Item 1. Business
Item 1.
Business.
Overview
We are a clinical pharmaceutical company organized
as a Nevada corporation in July 2017 to focus on the development of anti-cancer drug candidates for the treatment of brain and central
nervous system tumors, based on intellectual property that we license under license agreements with Cortice Biosciences, Inc. (“Cortice”)
and own pursuant to a collaboration and asset purchase agreement with Reata Pharmaceuticals, Inc. (“Reata”).
We believe our drug candidates, TPI 287 and Berubicin,
may be significant developments in the treatment of Glioblastoma and other CNS malignancies, and if approved by the U.S. Food and Drug
Administration (“FDA”), could give Glioblastoma patients important new therapeutic alternatives to the current standard of
care. Glioblastomas are tumors that arise from astrocytes, which are star-shaped cells making up the supportive tissue of the brain. These
tumors are usually highly malignant (cancerous) because the cells reproduce quickly, and they are supported by a large network of blood
vessels. Berubicin is an anthracycline, which is a class of drugs that are among the most powerful and extensively used chemotherapy drugs
known. TPI 287 is an abeotaxane, and is related to the family of common chemotherapy drugs known as taxanes. Based on limited clinical
and preclinical data, we believe TPI 287 is the first taxane that appears to cross the blood brain barrier (“BBB”) in significant
concentrations targeting brain cancer cells. Based on clinical and preclinical data, Berubicin is the first anthracycline that appears
to cross the BBB in significant concentrations targeting brain cancer cells. While our focus is currently on the development of TPI 287
and Berubicin, we are also in the process of attempting to secure intellectual property rights to additional compounds that we plan to
develop into drugs to treat CNS and other cancers.
TPI 287 had previously been granted Orphan Drug
Designation (“ODD”) status by the FDA. ODD from the FDA is available for drugs targeting diseases with less than 200,000 cases
per year. ODD may enable market exclusivity of 7 years from the date of approval of a New Drug Application (“NDA”) in the
United States. During that period the FDA generally could not approve another product containing the same drug for the same designated
indication. Orphan drug exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product
with the same active ingredient for the same indication is shown to be clinically superior to the approved product on the basis of greater
efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet
market demand. The ODD strengthens our intellectual property protections although the Company is exploring if there are other patents
that could be filed related to TPI 287 to extend additional protections.
TPI 287 is an abeotaxane and is an investigational
chemotherapy agent classified as a third-generation taxane derivative. It was developed to address some of the limitations of earlier
taxanes like paclitaxel (Taxol) and docetaxel (Taxotere), particularly issues related to drug resistance and poor penetration of the BBB.
As a synthetic, lipophilic compound, TPI 287 is designed to be brain-penetrant, potentially allowing it to reach CNS tumors more effectively
than its predecessors. Like other taxanes, TPI 287’s mechanism of action is to stabilize microtubules, which disrupts cell division
and induces apoptosis. However, one of its notable advantages is its reduced susceptibility to drug efflux pumps such as P-glycoprotein
(P-gp), a common mechanism by which cancer cells develop resistance to chemotherapy. This feature gives TPI 287 potential utility in treating
drug-resistant cancers in the CNS.
TPI 287 has been studied in early-phase clinical
trials (Phase I and II) in over 300 patients for several indications, including Glioblastoma, metastatic breast cancer with brain metastases,
non-small cell lung cancer (“NSCLC”), castration-resistant prostate cancer, and neuroblastoma. TPI 287 represents a promising
candidate for treating cancers involving the CNS, as well as those that have become resistant to traditional taxane therapies. While it
has shown promise in limited clinical trials, further clinical development is necessary to determine its future in neuro-oncology.
Berubicin was discovered at The University of Texas
M.D. Anderson Cancer Center (“UTMDACC”) by Dr. Waldemar Priebe, the founder of the Company. Through a series of transactions,
Berubicin was initially licensed to Reata. Reata initiated several Phase I clinical trials with Berubicin for CNS malignancies, one of
which was for malignant gliomas, but subsequently allowed their Investigational New Drug (“IND”) with the FDA to lapse for
strategic reasons. This required us to obtain a new IND for Berubicin before beginning further clinical trials. On December 17, 2020,
we announced that our IND application with the FDA for Berubicin for the treatment of Glioblastoma Multiforme was in effect. We initiated
this trial for patient enrollment during the second quarter of 2021 with the first patient dosed during the third quarter of 2021 to investigate
the efficacy of Berubicin in adults with Glioblastoma Multiforme who have failed first-line therapy. The first patient on the trial was
treated during the third quarter of 2021. Correspondence between the Company and the FDA resulted in modifications to our initial trial
design, including designating overall survival (OS) as the primary endpoint of the study. OS is a rigorous endpoint that the FDA has recognized
as a basis for approval of oncology drugs when a statistically significant improvement can be shown relative to a randomized control arm.
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On March 25, 2025, CNS released topline data from
a primary analysis of a clinical trial being conducted to evaluate the efficacy of Berubicin in patients with Glioblastoma Multiforme
who have failed primary treatment for their disease. The trial, compares the efficacy of Berubicin to that of Lomustine, a current standard
of care in this setting, with a 2 to 1 randomization of the 252 patients to Berubicin or Lomustine. Patients receiving Berubicin were
administered a 2-hour IV infusion of 7.5 mg/m2 berubicin hydrochloride daily for three consecutive days followed by 18 days off (a 21-day
cycle). Lomustine is administered orally once every six weeks. The trial design included a pre-planned, non-binding interim futility analysis.
We reached the criteria required by the study protocol to conduct this interim futility analysis, which an independent Data Safety Monitoring
Board (“DSMB”) was responsible for conducting. The DSMB’s charter mandated that they review the primary endpoint, Overall
Survival, as well as secondary endpoints and safety data to determine whether the efficacy data for the risk-benefit profile warrants
modification or discontinuation of the study. On December 18, 2023, we released the DSMB’s recommendation which was to continue
the study without modification. The recently released topline data showed that although Berubicin produced clinically relevant outcomes
that appear to be comparable (although the trial was not powered to determine non-inferiority) to Lomustine across multiple endpoints,
it did not demonstrate a statistically significant difference in overall survival, the primary endpoint. Nevertheless, given the dearth
of alternative approved therapies for GBM, we believe Berubicin has demonstrated potential value as a possible treatment for Glioblastoma.
As such we are currently evaluating whether any potential paths forward exist for the program. Any such path will be planned and executed
in consultation with the FDA. Even if Berubicin is approved, there is no assurance that patients will choose an infusion treatment, as
compared to the current standard of care, which requires oral administration.
We do not have manufacturing facilities and all
manufacturing activities are contracted out to third parties. Additionally, we do not have a sales organization.
On November 21, 2017, we entered into a Collaboration
and Asset Purchase Agreement with Reata (the “Reata Agreement”). Pursuant to the Reata Agreement we purchased all of Reata’s
intellectual property and development data regarding Berubicin, including all trade secrets, knowhow, confidential information and other
intellectual property rights.
On December 28, 2017, we obtained the rights to
a worldwide, exclusive royalty-bearing, license to the chemical compound commonly known as Berubicin from HPI in an agreement we refer
to as the HPI License. HPI is affiliated with our founder, Dr. Priebe. Under the HPI License we obtained the exclusive right to develop
certain chemical compounds for use in the treatment of cancer anywhere in the world. In the HPI License we agreed to pay HPI: (i) development
fees of $750,000 over a three-year period beginning November 2019; (ii) a 2% royalty on net sales; (iii) a $50,000 per year license fee;
(iv) milestone payments of $100,000 upon the commencement of a Phase II trial and $1.0 million upon the approval of a New Drug Application
(“NDA”) for Berubicin; and (v) 3 shares of our common stock. The patents we licensed from HPI expired in March 2020. On March
23, 2025, the Company terminated the HPI License.
On June 10, 2020, the FDA granted Orphan Drug Designation
for Berubicin for the treatment of malignant gliomas. The ODD now constitutes our primary intellectual property protections related to
Berubicin although the Company is exploring other patents that could be filed related to Berubicin to extend additional protections. We
believe we have all rights and intellectual property necessary to develop Berubicin. As stated earlier, it is our plan to obtain additional
intellectual property covering other compounds which, subject to the receipt of additional financing, may be developed into drugs for
brain and other cancers.
On July 29, 2024, we entered into an Exclusive
License Agreement and Stock Purchase Agreement (collectively, the “Cortice Agreements”) with Cortice Biosciences, Inc. (“Cortice”)
pursuant to which Cortice granted us an exclusive license to the intellectual property rights related to certain patents around the compound
TPI 287 in the United States, Canada, Mexico and Japan. The term of the license will expire, other than due to a breach of the Cortice
Agreements, at the end of the royalty term with respect to any licensed product in any of the included territories, which begins upon
the first commercial sale in such territory and ends on the latest of (i) ten years after such sale, (ii) the expiration of regulatory
or marketing exclusivity for such licensed product in such country, or (c) the expiration of the last to expire valid patent claim in
such country covering such licensed product.
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Market for Cancer Drugs
Cancer is the second leading cause of death in
the United States behind heart disease. In 2019, there were an estimated 16.9 million cancer survivors in the United States. In 2022,
the American Cancer Society estimated that nearly 1.9 million new cases would be diagnosed and over 600,000 Americans would die from cancer.
Digestive, reproductive, breast and respiratory
cancers comprise 69% of expected cancer diagnoses in 2022, while cancers like leukemia and brain tumors are considered “rare diseases.”
The worldwide cancer drug business has been estimated
to represent nearly $100 billion in annual sales. Our drug candidate, Berubicin, is in a class of drugs referred to as anthracyclines,
which are chemotherapy drugs designed to destroy the DNA of targeted cancer cells. The most common approved anthracyclines are daunorubicin
and doxorubicin and, prior to the expansion of their generic equivalents, annual revenues generated from anthracyclines have been estimated
in the range of $600 million. Many cancers are currently treated with anthracyclines; however, primary and metastatic brain cancers have
not been among them because heretofore no anthracyclines have been able to sufficiently penetrate the BBB. We believe that based on clinical
and preclinical data, Berubicin appears to cross the BBB despite not showing a statistically significant superiority to Lomustine, the
current standard of care in refractory and recurrent GBM.
Brain cancer in general is considered a rare disease
for which there are few available treatments. The leading brain tumor drug is temozolomide (“TMZ”), a drug introduced under
the brand name Temodar®. In 2012, one industry source reported annual revenues of approximately $882 million for Temodar before the
expiration of its patent protection, at which point generic versions of the drug began to enter the market and reduce prices. TMZ extends
overall survival when used in combination with radiation after preliminary surgery, followed by maintenance therapy as a single agent
thereafter.
The Orphan Drug Act and other legislative initiatives
provide incentives, including market exclusivity and accelerated approval pathways, for companies that pursue the development of treatments
for rare diseases and serious diseases for which there are few or no acceptable available treatment alternatives. Orphan Drug exclusivity
prevents for seven years the approval of another product with the same active moiety for the same rare disease. If a product is a new
chemical entity (i.e., generally that the moiety has not previously been approved), it may receive five years of exclusivity, during which
period FDA may not accept for review certain NDAs for another product with the same moiety. If approval of a product required new clinical
data, it may convey three years of exclusivity against approval of certain NDAs for similar products. Over the last 10 years, an increasing
number of companies have begun using these designations to obtain new drug approvals for drugs where patent coverage has expired and/or
where accelerated approval appears possible. An IMS Health report estimated that, in 2013, the sale of drugs with full or partial Orphan
Drug exclusivity represented approximately $29 billion in revenue. We consider the receipt of Orphan Drug exclusivity and expedited pathways
to approval or further development to be an important part of our development strategy for our drug candidates.
The Clinical Therapeutic Opportunity
The Company was created to specialize in the discovery
and development of novel treatments for brain tumors. Our main focus is currently the development and testing of TPI 287 and Berubicin.
We believe TPI 287 is the first taxane and Berubicin is the first anthracycline that appears to cross the BBB and target cancer cells
based upon preclinical animal models and limited clinical data derived from Phase 1 human clinical trials, and in the case of Berubicin,
based on Phase 2 clinical data. Currently, there are no curative therapies for glioblastoma.
TPI 287 has been investigated in neuro-oncology
for its potential to treat brain tumors due to its apparent ability to cross the blood-brain barrier. A Phase 1/2 clinical trial evaluated
TPI 287 in combination with bevacizumab in patients with recurrent glioblastoma multiforme (GBM). The study reported an objective response
rate of 54%, including two complete responses, and a disease control rate of 92%. The combination therapy was generally well-tolerated,
with no dose-limiting toxicities observed up to doses of 170 mg/m². These early trials suggest that TPI 287 shows potential in neuro-oncology.
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In 2009, Reata, the prior developer of Berubicin,
completed its Phase 1 clinical trial in patients diagnosed with brain cancers, including glioblastoma, the most aggressive form of brain
cancer. In the clinical trial completed by Reata in February 2009, Berubicin demonstrated one durable complete response lasting over 17
years in a patient treated on the original Phase 1 clinical trial. This patient remains disease free and clinically stable as of November
2022 (the date of the patient’s most recent confirmed MRI).
The Phase 1 trial was in a patient population that
had a median survival rate of only 14.6 months from glioblastoma diagnosis and few effective therapeutic options. In this trial, 25 of
the 35 patients enrolled were evaluable for response, and there was 1 complete response, 1 partial response, and 1 minor response, all
indicative of tumor shrinkage. In addition, 8 other patients had stable disease, for a disease control rate (“DCR”) of 44%.
If in consultation with the FDA we determine a path forward exists for Berubicin, despite not showing statistically significant superiority
to Lomustine, and regulatory approval is secured to market it, we believe this drug has the potential to become an important therapeutic
option for this deadly cancer.
In the eight major markets for pharmaceuticals
(the US, France, Germany, Italy, Spain, the UK, Japan and China), approximately 55,000 new glioblastoma patients were diagnosed in 2021
with a median survival rate for these patients of only 15 months (GlobalData, 2018). Due to the lack of effective therapies, the five-year
survival rate of glioblastoma ranges from 13% for younger aged patients (20 to 44 years) to 1% for older populations (over 44 years).
The current standard of care for first-line treatment is surgery, radiation, and chemotherapy with TMZ. TMZ, the current chemotherapeutic
component of the first-line standard of care for glioblastoma, has limited efficacy. In the TMZ final clinical trial performed before
submitting for FDA approval (573 patients), overall survival was improved by 2.5 months versus radiation alone, a clearly significant
improvement in survival. However, at least 50% of TMZ treated patients do not respond to TMZ (or have responded very poorly), primarily
due to the O6-methylguanine methyltransferase (“MGMT”) enzyme, which is a DNA repair pathway in glioblastoma cells.
Berubicin
Our first product under development is Berubicin,
a development stage anthracycline intended to treat glioblastoma and with potential to treat other neuro-oncology indications. Berubicin
is an anthracycline, a class of drugs that are among the most powerful chemotherapy drugs known. Berubicin intercalates into DNA and interrupts
topoisomerase II activity, resulting in the inhibition of DNA replication and repair, and ultimately RNA and protein synthesis. Based
on clinical and preclinical data, Berubicin appears to cross the blood brain barrier and target cancer cells, specifically glioblastoma,
more effectively and efficiently than any other known anthracyclines.
Berubicin hydrochloride (HCl) is a novel synthetic
anthracycline with a chemical structure similar to doxorubicin HCl, a cytotoxic anthracycline topoisomerase II inhibitor isolated from
cultures of Streptomyces peucetius var. caesius. Doxorubicin HCl Injection and Doxorubicin HCl for Injection, drugs related in chemical
structure and mechanism of action to Berubicin, are approved by the FDA for the treatment of various cancers, including acute lymphoblastic
leukemia, acute myeloblastic leukemia, Hodgkin lymphoma, Non-Hodgkin lymphoma, metastatic breast cancer, metastatic Wilms’ tumor,
metastatic neuroblastoma, metastatic soft tissue sarcoma, metastatic bone sarcomas, metastatic ovarian carcinoma, metastatic transitional
cell bladder carcinoma, metastatic thyroid carcinoma, metastatic gastric carcinoma, and metastatic bronchogenic carcinoma, as well as
part of a multiagent adjuvant chemotherapy for the treatment of women with axillary lymph node involvement after resection of primary
breast cancer. A liposomal formulation of doxorubicin HCl is also approved for the treatment of ovarian cancer, AIDS-related Kaposi’s
sarcoma, and multiple myeloma.
Doxorubicin HCl is not indicated for cancers of
the brain, where it has limited efficacy due to its poor penetration through the blood-brain barrier. Further, even for those cancers
that doxorubicin HCl is indicated, development of drug resistance remains a problem. In an effort to develop a second-generation anthracycline
topoisomerase II inhibitor that can circumvent the BBB and the development of drug resistance, a library of high-affinity and sequence-selective
deoxyribonucleic acid (“DNA”)-binding agents was created and screened against a panel of P-glycoprotein 1 (Pgp) and multidrug
resistance-associated protein 1 (MRP1)-overexpressing cells. This led to the identification of berubicin HCl, which preclinical studies
appear to show to be less affected by multidrug transporters than doxorubicin, to be potentially more potent as an inhibitor of cell growth
and inducer of apoptosis than doxorubicin, to sequester preferentially in tumor tissue versus brain tissue, and to improve overall survival
in an intracranial orthotopic glioma model. There is no assurance that Berubicin will be able to demonstrate such traits in clinical trials.
4
Glioblastoma has an unfavorable prognosis mainly
due to its high propensity for tumor recurrence, which is inevitable after a median survival time of 32–36 weeks. A plethora of
monotherapy and combination chemotherapy strategies have been evaluated in patients with recurrent glioblastoma. Although these can result
in some minor improvements in progression-free survival, with an estimation of approximately 30% after six months, no obvious increase
in survival has been associated with any particular regimen since the Stupp regimen of TMZ and radiation (2005).
Despite aggressive initial treatment, most patients
develop recurrent diseases which can be treated with re-resection, systemic treatment with targeted agents or cytotoxic chemotherapy,
reirradiation, or radiosurgery. Research into novel therapies is investigating alternative temozolomide regimens, convection-enhanced
delivery, immunotherapy, gene therapy, antiangiogenic agents, poly ADP ribose polymerase inhibitors, or cancer stem cell signaling pathways.
Overall, the 5-year survival rate is <10%, with a final mortality rate of close to 100%. Therefore, the development of novel therapeutic
options for patients with recurrent glioblastoma remains a priority. Given the short-term efficacy and low survival rate of glioblastoma
and other central nervous system patient groups, we believe there is a significant unmet need, and financial opportunity.
Less than 40% of glioblastoma patients have a genetic
variation which makes their tumors initially more responsive to TMZ. However, because nearly all these patients will quickly become resistant,
Berubicin could be prescribed after failure with TMZ. The remaining 60% of patients initially fail to respond to TMZ, primarily due to
the over-expression of O6-methylguanine methyltransferase (MGMT) conferring a lack of a DNA repair pathway in glioblastoma cells.
Reata licensed in berubicin HCl with the intent
of developing it for commercialization. On December 28, 2004, Reata filed an initial IND (IND 68,279; Serial No. 000) for an injection
formulation of berubicin HCl (RTA 744 Injection) for the treatment of anaplastic astrocytoma, anaplastic oligodendroglioma, anaplastic
mixed oligo-astrocytoma, glioblastoma, and gliosarcoma. Three clinical trials were initiated under IND 68,279, two phase 1 trials and
one phase 2 trial. The initial phase 1 trial (Study RTA 744-C-0401) was completed and the maximum tolerated dose determined. A 44% disease
control response rate was observed. The disease control rate was based on patients with stable disease plus responses. In the trial, out
of 25 patients, one patient achieved a complete response, 1 patient had a partial response, 1 patient had a minor response, and 8 patients
achieved a stable response. The 44% disease control response rate is based on these 11 patients (out of 25 patients). Regardless, in 2008,
Reata decided to curtail development of RTA 744 Injection for strategic reasons. Further enrollment in the two other ongoing berubicin
clinical trials was halted. Reata submitted a request to inactivate the IND on March 17, 2011 (Serial No. 054) and requested that the
IND be withdrawn on June 10, 2016 (Serial No. 0055). IND 68,279 was not withdrawn due to safety or efficacy concerns, but rather due to
the above noted corporate reprioritization.
CNS was formed in 2017. Reata sold CNS all rights
to the berubicin investigational drug data, including the data submitted under IND 68,279, and CNS has assumed sole authority, discretion,
and responsibility with respect to the development of the drug. As a result of the Reata Agreement, we are the direct beneficiaries of
the 4 years of active clinical development work performed by Reata, including the execution of multiple Phase 1 human clinical trials.
Berubicin Phase 1 Clinical Trial
In the first clinical trial for Berubicin, which
was referred to as Study RTA 744-C-0401, 25 of the 35 patients enrolled were evaluable for response. One patient achieved a complete response,
remained on study through seven cycles of therapy and was withdrawn for adverse events unrelated to Berubicin. The patient was disease
free as of November 2022.
Study design
Study RTA 744-C-0401 was a Phase 1 dose-finding,
safety and pharmacokinetic (PK) study of intravenous Berubicin injection in patients with recurrent or refractory anaplastic astrocytoma,
anaplastic oligodendroglioma, anaplastic mixed oligo-astrocytoma, glioblastoma multiforme or gliosarcoma.
5
The study was an open-label, accelerated dose-escalation
study to determine the maximum tolerated dose starting with patients who were not taking concurrent enzyme-inducing anti-epileptic drugs
(EIAEDs) that could interfere with Berubicin drug metabolism. Intra-patient dose-escalation was allowed after a patient had received a
minimum of 4 cycles. Berubicin injection was administered either daily for three consecutive days repeated every three weeks (Group A),
or once-weekly for four-consecutive weeks repeated every five weeks (Group C). Enrollment for a planned dose escalation in Group B (patients
on EIAEDs) was not initiated after it was determined that the standard of care had changed and an insufficient number of patients being
treated with these anti-epileptic drugs would make it difficult to accrue the requisite number of patients. The MTD for the remaining
groups was determined in a stepwise fashion such that once the MTD for Group A (three days in a row every 3 weeks) was determined, Group
C was initiated at the MTD from Group A, given on a weekly basis for 4 of every 5 weeks to evaluate the tolerability and MTD of Berubicin
on this alternative schedule.
Study Results
The first patient was enrolled into the study in
November 2005 and as of February 2009, the study was closed to accrual with no active patients remaining on study. Berubicin was administered
to a total of 54 patients (35 male and 19 female) with ages ranging from 25 to 70 years. Thirty-seven of the patients (69%) entered the
study with a diagnosis of glioblastoma multiforme, seven of which were secondary to transformation from anaplastic astrocytoma. The time
from the initial brain tumor diagnosis to enrollment on the study ranged from four months to 301 months (this last timing for a patient
diagnosed with childhood anaplastic astrocytoma).
Efficacy : Twenty-five of the 35 patients
enrolled in Group A were evaluable for response (under the Macdonald criteria described below). One patient receiving Berubicin at 2.4
mg/m2/day achieved a complete response. The patient remained on study through 7 cycles of therapy before being withdrawn for elevated
liver function tests unrelated to study drug, and in follow-up remains disease free and clinically stable as of November 2022.
One additional patient receiving Berubicin at 7.5
mg/m2/day achieved an unconfirmed partial response as their best recorded response, unconfirmed since the scan showing the partial response
required a second scan corroborating the response. Although the patient had an 80% reduction in tumor volume after two cycles of therapy,
at the end of four cycles of therapy when an additional scan was obtained, despite the fact that the initial lesion remained reduced,
the patient developed a new lesion and was assessed as having disease progression, thus the PR could not be confirmed. Ten additional
patients in Group A had stable disease of 2-to-8 cycles in duration, with a median progression free survival of four cycles (12 weeks).
In Group C, seven patients were evaluable for response and all had progressive disease. Twelve patients were discontinued from the study
prior to the end of cycle 2 due to clinical deterioration and/or disease progression.
Macdonald criteria : The Macdonald criteria,
similarly to other systems, divides response into four types of response based on imaging (MRI) and clinical features:
Assessment
Imaging Features
Clinical Features
Complete Response (CR)
§
Disappearance of all enhancing disease (measurable and non-measurable)
§
Sustained for at least four weeks
§
No new lesions
§
No corticosteroids
§
Clinically stable or improved
Partial Response (PR)
§
50% or more decrease of measurable enhancing lesions
§
Sustained for at least four weeks
§
No new lesions
§
Stable or reduced corticosteroids
§
Clinically stable or improved
Stable Disease (SD)
§ Does not qualify for CR, PR or progression
§ Clinically stable
Progression
§
25% or more increase in enhancing lesions
§
Any new lesions
§ Clinical deterioration
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Measurements of lesions are obtained from axial
post contrast T1 images. The maximal diameter is obtained, and then the second diameter is obtained at right angles to the first. The
product of these measurements is then used as the size of the lesion for the purpose of comparison.
Summary of Adverse Events : The adverse events
documented during Study RTA 744-C-0401 for all CTC grades of severity and regardless of relationship to study medication are identified
below.
Serious Adverse Event
Number of Patients Experiencing Adverse Event
Pulmonary embolism
5
Convulsion
5
Urinary tract infection
1
Peripheral motor neuropathy
1
Peripheral sensory neuropathy
1
Urinary retention
1
Nausea
4
Vomiting
5
Constipation
1
Leukopenia
1
Neutropenia
1
Headache
3
Speech disorder
1
Pyramidal tract syndrome
3
Somnolence
1
Dehydration
3
Brain oedema
1
Papilloedema
1
Eyelid ptosis
1
Macular oedema
1
Syncope
2
Deep vein thrombosis
1
Loss of consciousness
1
Embolism
1
Hemiparesis
1
Hydrocephalus
1
Muscle atrophy
1
Thrombocytopenia
1
Disease progression
3
Mental status changes
4
Thrombosis
1
Sepsis
1
Depressed level of consciousness
1
Dyspnoea
2
The larger number of events related to the central
nervous system is consistent with the impact of the underlying malignant disease in the brain of these patients. Myelosupression, i.e.,
a decrease in the number of bone-marrow derived cells, is expected and consistent with the known toxicities of anthracyclines, which can
be managed by the use of effective supportive care.
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Berubicin Phase 2 Clinical Trial
Based on data relating to the mechanism of action
of Berubicin, as well as clinical results from the Phase 1 study in brain tumors performed by Reata, the prior developer of Berubicin,
we initiated a randomized, controlled multicenter study intended to evaluate the efficacy of Berubicin versus Lomustine (CCNU, CeeNU®,
or Gleostine®) in patients with recurrent glioblastoma. Randomization to the two therapies (Berubicin or Lomustine) was on a 2:1 basis
with 2 patients receiving Berubicin for every patient randomized to Lomustine. Lomustine is a drug considered effective in patients with
glioblastoma that has recurred or progressed following first line therapy. From the data available from the Reata Phase 1 clinical trial
(RTA 744-C-0401), the FDA has agreed that the dosage for Berubicin will be at the maximum tolerated dose (“MTD”) determined
in that trial. Thus, patients randomized to the Berubicin arm receive a 2-hour IV infusion of 7.5 mg/m2 berubicin hydrochloride daily
for three consecutive days followed by 18 days off (21-day cycle). Patients randomized to Lomustine receive a single oral dose of 130
mg/m2 (rounded to the nearest 5 mg) every 6 weeks, or per the full prescribing information for Lomustine incorporating institutional standards
at each study site.
Efficacy was measured by the benefit of Berubicin
vs. Lomustine in terms of overall survival (OS), considered by the FDA as the only endpoint acceptable for clinical trials in Neuro-Oncology
which form the basis for a request for approval of a New Drug Application. Secondary endpoints using accepted radiologic methodology (magnetic
resonance imaging “MRI”), including both pre- and post-gadolinium T1-weighted scans and T2/fluid attenuated inversion recovery
(“FLAIR”) images will evaluate objective response rates (ORR), which include complete responses (CR) and partial responses
(PR) as per RANO (Response Assessment for Neuro-Oncology), and progression free survival at 6 months (PFS6). Additional information collected
include event free survival (EFS), corticosteroid usage, neurologic status, quality of life, and safety, and for Berubicin, the pharmacokinetics
(PK) at the dose and schedule employed. On March 25, 2025, we released the results of the primary analysis of the Berubicin trial. While
Berubicin showed clinically relevant outcomes comparable (although the trial was not powered to determine non-inferiority) to Lomustine
across multiple endpoints, it did not demonstrate a statistically significant difference in overall survival, the primary endpoint.
The trial included a pre-planned, non-binding interim
futility analysis which was conducted by an independent DSMB to recommend whether this study should continue as planned, be discontinued,
or be modified to address safety concerns. The trial design called for this interim analysis to be conducted after at least 50% of the
patients in the interim analysis population (30-50% of total expected patients for the trial) can be evaluated as having failed the primary
efficacy endpoint of Overall Survival. The median survival of patients receiving second-line treatment for glioblastoma has historically
been shown to be approximately 6 months. The DSMB’s charter mandated that they review the primary endpoint, Overall Survival, as
well as secondary endpoints and safety data to determine whether the efficacy data for the risk-benefit profile warrants modification
or discontinuation of the study. On December 18, 2023, we released the DSMB’s recommendation which was to continue the study without
modification.
We are currently exploring what path forward, if
any, may be available for Berubicin. Our planning process will involve consultation with and input from the FDA. If a path forward is
identified, we may look for a partner with which to conduct any additional studies which may be required, or we may attempt to raise sufficient
capital to conduct such studies on our own. The goal of these additional studies, should they be necessary, would be to develop a body
of evidence to support a successful application with the FDA and/or other similar regulatory agencies around the world. Should we obtain
approval from the FDA or other international regulatory agencies to market Berubicin, we will either partner with third parties to sell
and distribute it to physicians and patients, or we will develop our own sales force to do so.
Competition
We operate in a highly competitive segment of the
pharmaceutical market, which market is highly competitive as a whole. We face competition from numerous sources including commercial pharmaceutical
and biotechnology enterprises, academic institutions, government agencies, and private and public research institutions. Many of our competitors
may have significantly greater financial, product development, manufacturing and marketing resources. Additionally, many universities
and private and public research institutes are active in cancer research, and some may be in direct competition with us. We may also compete
with these organizations to recruit scientists and clinical development personnel. Smaller or early-stage companies may also prove to
be significant competitors, particularly through collaborative arrangements with large and established companies.
8
The unmet medical need for more effective cancer
therapies is such that oncology drugs are one of the leading class of drugs in development. These include a wide array of products against
cancer targeting many of the same indications as our drug candidates. While the introduction of newer targeted agents may result in extended
overall survival, induction therapy regimens are likely to remain a cornerstone of cancer treatment in the foreseeable future.
The current standard for the initial treatment
of glioblastoma is surgery, followed by radiation in combination with TMZ, followed by maintenance TMZ. Treatment with Lomustine is considered
to be the standard of care for recurrent glioblastoma even though it is not formally approved by the FDA for this purpose, a fact which
highlights the lack of available options for treatment. While the percentage of patients who survive two years from the diagnosis of glioblastoma
has increased because of the use of TMZ, overall survival for GBM patients remains dismal. There are currently at least 77 different experimental
therapies under clinical development in the United States for recurrent GBM based on the clinicaltrials.gov website. Thus, we are operating
in a highly competitive clinical trial environment, moving towards the pharmaceutical market, which is also extremely competitive for
patients with GBM. We also face competition from numerous sources including commercial pharmaceutical and biotechnology enterprises, academic
institutions, government agencies, and private and public research institutions. Many of our competitors may have significantly greater
cancer research capabilities, as well as financial, product development, manufacturing, and marketing resources. Additionally, many universities
and private and public research institutes are active in cancer research, and some may be in direct competition with us. In addition,
we also compete with these organizations to recruit scientists and clinical development personnel. Smaller or early-stage companies may
also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
Intellectual Property
When we licensed TPI 287 from Cortice on July 29,
2024, it had previously been granted Orphan Drug Designation (“ODD”)by the FDA. On June 10, 2020, the FDA granted Orphan Drug
Designation for Berubicin for the treatment of malignant gliomas. ODD from the FDA is available for drugs targeting diseases with less
than 200,000 cases per year. ODD may enable market exclusivity of 7 years from the date of approval of a NDA in the United States. During
that period the FDA generally could not approve another product containing the same drug for the same designated indication. Orphan drug
exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same active
ingredient for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety,
or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand. We
do not hold or license any patents related to Berubicin and the ODD now constitutes our primary intellectual property protections although
the Company is exploring if there are other patents that could be filed related to Berubicin to extend additional protections.
On July 24, 2021,
the Company received Fast Track Designation from the FDA for Berubicin. Fast Track Designation is designed to facilitate the development
and expedite the review of drugs to treat serious conditions and fill an unmet medical need.
We are exploring the possibility to file additional
patent applications that potentially might allow for further increase of the exclusive market protection for use of TPI 287 and Berubicin.
However, we can provide no assurance that we will be able to file or receive additional patent protection. The failure to receive such
additional patent protection will reduce the barrier to entry for competition for TPI 287 and Berubicin, which may adversely affect our
operations.
Governmental Regulation
Government authorities in the United States, at
the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing,
manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval
monitoring and reporting, marketing and export and import of products such as those we are developing. The pharmaceutical drug product
candidates that we develop must be approved by the FDA before they may be marketed and distributed.
9
In the United States, the FDA regulates pharmaceutical
products under the Federal Food, Drug, and Cosmetic Act, and implementing regulations. Pharmaceutical products are also subject to other
federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate
federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure
to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval,
may subject an applicant to administrative or judicial sanctions. FDA and related enforcement activity could include refusal to approve
pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial
suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal
penalties. Any agency or judicial enforcement action could have a material adverse effect on us. The process required by the FDA before
a pharmaceutical product may be marketed in the United States generally involves the following:
·
Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices or other applicable regulations;
·
Submission to the FDA of an Investigational New Drug application, or IND, which must become effective before human clinical studies may begin;
·
Performance of adequate and well-controlled human clinical studies according to the FDA’s current good clinical practices (“GCP”), to establish the safety and efficacy of the proposed pharmaceutical product for its intended use;
·
Submission to the FDA of an NDA for a new pharmaceutical product;
·
Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced, to assess compliance with current good manufacturing practices (“cGMP”), to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity;
·
Potential FDA audit of the preclinical and clinical study sites that generated the data in support of the NDA; and
·
FDA review and approval of the NDA.
The lengthy process of seeking required approvals
and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources and approvals,
and continued compliance is inherently uncertain.
Before testing any compounds with potential therapeutic
value in humans, the pharmaceutical product candidate enters the preclinical testing stage. Preclinical tests include laboratory evaluations
of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the pharmaceutical
product candidate. These early proof-of-principle studies are done using sound scientific procedures and thorough documentation. The conduct
of the single and repeat dose toxicology and toxicokinetic studies in animals must comply with federal regulations and requirements including
good laboratory practices. The sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical
data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. The IND automatically
becomes effective 30 days after receipt by the FDA, unless the FDA has concerns and notifies the sponsor. In such a case, the IND sponsor
and the FDA must resolve any outstanding concerns before the clinical study can begin. If resolution cannot be reached within the 30-day
review period, either the FDA places the IND on clinical hold or the sponsor withdraws the application. The FDA may also impose clinical
holds on a pharmaceutical product candidate at any time before or during clinical studies for various reasons. Accordingly, we cannot
be sure that submission of an IND will result in the FDA allowing clinical studies to begin, or that, once begun, issues will not arise
that suspend or terminate such clinical study.
10
Clinical studies involve the administration of
the pharmaceutical product candidate to healthy volunteers or patients under the supervision of qualified investigators, generally physicians
not employed by or under the clinical study sponsor’s control. Clinical studies are conducted under protocols detailing, among other
things, the objectives of the clinical study, dosing procedures, subject selection and exclusion criteria, how the results will be analyzed
and presented and the parameters to be used to monitor subject safety. Each protocol must be submitted to the FDA as part of the IND.
Clinical studies must be conducted in accordance with GCP. Further, each clinical study must be reviewed and approved by an independent
institutional review board (“IRB”) at, or servicing, each institution at which the clinical study will be conducted. An IRB
is charged with protecting the welfare and rights of study participants and considers such items as whether the risks to individuals participating
in the clinical studies are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the informed consent
form that must be provided to each clinical study subject or his or her legal representative and must monitor the clinical study until
completed.
Human clinical studies are typically conducted
in three sequential phases that may overlap or be combined. While such designations are not officially defined by the regulatory agencies
(including the FDA), the generally accepted meanings are:
·
Phase 1: The pharmaceutical product is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases such as cancer, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients, with a goal of characterizing the safety profile of the drug and establishing a maximum tolerable dose.
·
Phase 2: With the maximum tolerable dose established in a Phase 1 trial, the pharmaceutical product is evaluated in a limited patient population at the MTD to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases, to determine dosage tolerance, optimal dosage and dosing schedule and to identify patient populations with specific characteristics where the pharmaceutical product may be more effective.
·
Phase 3: Clinical studies are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical study sites. These clinical studies are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling. The studies must be well controlled and usually include a control arm for comparison. One or two Phase 3 studies are usually required by the FDA for an NDA approval, depending on the disease severity and other available treatment options. In some instances, an NDA approval may be obtained based on Phase 2 clinical data with the understanding that the approved drug can be sold subject to a confirmatory trial to be conducted post-approval.
Post-approval studies, or Phase 4 clinical studies,
may be conducted after initial marketing approval. These studies are often used to gain additional experience from the treatment of patients
in the intended therapeutic indication. The FDA also may require Phase 4 studies, Risk Evaluation and Mitigation Strategies (“REMS”)
and post-marketing surveillance, among other things, to monitor the effects of an approved product or place conditions on an approval
that could restrict the distribution or use of the product.
Progress reports detailing the results of the clinical
studies must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators
for serious and unexpected adverse events or any finding from tests in laboratory animals that suggests a significant risk for human subjects.
Phase 1, Phase 2 and Phase 3 clinical studies may not be completed successfully within any specified period, if at all. The FDA or the
sponsor or its data safety monitoring board may suspend a clinical study at any time on various grounds, including a finding that the
research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of
a clinical study at its institution if the clinical study is not being conducted in accordance with the IRB’s requirements or if
the pharmaceutical product has been associated with unexpected serious harm to patients.
11
Concurrent with clinical studies, companies may
complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the
pharmaceutical product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
The manufacturing process must be capable of consistently producing quality batches of the pharmaceutical product candidate and, among
other things, must develop methods for testing the identity, strength, quality and purity of the final pharmaceutical product. Additionally,
appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the pharmaceutical product
candidate does not undergo unacceptable deterioration over its shelf life.
The results of product development, preclinical
studies and clinical studies, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the
pharmaceutical product, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval
to market the product. The submission of an NDA is subject to the payment of substantial user fees. A waiver of such fees may be obtained
under certain limited circumstances.
The FDA reviews all NDAs submitted before it accepts
them for filing and may request additional information rather than accepting an NDA for filing. Once the submission is accepted for filing,
the FDA begins an in-depth review of the NDA. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act
(“PDUFA”), the FDA has 10 months after the 60-day filing date in which to complete its initial review of a standard review
NDA and respond to the applicant, and six months after the 60-day filing date for a priority review NDA. The FDA does not always meet
its PDUFA goal dates for standard and priority NDAs.
After the NDA submission is accepted for filing,
the FDA reviews the NDA application to determine, among other things, whether the proposed product is safe and effective for its intended
use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength,
quality and purity. The FDA may refer applications for novel pharmaceutical products or pharmaceutical products which present difficult
questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation
and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations
of an advisory committee, but it considers such recommendations carefully when making decisions. During the pharmaceutical product approval
process, the FDA also will determine whether a REMS is necessary to assure the safe use of the pharmaceutical product. If the FDA concludes
that a REMS is needed, the sponsor of the NDA must submit a proposed REMS; the FDA will not approve the NDA without a REMS, if required.
Before approving an NDA, the FDA will inspect the
facilities at which the product is manufactured. The FDA will not approve the product unless it determines that the manufacturing processes
and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.
Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites as well as the site where the pharmaceutical
product is manufactured to assure compliance with GCP and cGMP. If the FDA determines the application, manufacturing process or manufacturing
facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information.
In addition, the FDA will require the review and approval of product labeling.
The NDA review and approval process is lengthy
and difficult, and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied or may require additional
clinical data or other data and information. Even if such data and information is submitted, the FDA may ultimately decide that the NDA
does not satisfy the criteria for approval. Data obtained from clinical studies are not always conclusive and the FDA may interpret data
differently than we interpret the same data. The FDA will issue a complete response letter if the agency decides not to approve the NDA.
The complete response letter usually describes all of the specific deficiencies in the NDA identified by the FDA. The deficiencies identified
may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical studies. Additionally, the
complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval.
If a complete response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the
letter, or withdraw the application.
12
If a product receives regulatory approval, the
approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could
restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings, or precautions be
included in the product labeling. In addition, the FDA may require Phase 4 testing which involves clinical studies designed to further
assess pharmaceutical product safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved
products that have been commercialized.
Expedited Development and Review Programs
On July 24, 2021,
the Company received Fast Track Designation from the FDA for Berubicin. The Company intends to seek Fast Track Designation for TPI 287
as well.
The FDA’s Fast Track program is intended
to expedite or facilitate the process for reviewing new pharmaceutical products that meet certain criteria. Specifically, new pharmaceutical
products are eligible for Fast Track designation if they are intended to treat a serious condition and demonstrate the potential to address
unmet medical needs for the condition. Fast Track designation applies to the combination of the product and the specific indication for
which it is being studied. Unique to a Fast Track product, the FDA may consider for review sections of the NDA on a rolling basis before
the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, if the FDA determines
that the schedule is acceptable and if the sponsor pays any required user fees upon submission of the first section of the NDA.
Any product submitted to the FDA for market, including
a Fast Track program, may also be eligible for other FDA programs intended to expedite development and review, such as priority review
and accelerated approval. Any product is eligible for priority review if it is intended to treat a serious condition and it offers a significant
improvement in the treatment, diagnosis or prevention of a disease compared to marketed products. The FDA will attempt to direct additional
resources to the evaluation of an application for a new pharmaceutical product designated for priority review in an effort to facilitate
the review. Additionally, accelerated approval may be available for a product intended to treat a serious condition that provides meaningful
therapeutic benefit over existing treatments, which means the product may be approved on the basis of adequate and well-controlled clinical
studies establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or
on the basis of an effect on an intermediate clinical endpoint. As a condition of accelerated approval, the FDA may require the sponsor
to perform adequate and well-controlled post-marketing clinical studies. In addition, the FDA currently requires pre-approval of promotional
materials for products receiving accelerated approval, which could impact the timing of the commercial launch of the product. Fast Track
designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval
process.
Post-Approval Requirements
Any pharmaceutical products for which the Company
receives FDA approvals are subject to continuing regulation by the FDA, including, among other things, cGMP compliance, record-keeping
requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product
sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion
and advertising requirements, which include, among others, standards for direct-to-consumer advertising, prohibitions on promoting pharmaceutical
products for uses or in patient populations that are not described in the pharmaceutical product’s approved labeling (known as “off-label
use”), industry-sponsored scientific and educational activities and promotional activities involving the internet. Failure to comply
with FDA requirements can have negative consequences, including adverse publicity, enforcement letters from the FDA, actions by the U.S.
Department of Justice and/or U.S. Department of Health and Human Services’ Office of Inspector General, mandated corrective advertising
or communications with doctors, and civil or criminal penalties. Although physicians may prescribe legally available pharmaceutical products
for off-label uses, manufacturers may not directly or indirectly market or promote such off-label uses.
13
We expect to rely on third parties for the production
of clinical and commercial quantities of our products. Manufacturers of our products are required to comply with applicable FDA manufacturing
requirements contained in the FDA’s cGMP regulations. cGMP regulations require, among other things, quality control and quality
assurance, as well as the corresponding maintenance of records and documentation. Pharmaceutical product manufacturers and other entities
involved in the manufacture and distribution of approved pharmaceutical 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 cGMP and other laws. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality
control to maintain cGMP compliance. Discovery of problems with a product after approval may result in restrictions on a product, manufacturer
or holder of an approved NDA, including withdrawal of the product from the market. In addition, changes to the manufacturing process generally
require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications
and additional labeling claims, are also subject to further FDA review and approval.
Pharmaceutical Coverage, Pricing and Reimbursement
Significant uncertainty exists as to the coverage
and reimbursement status of any pharmaceutical product candidates for which we may obtain regulatory approval. In the United States and
in markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part
upon the availability of reimbursement from third-party payers. Third-party payers include government payers such as Medicare and Medicaid,
managed care providers, private health insurers and other organizations. The process for determining whether a payer will provide coverage
for a pharmaceutical product may be separate from the process for setting the price or reimbursement rate that the payer will pay for
the pharmaceutical product. Third-party payers may limit coverage to specific pharmaceutical products on an approved list, or formulary,
which might not, and frequently does not, include all of the FDA-approved pharmaceutical products for a particular indication. Third-party
payers are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services,
in addition to their safety and efficacy. A payer’s decision to provide coverage for a pharmaceutical product does not imply that
an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price
levels sufficient to realize an appropriate return on our investment in product development. In addition, in the United States there is
a growing emphasis on comparative effectiveness research, both by private payers and by government agencies. We may need to conduct expensive
pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs
required to obtain the FDA approvals. Our pharmaceutical product candidates may not be considered medically necessary or cost-effective.
To the extent other drugs or therapies are found to be more effective than our products, payers may elect to cover such therapies in lieu
of our products and/or reimburse our products at a lower rate.
Orphan Drug exclusivity prevents for seven years
the approval of another product with the same active moiety for the same rare disease. On June 10, 2020, the FDA granted Orphan Drug Designation
for Berubicin for the treatment of malignant gliomas. If a product is a new chemical entity (i.e., generally that the moiety has not previously
been approved), it may receive five years of exclusivity, during which period FDA may not accept for review certain NDAs for another product
with the same moiety. If approval of a product required new clinical data, it may convey three years of exclusivity against approval of
certain NDAs for similar products.
The marketability of any pharmaceutical product
candidates for which we may receive regulatory approval for commercial sale may suffer if the government and third-party payers fail to
provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and we expect this
will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at
any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we may receive regulatory
approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
14
International Regulation
In addition to regulations in the United States,
we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our future drugs.
Whether or not we obtain FDA approval for a drug, we must obtain approval of a drug by the comparable regulatory authorities of foreign
countries before we can commence clinical trials or marketing of the drug in those countries. The approval process varies from country
to country, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical
trials, product licensing, pricing and reimbursement vary greatly from country to country.
Under European Union regulatory systems, marketing
authorizations may be submitted either under a centralized or mutual recognition procedure. The centralized procedure provides for the
grant of a single marketing authorization that is valid for all European Union member states. The mutual recognition procedure provides
for mutual recognition of national approval decisions. Under this procedure, the holder of a national marketing authorization may submit
an application to the remaining member states. Within 90 days of receiving the applications and assessment report, each member state must
decide whether to recognize approval.
In addition to regulations in Europe and the United
States, we will be subject to a variety of foreign regulations governing clinical trials and commercial distribution of our future drugs.
License Agreements
On November 21, 2017, we entered into the Reata
Agreement. Pursuant to the Reata Agreement we purchased all of Reata’s intellectual property and development data regarding Berubicin,
including all trade secrets, knowhow, confidential information and other intellectual property rights.
On December 28, 2017, the Company entered into
a Technology Rights and Development Agreement with HPI. Pursuant to this agreement, the Company obtained a worldwide exclusive license
to the chemical compound commonly known as WP744. In exchange for these rights, the Company agreed to pay consideration to HPI as follows:
(i) a royalty of 2% of net sales of any product utilizing WP744 for a period of ten years after the first commercial sale of such; and
(ii) $100,000 upon beginning Phase II clinical trials (paid in 2021); and (iii) $200,000 upon the approval by the FDA of a New Drug Application
for any product utilizing WP744; and (iv) a series of quarterly development payments totaling $750,000 beginning immediately after the
Company’s raise of $7,000,000 of investment capital. In addition, the Company issued 3 shares of the Company’s common stock
valued at $3,000 per share to HPI upon execution of the agreement. On November 13, 2019, the Company closed its IPO, thereby fulfilling
all conditions precedent and completing the acquisition of the intellectual property discussed in the HPI agreement. During the years
ended December 31, 2024 and 2023, the Company recognized $50,000 and $50,000 related to this agreement, respectively. Unrelated to this
agreement, from time to time, the Company purchases pharmaceutical products from HPI which are necessary for the manufacturing of Berubicin
API and drug product. On March 23, 2025, the Company terminated the HPI License.
On July 29, 2024, the Company entered into the Cortice
Agreements, pursuant to which Cortice granted the Company an exclusive license to the intellectual property rights related to certain
patents around the compound TPI 287 in the United States, Canada, Mexico and Japan. The term of the license will expire, other than due
to a breach of the Cortice Agreements, at the end of the royalty term with respect to any licensed product in any of the included territories,
which begins upon the first commercial sale in such territory and ends on the latest of (i) ten years after such sale, (ii) the expiration
of regulatory or marketing exclusivity for such licensed product in such country, or (c) the expiration of the last to expire valid patent
claim in such country covering such licensed product.
Employees
As of March 31, 2025, we had four full time employees.
We also have one part-time employee serving as our chief scientific officer, and accordingly, a high percentage of the work performed
for our development projects is conducted by qualified part-time staff and independent contractors.
15
Legal Proceedings
From time to time in the ordinary course of our
business, we may be involved in legal proceedings, the outcomes of which may not be determinable. The results of litigation are inherently
unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant
amounts of management time and result in diversion of significant resources. We have insurance policies covering any potential losses
where such coverage is cost effective.
We are not at this time involved in any additional
legal proceedings that we believe could have a material effect on our business, financial condition, results of operations or cash flows.
Properties
Our corporate headquarter is located in a leased facility
in Houston, Texas. We believe our facilities are sufficient to meet our current needs and that suitable space will be available as and
when needed. We do not own any real property.
Available Information
Our Internet address is www.cnspharma.com .
On this Web site, we post the following filings as soon as reasonably practicable after they are electronically filed with or furnished
to the U.S. Securities and Exchange Commission (“SEC”): our Annual Reports on Form 10-K; our Quarterly Reports on Form 10-Q;
our Current Reports on Form 8-K; our proxy statements related to our annual stockholders’ meetings; and any amendments to those
reports or statements. The SEC maintains an internet site that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC at www.sec.gov. All such filings are also available on our Web site free of charge.
The charters of our audit, nominating and governance and compensation committees and our Code of Business Conduct and Ethics Policy are
also available on our Web site and in print to any stockholder who requests them. The content on our Web site is not incorporated by reference
into this Form 10-K unless expressly noted.