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Item 1. Business

2024-03-28 compared with 2023-03-30 · 435 added, 344 removed, 766 unchanged (50% of the section changed)

We are a clinical stage biopharmaceutical company focused on developing and commercializing viral immunotherapies to help patients fight cancer.

Our engineered viruses are designed to induce a systemic anti-tumor response due to immunogenic cell death through direct viral-mediated cytotoxicity in cancer cells, thus releasing tumor neo-antigens and creating a pro-inflammatory microenvironment.

We are a clinical stage biopharmaceutical company focused on developing off-the-shelf viral immunotherapies that elicit an individualized, systemic anti-tumor immune response to help patients fight cancer.

This is intended to lead to in-situ vaccination against the injected tumor and uninjected distant metastases.

Our viral immunotherapy approach utilizes intratumoral administration of genetically engineered viruses to induce tumor cell death and elicit a systemic anti-tumor response.

Local delivery enables us to achieve these effects while aiming to minimize systemic toxicity.

The immune cells induced by these viral immunotherapies are believed to target patients’

specific tumor antigens, potentially improving responses in immunologically “hot”

tumors while at the same time infiltrating the tumor microenvironment, transforming non-inflamed “cold”

tumors with limited immune response into “hot”

While our product candidates are administered directly into the tumor, we have observed a systemic immune response in our preclinical studies and clinical trials that may indicate the potential of our product candidates to induce a systemic immune response against distal, uninjected tumors, also known as an “abscopal”

The immune cells induced by these viral immunotherapies are believed to target patients’ specific tumor antigens, potentially improving responses in immunologically “hot” tumors while at the same time infiltrating the tumor microenvironment, transforming non-inflamed “cold” tumors with limited immune response into “hot” tumors.

While our product candidates are administered directly into the tumor, we have observed systemic immune response in our preclinical studies and clinical trials that may indicate the potential of our product candidates to induce systemic immune response against distal, uninjected tumors, also known as an “abscopal” effect.

We believe viral immunotherapy is among the most promising cancer treatment modalities today.

Our goal is to further improve patient outcomes through viral immunotherapies by selecting the optimal vector, specific transgenes and clinical indications for each tumor type while optimizing product candidate attributes, such as high-titer formulation, intratumoral administration to induce systemic anti-tumor immunity, and storage conditions that could potentially lower logistical barriers for patients and clinicians.

We have established two clinical stage viral immunotherapy platforms based on novel, genetically modified adenovirus and herpes simplex virus (HSV) constructs, respectively.

Our most advanced product candidate, CAN-2409, is an off-the-shelf adenovirus product candidate which is combined with the prodrug, valacyclovir, that has generated promising clinical activity across a range of solid tumor indications.

We have established two clinical off-the-shelf viral immunotherapy platforms based on novel, genetically modified adenovirus and herpes simplex virus (HSV) constructs, respectively.

Our most advanced product candidate, CAN-2409, is an off-the-shelf adenovirus product candidate which is administered in conjunction with the prodrug valacyclovir, that has generated promising clinical activity across a range of solid tumor indications.

CAN-2409 is currently being studied in the following ongoing clinical trials:

• Prostate Cancer

o a Phase 3 randomized, triple-blinded and placebo-controlled clinical trial in the United States under a Special Protocol Assessment (SPA), with the U.S.

Food and Drug Administration (FDA) evaluating 711 patients with newly diagnosed, localized prostate cancer who have an intermediate or high-risk for progression.

We completed enrollment of this trial in September 2021 and we expect to present topline data at the end of 2024.

o A pivotal phase 3 randomized, triple-blinded and placebo-controlled clinical trial in the United States under a Special Protocol Assessment (SPA), with the U.S.

Food and Drug Administration (FDA) evaluating 711 evaluable patients with newly diagnosed, localized prostate cancer who have an intermediate or high-risk for progression.

We completed enrollment of this trial in September 2021, and we expect to report topline data in the fourth quarter of 2024.

o A phase 2 randomized, double blind, placebo-controlled clinical trial in the United States evaluating 187 patients with low-to-intermediate risk, localized prostate cancer undergoing active surveillance.

We completed enrollment of this trial in May 2019 and we expect topline data from this clinical trial to be available in the fourth quarter of 2024.

Non-small Cell Lung Cancer (NSCLC) –

an open-label Phase 2 clinical trial in the United States evaluating CAN-2409 plus valacyclovir in combination with continued PD-(L)1 checkpoint inhibitors in 80 patients with stage III/IV NSCLC who have inadequate response to PD-(L)1 checkpoint inhibitors.

We reported initial data from this trial at the American Society for Clinical Oncology (ASCO) Annual Meeting in June 2022 and an update during our Research and Development Day in December 2022, demonstrating the following:

o Evidence of local and systemic anti-tumor activity

o Disease control rate of 77% (20/26) in patients entering trial with disease progression (cohort 2)

o Sustained and ongoing clinical responses greater than 1 year

o Favorable change in trajectory of tumor progression

o Decreased tumor size of RECIST target lesions in most patients

o Reduced uninjected tumor size in 14/21 patients (67%)

o Overall response rate of 13% (4/30) across cohorts 1 and 2

o Durable disease stabilization translating into encouraging preliminary evidence of progression-free survival

o Consistent induction of local and systemic cytotoxic T cell response

o Increased infiltration of CD8+ T cells in the tumor microenvironment

o Systemic expansion of effector T cells and increase in soluble granzyme B levels in peripheral blood

o Favorable safety/tolerability data with most treatment-related adverse events being grade 1/2

We anticipate presenting additional updated clinical data from this ongoing clinical trial in the third quarter of 2023.

Pancreatic Cancer –

we have initiated a randomized Phase 2 clinical trial in the United States evaluating CAN-2409 in borderline resectable pancreatic adenocarcinoma.

In March 2023, in connection with our cost management and dynamic portfolio management initiatives, we paused new enrollment in this randomized Phase 2 clinical trial, subject to additional funding.

Despite the pause in patient enrollment, we continue to expect to present initial clinical data in the fourth quarter of 2023.

In a previous Phase 1b trial, patients with pancreatic cancer treated with CAN-2409 in addition to standard of care demonstrated a greater survival duration over the expected survival of the patients treated with the existing standard of care alone in a comparison to historical trial results.

Furthermore, in the group of patients where pre- and post-treatment tumor biopsies were available, a statistically significant increase in the number of CD8+ tumor infiltrating lymphocytes was observed.

We completed enrollment of this trial in May 2019, and we expect to report topline data in the fourth quarter of 2024.

• Non-Small Cell Lung Cancer (NSCLC)

o An open-label phase 2 clinical trial in the United States evaluating CAN-2409 plus valacyclovir in combination with continued PD-(L)1 checkpoint inhibitors in approximately 80 patients with stage III/IV NSCLC who have inadequate response to front line PD-(L)1 checkpoint inhibitor treatments.

In April 2023, we announced that the FDA granted fast track designation for CAN-2409 plus valacyclovir in combination with pembrolizumab in order to improve survival or delay progression in patients with stage III (not candidates for curative intent) or stage IV NSCLC, who are resistant to first line PD-(L)1 inhibitor therapy and who do not have activating molecular driver mutations or have progressed on directed molecular therapy.

These patients historically have had an expected median overall survival (mOS) of 10-14 months (Reckamp K et al.

J Clin Onc 2022;40:2295-2306).

The aim of the CAN-2409 immunotherapy antitumor strategy is to raise the tail on the survival curve by increasing the number of long survivors beyond 10-14 months.

o In 2022, we presented data from this phase 2 clinical trial where patients who received two administrations of CAN-2409 plus prodrug and completed the 12-week treatment window that demonstrated:

1) increased infiltration of CD8+ cytotoxic tumor infiltrating lymphocytes in the tumor microenvironment, systemic expansion of effector T cells and increased soluble granzyme B levels in

peripheral blood, 2) favorable changes in the trajectory of tumor progression, 3) decreased tumor size of target lesions in most patients, and 4) reduced size of uninjected tumor lesions (Aggarwal C et al.

Abstract #9037 ASCO June 2022 and Aggarwal C et al.

Candel Virtual R&D Day, December 2022).

These data were further supported in an update released September 2023, based on a data cutoff of August 1, 2023:

▪ 40 patients across Cohort 1 (stable disease at enrollment;

n=5) and Cohort 2 (progressive disease at enrollment;

n=35) were evaluable, as they received two courses of CAN-2409 plus valacyclovir and completed the 12-week treatment window.

▪ While overall survival was not yet mature, we observed an encouraging number of long survivors.

We believe that CAN-2409 may induce a new state of functional immunosurveillance and durable disease control in a subset of the patients.

▪ Of the 40 evaluable patients, 15 patients had lived ≥ 12 months;

of these, 10 patients had lived > 18 months, of whom 70% (7/10) were alive as of last follow up.

All 4 patients (100%) with overall survival > 24 months were alive at last follow up, with the longest reaching 31.7 months.

▪ An additional 18 out of the 40 evaluable patients were also alive but had not yet reached 12 months of follow up.

▪ Notably, many patients treated with CAN-2409 had long survival (≥ 12 months) despite having disease features generally associated with advanced disease and reduced likelihood to benefit from immune checkpoint inhibitor therapy, such as low or negative PD-(L)1 expression, including:

• Amongst patients alive ≥ 12 months with known PD-(L)1 status (14/15), 93% had negative or low PD-(L)1 score (<1 or between 1-49).

• Advanced disease with stage IV in 73% (11/15), lymph node involvement in 73% (11/15), pleural effusion in 40% (6/15), bone metastases in 27% (4/15), adrenal metastases in 20% (3/15), brain metastases in 13% (2/15), liver metastases in 7% (1/15), involvement of 3 or more organs in 13% (2/15), and Eastern Cooperative Oncology Group performance status 1 in 40% (6/15).

▪ There was a significant increase observed in activated central memory, effector-memory, effector T cells, and natural killer (NK) cells after CAN-2409 treatment.

These include CD8+Ki67+IFN g + T cells, CD8+ granzyme B+Ki67+ T cells, CD56+CD16+granzyme B+ NK cells, and gd + T cells.

We also observed an increase in memory B cells after CAN-2409 treatment

▪ We observed an increase in effector/cytotoxic T cells and NK cells in peripheral blood after the second CAN-2409 administration associated with subsequent improved survival (≥ 12 months).

▪ We continued to observe a favorable safety/tolerability profile after CAN-2409 treatment in NSCLC.

There were no dose limiting toxicities or grade 4 or greater treatment related adverse events.

Grade 3 treatment related adverse events were reported in < 10% of patients receiving at least one dose of CAN-2409 (safety population), which we believe compares favorably to current standard of care (SoC) options.

o Candel expects to share topline overall survival data for Cohort 2 in the second quarter of 2024, assuming data are mature at that time.

• Pancreatic Cancer

o We have initiated a randomized phase 2 clinical trial in the United States evaluating CAN-2409 in borderline resectable and locally advanced pancreatic adenocarcinoma.

In December 2023, we announced that the FDA granted fast track designation for CAN-2409 plus valacyclovir for the treatment of patients with pancreatic ductal adenocarcinoma (PDAC) to improve overall survival.

March 2023, in connection with our cost management and dynamic portfolio management initiatives, we elected to pause new enrollment in this randomized phase 2 clinical trial, subject to additional funding.

Despite the pause in new patient enrollment, we presented initial positive interim overall survival and immunological biomarker clinical data at the Society for Immunotherapy of Cancer (SITC) Annual Meeting in the fourth quarter of 2023.

o In a previous phase 1b trial, a statistically significant increase in the number of CD8+ tumor infiltrating lymphocytes was observed.

Initial positive phase 2 data revealed notable improvements in patients with borderline resectable pancreatic ductal adenorcarcinoma (PDAC) following CAN-2409 plus prodrug together with SoC chemoradiation;

the following data were disclosed as of the August 21, 2023 data cutoff

▪ Clinical data highlights:

• Prolonged and sustained survival was observed after experimental treatment with CAN-2409 in patients with borderline resectable PDAC.

• An estimated survival rate of 71.4% at both 24 and 36 months was observed in patients who received CAN-2409 regimen together with SoC chemoradiation prior to surgery, versus only 16.7% estimated survival at 24 and 36 months with SoC chemoradiation prior to surgery

• Importantly, 5 out of 7 patients who received CAN-2409 were still alive at the time of data cutoff, with two patients surviving more than 45 months from enrollment.

Only one patient randomized to control SoC chemotherapy remained alive at data cutoff (alive at 43 months).

• mOS has not been reached yet in patients who received CAN-2409 because most of the patients in the CAN-2409 group were still alive at data cut-off;

mOS was 12.5 months in the control arm.

• Disease course was altered after salvage chemotherapy with improved CA19-9 levels and ongoing survival in CAN-2409 arm, but not in control arm.

▪ Biomarker data analysis demonstrated:

• Consistent and robust activation of immune response after dosing with CAN-2409.

• In pancreatic tissue of patients treated with CAN-2409 plus prodrug together with SoC (but not SoC alone), dense aggregates of CD8+ granzyme B positive cytotoxic T cells, dendritic cells, and B cells were observed in the tumor microenvironment.

• Increased levels of soluble granzymes B and H as well as pro-inflammatory cytokines, including IFN-γ, were observed in peripheral blood after CAN-2409 treatment, but not with control treatment.

▪ Safety analysis:

• CAN-2409 was associated with a favorable tolerability profile.

• Addition of CAN-2409 regimen to SoC was generally well tolerated, with no reported dose-limiting toxicities, including no cases of pancreatitis.

Our lead HSV-based product candidate, CAN-3110, is currently in an ongoing investigator-sponsored phase 1 clinical trial in our initial target indication of recurrent high-grade glioma (HGG).

These patients have failed standard of care treatment and have a poor prognosis.

Initial clinical data from this trial was presented in an oral presentation at the ASCO Annual Meeting in June 2021, and additional biomarker data was reported in November 2021.

During our Research and Development Day in December 2022, we presented updated data demonstrating that CAN-3110 was well tolerated with no observed dose-limiting toxicity, achieved 11.6 months mOS with a single dose, and showed evidence of persistent HSV-1 antigen and HSV-1 replication consistent with mechanism of action

as well as robust evidence of immune activation.

We are currently evaluating the effects of multiple doses of CAN-3110 in recurrent HGG supported by the Break Through Cancer foundation.

We are also designing other novel viral immunotherapy candidates using our proprietary enLIGHTEN Discovery Platform, the first systematic, iterative HSV-based discovery platform leveraging human biology and advanced analytics to create new viral immunotherapy candidates for solid tumors.

In October 2022, we entered into a collaboration with the University of Pennsylvania (UPenn) Center for Cellular Immunotherapies to study the impact of novel viral immunotherapy candidates based on Candel’s enLIGHTEN Discovery Platform to strengthen the activity of UPenn’s investigational CAR-T cell therapies in difficult to treat solid tumors.

In February 2024, we announced that the FDA granted fast track designation for CAN-3110 for the treatment of patients with recurrent HGG to improve overall survival.

These patients have failed SoC treatment and have a poor prognosis (expected overall survival < 6-9 months).

Initial overall survival data from this clinical trial was presented in an oral presentation at the ASCO Annual Meeting in June 2021, and additional biomarker data was reported in an oral presentation at the Society for Neuro-Oncology Annual Meeting in November 2021.

During our Research and Development Day in December 2022, we presented updated

data demonstrating that CAN-3110 was well tolerated with no observed dose-limiting toxicity;

achieved 11.6 months mOS with a single dose;

and showed evidence of persistent herpes simplex virus 1 (HSV-1) antigen and HSV-1 replication consistent with mechanism of action as well as robust evidence of immune activation.

In May 2023, we presented clinical and biomarker data from this ongoing clinical trial in an oral presentation at the American Society of Gene & Cell Therapy (ASGCT) Annual Meeting where we reported mOS in arm A (n=41) ongoing at 11.8 months and mOS in arm B (n=9) ongoing at 12.0 months as of the April 20, 2023 data cutoff.

Safety and tolerability data reported no dose-limiting toxicities in both arm A and arm B.

In October 2023, we jointly published an article in Nature that reported extended survival associated with immune activation in patients with recurrent HGG treated with CAN-3110.

Notably, new data reported an increased survival in 66% of patients with positivity for anti-HSV1 antibodies (mOS of 14.2 months).

Immune status was positively associated with survival both in patients with pre-existing HSV1 antibodies (pre-treatment) and in 33% of patients that, while negative at baseline, developed anti-HSV1 antibodies after a single injection of CAN-3110.

Clinical responses were observed in both injected and uninjected lesions in patients with multifocal disease.

Significant tumor responses in both arm A and arm B were observed, with continued reduction in tumor volume in a patient in arm B approximately one year after CAN-3110 treatment.

Clinical response for this patient, in follow-up as of data cutoff, continued without additional treatment.

Analysis of post-treatment samples demonstrated evidence of persistent HSV antigen expression and replication in both injected and uninjected tumor tissue associated with CD8+ T cell infiltration.

The extent of immune activation, measured by gene profiling and quantification of immune cells in post-treatment specimens, was associated with the presence of anti-HSV1 antibodies and survival.

Survival was also associated with the diversity of the T cell repertoire in circulating T cells, suggesting that patients treated with CAN-3110 were able to mount a diverse immune response against the virus and tumor antigens released during the oncolytic process had improved survival.

We are conducting an extension of the clinical trial known as arm C, in which patients with recurrent HGG will receive a repeat dosing regimen of CAN-3110 (up to six injections over four months).

Clinical data from arm C will help evaluate whether multiple injections can increase mOS.

This clinical trial extension is supported by the Break Through Cancer foundation.

We are also designing other novel viral immunotherapy candidates using our proprietary enLIGHTEN Discovery Platform, a systematic, iterative HSV-based discovery platform leveraging human biology and advanced analytics to create new viral immunotherapy candidates for solid tumors.

In October 2022, we entered into a collaboration with the University of Pennsylvania (UPenn) Center for Cellular Immunotherapies to study the impact of novel viral immunotherapy candidates based on our enLIGHTEN Discovery Platform to strengthen the activity of UPenn’s investigational CAR-T cell therapies in difficult to treat solid tumors.

In November 2023, during the SITC 2023 Annual Meeting, we presented two posters describing the key elements of the platform and the development of the first experimental agent from the enLIGHTEN Discovery Platform.

The new agent, Alpha-201 Macro1, is an investigational viral immunotherapy designed to interfere with the CD47/SIRPα pathway and activate innate immune surveillance.

Results demonstrated monotherapy activity following local administration in a preclinical model of lung and breast cancer.

Additional preclinical data presented at SITC confirmed the capability of the enLIGHTEN Advanced Analytics suite to predict optimal gene payload combinations to arm viral vectors, that enable the design of potential combination therapeutics to overcome tumor resistance especially in cancers resistant to ICI treatment.

In March 2024, we announced the acceptance of an abstract at the American Association for Cancer Research's (AACR) 2024 Annual Meeting related to the second candidate from our enLIGHTEN Discovery Platform, a first-in-class multimodal immunotherapy for induction of tertiary lymphoid structures as a novel therapeutic strategy for solid tumors.

We currently own development and commercialization rights for our programs in major markets, including the United States, Europe and Asia, allowing us to control development and seek approval in those areas as we prepare our commercialization efforts.

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We completed our initial public offering in July 2021.

Our goal is to develop best-in-class viral immunotherapies to transform the lives of cancer patients.

We plan to develop and commercialize our two lead product candidates, CAN-2409 and CAN-3110, for the treatment of a broad range of solid tumor indications, while continuing to build our pipeline through our discovery platform .

Our goal is to develop first-in class and best-in-class viral immunotherapies to transform the lives of cancer patients.

We plan to develop and commercialize our two most advanced product candidates, CAN-2409 and CAN-3110, for the

treatment of a broad range of solid tumor indications, while continuing to build our pipeline through our discovery platform .

Key elements of our strategy include the following:

Advance the late-stage development of, and seek regulatory approval for, our lead product candidate, CAN-2409, in newly diagnosed, localized prostate cancer.

We are currently conducting a potentially registrational Phase 3 clinical trial in intermediate- and high-risk patients in combination with the standard of care, radiotherapy.

If approved, we believe CAN-2409 could be a first-in-class drug for localized prostate cancer patients with the potential to reduce disease progression and recurrence.

▪ Advance the late-stage development of, and seek regulatory approval for, our product candidate, CAN-2409, in newly diagnosed, localized prostate cancer.

We are currently conducting a potentially registrational phase 3 clinical trial in intermediate- and high-risk patients in combination with the SoC, radiotherapy.

If approved, we believe CAN-2409 could be a first-in-class drug for localized prostate cancer patients with the potential to significantly increase percentage of patients that achieve disease-free survival or reduce disease progression and recurrence.

▪ Advance the clinical development of CAN-3110 from our HSV platform with tumor-specific enhanced replication potency.

An investigator-sponsored Phase 1 clinical trial is ongoing in recurrent HGG.

An investigator-sponsored phase 1b clinical trial is ongoing in recurrent HGG.

This trial is evaluating the activity of CAN-3110 in therapy-resistant disease, where we believe a replicating virus may present therapeutic advantages.

Advance the development of CAN-2409 in stage III/IV NSCLC patients with inadequate responses to standard of care immune checkpoint inhibitors (ICI).

A Phase 2 trial that evaluates CAN-2409 in combination with ICI is currently underway in NSCLC.

Continue to expand the development of CAN-2409 in other solid tumor indications, such as pancreatic cancer.

We believe we can leverage our broad clinical experience to expand the development of CAN-2409

in other indications.

Our aim is to improve mOS compared to optimal SoC.

▪ Advance the development of CAN-2409 in stage III/IV NSCLC patients with inadequate responses to SoC immune checkpoint inhibitors (ICI).

A phase 2 clinical trial that evaluates CAN-2409 in combination with ICI is currently underway in NSCLC.

Our aim is to improve mOS compared to optimal SoC (12-14 months).

▪ Advance the development of CAN-2409 in patients with newly diagnosed, localized prostate cancer.

A phase 2 trial that evaluates CAN-2409 as a monotherapy is currently underway in low to moderate risk patients who are under active surveillance.

Our aim is to improve progression-free survival compared to the active surveillance approach.

▪ Advance the development of CAN-2409 in pancreatic cancer.

We have initiated a randomized phase 2 clinical trial in patients with borderline resectable pancreatic adenocarcinoma.

However, in March 2023, in connection with our cost management and dynamic portfolio management initiatives, we elected to pause new enrollment in this randomized Phase 2 clinical trial, subject to additional funding.

However, in March 2023, in connection with our cost management and dynamic portfolio management initiatives, we elected to pause new enrollment in this randomized phase 2 clinical trial, subject to additional funding, while we continue to follow the patients who participated in the clinical trial.

Our aim is to improve mOS compared to SoC.

▪ Advance the development and initiate IND-enabling work of CAN-3110 in a second indication characterized by Nestin expression.

We intend to discuss a new clinical trial designed to explore safety, tolerability and preliminary efficacy in a new indication characterized by Nestin expression (such as breast cancer or melanoma) with the FDA.

▪ Leverage our HSV viral immunotherapy platform to develop additional HSV-based product candidates.

Our new enLIGHTEN Discovery Platform enables rapid vector engineering to generate a range of new candidates in a data driven and indication specific manner.

We utilize a key attribute of HSV, a high capacity for genetic cargo, to seek to enable targeted modifications and deploy indication specific genes to the tumor microenvironment.

We utilize a key attribute of HSV, a high capacity for genetic cargo, to enable targeted modifications and deploy indication specific genes to the tumor microenvironment.

Our platform is designed to generate both replication-defective and replication-competent agents depending on the demands of a particular application.

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▪ Ensure commercial-scale manufacturing of our product candidates .

We will rely on third party contract manufacturers for commercial-scale manufacturing of our adenovirus product candidate, CAN-2409.

We will rely on third party contract manufacturers for commercial-scale manufacturing of both product candidates, CAN-2409 and CAN-3110.

We expect that our cost-of-goods will be substantially lower than cell- and antibody-based therapies because of our high-yield manufacturing process.

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Much focus has been placed on harnessing the effector T cell arm of the immune system for tumor specific immunity.

Adoptive T cell therapy has shown positive results but with limited activity in solid tumors, and is not scalable for widespread use.

Adoptive T cell therapy

has shown positive results but with limited activity in solid tumors, and is not scalable for widespread use.

Vaccine approaches range in complexity from peptide antigens to autologous or allogeneic tumor cell products.

The advantage of the single antigen approaches is that they can be easily manufactured and produced, however, they have the fundamental disadvantage of being potentially irrelevant for a patient’s specific tumor or immune system or easily bypassed by resistant clones.

Cellular vaccines are not easily scalable and allogeneic vaccines may not bear the relevant antigens expressed by a patient’s tumor.

ICIs such as anti-PD-1 and anti-PD-L1 antibodies, have transformed the treatment paradigm for different cancer indications.

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The currently understood generalized mechanism of action of viral immunotherapies is unique in combining both an anti-tumor cytotoxic component and an immune-stimulatory component.

Together, these modalities lead to an “in-situ vaccination”

effect against the injected tumor followed by an effect on uninjected distant metastases.

Together, these modalities lead to an “in-situ vaccination” effect against the injected tumor followed by an effect on uninjected distant metastases.

Pairing this therapeutic approach with ICI treatment or with radiotherapy is based on a strong mechanistic rationale and has shown promise in experimental models of cancer.

It has been observed that tumors that are least responsive to ICI are commonly characterized by low levels of lymphocytic infiltration and low or no PD-L1 expression levels;

they are referred to as “cold”

One of our areas of focus is the conversion of immunologically suppressed “cold”

tumors into immunologically active “hot”

tumors, thereby increasing their responsiveness to ICI or other therapies, such as radiotherapy.

they are referred to as “cold” tumors.

One of our areas of focus is the conversion of immunologically suppressed “cold” tumors into immunologically active “hot” tumors, thereby increasing their responsiveness to ICI or other therapies, such as radiotherapy.

The Mechanism of Action of Viral Immunotherapy:

• Direct anti-tumor cytotoxic activity.

Tumor-specific viral-mediated oncolysis is achieved by both precise delivery of the engineered virus to the tumor as well as the virus’

ability to selectively replicate within a cancer cell.

Tumor-specific viral-mediated oncolysis is achieved by both precise delivery of the engineered virus to the tumor as well as the virus’ ability to selectively replicate within a cancer cell.

Various approaches have been applied in different programs to increase the specificity and potency of viral toxicity aimed at tumor cells, including genetic modifications and use of prodrugs.

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The lysis of cancer cells leads to the exposure of tumor-specific antigens.

This early effect, combined with intratumoral immune cell infiltration and activation, leads to antigen presentation and initiation of a local adaptive immune response targeted against a set of tumor antigens expressed by the patient’s cancer cells.

• Development of a systemic immune memory response.

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Desirable Clinical Properties.

Viral immunotherapy has attributes that are important for a cancer therapeutic.

The agents are off-the-shelf, and while they have been shown to stimulate immune responses in most patients, there is no requirement to modify them for each patient, unlike other cellular therapy approaches.

Viral immunotherapy has attributes that are important for cancer therapeutics.

The agents are off-the-shelf and they have been shown to stimulate local and systemic immune responses in most patients, leading to an individualized anti-tumor immune response.

In contrast, individualized cellular immunotherapies require specific manufacturing processes for each individual patient.

The first viral immunotherapy was approved by the FDA in 2015, providing support that additional agents in this class may have similar potential.

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Our Immunotherapy Platforms.

Our two platforms, one based on adenovirus and the other based on HSV, provide different and complementary sets of attributes, which allows us to utilize the product candidate that is best suited for a particular clinical application.

Our two clinical platforms, one based on adenovirus and the other based on HSV, provide different and complementary sets of attributes, which allows us to utilize the product candidate that is best suited for a particular clinical application.

Key attributes across our viral immunotherapy platforms include:

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▪ Intratumoral Route of Administration.

Both of our product candidates are administered by direct injection into the tumor site.

This aims to maximize immune stimulation and minimize systemic toxicity, factors that are believed to be suboptimal with intravenous administration.

We believe that directly injecting these viral immunotherapies into a patient’s cancerous tissue helps to optimize the benefit/risk for these agents to be highly immunostimulatory at the site of the tumor, whereas systemically administered agents would need to avoid detection by the body’s immune surveillance mechanisms to avoid rapid destruction before getting to the target tumor.

While our product candidates are administered directly into the tumor, we have observed a systemic immune response in our preclinical studies and clinical trials that may indicate the potential of our product candidates to induce systemic immune response against distal, uninjected tumors, also known as an “abscopal”

For the indications that we selected, intratumoral administration is a straightforward procedure that is aligned with clinical practice, leveraging standard of care medical procedures, such as intra-prostate injection or delivery during diagnostic (bronchoscopy) or therapeutic (neurosurgery) procedures.

Both of our product candidates are administered by direct injection into the tumor site, and have been shown to result in a systemic immune response.

This approach aims to maximize immune stimulation and minimize systemic toxicity, factors that are believed to be suboptimal with intravenous administration.

While our product candidates are administered directly into the tumor, we have observed a systemic anti-tumor immune response in our preclinical studies and clinical trials, resulting in improvement of both injected and uninjected tumors, also known as an “abscopal” effect.

For the indications that we selected, intratumoral administration is a straightforward procedure that is aligned with clinical practice, leveraging SoC medical procedures, such as intra-prostate injection or delivery during diagnostic (bronchoscopy) or therapeutic (neurosurgery) procedures.

▪ Cost-efficient Manufacturing.

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▪ Product Stability.

The formulation deployed in clinical trials has stability at refrigerator temperatures (4°C), supporting use at less specialized and therefore widely accessible sites such as community-based private clinics.

▪ Non-Replicating Design .

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CAN-3110 is designed to persist and replicate at the site of the tumor.

Viral replication is accompanied by tumor oncolysis, with release of tumor antigens in the microenvironment and activation of local systemic immune response.

Viral replication is accompanied by tumor oncolysis, with release of tumor antigens in the microenvironment and activation of a local systemic immune response.

Key attributes of the enLIGHTEN Discovery Platform include:

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▪ Data driven selection of the payload.

The use of advanced analytics on proprietary and publicly available datasets enables us to select what we believe is the best payload for combinatory strategy in a specific indication, rationalizing our payload selection, de-risking development and maximizing our probability of success .

The use of advanced analytics on proprietary and publicly available datasets enables us to select what we believe is the best payload for combinatory strategy in a specific

indication, rationalizing our payload selection, de-risking development and maximizing our probability of success .

▪ Use of HSV based on its high capacity for genetic cargos .

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Leveraging these modifications, we can select the best viral vector to deliver the selected payload in a specific indication.

We have an advanced pipeline of late-stage and early-stage clinical trials with our two lead product candidates, CAN-2409 and CAN-3110.

We have an advanced pipeline of late-stage and early-stage clinical trials with our two most advanced product candidates, CAN-2409 and CAN-3110.

CAN-2409, formerly known as gene mediated cytotoxic immunotherapy (GMCI), is our most advanced product candidate.

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Together, this results in the recruitment, activation and proliferation of anti-tumor effector cells, in particular CD8+ cytotoxic T cells.

Consequently, the localized death of tumor cells releases numerous antigens that can be recognized by the patient’s own immune system, thereby training the immune system to recognize, target and destroy cancer cells bearing the same antigens that have spread to other sites in the body.

To date, CAN-2409 has been administered to over 950 patients with cancer, who are in ongoing, placebo-controlled randomized trials.

To date, CAN-2409 has been administered to over 1000 patients with cancer, many of whom are in ongoing, placebo-controlled randomized clinical trials.

In total, we have conducted more than 10 clinical trials with CAN-2409 in a range of solid tumor indications.

We have seen encouraging clinical activity and a favorable tolerability profile with CAN-2409 in both monotherapy and combination settings with radiotherapy, ICI therapy, androgen deprivation therapy (ADT), chemotherapy and surgery.

Based on the totality of our clinical data generated to date, we are currently pursuing indications in lung, pancreatic, and prostate cancer, which we believe all have great potential to address unmet need.

We are conducting a Phase 3 clinical trial with CAN-2409 under agreement with the FDA through the SPA process in newly diagnosed localized prostate cancer in intermediate- and certain high-risk patients in combination with the standard of care that comprises radiotherapy and optional ADT.

We are conducting a phase 3 clinical trial of CAN-2409 under agreement with the FDA through the SPA process in newly diagnosed localized prostate cancer in intermediate- and certain high-risk patients in combination with the SoC that comprises radiotherapy and optional ADT.

Our SPA provides FDA concurrence that our key endpoints and specific critical elements of our trial design are adequate to support a future marketing application if, among other things, we achieve the primary endpoint in the trial.

The clinical trial is randomized, triple-blinded and placebo-controlled.

It targeted enrollment of approximately 700 patients and was fully enrolled with 711 patients in September 2021 with topline data anticipated at the end of 2024.

It targeted enrollment of approximately 700 patients and was fully enrolled with 711 patients in September 2021, with topline data anticipated in the fourth quarter of 2024.

We have also received fast track designation by the FDA for the development of CAN-2409 for the treatment of localized, primary prostate cancer in combination with radiotherapy to improve the local control rate, decrease recurrence and improve disease-free survival.

We expect that if the trial is successful and if we obtain FDA approval, CAN-2409 could be the first new FDA approved pharmacologic treatment available in over 30 years as a first-line therapeutic for the over 100,000 patients who are newly diagnosed with localized prostate cancer each year in the United States.

We have also completed enrollment for a Phase 2 clinical trial with CAN-2409 as monotherapy in newly diagnosed prostate cancer patients under active surveillance.

We have also completed enrollment for a phase 2 clinical trial of CAN-2409 as monotherapy in newly diagnosed prostate cancer patients under active surveillance.

This trial has recruited 187 patients with low-, intermediate- and certain high-risk localized prostate cancer.

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In 2020, we initiated a phase 2 clinical trial evaluating CAN-2409 in combination with PD-(L)1 checkpoint inhibitors for patients with inadequate response to PD-(L)1 ICI.

This open label trial, as amended, is targeting enrollment of approximately 80 patients with stage III/IV NSCLC in two separate cohorts.

This open-label clinical trial was originally amended to target enrollment of approximately 80 patients with stage III/IV NSCLC in two separate cohorts.

The cohorts are defined based on response to ICI at the time of enrollment.

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Patients will continue treatment with their initial checkpoint inhibitor and CAN-2409 will be added to their regimen.

The primary efficacy endpoint for this trial is tumor response as measured by RECIST criteria including overall response rate (ORR) and/or disease control rate (DCR).

We reported initial data from this trial at the ASCO Annual Meeting in June 2022 and during our Research and Development Day in December 2022, we presented updated data showing evidence of local and systemic anti-tumor activity;

The primary efficacy endpoints for this trial are tumor response as measured by RECIST criteria including overall response rate (ORR) and/or disease control rate (DCR).

We reported initial data from this trial at the ASCO Annual Meeting in June 2022 and during our Research and Development Day in December 2022.

These data were further supported in an update announced in September 2023, based on a data cutoff of August 1, 2023.

In this September 2023 announcement, we presented updated data which showed evidence of local and systemic anti-tumor activity;

a DCR of 77% (20/26) in patients entering the trial with disease progression (cohort 2);

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and a favorable safety/tolerability data with most treatment-related adverse events being grade 1/2.

We anticipate presenting additional updated data from this ongoing clinical trial in the third quarter of 2023.

In December 2023, the recruitment of this study was paused as we completed target enrollment for cohort 2.

We received FDA fast track designation for CAN-2409 plus valacyclovir in combination with pembrolizumab in order to improve survival or delay progression in patients with stage III/stage IV in NSCLC who are resistant to first line PD-(L)1 inhibitor therapy and who do not have activating molecular driver mutations or have progressed on directed molecular therapy in April 2023.

We anticipate presenting topline overall survival data in the second quarter of 2024.

In a previous phase 1b trial, patients with pancreatic cancer treated with CAN-2409 in addition to SoC demonstrated a greater survival duration over the expected survival of the patients treated with the existing SoC alone in a comparison to historical trial results.

We have initiated a randomized phase 2 clinical trial evaluating CAN-2409 in borderline-resectable pancreatic adenocarcinoma.

In March 2023, in connection with our cost management and dynamic portfolio management initiatives, we elected to pause new enrollment in this randomized phase 2 clinical trial, subject to additional funding.

Despite the pause in patient enrollment, we continue to expect to present initial clinical data in the fourth quarter of 2023.

Despite the pause in patient enrollment, we presented initial clinical data in the fourth quarter of 2023.

The initial data showed prolonged and sustained survival in patients treated with CAN-2409 but not in the control arm, We observed a separation of the survival curves with an estimated survival rate of 71% in the treatment arm, compared to 16.7% in the control arm at both 24 and 36 months after treatment.

We received FDA fast track designation for CAN-2409 plus prodrug (valacyclovir) for the treatment of patients with PDAC to improve overall survival in December 2023.

We expect to present an update of the survival data in the second quarter of 2024.

Our second viral immunotherapy platform is based on a novel, next generation, genetically modified HSV that induces tumor specific oncolysis.

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CAN-3110, our first HSV-based product candidate, has been engineered for enhanced specificity and tumor cell killing, while minimizing toxicity on healthy tissue.

CAN-3110 was formerly known as rQNestin34.5v.2.

An investigator-sponsored Phase 1 clinical trial is ongoing with CAN-3110 in our initial target indication of recurrent HGG and we reported additional biomarker results in November 2021.

formerly known as rQNestin34.5v.2.

An investigator-sponsored phase 1b clinical trial is ongoing with CAN-3110 in our initial target indication of recurrent HGG and we reported additional biomarker results in November 2021.

During our Research and Development Day in December 2022, we presented updated data demonstrating that the treatment was well tolerated, with no observed dose-limiting toxicity.

produced a median overall survival (mOS) of 11.6 months with a single dose;

showed evidence of immune activation

and persistent HSV-1 antigen and HSV-1 replication consistent with the mechanism of action.

This was further supported during an oral presentation at the ASGCT Annual Meeting in May of 2023, where we reported mOS of 11.8 months in arm A and 12.0 months in arm B with a single dose, based on a data cutoff date of April 20, 2023.

Additionally, the data showed evidence of immune activation and persistent HSV-1 antigen and HSV-1 replication consistent with the mechanism of action.

Clinical and biomarker data for the first 41 patients treated with a single injection of CAN-3110 were published in Nature in October 2023.

The FDA has granted fast track designation to CAN-3110 for the treatment of patients with recurrent HGG to improve overall survival in February 2024.

We are currently evaluating the effects of multiple doses of CAN-3110 in recurrent HGG supported by the Break Through Cancer foundation.

Based on the molecular targeting of CAN-3110, we believe that it could be evaluated in an expanded range of indications in the future, such as other neurologic tumors, melanoma, gastrointestinal stromal tumors, thyroid tumors and breast cancer.

Based on the molecular targeting of CAN-3110, we believe that it could be evaluated in an expanded range of indications in the future, such as other neurologic tumors, melanoma, sarcoma, gastrointestinal stromal tumors, thyroid tumors, and breast cancer.

In addition, we are pursuing novel discovery programs based on our enLIGHTEN Discovery Platform.

This first agent, Alpha-201 Macro1, is an investigational viral immunotherapy designed to interfere with the CD47/SIRPα pathway and activate innate immune surveillance.

Results demonstrated monotherapy activity following local administration in a preclinical model of lung cancer.

In March 2024, we announced the acceptance of an abstract at AACR 2024 Annual Meeting related to the second candidate from our enLIGHTEN Discovery Platform, a first-in-class multimodal immunotherapy for induction of tertiary lymphoid structures as a novel therapeutic strategy for solid tumors.

Market Opportunity

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Although most deaths occur in patients with later stage metastatic disease, most prostate cancer patients roughly 150,000 annually in the United States are initially diagnosed in the early stage of disease, of which roughly 105,000 are considered to have intermediate- or high-risk of progression and approximately 45,000 are considered to be low-risk.

For the intermediate- and high-risk patients, the standard of care is radical prostatectomy and radiotherapy often in conjunction with androgen deprivation therapy or chemical castration.

These treatments have a high incidence of

potentially life altering side effects, including incontinence and erectile dysfunction.

There is therefore a significant unmet need for a novel treatment able to forestall or prevent progression to later stages of disease without the burdensome side effects associated with the current standard of care.

For the intermediate- and high-risk patients, the SoC is radical prostatectomy and radiotherapy often in conjunction with androgen deprivation therapy or chemical castration.

These treatments have a high incidence of potentially life altering side effects, including incontinence and erectile dysfunction.

Weighing the balance between therapeutic efficacy and side effects linked to therapy, about 10% of the intermediate-risk patients, and approximately 40% of the low-risk patients decide, in consultation with their physicians, to adopt a close monitoring approach known as active surveillance that involves periodic imaging, biomarker evaluation and biopsies.

Standard of care in this early, localized setting, leaves substantial need unaddressed.

SoC in this early, localized setting, leaves substantial need unaddressed.

As a result of PSA screening programs, most patients are diagnosed at early stages of disease with low grade, low volume, asymptomatic prostate cancer.

Current screening methods are inadequate to definitively identify which patients are most likely to progress.

As a result of these side effects, there is a large desire to delay or prevent the need for radical treatment.

As a result of the side effects and complications from currently available treatments, there is a large desire to delay or prevent the need for radical treatment.

As a result, many men with prostate cancer meeting the National Comprehensive Cancer Network (NCCN) guidelines for low-risk prostate cancer choose not to be treated and to undergo an intense monitoring program, known as Active Surveillance (AS), as their preferred initial course of treatment.

However, within 10 years of diagnosis, between 21% and 38% of men will have developed progressive cancer and require invasive treatments.

It has been reported that 21% and 41% of patients initially under AS convert to active treatment based on progression of their disease within two and five years, and approximately 17% of men undergoing AS choose to move to active treatments within 10 years of diagnosis, even in the absence of any evidence of progression, underscoring the level of concern around progression and the significant unmet need in this early line of treatment.

progression, underscoring the level of anxiety that patients experience when they carry a diagnosis of untreated prostate cancer and the significant unmet need in this early line of treatment.

To our knowledge, the only FDA-approved pharmacologic intervention indicated for newly diagnosed localized prostate cancer is chemical castration therapy, also known as ADT.

Standard of care for localized disease is primarily surgery, radiotherapy and/or ADT.

Because ADT has a potentially severe side effect profile, including impotence, hot flashes, mood changes, depression and others, these hormone treatments are reserved only for those patients that present the highest risk of localized or metastatic prostate cancer.

SoC for localized disease is primarily surgery, radiotherapy and/or ADT.

Because ADT has a potentially severe side effect profile, including impotence, hot flashes, mood changes, depression, impact on quality of life, and others, these hormone treatments are reserved only for those patients that present the highest risk of localized or metastatic prostate cancer.

Similarly, surgical prostatectomy can often cause urinary dysfunction and sexual dysfunction that can last years and sometimes be permanent.

Approximately one-third of men with normal baseline function will report some increase in urinary symptoms and urgency after prostatectomy and most men will experience some erectile dysfunction after treatment with either surgery or radiation.

We believe CAN-2409 provides a significant commercial opportunity for therapeutic use in the newly diagnosed, localized prostate cancer patient population, with the goal of reducing progression or recurrence of disease without significant toxicities and with a product that can be administered at outpatient facilities.

Approximately one-third of men with normal baseline function will report an increase in urinary symptoms and urgency after prostatectomy and most men will experience erectile dysfunction after treatment with either surgery or radiation.

We believe CAN-2409 could provide a significant commercial opportunity for therapeutic use in the newly diagnosed, localized prostate cancer patient population, with the goal of reducing progression or recurrence of disease without significant toxicities and with a product that can be administered at outpatient facilities.

Non-Small Cell Lung Cancer

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47,920 and 21,990 in first-, second- and third-line treatment, respectively.

ICI use in NSCLC has become standard of care with approximately 49% of first-line patients in the United States being treated with an ICI alone or in combination with other agents.

ICI use in NSCLC has become SoC with approximately 49% of first-line patients in the United States being treated with an ICI alone or in combination with other agents.

Nonetheless, 60% of these patients will have an inadequate response after one year of ICI treatment, and 80% after three years.

We believe CAN-2409 could provide a significant commercial opportunity for therapeutic use in NSCLC patients with an inadequate response to ICI, if we are able to demonstrate overall survival of more than 12-14 months after treatment per protocol.

Pancreatic Cancer

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For resected patients, while surgery and adjuvant approaches (e.g.

FOLFORINOX) have improved median overall survival, 5 year survival rates remain modest (20-30%) and most tumors will recur (median recurrence free survival ~1.5 years).

FOLFORINOX) have improved mOS, 5 year survival rates remain modest (20-30%) and most tumors will recur (median recurrence free survival ~1.5 years).

While there is a high level of total clinical research and development activity across pancreatic cancer settings (over 150 investigational products in phase 2 or later development), the majority are targeting metastatic disease.

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there are 12,340 patients with borderline resectable disease and 30,850 with locally advanced tumors (with the majority undergoing neoadjuvant / induction treatment) in the US/EU5.

We believe CAN-2409 could provide a significant commercial opportunity for therapeutic use in borderline resectable pancreatic cancer patients, if we are able to confirm the improvement in overall survival two years after initiation of treatment in patients who received CAN-2409 combined with SoC compared to SoC alone.

High-Grade Glioma

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The prognosis for glioblastoma that has recurred is dire;

median overall survival with second line chemotherapy such as lomustine is associated with median overall survival of 6-9 months.

mOS with second line chemotherapy such as lomustine is associated with mOS of 6-9 months.

Few pharmaceutical treatment options exist for patients with recurrent HGG, with the last significant FDA approval over a decade ago.

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New agents to treat patients with recurrent HGG are urgently needed.

We believe CAN-3110 provides a significant opportunity for therapeutic use in recurrent HGG based on the results published in Nature in October 2023, showing nearly doubling of the expected mOS after just a single injection of CAN-3110.

Our Product Candidates

Lead Product Candidate - CAN-2409

Initial Product Candidate - CAN-2409

We believe the adenovirus-based CAN-2409 has advantageous properties that differentiate from other viral immunotherapies.

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▪ Has consistently shown activity in clinical trials across a range of solid tumor types.

Has been dosed in hundreds of patients and has generated favorable tolerability and safety data.

Is engineered to be potently immunogenic but non-replicating with the goal of maximizing the anti-tumor immune response while minimizing the risk for local and systemic toxicity.

Can be stored at 4°C, facilitating the use of CAN-2409 in out-patient clinics.

▪ Has been dosed in more than a thousand patients and has generated favorable tolerability and safety data.

▪ Is engineered to be potently immunogenic but non-replicating with the goal of eliciting a systemic anti-tumor immune response while minimizing the risk for local and systemic toxicity.

▪ Can be stored at 4°C, facilitating the use of CAN-2409 in out-patient clinics.

This aspect is particularly favorable in indications such as prostate cancer, where patients are often monitored in individual private practices.

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aglatimagene besadenovec) is an adenovirus-based replication-defective engineered gene construct encoding the thymidine kinase gene derived from the herpes simplex virus.

It is injected directly into the tumor or target tissue.

Localized injection is intended to minimize systemic toxicities associated with systemic intravenous administration, eliminating the requirement for complex immune evasion or tumor-specific targeting mechanisms, and focuses the immune response locally against the tumor, while also activating the desired systemic anti-tumoral response against the injected tumor and uninjected metastases.

The adenoviral vector is used to transport the thymidine kinase gene into the tumor cells at the site of injection.

It is injected directly into a tumor or target tissue.

Localized injection is intended to minimize systemic toxicities associated with systemic intravenous administration, eliminating the requirement for complex immune evasion or tumor-specific targeting mechanisms, and reprograms the immune response against the injected tumor, while activating the desired systemic anti-tumoral immune response against the injected tumor and uninjected metastases.

The adenoviral vector is used to transport the HSV-thymidine kinase gene into the tumor cells at the site of injection.

HSV-thymidine kinase converts generic, FDA-approved anti-herpes drugs, such as ganciclovir, acyclovir and valacyclovir, which we use as prodrugs, into a toxic nucleotide analogue.

These agents are widely available, inexpensive and are generally well-tolerated.

Cells transduced with the thymidine kinase gene as well as neighboring cells that are replicating or exhibit DNA damage undergo immunogenic cell death after exposure to these systemically administered prodrugs that are converted in the tumor microenvironment into toxic metabolites.

Cells transduced with the HSV-thymidine kinase gene as well as neighboring cells that are replicating or exhibit DNA damage undergo immunogenic cell death after exposure to these systemically administered prodrugs that are converted in the tumor microenvironment into toxic metabolites.

The prodrug-derived cytotoxic nucleotide analogs are designed to inhibit DNA replication and repair, leading to the death of multiplying tumor cells, and in particular of cells undergoing repair from radiation or chemotherapy damage.

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Additionally, the virus itself stimulates a marked immuno-inflammatory response.

Key pro-inflammatory cytokines as well as chemokines, adhesion molecules and costimulatory molecules are locally upregulated, resulting in an inflamed (hot) tumor microenvironment, able to further enhance CD8+ cytotoxic T cell activation and immunization against released tumor antigens.

Key pro-inflammatory cytokines as well as chemokines, adhesion molecules and costimulatory molecules are locally upregulated, resulting in an inflamed (hot) tumor microenvironment, able to further enhance CD8+ cytotoxic tumor infiltrating lymphocyte cell activation and immunization against various released tumor antigens.

This local effect provides a strong mechanistic rationale for the combination of viral immunotherapy with ICIs such as PD-1 or PD-L1 targeting antibodies.

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By blocking this suppressive signal pharmacologically, it has been demonstrated that T cells can be unleashed to attack cancer cells and that profound clinical benefit can be achieved, but this benefits only a minority of patients.

It has been hypothesized that treatment results can be significantly improved by optimizing recognition of the specific tumor antigens by the patient’s adaptive immune system using viral immunotherapy combined with the non-specific stimulation of T cells induced by ICI treatment.

It appears that a duality of signals is required:

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The immune system is highly dynamic, with continuous trafficking of different populations of immune cells throughout the body.

One outcome of this is that when T cells are locally activated and trained to recognize tumor-specific antigens, they can act systemically to drive an efficient immune response at sites distant from the original tumor.

One outcome of this is that when T cells are locally activated and reprogrammed to recognize tumor-specific antigens, they can act systemically to drive an efficient immune response at sites distant from the original tumor.

This abscopal effect may explain the significant effects observed at distant, uninjected sites demonstrated in experimental models of cancers.

Abscopal effect has been shown with CAN-2409 in a mouse model of prostate cancer.

The model employed

RM-1, a syngeneic prostate cell line, that was implanted both in the flanks of the mice as well as systemic, via a tail vein injection to mimic metastatic disease, resulting in the emergence of lung tumor nodules.

The model employed RM-1, a syngeneic prostate cell line, that was implanted both in the flanks of the mice as well as systemic, via a tail vein injection to mimic metastatic disease, resulting in the emergence of lung tumor nodules.

After intratumor treatment of the flank tumor masses with either CAN-2409 and systemic prodrug, alone or in combination with radiotherapy, we observed a beneficial response in both injected and uninjected metastatic tumor.

Use of CAN-2409 resulted in a 38% mean reduction in tumor volume and, in the combination arm, a reduction of 61% in tumor volume.

Notably, the average number of lung nodules was reduced from 20.5 in the control arm and 22.4 in the mice that received radiotherapy to 13.0 in the CAN-2409 arm, and to 6.6 when CAN-2409 was combined with radiotherapy.

Notably, the average number of lung nodules was reduced from 20.5 in the control arm and 22.4 in the mice that

received radiotherapy to 13.0 in the CAN-2409 arm, and to 6.6 when CAN-2409 was combined with radiotherapy.

We have also observed the abscopal response in connection with the experimental treatment of CAN-2409 in patients with NSCLC.

We observed regression of uninjected lesions in about two-thirds of evaluable patients presenting with multiple lesions.

The activity of CAN-2409 treatment has been shown to be dependent on CD8+ T cell involvement in studies in mouse models that evaluated permutations of CAN-2409 treatment and T cell depletion.

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▪ Has demonstrated statistically significant survival benefit in preclinical models of brain cancer.

Has generated favorable tolerability and safety data, not reaching a dose limiting toxicity in the dose range tested in an ongoing investigator-sponsored Phase 1 trial.

▪ Has generated favorable tolerability and safety data, not reaching a dose limiting toxicity in the dose range tested in an ongoing investigator-sponsored phase 1b trial.

▪ Has shown a clinical signal in a difficult to treat brain cancer population, critically defined by a highly immunosuppressive environment.

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CAN-2409 for Prostate Cancer

We have completed multiple Phase 1 and Phase 2 clinical trials in non-metastatic prostate cancer using CAN-2409 as monotherapy and in combination with standard of care.

We have completed multiple phase 1 and phase 2 clinical trials in non-metastatic prostate cancer using CAN-2409 as monotherapy and in combination with SoC.

These trials generated favorable tolerability and safety data and also provide evidence to support CAN-2409 immune activation, dosing levels and schedules.

We have administered CAN-2409 to about 900 patients with localized prostate cancer to date, most of whom are currently in ongoing, placebo-controlled randomized trials.

We have administered CAN-2409 to more than 700 patients with localized prostate cancer to date, most of whom are currently in ongoing, placebo-controlled randomized trials.

Monotherapy Activity

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These responses have been consistently observed in patients with prostate cancer, including patients with newly diagnosed, localized disease, as well as those whose cancer was progressing even after radiotherapy.

In newly diagnosed patients with localized prostate cancer, analysis of biopsies following monotherapy CAN-2409 treatment revealed change in glandular architecture, necrosis and increased immune cell infiltration as compared to baseline biopsy.

We observed in treated samples a 4-fold increase in the number of CD8+ T cells and a 3-fold increase in the number of CD68+ macrophages, demonstrating immune response after CAN-2409 administration.

In another Phase 1/2 clinical trial, patients whose prostate cancer had progressed following radiotherapy and that presented a persistently rising PSA level, were treated with CAN-2409 as monotherapy using six dose levels, ranging from 1x10 8 –1x10 11 viral particles.

In newly diagnosed patients with localized prostate cancer, analysis of biopsies following monotherapy CAN-2409 treatment revealed a change in glandular architecture, necrosis and increased immune cell infiltration as compared to baseline biopsy.

We observed in treated samples a 4-fold increase in the number of CD8+ T cells and a 3-fold increase in the number of CD68+ macrophages, demonstrating an immune response after CAN-2409 administration.

In another phase 1/2 clinical trial, patients whose prostate cancer had progressed following radiotherapy and that presented a persistently rising PSA level, were treated with CAN-2409 as monotherapy using six dose levels, ranging from 1x10 8 –1x10 11 viral particles.

In 27 of the 36 patients recruited, a decrease in PSA levels was observed following a single cycle of CAN-2409, as measured by the best PSA decrease in serial assessments within the first 3 months after treatment.

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Combination Therapy

Because of the increasing prevalence of combination therapy for cancer patients, the ability to combine novel agents with standard of care treatments without overlapping toxicity is of increasing importance.

Because of the increasing prevalence of combination therapy for cancer patients, the ability to combine novel agents with SoC treatments without overlapping toxicity is of increasing importance.

We believe that the favorable tolerability and safety data generated for CAN-2409 in our clinical trials is encouraging for our current and future development plans, in combination with other agents but also as a monotherapy in lower risk patient populations that are not willing to undergo more aggressive forms of treatment.

The safety data from our Phase 2 clinical trial in prostate cancer patients treated with CAN-2409 in combination with standard of care of radiotherapy or androgen deprivation therapy, reported no grade 4 treatment-related adverse events and only single-patient incidence of grade 3 treatment related adverse events.

The safety data from our phase 2 clinical trial in prostate cancer patients treated with CAN-2409 in combination with SoC of radiotherapy or androgen deprivation therapy, reported no grade 4 treatment-related adverse events and only single-patient incidence of grade 3 treatment related adverse events.

It was anticipated that flu-like symptoms would be evident, because CAN-2409 is an adenoviral gene construct known to induce a systemic immune response.

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These symptoms, which generally manifested early and transiently, often occurred on the evening of the intratumoral administration of CAN-2409 and resolved by the following morning.

The rates of the gastrointestinal adverse events are consistent with those typically reported by patients undergoing radiotherapy, which is a component of standard of care in this population.

The rates of the gastrointestinal adverse events in this study are consistent with those typically reported by patients undergoing radiotherapy, which is a component of SoC in this population.

Our previous phase 2 clinical trial data informed our agreement with the FDA under the SPA for our ongoing phase 3 clinical trial.

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Based on the data from our clinical trials to date, we believe that CAN-2409 has the potential, if approved, to be the first new first-line product candidate approved for patients with localized prostate cancer in over 30 years.

We are currently conducting a potentially registrational Phase 3 trial for CAN-2409, with agreement, under an SPA with the FDA for a single pivotal trial in newly diagnosed localized prostate cancer in intermediate and high-risk patients in combination with the standard of care, radiotherapy.

We are currently conducting a potentially registrational phase 3 trial for CAN-2409, with agreement, under an SPA with the FDA for a single pivotal trial in newly diagnosed localized prostate cancer in intermediate and high-risk patients in combination with the SoC, radiotherapy.

This phase 3 clinical trial is fully enrolled with 711 patients, randomized 2:1.

Patients receive three investigational treatment courses of CAN-2409, each consisting of four concurrent injections of transrectal ultrasound guided administration of CAN-2409 followed by a course of oral valacyclovir.

Patients receive three investigational treatment courses of CAN-2409, each consisting of four concurrent injections of transrectal or transperineal ultrasound guided administration of CAN-2409 followed by a course of oral valacyclovir.

The first injection course is given at least 15 days but not more than 8 weeks before starting radiation.

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The third and final injection course is delivered 15-22 days after the second injections.

A fixed dose of valacyclovir is

given for 14 days after each CAN-2409 administration.

Standard of care external beam radiotherapy is administered to patients throughout the course of the trial with optional ADT as determined by the treating physician.

A fixed dose of valacyclovir is given for 14 days after each CAN-2409 administration.

SoC external beam radiotherapy is administered to patients throughout the course of the trial with optional ADT as determined by the treating physician.

Trial inclusion criteria are based on patients with localized prostate cancer meeting the NCCN criteria of intermediate-risk or patients presenting only one NCCN high-risk feature.

NCCN intermediate-risk is defined as having at least one of the following:

NCCN intermediate-risk is defined as having at least one of

the following:

prostate serum antigen (PSA) of 10-20 ng/ml, Gleason Score of 7, and is staged T2b-T2c via the TNM staging system.

Patients may also exhibit one high-risk characteristic that may consist of a PSA of 20+ ng/ml, a Gleason Score of 8-10, or a cancer that is up to stage T3a, but not more than one of these high-risk factors.

The SPA agreement specifically defines agreement with the FDA on the statistical design and power of the Phase 3 trial, as well as the primary endpoint definition.

The SPA specifically defines agreement with the FDA on the statistical design and power of the phase 3 trial, as well as the primary endpoint definition.

The SPA states that the trial is adequately designed to provide the necessary data that, depending on the outcome, could support a Biologics License Application (BLA) submission.

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We are assuming a 15% improvement in the active arm (CAN-2409) as compared to placebo in the rate of events measured according to the DFS definition provided above.

We expect topline data from this Phase 3 trial at the end of 2024.

We expect topline data from this phase 3 clinical trial in the fourth quarter of 2024.

Phase 2 Clinical Trial for Active Surveillance

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CAN-2409 for Non-Small Cell Lung Cancer (NSCLC)

To assess the potential for CAN-2409 to trigger local and systemic immune activation and produce a “hot”

tumor phenotype, we designed and completed a clinical trial in patients with surgically resectable lung cancer.

To assess the potential for CAN-2409 to trigger local and systemic immune activation and produce a “hot” tumor phenotype, we designed and completed a clinical trial in patients with surgically resectable lung cancer.

In this proof of mechanism phase 1 clinical trial, dose escalation of intratumoral neoadjuvant CAN-2409 was followed by tumor resection three weeks later.

The specific goal was to obtain biological data to better understand the impact of CAN-2409 on the tumor microenvironment, with a specific focus on intratumoral CD8+ T cell activation and function while assessing effects on the systemic immune response.

The effects of CAN-2409 were evaluated by comparing post-injection specimens to an internal control consisting of each patient’s own pre-treatment needle biopsy and blood samples, and an external cohort of matched patients who underwent standard surgical resection without CAN-2409.

The specific goal was to obtain biological data to better understand the impact of CAN-2409 on the tumor microenvironment, with a specific focus on intratumoral CD8+ tumor infiltrating lymphocyte cell activation and function while also assessing the effects on the systemic immune response.

The results showed evidence of significant intratumoral and systemic immune activation after experimental CAN-2409 monotherapy treatment.

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CAN-2409 and Checkpoint Combination Phase 2 Clinical Trial for NSCLC in Patients with Inadequate Response to ICI

In 2020, we initiated a Phase 2 clinical trial in NSCLC patients with inadequate response to ICI that will enroll patients receiving standard of care ICI (plus chemotherapy if indicated) in combination with two courses of CAN-2409 plus continued ICI.

This open label clinical trial, as amended, is targeting enrollment of approximately 80 patients with stage III/IV NSCLC in two separate cohorts.

In 2020, we initiated a phase 2 clinical trial of CAN-2409 in NSCLC patients with inadequate response to ICI that has enrolled patients receiving SoC ICI (plus chemotherapy if indicated) in combination with two courses of CAN-2409 plus continued ICI.

This open label clinical trial, as amended, targeted enrollment of approximately 80 patients with stage III/IV NSCLC in two separate cohorts.

The cohorts are defined based on response to ICIs at the time of enrollment.

Cohort 1 addresses patients with stable disease and Cohort 2 enrolls patients with progressive disease after at least 18

weeks of ICI treatment.

Patients will continue treatment with their initial ICI and CAN-2409 will be added to their regimen.

The primary efficacy endpoint for this trial is response rate measured by RECIST and/or Disease Control Rate.

Cohort 1 addresses patients with stable disease and Cohort 2 enrolled patients with progressive disease after at least 18 weeks of ICI treatment.

Patients continue treatment with their initial ICI and CAN-2409 was added to their regimen.

The primary efficacy endpoints for this trial are response rate measured by RECIST and/or Disease Control Rate, with overall survival as a key study endpoint.

We reported initial data from this trial at the ASCO Annual Meeting in June 2022.

During our Research and Development Day in December 2022, we presented updated data demonstrating evidence of local and systemic anti-tumor activity;

During our Research and Development Day in December 2022.

These data were further supported in an update announced in September 2023, based on a data cutoff of August 1, 2023, where we presented updated data demonstrating evidence of local and systemic anti-tumor activity;

a disease control rate of 77% (20/26) in patients entering trial with disease progression (cohort 2);

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and favorable safety/tolerability data with most treatment-related adverse events being grade 1/2.

We anticipate presenting additional updated data from this ongoing Phase 2 clinical trial in the third quarter of 2023.

In December 2023, the recruitment of this study was paused as we completed target enrollment for cohort 2.

We anticipate presenting topline overall survival data from this ongoing phase 2 clinical trial in the second quarter of 2024.

CAN-2409 for Pancreatic Cancer

We are currently conducting a randomized Phase 2 clinical trial for CAN-2409 in borderline resectable pancreatic cancer, with a target enrollment of up to 54 patients.

In March 2023, in connection with our cost management and dynamic portfolio management initiatives, we elected to pause new enrollment in this randomized Phase 2 clinical trial, subject to additional funding.

Despite the pause in patient enrollment, we continue to expect to present initial clinical data in the fourth quarter of 2023.

In a previous Phase 1b clinical trial, patients with pancreatic cancer treated with CAN-2409 in addition to standard of care demonstrated a greater survival duration over the expected survival of the patients treated with the existing standard of care alone in a comparison to historical trial results.

In a previous phase 1b clinical trial, patients with pancreatic cancer treated with CAN-2409 in addition to SoC demonstrated a greater survival duration over the expected survival of the patients treated with the existing SoC alone in a comparison to historical trial results.

Furthermore, in the subset of patients where pre- and post-treatment tumor biopsies were available, a statistically significant increase in the number of CD8+ tumor infiltrating lymphocytes was observed.

In addition, the study demonstrated that CAN-2409 was generally well-tolerated in combination with standard of care.

In addition, the study demonstrated that CAN-2409 was generally well-tolerated in combination with SoC.

We are currently conducting a randomized phase 2 clinical trial of CAN-2409 in borderline resectable pancreatic cancer, with a target enrollment of up to 54 patients.

Despite the pause in patient enrollment, we presented initial clinical data in the fourth quarter of 2023, based on a data cutoff date of August 21, 2023.

The initial data showed prolonged and sustained survival in patients who were treated with CAN-2409 and there was a separation of the survival rates in the treatment and placebo arms.

Estimated survival was 71.4% when 2-3 CAN-2409 courses were added to standard neoadjuvant chemoradiotherapy followed by attempted surgical resection compared to 16.7% with standard neoadjuvant chemoradiotherapy followed by attempted surgical resection alone at both 24 and 36 months after treatment.

We expect to present an update to this survival data in the second quarter of 2024.

CAN-2409 for High-Grade Glioma

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Phase 1 Clinical Trial of CAN-2409 With Opdivo in High-Grade Glioma

We conducted a Phase 1 clinical trial in patients with newly diagnosed HGG examining the combination of CAN-2409 and anti-PD-1 nivolumab (Opdivo, BMS) in collaboration with BMS and Adult Brain Tumor Consortium.

We conducted a phase 1b clinical trial in patients with newly diagnosed HGG examining the combination of CAN-2409 and anti-PD-1 nivolumab (Opdivo, BMS) in collaboration with BMS and Adult Brain Tumor Consortium.

This was the first clinical trial to evaluate the combination of CAN-2409 and nivolumab in HGG patients with the goal of enhancing anti-tumor T cell activation and expansion and the potential for better clinical outcome.

Data for this Phase 1 clinical trial were presented at the 37th Annual Meeting of Society for Immunotherapy of Cancer (SITC) in Boston in November 2022.

Data for this phase 1b clinical trial were presented at the 37th Annual Meeting of Society for Immunotherapy of Cancer (SITC) in Boston in November 2022.

In the trial involving 35 evaluable patients, extensive biomarker analyses demonstrated that the combination of CAN-2409 and nivolumab resulted in a statistically significant expansion of activated tumor-fighting CD4+ and CD8+ T cells effector cells as well as decreased markers of exhaustion on effector cells.

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Systemic immune activation was observed after the single administration of CAN-2409, prior to initiation of nivolumab (week 3 post treatment).

Median overall survival (mOS) for patients with methylated MGMT promoter was 30.6 months for those who underwent gross total resection (GTR) (n=10) and 12.6 months for those who underwent sub-total resection (STR) (n=5).

mOS for patients with methylated MGMT promoter was 30.6 months for those who underwent gross total resection (GTR) (n=10) and 12.6 months for those who underwent sub-total resection (STR) (n=5).

mOS for patients with unmethylated MGMT was 13.2 months (GTR) (n=16) and 15.9 months (STR) (n=4), respectively.

Phase 1b/2 Clinical Trial of CAN-2409 Combined with Standard of Care in High-Grade Glioma

In our Phase 1b/2 clinical trial in newly diagnosed patients with HGGs, including the difficult-to-treat glioblastoma, CAN-2409 demonstrated a statistically significant increase in patient survival when combined with current standard of care over the current standard of care alone (surgery, radiation and temozolomide).

The trial compared the overall survival of 48 enrolled patients treated at 4 clinical sites with CAN-2409 plus standard of care against a matched controlled set of 134 patients enrolled at MGB who received only standard of care.

The results demonstrated that the median overall survival of patients receiving standard of care alone was 13.5 months while patients receiving CAN-2409 plus standard of care was 17.1 months (p=0.0417).

Importantly, a pre-planned analysis on a subset of patients treated surgically with gross total resection (>95% of tumor removed) during surgery (18 patients compared to 44 in the control arm),

demonstrated a median overall survival of 25.1 months in the CAN-2409 arm versus 16.3 months in the standard of care group, with approximately a 50% improvement (p=0.0120).

In this patient population, after three years, one in three patients was alive in the CAN-2409 arm compared to 1 in 20 patients in the standard of care group.

Phase 1b/2 Clinical Trial of CAN-2409 Combined with SoC in High-Grade Glioma

In our phase 1b/2 clinical trial in newly diagnosed patients with HGGs, including the difficult-to-treat glioblastoma, CAN-2409 demonstrated a statistically significant increase in patient survival when combined with current SoC over the

current SoC alone (surgery, radiation and temozolomide).

The trial compared the overall survival of 48 enrolled patients treated at 4 clinical sites with CAN-2409 plus SoC against a matched controlled set of 134 patients enrolled at MGB who received only SoC.

The results demonstrated that the mOS of patients receiving SoC alone was 13.5 months while patients receiving CAN-2409 plus SoC was 17.1 months (p=0.0417).

Importantly, a pre-planned analysis on a subset of patients treated surgically with gross total resection (>95% of tumor removed) during surgery (18 patients compared to 44 in the control arm), demonstrated a mOS of 25.1 months in the CAN-2409 arm versus 16.3 months in the SoC group, with approximately a 50% improvement (p=0.0120).

In this patient population, after three years, one in three patients was alive in the CAN-2409 arm compared to 1 in 20 patients in the SoC group.

At the end of the study, three of the patients who received CAN-2409 were alive without progression after 43, 62.1 and 88.5 months.

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CAN-3110 for Recurrent High-grade Glioma

Our first HSV-based product candidate, CAN-3110, is in an ongoing investigator-sponsored Phase 1 clinical trial in recurrent HGG.

This is an open-label, single center, dose-escalation clinical trial in patients who have failed standard of care.

The primary endpoint of this clinical trial is to analyze the safety of CAN-3110 use in patients with recurrent HGG.

Our first HSV-based product candidate, CAN-3110, is in an ongoing investigator-sponsored phase 1b clinical trial in recurrent HGG.

This is an open-label, dose-escalation clinical trial in patients who have failed SoC.

The primary objective of this clinical trial is to analyze the safety of CAN-3110 use in patients with recurrent HGG.

No dose-limiting toxicities were observed in doses ranging from 1x10 6 to 1x10 10 PFU in half-log increments.

51 patients have been treated.

More than 50 patients have been treated.

Immunohistology studies showed persistent presence of HSV antigen and infiltration by CD8+ cytotoxic tumor infiltrating lymphocytes post treatment, providing support for the expected mechanism of action of CAN-3110.

We are particularly encouraged by the clinical course of a few patients who received a single injection with CAN-3110 as monotherapy upon recurrence of glioblastoma.

One patient, originally diagnosed with multicentric glioblastoma and initially treated with standard of care surgical resection followed by temozolomide and radiotherapy has been treated with CAN-3110 monotherapy, upon recurrency with development of two lesions visualized on MRI.

One patient, originally diagnosed with multicentric glioblastoma and initially treated with SoC surgical resection followed by temozolomide and radiotherapy has been treated with CAN-3110 monotherapy, upon recurrency with development of two lesions visualized on MRI.

One lesion, in the frontal region, had developed at the site of the initially resected mass.

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Post-treatment scan demonstrated progressive reduction in enhancement with cavitary necrosis at the site of injection.

The patient remains clinically stable as of February 2023 and has not required additional therapies up to day 350 post CAN-3110.

We find these case reports to be encouraging because of the unusually favorable disease course experienced by these patients with recurrent HGG who had previously failed standard of care treatment, in absence of concurrent therapies.

Additionally, we have observed a median overall survival of 11.6 months in the Phase 1 trial in the first 41 patients as of the cutoff date of October 2022.

Given the median overall survival of 6-9 months in historical clinical trials of other investigational agents in patients with recurrent HGG, who have failed standard of care treatment we believe this is encouraging evidence of clinical activity.

We will continue to assess CAN-3110 in this clinical trial.

The patient remains clinically stable as of February 2024 and has not required additional therapies in the two years post CAN-3110 treatment.

We find these case reports to be encouraging because of the unusually favorable disease course experienced by these patients with recurrent HGG who had previously failed SoC treatment, in absence of concurrent therapies.

Additionally, we have observed a mOS of 11.8 months in the phase 1b trial in the first 41 patients as of the cutoff date of April 20, 2023.

This data was confirmed in an independent cohort of 9 patients (cohort B;

mOS 12.0 months).

Prolonged survival after CAN-3110 treatment was associated with HSV-1 seropositivity as well as with changes in T cell fractions and TCRβ diversity.

Given the mOS of less than 6-9 months in historical clinical trials of other investigational agents in patients with recurrent HGG, who have failed SoC treatment we believe this is encouraging evidence of clinical activity.

We expect to report additional data, including the potential benefits from multiple injections of CAN-3110, from the ongoing phase 1b clinical trial in the second half of 2024.

Collaborations and Other Transactions

We are a party to various license and collaboration agreements under which we license patents, patent applications and other intellectual property to and from third parties.

These licenses impose various diligence and financial payment obligations on us.

These licenses impose various diligence and financial payment

obligations on us.

We expect to continue to enter into these types of license agreements in the future.

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On December 9, 2019, we entered into a series of agreements, including an exclusive license agreement, a novation agreement, an equipment purchase agreement and an intellectual property assignment agreement, collectively the Periphagen Agreements, with Periphagen, whereby we acquired certain assets and licensed certain rights (including specified patent rights and know-how, or the Licensed IP Rights) of Periphagen, primarily consisting of exclusive rights to their technology platform and a portfolio of pre-clinical, development stage virus vectors, as well as certain physical property and equipment.

The primary classes of assets are HSV-derived assets expressing

neurotrophin-3 (or NT-3 Assets) and other HSV-derived assets (Gene Transfer Neuro-Assets).

The primary classes of assets are HSV-derived assets expressing neurotrophin-3 (or NT-3 Assets) and other HSV-derived assets (Gene Transfer Neuro-Assets).

Under the license agreement, Periphagen granted us a worldwide exclusive license with the right to grant sublicenses through multiple tiers under the Licensed IP Rights to conduct research and to develop, make, have made, use, have used, offer for sale, have sold, export and import products incorporating the Licensed IP Rights in all fields of use except the treatment, diagnosis, and prevention of nononcologic skin diseases and conditions (including use as an aesthetic).

In addition, pursuant to the Periphagen Agreements, we undertook certain commitments and obligations, including the assumption of Periphagen’s outstanding loan in the principal amount of $1,000,000 with Diamyd Medical, AB.

The promissory note has a contractual interest rate of 2% compounded annually, with the outstanding balance and accrued interest due upon maturity in November 2027, with no interim installments.

In consideration for the licenses under the Periphagen Agreements, we paid Periphagen $811,000 upon signing and agreed to make the following royalty and other payments:

• NT-3 Assets:

a single digit percentage of net sales of NT-3 Assets, or, if applicable, a percentage of royalties received by us in the event of a license, sublicense, assignment or other transfer to a third party for commercialization (but no greater than the original royalty percentage we would be required to pay in the event we did not license, sublicense, assign or transfer NT-3 Assets);

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If we fail to do so, Periphagen may terminate the Periphagen License Agreement for material breach.

On December 15, 2022, Periphagen provided notice purporting to terminate the Periphagen License Agreement claiming we failed to use commercially reasonable efforts to complete a human proof of concept clinical trial of an NT-3 Asset.

We have denied Periphagen’s claim and the parties are engaged in the dispute and escalation provisions under the Periphagen License Agreement.

See Part I, Item 3 “Legal Proceedings”.

On December 15, 2022, Periphagen notified us by letter of its claim that we have failed to use commercially reasonable efforts to complete a human proof of concept clinical trial of an NT-3 Asset under an Exclusive License Agreement dated December 9, 2019 between us and Periphagen (the “Periphagen License Agreement”).

On January 13, 2023, we filed a demand for arbitration against Periphagen with the American Arbitration Association, seeking a declaration that Periphagen’s December 15 letter failed to comply with the dispute and escalation provisions in the Periphagen License Agreement.

On March 10, 2023, Periphagen filed its answer and counterclaims to our demand for arbitration.

In its counterclaims, Periphagen sought a declaration that we have not used commercially reasonable efforts to complete a human proof of concept clinical trial of the NT-3 Asset and a declaration that any further extension of time would not be scientifically or commercially reasonable.

We denied Periphagen’s counterclaims.

On June 7, 2023, the parties entered into an amendment to the Exclusive License Agreement that resolved the dispute and resulted in termination of the arbitration.

See Part I, Item 3 “Legal Proceedings”.

The Periphagen License Agreement expires on the later of December 9, 2069 or the end of the Royalty Term.

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or (ii) the date that a certain amount of generic competition exists in such country, provided that no Royalty Term shall exceed 30 years.

The Periphagen License Agreement may be terminated (i) by us for convenience upon 90 days’

prior written notice to Periphagen, (ii) by Periphagen if we remain in breach of the Periphagen Agreement following a cure period to remedy the breach or (iii) by Periphagen if we become bankrupt, file for bankruptcy or otherwise become insolvent or are placed in receivership.

The Periphagen License Agreement may be terminated (i) by us for convenience upon 90 days’ prior written notice to Periphagen, (ii) by Periphagen if we remain in breach of the Periphagen Agreement following a cure period to remedy the breach or (iii) by Periphagen if we become bankrupt, file for bankruptcy or otherwise become insolvent or are placed in receivership.

Mass General Brigham (MGB).

On January 20, 2018, we entered into an exclusive option agreement (the Option Agreement) with MGB.

Pursuant to the Option Agreement, we obtained the exclusive right from MGB to negotiate an exclusive worldwide, royalty-bearing license to develop and commercialize products covered by certain MGB patents, including those patents covering CAN-3110, in the field of gene therapy and vector therapy for the treatment or

prevention of cancerous tumors in humans or animals, as such field is further detailed in the Option Agreement (Licensed Field).

In consideration for MGB’s granting of the exclusive option, we paid MGB a non-refundable fee of $40,000.

Under the Option Agreement, we were required to use reasonable efforts to enter into a clinical trial agreement with MGB.

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On September 15, 2020, we exercised our option and entered into an exclusive patent license agreement with MGB (the MGB License Agreement).

Under the MGB License Agreement, MGB granted to us (a) an exclusive, royalty-bearing license under certain of MGB’s patents to make, have made, use, have used, sell and have sold certain products covered by such licensed patents (the Licensed Products) and otherwise practice processes covered by such licensed patents (Licensed Processes);

and (b) a non-exclusive, royalty-bearing license under certain other of MGB’s patents to make, have made, use, have used, sell and have sold Licensed Products, but not to sell or have sold Licensed Processes.

The foregoing rights are sublicensable, subject to sublicensing terms set forth in the MGB License Agreement.

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The MGB License Agreement may be terminated by MGB (i) if we fail to pay any amounts owed under the terms of the agreement within a specified cure period, (ii) if we fail to maintain insurance in accordance with the MGB License Agreement, (iii) if we file for bankruptcy, or (iv) if we remain in default of the MGB License Agreement for non-financial reasons following a specified cure period to remedy the breach.

The MGB License Agreement may be terminated by us for convenience upon 90 days’

prior written notice.

The MGB License Agreement may be terminated by us for convenience upon 90 days’ prior written notice.

On March 1, 2014, we entered into an exclusive license agreement (the Ventagen Agreement), with Ventagen, LLC (Ventagen).

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Under the Ventagen Agreement, Ventagen agreed to use commercially reasonable efforts to develop and commercialize Licensed Products in the Territory in the Field of Use.

Ventagen agreed to pay us $1,000,000 for research and development, which we received in 2014 and 2015, and agreed to pay us a fixed future milestone payment of $2,500,000 upon Ventagen’s achievement of a specified amount of sales of a Licensed Product, which is subject to certain reductions for our direct cost over a specified threshold.

Ventagen also agreed to purchase all of its clinical and commercial supply of Licensed Products from us required for clinical or commercial purposes at a price of cost plus a specified increase of the wholesale price of the Licensed Products, subject to a minimum and maximum price, through the end of the Royalty Term, which is defined as the period commencing on the effective date of the Ventagen Agreement and ending on a country-by-country basis on the later of (i) the last expiration date of the patent rights covering a Licensed Product, (ii) twelve years from the receipt of marketing authorization of the Licensed Product in the applicable country, or (iii) the date a generic version of a Licensed Product that is manufactured, owned or controlled by a third party is granted a market authorization.

If we are unable or unwilling to manufacture supply under the terms of the Ventagen Agreement, Ventagen has the right to manufacture its own supply and will be required to pay to us a fixed fee per dose sold by Ventagen, its affiliates, agents, sublicensee or end users.

We have also agreed to provide certain services to Ventagen related to Ventagen’s development plan.

The Ventagen Agreement expires on the date of the expiration of the final Royalty Term in all countries in the Territory.

The Ventagen Agreement may be terminated (i) by Ventagen at will upon 30 days’

prior written notice to us, (ii) by us subject to a specified notice period if Ventagen files for bankruptcy or becomes insolvent or (iii) by us if Ventagen remains in material breach of the Ventagen Agreement following notice and a cure period to remedy the breach.

The Ventagen Agreement may be terminated (i) by Ventagen at will upon 30 days’ prior written notice to us, (ii) by us subject to a specified notice period if Ventagen files for bankruptcy or becomes insolvent or (iii) by us if Ventagen remains in material breach of the Ventagen Agreement following notice and a cure period to remedy the breach.

Ventagen retains an irrevocable, perpetual, paid up, royalty-free license, with rights of sublicense to use, have used, lease, import and export, offer to sell, sell, have sold, product, distribute and market Licensed Products in each country in the Territory after the expiration of the Royalty Term in such country.

Certain of our current stockholders own 49.5% of the voting stock of Ventagen, but we do not hold any management position or run the day-to-day operations of Ventagen.

See “Certain Relationships and Related Person Transactions.”

The development and commercialization of new product candidates is highly competitive.

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There are other companies working to develop viral immunotherapies for the treatment of cancer including divisions of large pharmaceutical and biotechnology companies of various sizes.

The large pharmaceutical and biotechnology companies that have commercialized and/or are developing immuno-oncology treatments for cancer include AstraZeneca, Bristol-Myers Squibb, Gilead Sciences, Merck & Co., Novartis, Pfizer and Genentech.

The large pharmaceutical and biotechnology companies that have commercialized and/or are

developing immuno-oncology treatments for cancer include AstraZeneca, Bristol-Myers Squibb, Gilead Sciences, Merck & Co., Novartis, Pfizer and Genentech.

Some of the products and therapies developed by our competitors are based on scientific approaches that are the same as or similar to our approach, including with respect to the use of viral immunotherapy with adenovirus and HSV.

Other competitive products and therapies are based on entirely different approaches.

We are aware that Oncorus, Inc., Replimune Group, Inc., Amgen Inc., Astellas Pharma, Inc, Istari Oncology Inc, Orca Therapeutics, B.V., CG Oncology, Inc, ImmVira Co., Ltd., IconOVir Bio, Inc., and FerGene, Inc., among others, are developing viral immunotherapies that may have utility for the treatment of indications that we are targeting.

We are aware that Replimune Group, Inc., Amgen Inc., Astellas Pharma, Inc, Istari Oncology Inc, Orca Therapeutics, B.V., CG Oncology, Inc, ImmVira Co., Ltd., IconOVir Bio, Inc., and FerGene, Inc., among others, are developing viral immunotherapies that may have utility for the treatment of indications that we are targeting.

Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

Many of the companies we compete against or may compete against in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in the concentration of even more resources among a smaller

number of our competitors.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in the concentration of even more resources among a smaller number of our competitors.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

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We intend to build the necessary infrastructure and capabilities over time for the United States, and potentially other regions, following further advancement of our product candidates.

Clinical data, the size of the addressable patient population, the size of the commercial infrastructure and manufacturing needs may all influence or alter our commercialization plans.

Clinical data, the size of the addressable patient population, the size of the commercial infrastructure and manufacturing needs, and partnering opportunities may all influence or alter our commercialization plans.

Manufacturing

We have established an operations leadership team with extensive experience in manufacturing biologics based on viruses, including viral immunotherapy products and gene therapy products, and in the construction, validation, approval and operation of facilities designed to manufacture biologics.

We have secured a third-party contract manufacturing organization for clinical and commercial-scale manufacturing of our CAN-2409 product candidates.

We are also currently evaluating various options for the clinical-scale manufacture of our CAN-3110 product candidate, including the development of clinical-scale manufacturing capabilities at our own facility.

We have secured a third-party contract manufacturing organization for clinical and commercial-scale manufacturing of our CAN-2409 and CAN-3110 product candidates.

Intellectual Property

We believe that approval of our CAN-2409 and CAN-3110 product candidates under a BLA may result in 12 years of data exclusivity in the United States under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively the ACA), 10 years of market exclusivity in Europe and significant durations in other markets, which would be complementary to any relevant patent exclusivity.

With regard to patent exclusivities, we have rights to issued composition of matter patents in the United States, Australia, Canada, China, Europe, and Japan and patent applications pending in Australia, Europe, and Korea that relate to CAN-3110.

The issued patents and the pending applications, if issued, are expected to expire in 2036.

This patent family is exclusively licensed to us.

We also own a United States patent and a pending patent application that relate to a method of use of CAN-2409 in combination with a checkpoint inhibitor.

With regard to patent exclusivities, we have or are pursuing patent protection for our CAN-2409 and CAN-3110 product candidates and our enLIGHTEN Discovery Platform.

With regard to our CAN-2409 product candidate, we own a United States patent and a pending patent application that relate to a method of use of CAN-2409 in combination with an immune checkpoint inhibitor.

The issued patent and the pending application, if issued, are expected to expire in 2034.

We also have in-licensed from Periphagen patents and patent applications relating to our enLIGHTEN Discovery Platform.

These patents and applications, if issued, are expected to expire between 2037 and 2042.

With regard to our CAN-3110 product candidate, we have rights to issued composition of matter patents in the United States, Australia, Canada, China, Europe, and Japan and patent applications pending in Australia, Europe, and Korea that relate to CAN-3110.

The issued patents and the pending applications, if issued, are expected to expire in 2036.

This patent family is exclusively licensed to us from MGB.

In addition, we have entered into an option agreement with MGB to a pending U.S.

provisional patent application that relates to the use of biomarkers for the selection of cancer patients for treatment with CAN-3110 and for the management of treatment regimens in cancer patients receiving CAN-3110.

The term of patents claiming priority to the provisional patent application, if issued, are expected to expire in 2044.

With regard to our enLIGHTEN Discovery Platform, we have exclusively in-licensed from Periphagen a patent family that includes composition of matter patents in the United States, Europe, and China and pending applications in the United States and China that relate to an HSV vector used in our enLIGHTEN Discovery Platform.

The issued patents and the pending applications, if issued, are expected to expire in 2037.

In addition, we own a pending international patent application filed under the Patent Cooperation Treaty with composition of matter claims that also relate to an HSV vector and candidate payloads used in our enLIGHTEN Discovery Platform and methods of use.

The term of patents claiming priority to the international patent application, if issued, are expected to expire in 2043.

We also own a pending U.S.

provisional patent application that relates to methods of treating certain cancer patients using our HSV vector.

The term of patents claiming priority to the provisional patent application, if issued, are expected to expire in 2044.

Government Regulation

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Such laws, rules, and regulations are complex, continuously evolving, and, in many cases, have not been subject to extensive interpretation by applicable regulatory agencies or the courts.

are required to invest significant time and financial resources in policies, procedures, processes, and systems to ensure compliance with these laws, rules, and regulations, and our failure to do so may result in the imposition of substantial monetary or other penalties by federal or state regulatory agencies, give rise to reputational harm, or otherwise have a material adverse effect on our results of operations and financial condition.

We are required to invest significant time and financial resources in policies, procedures, processes, and systems to ensure compliance with these laws, rules, and regulations, and our failure to do so may result in the imposition of substantial monetary or other penalties by federal or state regulatory agencies, give rise to reputational harm, or otherwise have a material adverse effect on our results of operations and financial condition.

United States Biological Products Development Process

The process required by the FDA before a biological product candidate may be licensed for marketing in the United States generally involves the following:

completion of nonclinical laboratory tests and animal studies performed in accordance with FDA’s good laboratory practices (GLPs) requirements and applicable requirements for the humane use of laboratory animals or other applicable regulations;

• completion of nonclinical laboratory tests and animal studies performed in accordance with FDA’s good laboratory practices (GLPs) requirements and applicable requirements for the humane use of laboratory animals or other applicable regulations;

• submission to the FDA of an application for an investigational new drug application (IND) which must become effective before human clinical trials may begin;

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• a determination by the FDA within 60 days of its receipt of a BLA to accept and file the application;

satisfactory completion of an FDA pre-license inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with current good manufacturing practices (cGMPs) to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity;

• satisfactory completion of an FDA pre-license inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with current good manufacturing practices (cGMPs) to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity;

• satisfactory completion of an FDA advisory committee review, if applicable;

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

Preclinical tests, also referred to as nonclinical studies, include laboratory evaluations of the product’s biological characteristics, chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the product candidate.

The conduct of the preclinical tests must comply with federal regulations and requirements including GLPs.

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Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

study design deficiencies, interference with the conduct or completion of a study designed to be adequate and well-controlled for the same or another investigational product, insufficient quantities of investigational product, lack of effectiveness, or non-compliance.

The FDA also may impose clinical holds on a sponsor’s IND at any time before or during clinical trials due to, among other considerations, unreasonable or significant safety concerns, inability to assess safety concerns, lack of qualified investigators, a misleading or materially incomplete investigator brochure, study design deficiencies, interference with the conduct or completion of a study designed to be adequate and well-controlled for the same or another investigational product, insufficient quantities of investigational product, lack of effectiveness, or non-compliance.

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

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Each protocol and any amendments to the protocol must be submitted to the FDA as part of the IND.

Clinical trials must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP requirements, including the requirement that all research subjects provide informed consent.

An IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the trial at least annually.

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An IRB must operate in compliance with FDA regulations.

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

Some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee (DSMB).

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The biological product candidate is initially introduced into healthy human subjects and tested for safety.

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

These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the biological product candidate in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence of effectiveness.

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These clinical trials are intended to establish the overall risk/benefit ratio of the product candidate and provide an adequate basis for approval and product labeling.

In March 2022, the FDA released a final guidance entitled “Expansion Cohorts:

Use in First-In-Human Clinical Trials to Expedite Development of Oncology Drugs and Biologics,”

which outlines how developers can utilize an adaptive trial design commonly referred to as a seamless trial design in early stages of oncology biological product development (i.e., the first-in-human clinical trial) to compress the traditional three phases of trials into one continuous trial called an expansion cohort trial.

In March 2022, the FDA released a final guidance entitled “Expansion Cohorts:

Use in First-In-Human Clinical Trials to Expedite Development of Oncology Drugs and Biologics,” which outlines how developers can utilize an adaptive trial design commonly referred to as a seamless trial design in early stages of oncology biological product development (i.e., the first-in-human clinical trial) to compress the traditional three phases of trials into one continuous trial called an expansion cohort trial.

Information to support the design of individual expansion cohorts are included in IND applications and assessed by FDA.

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Failure to exhibit due diligence with regard to conducting required phase 4 clinical trials could result in withdrawal of approval for products.

Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the biological product as well as finalize a process for

manufacturing the product in commercial quantities in accordance with cGMP requirements.

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

To help reduce the risk of the introduction of adventitious agents with use of biological products, the Public Health Service Act (PHS Act), emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined.

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

Both the FDA and the EMA provide expedited pathways for the development of biological product candidates for treatment of rare diseases, particularly life threatening diseases with high unmet medical need.

Such biological product candidates may be eligible to proceed to registration following a single clinical trial in a limited patient population, sometimes referred to as a Phase 1/2 trial, but which may be deemed a pivotal or registrational trial following review of the trial’s design and primary endpoints by the applicable regulatory agencies.

Determination of the requirements to be deemed a pivotal or registrational trial is subject to the applicable regulatory authority’s scientific judgement and these requirements may differ in the United States and the European Union.

During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.

Annual progress reports detailing the results of the clinical trials must be submitted to the FDA.

Written IND safety reports must be promptly submitted to the FDA and the investigators for serious and unexpected adverse events, any findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects, or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

Both the FDA and the EMA provide expedited pathways for the development of biological product candidates for the treatment of rare diseases, particularly life-threatening diseases with high unmet medical need.

Such biological product candidates may be eligible to proceed to registration following an early phase single clinical trial in a limited patient population which may be deemed a pivotal or registrational trial following review of the trial’s design, primary endpoints and results by the applicable regulatory agencies.

During all phases of clinical development, regulatory agencies require a sponsor assure extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.

Annual progress reports detailing the results of the clinical trials, particularly the safety information, must be submitted to the FDA.

Written IND safety reports must be promptly submitted to the FDA and the investigators for serious and unexpected adverse events associated with the use of the study drug, and in some cases, any findings from other studies of the same drug, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects, or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

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

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

Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives.

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Review and Approval Processes

Assuming successful the completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.

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

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

Within 60 days following submission of the application, the FDA reviews a BLA submitted to determine if it is substantially complete before the FDA accepts it for filing.

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

Within 60 days following submission of the application, the FDA reviews the BLA submission to determine if it is substantially complete before the FDA accepts it for filing and full review.

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

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

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Under the performance goals and policies implemented by the FDA under the Prescription Drug User Fee Act (PDUFA) for original BLAs, the FDA targets ten months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and six months from the filing date for an application with priority review.

The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification.

This review typically takes twelve months from the date the BLA is submitted to the FDA because the FDA has approximately two months to make a “filing”

The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification and in some cases, convening of an Advisory Committee.

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

The review process and the PDUFA goal date may be extended by three months if the FDA requests or the BLA sponsor otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date.

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The FDA reviews the BLA to determine, among other things, whether the proposed product is safe, pure and potent for its intended use and whether the product is being manufactured in accordance with cGMP to ensure its continued safety, purity and purity.

review, evaluation and a recommendation as to whether the application should be approved and under what conditions.

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

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

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Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace.

The FDA may require one or more Phase 4 post-market trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing trials.

In addition, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could impact the timeline for regulatory approval or otherwise impact ongoing development programs.

The FDA may require one or more phase 4 post-market trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing trials.

Orphan Product Designation

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If a product that has orphan product designation subsequently receives the first FDA approval for a particular active ingredient for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan product exclusivity.

however, may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity.

Orphan product exclusivity also could block the approval of one of our products for seven years if a competitor obtains approval of the same biological product as defined by the FDA or if a product candidate is determined to be contained within the competitor’s product for the same indication or disease.

Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity.

If a biological product designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product exclusivity.

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One benefit of fast track designation, for example, is that the FDA may consider for review sections of the marketing application on a rolling basis before the complete application is submitted if certain conditions are satisfied, including an agreement with the FDA on the proposed schedule for submission of portions of the application and the payment of applicable user fees before the FDA may initiate a review.

Under the FDA’s breakthrough therapy program, a sponsor may seek FDA designation of its product candidate as a breakthrough therapy if the product candidate is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

Breakthrough therapy designation comes with all of the benefits of fast track designation.

The FDA may take other actions appropriate to expedite the development and review of the product candidate, including holding meetings with the sponsor and providing timely advice to, and interactive communication with, the sponsor regarding the development program.

The FDA may take other actions appropriate to expedite the development and

review of the product candidate, including holding meetings with the sponsor and providing timely advice to, and interactive communication with, the sponsor regarding the development program.

A product candidate is eligible for priority review if it treats a serious or life-threatening disease or condition and, if approved, would provide a significant improvement in the safety or effectiveness of the treatment, diagnosis or prevention of a serious disease or condition.

The FDA will attempt to direct additional resources to the evaluation of an application for a new drug or biological product designated for priority review in an effort to facilitate the review.

Under priority review, the FDA’s goal is to review an application in six months once it is filed, compared to ten months for a standard review.

Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.

With respect to oncology products, the FDA may review applications under Real-Time Oncology Review (RTOR) established by the FDA’s Oncology Center of Excellence.

RTOR, which allows an applicant to pre-submit components of the application to allow the FDA to review clinical data before the complete filing is submitted, aims to explore a more efficient review process to ensure that safe and effective treatments are available to patients as early as possible, while maintaining and improving review quality.

Drugs considered for review under RTOR must, among other things, be likely to demonstrate substantial improvements on a clinically relevant endpoint(s) over available therapy, and must have easily interpreted endpoints.

In addition, no aspect of the application should be likely to require a longer review time, such as, for example, a requirement for a new REMS.

To determine eligibility for RTOR, the FDA requires top-line efficacy and safety results from an applicant’s pivotal clinical trial(s), as well as completion of database lock for the clinical trial(s).

The FDA will generally make a decision regarding acceptance into RTOR within twenty (20) business days of receipt of the request from the applicant.

If an applicant is not accepted into RTOR, the applicant will follow routine application submission procedures.

Additionally, a product candidate may be eligible for accelerated approval.

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As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the 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 manufacturer’s tests performed on the lot.

The FDA also may 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.

Manufacturers must comply with the FDA’s advertising and promotion requirements, such as those related to direct-to-consumer advertising, the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.

Discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions.

Discovery of previously unknown problems or the failure to comply with the

applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions.

Failure to comply with the applicable U.S.

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Any agency or judicial enforcement action could have a material adverse effect on us.

Biological product manufacturers and other entities involved in the manufacture and distribution of approved biological products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMPs, which impose certain procedural and documentation requirements on sponsors and their contract manufacturing organizations (CMOs).

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

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Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of the FDA approval of a biological product, some of a sponsor’s U.S.

patents may be eligible for limited patent term extension under the Hatch-Waxman Amendments.

The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process.

However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date.

The patent term restoration 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.

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A biological product can obtain pediatric market exclusivity in the U.S.

Pediatric exclusivity, if granted, adds six months to existing exclusivity periods, including some regulatory exclusivity periods tied to patent terms.

This six-month

exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request”

for such a study.

Pediatric exclusivity, if granted, adds six months to existing exclusivity periods for all formulations, dosage forms, and indications of the biologic.

This six-month exclusivity, which runs from the end of other exclusivity protection, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining.

The ACA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (BPCIA) which created an abbreviated approval pathway for biological products shown to be biosimilar to, or interchangeable with, an FDA-licensed reference biological product.

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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, and FDA will not approve an application for a biosimilar or interchangeable product based on the reference biological product until 12 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.

“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.

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If use of companion diagnostic is essential to safe and effective use of a drug or biological product, then the FDA generally will require approval or clearance of the diagnostic contemporaneously with the approval of the therapeutic product.

On August 6, 2014, the FDA issued a final guidance document addressing the development and approval process for “In Vitro Companion Diagnostic Devices.”

According to the guidance, for novel candidates such as our product candidates, a companion diagnostic device and its corresponding drug or biological candidate should be approved or cleared contemporaneously by FDA for the use indicated in the therapeutic product labeling.

On August 6, 2014, the FDA issued a final guidance document addressing the development and approval process for “In Vitro Companion Diagnostic Devices.” According to the guidance, for novel candidates such as our product candidates, a companion diagnostic device and its corresponding drug or biological candidate should be approved or cleared contemporaneously by FDA for the use indicated in the therapeutic product labeling.

The guidance also explains that a companion diagnostic device used to make treatment decisions in clinical trials of a biologic product candidate generally will be considered an investigational device, unless it is employed for an intended use for which the device is already approved or cleared.

If used to make critical treatment decisions, such as patient selection, the diagnostic device generally will be considered a significant risk device under the FDA’s Investigational Device Exemption (IDE) regulations.

Thus, the sponsor of the diagnostic device will be required to comply with the IDE regulations.

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The FDA generally requires companion diagnostics intended to select the patients who will respond to cancer treatment to obtain approval of a PMA for that diagnostic contemporaneously with approval of the therapeutic.

The review of these in vitro companion diagnostics in conjunction with the review of therapeutic candidates such as those we are developing

involves coordination of review by the FDA’s Center for Biologics Evaluation and Research and by the FDA’s Center for Devices and Radiological Health.

The review of these in vitro companion diagnostics in conjunction with the review of therapeutic candidates such as those we are developing involves coordination of review by the FDA’s Center for Biologics Evaluation and Research and by the FDA’s Center for Devices and Radiological Health.

The PMA process, including the gathering of clinical and pre-clinical data and the submission to and review by the FDA, can take several years or longer.

It involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling.

PMA applications are also subject to an application fee.

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In particular, for a diagnostic, the applicant must demonstrate that the diagnostic produces reproducible results when the same sample is tested multiple times by multiple users at multiple laboratories.

In addition, as part of the PMA review, the FDA will typically inspect the manufacturer’s facilities for compliance with the Quality System Regulation (QSR) which imposes elaborate testing, control, documentation and other quality assurance requirements.

If the FDA evaluations of both the PMA application and the manufacturing facilities are favorable, the FDA will either issue an approval letter or a not-approvable letter, which usually contains a number of conditions that must be met in order to secure the final approval of the PMA, such as changes in labeling, or specific additional information, such as submission of final labeling, in order to secure final approval of the PMA.

If the FDA concludes that the applicable criteria have been met, the FDA will issue a PMA for the approved indications, which can be more limited than those originally sought by the applicant.

The PMA can include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution.

If the FDA’s evaluation of the PMA or manufacturing facilities is not favorable, the FDA will issue an order denying approval of the PMA or issue a not approvable order.

The PMA can include post-approval conditions that the FDA believes necessary to

ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution.

If the FDA’s evaluation of the PMA or manufacturing facilities is not favorable, the FDA will issue an order denying approval of the PMA or issue a not approvable order.

A not approvable letter will outline the deficiencies in the application and, where practical, will identify what is necessary to make the PMA approvable.

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PMA approval is not guaranteed, and the FDA may ultimately respond to a PMA submission with a not approvable determination based on deficiencies in the application and require additional clinical trial or other data that may be expensive and time-consuming to generate and that can substantially delay approval.

In January 2024, the FDA announced its intention to initiate the reclassification process for most in vitro diagnostics, including companion diagnostics.

Further, the FDA indicated that in addition to the reclassification process, the FDA will continue taking a risk-based approach in the initial classification of individual in vitro diagnostics to determine whether a new test may be classified into Class II through the de novo classification process.

In so doing, the FDA indicated that it may regulate most future companion diagnostics as Class II devices, which would likely entail less onerous development, approval, and postmarket regulatory requirements than what is required for Class III medical devices and in vitro diagnostics that are subject to the PMA pathway.

After a device is placed on the market, it remains subject to significant regulatory requirements.

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Device manufacturers must also establish registration and device listings with the FDA.

A medical device manufacturer’s manufacturing processes and those of its suppliers are required to comply with the applicable portions of the QSR, which cover the methods and documentation of the design, testing, production, processes, controls, quality assurance, labeling, packaging and shipping of medical devices.

Domestic facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA.

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Certain countries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials.

In the EU, for example, an application must be submitted for each clinical trial to each country’s national competent authority (NCA), and at least one independent ethics committee, much like the FDA and an IRB, respectively.

Under the new Clinical Trials Regulation (EU) No.

Under the Clinical Trials Regulation (EU) No.

536/2014, which replaced the Clinical Trials Directive 2001/20/EC on January 31, 2022, a single application is now made through the Clinical Trials Information System (CTIS) for clinical trial authorization in up to 30 EU/EEA countries at the same time and with a single set of documentation.

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Part II is assessed separately by each Member State concerned.

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

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

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

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

European Union Drug Review and Approval

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

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

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

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

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

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

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

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The application used to submit the BLA in the United States is similar to that required in the European Union, although there may be certain specific requirements, for example those set out in Regulation (EC) No 1394/2007 on advanced therapy medicinal products, covering gene therapy, somatic cell therapy and tissue-engineered medicinal products.

Now that the UK (which comprises Great Britain and Northern Ireland) has left the EU, Great Britain is no longer covered by centralized marketing authorizations (under the Northern Ireland Protocol, centralized marketing authorizations will continue to be recognized in Northern Ireland).

All medicinal products with a centralized marketing authorization were automatically converted to Great Britain marketing authorizations on January, 1 2021.

For a period of three years from January 1, 2021, the Medicines and Healthcare products Regulatory Agency (MHRA) the UK medicines regulator, may rely on a decision taken by the European Commission on the approval of a new marketing authorization in the centralized procedure, in order to more quickly grant a new Great Britain marketing authorization.

A separate application will, however, still be required.

On January 24, 2023, the MHRA announced that a new international recognition framework will be put in place from January 1, 2024, which will have regard to decisions on the approval of marketing authorizations made by the European Medicines Agency and certain other regulators when determining an application for a new Great Britain marketing authorization.

Now that the UK (which comprises Great Britain and Northern Ireland) has left the EU, Great Britain is no longer covered by centralized marketing authorizations (under the Northern Ireland Protocol, centralized marketing authorizations currently continue to be recognized in Northern Ireland).

On January 1, 2024, an international recognition framework was put in place by the MHRA, under which the MHRA will have regard to decisions on the approval of marketing authorizations made by the European Medicines Agency and certain other regulators when determining an application for a new Great Britain marketing authorization.

Data and Market Exclusivity

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

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

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

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

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

Orphan Drug Designation and Exclusivity

Products receiving orphan designation in the EU can receive ten years of market exclusivity, during which time no “similar medicinal product”

may be placed on the market.

A “similar medicinal product”

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

Orphan Designation and Exclusivity

Products receiving orphan designation in the EU can receive ten years of market exclusivity, during which time no “similar medicinal product” may be placed on the market.

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

An orphan medicinal product can also obtain an additional two years of market exclusivity in the EU where an agreed pediatric investigation plan (PIP) for pediatric studies has been complied with.

No extension to any supplementary protection certificate (SPC) can be granted on the basis of pediatric studies for orphan indications.

The criteria for designating an “orphan medicinal product”

in the EU are similar in principle to those in the United States.

The criteria for designating an “orphan medicinal product” in the EU are similar in principle to those in the United States.

Under Article 3 of Regulation (EC) 141/2000, a product may be designated as an orphan medicinal product if it meets the following criteria:

(1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition;

(2) either (a) such condition affects no more than five (5) in ten thousand (10,000) persons in the EEA when the application is made, or (b) it is unlikely that the product, without the benefits derived from orphan status, would generate sufficient return in the EU to justify the necessary investment in its development;

(2) either (a) such condition affects no more than five (5) in ten thousand (10,000) persons in the EU when the application is made, or (b) it is unlikely that the product, without the benefits derived from orphan status, would generate sufficient return in the EU to justify the necessary investment in its development;

and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the product would be of significant benefit to those affected by that condition, as defined in Regulation (EC) 847/2000.

Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon the grant of a marketing authorization, entitled to ten years of market exclusivity for the approved therapeutic indication.

The application for orphan designation must be submitted before the application for marketing authorization.

The applicant will receive a fee reduction for the MAA if the orphan drug designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted.

The application for orphan designation must be submitted before the application for a marketing authorization.

The applicant will receive a fee reduction for the MAA if the orphan designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted.

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

The 10-year market exclusivity may 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 designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.

Additionally, a marketing authorization may be granted to a similar medicinal product for the same indication at any time if:

Additionally, a marketing authorization may be granted to a similar medicinal product for the same indication as an authorized orphan product at any time if:

• the second applicant can establish that its product, although similar to the authorized orphan product, is safer, more effective or otherwise clinically superior;

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Pediatric Development

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

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

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

The MAA for the product must include the results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies, or a deferral has been granted by the PDCO of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults, in which case the pediatric clinical trials must be

completed at a later date.

Products that are granted a marketing authorization with the results of the pediatric clinical trials conducted in accordance with the PIP are eligible for a six month extension of the protection under an SPC (provided an application for such extension is made at the same time as filing the SPC application for the product, or at any point up to 2 years before the SPC expires) even where the trial results are negative.

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The aforementioned EU rules are generally applicable in the EEA.

Reform of the Regulatory Framework in the European Union

The European Commission introduced legislative proposals in April 2023 that, if implemented, will replace the current regulatory framework in the EU for all medicines (including those for rare diseases and for children).

The European Commission has provided the legislative proposals to the European Parliament and the European Council for their review and approval.

In October 2023, the European Parliament published draft reports proposing amendments to the legislative proposals, which will be debated by the European Parliament.

Once the European Commission’s legislative proposals are approved (with or without amendment), they will be adopted into EU law.

Brexit and the Regulatory Framework in the United Kingdom

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The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not provide for wholesale mutual recognition of UK and EU pharmaceutical regulations.

At present, Great Britain has implemented EU legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the EU regulatory framework continues to apply in Northern Ireland).

Except in respect of the new EU Clinical Trials Regulation, the regulatory regime in Great Britain therefore largely aligns with current EU medicines regulations, however it is possible that these regimes will diverge more significantly in future now that Great Britain’s regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.

However, notwithstanding that there is no wholesale recognition of EU pharmaceutical legislation under the TCA, under the new framework mentioned above which will be put in place by the MHRA from January 1, 2024, the MHRA has stated that it will still take into account decisions on the approval of marketing authorizations from the EMA (and certain other regulators) when considering an application for Great Britain marketing authorization.

Except in respect of the EU Clinical Trials Regulation, the regulatory regime in Great Britain therefore largely aligns with current EU medicines regulations, however it is possible that these regimes will diverge more significantly in future now that Great Britain’s regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.

However, notwithstanding that there is no wholesale recognition of EU pharmaceutical legislation under the TCA, under a new international recognition framework mentioned above which was put in place by the MHRA on January 1, 2024, the MHRA may take into account decisions on the approval of marketing authorizations from the EMA (and certain other regulators) when considering an application for a Great Britain marketing authorization.

On February 27, 2023, the UK government and the European Commission announced a political agreement in principle to replace the Northern Ireland Protocol with a new set of arrangements, known as the “Windsor Framework”.

This new framework fundamentally changes the existing system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the UK.

In particular, the MHRA will be responsible for approving all medicinal products destined for the UK market (i.e., Great Britain and Northern Ireland), and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland.

A single UK-wide marketing authorization will be granted by the MHRA for all medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK.

The Windsor Framework was approved by the EU-UK Joint Committee on March 24, 2023, so the UK government and the EU will enact legislative measures to bring it into law.

On June 9, 2023, the MHRA announced that the medicines aspects of the Windsor Framework will apply from January 1, 2025.

Health Reform

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pharmaceutical industry.

The ACA, among other things, subjects biological products to potential competition by lower-cost biosimilars, increases the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program extends the rebate program to individuals enrolled in Medicaid managed care organizations, establishes annual fees and taxes on manufacturers of certain branded prescription drugs, and creates a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition to coverage under Medicare Part D for the manufacturer’s outpatient drugs.

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

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

On May 23, 2019, CMS published a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020.

• On May 23, 2019, CMS published a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020.

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives which could limit the amounts that federal and state governments will pay for healthcare products and services and result in reduced demand for certain pharmaceutical products or additional pricing pressures.

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

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

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

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

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

The implementation of the IRA is currently subject to ongoing litigation challenging the constitutionality of the IRA’s Medicare drug price negotiation program.

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

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

In February 2023, HHS also issued a proposal in response to an October 2022 executive order from President Biden that includes a proposed prescription drug pricing model that will test whether targeted Medicare payment adjustments will sufficiently incentivize manufacturers to complete confirmatory trials for drugs approved through FDA’s accelerated approval pathway.

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

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In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

This could reduce the ultimate demand for our drugs or put pressure on our drug pricing, which could negatively affect our business, financial condition, results of operations and prospects.

This could reduce the ultimate demand for our

drugs or put pressure on our drug pricing, which could negatively affect our business, financial condition, results of operations and prospects.

Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, financial condition, results of operations and prospects.

This could reduce the ultimate

demand for our drugs or put pressure on our drug pricing, which could negatively affect our business, financial condition, results of operations and prospects.

This could reduce the ultimate demand for our drugs or put pressure on our drug pricing, which could negatively affect our business, financial condition, results of operations and prospects.

Coverage and Reimbursement

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Third-party payors are increasingly challenging the prices charged, examining the medical necessity, reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs.

Coverage and reimbursement by a third-party payor may depend upon several factors, including the third-party payor’s determination that use of a product is:

• a covered benefit under its health plan;

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A decision by a third-party payor not to cover a product could reduce physician utilization once the product is approved and have a material adverse effect on sales, our operations and financial condition.

Additionally, a third-party payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor.

Additionally, a third-party payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

The containment of healthcare costs has become a priority of federal, state and foreign governments, and the prices of products have been a focus in this effort.

Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products.

Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products.

any approved products.

Coverage policies and third-party payor reimbursement rates may change at any time.

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

For example, the European

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

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

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

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or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government.

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.

The FCA also permits a private individual acting as a “whistleblower”

to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery.

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.

The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery.

When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs.

The federal civil monetary penalties laws impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare program beneficiary, if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) imposes criminal and civil liability for knowingly and willfully executing a scheme, or attempting to execute a scheme, to defraud any healthcare benefit program, including private payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, or falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services.

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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their respective implementing regulations, impose, among other things, specified requirements on covered entities and their respective business associates relating to the privacy and security of individually identifiable health information including mandatory contractual terms and required implementation of technical safeguards of such information.

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

fees and costs associated with pursuing federal civil actions.

provided to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

The Physician Payments Sunshine Act, enacted as part of the ACA, imposed new annual reporting requirements for certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, for certain payments and “transfers of value” provided to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Additionally, we are subject to state and foreign equivalents of each of the healthcare laws and regulations described above, among others, some of which may be broader in scope and may apply regardless of the payor.

states have adopted laws similar to the federal Anti-Kickback Statute and False Claims Act, and may apply to our business practices, including, but not limited to, research, distribution, sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors, including private insurers.

In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America’s Code on Interactions with Healthcare Professionals.

Several states also impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state and require the registration of pharmaceutical sales representatives.

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Analogous state and foreign laws and regulations, including, but not limited to, state anti-kickback and false claims laws, may be broader in scope than the provisions described above and may apply regardless of payor.

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and relevant federal government compliance guidance;

require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers;

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If any of the physicians or other healthcare providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to similar actions, penalties and sanctions.

Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from its business.

Employees and Human Capital Resources

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Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.

The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

The principal purposes of our equity and cash

incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

Legal Proceedings

From time to time, we may become involved in litigation or other legal proceedings.

We have denied Periphagen’s claims.

On January 13, 2023, we

filed a demand for arbitration against Periphagen with the American Arbitration Association, seeking a declaration that Periphagen’s December 15 letter failed to comply with the dispute and escalation provisions in the Periphagen License Agreement.

After filing the demand, the parties began engaging in the dispute and escalation process under the Periphagen License Agreement.

On March 10, 2023, Periphagen filed its answer and counterclaims to our demand for arbitration.

In its counterclaims, Periphagen seeks a declaration that we have not used commercially reasonable efforts to complete a human proof of concept clinical trial of the NT-3 Asset and a declaration that any further extension of time would not be scientifically or commercially reasonable.

Periphagen also seeks a declaration that we must use commercially reasonable efforts to develop the NT-3 Asset during any remaining time under the agreement.

We have denied Periphagen’s counter claims.

In the event the parties are unable to resolve the dispute as part of the escalation process, an arbitrator will decide whether we have used commercially reasonable efforts.

In the event that the arbitrator determines that we have not used commercially reasonable efforts, then we may submit a specified payment in lieu of satisfying such obligations.

We denied Periphagen’s counterclaims.

On June 7, 2023, the parties entered into an amendment to the Exclusive License Agreement that resolved the dispute and resulted in termination of the arbitration.

Aside from the proceeding with Periphagen, we are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are probable to have a material adverse effect on our business.

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Our Internet website address is www.candeltx.com.

portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC).

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), are available through the “Investors” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC).

Information on our website is not part of this Annual Report on Form 10-K or any of our other securities filings unless specifically incorporated herein by reference.

In addition, our filings with the SEC may be accessed through the SEC’s Interactive Data Electronic Applications system at www.sec.gov.

All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

Our code of conduct, corporate governance guidelines and the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available through the “Corporate Governance”

portion of our website.

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

What changed 10-K

Item 1. Business