basis of our
promising Boltbody ISAC platform.
We have assembled a highly qualified management team with broad experience in myeloid biology, drug
discovery and development to execute our mission. Our scientific founders and our management team collectively have extensive experience in immunology, oncology drug development and patient care. We are industry veterans with prior experience at
companies such as Alder, Astellas, Gilead, Jazz, Roche / Genentech, Sunesis and others. Together, our team has a proven track record in the discovery, development and commercialization of numerous approved therapeutics such as Alecensa, Cytovene,
Evenity, Gazyva, Herceptin, Kadcyla, Polivy, Perjeta, Rituxan, Tecentriq, Valcyte, Venclexta and Vyepti while at other companies. Prior to the completion of our initial public offering in February 2021, we funded our operations primarily through
private placements of our convertible preferred stock for gross proceeds of $173.7 million, including the January 2021 issuance and sale of 5,611,059 shares of Series C-2 preferred stock for net proceeds of $51.9 million. In February 2021, we
completed our initial public offering of 13,225,000 shares of our common stock at a price to the public of $20.00 per share, including the exercise in full by the underwriters of their option to purchase
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1,725,000 additional shares of our common stock. Including this option exercise, the aggregate net proceeds to us from the offering was approximately $241.7 million, net of approximately $22.8
million in underwriting discounts, commissions and other offering expenses.
Strategy
Our goal is to become a leading immuno-oncology company, leveraging our myeloid biology expertise and proprietary Boltbody ISAC approach to
discover, develop and commercialize transformative treatments to address key unmet medical needs in cancer. The key components of our strategy are to:
Leverage our Boltbody ISAC approach and myeloid expertise to develop our pipeline of immune-activating
therapies. Our expertise in myeloid biology and immuno-oncology has led us to research various tumor antigens across solid tumors where significant unmet medical needs remain. Our expertise in medicinal chemistry and mAb engineering and our
ability to modulate TLR linker-payloads allow us to optimize the therapeutic profile of our product candidates for any particular tumor antigen as part of our research and discovery efforts to produce durable anti-tumor responses. We believe that
our approach is applicable to a broad spectrum of tumor-associated antigens expressed on cancers, including those that are refractory to existing therapies.
Rapidly advance the development of our lead Boltbody ISAC product candidate,
BDC-1001, for the treatment of patients with HER2-expressing cancers. BDC-1001 is currently in an ongoing Phase 1/2 clinical trial for the treatment of patients with
HER2-expressing solid tumors. Based on our promising preclinical activity, BDC-1001 has the potential to be effective both as a monotherapy and in combination with existing therapies for patients with
HER2-expressing solid tumors. While currently approved HER2-targeting agents are important and effective treatment options for some patients with HER2-expressing solid tumors, a large percentage of patients do not respond to these therapies, develop
tumor progression after initial response or are not indicated for current HER2-targeting therapies. These sizable patient populations do not have adequate treatment options available to them. Therefore, we intend to rapidly advance development of BDC-1001 across multiple HER2-expressing cancers, including in both HER2-expressing and certain HER2-low cancers.
Expeditiously advance our pipeline focused on additional promising targets including CEA and PD-L1. Our robust pipeline includes BDC-2034 targeting CEA and a PD-L1 Boltbody program for which we have observed promising
preclinical activity. These programs represent additional opportunities to differentiate our Boltbody ISAC approach from traditional immuno-oncology therapies that seek to inhibit key oncology pathways. By contrast, our Boltbody ISACs utilize target
tumor antigens to bring nearby myeloid cells to the targeted tumor microenvironment to initiate robust innate and adaptive immune responses. We believe that this differentiated approach could improve the lives of patients by producing durable
anti-tumor responses. We expect to designate our next clinical candidate in 2021.
Continue to invest in our myeloid expertise and Boltbody ISAC approach to explore the full potential of our
targeted immunotherapies for the treatment of cancer. Our expertise, rigor and unbiased data-driven approach may lead to additional research and discovery programs that are complementary or independent of our Boltbody ISAC approach and our
growing library of innate immune stimulators. Our research and discovery efforts are exploring additional immune agonists for the Boltbody ISAC approach as well as identifying novel targets in tumor-associated myeloid cells that can be targeted for
anti-tumor outcomes. We believe such agents have the potential to reprogram tumor-supportive macrophages into tumor-destructive macrophages to elicit a productive anti-tumor immune response. This approach could potentially provide an avenue to
further develop precision medicine with an immune modulator.
Selectively enter into collaborations to expand and enhance our proprietary Boltbody ISAC approach and myeloid
expertise to increase the impact of our future product candidates. In order
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to advance treatment options for patients, we may selectively collaborate with other companies with complementary technology or resources that could maximize the value of our product candidates
and also expand our pipeline. Such collaborations may provide us with novel technologies, targets, agents or approaches that complement our myeloid expertise and innovative Boltbody ISAC approach to improve the lives of patients with cancer.
Background of Myeloid Cell Biology
Overview of Myeloid Cell Biology in Cancer
Myeloid cells are a group of immune cells that belong to the innate immune system, consisting of cell types known as monocytes, macrophages,
dendritic cells and granulocytes. These cells serve various essential roles in the bodys immune system. In particular, myeloid antigen presenting cells, or myeloid APCs, which include monocytes, macrophages and dendritic cells, are critically
involved in the regulation of T cell responses and thereby bridge our bodys innate and adaptive immune systems. Due to various immunosuppressive factors produced in the tumor microenvironment, the normal function of these cells can be
inhibited and limited in their ability to create a productive anti-tumor immune response. The source of these immunosuppressive factors can be from cancer cells, cancer-associated fibroblasts, tumor-associated neutrophils, T regulatory cells,
tumor-associated macrophages or myeloid-derived suppressor cells. When functioning properly, myeloid APCs can stimulate anti-tumor effects in the body, including direct tumor cell killing by phagocytosis and subsequent activation of T cells to
effect long lasting tumor cell killing. This type of T cell response, which is critical for durable anti-tumor immunity, begins when the Boltbody ISAC targets the antigen-expressing tumor cells for phagocytosis by myeloid APCs such as dendritic
cells. When appropriately activated by a Boltbody ISAC or other stimuli, these myeloid cells transform into effective antigen-presenting cells that can migrate to the lymph nodes to activate tumor antigen-specific T cells that are critical to direct
tumor cell killing. These activated myeloid APCs also secrete pro-inflammatory chemokines and cytokines that help convert immunologically cold tumors into hot tumors. As such,
tumor-supportive myeloid cells are converted to tumor-destructive myeloid cells, further amplifying the innate and adaptive immune responses and thereby leading to a productive and durable anti-tumor immune response.
Overview of Toll-Like Receptors and Their Use in Cancer
Toll-like receptors, or TLRs, are a class of pattern recognition receptors that bind to molecules present on bacteria, viruses and other
microorganisms. They are highly expressed by myeloid APCs and other innate immune cells and play a key role in the activation of the immune system in response to microbial invasion. Stimulation of the TLRs by their natural ligands or synthetic
agonists induces the secretion of pro-inflammatory cytokines as well as the upregulation of molecules involved in antigen processing and presentation. As part of TLR activation, certain pathogens may be
phagocytosed and digested and their antigens presented to T cells that further enhance the innate immune response. These events culminate in the bridging of the innate and adaptive immune responses leading to the induction of a robust T cell
response by TLR-activated myeloid APCs, which is critical for the development of durable immunity against foreign pathogens and cancerous cells.
TLR7 and TLR8 are often described together in scientific literature due to their high degree of homology and shared function. They are both
intracellular TLRs that detect virus-associated single-stranded RNA (ssRNA) and are expressed at varying levels by myeloid APCs, including monocytes, macrophages and dendritic cells. TLR8 is unique in that its expression is restricted to myeloid
APCs, whereas TLR7 is expressed by myeloid APCs, B cells and plasmacytoid dendritic cells, or pDCs. Furthermore, pDCs produce interferon alpha that amplifies the immune response by bolstering dendritic cell and T cell activity. Importantly, both
TLR7 and TLR8 agonists can strongly activate myeloid APCs and elicit protective T cell responses. Targeting both TLR7 and TLR8 thus activates a broader set of immune cells that contribute to a productive anti-tumor immune response.
TLR agonists have been tested to activate the innate immune response to generate anti-tumor activity. If administered systemically, TLR
agonists by themselves pose a risk of systemic immune activation that can lead
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to cytokine release syndrome. As such, they have been administered via intratumoral injection. Examples of intratumoral TLR approaches include CMP-001, SD-101 and NKTR-262. While TLR agonists may have anti-tumor efficacy as a monotherapy, our publication in Nature indicates that anti-tumor responses can be greatly
augmented if immune stimulants are co-administered with tumor-targeting antibody as the combination enables myeloid cells to more effectively uptake (phagocytosis) and present tumor neoantigens to T
cells. Furthermore, our preclinical data demonstrate that conjugation of TLR agonists to tumor-targeting antibodies greatly enhances anti-tumor activity beyond co-administration of unconjugated TLR
agonists and tumor-targeting antibodies.
Boltbody ISACs Initiate a New Innate Anti-tumor Immune Response which Leads to Adaptive
Immunity with Subsequent Immunological Memory
While the majority of the current immunotherapy approaches are focused largely on the adaptive immune
response, the right-hand side of the above cancer immunity cycle, there remains limited approaches to successfully engage the innate immune response that is depicted on the left-hand (shaded) side of the cancer immunity cycle. Our ISACs are designed
to elicit an all-encompassing immune response by engaging the innate immune system to trigger a new adaptive immune response using a single therapeutic agent.
Current immunotherapies seek to address the immune suppression aspects of tumor survival. While these approaches have had a tremendous impact
on the lives of patients, they also have several shortcomings and limitations:
T cell exhaustion: Due to chronic antigen stimulation, activated T cells become less effective over time,
losing much of their function due to sustained expression of inhibitory receptors
Complexities and costs of personalized T cell approaches: Personalized approaches have
significant costs which limit their utilization and complexities with manufacturing and administration further restricts access to primarily academic centers
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Re-treatment in the event of relapse: Lack of engagement with
adaptive immunity reduces likelihood of a long-term anti-tumor response as tumor survival mechanisms often evolve to shed the initial antigen and lead to relapse/recurrence of tumor
Inability to target undruggable tumor targets: Limited number of accessible antigen targets
reduce the ability of therapies to fully engage the immune system
Systemic overstimulation of the immune system: Limited ability to directly target the tumor can lead to
cytokine release syndrome and life-threatening toxicity, narrowing a treatments therapeutic window
We address
each of these pitfalls by engaging an entirely new immune response via our tumor-targeted Boltbody ISACs, which have the potential to safely stimulate the TLRs within the myeloid cells ultimately leading to a T cell-driven anti-tumor response.
Our Boltbody ISAC Approach
Our Boltbody
ISAC approach is pioneering a new category of targeted immunotherapies engineered for systemic administration such that circulating Boltbody ISACs reprogram the tumor microenvironment. In the tumor microenvironment, the Boltbody ISACs initiate
anti-tumor activity through a Three-Factor Authentication process that involves the following:
1.
Tumor antigen recognition: Our selective and specific tumor-targeting Boltbody ISACs recognize and bind
specifically to the target antigen-expressing tumors.
2.
FcR-dependent phagocytosis: Engagement of optimized Fc domains
triggers myeloid-mediated phagocytosis of the Boltbody ISAC-bound tumor cell. This process directly kills antigen-expressing tumor cells and delivers tumor neoantigens to myeloid cells.
3.
TLR-mediated activation: Our proprietary TLR agonist conjugates
activate myeloid cells and enable the presentation of tumor-associated neoantigens to cytotoxic T cells, thereby initiating the bodys adaptive anti-tumor immune response and converting immunologically cold tumors to hot
tumors. Furthermore, these activated myeloid cells also encourage additional myeloid cell-mediated phagocytosis to amplify the innate and adaptive immune responses.
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The Three-Factor Authentication process provides an added safety benefit to
ensure that the immune system is selectively targeted and only fully activated when all three steps have been met. This ensures an initially localized immune effect. During the Three-Factor Authentication, tumor-associated myeloid APCs
engulf the Boltbody ISAC-bound tumors, become armed with tumor neoantigens, and migrate to the lymph nodes where they mediate the activation and rapid expansion of tumor-reactive T cells to eliminate tumor cells, including those without the initial
target antigen. This process enables the bodys own immune system to determine which neoantigens are most important to eliminate the target tumors. We believe that this represents the development of systemic immunological memory with epitope
spreading to neoantigens that will result in long-term anti-tumor responses in patients.
The Boltbody Immune-Stimulating Antibody Conjugate
We designed our Boltbody ISACs with three primary components: a tumor antigen-targeting antibody, a linker that can be designed either as
cleavable or non-cleavable and a proprietary immune stimulant to activate the patients innate and adaptive immune systems. Together these components allow us to believe that our Boltbody ISACs have the
potential to overcome the limitations of existing immunotherapies by triggering both the bodys innate and adaptive immune systems through different stages of the cancer immunity cycle to produce long-term anti-tumor activity.
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The figure below depicts the mechanism of action of our Boltbody ISACs starting with
systemic administration followed by 1) tumor antigen recognition, 2) FcR-dependent phagocytosis and 3) TLR-mediated activation, to target tumors locally and activate the
bodys innate and adaptive immune systems, leading to systemic immunological memory with epitope spreading to neoantigens.
Key Features of Our Boltbody ISAC Approach
We believe the following key features are critical to the successful engineering of Boltbody ISACs and set our approach apart from traditional
immunotherapies. These advantages provide us with the opportunity for robust applications across various solid tumors designed to deliver effective and safe therapeutics to provide durable anti-tumor responses.
Ability to address
difficult-to-treat solid tumors including those refractory to current treatments: We have observed in vivo anti-tumor activity in large, well-established
tumors as well as in tumors refractory to current therapies;
Engaging the bodys innate and adaptive immune responses: Targeted activation of myeloid APCs for
antigen presentation encourages the patients own adaptive immune system to reveal relevant tumor neoantigens;
Generation of immunological memory with epitope spreading to provide long-term anti-tumor responses and
protect against recurrence: Our preclinical experiments indicate that Boltbody ISACs generate immunological memory and epitope spreading to tumor antigens that are distinct from the Boltbody ISAC target. This process may prevent tumor recurrence
and kill related tumors that do not express the original Boltbody ISAC target antigen;
Ability to target tumor antigens with less dense cell surface expression: We have observed in preclinical
studies that Boltbody ISACs demonstrated promising anti-tumor activity even at low levels of target antigen expression;
Capability to modulate myeloid cell activity via TLR potency and selectivity and Fc engineering: Our
medicinal chemistry and mAb engineering expertise allow us to modulate potency, selectivity and specificity of our TLR agonists as well as enhance the stability, PK/PD profile and safety of our Boltbody ISACs;
Well tolerated in preclinical studies by avoiding unintended systemic immune stimulation: Our
Three-Factor Authentication system provides additional layers of safety for an initially localized immune effect that may avoid unintended systemic immune activation. In our preclinical safety studies,
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BDC-1001 was well tolerated and no adverse safety signals were observed. We believe this will potentially enable us to treat patients earlier in the course
of their disease. This can be used as monotherapy or as part of a combination therapy strategy; and
Potential to benefit patients who have a defective adaptive immune response: Some patients tumors
may have defects at presenting neoantigens that makes them resistant to T cell-mediated killing. Boltbody ISACs overcome this barrier by activating myeloid cells and enhancing their phagocytic capacity resulting in anti-tumor activity.
Our Lead Program: BDC-1001
BDC-1001 Overview
Our lead product candidate, BDC-1001, is currently in clinical development for the treatment of
patients with HER2-expressing solid tumors, including those with HER2-low tumors. BDC-1001 provides a compelling example of the potential of Boltbody ISACs to address
unmet medical needs in solid tumors. BDC-1001 is delivered systemically and acts locally by targeting HER2-expressing tumors and related metastatic disease, triggering their destruction by the innate and
adaptive immune systems. BDC-1001 consists of a biosimilar of the humanized monoclonal antibody trastuzumab that is chemically conjugated to one of our proprietary TLR7/8 agonists via a non-cleavable linker. We have observed through our preclinical studies that BDC-1001 is an activator of human myeloid antigen presenting cells that may kill tumors via three
distinct mechanisms: trastuzumab-mediated cell killing, robust immune activation and induction of immunological memory. Our observed preclinical anti-tumor response coupled with a lack of adverse safety signals in our
non-human primate GLP toxicology studies leads us to believe that BDC-1001 offers the potential for long-term and meaningful response for patients with HER2-expressing
cancers, including certain HER2-low tumors. We initiated a Phase 1/2 trial of BDC-1001 in the first quarter of 2020 for the treatment of patients with HER2-expressing
solid tumors. We are currently in the dose escalation portion of the trial and expect to move into Phase 2 dose expansions in 2021. We believe that our preliminary Phase 1/2 data provide us with clinical proof of concept for our HER2 Boltbody ISAC
approach.
BDC-1001 Mechanism of Action
BDC-1001 stimulates anti-tumor activity with a three-pronged approach: direct tumor cell killing by
trastuzumab-mediated mechanisms, localized phagocytosis and elimination of HER2-expressing tumor cells by activated myeloid APCs and durable immunity manifested by T cells reactive to tumor-associated antigens or neoantigens. These mechanisms
are supported by our in vivo data demonstrating tumor elimination and immunological memory when treated with our BDC-1001 surrogates.
The mechanism governing myeloid cell activation is tripartite with BDC-1001 binding to HER2-expressing
tumor cells via the antibody variable region, leading to phagocytosis and tumor cell killing by myeloid APCs expressing Fc g receptors, or FcRs, such as macrophages, dendritic cells and monocytes. Once
internalized, the TLR7/8 agonist attached to BDC-1001 gains access to the phagolysosome and mediates downstream events associated with TLR7/8 activation, including increased cytotoxicity, cytokine secretion,
recruitment of immune effector cells and the processing and presentation of tumor-associated antigens that stimulate T cell-mediated immunity. Taken together, the downstream effects of myeloid APC activation induced by BDC-1001 results in the conversion of immunologically cold tumors into hot tumors.
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Activated myeloid APCs migrate to the draining lymph nodes following BDC-1001 mediated phagocytosis of HER2-expressing tumor cells. Upon arrival to the draining lymph nodes, activated APCs present the full diversity of potential tumor-associated antigens and neoantigens located
within the phagocytosed tumor cells on peptide-MHC complexes to naïve and antigen experienced or previously exhausted T cells. This process, in conjunction with elevated
co-stimulatory molecule expression following TLR7/8 recognition in myeloid APCs, leads to the polyclonal activation and expansion of T cells. As a result, the patients own immune system determines which
are the relevant T cells to mobilize for tumor destruction and subsequent immunosurveillance, providing a compelling example of how an off-the-shelf targeted
immunotherapeutic such as BDC-1001 can deliver a personalized therapeutic outcome.
BDC-1001 Design / Selection Process
To demonstrate the promise of our Boltbody ISAC approach, we sought a target that was well-validated and was present in cancer
indications that continue to have significant unmet medical need. We selected HER2 as the target for our first Boltbody ISAC as it met these criteria and is expressed at high levels in multiple malignancies and remains expressed at a high level in
the majority of patients who unfortunately develop tumor progression while on HER2-targeted therapies. HER2-expressing tumors also tend to be rich in myeloid cells, which BDC-1001 utilizes to initiate the
ISAC-mediated anti-tumor cascade that ultimately resulted in tumor elimination and immunological memory in our various preclinical studies.
We selected a biosimilar of trastuzumab as the antibody backbone for BDC-1001 based on the following
parameters: 1) trastuzumab is a well-validated and successful monoclonal antibody that induces meaningful clinical responses in patients with a well understood safety profile, 2) trastuzumab is effective at promoting antibody-dependent
cellular phagocytosis, or ADCP, which is a key step in unlocking the full power of our mechanism of action, 3) trastuzumab has low rates of immunogenicity in patients, 4) trastuzumab has been commercialized as a biosimilar, thereby making
biosimilars of trastuzumab available for the manufacturing of Boltbody ISACs and 5) our preclinical data demonstrated that trastuzumab-based ISACs outperformed pertuzumab-based ISACs with the same payloads.
The other key design element of a Boltbody ISAC is the linker payload, which is designed to promote immune stimulation. For BDC-1001, the combination of TLR7 and TLR8 was selected as the immune stimulant
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for the following reasons: 1) targeting of an endosomal TLR was desirable when considering the safety of the ISAC, as FcR-mediated uptake into the myeloid
APC is required for access to the TLR, 2) gene expression data demonstrated that TLR7 and TLR8 are largely restricted to expression on cells of myeloid lineage including monocytes, macrophages and dendritic cells, 3) TLR7 is also expressed on B
cells and plasmacytoid dendritic cells, which stimulate type I interferon and antibody responses following stimulation, 4) the expression pattern of murine TLR7 recapitulates the combination of TLR7 and TLR8 expression in the human, which enables us
to use murine tumor models as an appropriate setting to investigate our ISAC-mediated mechanisms and 5) we generated data in preclinical experiments demonstrating that dual TLR7/8 agonists outperformed TLR7-specific and TLR8-specific agonists for
activating myeloid cells. Therefore, we believe that a dual TLR7/8 agonist will enhance the potential for a productive anti-tumor immune response.
BDC-1001 was designed with safety in mind. The final linker-payload selection was motivated by the
goal to demonstrate a favorable safety profile in IND-enabling toxicology studies. Our preclinical data demonstrated that non-cleavable linkers lead to increased myeloid
activation and provide a favorable pharmacokinetic profile and a lack of adverse safety signals, as compared to cleavable linkers. In addition, non-cleavable linkers are also less likely to release an active
TLR agonist, further reducing the potential for systemic toxicity. We selected both a non-cleavable linker and the TLR7/8 agonist payload because it conferred a favorable immunogenicity profile and
pharmacokinetic profile for BDC-1001 in non-human primate studies, and importantly, did not induce cytokine release syndrome. Furthermore, the BDC-1001 linker-payload is cell membrane impermeable which limits off target activity and enables our Three-Factor Authentication process for added safety.
BDC-1001 Validation of the HER2 Boltbody ISAC Approach
Boltbody ISACs Outperform Equimolar Mixture of Unconjugated TLR7/8 Agonist and Trastuzumab
To demonstrate that our Boltbody ISAC approach is more potent than the mixture of unconjugated TLR7/8 agonist and trastuzumab, we implanted
mice with a HER2-expressing tumor cell line (HCC1954) and treated mice that have functional murine myeloid cells but are deficient in B, T, and NK cells with our BDC-1001 surrogate, trastuzumab alone or
trastuzumab and an unconjugated TLR7/8 agonist. We observed that a single administration of our BDC-1001 surrogate resulted in markedly improved anti-tumor activity as compared to an equimolar mixture of the
unconjugated TLR7/8 agonist and trastuzumab. Therefore, we believe that covalent attachment of a TLR7/8 agonist to a tumor-targeting antibody such as trastuzumab in the form of a Boltbody ISAC dramatically improves the immunostimulatory outcome and
anti-tumor activity of otherwise intratumorally administered, unconjugated TLR agonists.
Figure 1: BDC-1001
Surrogate Delivers Enhanced Anti-Tumor Activity vs. Unconjugated TLR7/8 Agonist and Trastuzumab
SCID/beige mice were dosed once with 5 mg/kg of
BDC-1001 Surrogate, trastuzumab, or an equimolar mixture of trastuzumab and TLR7/8 agonist. Data are shown as mean and standard error of the mean, or SEM, with 3-5 mice
per group.
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Myeloid APCs Eliminate Tumors via Phagocytosis Following Boltbody ISAC
Three-Factor Authentication
To assess that Boltbody ISAC activity is governed by three key factors: tumor-targeting,
FcR engagement and TLR agonism, we performed experiments in which each step was perturbed and measured the subsequent anti-tumor effects. In each experiment, mice were implanted with a HER2-expressing tumor cell line and were randomized when the
tumor volume reached 50 75 mm 3 . The figures below demonstrate that our Boltbody ISACs follow a Three-Factor Authentication process, in which tumor-targeting, FcR and TLR
engagement are essential to initiate myeloid mediated tumor destruction, even in the absence of the adaptive immune system.
To
demonstrate the requirement for tumor targeting, mice were treated systemically with our BDC-1001 surrogate, trastuzumab, isotype mAb or isotype ISAC. We observed that while our
BDC-1001 surrogate led to tumor elimination, an isotype ISAC that does not recognize the HER2 tumor antigen showed no anti-tumor activity.
Figure 2: BDC-1001 Surrogate Activity Requires Tumor-Targeting
NSG mice were dosed systemically with 5 mg/kg every 5 days through day 25. Data
are shown as mean and SEM with 5 mice per group.
To demonstrate the requirement for Fc-mediated
engagement and TLR agonism, we altered the ISAC by inactivating the Fc domain (Fc-Null ISAC) or by inactivating the payload (TLR-Null ISAC). In the figure below, mice
were treated systemically with our BDC-1001 surrogate, trastuzumab, Fc-Null ISAC or TLR-Null ISAC. We observed that only the BDC-1001 surrogate mediated anti-tumor activity, confirming the requirement for both Fc-mediated engagement and TLR agonism.
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Figure 3: BDC-1001 Surrogate Activity Dependent on Both FcR
Engagement and TLR Agonism
NSG mice were dosed systemically with 5 mg/kg every 5 days through day 25. Data are
shown as mean and SEM with 5 mice per group.
Lastly, to demonstrate that BDC-1001 activity is
dependent on the presence of phagocytes, tumor cells were implanted into mice, and phagocytes were depleted prior to and during BDC-1001 surrogate treatment using clodronate-loaded liposomes. We observed that
depletion of phagocytes, including myeloid APCs, significantly reduced our BDC-1001 surrogate-mediated anti-tumor activity.
Figure 4: BDC-1001 Surrogate Activity Dependent on Presence of Phagocytes
SCID/Beige were dosed systemically with 5 mg/kg on day 0, 5 and 10. Phagocytes were
depleted using clodronate loaded liposomes through day 21. Data are shown as mean and SEM with 4-6 mice per group.
Boltbody ISAC-stimulated CD8 + Cytotoxic T cells Infiltrate and Eliminate Large
Syngeneic Tumors
To assess the capacity of ISACs to mediate anti-tumor activity in the presence of functional innate and adaptive
immune systems, we utilized an immunologically cold syngeneic mouse mammary carcinoma, or MMC, tumor model. To minimize cross-species immunogenicity associated with rat HER2, or rHER2, expression in the MMC tumor, transgenic mice that
endogenously express rat HER2 were used as the host.
In the figure below, mice were implanted with the MMC tumor cell line and the tumors
were allowed to grow until they were very large (~500 mm 3 ) and well established. Mice were then treated systemically with our BDC-1001 surrogate, rHER2 mAb
or isotype ISAC. We observed that systemic administration of the BDC-1001 surrogate was well tolerated and the only agent that led to tumor elimination.
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Figure 5: BDC-1001 Surrogate Mediated Tumor Elimination in Very
Large Well-Established Tumors
FVB Erbb2 transgenic mice were dosed systemically with 5 mg/kg on days 0 and 5. Data are
shown as mean and SEM with 4-7 mice per group.
To demonstrate the induction of immunological
memory, BDC-1001 surrogate treated mice with tumor elimination for >60 days after their last treatment were re-challenged with the MMC tumor cell line; tumor
naïve mice served as implantation controls. We observed that our BDC-1001 surrogate generated immunological memory as the previously treated, tumor-free mice were protected against tumor re-challenge and remained tumor-free without retreatment for the duration of the study.
Figure 6: BDC-1001 Surrogate Generated Immunological Memory
FVB Erbb2 transgenic mice that eliminated their tumors for >60 days after the last
treatment with BDC-1001 surrogate or tumor naïve mice were challenged with MMC tumor cells. Date are shown as mean and SEM with 5 mice per group.
To demonstrate that BDC-1001 also results in a T cell-mediated adaptive immune response, mice were
implanted with the MMC tumor cell line and then pre-treated with anti-CD8 depleting antibody with rIgG2b serving as the
non-depleting control. Mice were then treated with our BDC-1001 surrogate. We observed that BDC-1001 surrogate-driven tumor
regression was heavily dependent on CD8 T cell activity, as depletion of CD8 T cells reduced anti-tumor activity. Furthermore, significant increases in phagocytes and CD8 T cells were measured in tumors following
BDC-1001 surrogate treatment, further supporting a mechanism that bridges the innate and adaptive immune systems.
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Figure 7: BDC-1001 Surrogate Activity Dependent on CD8 T Cell
Activity
FVB Erbb2 transgenic mice were treated systemically with 5 mg/kg at days 0 and 5 with BDC-1001 surrogate or rHER2 mAb. CD8 T cells were depleted through day 21. Data are shown as mean and SEM with 6 mice per group.
Boltbody ISACs Generate Immunological Memory & Evidence of Epitope Spreading Beyond HER2
To demonstrate that BDC-1001 surrogate-induced T cell response and immunological memory extend beyond
HER2-expressing tumor cells, as would be expected if epitope spreading occurred, we developed a CT26 cell line that stably expresses rat HER2 (CT26-rHER2) where approximately 10% of the CT26 cells did not express rHER2 after tumor implantation. We
observed that treatment with BDC-1001 surrogate resulted in tumor elimination in approximately 75% of mice whereas none of the mice treated with the unconjugated antibody had their tumors eliminated. These
data demonstrate that the BDC-1001 surrogate was capable of eliminating tumor cells expressing HER2 as well as those with no HER2 expression, suggesting that BDC-1001
surrogate induced epitope spreading. This is an important observation as human tumors are heterogeneous with regards to cell surface HER2 expression. A tumor determined to be HER2-positive will have tumor cells with varying levels of HER2 expression
and BDC-1001 should be capable of eliminating even those tumor cells with low or no HER2 expression.
We performed a re-challenge experiment to further assess the potential for immunological memory with
epitope spreading. Mice that experienced tumor elimination, i.e. were tumor-free, following BDC-1001 surrogate treatment were re-challenged with the parental CT26 cell
line that lacked rHER2 expression or a genetically distinct tumor cell line, 4T1, in the presence and absence of CD4/CD8 T cells. We observed that mice were protected from re-challenge with the parental CT26
line and that this protection required the presence of CD4/CD8 T cells. Finally, we observed that the development of immunological memory and potential epitope spreading was specific to CT26 as tumor growth of 4T1 tumors was not impacted.
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Figure 8: BDC-1001 Surrogate Elicits Tumor Elimination with
Epitope Spreading and Immunological Memory
Balb/c mice were dosed systemically with 10 mg/kg every 5 days through day 25. Mice that
eliminated their tumors for >21 days after the last treatment with BDC-1001 surrogate or tumor naïve mice were challenged with CT26 tumor cells without rHER2 expression. Data are shown as mean and SEM
with 3-8 mice per group.
BDC-1001 Is an Activator
of Human Myeloid APCs at Various Levels of HER2 Expression
BDC-1001 activates human
myeloid APCs to a greater extent than trastuzumab following co-culture with variable HER2-expressing cancer cell lines. As demonstrated in the figure below, BDC-1001
stimulation led to increased expression of CD86, a co-stimulatory molecule that is essential for T cell activation. BDC-1001 also led to increased expression of the co-stimulatory molecule CD40 and increased TNFα secretion, each of which is indicative of a robust myeloid activation response. Importantly, BDC-1001 activated myeloid
APCs to a similar extent when co-cultured with tumor cell lines expressing high (IHC3+) or lower levels of HER2 (IHC2+ or IHC1+). These data suggest that BDC-1001 can
activate myeloid cells even in the presence of low levels of HER2 surface expression on the tumor cells. These data highlight the potential benefit of BDC-1001 in patients with
HER2-low tumors, currently a population for which trastuzumab is not approved.
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Figure 9: BDC-1001 Activates Human Myeloid APCs in Tumor Co-culture Assays
Pooled myeloid APCs were incubated with the indicated cancer cell line and trastuzumab or
BDC-1001. Median fluorescence intensity of CD86 is shown. Data are shown as mean and SEM from 3 experiments with 18 donors.
In a separate set of experiments, we confirmed the requirement for Three-Factor Authentication, as
FcR-mediated internalization was needed to bring the linker-payload inside the cell to drive myeloid activation through TLR7/8 agonism. We also confirmed that BDC-1001
retains native trastuzumab functionality, as determined by HER2 binding and in vitro tumor growth inhibition assays.
BDC-1001 Is Well Tolerated in Non-Human Primates
To
assess the potential safety and tolerability of BDC-1001, we performed a multi-dose non-human primate GLP toxicology study where we administered vehicle, 10, 30 or 90
mg/kg of BDC-1001 at weekly intervals for a total of 4 dose administrations (n=7 per group). We did not observe any BDC-1001-related clinical signs or changes in any of
the in-life observations/examinations (e.g., body weights, respiratory rate, as well as ophthalmological, cardiac and neurological endpoints). Furthermore, we did not observe any
BDC-1001-related changes in the serum cytokines evaluated and there were no BDC-1001-related organ weight changes. As a result, it was concluded that BDC-1001 was well-tolerated in non-human primates and that the no observed adverse effect level, or NOAEL, for BDC-1001 was 90 mg/kg,
the highest dose tested.
BDC-1001 Overview of HER2 Indications and Treatment
Paradigms
HER2 is a proto-oncogene that encodes a transmembrane protein involved in signal transduction pathways that
promote cell growth and differentiation. HER2 protein overexpression and gene amplification have been documented across multiple cancers. Targeting HER2 with mAbs and small molecule tyrosine kinase inhibitors has had a major impact on patients with
HER2-expressing breast and gastric cancer, but there remains a significant unmet medical need on an individual and global patient basis. Our BDC-1001 program seeks to improve therapeutic outcomes for patients
with HER2-expressing tumors across three categories: 1) HER2-positive breast and gastric cancer refractory to existing anti-HER2 therapies, 2) tumors with lower expression of HER2 that are not indicated for approved therapies, and 3) other
HER2-positive tumors not indicated for approved therapies. In addition, the innovative Boltbody ISAC approach of BDC-1001 seeks to address this critically important unmet medical need not only in patients with
the aforementioned advanced tumors, but also to extend that innovation to neoadjuvant and adjuvant settings.
As is widely scientifically
accepted and as shown in a 2015 study in the Cancer Metastasis Review, HER2-positivity (IHC 3+ or gene amplification) has been identified in a wide range of malignancies including breast, gastric, bladder, lung, esophageal, colorectal, ovarian,
salivary gland, pancreatic, cervical cancers and others. Prevalence of HER2 overexpressing or amplified tumors varies across indications.
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Figure 10: Estimated Percentage Prevalence of HER2 Positivity by Protein Expression Across Solid Tumor
Indications
Although there is broad prevalence of HER2 expression across tumor types, HER2-targeting agents have only
been approved for patients with HER2-positive breast and gastric cancers, with HER2-positivity based on protein overexpression or gene amplification. Only trastuzumab is approved for both indications. Additional approved HER2-targeting agents for
HER2-positive breast cancer include the following: pertuzumab, trastuzumab emtansine, trastuzumab-hyaluronidase-oysk, lapatinib, neratinib, and most recently, trastuzumab-deruxtecan and tucatinib.
According to epidemiology data publicly presented by F. Hoffmann-La Roche AG/Genentech, Inc., the 2018
annual drug-treated incidence of breast cancer in the United States and in France, Germany, Italy, Spain and the UK (formerly known as the EU5) was estimated to be approximately 477,800 patients in the aggregate. Of these, we estimate
that only approximately 75,800 patients are HER2-positive. We estimate HER2-low patients to be more than 50% of the total population, including approximately 86,900 patients who are IHC2+ without gene
amplification and approximately 155,500 patients who are IHC1+ without gene amplification. We plan to explore this HER2-low population in breast cancer starting with the IHC2+ group first.
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Figure 11: Annual Drug-Treated Breast Cancer Incidence and Established Segments in HER2+ Breast Cancer
Trastuzumab-deruxtecan and tucatinib are important recently approved agents for the treatment of patients
with previously treated advanced HER2-positive breast cancer. While both these agents provide important options for patients with advanced breast cancer, it is important to highlight the large percentage of patients who do not respond to these
therapies or develop tumor progression after initial response. There are no approved treatments for either of these patient groups.
Despite the availability of these HER2-targeted agents, most patients with advanced disease and many with early disease are not cured and
require multiple lines of therapy to achieve disease control, improve quality of life and extend survival. Additionally, there are patients not recognized in the current HER2-positive treatment paradigm such as those with lower HER2-expressing
tumors or with HER2-expressing tumor types other than breast and gastric. This unmet medical need includes patients with other tumor types, such as gastric cancer, NSCLC, CRC and bladder cancer, both for HER2-positive and HER2-low cancers. HER2 protein expression and overexpression have been well documented in a wide range of malignancies. Relative patient numbers for HER2 protein expression in these select tumor types are detailed
in the figure below. This represents a large opportunity for a HER2 therapy utilizing our Boltbody ISAC approach.
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Figure 12: 2020 Estimated Incidence in the U.S. of Selected Tumor Types by HER2 Protein Status
BDC-1001 Clinical Development Overview
We are currently conducting a four-part, Phase 1/2 multiple ascending dose and dose-expansion trial of
BDC-1001 administered as a single agent or in combination with an immune checkpoint inhibitor. We initiated the trial in the first quarter of 2020 and plan to enroll up to 390 patients at 20 or more sites
worldwide. This trial will evaluate safety, tolerability, pharmacokinetics, pharmacodynamics and preliminary anti-tumor activity in patients with HER2-positive disease (IHC3+ or HER2 gene amplification) as well as patients whose tumors have lower
HER2 expression (defined as IHC2+). Collectively, we call these groups HER2-expressing. All patients in our study have metastatic disease and disease progression after prior therapies.
Monotherapy
Part 1: Monotherapy dose escalation to evaluate safety and determine a maximum tolerated dose, or MTD, or
recommended Phase 2 dose, or RP2D.
Part 3: Monotherapy dose expansion to evaluate safety and preliminary responses in 4 predefined tumor types
(HER2-positive breast cancer, HER2 Low breast cancer, HER2-positive gastric cancer and other HER2-positive cancers).
Combination
with Checkpoint Inhibitor
Part 2: Combination with checkpoint inhibitor dose escalation to evaluate safety and determine a MTD or RP2D.
Part 4: Combination therapy with an immune checkpoint inhibitor to evaluate safety and preliminary responses in 4
predefined tumor types (HER2-positive breast cancer, HER2 Low breast cancer, HER2-positive gastric cancer and other HER2-positive cancers).
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MonotherapyParts 1 and 3
Combination Therapy with Checkpoint InhibitorParts 2 and 4
Biomarker analyses will be performed and assessed in both tumor tissue and blood. BDC-1001 biological activity will be evaluated by exploring pharmacodynamics or predictive biomarkers that may correlate with activity or help identify patients likely to respond to
BDC-1001 as monotherapy or BDC-1001 in combination with specific anti-cancer therapies. Patients may receive study drug up to 24 months after Cycle 1 and may be followed
for survival up to 2 years after their last dose. They will remain on treatment until confirmed progressive disease, initiation of alternative cancer therapy, unacceptable toxicity, withdrawal of consent or if other reasons to discontinue treatment
occur.
BDC-1001 Preliminary Clinical Results
As of January 29, 2021, we have enrolled 20 patients across four cohorts at escalating dose levels. The lowest dose cohort of 0.15 mg/kg
required a single patient to assess tolerability to proceed to the next dose level. Each subsequent cohort enrolls an initial three patients to evaluate for dose-limiting toxicities, after which we are able to enroll up to an additional 12 patients
to such cohort and escalate to the next dose level if the safety criteria are met. We enrolled one patient in the 0.15 mg/kg cohort and three patients in the 0.5 mg/kg cohort. These dose levels were well tolerated by all four patients and they
completed the safety evaluation period without incident. Neither dose was expected to be therapeutically active based on our preclinical modeling. We enrolled four patients, which includes one additional patient, in the 2 mg/kg cohort and we have
enrolled 12 patients, which includes nine additional patients, in the 5 mg/kg cohort. In the 2 mg/kg and 5 mg/kg cohorts, we have observed early signs of clinical activity as well as changes in pharmacodynamic biomarkers that we believe are
consistent with our proposed mechanism of action.
In the 2 mg/kg cohort, we enrolled four patients with the following cancers: biliary,
gastric, rectal and uterine. These patients remained on study with treatment duration ranging from five weeks to 17 weeks, to date. We observed one unconfirmed stable disease in the patient with rectal cancer, who remained on study for
11 weeks. We also observed confirmed stable disease in the patient with microsatellite-stable uterine cancer with visceral lung metastases. This patient remains on study, has received six doses of
BDC-1001 and is in her 17th week of treatment.
In the 5 mg/kg cohort, we have enrolled 12
patients as of January 29, 2021, with the following cancers: cervix, uterine, colon, esophageal, GE junction, rectal, lung, salivary ductal and bladder. Five patients remain on study at this dose level with treatment durations ranging up to 12
weeks, to date. We observed stable disease in two patients with microsatellite-stable colorectal cancer, both of whom have visceral lung or both lung and liver
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metastases. Both of these patients remain on study and had their first CT scan at six weeks, after two doses of BDC-1001. We have also observed a confirmed
partial response in a patient with microsatellite-stable colorectal cancer. The first CT scan for this patient demonstrated a 36% reduction in the sum of the longest diameters of all four measurable tumor lesions. Their second CT scan at 12 weeks
demonstrated a 39% reduction in the sum of the longest diameters of all four measurable tumor lesions, and qualified as a confirmed partial response using RECIST 1.1 criteria. This patient remains on study, and is in his 12th week of treatment.
BDC-1001 has been well tolerated to date in all 20 patients. All subjects have completed their 21-day DLT evaluation period (excluding the 20th patient who was recently enrolled and is still in the DLT period) and no DLTs or drug-related serious adverse events have been observed. Treatment-emergent adverse
events deemed to be related to BDC-1001 have been mild or moderate in severity, including mild infusion-related reactions without interruption to dosing. We continue to enroll patients in the study and we are
proceeding to open enrollment in the next higher dose level cohort at 8 mg/kg.
In addition to our clinical observations, elevations in
pharmacodynamic markers such as plasma cytokines and chemokines were observed with a trend towards greater magnitude in patients with increasing dose level. These include increases in plasma levels of MCP-1,
MIP1α and IP-10, which are chemokines consistent with myeloid cell activation. We have also observed transient increases in plasma levels of TNFα, an indicator of TLR activation. The plasma cytokine
and chemokine data are consistent with our preclinical data and we believe they are also consistent with the proposed mechanism of action of BDC-1001.
We are currently in the Part 1 dose escalation portion of the trial and expect to move into monotherapy Phase 2 dose expansions, as well as
the dose escalation evaluating the combination with an immune checkpoint inhibitor, in 2021.
BDC-2034
Our second program focuses on CEA, a well-known tumor antigen that is overexpressed in various solid tumors with significant unmet medical need
including, but not limited to, colorectal cancer, non-small cell lung cancer, pancreatic cancer and breast cancer. CEA is upregulated on the cell surface of these cancers and displays minimal receptor-mediated
internalization into the cancer cell. In our preclinical studies, we have observed promising anti-tumor activity in vivo with potent in vitro ADCP.
Immune profiling of various solid tumors has revealed that myeloid cells are present in immunologically hot and cold
tumors. Immunologically cold tumors include, but are not limited to, colorectal cancer and pancreatic cancer. CEA is overexpressed in these immunologically cold cancers. We believe that this, combined with the aforementioned
properties, makes CEA-expressing tumors an attractive therapeutic opportunity for our Boltbody ISAC approach. We anticipate advancing our CEA Boltbody ISAC, designated
BDC-2034, into the clinic in 2022.
Preclinical Data
In our preclinical experiments we have identified a CEA-targeting mAb that has the desired CEA binding
properties as well as selectivity over other key members of the CEACAM family. We believe this selectivity will reduce unwanted off-target effects that could lead to safety complications. The favorable binding
properties of this mAb will permit increased residence time on CEA to permit an opportunity for myeloid cells to engage the Fc portion of the CEA mAb through Fc receptors.
We also tested the ability of CEA-targeting mAbs to invoke activity in a cellular-based assay that
measures ADCP. We observed that our lead CEA-targeting mAb (CEA mAb) has prominent ADCP activity relative to other mAbs tested. We believe this serves as a strong foundational mAb for BDC-2034 since ADCP is a key part of the ISAC mechanism that leads to a productive anti-tumor immune response.
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To assess the potential efficacy of our CEA Boltbody ISAC program targeting CEA-expressing tumors, we conducted in vivo xenograft experiments in mice engrafted with the human pancreatic cancer cell line HPAFII. The cell surface expression of CEA on HPAFII tumors is believed to
represent the typical CEA expression levels found in human pancreatic cancers. In this study we compared the anti-tumor activity of our lead CEA mAb to a CEA Boltbody ISAC (CEA ISAC). In addition, we also compared both of these groups to mice that
did not receive either therapy (Untreated). Measuring tumor volumes throughout the course of the study revealed that the HPAFII model was refractory to naked CEA mAb with no evidence of anti-tumor activity compared to the Untreated group of animals.
In contrast, CEA ISAC displayed anti-tumor activity in all animals. We believe that these data support continued research and development of BDC-2034 for patients with
CEA-expressing cancers.
Figure 13: In vivo Activity of CEA Boltbody ISAC in HPAFII Human
Pancreatic Xenograft Model
SCID/beige mice were dosed systemically with 5 mg/kg every 5 days through day 15.
Data are shown as mean and SEM with 6 mice per group.
PD-L1 Program
Our third program, a PD-L1 Boltbody ISAC, focuses on another area with significant unmet medical need,
the treatment of patients with tumors that are nonresponsive or become refractory to immune checkpoint blockade, such as NSCLC, CRC, breast and other cancers. PD-L1 is an immune checkpoint protein that can be
expressed on cancer and immune cells. Expression of PD-L1 on the cell surface of these cells engages the PD-1 checkpoint and results in the inhibition of a productive
anti-tumor immune response. More specifically, T cell-mediated immune responses are significantly dampened since the expression of PD-L1 on the cancer cells engages with the
PD-1 on the cell surface of T cells and acts as a brake on the immune system. Inhibition of the PD-L1/PD-1 axis has shown potent
anti-tumor immune responses in numerous types of cancers; however, a substantial number of cancer patients tumors are non-responsive or become refractory to immune checkpoint blockade. These patients
with checkpoint refractory tumors represent a significant unmet medical need. We believe that a PD-L1 Boltbody ISAC has the potential to overcome the limitations of current anti-PD-L1 therapies.
Our PD-L1 Boltbody ISAC is
designed to be a trifunctional therapeutic to overcome such limitations. As such, our PD-L1 ISAC is built to elicit: 1) antibody-dependent cellular phagocytosis of the tumor, 2) activation of myeloid
cells in the tumor microenvironment to enhance neoantigen presentation and consequential T cell-dependent tumor killing and immunological memory, and 3) inhibition of the PD-L1/PD1 axis that can
thwart T cell-dependent responses.
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Preclinical Data
In our preclinical experiments, we have identified
PD-L1-targeting mAbs that have the desired activity in a cellular-based assay that measures ADCP. Our
PD-L1-targeting mAbs have ADCP activity and meet the criteria for the PD-L1 Boltbody ISAC given ADCP is a key part of the ISAC
mechanism that leads to a productive anti-tumor immune response.
PD-1/PD-L1 blockade is a key property for our desired PD-L1 Boltbody ISAC in order to endow the molecule with a trifunctional mechanism of action. In our preclinical experiments, we observed the ability of our PD-L1-targeting mAbs to disrupt the PD-L1/PD-1 interaction in a cellular-based reporter assay. All three of our top PD-L1-targeting mAbs show robust PD-L1/PD-1 blockade. We believe this property within a PD-L1 Boltbody ISAC would provide a substantial increase in the capacity to elicit a robust anti-tumor immune response.
To further assess and characterize the PD-1/PD-L1 blockade
capacity of each of our PD-L1 mAbs, we conducted mixed lymphocyte reaction, or MLR, in vitro assays experiments. All three of our top
PD-L1-targeting mAbs demonstrated robust production of IFN g , a cytokine produced as a result of PD-L1/PD-1 blockade. These data, combined with the PD-L1/PD-1 blockade cellular reporter assay,
suggest that our PD-L1 mAbs have the desired PD-L1/PD-1 blockade function required for a
PD-L1 Boltbody ISAC.
To assess the potential efficacy of our
PD-L1 Boltbody ISAC program targeting PD-L1-expressing tumors, we conducted in vivo syngeneic experiments in mice
engrafted with the murine colorectal cancer cell line, MC38 that expresses human PD-L1. In this preclinical study we compared the tumor elimination of one of our PD-L1-targeting mAb (PD-L1 mAb) to the same PD-L1-targeting mAb conjugated to a murine
TLR7 agonist (PD-L1 ISAC). In addition, we also compared both of these groups to animals that received a non-tumor-targeting mAb (isotype mAb). We observed that MC38-hPD-L1 was partially sensitive to our PD-L1-targeting mAbs relative to the isotype mAb-treated animals; however, no complete responses were observed. In contrast, PD-L1 ISAC displayed marked tumor elimination with complete responses observed in 75% of
animals tested. We believe that these data support continued research and development of a PD-L1 Boltbody ISAC for
PD-L1-expressing cancers for the potential treatment of patients with checkpoint refractory tumors.
Figure 14: In vivo Activity of PD-L1 Boltbody ISAC in MC38-hPD-L1 Colorectal Syngeneic Tumor Model
C57BL/6J mice were dosed systemically with 5 mg/kg every 3 days through day 9. Data are
shown as mean and SEM with 4 mice per group.
Myeloid Modulators and Future Research
Our expertise in myeloid biology and immuno-oncology has led us to research various tumor antigens across solid tumors where significant unmet
medical need remains. In addition, we have expertise in modulating
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the various properties of a Boltbody ISAC that would further optimize the profile for any particular tumor antigen in our research and discovery programs. Our Boltbody ISAC approach is designed
to elicit a robust anti-tumor immune response with a favorable safety profile. We believe this approach has the potential to enable us to develop product candidates to treat patients with a wide variety of tumors.
Our expertise may lead to additional research and discovery programs that are independent, but may complement, our Boltbody ISAC approach and
our growing library of innate immune stimulators. Importantly, tumor-associated myeloid cells tend to be tumor-supportive rather than tumor destructive. Additional ways of modulating tumor-associated myeloid cells are warranted given the
heterogeneity of human cancers with respect to tumor mutational burden as well as immunological profile. Our research and discovery efforts are exploring additional immune agonists for the Boltbody ISAC approach as well as identifying novel targets
in tumor-associated myeloid cells that can be targeted with other therapeutic modalities.
An example from these efforts is shown in the
figure below where we have identified mAbs (Antibodies 1-4) in our laboratories that are capable of binding to and agonizing a novel cell surface protein, which we refer to as TAM1, on tumor-supportive
macrophages. TAM1 agonism results in the production of pro-inflammatory cytokines more consistent with the characteristics of tumor-destructive myeloid cells. We believe such molecule may have the potential to
reprogram tumor-supportive macrophages into tumor-destructive macrophages to elicit a productive anti-tumor immune response. Additionally, KRAS and TP53 mutations may upregulate TAM1 on tumor-associated myeloid cells and could provide an avenue to
develop precision medicine with an immune modulator.
Figure 15: Capacity of TAM1 Binding mAbs to Enhance TNF α Secretion from
Tumor-Supportive Macrophages
TNFα secretion by human M-CSF differentiated
macrophages stimulated with TAM1 binding mAbs for 20 hours. Data are shown as mean and SEM with 5 donors.
License and Collaboration Agreements
License Agreements with Stanford University
In May 2015, we entered into a license agreement with Stanford, or the 2015 Stanford Agreement, pursuant to which Stanford granted us a
worldwide exclusive, sublicenseable license under certain patents related to our proprietary Boltbody ISAC technology, to develop, manufacture and commercialize licensed products incorporating such technology. In consideration for the rights granted
to us under the 2015 Stanford Agreement, we paid Stanford a nominal nonrefundable license issue fee and issued Stanford and two co-inventors an aggregate of 52,401 shares of our common stock. Stanford retained
the right under the 2015 Stanford Agreement, on behalf of itself and all other non-profit research institutions, to practice the licensed patents for any non-profit
purpose, including sponsored research and collaborations, but excluding delivery of paid or reimbursed healthcare. However, Stanford retained the right to practice the licensed patents for the delivery of its own paid or reimbursed healthcare.
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In June 2018, we entered into a second license agreement with Stanford, or the 2018 Stanford
Agreement, and collectively with the 2015 Stanford Agreement, the Stanford Agreements. Pursuant to the 2018 Stanford Agreement, Stanford granted us a worldwide exclusive license, under certain patents related to myeloid modulation for cancer
immunotherapy to develop, manufacture and commercialize products containing such technology. In consideration for the rights granted to us under the 2018 Stanford Agreement, we paid Stanford a nominal nonrefundable license issue fee and reimbursed
Stanford for past patent expenses, together totaling less than $0.1 million. Stanford retained the right under the 2018 Stanford Agreement, on behalf of itself, Stanford Health Care, Lucile Packard Childrens Hospital at Stanford and all
other non-profit research institutions, to practice the licensed patents for any non-profit purpose, including sponsored research and collaborations. The licensed
patents are additionally subject to a nonexclusive, worldwide license held by the Howard Hughes Medical Institute to exercise such intellectual property rights for research purposes, with the right to sublicense to
non-profit and governmental entities.
The technology claimed by the patents licensed under both
Stanford Agreements was developed using U.S. government funding and the licenses are therefore subject to a nonexclusive license held by the U.S. government, certain requirements that licensed products be manufactured in the United States (unless
waived according to U.S. government process) and U.S. government march-in rights. For more information on risks related to technology developed using government funding see Risk FactorsRisks
Related to Our Intellectual Property.
Under each Stanford Agreement, we are obligated to pay annual license maintenance fees, which
are nominal and will be creditable against any royalties payable to Stanford under such agreement in the applicable year. We are required in each Stanford Agreement to make milestone payments up to an aggregate of $0.4 million for the first
licensed product under such agreement that meets certain patent issuance, clinical and regulatory milestones, and an additional milestone payment of $0.2 million for each additional regulatory approval. We also agreed in each Stanford Agreement
to pay Stanford tiered royalties on our and our sublicensees net sales of licensed products, at low single-digit percentage rates, subject to certain customary reductions. Our royalty obligations continue for the term of each Stanford
Agreement and we are required to pay royalties on any licensed products made, used, imported or offered for sale during the term of such agreement but sold after the term of the agreement. In addition, we are obligated in each Stanford Agreement to
pay Stanford a sub-teen double digit to low teen double-digit percentage of certain consideration we receive as a result of granting sublicenses to the licensed patents. Pursuant to each Stanford Agreement, we
will reimburse Stanfords patent expenses, including reasonable costs incurred in assisting us with prosecuting and maintaining licensed patents.
Under each Stanford Agreement, we are obligated to use commercially reasonable efforts to develop and commercialize licensed products and we
are also required to achieve certain funding, development and/or regulatory milestones by certain dates, which can be extended a limited number of times upon the payment of a nominal fee.
The Stanford Agreements continue until terminated. We may terminate either of the Stanford Agreements at any time for any reason by providing
at least 30 days written notice to Stanford. Stanford may terminate either of the Stanford Agreements if we breach certain provisions of such Stanford Agreement, including the payment and funding, development and/or regulatory milestone
obligations, and fail to remedy such breach within 60 days after written notice of such breach by Stanford.
Joint Development and
License Agreement with Toray Industries
In March 2019, we entered into the Toray Development Agreement to develop and
commercialize collaboration products, each containing a proprietary antibody owned by Toray, or the Toray Antibody, or a related antibody against the same novel tumor antigen target, and our Boltbody technology, for cancer in the United States,
Japan and the European Union, or the Territory. In conjunction with the Toray Development Agreement, Toray purchased 717,514 shares of our preferred stock at an aggregate purchase price of $10.0 million.
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Under the Toray Development Agreement, we granted Toray a
co-exclusive (with us) license under certain of our patents and know-how related to our Boltbody technology, and we received from Toray a
co-exclusive (with Toray) license under certain of its patents and know-how related to the Toray Antibody. Both co-exclusive
licenses are limited to the development, manufacture and commercialization of collaboration products in the Territory for the diagnosis, treatment and prevention of a specified number of cancer indications to be selected by the parties, or the
Indications. The parties are obligated to work exclusively on each collaboration product, and neither party is permitted to independently develop or commercialize any collaboration product, or independently use the other partys technology or
patents generated during the collaboration that are specific to collaboration products. The terms of the Toray Development Agreement do not restrict our use of our Boltbody technology independent of the Toray Antibody and related antibodies against
the same antigen target, nor do they restrict Torays use of the Toray Antibody and related antibodies independent of our Boltbody technology.
Each party is required to use commercially reasonable efforts to conduct development and regulatory activities assigned to it under a
development plan. Toray will be solely responsible for both parties development costs up to the conclusion of the first Phase I clinical trial and Toray is entitled to reimbursement for 50% of such development costs from our share of revenues
collected from the sale or licensing of collaboration products. After the conclusion of the first Phase I clinical trial, the parties will share equally all costs of development activities necessary for obtaining regulatory approval of collaboration
products in the Indications in the Territory, unless either party elects to opt out of its co-funding obligations or reduce them by half, which election can be on a region-by-region basis or for the Territory as a whole. Unless a party has made such an election, the parties will share equally all commercialization and outlicense revenues and other consideration received
from collaboration activities.
If either party opts out of its co-funding obligation, then the
other party will have the exclusive, sublicensable right to develop and commercialize collaboration products in the Indications in the applicable regions of the Territory. The opting-out party, instead of
equally sharing revenues from the sale of collaboration products in the opt-out regions, will receive royalties on other partys net sales of collaboration products in such regions, at rates from a mid-single digit to high teens percentage, subject to certain customary reductions, as well as a portion of any outlicensing revenue.
Unless earlier terminated, the Toray Development Agreement will remain in effect until collaboration products are no longer sold in the
Territory. Either party has the right to terminate the Toray Development Agreement for the other partys uncured material breach or insolvency. The parties additionally may terminate the Toray Development Agreement by mutual agreement. The
Toray Development Agreement will automatically terminate if the results of preclinical studies or the first Phase I clinical trial of the collaboration product do not meet the success criteria that are specified in the Toray Development Agreement.
In the event of termination all licenses granted under the Toray Development Agreement and all development and commercialization obligations under the Toray Development Agreement will terminate. If either party elects to reduce its co-funding obligations by half in any region, then it will receive an adjusted share of revenues from the collaboration in such region to reflect such reduced funding.
Manufacturing
We do not own or operate
any manufacturing facilities. We rely on third-party CMOs for production and testing of our clinical material, including the linkers, payloads and antibodies used to make our Boltbody ISACs, and we expect to continue to do so to meet our toxicology,
clinical and commercial activities. We believe there are multiple sources for all of the materials required for the manufacture of our product candidates.
Manufacturing Agreement with Piramal
In June 2018, we entered into a master services agreement with Piramal pursuant to which Piramal provides development and cGMP manufacturing
services to us on a non-exclusive basis, with initial statements of work
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covering our BDC-1001 drug substance and drug product. The agreement has an initial term of five years, and will continue for consecutive one-year renewal terms unless terminated by either party upon written notice to the other party prior to the end of the then current term. We may terminate the agreement or any statement of work upon prior written
notice to Piramal, and may be required to pay cancellation fees if we cancel scheduled cGMP manufacturing slots without sufficient advance notice prior to the planned start date. In addition, either party may terminate the agreement for the other
partys uncured material breach.
Supply Agreement with EirGenix
In March 2019, we entered into a supply agreement with EirGenix, Inc., pursuant to which EirGenix agreed to supply to us, on a non-exclusive basis, bulk drug substance of EG12014, its monoclonal antibody being developed as a biosimilar of trastuzumab, which we use in the manufacture of our BDC-1001
HER2 Boltbody ISAC. In addition, EirGenix provides us access to its regulatory data package to facilitate our development and commercialization efforts and we are required to make milestone payments to EirGenix up to an aggregate of
$2.0 million based upon achievement of certain regulatory milestones by our HER2 Boltbody ISAC. The agreement will remain in effect as long as we, or any of our affiliates or licensees, continue to pursue the development or commercialization of
any Boltbody ISAC, unless earlier terminated. We may terminate the agreement if EirGenix fails to supply sufficient quantities of EG12014, or if EirGenix does not obtain regulatory approval for EG12014 as a standalone biosimilar product. We may also
terminate the EirGenix Agreement upon prior written notice to EirGenix. EirGenix may terminate the agreement if we do not actively develop a HER2 Boltbody ISAC for more than two years. In addition, either party may terminate the agreement for the
other partys uncured material breach or insolvency.
Competition
The biotechnology and pharmaceutical industries, including the immuno-oncology subsector, are characterized by rapidly advancing technologies,
fierce competition and a strong emphasis on proprietary drugs and defense of intellectual property. We face potential competition from many sources, including pharmaceutical and biotechnology companies, academic institutions, public and private
research institutions and governmental agencies. Any drug candidates that we successfully develop and commercialize will compete with existing treatments and new treatments that are in development and may become available in the future.
Oncology therapeutics on the market and in development range from traditional cancer therapies, including chemotherapy, to new therapies that
harness the bodys own immune system to fight cancer. A significant part of the immune response to cancer involves myeloid cells, including macrophages, dendritic cells, neutrophils, monocytes and granulocytes, all of which dynamically regulate
tumor growth and progression. There are several therapies targeting myeloid cells on the market or in development. We view companies developing ISACs containing TLR agonists as the closest competitors for our lead program, BDC-1001. At least two other TLR agonist-containing ISACs are in development for oncology indications including Novartis NJH-395 and Silverbacks SBT6050. We
currently do not consider any company potentially developing unconjugated TLR agonists to be direct competitors given our Boltbody ISAC approach has demonstrated greater effectiveness and differentiating biology compared to an unconjugated TLR
agonist and such agents typically are administered intratumorally or have significant toxicities when administered systemically.
We are
initially developing BDC-1001 for the treatment of HER2-expressing cancers. HER2 is a well-known and validated oncology target and there are marketed therapies and others in development addressing this target.
Marketed therapies include Roches Herceptin, Perjeta and Kadcyla, Novartis Tykerb, Seattle Genetics TUKYSA, MacroGenics Margenza, as well as Daiichi Sankyo and AstraZenecas ENHERTU. We are aware of several therapies in
development for patients with HER2-expressing tumors including Zymeworks zanidatamab and ZW49, Merus MCLA-128 and Ambrxs ARX788.
Many of the companies against which we currently are competing or which we may compete with in the future have significantly greater financial
resources and expertise in research and development, manufacturing,
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preclinical and clinical development, obtaining regulatory approvals and marketing approved drugs than we do. Smaller or early-stage companies may also prove to be significant competitors,
particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and enrolling
subjects for our clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
Our success is
contingent in part upon the successful development and commercialization of BDC-1001 and our other pipeline candidates from the Boltbody ISAC approach that prove to be more effective or safer than competing
products in our target indications. We could see a reduction or elimination of our commercial opportunity if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more
convenient or are less expensive than BDC-1001 or any other drug that we may develop. Our competitors also may be more successful than us in obtaining FDA or other regulatory approvals for their drugs more
rapidly than we may obtain approval for BDC-1001 or our other drugs, which could result in our competitors establishing a strong market position before we are able to enter the market.
Intellectual Property
Our commercial
success depends in part on our ability to obtain, maintain and protect intellectual property and other proprietary rights for our current and future product candidates, and our Boltbody ISAC approach through a variety of methods, including seeking
and maintaining patents intended to cover our Boltbody ISAC approach, our products and compositions, their methods of use and processes for their manufacture and any other inventions that are commercially important to the development of our
business, novel discoveries, product development technologies and know-how, to operate without infringing, misappropriating or otherwise violating the intellectual property and proprietary rights of
others and to prevent others from infringing, misappropriating or violating our intellectual property and proprietary rights. We also rely on trademarks, trade secrets, know-how, continuing technological
innovation and confidential information to develop and maintain our proprietary position.
Regardless of the coverage we seek under our
existing patent applications, there is always a risk that an alteration to the product or process may provide sufficient basis for a competitor to avoid infringement claims. In addition, the coverage claimed in a patent application can be
significantly reduced before a patent is issued and courts can reinterpret patent scope after issuance. Moreover, many jurisdictions, including the United States, permit third parties to challenge issued patents in administrative proceedings, which
may result in further narrowing or even cancellation of patent claims. Moreover, we cannot provide any assurance that any patents will be issued from our pending or any future applications or that any current or future issued patents will adequately
protect our intellectual property. For this and other risks related to our proprietary technology, inventions, improvements, Boltbody ISAC approach and product candidates, please see the section entitled Risk FactorsRisks Related to Our
Intellectual Property.
As of December 31, 2020, we have one issued U.S. patent which we
co-own with Stanford and for which Stanford has exclusively licensed their rights to us under the 2015 Stanford Agreement. The issued U.S. patent contains claims to our lead product candidate BDC-1001 and will expire in 2037. In addition, as of December 31, 2020, we own, co-own with Stanford or exclusively license from Stanford one issued Australian patent and
approximately 71 pending patent applications in various countries (21 of which are pending in the United States).
In particular, we have
21 pending patent applications, including two pending U.S. nonprovisional patent applications, 18 pending foreign patent applications and one Patent Cooperation Treaty (PCT) application that has yet to enter the national phase in any countries,
which contain claims to our lead product candidate BDC-1001 and which we co-own with Stanford and for which Stanford has exclusively licensed its rights to us under the
2015 Stanford Agreement. These pending patent applications, if issued, are expected to expire between 2037 and 2040, excluding any extension of patent term that may be available. We also have two pending U.S. provisional patent applications, which
we solely own, directed to the clinical use of our lead product candidate
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BDC-1001, as well as one pending U.S. nonprovisional patent application and one pending European patent application, which we solely own, directed to a
method of preparing immunoconjugates, which could be utilized to prepare our lead product candidate BDC-1001 or other Boltbody ISACs. These pending patent applications, if issued, are expected to expire
between 2038 and 2040, excluding any extension of patent term that may be available.
In addition, we have 46 pending patent applications
directed to potential products and methods other than our lead product candidate BDC-1001 and the use thereof, including 28 pending patent applications that are solely owned by us, five pending patent
applications that we co-own with Stanford and have exclusively licensed under the 2015 Stanford Agreement, five pending patent applications that are solely owned by Stanford and that we have exclusively
licensed under the 2015 Stanford Agreement and eight pending patent applications that are solely owned by Stanford and that we have exclusively licensed under the 2018 Stanford Agreement. Of these 46 pending patent applications, 10 are U.S.
provisional patent applications, 12 are PCT applications that have yet to enter the national phase in one or more countries, six are U.S. nonprovisional patent applications and 18 are foreign patent applications. These pending patent applications,
if issued, are expected to expire between 2035 and 2040 excluding any extension of patent term that may be available.
The patents and
patent applications licensed from Stanford are subject to retained rights by Stanford to allow academic and non-profit research institutions to practice the licensed technology and patents for non-commercial purposes. The patents and patent applications licensed from Stanford pursuant to the 2018 Stanford Agreement are additionally subject to a non-exclusive,
worldwide license held by the Howard Hughes Medical Institute to exercise such intellectual property rights for research purposes, with the right to sublicense to non-profit and governmental entities.
For more information regarding our license agreements with Stanford, please see License and Collaboration Agreements.
Some of our pending patent applications in the United States are provisional patent applications. Provisional patent applications are not
eligible to become issued patents until, among other things, we file a non-provisional patent application within 12 months of filing of one or more of our related provisional patent applications. If we do not
timely file any non-provisional patent applications, we may lose our priority date with respect to our provisional patent applications and any patent protection on the inventions disclosed in our provisional
patent applications. While we intend to timely file non-provisional patent applications relating to our provisional patent applications, we cannot predict whether any such patent applications will result in
the issuance of patents that provide us with any competitive advantage.
The term of individual issued patents extend for varying periods
depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, utility patents issued for applications filed in the United States are
granted a term of 20 years from the earliest effective filing date of a non-provisional patent application, assuming the patent has not been terminally disclaimed over a commonly-owned patent or a patent
naming a common inventor, or over a patent not commonly owned but that was disqualified as prior art as the result of activities undertaken within the scope of a joint research agreement. The life of a patent, and the protection it affords, is
therefore limited and once the patent life of our issued patents have expired, we may face competition, including from other competing technologies. In addition, in certain instances, the term of a U.S. patent can be extended to recapture a portion
of the delay by the USPTO in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as to the FDA component, the restoration period cannot be longer than five years, the total
patent term including the restoration period must not exceed 14 years following FDA approval, only one patent applicable to each regulatory review period may be extended and only those claims covering the approved drug or a method for using it may
be extended. We may not receive an extension if we fail to exercise due diligence during the testing phase or regulatory review process, fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise
fail to satisfy applicable requirements.
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Moreover, the length of the extension could be less than we request. There can be no assurance that we will benefit from any patent term extension or favorable adjustment to the term of any of
our patents. The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective filing date. The actual protection afforded by a patent may vary on a product-by-product basis and from country to country and can depend upon many factors, including the type of patent, the scope of its coverage, the availability of
regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude
others from commercializing products similar or identical to ours.
Furthermore, we rely upon trade secrets
and know-how, confidential information, unpatented technologies, continuing technological innovation and other proprietary information to develop, protect and maintain our competitive position and aspects
of our business that are not amenable to, or that we do not presently consider appropriate for, patent protection and prevent competitors from reverse engineering or copying our technologies. However, the foregoing rights, technologies and
information are difficult to protect. We seek to protect them by, in part, using confidentiality agreements with our employees and consultants and any potential commercial partners and collaborators and invention assignment agreements with our
employees. We also have implemented or intend to implement confidentiality agreements or invention assignment agreements with our selected consultants and any potential commercial partners. These agreements are designed to protect our proprietary
information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party. These agreements may be breached, and we may not have adequate remedies for any
breach. There can be no assurance that these agreements will be self-executing or otherwise provide meaningful protection for our trade secrets or other intellectual property or proprietary information, In addition, our trade secrets may otherwise
become known or be independently discovered by competitors. To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in
related or resulting know-how and inventions.
Our commercial success will also depend
in part on not infringing, misappropriating or otherwise violating the intellectual or proprietary rights of third parties. The issuance of third-party patents could require us to alter our development or commercial strategies, change our products
or processes, obtain licenses to additional third-party patents or other intellectual property or cease certain activities. Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or
commercialize our future products may have an adverse impact on us. Given that patent applications in the United States and certain other jurisdictions are maintained in secrecy for 18 months or potentially longer, and since publication of
discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain of the patent protection being sought by third parties and/or the priority of inventions covered by such patent applications. Moreover, we
may have to participate in interference, revocation, derivation, re-examination, post-grant review, inter parte s review, or opposition proceedings brought by third parties or declared by the USPTO or an
equivalent foreign body. See Risk FactorsRisks Related to Our Intellectual Property for additional information regarding these and other risks related to our intellectual property portfolio and their potential effect on us.
Government Regulation
Government
authorities in the United States at the federal, state and local level and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, manufacture, quality
control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of drug and biological products, such as our investigational medicines and
any future investigational medicines. Generally, before a new drug or biologic can be marketed, considerable data demonstrating its quality, safety and efficacy must be obtained, organized into a format specific for each regulatory authority,
submitted for review and approved by the regulatory authority.
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Regulatory Approval in the United States
In the United States, pharmaceutical products are subject to extensive regulation by the FDA. The FDCA, and other federal and state statutes
and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export
of pharmaceutical products. Biological products used for the prevention, treatment or cure of a disease or condition of a human being are subject to regulation under the FDCA, except the section of the FDCA that governs the approval of new drug
applications, NDAs. Biological products, such as our Boltbody ISAC product candidates, are approved for marketing under provisions of the Public Health Service Act. the PHSA, via a BLA. However, the application process and requirements for approval
of BLAs are very similar to those for NDAs, and biologics are associated with similar approval risks and costs as drugs. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions,
such as clinical hold, FDA refusal to approve pending NDAs or BLAs, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal
prosecution.
Our investigational medicines and any future investigational medicines must be approved by the FDA pursuant to a BLA before
they may be legally marketed in the United States. The process generally involves the following:
completion of extensive preclinical laboratory and animal studies in accordance with applicable regulations,
including studies conducted in accordance with GLP requirements;
submission to the FDA of an IND, which must become effective before human clinical trials may begin;
approval by an IRB or independent ethics committee at each clinical trial site before each clinical trial may be
commenced;
performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations,
GCP requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication;
submission to the FDA of a BLA;
payment of any user fees for FDA review of the BLA;
a determination by the FDA within 60 days of its receipt of a BLA to accept the filing for review;
satisfactory completion of one or more FDA pre-approval inspections of
the manufacturing facility or facilities where the biologic, or components thereof, will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the biologics
identity, strength, quality and purity;
satisfactory completion of any potential FDA audits of the clinical trial sites that generated the data in
support of the BLA to assure compliance with GCPs and integrity of the clinical data;
FDA review and approval of the BLA, including consideration of the views of any FDA advisory committee; and
compliance with any post-approval requirements, including REMS, where applicable, and post-approval studies
required by the FDA as a condition of approval.
The preclinical and clinical testing and approval process requires
substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will be granted on a timely basis, or at all.
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Preclinical Studies
Before testing any biological product candidates in humans, the product candidate must undergo rigorous preclinical testing. Preclinical
studies include laboratory evaluation of product chemistry and formulation, as well as in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for therapeutic use. The conduct of
preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical
data, any available clinical data or literature and plans for clinical studies, among other things, 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 must become
effective before human clinical trials may begin. Some long-term preclinical testing may continue after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises
concerns or questions related to one or more proposed clinical trials and places the trial on clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result,
submission of an IND may not result in the FDA allowing clinical trials to commence.
Clinical Trials
The clinical stage of development involves the administration of the investigational product to healthy volunteers or patients under the
supervision of qualified investigators, generally physicians not employed by or under the trial sponsors control. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with GCPs, an
international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors; as well as (iii) under protocols detailing, among other things, the objectives of the
trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated in the trial. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as part of the IND.
Furthermore, each clinical trial must be reviewed and approved by an IRB for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable
in relation to anticipated benefits. The IRB also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed.
There also are requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries.
Information about certain clinical trials, including clinical trial results, must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website. Information related to the product, patient population, phase of
investigation, clinical trial sites and investigators and other aspects of the clinical trial is then made public as part of the registration. Disclosure of the results of these clinical trials can be delayed in certain circumstances for up to two
years after the date of completion of the trial.
A sponsor who wishes to conduct a clinical trial outside of the United States may, but
need not, obtain FDA authorization to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the sponsor may submit data from the clinical trial to the FDA in support of a BLA. The FDA will accept a
well-designed and well-conducted foreign clinical trial not conducted under an IND if the clinical trial was conducted in accordance with GCP requirements, and the FDA is able to validate the data through an onsite inspection if deemed necessary.
Clinical trials are generally conducted in three sequential phases, known as Phase 1, Phase 2 and Phase 3:
Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who
are initially exposed to a single dose and then multiple doses of the product candidate. The primary purpose of these clinical trials is to assess the metabolism, pharmacokinetics, pharmacologic action, side effect tolerability, safety of the
product candidate, and, if possible, early evidence of effectiveness.
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Phase 2 clinical trials generally involve studies in disease-affected patients to evaluate proof of concept
and/or determine the dosing regimen(s) for subsequent investigations. At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects and safety risks are identified, and a preliminary
evaluation of efficacy is conducted.
Phase 3 clinical trials generally involve a large number of patients at multiple sites and are designed to
provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use and to establish the overall benefit/risk relationship of the product and provide an adequate basis for product labeling. In most
cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the biologic.
These Phases may overlap or be combined. For example, a Phase 1/2 clinical trial may contain both a dose-escalation stage and a dose-expansion
stage, the latter of which may confirm tolerability at the recommended dose for expansion in future clinical trials (as in traditional Phase 1 clinical trials) and provide insight into the anti-tumor effects of the investigational therapy in
selected subpopulation(s).
Typically, during the development of oncology therapies, all subjects enrolled in Phase 1 clinical trials are
disease-affected patients and, as a result, considerably more information on clinical activity may be collected during such trials than during Phase 1 clinical trials for non-oncology therapies. A single Phase
3 or Phase 2 trial with other confirmatory evidence may be sufficient in rare instances to provide substantial evidence of effectiveness (generally subject to the requirement of additional post-approval studies).
Phase 1, Phase 2, Phase 3 and other types of clinical trials may not be completed successfully within any specified period, if at all. The
FDA, the IRB, or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including non-compliance with regulatory requirements or a finding that the patients are being exposed to
an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRBs requirements or if the drug or biologic has been
associated with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This
group provides authorization for whether a trial may move forward at designated checkpoints based on access to certain data from the trial.
Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the
chemistry and physical characteristics of the drug or biologic as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently
producing quality batches of the product and, among other things, companies must develop methods for testing the identity, strength, quality, potency and purity of the final product. Additionally, appropriate packaging must be selected and tested,
and stability studies must be conducted to demonstrate that the investigational medicines do not undergo unacceptable deterioration over their shelf life.
FDA Review Process
Following completion of the clinical trials, the results of preclinical studies and clinical trials are submitted to the FDA as part of a BLA,
along with proposed labeling, chemistry and manufacturing information to ensure product quality and other relevant data. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and
efficacy of the investigational product to the satisfaction of the FDA. FDA approval of a BLA must be obtained before a biologic or drug may be marketed in the United States.
The cost of preparing and submitting a BLA is substantial. Under the PDUFA, each BLA must be accompanied by a substantial user fee. The FDA
adjusts the PDUFA user fees on an annual basis. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first
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application filed by a small business. Additionally, no user fees are assessed on BLAs for products designated as orphan drugs, unless the product also includes a
non-orphan indication. The applicant under an approved BLA is also subject to an annual program fee.
The FDA reviews all submitted BLAs before it accepts them for filing and may request additional information. The FDA must make a decision on
accepting a BLA for filing within 60 days of receipt, and such decision could include a refusal to file by the FDA. Once the submission is accepted for filing, the FDA begins an in-depth review of the BLA.
Under the goals and policies agreed to by the FDA under PDUFA, the FDA has 10 months, from the filing date, in which to complete its initial review of an original BLA for a new molecular entity and respond to the applicant, and six months from the
filing date of an original BLA designated for priority review. The review process for both standard and priority review may be extended by the FDA for three additional months to consider certain late-submitted information, or information intended to
clarify information already provided in the submission. The FDA does not always meet its PDUFA goal dates for standard and priority BLAs, and the review process can be extended by FDA requests for additional information or clarification.
Before approving a BLA, the FDA will conduct a pre-approval inspection of the manufacturing facilities
for the new product to determine whether they comply with cGMP requirements. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure
consistent production of the product within required specifications.
The FDA also may audit data from clinical trials to ensure
compliance with GCP requirements and the integrity of the data supporting safety and efficacy. Additionally, the FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory
committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions, if any. The FDA is not bound by recommendations of an
advisory committee, but it generally follows such recommendations when making decisions on approval. The FDA likely will reanalyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the
review process.
After the FDA evaluates a BLA, it will issue either an approval letter or a Complete Response Letter. An approval letter
authorizes commercial marketing of the biologic with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its
present form. A Complete Response Letter generally outlines the deficiencies in the BLA and may require additional clinical data, additional pivotal clinical trial(s) and/or other significant and time-consuming requirements related to clinical
trials, preclinical studies or manufacturing in order for FDA to reconsider the application. If a Complete Response Letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw
the application or request an opportunity for a hearing. The FDA has committed to reviewing such resubmissions in two or six months, depending on the type of information included. Even if such data and information are submitted, the FDA may decide
that the BLA does not satisfy the criteria for approval.
As a condition of BLA approval, the FDA may require a REMS to help ensure that
the benefits of the biologic outweigh the potential risks to patients. A REMS can include medication guides, communication plans for healthcare professionals and elements to assure a products safe use, or ETASU. An ETASU can include, but is
not limited to, special training or certification for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring and the use of patient-specific registries. The requirement for a REMS can
materially affect the potential market and profitability of the product. Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the products safety or efficacy.
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Orphan Drug Designation
Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition,
which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States but for which there is no reasonable expectation that the cost of developing and making
the product for this type of disease or condition will be recovered from sales of the product in the United States.
Orphan drug
designation must be requested before submitting a BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation on its own does not
convey any advantage in or shorten the duration of the regulatory review and approval process.
If a product that has orphan designation
subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same
product for the same indication for seven years from the date of such approval, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity by means of greater effectiveness, greater safety, or
providing a major contribution to patient care, or in instances of drug supply issues. Competitors, however, may receive approval of either a different product for the same indication or the same product for a different indication. In the latter
case, because healthcare professionals are free to prescribe products for off-label uses, based on their independent medical judgment, the competitors product could be used for the orphan indication
despite another products orphan exclusivity.
FDAs determination of whether two ADCs are the same product for purposes of
orphan drug exclusivity is based on a determination of sameness of the monoclonal antibody element and the functional element of the conjugated molecule. Two ADCs are deemed to be the same product if the complementarity determining region sequences
of the antibody and the functional element of the conjugated molecule are the same. A difference in either of those two elements can result in a determination that the molecules are different.
Expedited Development and Review Programs
The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment
of a serious or life-threatening disease or condition.
Fast track designation may be granted for products that are intended to treat a
serious or life-threatening disease or condition for which there is no effective treatment and preclinical or clinical data demonstrate the potential to address unmet medical needs for the condition. Fast track designation applies to both the
product and the specific indication for which it is being studied. The sponsor of a new biologic candidate can request the FDA to designate the candidate for a specific indication for fast track status concurrent with, or after, the submission of
the IND for the candidate. The FDA must determine if the biologic candidate qualifies for fast track designation within 60 days of receipt of the sponsors request. For fast track products, sponsors may have greater interactions with the FDA
and the FDA may initiate review of sections of a fast track products BLA before the application is complete. This rolling review is available if the FDA determines, after preliminary evaluation of clinical data submitted by the
sponsor, that a fast track product may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. Any product submitted to the FDA
for marketing, including under a fast track program, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval.
Breakthrough therapy designation may be granted for products that are intended, alone or in combination with one or more other products, to
treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over currently approved therapies on one or
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more clinically significant endpoints. Under the breakthrough therapy program, the sponsor of a new biologic candidate may request that the FDA designate the candidate for a specific indication
as a breakthrough therapy concurrent with, or after, the submission of the IND for the biologic candidate. The FDA must determine if the biological product qualifies for breakthrough therapy designation within 60 days of receipt of the
sponsors request. The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process, providing timely advice to the product sponsor regarding development and
approval, involving more senior staff in the review process, assigning a cross-disciplinary project lead for the review team and taking other steps to design the clinical studies in an efficient manner.
Priority review may be granted for products that are intended to treat a serious or life-threatening condition and, if approved, would provide
a significant improvement in safety and effectiveness compared to available therapies. The FDA will attempt to direct additional resources to the evaluation of an application designated for priority review in an effort to facilitate the review.
Accelerated approval may be granted for products that are intended to treat a serious or life-threatening condition and that generally provide
a meaningful therapeutic advantage to patients over existing treatments. A product eligible for accelerated approval may be approved on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical
endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence
of the condition and the availability or lack of alternative treatments. In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that substitutes for a direct measurement of how a patient
feels, functions or survives. The accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical benefit of a product, even if the
effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has been used extensively in the development and approval of products for treatment of a variety of cancers in which the goal of therapy is
generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large studies to demonstrate a clinical or survival benefit. The accelerated approval pathway is contingent on a
sponsors agreement to conduct additional post-approval confirmatory studies to verify and describe the products clinical benefit. These confirmatory trials must be completed with due diligence and, in some cases, the FDA may require that
the trial be designed, initiated and/or fully enrolled prior to approval. Failure to conduct required post-approval studies, or to confirm a clinical benefit during post-marketing studies, would allow the FDA to withdraw the product from the market
on an expedited basis. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA.
Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for
qualification or the time period for FDA review or approval may not be shortened. Furthermore, fast track designation, breakthrough therapy designation, priority review and accelerated approval do not change the standards for approval, but may
expedite the development or approval process.
Additional Controls for Biologics
To help reduce the increased risk of the introduction of adventitious agents, the PHSA emphasizes the importance of manufacturing controls for
products whose attributes cannot be precisely defined. The PHSA also provides authority to the FDA to immediately suspend licenses in situations where there exists a danger to public health, to prepare or procure products in the event of shortages
and critical public health needs, and to authorize the creation and enforcement of regulations to prevent the introduction or spread of communicable diseases in the United States and between states.
After a BLA is approved, the product may also be subject to official lot release as a condition of approval. As part of the manufacturing
process, the manufacturer is required to perform certain tests on each lot of the
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product before it is released for distribution. If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA together with a
release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturers tests performed on the lot. The FDA may also perform certain confirmatory tests on lots of some products, such as viral
vaccines, before releasing the lots for distribution by the manufacturer. In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency and effectiveness of biological products. As with drugs,
after approval of biologics, manufacturers must address any safety issues that arise, are subject to recalls or a halt in manufacturing, and are subject to periodic inspection after approval.
Pediatric Information
Under the Pediatric Research Equity Act, or PREA, BLAs or supplements to BLAs must contain data to assess the safety and effectiveness of the
biological product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the biological product is safe and effective. The FDA may grant full or
partial waivers, or deferrals, for submission of data. Unless otherwise required by regulation, PREA generally does not apply to any biological product for an indication for which orphan designation has been granted. However, beginning in 2020, PREA
will apply to BLAs for orphan-designated biologics if the biologic is a molecularly targeted cancer product intended for the treatment of an adult cancer and is directed at a molecular target that FDA has determined is substantially relevant to the
growth or progression of a pediatric cancer.
The Best Pharmaceuticals for Children Act, or the BPCA, provides a six-month extension of any exclusivitypatent or non-patentfor a biologic if certain conditions are met. Conditions for exclusivity include the FDAs
determination that information relating to the use of a new biologic in the pediatric population may produce health benefits in that population, FDA making a written request for pediatric studies, and the applicant agreeing to perform, and reporting
on, the requested studies within the statutory timeframe. Applications under the BPCA are treated as priority applications, with all of the benefits that designation confers.
Post-Approval Requirements
Once a BLA is approved, a product will be subject to certain post-approval requirements. For instance, the FDA closely regulates the
post-approval marketing and promotion of biologics, including standards and regulations for direct-to-consumer advertising,
off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet. Biologics may be marketed only for the approved indications and in a manner
consistent with the provisions of the approved labeling.
Adverse event reporting and submission of periodic safety summary reports is
required following FDA approval of a BLA. The FDA also may require post-marketing testing, known as Phase 4 testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions on an approval that could
restrict the distribution or use of the product. In addition, quality control, biological product manufacture, packaging and labeling procedures must continue to conform to cGMPs after approval. Biologic manufacturers and certain of their
subcontractors are required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects a biologic
products manufacturing facilities to assess compliance with cGMPs. Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality-control to maintain compliance with cGMPs. Regulatory
authorities may withdraw product approvals or request product recalls if a company fails to comply with required regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently
discovered.
Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is
not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or
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frequency, or with manufacturing processes or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of
post-market studies or clinical studies to assess new safety risks or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:
restrictions on the marketing or manufacturing of the product, suspension of the approval, complete withdrawal of
the product from the market or product recalls;
fines, warning or other enforcement-related letters or holds on post-approval clinical studies;
refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of
product license approvals;
product seizure or detention, or refusal to permit the import or export of products; or
injunctions or the imposition of civil or criminal penalties.
U.S. Patent Term Restoration and Marketing Exclusivity
Depending upon the timing, duration and specifics of FDA approval of our product candidates, some of our U.S. patents may be eligible for
limited patent term extension under the Hatch Waxman Amendments. The Hatch Waxman Amendments permit a patent term extension of up to five years as compensation for patent term lost during the FDA regulatory review process. Patent term extension,
however, cannot extend the remaining term of a patent beyond a total of 14 years from the products approval date. The patent term extension period is generally one half the time between the effective date of an IND and the submission date
of a BLA, plus the time between the submission date of a BLA and the approval of that application, except that the review period is reduced by any time during which the applicant failed to exercise due diligence. Only one patent applicable to an
approved drug is eligible for such an extension, only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended and the application for the extension must be submitted prior to the expiration of
the patent. The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that
covers an approved drug. In the future, we or our licensors may apply for patent term extension for our owned or licensed patents to add patent life beyond their current expiration date, depending on the expected length of the clinical trials and
other factors involved in the filing of the relevant BLA. However, an extension might not be granted because of, for example, our or our licensors failure to exercise due diligence during the testing phase or regulatory review process, failure
to apply within applicable deadlines, failure to apply prior to expiration of relevant patents or any other failure to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less
than requested. There is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether any extensions should be granted, and if granted, the length of such extensions.
The Biologics Price Competition and Innovation Act of 2009, or the BPCIA, created an abbreviated approval pathway for biological products
shown to be biosimilar to, or interchangeable with, an FDA-licensed reference biological product. Biosimilarity, which requires that the biological product be highly similar to the reference product
notwithstanding minor differences in clinically inactive components and that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency, can be shown through
analytical studies, animal studies and a clinical trial or trials. Interchangeability requires that a biological product be biosimilar to the reference product and that the product can be expected to produce the same clinical results as the
reference product in any given patient and, for products administered multiple times to an individual, that the product and the reference product may be alternated or switched after one has been previously administered without increasing safety
risks or risks of diminished efficacy relative to exclusive use of the reference biological product without such alternation or switch.
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A reference biological product is granted 12 years of data exclusivity from the time of
first licensure of the product and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product. First
licensure typically means the initial date the particular product at issue was licensed in the United States. Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a biological
product if the licensure is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest or other related entity) for a change
(not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength, or for a modification to the
structure of the biological product that does not result in a change in safety, purity or potency.
Regulatory Approval in the
European Union
The EMA is a decentralized scientific agency of the European Union. It coordinates the evaluation and monitoring of
centrally authorized medicinal products. It is responsible for the scientific evaluation of applications for EU marketing authorizations, as well as the development of technical guidance and the provision of scientific advice to sponsors. The EMA
decentralizes its scientific assessment of medicines by working through a network of about 4,500 experts throughout the European Union, nominated by the member states. The EMA draws on resources of over 40 National Competent Authorities of European
Union member states.
The process regarding approval of medicinal products in the European Union follows roughly the same lines as in the
United States and likewise generally involves satisfactorily completing each of the following:
preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the
applicable EU Good Laboratory Practice regulations;
submission to the relevant national authorities of a clinical trial application, or CTA, for each trial in
humans, which must be approved before the trial may begin in each country where patient enrollment is planned;
performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product
for each proposed indication;
submission to the relevant competent authorities of a MAA, which includes the data supporting safety and efficacy
as well as detailed information on the manufacture and composition of the product in clinical development and proposed labelling;
satisfactory completion of an inspection by the relevant national authorities of the manufacturing facility or
facilities, including those of third parties, at which the product is produced to assess compliance with strictly enforced cGMP;
potential audits of the non-clinical and clinical trial sites that
generated the data in support of the MAA; and
review and approval by the relevant competent authority of the MAA before any commercial marketing, sale or
shipment of the product.
Preclinical Studies
Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in
animal studies, in order to assess the quality and potential safety and efficacy of the product. The conduct of the preclinical tests and formulation of the compounds for testing must comply with the relevant international, EU and national
legislation, regulations and guidelines. The results of the preclinical tests, together with relevant manufacturing information and analytical data, are submitted as part of the CTA.
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Clinical Trials
Pursuant to the Clinical Trials Directive 2001/20/EC, as amended, or the Clinical Trials Directive, a system for the approval of clinical
trials in the European Union has been implemented through national legislation of the member states. Under this system, approval must be obtained from the competent national authority of each European Union member state in which a clinical trial is
planned to be conducted. To this end, a CTA is submitted, which must be supported by an investigational medicinal product dossier and further supporting information prescribed by the Clinical Trials Directive and other applicable guidance documents
including but not being limited to the clinical trial protocol. Furthermore, a clinical trial may only be started after a competent ethics committee has issued a favorable opinion on the clinical trial application in that country.
Directive 2001/20/EC will be replaced by Regulation (EU) No. 536/2014, which was adopted and entered into force in 2014. The Regulation
harmonizes the assessment and supervision of clinical trials throughout the European Union, via a single EU Portal, the Clinical Trials Information System, or the CTIS. The Regulation introduces an authorization procedure based on a single
submission via a single EU portal, an assessment procedure leading to a single decision, as well as transparency requirements (the proactive publication of clinical trial data in the EU database). Since October 2016, based on its Policy 0070, the
EMA has been publishing clinical data submitted by pharmaceutical companies to support their MAA for human medicines under this centralized procedure. The Regulation will not apply until six months following the European Commission confirming that
the CTIS is fully functional. The current expectation is that the CTIS will go live by 31 January 2022.
Manufacturing and import into the
EU of investigational medicinal products is subject to the holding of appropriate authorizations and must be carried out in accordance with cGMP.
Review and Approval
Authorization to market a product in European Union member states proceeds under one of four procedures: a centralized authorization procedure,
a mutual recognition procedure, a decentralized procedure or a national procedure. Since our products by their virtue of being antibody-based biologics fall under the centralized procedure, only this procedure will be described here.
Certain drugs, including medicinal products developed by means of biotechnological processes, must be approved via the centralized
authorization procedure for marketing authorization. A successful application under the centralized authorization procedure results in a marketing authorization from the European Commission, which is automatically valid in all European Union member
states. The other European Economic Area member states (namely Norway, Iceland and Liechtenstein) are also obligated to recognize the European Commission decision. The EMA and the European Commission administer the centralized authorization
procedure.
Under the centralized authorization procedure, the Committee for Medicinal Products for Human Use, or the CHMP, serves as the
scientific committee that renders opinions about the safety, efficacy and quality of human products on behalf of the EMA. The CHMP is composed of experts nominated by each member states national drug authority, with one of them appointed to
act as Rapporteur for the co-ordination of the evaluation with the possible assistance of a further member of the CHMP acting as a Co-Rapporteur. After approval, the
Rapporteur(s) continue to monitor the product throughout its life cycle. The CHMP is required to issue an opinion within 210 days of receipt of a valid application, though the clock is stopped if it is necessary to ask the applicant for
clarification or further supporting data. The process is complex and involves extensive consultation with the regulatory authorities of member states and a number of experts. Once the procedure is completed, a European Public Assessment Report is
produced. If the CHMP concludes that the quality, safety and efficacy of the medicinal product is sufficiently proven, it adopts a positive opinion. The CHMPs opinion is sent to the European Commission, which uses the opinion as the basis for
its decision whether or not to grant a marketing authorization. If the opinion is negative, information is given as to the grounds on which this conclusion was reached.
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After a drug has been authorized and launched, it is a condition of maintaining the
marketing authorization that all aspects relating to its quality, safety and efficacy must be kept under review. Sanctions may be imposed for failure to adhere to the conditions of the marketing authorization. In extreme cases, the authorization may
be revoked, resulting in withdrawal of the product from sale.
Conditional Approval and Accelerated Assessment
As per Article 14(7) of Regulation (EC) 726/2004, a medicine that would fulfill an unmet medical need may, if its immediate availability is in
the interest of public health, be granted a conditional marketing authorization on the basis of less complete clinical data than are normally required, subject to specific obligations being imposed on the authorization holder. These specific
obligations are to be reviewed annually by the EMA. The list of these obligations shall be made publicly accessible. Such an authorization shall be valid for one year, on a renewable basis.
When an application is submitted for a marketing authorization in respect of a drug for human use which is of major interest from the point of
view of public health and in particular from the viewpoint of therapeutic innovation, the applicant may request an accelerated assessment procedure pursuant to Article 14(9) of Regulation (EC) 726/2004. Under the accelerated assessment procedure,
the CHMP is required to issue an opinion within 150 days of receipt of a valid application, subject to clock stops. We believe that some of the disease indications in which our product candidates are currently being or may be developed in the future
qualify for this provision, and we will take advantage of this provision as appropriate.
Period of Authorization and Renewals
A marketing authorization is initially valid for five years and may then be renewed on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state. To this end, the marketing authorization holder shall provide the EMA or the competent authority
with a version of the file in respect of quality, safety and efficacy, including all variants introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid. Once renewed, the
marketing authorization shall be valid for an unlimited period, unless the European Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. Any
authorization which is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization shall cease to be valid (the so-called sunset clause).
Without prejudice to the law on the protection of industrial and
commercial property, marketing authorizations for new medicinal products benefit from an 8+2+1 year period of regulatory protection. This regime consists of a regulatory data protection period of eight years plus a concurrent market exclusivity
of 10 years plus an additional market exclusivity of one further year if, during the first eight years of those 10 years, the marketing approval holder obtains an approval for one or more new therapeutic indications which, during the
scientific evaluation prior to their approval, are determined to bring a significant clinical benefit in comparison with existing therapies. Under the current rules, a third party may reference the preclinical and clinical data of the reference
product beginning eight years after first approval, but the third party may market a generic version of the reference product after only 10 (or 11) years have lapsed.
Orphan Drug Designation
Regulation (EC) 141/2000 states that a drug shall be designated as an orphan drug if its sponsor can establish (i) that it is intended for
the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the European Union when the application is made, or that it is intended for the diagnosis,
prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the European Union and that without incentives it is unlikely that the marketing of the drug in the European Union would generate sufficient
return to justify the necessary
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investment; and (ii) that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the European Union or, if such
method exists, the drug will be of significant benefit to those affected by that condition.
Regulation (EC) 847/2000 sets out criteria
for the designation of orphan drugs. An application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. Marketing authorization for an orphan drug leads to a 10-year period of market exclusivity, which means that no similar medicinal product can be authorized in the same indication. This period may, however, be reduced to six years if, at the end of the fifth year, it is
established that the product no longer meets the criteria for orphan drug designation, for example because the product is sufficiently profitable not to justify continued market exclusivity. In addition, derogation from market exclusivity may be
granted on an individual basis in very selected cases, such as consent from the marketing authorization holder, inability to supply sufficient quantities of the product or demonstration of clinically relevant superiority by a similar
medicinal product. Medicinal products designated as orphan drugs pursuant to Regulation (EC) 141/2000 are eligible for incentives made available by the European Union and by the member states to support research into, and the development and
availability of, orphan drugs.
If the MAA of a medicinal product designated as an orphan drug pursuant to Regulation (EC) 141/2000
includes the results of all studies conducted in compliance with an agreed PIP, and a corresponding statement is subsequently included in the marketing authorization granted, the 10-year period of market
exclusivity will be extended to 12 years.
European Data Collection and Processing
The collection, transfer, processing and other use of personal information, including health data, in the European Union is governed by the
GDPR, which came into effect in May 2018. This directive imposes several requirements relating to (i) obtaining, in some situations, the consent of the individuals to whom the personal data relates, (ii) the information provided to the
individuals about how their personal information is used, (iii) ensuring the security and confidentiality of the personal data, (iv) the obligation to notify regulatory authorities and affected individuals of personal data breaches,
(v) extensive internal privacy governance obligations and (vi) obligations to honor rights of individuals in relation to their personal data (for example, the right to access, correct and delete their data). The GDPR prohibits the transfer
of personal data to countries outside the European Economic Area, such as the United States, which are not considered by the European Commission to provide an adequate level of data protection. Switzerland has adopted similar restrictions. Failure
to comply with the requirements of the GDPR and the related national data protection laws of the European Union member states may result in fines and other administrative penalties. The GDPR introduces new data protection requirements in the EU and
substantial fines for breaches of the data protection rules. The GDPR and related data protection laws may impose additional responsibility and liability in relation to personal data that we collect and process and we may be required to put in place
additional mechanisms ensuring compliance with such rules. This may be onerous and adversely affect our business, financial condition, results of operations and prospects.
Marketing
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 physicians is governed by the national anti-bribery laws of European Union member states. Infringement of these laws could result in substantial fines and imprisonment.
Payments made to physicians in certain European Union member states must be publicly disclosed. Moreover, agreements with physicians often
must be the subject of prior notification and approval by the physicians employer, his or her competent professional organization and/or the regulatory authorities of the
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individual European Union member states. These requirements are provided in the national laws, industry codes or professional codes of conduct, applicable in the European Union member states.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
Brexit and the Regulatory Framework in the United Kingdom
On June 23, 2016, the electorate in the United Kingdom voted in favor of Brexit and the United Kingdom officially withdrew from the European
Union on January 31, 2020. Pursuant to the formal withdrawal arrangements agreed between the United Kingdom and the European Union, the United Kingdom was subject to a transition period until December 31, 2020, during which European Union rules
continued to apply. A trade and cooperation agreement, or the Trade and Cooperation Agreement, which outlines the future trading relationship between the United Kingdom and the European Union was agreed in December 2020.
Great Britain is no longer covered by the European Unions procedures for the grant of marketing authorizations (Northern Ireland is
covered by the centralized authorization procedure and can be covered under the decentralized or mutual recognition procedures). A separate marketing authorization will be required to market drugs in Great Britain. For two years from 1 January 2021,
the Medicines and Healthcare products Regulatory Agency, or MHRA, may adopt decisions taken by the European Commission on the approval of new marketing authorizations through the centralized procedure, and the MHRA will have regard to marketing
authorizations approved in a country in the European Economic Area (although in both cases a marketing authorization will only be granted if any Great Britain-specific requirements are met). Various national procedures are now available to place a
drug on the market in the United Kingdom, Great Britain, or Northern Ireland, with the main national procedure having a maximum timeframe of 150 days (excluding time taken to provide any further information or data required). The data exclusivity
periods in the United Kingdom are currently in line with those in the European Union, but the Trade and Cooperation Agreement provides that the periods for both data and market exclusivity are to be determined by domestic law, and so there could be
divergence in the future. It is currently unclear whether the MHRA in the United Kingdom is sufficiently prepared to handle the increased volume of marketing authorization applications that it is likely to receive.
Gaining orphan drug designation in Great Britain following Brexit is based on the prevalence of the condition in Great Britain (rather than in
the European Union). It is therefore possible that conditions that are currently designated as orphan conditions in Great Britain will no longer be and that conditions that are not currently designated as orphan conditions in the European Union will
be designated as such in Great Britain. Unlike in the European Union, applications for orphan drug designation in Great Britain are reviewed in parallel with the corresponding marketing authorization application.
The European Unions regulatory environment for clinical trials is being harmonized as part of the Clinical Trial Regulations, which are
due to enter into full effect at the end of 2021, but it is currently unclear as to what extent the United Kingdom will seek to align its regulations with the European Union.
International Regulation
In addition to regulations in the United States and Europe, a variety of foreign regulations govern clinical trials, commercial sales and
distribution of product candidates. The approval process varies from country to country and the time to approval may be longer or shorter than that required for FDA or European Commission approval.
Other Healthcare Laws and Regulations and Legislative Reform
Healthcare and Privacy Laws and Regulations
Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription of any product
candidates for which we obtain marketing approval. Our operations, including any arrangements with healthcare providers, physicians, third-party payors and customers may expose us to broadly
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applicable fraud and abuse and other healthcare laws that may affect the business or financial arrangements and relationships through which we would market, sell and distribute our products. The
healthcare laws that may affect our ability to operate include, but are not limited to:
The federal Anti-Kickback Statute, which prohibits any person or entity from, among other things, knowingly and
willfully soliciting, receiving, offering or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of an item
or service reimbursable, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. The term remuneration has been broadly interpreted to include anything of value. The federal Anti-Kickback
Statute has also been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other hand. There are a number of statutory exceptions and regulatory safe
harbors protecting some common activities from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection.
Federal civil and criminal false claims laws, such as the FCA, which can be enforced by private citizens through
civil qui tam actions, and civil monetary penalty laws prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, false, fictitious or fraudulent claims for payment of federal funds, and knowingly
making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to the federal government. For example, pharmaceutical companies have been
prosecuted under the FCA in connection with their alleged off-label promotion of drugs, purportedly concealing price concessions in the pricing information submitted to the government for government price
reporting purposes, and allegedly providing free product to customers with the expectation that the customers would bill federal healthcare programs for the product. In addition, 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 FCA. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes any request or demand for money or
property presented to the U.S. government. In addition, manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to cause the submission of false or fraudulent
claims.
HIPAA, among other things, imposes criminal liability for executing or attempting to execute a scheme to defraud
any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and creates federal
criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing
the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services.
HIPAA, as amended by HITECH, and their implementing regulations, which impose privacy, security and breach
reporting obligations with respect to individually identifiable health information upon entities subject to the law, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective
business associates that perform services for them that involve individually identifiable health information, and their covered subcontractors. 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 U.S. federal courts to enforce HIPAA laws and seek attorneys fees and costs associated
with pursuing federal civil actions.
Federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities
and activities that potentially harm consumers.
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The federal transparency requirements under the Physician Payments Sunshine Act, created under the Patient
Protection and Affordable Care Act, or the Health Care Reform Act, which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Childrens Health
Insurance Program to report annually to CMS information related to payments and other transfers of value provided to physicians, (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), and teaching hospitals and
physician ownership and investment interests, including such ownership and investment interests held by a physicians immediate family members, and, beginning in 2022, will require applicable manufacturers to report information regarding
payments and transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives during the previous year.
State and foreign laws that are analogous to each of the above federal laws, such as anti-kickback and false
claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by non-governmental third-party payors, including private insurers.
State and foreign laws that require pharmaceutical companies to implement compliance programs, comply with the
pharmaceutical industrys voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or to track and report gifts, compensation and other remuneration provided to physicians and other healthcare
providers; state laws that require the reporting of marketing expenditures or drug pricing, including information pertaining to and justifying price increases; state and local laws that require the registration of pharmaceutical sales
representatives; state laws that prohibit various marketing-related activities, such as the provision of certain kinds of gifts or meals; state laws that require the posting of information relating to clinical trials and their outcomes; and other
federal, state and foreign laws that govern the privacy and security of health information or personally identifiable information in certain circumstances, including state health information privacy and data breach notification laws which govern the
collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways and often are not pre-empted by HIPAA, thus requiring
additional compliance efforts.
If our operations are found to be in violation of any of these laws or any other current
or future healthcare laws that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from government funded healthcare programs, such as Medicare and
Medicaid, contractual damages, reputational harm, diminished profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could substantially disrupt our operations. Although effective compliance programs can mitigate the risk of
investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated. Any action against us for an alleged or suspected violation could cause us to incur significant legal expenses and could divert our
managements attention from the operation of our business, even if our defense is successful. In addition, if any of the physicians or other healthcare providers or entities with whom we expect to do business is found not to be in compliance
with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.
Legislative Reform
We operate in a highly regulated industry, and new laws, regulations and judicial decisions, or new interpretations of existing laws,
regulations and decisions, related to healthcare availability, the method of delivery and payment for healthcare products and services could negatively affect our business, financial condition and prospects. There is significant interest in
promoting healthcare reforms, and it is likely that federal and state legislatures within the United States and the governments of other countries will continue to consider changes to existing healthcare legislation.
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For example, the United States and state governments continue to propose and pass
legislation designed to reduce the cost of healthcare. In 2010, the U.S. Congress enacted the Health Care Reform Act, which included changes to the coverage and reimbursement of drug products under government healthcare programs such as:
increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program;
established a branded prescription drug fee that pharmaceutical manufacturers of certain branded prescription
drugs must pay to the federal government;
expanded the list of covered entities eligible to participate in the 340B drug pricing program by adding new
entities to the program;
established a new Medicare Part D coverage gap discount program, in which manufacturers must now 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
manufacturers outpatient drugs to be covered under Medicare Part D;
extended manufacturers Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled
in Medicaid managed care organizations;
expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid
coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers Medicaid rebate liability;
created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are
calculated for certain drugs and biologics, including our product candidates, that are inhaled, infused, instilled, implanted or injected;
established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct
comparative clinical effectiveness research, along with funding for such research;
established a Center for Medicare and Medicaid Innovation at the CMS to test innovative payment and service
delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending; and
created a licensure framework for follow-on biologic products.
There have been executive judicial and congressional challenges to certain aspects of the Health Care Reform Act, and
several bills affecting the implementation of certain taxes under the Health Care Reform Act have been signed into law. For example, in 2017, the U.S. Congress enacted the Tax Act, which eliminated the
tax-based, shared responsibility payment imposed by the Health Care Reform Act on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as
the individual mandate. In addition, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA-mandated Cadillac tax on high-cost employer-sponsored health coverage and medical device tax
and, effective January 1, 2021, also eliminated the health insurer tax. On December 14, 2018, the U.S. District Court for the Northern District of Texas held that the individual mandate is a critical and inseverable feature of the Health Care
Reform Act, and therefore, because it was repealed by the Tax Act, the remaining provisions of the Health Care Reform Act are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the Fifth Circuit upheld the District Court
ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the Health Care Reform Act are invalid as well. The U.S. Supreme Court is currently reviewing
the case, although it is unknown when a decision will be made. Further, although the U.S. Supreme Court has not yet ruled on the constitutionality of the Health Care Reform Act, on January 28, 2021, President Biden issued an executive order to
initiate a special enrollment period from February 15, 2021 through May 15, 2021 for purposes of obtaining health insurance coverage through the Health Care Reform Act marketplace. The executive order also instructs certain governmental
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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 Health Care Reform Act. It is unclear how the Supreme Court ruling, other such litigation, and the
healthcare reform measures of the Biden administration will impact the Health Care Reform Act.
In addition, there have been and continue
to be a number of initiatives at the United States federal and state levels that seek to reduce healthcare costs. In 2011, the U.S. Congress enacted the Budget Control Act, which included provisions intended to reduce the federal deficit. The Budget
Control Act resulted in the imposition of 2% reductions in Medicare payments to providers beginning in 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030 with the exception of a temporary suspension
from May 1, 2020 through March 31, 2021 due to the COVID-19 pandemic, absent additional congressional action. In 2012, the U.S. Congress enacted the American Taxpayer Relief Act, which, among other things, further reduced Medicare payments to
several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. If government spending
is further reduced, anticipated budgetary shortfalls may also impact the ability of relevant agencies, such as the FDA, to continue to function at current levels, which may impact the ability of relevant agencies to timely review and approve
research and development, manufacturing and marketing activities, which may delay our ability to develop, market and sell any product candidates we may develop. In addition, any significant spending reductions affecting Medicare, Medicaid or other
publicly funded or subsidized health programs that may be implemented, or any significant taxes or fees that may be imposed on us, as part of any broader deficit reduction effort or legislative replacement to the Budget Control Act, could have an
adverse impact on our anticipated product revenues.
Furthermore, there has been heightened governmental scrutiny over the manner in which
manufacturers set prices for their marketed products, which has resulted in several congressional inquiries and proposed legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing
and manufacturer patient programs and reform government program reimbursement methodologies for drug products. At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including through federal
budget proposals, executive orders and policy initiatives. For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing that attempted to implement several of
the administrations proposals. As a result, the FDA released a final rule on September 24, 2020, effective November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada. Further, on November 20,
2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Medicare Part D, either directly or through pharmacy benefit managers, unless the price reduction is
required by law. The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the
point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed pending review by the Biden administration until March 22, 2021.
On November 20, 2020, CMS issued an interim final rule implementing the Trump administrations Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in
other economically advanced countries, effective January 1, 2021. On December 28, 2020, the U.S. District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule. It is unclear whether
the Biden administration will work to reverse these measures or pursue similar policy initiatives. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control
pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation
from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding
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procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. We expect that additional state and federal
healthcare reform measures will be adopted in the future. It is also possible that additional governmental action will be taken in response to the COVID-19 pandemic.
Environmental, Health and Safety Laws and Regulations
We and our third-party contractors are subject to numerous environmental, health and safety laws and regulations, including those governing
laboratory procedures and the use, generation, manufacture, distribution, storage, handling, treatment, remediation and disposal of hazardous materials and wastes. Hazardous chemicals, including flammable and biological materials, are involved in
certain aspects of our business, and we cannot eliminate the risk of injury or contamination from the use, generation, manufacture, distribution, storage, handling, treatment or disposal of hazardous materials and wastes. In particular, our product
candidates use PBDs, which are highly potent cytotoxins that require special handling by our and our contractors staff. In the event of contamination or injury, or failure to comply with environmental, health and safety laws and regulations,
we could be held liable for any resulting damages, fines and penalties associated with such liability could exceed our assets and resources. Environmental, health and safety laws and regulations are becoming increasingly more stringent. We may incur
substantial costs in order to comply with current or future environmental, health and safety laws and regulations.
Pharmaceutical
Coverage, Pricing and Reimbursement
The availability and extent of coverage and adequate reimbursement by governmental and private
third-party payors are essential for most patients to be able to afford expensive medical treatments. In both domestic and foreign markets, sales of our product candidates will depend substantially on the extent to which the costs of our product
candidates will be covered by third-party payors, such as government health programs, commercial insurance and managed healthcare organizations. These third-party payors decide which products will be covered and establish reimbursement levels for
those products.
Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party
payors determination that use of a product is:
a covered benefit under its health plan;
safe, effective and medically necessary;
appropriate for the specific patient;
cost-effective; and
neither experimental nor investigational.
Obtaining coverage approval and reimbursement for a product from a government or other third-party payor is a time-consuming and costly
process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products to the payor. We may not be able to provide data sufficient to gain acceptance with respect to coverage and
reimbursement at a satisfactory level. If coverage and adequate reimbursement of our future products, if any, are unavailable or limited in scope or amount, such as may result where alternative or generic treatments are available, we may be unable
to achieve or sustain profitability. Adverse coverage and reimbursement limitations may hinder our ability to recoup our investment in our product candidates, even if such product candidates obtain regulatory approval.
There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. There is no uniform policy
for coverage and reimbursement in the United States and, as a result, coverage and reimbursement can differ significantly from payor to payor. In the United States, the principal
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decisions about reimbursement for new medicines are typically made by the CMS, which decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private
payors often, but not always, follow the CMSs decisions regarding coverage and reimbursement. It is difficult to predict what third-party payors will decide with respect to coverage and reimbursement for fundamentally novel products such as
ours, as there is no body of established practices and precedents for these new products. Further, one payors determination to provide coverage and adequate reimbursement for a product does not assure that other payors will also provide
coverage and adequate reimbursement for that product. We may need to conduct expensive pharmaco-economic studies in order to demonstrate the medical necessity and cost-effectiveness of our product candidates. There can be no assurance that our
product candidates will be considered medically necessary or cost-effective. In addition to third-party payors, professional organizations and patient advocacy groups such as the National Comprehensive Cancer Network and the American Society of
Clinical Oncology can influence decisions about reimbursement for new medicines by determining standards for care. Therefore, it is possible that any of our product candidates, even if approved, may not be covered by third-party payors or the
reimbursement limit may be so restrictive that we cannot commercialize the product candidates profitably.
Reimbursement agencies in
Europe may be more restrictive than payors in the United States. For example, a number of cancer products have been approved for reimbursement in the United States but not in certain European countries. In Europe, pricing and reimbursement schemes
vary widely from country to country. For example, some countries provide that products may be marketed only after an agreement on reimbursement price has been reached. Such pricing negotiations with governmental authorities can take considerable
time after receipt of marketing approval for a product. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Other countries require
the completion of additional health technology assessments that compare the cost-effectiveness of a particular product candidate to currently available therapies. In addition, 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, may adopt a system of
direct or indirect controls on the profitability of the company placing the product on the market or monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Reference pricing used by various European Union
member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. Furthermore, many countries in the European Union have increased the amount of
discounts required on pharmaceutical products, 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.
There can be no assurance that any country that has reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products, if approved in those countries. Accordingly, the
reimbursement for any products in Europe may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenues and profits.
Furthermore, the containment of healthcare costs has become a priority of foreign and domestic governments as well as private third-party
payors. The prices of drugs have been a focus in this effort. Governments and private third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, which could affect our ability
to sell our product candidates profitably. We also expect to experience pricing pressures due to the trend towards managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. These and other
cost-control initiatives could cause us to decrease the price we might establish for products, which could result in lower-than-anticipated product revenues. In addition, the publication of discounts by third-party payors or authorities may lead to
further pressure on the prices or reimbursement levels within the country of publication and other countries. If pricing is set at unsatisfactory levels or if coverage and adequate reimbursement of our products is unavailable or limited in scope or
amount, our revenues and the potential profitability of our product candidates in those countries would be negatively affected.
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Human Capital
As of December 31, 2020, we had 65 employees, all of whom were full-time. None of our employees are represented by labor unions or covered
by collective bargaining agreements. We consider our relationship with our employees to be good and we have not experienced any work stoppages.
We recognize that attracting, motivating and retaining talent at all levels is vital to our continued success. Our employees are a significant
asset and we aim to create an equitable, inclusive and empowering environment in which our employees can grow and advance their careers, with the overall goal of developing, expanding and retaining our workforce to support our current pipeline and
future business goals. By focusing on employee retention and engagement, we also improve our ability to support our clinical trials, our pipeline, our platform technologies, business and operations, and also protect the long-term interests of our
securityholders. Our success also depends on our ability to attract, engage and retain a diverse group of employees. Our efforts to recruit and retain a diverse and passionate workforce include providing competitive compensation and benefits
packages and ensuring we listen to our employees.
We value innovation, passion, data-driven decision making, persistence and honesty, and
are building a diverse environment where our employees can thrive and be inspired to make exceptional contributions to bring novel and more effective therapies to cancer patients.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, motivating and integrating our existing and
future employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through grants of stock-based compensation awards and payments of cash-based performance bonus
awards, in order to increase stockholder value and the success of our company by motivating our employees to perform to the best of their abilities and achieve our objectives. We are committed to providing a competitive and comprehensive benefits
package to our employees. Our benefits package provides a balance of protection along with the flexibility to meet the individual health and wellness needs of our employees. We plan to continue to refine our efforts related to optimizing our use of
human capital as we grow, including improvements in the way we hire, develop, motivate and retain employees.
Corporate History
We were incorporated under the laws of Delaware under the name Bolt Therapeutics, Inc. as a private company in January 2015. We changed our
name to Bolt Biotherapeutics, Inc. on July 29, 2015 and we completed our initial public offering in February 2021. Our principal executive offices are located at 900 Chesapeake Drive, Redwood City, California 94063 and our telephone number is (650) 665-9295. Information contained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report, and you should not consider information on our website to be part
of this Annual Report on Form 10-K. We have included our website address as an inactive textual reference only.
We file annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a), 14 and 15(d) of the Exchange Act. The SEC maintains a website
at https://www.sec.gov that contains reports, and other information regarding us and other companies that file materials with the SEC electronically. Copies of our reports on Forms 10-K, Forms 10-Q, and Forms 8-K, may be obtained, free of charge, electronically through our website at www.boltbio.com as soon as reasonably practicable after we file such material with,
or furnish such material to, the SEC.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.