Item 1. Business
Item 1. Business
Overview
We are a clinical-stage biopharmaceutical company advancing T cell engaging (“TCE”) bispecific antibodies (“bsAb”) for solid tumors. Our goal is to build an innovative portfolio of TCE bispecific therapeutics, including CTIM-76, a Claudin 6 (“CLDN6”) x CD3 TCE, CT-95, a Mesothelin (“MSLN”) x CD3 TCE, and CT-202, a Nectin cell adhesion protein 4 (“Nectin-4”) x CD3 TCE.
Our pipeline is shown below:
CTIM-76 is a CLDN6 x CD3 TCE that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6. CLDN6 is a tight junction membrane protein target expressed in multiple solid tumors and absent from or expressed at low levels in healthy adult tissues. IND-enabling studies on CTIM-76 have been completed. On May 2, 2024, we announced the U.S. Food and Drug Administration (the “FDA”) cleared our IND application to support the initiation of a Phase 1 dose escalation and expansion trial of CTIM-76 in patients with CLDN6-positive gynecologic and testicular cancers. We dosed the first patient in our CTIM-76 Phase 1 trial in January 2025. We expect to share Phase 1a interim data for the CTIM-76 trial in June 2026.
CT-95 is an MSLN x CD3 TCE that is intended to redirect T-cell-mediated lysis toward malignant cells expressing MSLN. MSLN is a membrane protein overexpressed in approximately 30% of cancers. We dosed the first patient in our CT-95 Phase 1 trial in April 2025. We expect to share Phase 1a interim data for the CT-95 trial in September 2026.
CT-202 is a Nectin-4 x CD3 TCE that targets Nectin-4, a cell surface protein that is highly and frequently overexpressed in a variety of solid tumors, including bladder, colorectal, lung and breast. Nectin-4 is a clinically validated target for cancer therapy using a traditional antibody-drug conjugate (“ADC”), but it is also associated with certain adverse events, including neuropathy and rash. CT-202 is a pH-dependent TCE that is designed to be preferentially active within the tumor microenvironment. We submitted our application to the Australian Bellberry Human Research Ethics Committee (“HREC”) in March 2026 to support the initiation of a first-in-human trial for CT-202. We expect to dose the first patient in our CT-202 Phase 1 trial in the third quarter of 2026.
Beyond these product candidates, we continue to evaluate opportunities to expand our pipeline. We believe our team and capabilities position us to be a leader in developing novel therapies targeting solid tumors. We retain full worldwide development and commercialization rights to certain CTIM-76 patents in the field of bispecific
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antibodies, full worldwide development and commercialization rights to CT-95 patents, and full worldwide development and commercialization rights to certain CT-202 patents.
Our Strategy
Our goal is to deliver safe and effective selective cancer therapies for patient populations with significant unmet medical needs. Key elements of our strategy include:
• Rapidly advance our CTIM-76 and CT-95 clinical programs through Phase 1 proof of concept. We are currently evaluating CTIM-76 in a Phase 1 clinical trial and plan to provide Phase 1a interim data for the CTIM-76 trial in June 2026. Additionally, we plan to provide Phase 1a interim data for the CT-95 trial in September 2026.
• Rapidly advance our third program, CT-202, into clinical development. We submitted our application to the HREC in March 2026 to support the initiation of a first-in-human trial for CT-202. We expect to dose the first patient in our CT-202 Phase 1 trial in the third quarter of 2026.
• Seek opportunities to expand our pipeline of selective cancer drug candidates and targets. We intend to continue to seek opportunities to expand our TCE pipeline for solid tumors. If we identify targets that we deem to have high potential to address unmet medical needs, we may develop, in-license or acquire assets with therapeutic potential against those identified selective cancer targets.
• Evaluate strategic opportunities to potentially accelerate development timelines and enhance the commercial potential of our product candidates globally. We intend to leverage our TCE expertise to advance a novel pipeline. We plan to commercialize our product candidates in key markets, either alone or with strategic partners, and seek to maximize the worldwide commercial potential of our programs, including the potential to out-license certain assets during development to a third party that may accelerate development and commercialization of one or all of our assets.
Our Product Pipeline and Development
CLDN6xCD3 TCE program: CTIM-76
Our clinical product candidate, CTIM-76, is a CLDN6 x CD3 TCE that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6. CLDN6 is a tight junction membrane protein target that has high prevalence across many solid tumors and is absent from or expressed at low levels in healthy adult tissues.
We believe CTIM-76 has the potential to be a differentiated CLDN6 product candidate, due in part to: (i) its high selectivity for CLDN6 over Claudin 3 (“CLDN3”), Claudin 4 (“CLDN4”), and Claudin 9 (“CLDN9”); and (ii) its potential ability to target tumors with low, medium or high levels of CLDN6 expression, which could potentially result in a broader target population and greater commercial opportunity compared with other approaches.
Structure and Mechanism of Action
CLDN6 is an oncofetal protein that is normally present at higher levels during embryonic development. In normal, adult tissue, CLDN6 is turned off or has very low levels of expression due to epigenetic silencing. CLDN6 is thought to be reactivated by some cancers to adopt a more embryonic phenotype through the process of dedifferentiation.
The structural complexity of CLDN6 and its similarity to other Claudin proteins expressed on healthy tissue, particularly CLDN3, CLDN4, and CLDN9, make selectivity a key development challenge that must be addressed by CLDN6-targeting assets in development.
The preclinical data below illustrate that CTIM-76 is a highly selective and potent CLDN6 x CD3 TCE.
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Market Opportunity
There is a significant global opportunity for the treatment of patients with tumors expressing CLDN6. CLDN6 is overexpressed in several cancers with significant unmet needs, including ovarian, non-small cell lung, colon, endometrial, breast and testicular, with expression being highest in ovarian, endometrial, and testicular adenocarcinomas.
Estimated incidence information for annual new cancer cases in the United States and CLDN6 expression rates for certain cancers with significant unmet needs are shown below. We estimate that greater than 50,000 patients per year in the United States have CLDN6- positive relapse/refractory (“R/R”) disease.
Initial indications of interest are based on: (i) CLDN6 prevalence; (ii) patient population size; (iii) observed clinical responses; and (iv) potential for accelerated development.
Selected Cancer indications Incidence
(US Only) R/R Incidence CLDN6 Positive CLDN6
Med/High Patient Population
Based on R/R Incidence
Ovarian 19,900 12,800 75% 1
35% 1
9,600
Endometrial 65,900 14,000 50% 1
22% 1
7,000
Testicular 9,910 400 100% 3
>95% 3
400
Non-Small Cell Lung 201,229 110,653 26% 2
6% 2
28,769
Colon 152,810 53,010 43% 3
0% 3
22,794
Breast 290,600 43,800 40% 3
0% 3
17,520
1 Context internal Phase 1 data; 2 Context internal biopsy prevalence screen data; 3 Mackensen, Nature Medicine, 2023. Incidences based on public estimates; R/R or last-line patient population approximated by annual mortality; CLDN6 target prevalence is based on IHC or RNAseq from published reports. Patient population derived from midpoint of CLDN6 positive population multiplied by R/R incident population.
Clinical Validation of the Target and Potential for Broader Patient Population
Based on clinical data reported for other therapeutic agents targeting CLDN6, including BioNTech (BNT211), TORL (TORL-1-23), and Daiichi Sankyo (DS9606a), in various phases of clinical development, including ADC and CAR T-cell approaches, we believe this target has been clinically validated. Whereas both ADC and CAR T-cell anti-CLDN6 approaches have required a substantial portion of tumor cells with high expression of CLDN6 for anti-
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tumor activity, we believe a T cell engager approach could potentially target tumors with varying levels of CLDN6 expression, including tumors with low levels of expression. Therefore, CTIM-76 could potentially capture a broader patient population and greater commercial opportunity.
Clinical Development Plan
We have an active IND for CTIM-76 with the FDA. In January 2025, we announced that the first patient had been dosed in the CTIM-76 Phase 1 clinical trial, which is a dose escalation and expansion trial in patients with solid tumors likely to express CLDN6. In the dose escalation part of our Phase 1 trial, we are enrolling patients with advanced unresectable or metastatic ovarian, endometrial or testicular cancer in increasing dose levels. The primary objective in dose escalation is to evaluate the safety and tolerability of CTIM-76. In the expansion part of our Phase 1 trial, we plan to evaluate two doses and at least two dose schedules in a single cancer type based upon dose escalation data. The primary objective in expansion will be to evaluate preliminary anti-tumor activity of CTIM-76 and to select a dose and dose schedule for future trials. CLDN6 expression is required for enrollment in our Phase 1 trial for patients with ovarian and endometrial cancer. Due to high CLDN6 expression, prospective screening for testicular cancer is not required.
Mesothelin x CD3 TCE program: CT-95
Our clinical product candidate, CT-95, is an MSLN x CD3 TCE that is intended to redirect T-cell-mediated lysis toward malignant cells expressing MSLN. MSLN is a membrane protein overexpressed in approximately 30% of cancers. One challenge in developing MSLN-targeted therapies has been the presence of MSLN fragments, also referred to as shed MSLN (“sMSLN”), found in both blood and the tumor microenvironment that can serve as a decoy or sink for MSLN-targeting antibodies. CT-95 is a fully humanized bispecific T cell engager that has a moderate affinity but high avidity for membrane-bound MSLN, minimizing the impact of the sMSLN.
We believe CT-95 has the potential to be a differentiated MSLN product candidate, due in part to: (i) its ability to bind to the membrane-proximal side of MSLN, which has been shown to increase potency compared to a historic program from Harpoon Therapeutics (HPN536), potentially driving improved outcomes for patients; (ii) avidity enhancement that aims to minimize the risk of adverse events, including cytokine release syndrome and hypoxia; and (iii) its potential ability to target tumors with low, medium or high levels of MSLN expression, which could potentially result in a broader target population and greater commercial opportunity compared with non-TCE approaches.
On July 9, 2024, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) pursuant to which we acquired CT-95 (formerly known as LNK-101), from Link (assignment for the benefit of creditors), LLC (“Link”), which succeeded to the assets of Link Immunotherapeutics Inc. The FDA previously cleared the IND application for CT-95.
Pursuant to the Asset Purchase Agreement, we purchased the assets of Link associated with CT-95, including patent rights, know-how, regulatory filings, and inventory of drug substance and drug product (the “Transferred Assets”), on an “as is” and “where is” basis. CT-95 patents are currently being prosecuted and/or maintained in the United States, Europe, Canada, Australia, Japan and Taiwan. We also assumed certain liabilities relating to the Transferred Assets. In consideration of the Transferred Assets, we made a one-time payment to Link of $3.75 million.
Structure and Mechanism of Action
MSLN is bound to tumor cells via a glycosylphosphatidylinositol (“GPI”) linker. Like many GPI-anchored proteins, MSLN can be cut into smaller fragments. The MSLN gene encodes a precursor that is cleaved into two products: a soluble N-terminal protein called megakaryocyte potentiating factor (MPF), and a membrane-bound fragment called full length mesothelin (“FL-MSLN”). FL-MSLN can then be further cleaved into even smaller sMSLN fragments. sMSLN serves as a competitive sink, preventing antibodies from binding to the tumor, which can lead to suboptimal drug exposure and efficacy.
CT-95 was designed to overcome the sMSLN sink through binding to membrane-proximal MSLN epitope and avidity enhancement. CT-95 exhibits moderate affinity for membrane-proximal MSLN but cooperative binding through bivalent binding of CT-95 to two MSLN epitopes results in high avidity binding of CT-95 to the tumor. This
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results in a potentially wide therapeutic window due to: (i) limited crosslinking by sMSLN, mitigating off-tumor T cell activation; and (ii) cooperative binding of MSLN on tumor surface to crosslink CD3, thereby activating T cells.
The figure below indicates that HPN-536 (Harpoon Therapeutics) binds to MSLN fragments in a dose proportional manner, limiting therapeutic exposure, whereas CT-95 does not lose potency in the same OVCAR-3 cell line model.
Market Opportunity
There is a significant global opportunity for the treatment of patients with tumors expressing MSLN. MSLN is overexpressed in several cancers with significant unmet needs, high grade serous ovarian, non-small cell lung, colon, esophageal, pancreatic carcinoma, endometrial, gastric, and mesothelioma, with expression being highest in high-grade serous ovarian cancer, pancreatic carcinoma, and mesothelioma.
Estimated incidence information for annual new cancer cases in the United States and MSLN expression rates for certain cancers with significant unmet needs are shown below. We estimate that greater than 100,000 patients per year in the United States have mesothelin-positive R/R disease.
Initial indications of interest are based on: (i) MSLN prevalence; (ii) patient population size; (iii) observed clinical responses; and (iv) potential for accelerated development.
Selected Cancer indications Incidence (US Only) R/R Incidence MSLN Positive MSLN Med/High Patient Population
Based on R/R Incidence
Non-Small Cell Lung 201,229 110,653 55% 36% 60,859
Pancreatic 66,440 51,750 80% 61% 41,400
Colon 152,810 53,010 41% 17% 21,734
Ovarian 19,900 12,800 90% 80% 11,520
Mesothelioma 3,000 2,500 70% 60% 1,750
Esophageal 22,370 16,130 41% 26% 6,613
Endometrial 65,900 14,000 45% 23% 6,300
Gastric 26,380 11,090 49% 23% 5,434
Incidences based on public estimates; R/R or last-line patient population approximated by annual mortality; MSLN target prevalence is based on Simon et al, Biomedicines, 2021. Patient population derived from MSLN positive population multiplied by R/R incident population.
Clinical Validation of the Target and Potential for Broader Patient Population
Based on clinical data reported for other therapeutic agents targeting MSLN, including RemeGen Biosciences (RC88) and TCR2 Therapeutics (gavocabtagene autoleucel), in various phases of clinical development, including
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ADC and CAR T-cell approaches, we believe this target has been clinically validated. Whereas both ADC and CAR T-cell anti-MSLN approaches have required a substantial portion of tumor cells with high expression of MSLN for anti-tumor activity, we believe a T cell engager approach could potentially target tumors with varying levels of MSLN expression, including tumors with low levels of expression. Therefore, MSLN could potentially capture a broader patient population and greater commercial opportunity.
Clinical Development Plan
We have an active IND for CT-95 with the FDA. In April 2025, we announced that the first patient had been dosed in the CT-95 Phase 1 trial, which is a dose escalation trial in patients with solid tumors likely to express MSLN. We are enrolling patients with advanced unresectable or metastatic high grade serous ovarian cancer, pancreatic carcinoma, and mesothelioma. The primary objective in dose escalation is to evaluate the safety and tolerability of CT-95. Expression of MSLN is not required for enrollment in our Phase 1 trial; tumor tissue samples are being collected for retrospective biomarker assessment of MSLN expression by immunohistochemistry (“IHC”).
Nectin-4 x CD3 TCE program: CT-202
Our preclinical product candidate, CT-202, targets Nectin-4, which is highly and frequently overexpressed in a variety of cancers. Nectin-4 is a clinically-validated target for cancer therapy using a traditional antibody-drug conjugate, but it is also associated with certain adverse events, including neuropathy and rash. CT-202 is a pH-dependent TCE that is designed to be preferentially active within the acidic tumor microenvironment.
On September 23, 2024, we entered into a license agreement (the “BioAtla License Agreement”) with BioAtla, Inc. ("BioAtla"), pursuant to which we obtained an exclusive, worldwide license to develop, manufacture and commercialize two licensed antibodies (the “BioAtla Assets”), including BA3362 (renamed by the Company as CT-202), BioAtla’s Nectin-4 x CD3 TCE.
As partial consideration for the exclusive license under the BioAtla License Agreement, we made an upfront payment of $11.0 million, and BioAtla is eligible to receive up to $122.5 million in additional milestone payments based upon the achievement of specified pre-clinical, clinical, development and commercial milestones, as well as tiered mid-single-digit to low double-digit royalties on future net sales for products containing the BioAtla Assets, subject to standard reductions.
We believe CT-202 has the potential to be a differentiated Nectin-4 product candidate, due in part to: (i) its ability to preferentially bind to Nectin-4 and CD3 in the low pH environment of tumor relative to pH neutral normal tissue, which has the potential to reduce the risk of dermatologic side effects associated with Nectin-4 expression in the skin; (ii) avidity enhancement to improve CT-202 residence in the tumor microenvironment and minimize the risk of cytokine release syndrome; and (iii) its potential ability to target tumors with low, medium or high levels of Nectin-4 expression, which could potentially result in a broader target population and greater commercial opportunity compared with non-TCE approaches.
Structure and Mechanism of Action
CT-202 incorporates logic gating through pH dependence and avidity enhancement which is intended to spare Nectin-4 in normal tissue. Because of its expression in healthy epidermal keratinocytes, sweat glands, and hair follicles, Nectin-4 targeted treatments are often associated with dermatological side effects. CT-202 incorporates pH dependent binding to both Nectin-4 and CD3 to minimize binding to healthy tissues and maximize binding and T cell activation within the tumor microenvironment.
CT-202 is avidity optimized to mitigate cytokine release syndrome risk. Cooperative Nectin-4 binding through bivalent binding to the tumor cell surface is intended to reduce T cell crosslinking in the absence of target. Steric hindrance of CD3 binding by Fc domain prevents T cell crosslinking by single CT-202 molecules.
The figure below indicates our two-pronged approach for CT-202 to overcome Nectin-4 expression in the skin and to generate robust antitumor responses while minimizing the risk of cytokine release syndrome.
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1 Chang, PNAS, 2021
Market Opportunity
There is a significant global opportunity for the treatment of patients with tumors expressing Nectin-4. Nectin-4 is overexpressed in several cancers with significant unmet needs, including bladder (urothelial), non-small cell lung, pancreatic, head and neck, esophageal, colorectal, gastric, and triple negative breast cancer (“TNBC”), with expression being highest in bladder, colorectal, and TNBC.
Estimated incidence information for annual new cancer cases in the United States and Nectin-4 expression rates for certain cancers with significant unmet needs are shown below. We estimate that greater than 125,000 patients per year in the United States have Nectin-4- positive R/R disease. Initial indications of interest are based on: (i) Nectin-4 prevalence; (ii) patient population size; and (iii) observed clinical responses.
Selected Cancer indications Incidence
(US Only) R/R Incidence Nectin-4 Positive Nectin-4 Med/High Patient Population
Based on R/R Incidence
Colon 152,810 53,010 87% 1
78% 2
46,119
Bladder (urothelial) 83,190
20,000
83% 3
60% 3
16,600
Breast (TNBC) 62,054 15,500 78% 3
58% 5
12,090
Non-Small Cell Lung 201,229 110,653 64% 3
58% 6
70,818
Pancreatic 66,440 51,750 71% 3
37% 3
36,743
Head and Neck 54,000 12,000 59% 3
18% 3
7,080
Esophageal 22,370 16,130 55% 3
24% 3
8,872
Gastric 26,890 12,000 94% 7
60% 4
11,280
Incidences based on public estimates; Relapsed/refractory (R/R) or last-line patient population approximated by annual mortality; Patient population derived from Nectin-4 positive population multiplied by R/R incident population. 1 Kobecki, Int J Mol Sci, 2023; 2 Nikanjan, Can Let, 2025; 3 Challita, Can Res, 2016; 4 Zhang, Oncol Lett, 2018; 5 Zeindler, Front Med, 2019; 6 Takano, Mol Bio, 2009; 7 Muro, ESMO Open, 2025
Clinical Validation of the Target and Potential for Broader Patient Population
Based on clinical data reported for other therapeutic agents targeting Nectin-4, including Pfizer (Padcev®) and Bicycle Therapeutics (BT8009), including ADC approaches, we believe this target has been clinically validated. Padcev is currently approved for locally advanced or metastatic urothelial carcinoma, which is associated with high
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levels of Nectin-4 expression. Whereas ADC Nectin-4 approaches require a substantial portion of tumor cells with high expression of Nectin-4 for anti-tumor activity, we believe a TCE approach could potentially target tumors with varying levels of Nectin-4 expression, including tumors with low levels of expression. Therefore, Nectin-4 could potentially capture a broader patient population and greater commercial opportunity.
Clinical Development Plan
We submitted our application to the HREC in March 2026 to support the initiation of a first-in-human trial for CT-202. We expect to dose the first patient in our CT-202 Phase 1 trial in the third quarter of 2026. The primary objective in dose escalation will be to evaluate the safety and tolerability of CT-202.
Our collaboration and license agreements
Collaboration and Licensing Agreement with Integral Molecular
In April 2021, we entered into a collaboration and licensing agreement with Integral Molecular, Inc. (“Integral”) (the “Integral License Agreement”) for the development of a CLDN6 bsAb for cancer therapy. Under the terms of the Integral License Agreement, we and Integral developed a CLDN6 bsAb that is intended to trigger the activation of T cells and eliminates cancer cells displaying CLDN6. We will conduct preclinical and all clinical development, as well as regulatory and commercial activities through exclusive worldwide rights to develop and commercialize the novel CLDN6 candidates. As a part of the Integral License Agreement, Integral was eligible to receive remaining development and regulatory milestone payments totaling approximately $55 million, sales milestone payments totaling up to $130 million, and tiered royalties of up to 12% of net sales of certain products developed under the Integral License Agreement.
On March 20, 2023, we amended the Integral License Agreement (the “First Amendment”) to remove the previously agreed to second milestone payment and to change the amount of the third milestone payment to increase such payment by the amount of the prior second milestone payment and to add payment for third-party research funding obtained and used by Integral in connection with the development of CTIM-76.
On February 29, 2024, we further amended the Integral License Agreement to reflect updated financial terms. In the course of our further due diligence review of CTIM-76, we determined that certain of the licensed rights under the Integral License Agreement may incorporate intellectual property rights currently held by a third party. Specifically, we are aware of issued patents in the United States and certain foreign jurisdictions expiring in January 2034, and then in 2025 became aware of a patent that issued in the United States expiring in March 2042, in each instance that potentially cover certain of the intellectual property included in CTIM-76. While we believe we will have reasonable defenses against any potential claim of infringement, we may not be successful in such efforts, and we also may not be able to obtain a license to such patent on commercially reasonable terms, or at all.
As part of Amendment 2 to the Integral License Agreement (the "Second Amendment"), Integral’s right to receive certain future payments was reduced as follows: aggregate development and regulatory milestone payments were reduced from $55 million to $15 million, aggregate sales milestone payments were reduced from $130 million to $12.5 million, and a tiered royalty of 8-12% that commenced at first commercial sale was reduced to a flat royalty rate of 6% on net sales beginning no sooner than February 1, 2034. The Second Amendment also narrowed the license grant from Integral to us to only cover CTIM-76, removed any further obligation of us to reimburse Integral for any independently obtained research funding Integral applied against CTIM-76 research, and included mutual releases by the parties.
The reduced development and regulatory milestones now reflect a payment due at each of: first patient’s first screening visit in a Phase 1b/2 or Phase 2 clinical trial for CTIM-76, first patient’s first screening visit in a Phase 3 clinical trial for CTIM-76, United States marketing approval for CTIM-76, European Union marketing approval for CTIM-76, United Kingdom marketing approval for CTIM-76, and Japan marketing approval for CTIM-76. The amended commercial milestones now also reflect a payment due upon the achievement of annual net sales of $500 million and annual net sales of $1 billion.
Asset Purchase Agreement with Link
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On July 9, 2024, we entered into the Asset Purchase Agreement pursuant to which we acquired CT-95 (formerly known as LNK-101), from Link, which succeeded to the assets of Link Immunotherapeutics Inc. The FDA previously cleared the IND application for CT-95.
Pursuant to the Asset Purchase Agreement, we purchased all of the Transferred Assets on an “as is” and “where is” basis. CT-95 patents are currently being prosecuted and/or maintained in the United States, Europe, Canada, Australia, Japan and Taiwan. We also assumed certain liabilities relating to the Transferred Assets. In consideration of the purchase of the Transferred Assets, we made a one-time payment to Link of $3.75 million.
Collaboration and Licensing Agreement with BioAtla
On September 23, 2024, we entered into the BioAtla License Agreement with BioAtla, pursuant to which we obtained an exclusive, worldwide license to develop, manufacture and commercialize the BioAtla Assets, including BA3362 (renamed by the Company as CT-202), BioAtla’s Nectin-4 x CD3 TCE.
As partial consideration for the exclusive license under the BioAtla License Agreement, we made an upfront payment of $11.0 million, and BioAtla is eligible to receive up to $122.5 million in additional milestone payments based upon the achievement of specified pre-clinical, clinical, development and commercial milestones, as well as tiered mid-single digit to low double-digit royalties on future net sales for products containing the BioAtla Assets, subject to standard reductions.
Commercialization
We retain full worldwide development and commercialization rights to certain CLDN6 patents in the field of bispecific antibodies, full worldwide development and commercialization rights to CT-95 patents, and full worldwide development and commercialization rights to certain CT-202 patents. We periodically evaluate out-license opportunities for our product candidates and seek to identify drug candidates for novel indications and/or patient subpopulations with an oncology focus that we might in-license. Our commercial plans and strategy for any of our programs may change as programs advance, markets change, and we receive more clinical data, and will depend on availability of current and future capital.
Sales and marketing
We currently have no sales, marketing, or commercial product distribution capabilities, and we may explore partnerships with larger pharmaceutical organizations that already have these capabilities. We intend to build the necessary infrastructure and capabilities over time for the United States, and potentially other regions, following further advancement of a product candidate.
Manufacturing
We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We rely, and expect to continue to rely, on third parties for the manufacture of our current and any future product candidates for preclinical and clinical testing, as well as for commercial manufacture if any product candidate obtains marketing approval. We also rely, and expect to continue to rely, on third parties to package, label, store and distribute our current and any future investigational product candidates, as well as for our commercial products if marketing approval is obtained. We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment and personnel while also enabling us to focus our expertise and resources on the development of our current and any future product candidates.
To date, we have obtained active pharmaceutical ingredients (“API”) and drug product for our product candidates from several third-party contract manufacturers, including Lonza Sales AG (“Lonza Sales”) and Lonza AG (“Lonza AG”, and collectively with Lonza Sales, “Lonza”) and Just-Evotec Biologics, Inc. We continue to develop our supply chain for CTIM-76, CT-95 and CT-202, and intend to put in place additional framework agreements under which third-party contract manufacturers will generally provide us with necessary quantities of API and drug product on a project-by-project basis based on our development needs.
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On November 7, 2022, we entered into a license agreement (the “Lonza CTIM-76 License Agreement”) with Lonza Sales. Under the terms of the Lonza CTIM-76 License Agreement, to the extent Lonza’s technology is incorporated into CTIM-76, Lonza granted us a non-exclusive license to use certain proprietary Lonza intellectual property and systems for us to develop, manufacture and commercially exploit CTIM-76.
On November 3, 2025, we entered into a license agreement (the “Lonza CT-202 License Agreement”) with Lonza Sales. Under the terms of the Lonza CT-202 License Agreement, to the extent Lonza’s technology is incorporated into CT-202, Lonza granted us a non-exclusive license to use certain proprietary Lonza intellectual property and systems for us to develop, manufacture and commercially exploit CT-202.
We shall pay certain royalties and annual payments to Lonza under the applicable license agreement with respect to the manufacturing and sale of CTIM-76 or CT-202, as applicable, which amounts shall be determined by the party manufacturing CTIM-76 or CT-202, as applicable, and ranges from a potential annual payment of up to less than $500,000 per asset and a royalty per asset on net sales from 0% up to a low single digit percentage. Under each respective license agreement, the royalty payments and annual payments would be reduced per asset in certain circumstances, including should the valid claims for any such patent rights not exist in the country in which CTIM-76 or CT-202, as applicable, is being sold, and the royalty payments per asset would expire upon the later of the expiration of the licensed patents in the country in which CTIM-76 or CT-202, as applicable, is being sold, the expiration of the licensed patents in the country in which CTIM-76 or CT-202, as applicable, is being manufactured, and 10 years from the first commercial sales of CTIM-76 or CT-202, as applicable, in such country of sale.
The Lonza CTIM-76 License Agreement and the Lonza CT-202 License Agreement each continue until respectively terminated. We or Lonza may terminate either the Lonza CTIM-76 License Agreement or the Lonza CT-202 License Agreement, as applicable, for uncured material breaches or insolvency of the other party. We can unilaterally terminate the Lonza CTIM-76 License Agreement or the Lonza CT-202 License Agreement with prior written notice to Lonza, and Lonza can also unilaterally terminate the Lonza CTIM-76 License Agreement or the Lonza CT-202 License Agreement upon certain actions by us.
The Lonza CTIM-76 License Agreement and Lonza CT-202 License Agreement also each contain customary representations, warranties, indemnification and other obligations of us and Lonza.
As we advance our current and any future product candidates through development, we will consider our lack of redundant supply for the API and drug product for each product candidate to protect against any potential supply disruptions.
We generally expect to rely on third parties for the manufacture of any companion diagnostics we may develop.
Competition
The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products. While we believe that our technology, the experience of our executive and scientific team, research, clinical capabilities, development experience and scientific knowledge provide us with competitive advantages, we face increasing competition from many different sources, including pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions. Product candidates that we successfully develop and commercialize may compete with existing therapies and new therapies that may become available in the future.
Many of our competitors, either alone or with their collaborators, have significantly greater financial resources, established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than we do. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Mergers and acquisitions may result in even more resources being concentrated in our competitors.
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Our commercial potential could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market or make our development more complicated. The key competitive factors affecting the success of all of our programs are likely to be efficacy, safety and convenience.
For CTIM-76, our CLDN6 x CD3 TCE, we are aware of several companies developing T cell engagers against CLDN6. Several TCE candidates are currently in clinical development, including those of Beigene (BGB-B455), Third Arc Bio (ARC101), and Xencor (XmAb541). We may face further competition from companies pursuing the development of product candidates that target CLDN6 through other modalities, including Daiichi Sankyo (DS9606), BioNTech (BNT211), and TORL (TORL-1-23).
For CT-95, our MSLN x CD3 TCE, we are aware that Amgen (AMG-305) has a TCE candidate currently in clinical development. We may face further competition from companies pursuing the development of product candidates that target MSLN through other modalities, including RemeGen Biosciences (RC88), Outpace Bio (OPB-101), and Navrogen (NAV001, NAV008).
For CT-202, our Nectin-4 x CD3 TCE, we are aware of several companies developing T cell engagers against Nectin-4. Several TCE candidates are currently in clinical development, including those of Bicycle Therapeutics (BT7480). We may face further competition from companies pursuing the development of product candidates that target Nectin-4 through other modalities, including Pfizer (Padcev®), Bicycle Therapeutics (BT8009), Eli Lilly (LY4052031, LY4101174), Corbus Pharmaceuticals (CRB-701), Bio-Thera (BAT8007), Mabwell (PMW2821), Adcentrx (ADRX-0706), Aktis Oncology (AKY-1189), and Shanghai Henlius Biotech (HLX-309).
Intellectual property
We strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to our business, including seeking, maintaining and defending our patent rights. We retain full worldwide development and commercialization rights to certain CLDN6 antibody patents in the field of bispecific antibodies, full worldwide development and commercialization rights to CT-95 patents, and full worldwide development and commercialization rights to certain CT-202 patents. Our policy is to seek to protect our proprietary position by, among other methods, filing patent applications in the United States and in jurisdictions outside of the United States directed to our proprietary technology, inventions, improvements and product candidates that are important to the development and implementation of our business. We also rely on trade secrets and know-how relating to our proprietary technology to protect our product candidates and continuing to innovate to develop, strengthen and maintain our proprietary position in the field of oncology. We also plan to rely on data exclusivity, market exclusivity and patent term extensions when available. Our commercial success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our product candidates, technology, inventions and improvements; to preserve the confidentiality of our trade secrets; to defend and enforce our proprietary rights, including any patents that we may own or license in the future; and to operate without infringing on the valid and enforceable patents and other proprietary rights of third parties.
As of March 1, 2026, the Integral Molecular, Inc. patent portfolio covering CTIM-76 and methods of use that we exclusively licensed pursuant to the Integral License Agreement includes three granted U.S. patents, two pending U.S. non-provisional applications, granted patents in China, Eurasia, Japan, Saudi Arabia, Vietnam, Ukraine, and South Africa, and pending foreign applications in United Arab Emirates, Australia, Brazil, Canada, Chile, China, Eurasia, Europe, Hong Kong, Indonesia, Israel, India, Japan, South Korea, Mexico, New Zealand, the Philippines, Saudi Arabia, Singapore, South Africa, Thailand, Taiwan and Vietnam, of which the Philippines and Vietnam are allowed. The U.S. patents are expected to expire in 2040 and 2043, subject to any extensions or disclaimers. We also own two pending U.S. provisional applications, two pending International Patent Cooperation Treaty applications, and a pending application in Taiwan covering CTIM-76 and methods of using it, which, if converted and issued, will expire in 2045, subject to any extensions or disclaimers.
As of March 1, 2026, we own the patent portfolio covering CT-95 and methods of use, which includes one U.S. patent, one pending U.S. non-provisional application, two pending U.S. provisional applications, and pending
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foreign applications in Australia, Canada, Europe, Japan, and Taiwan. The U.S. patent and any patents that grant from the pending applications are expected to expire in 2042, subject to any extensions or disclaimers.
As of March 1, 2026, the BioAtla patent portfolio covering CT-202 and methods of use that we exclusively licensed pursuant to the BioAtla License Agreement includes one U.S. patent, two pending U.S. non-provisional applications, a granted patent in Japan, Mexico and Taiwan, and pending foreign applications in Australia, Canada, China, Europe, Hong Kong, Israel, India, Japan, South Korea, Macau, Mexico, Singapore, Thailand, and Taiwan, of which Israel is allowed. The issued patent and any patents that grant from the pending applications are expected to expire from 2039 to 2041, subject to any extensions or disclaimers.
We also possess substantial know-how and trade secrets relating to the development and commercialization of our product candidates, including related manufacturing processes and technology.
With respect to our current and any future product candidates and processes, we intend to develop and commercialize in the normal course of business, and we intend to pursue patent protection covering, when possible, compositions, methods of use, dosing and formulations. We may also pursue patent protection with respect to manufacturing and drug development processes and technologies.
Issued patents can provide protection for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance and the legal term of patents in the countries in which they are obtained. In general, patents issued for applications filed in the United States can provide exclusionary rights for 20 years from the earliest effective filing date. In addition, in certain instances, the term of an issued U.S. patent that covers or claims an FDA approved product can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period, which is called patent term extension. The restoration period cannot be longer than five years and the total patent term, including the restoration period, must not exceed 14 years following FDA approval. The term of patents outside of the United States varies in accordance with the laws of the foreign jurisdiction, but typically is also 20 years from the earliest effective filing date. However, the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.
The patent positions of companies like ours are generally uncertain and involve complex legal and factual questions. No consistent policy regarding the scope of claims allowable in patents in the field of oncology has emerged in the United States. The relevant patent laws and their interpretation outside of the United States is also uncertain. Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our technology or product candidates and could affect the value of such intellectual property. In particular, our ability to stop third parties from making, using, selling, offering to sell or importing products that infringe our intellectual property will depend in part on our success in obtaining and enforcing patent claims that cover our product candidates, technology, inventions and improvements. We cannot guarantee that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications we may file in the future, nor can we be sure that any patents that may be granted to us in the future will be commercially useful in protecting our products, the methods of use or manufacture of those products. Moreover, even our issued patents may not guarantee us the right to commercialize our product candidates, if approved. Patent and other intellectual property rights in the pharmaceutical and biotechnology space are evolving and involve many risks and uncertainties. Third parties may have blocking patents that could be used to prevent us from commercializing our product candidates and practicing our proprietary product candidates, and our issued patents may be challenged, invalidated or circumvented, which could limit our ability to stop competitors from marketing related products or could limit the term of patent protection that otherwise may exist for our product candidates. Moreover, such third parties may obtain damages against us, which could require us to make commercially reasonable royalty payments, payments for lost profits, or other damages, costs and expenses. In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar products. Furthermore, our competitors may independently develop similar products that are outside the scope of the rights granted under any issued patents. For these reasons, we may face competition with respect to our product candidates. Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any particular product candidate can be
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commercialized, any patent protection for such product may expire or remain in force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides.
Government Regulation
U.S. Regulatory Pathway
We expect that CTIM-76, CT-95 and CT-202 will each be classified and regulated by the FDA as a biologic. We expect that any small molecule product that we may develop will be classified and regulated by the FDA as a drug. A new drug application (“NDA”) is required to introduce a drug into interstate commerce. A biologics license application (“BLA”) is required to introduce a biologic product into interstate commerce. The specific requirements of NDAs and BLAs include applicant information, product information, manufacturing information, pre-clinical data, clinical data, and labelling. The most important, time-consuming, and expensive aspect of preparing for a BLA or NDA is conducting clinical trials to demonstrate safety and effectiveness. The requirements of such clinical trials heavily influence the eventual allowable product label claims. The FDA has a performance goal as defined in the Prescription Drug User Fee Act of 10 months for a standard submission and six months for priority review. It is not uncommon for NDAs and BLAs to require medical advisory board review prior to the FDA granting marketing approval. A facility inspection verifying the manufacturing systems is also usually performed prior to FDA approval.
The FDA offers a number of expedited development and review programs for qualifying product candidates, including the fast track program. New drug and biological product candidates are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast track designation considers the combination of the product candidate’s therapeutic potential and the specific indication for which it is being studied. The sponsor of a new drug or biologic may request that the FDA designate product candidate as fast track at any time during clinical development. The sponsor of a fast track designated product candidate has opportunities for more frequent interactions with the applicable FDA review team during product candidate development. A fast track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA/BLA on a rolling basis before the complete application is submitted upon agreement with the FDA. Fast track designation does not change the standards for approval but may expedite the development or approval process. Even if a product candidate qualifies for this program, the FDA may later decide that the product candidate no longer meets the conditions for qualification and rescind the designation or decide that the time period for FDA review or approval will not be shortened.
Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs and biologics intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered from sales in the United States for that drug. Orphan drug designation must be requested before submitting an NDA/BLA. If the FDA grants orphan drug designation, the FDA then discloses publicly the identity of the therapeutic agent and its potential orphan use. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
If a product that has orphan drug designation subsequently receives the first FDA market approval for the disease 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 to market the same drug for the same indication, except in very limited circumstances, for seven years. Orphan drug exclusivity, however, could also block the approval of one of our products for seven years if a competitor obtains approval of the same drug for the same indication or disease as defined by the FDA.
We have in the past used and intend to continue to utilize the services of third-party experts to supplement internal regulatory planning and implementation.
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Ongoing FDA Regulation
After the FDA permits a product to enter commercial distribution, numerous and pervasive regulatory requirements continue to apply to our business operations, products and technologies. These include:
• current good manufacturing practice (“cGMP”) requirements applicable to drugs and biologics, which require manufacturers, including third-party manufacturers, to follow stringent production, control, quality assurance, supplier qualification, documentation and other procedures throughout all aspects of the manufacturing process;
• labeling and marketing regulations which require that promotion is truthful, not misleading, fairly balanced and consistent with FDA-approved labeling for prescription drug and biologic products;
• advertising and promotion requirements, including FDA prohibitions against the promotion of products for uncleared, unapproved or off-label uses and FDA guidance on off-label dissemination of information and responding to unsolicited requests for information;
• restrictions on sale, distribution or use;
• product establishment, registration and listing requirements and reporting requirements;
• recall requirements, including a mandatory recall if there is a reasonable probability that a product would cause serious adverse health consequences or death;
• an order of repair, replacement or refund; and
• post-market surveillance activities and regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data.
The FDA has broad post-market and regulatory enforcement powers. Manufacturers of biologic products and drug products are subject to unannounced inspections by the FDA and other state, local and foreign regulatory authorities to assess compliance with cGMP and other applicable regulations, and these inspections may include the manufacturing facilities of any suppliers.
Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:
• warning letters, untitled letters, Form 483s, fines, injunctions, consent decrees and civil penalties;
• recall or seizure of products;
• operating restrictions, partial suspension or total shutdown of production;
• the FDA’s refusal of requests for approval of new products or indications for existing products;
• the FDA’s refusal to issue certificates to foreign governments needed to export products for sale in other countries;
• withdrawing approvals that have already been granted; and
• criminal prosecution.
Regulatory Pathway in the EU
Like the United States, the most important and time-consuming part of seeking marketing authorization in the European Union (“EU”) is the clinical trial process. In the EU, the various stages of non-clinical and clinical testing are subject to a significant volume of regulatory requirements and controls.
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The EU Clinical Trials Regulations (“EU CTR”), adopted in April 2014, became applicable on January 31, 2022 and repealed and replaced the EU Clinical Trials Directive. The EU CTR applies to all EU member states, unlike the precedent directive, which required each member state to enact the directive into national law. The EU CTR aims to harmonize the assessment and supervision process for clinical trials throughout the EU through the Clinical Trials Information System (“CTIS”). The CTR creates a centralized process, permitting clinical trial sponsors to submit a single clinical trial application, applicable to all multi-center trial sites within the EEA.
The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR.
To be placed on the market in the European Economic Area (“EEA”) following the clinical trial process, new medical products, including biologics, require a marketing authorization (“MA”). An MA application may be made through either the centralized or decentralized process, dependent, among other things, on the type of medical product seeking authorization. A centralized MA is issued by the European Commission based on the opinion of the European Medicines Agency (“EMA”). Centralized MAs are valid throughout the EU and required for certain types of medicinal products like those derived from biotechnological processes, orphan medical products, advanced therapy medicinal products, and medicinal products with a new active substance for the treatment of certain diseases. Where the centralized procedure is not mandatory or chosen, applicants may seek authorization through national procedures, the decentralized procedure, or the mutual recognition procedure, which result in national marketing authorizations granted by individual EU Member States.
Regulatory Pathway in the United Kingdom
As of January 1, 2021 and the implementation of the Windsor Framework on January 1, 2025, the UK is not generally subject to EU laws related to medical products. The EU laws that have been transposed into UK law through secondary legislation remain applicable in the UK; however, new EU legislation such as the EU CTR is not applicable in the UK.
As of January 1, 2025, all of the UK (including England, Wales, Scotland, and Northern Ireland) are regulated under the Medicines and Healthcare products Regulatory Agency (“MHRA”), the standalone UK medicines and medical device regulator. The UK regulatory framework for clinical trials is the Medicines for Human Use (Clinical Trials) Regulations 2004, as amended, which is derived from the EU Clinical Trials Directive. In 2024, the UK introduced amendments to the law that seek to streamline the process and accelerate approvals, while maintaining appropriate safety standards. The amendment is set to take full effect starting in April 2026.
In order to obtain a UK marketing authorization to place medical products on the market in the UK, an applicant must follow one of the UK national authorization procedures or one of the remaining post-Brexit international cooperation procedures. The MHRA may rely on the International Recognition Procedure (“IRP”) when reviewing certain types of MA applications. Pursuant to the IRP, the MHRA will consider the expertise and decisions of trusted regulatory partners ( e.g. , the medicines regulatory authorities in Australia, Canada, Switzerland, Singapore, Japan, the U.S. and the EMA). The MHRA will conduct a targeted assessment of IRP applications but retains the authority to reject applications if the evidence provided is considered insufficiently robust.
Regulatory Pathway in Australia
The Australian Therapeutic Goods Administration (“TGA”) and the National Health and Medical Research Council (“NHMRC”) set the legislative, regulatory and good clinical practice (“GCPs”) requirements for clinical trials in Australia. Australia has also adopted the ICH guidelines on GCP. Like other jurisdictions discussed above, pre-clinical trials are required to support a first-in-human trial in Australia.
The Therapeutic Goods Act 1989 and related regulations establish and maintain the national system of controls relating to the efficacy, quality, safety and timely availability of drugs and medical devices in Australia. The TGA administers two pathways for clinical trials, the Clinical Trials Notification (“CTN”) and Clinical Trials Approval
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(“CTA”) schemes. These pathways govern the process through which “unapproved” ( i.e. , not yet authorized for the Australian market) therapeutic goods may be supplied solely for experimental use in humans. The choice of which pathway to use (CTN or CTA) is made by the clinical trial sponsor, which must be an Australian legal entity or have an Australian sponsor responsible to the TGA. That decision is reviewed and confirmed by the HREC that approves the protocol. The CTA pathway, which requires prior regulatory approval, is designed primarily for high-risk or novel treatments where there is limited or no knowledge of the therapeutic good’s safety for use in humans.
All therapeutic goods must be approved for inclusion in the Australian Register of Therapeutic Goods (the “ARTG”) before it may be marketed (or imported, exported, manufactured or supplied) in Australia. In order to obtain registration of the product on the ARTG, the medical product’s sponsor must provide evidence supporting quality, safety, and efficacy, which may include clinical trials, and evidence demonstrating that the manufacture of the therapeutic product complies with all applicable principles of current good manufacturing practices (“cGMPs”).
Privacy and Security Laws
There are numerous U.S. federal and state laws and regulations related to the privacy and security of personal information, including health information. Among others, the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and their implementing regulations, (collectively referred to as “HIPAA”), establish privacy and security standards that limit the use and disclosure of protected health information (“PHI”) and require covered entities and business associates to implement administrative, physical, and technical safeguards to ensure the confidentiality, integrity and availability of individually identifiable health information in electronic form, among other requirements.
Violations of HIPAA may result in civil and criminal penalties. Companies subject to HIPAA must also comply with HIPAA’s breach notification rule which requires notification of affected patients and the U.S. Department of Health and Human Services (“HHS”), and in certain cases of media outlets, in the case of a breach of unsecured PHI. The regulations also require business associates of covered entities to notify the covered entity of breaches by the business associate. State attorneys general also have the right to prosecute HIPAA violations committed against residents of their states, and HIPAA standards have been used as the basis for the duty of care in state civil suits, such as those for negligence or recklessness in misusing personal information. In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA covered entities and their business associates for compliance.
Many states have laws that protect the privacy and security of sensitive and personal information, including health information, to which we are subject. These laws may be similar to or even more protective than HIPAA and other federal privacy laws. For example, California enacted the California Consumer Privacy Act (the “CCPA”), which creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data. The CCPA went into effect on January 1, 2020, and the California Attorney General may bring enforcement actions for violations as of July 1, 2020. On January 1, 2023, California adopted the California Privacy Rights Act (“CPRA”), which amended the CCPA to enhance certain of the privacy protections for California consumers that were created by the CCPA. The enhancements include imposing additional compliance obligations for covered entities and removing certain exemptions previously available under the CCPA. While the California Attorney General retains civil enforcement authority, the CPRA also created the California Privacy Protection Agency to implement and enforce the law. Since the CCPA, many other states have passed or are considering passing similar state privacy laws.
We may be subject to other state and federal privacy laws, including laws that prohibit unfair privacy and security practices and deceptive statements about privacy and security, laws that place specific requirements on certain types of activities, such as data security and texting, and laws requiring holders of personal information to maintain safeguards and to take certain actions in response to a data breach.
European Union member states, the United Kingdom, Switzerland and other jurisdictions have also adopted data protection laws and regulations, which impose significant compliance obligations. The EU-wide General Data Protection Regulation (“GDPR”) became applicable on May 25, 2018, replacing the previous data protection laws issued by each EU Member State based on the Directive 95/46/EC. Unlike the Directive (which needed to be
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transposed at national level), the GDPR text is directly applicable in each EU member state, resulting in a more uniform application of data privacy laws across the EU. The GDPR imposes onerous accountability obligations, requiring data controllers and processors to maintain a record of their data processing and policies. It requires data controllers to be transparent and disclose to data subjects (in a concise, intelligible and easily accessible form) how their personal information is to be used, imposes limitations on retention of information, increases requirements pertaining to pseudonymized (i.e., key-coded) data, introduces mandatory data breach notification requirements and sets higher standards for data controllers to demonstrate that they have obtained valid consent for certain data processing activities. Fines for non-compliance with the GDPR are significant—the greater of EUR 20 million or 4% of global turnover. The GDPR provides that EU Member States may introduce further conditions, including limitations, to the processing of genetic, biometric or health data. In the UK, the UK General Data Protection Regulation (the “UK GDPR”) came into effect on January 1, 2021. Similar to the GDPR, the UK GDPR sets out the key principles, rights, and obligations for most processing of personal data in the UK. The Data Protection Act of 2018, which came into effect on May 25, 2018 and was amended on January 1, 2021, works alongside and supplements the UK GDPR.
U.S. Healthcare Reform
Changes in healthcare policy could increase our costs and subject us to additional regulatory requirements that may interrupt commercialization of our products. By way of example, the Patient Protection and Affordable Care Act (“PPACA”) substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacted the pharmaceutical, medical device and biologics industries, among others.
Since its enactment, there have been judicial and Congressional challenges to certain aspects of PPACA, and there may be additional amendments to PPACA in the future. For example, in 2017, Congress enacted the Tax Cuts and Jobs Act, which eliminated the tax-based shared responsibility payment imposed by PPACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.”
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”), was passed, which among other things, allows for the Centers for Medicare & Medicaid Services (“CMS”) to negotiate prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D, beginning with 10 high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond. The legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation. The legislation also caps Medicare beneficiaries’ annual out-of-pocket drug expenses at $2,000. The effect of the IRA on our business is not yet known.
There will continue to be proposals by legislators at both the federal and state levels, regulators and third-party payors to reduce costs while expanding individual healthcare benefits. Certain of these changes could impose additional limitations on the prices we will be able to charge and/or patients’ willingness to pay for our products. While in general it is too early to predict what effect, if any, any future healthcare reform legislation or policies will have on our business, current and future healthcare reform legislation and policies could have a material adverse effect on our business and prospects.
Pricing and Reimbursement
In the United States and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payors. Third-party payors include government health administrative authorities, managed care providers, private health insurers, and other organizations. These third-party payors are increasingly challenging the price and examining the cost-effectiveness of medical products and services. In addition, significant uncertainty exists as to the reimbursement status of newly approved healthcare products, and efforts are underway to reduce the cost of medical products and services overall. We may need to conduct expensive studies in order to demonstrate the cost-effectiveness of our products. Our current and any future product candidates may not be considered cost-effective.
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Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. One third-party payor’s decision to cover a particular product does not ensure that other payors will also provide coverage for the product. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate revenue level. Future legislation could limit payments for our current and any future product candidates.
The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of less costly products. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for our products. The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, an increasing emphasis on managed care in the United States has increased and will continue to increase the pressure on medical product and service pricing.
Anti-Kickback and False Claims Laws
In the United States, the research, manufacturing, distribution, sale and promotion of pharmaceutical products and devices are subject to regulation by various federal, state and local authorities in addition to the FDA, including CMS, other divisions of HHS (e.g., the Office of Inspector General), the U.S. Department of Justice, state Attorneys General, and other federal, state and local government agencies. For example, sales, marketing and scientific/educational grant programs must comply with the Federal Food, Drug, and Cosmetic Act, the Anti-Kickback Statute, as amended, the False Claims Act, as amended, the privacy regulations promulgated under HIPAA, and similar state laws. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply. All of these activities are also potentially subject to federal and state consumer protection and unfair competition laws.
As noted above, in the United States, we are subject to complex laws and regulations pertaining to healthcare “fraud and abuse,” including, but not limited to, the federal Anti-Kickback Statute, the federal False Claims Act, and other state and federal laws and regulations. The Anti-Kickback Statute makes it illegal for any person, including a biological product manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer, or pay any remuneration that is intended to induce the referral of business, including the purchase or order of an item for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. Violations of this law are punishable by up to five years in prison, criminal fines, administrative civil money penalties, and exclusion from participation in federal healthcare programs. In addition, many states have adopted laws similar to the Anti-Kickback Statute. Some of these state prohibitions apply to the referral of patients for healthcare services reimbursed by any insurer, not just federal healthcare programs such as Medicare and Medicaid. Due to the breadth of these federal and state anti-kickback laws and the potential for additional legal or regulatory change in this area, it is possible that our sales and marketing practices and/or our relationships with physicians might be challenged under anti-kickback laws, which could harm us. Because we plan to commercialize products that could be reimbursed under a federal healthcare program and other governmental healthcare programs, we plan to develop a comprehensive compliance program that establishes internal controls to facilitate adherence to the rules and program requirements to which we are subject.
The federal False Claims Act prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services, including pharmaceutical products, that are false or fraudulent. Although we would not submit claims directly to payers, manufacturers can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label. In addition, our activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state, and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law. For example, pharmaceutical companies have been prosecuted under the federal False Claims Act in connection with their off-label promotion of drugs. Penalties for a False Claims Act violation include three times the actual damages sustained by the government, plus mandatory civil penalties for each separate
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false claim, the potential for exclusion from participation in federal healthcare programs, and, although the federal False Claims Act is a civil statute, conduct that results in a False Claims Act violation may also implicate various federal criminal statutes. If the government were to allege that we were, or convict us of, violating these false claims laws, we could be subject to a substantial fine and may suffer a decline in our stock price. In addition, private individuals have the ability to bring actions under the federal False Claims Act and certain states have enacted laws modeled after the federal False Claims Act.
There are also an increasing number of state laws that require manufacturers to make reports to states on pricing and marketing information. Many of these laws contain ambiguities as to what is required to comply with the laws. In addition, a provision of PPACA, referred to as the Sunshine Act, requires pharmaceutical product manufacturers to track and report to the federal government certain payments or other transfers of value made to physicians, registered nurses and teaching hospitals, among others, in the previous calendar year. These laws may affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us. In addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to the penalty provisions of the pertinent state and federal authorities.
Other Federal Healthcare Fraud and Abuse Laws
We may also be subject to other federal healthcare fraud and abuse laws, including provisions of HIPAA, which prohibit knowingly and recklessly executing a scheme or artifice to defraud any healthcare benefit program, including private payors, as well as knowingly and willfully falsifying, concealing or covering up a material fact by any trick, scheme or device or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government-sponsored programs. Similar to the federal Anti-Kickback Statute, a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation.
Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act (the “FCPA”), prohibits U.S. businesses and their representatives from offering to pay, paying, promising to pay or authorizing the payment of money or anything of value to a foreign official in order to influence any act or decision of the foreign official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring us to maintain books and records, which in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the corporation, including international subsidiaries, if any, and to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements. The scope of the FCPA includes interactions with certain healthcare professionals in many countries.
Human Capital
As of March 1, 2026, we had fifteen full-time employees and no part-time employees. None of these employees are represented by labor unions or covered by collective bargaining agreements. We believe that our employee relations are good.
Culture is a critical element in the management of our organization. Our talented employees are focused on driving our business with the foundation for all our efforts being to advance medicines for solid tumors. Our goal is that each colleague feels a deep connection to what they do, loves coming to work, and is aligned to our mission.
Culture begins with our hiring process and continues throughout an employee’s time with Context. We support our colleagues with a comprehensive offering of competitive pay and benefits.
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Corporate Information
We were incorporated under the laws of the State of Delaware in April 2021. Our corporate office is located at 2001 Market Street, Suite 3915, Unit #15, Philadelphia, PA 19103. Our telephone number is (267) 225-7416. We maintain an Internet website at www.contexttherapeutics.com. The information contained on our website is not incorporated by reference into this Form 10-K.
We make available free of charge under the “Investors & News” — “Financials” — “SEC Filings” section of our website all of our filings with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to such documents, each of which is provided on our website as soon as reasonably practicable after we electronically file or furnish, as applicable, the information with the SEC.
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