What changed in this filing

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Item 1. Business

2021-03-17 compared with 2020-03-27 · 243 added, 291 removed, 176 unchanged (75% of the section changed)

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deliver small molecule therapeutics that are safe, effective, and convenient to administer.

We have identified promising preclinical

and early clinical stage antiviral compounds for unmet medical needs including Hepatitis C virus (“HCV”), influenza

virus, coronavirus, and norovirus infections.

We have identified promising discovery,

preclinical and clinical stage antiviral compounds for unmet medical needs caused by influenza virus, coronavirus, hepatitis C

virus (“HCV”), and norovirus infections.

Company operates in one segment.

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its business for internal reporting or decision-making.

We are developing antiviral

therapeutics that inhibit the essential viral replication function of several viruses.

One of our goals is to decrease the duration

of HCV therapy by advancing drug candidates targeting the HCV RNA-dependent RNA polymerase enzyme.

Additional goals include treating

human and avian (bird) influenza virus, coronavirus and norovirus infections by discovering and developing drug candidates targeting

the viral replication complex.

In the case of coronavirus, we target the protease enzyme that produces the active form

of the viral enzymes.

are developing antiviral therapeutics that inhibit the essential viral replication function of RNA viruses causing acute and chronic

viral diseases.

Our goals include treating influenza virus, coronavirus, and norovirus infections by discovering and developing

drug candidates targeting the viral replication process.

Additionally, one of our goals is to decrease the duration of HCV therapy

by advancing our drug candidate targeting the HCV RNA-dependent RNA polymerase enzyme through partnerships and/or licensing activities.

In the case of coronavirus, we target a major protease enzyme that produces the active form of the viral replication enzyme.

To discover and design these inhibitors, we use a proprietary platform comprising computation, medicinal

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We determine the structures of cocrystals containing the inhibitors

bound to the enzyme or protein to guide our design.

We also use advanced computational methods to screen and design product candidates

using proprietary cocrystal structural information.

In designing the candidates, we seek to anticipate and avert potential viral

mutations leading to resistance.

By designing and selecting drug candidates that interrupt the viral replication process and also

have specific binding characteristics, we seek to develop drugs that are not only effective against both the virus and possible

mutants of the virus, but which also have reduced off-target interactions that cause undesirable clinical side effects.

This successful

application of our approach requires an extensive knowledge of viruses and drug targets.

In addition, knowledge and experience

in the fields of structural biology, and enzymology are required.

We developed our proprietary structure-based drug design under

the guidance of Dr.

Roger Kornberg, our Chief Scientist and recipient of the Nobel Prize in Chemistry in 2006.

Our drug discovery

process focuses on those parts of the enzymes to which drugs bind and on drug-enzyme interactions at the atomic level.

Additionally,

we have developed proprietary targeted in-house chemical libraries of non-nucleoside inhibitors, metal-binding inhibitors, and

drug-like fragments.

Our drug discovery process is different from traditional, empirical, medicinal chemistry approaches that

often require iterative high-throughput compound screening and lengthy hit-to-lead processes.

We continue developing preclinical

and clinical drug candidates using our proprietary drug discovery technology.

bound to the enzyme or protein to guide our structure-based drug design.

We also use advanced computational methods to screen

and design product candidates using proprietary cocrystal structural information.

In designing the candidates, we seek to anticipate

and avert potential viral mutations leading to resistance.

By designing and selecting drug candidates that interrupt the viral

replication process and also have specific binding characteristics, we seek to develop drugs that are not only effective against

both the virus and possible mutants of the virus, but which also have reduced off-target interactions that cause undesirable clinical

side effects.

The successful application of our approach requires an extensive knowledge of viruses and drug targets.

knowledge and experience in the fields of structural biology, and enzymology are required.

We developed our proprietary structure-based

drug design under the guidance of Dr.

Roger Kornberg, our Chief Scientist, Chairman of our Scientific Advisory Board and recipient

of the Nobel Prize in Chemistry in 2006.

Our drug discovery process focuses on the highly conserved regions of the viral enzymes

and inhibitor-enzyme interactions at the atomic level.

Additionally, we have developed proprietary chemical libraries consisting

of non-nucleoside inhibitors, metal-binding inhibitors, and drug-like fragments.

Our drug discovery process is different from

traditional, empirical, medicinal chemistry approaches that often require iterative high-throughput compound screening and lengthy

hit-to-lead processes.

We will continue developing preclinical and clinical drug candidates using our proprietary drug discovery

Company’s proprietary technology integrates several powerful and specialized techniques:

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of enzymatic mechanisms to guide the design of drugs with exceptional affinity, specificity, and broad-spectrum activity;

for rapid identification of antiviral enzyme inhibitors showing broad-spectrum antiviral capability.

for rapid identification of antiviral enzyme inhibitors showing broad-spectrum antiviral activity.

have applied these techniques to develop antiviral inhibitors of four important viruses:

HCV, influenza virus, coronavirus and

influenza virus, coronavirus, HCV and

Market-Driven

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safety and tolerability profile;

of administration, for example, a pill.

routes of administration including oral, inhalation, and/or injection.

at the discovery stage of drug development, we select compounds with these factors in mind.

Furthermore, our technology is capable

of delivering therapies that satisfy all of these key factors, as detailed below.

Furthermore, we believe our

technology is capable of delivering therapies that satisfy all of these key factors, as detailed below.

barrier to drug resistance :

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For example, in the 2009 swine influenza pandemic, the predominant strain was resistant to the best available therapies.

the current COVID-19 pandemic mutated viruses have been identified and sequenced demonstrating that the potential for resistance

to current drugs and reduced effectiveness of vaccines is already present.

Company’s focus on viral replication proteins can overcome the obstacle of viral resistance.

We identify and target critical

components of viral replication proteins that are essential for function, therefore, sensitive to change.

components of viral replication proteins that are essential for function, and therefore, sensitive to change.

A mutation in these

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of viruses that cause the disease.

For example, there are six major strains of the virus known to cause HCV.

These strains are

termed “genotypes.”

Each HCV genotype is common in some parts of the world and rare in others.

Also, there are three

types of influenza viruses, A, B, and C.

Influenza A and B viruses are significant human respiratory pathogens that cause seasonal

For example, there are three types of influenza viruses, A, B, and C.

Influenza A and B viruses

are significant human respiratory pathogens that cause seasonal flu.

Influenza A viruses can also cause an influenza pandemic.

Influenza C is a subtype of the influenza virus that tends to cause

only mild illness and is not responsible for seasonal or pandemic infections.

Our goal is to design and develop drug candidates

that will be effective on the broadest possible range of viruses causing the disease.

antiviral drugs available today are effective only against certain strains of viruses and less effective or not effective at

all against other strains.

To address this problem, we are developing drug candidates that specifically target viral

proteins involved in viral replication.

Despite the various strains of virus that may exist, these replication enzymes are

essentially identical (highly conserved) among all strains of a given virus.

By targeting these conserved replication

enzymes, our antiviral compounds are designed and tested to be effective against major virus strains.

Replication enzymes are

generally conserved not only among subtypes of a given virus but also among many different viruses, creating an opportunity

Influenza C is a subtype of the influenza virus that tends to cause only mild illness and is not responsible for seasonal or pandemic

Our goal is to design and develop drug candidates that will be effective on the broadest possible range of viruses

causing the disease.

antiviral drugs available today are effective only against certain strains of a given virus and less effective or not effective

at all against other strains.

To address this problem, we are developing drug candidates that specifically target viral proteins

involved in viral replication.

Despite the various strains of virus that may exist, these enzymes required for viral replication

are essentially similar (highly conserved) among all strains of a given virus.

By targeting these highly conserved regions of

the replication enzymes, our antiviral compounds are designed and tested to be effective against major virus strains.

enzymes are generally conserved not only among subtypes of a given virus but also among many different viruses, creating an opportunity

for the development of broad-spectrum antiviral drugs.

onset of action:

In order to improve patient care and penetrate the HCV marketplace, drugs are needed with faster onset of

viral load reduction resulting in shorter treatment time.

Current and known future influenza treatments shorten symptoms by only

about 24 hours.

Coronavirus and norovirus

spread readily among the affected population and both are in need of a fast-acting therapeutic intervention.

discovery and development phases we focus on this important clinical variable.

Antiviral drugs are needed with faster onset of viral load reduction resulting in shorter treatment time.

and tolerability :

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Because the targets are viral, not human, minimal adverse effects

are possible.

may be the result.

During the discovery phase, we evaluate candidate compounds for potential cross-reactivity with human replication

enzymes and attempt to eliminate those compounds that are cross-reactive with humans.

enzymes and attempt to eliminate those compounds that are cross-reactive with human homologous proteins.

of administration:

We select compounds for development that can be administered orally, preferably once daily in pill-form,

or by inhalation or injection.

and Development Update

During the year ended

December 31, 2019 the Company focused its research and development efforts primarily in three areas:

our HCV Non-Nucleoside Polymerase Inhibitor (“NNI”), is a potential best-in-class pan-genotypic inhibitor of NS5B

polymerase for the treatment of HCV infection.

It has the potential to be an important component in an all-oral ultra-short HCV

combination therapy.

The Company filed an Investigational New Drug (“IND”) application with the U.S.

Food and Drug

Administration (“FDA”) on February 28, 2018 and received notice from the FDA on March 29, 2018 that its IND was now

open and the Company was cleared to initiate its Phase 2a clinical study evaluating CC-31244 for the treatment of HCV infected

June 2018, the Company began enrollment in and initiation of patient dosing in its Phase 2a clinical study evaluating CC-31244

for the treatment of HCV infected individuals and completed the enrollment in September 2018.

The Phase 2a open-label study was

designed to evaluate the safety, tolerability and preliminary efficacy of CC-31244 in combination with Epclusa, an approved HCV

Patients are treated with CC-31244 and Epclusa for two weeks and then Epclusa alone for an additional four weeks.

On January 22, 2019

the Company announced safety and preliminary efficacy data for the Phase 2a study.

All subjects had completed the six-week treatment

The treatment was well tolerated with no study discontinuations due to adverse events.

Eight of 12 subjects achieved

the primary efficacy endpoint of sustained virologic response at 12 weeks after completion of treatment (SVR12).

SVR12 is defined

as undetectable virus in blood 12 weeks after completion of treatment and is considered a virologic cure.

The trial is completed

at the Institute of Human Virology, University of Maryland School of Medicine and the final study report is

In addition, in October

2018, the Company signed a Clinical Trial Agreement for an investigator-initiated study with the Humanity & Health Research

Centre (“HHRC”) in Hong Kong, China.

Due to unrest in Hong Kong and the coronavirus pandemic, the clinical trial

agreement has been terminated effective March 24, 2020.

December 2018, the Company voluntarily terminated a license agreement with Emory University covering the patents and patent applications

for HCV inhibitors, which are not essential to our HCV program.

See “Item I - Business –

Collaborations –

University Collaboration”

for further information.

Company is in partnership discussions for further clinical development of CC-31244.

the year ended December 31, 2020 the Company focused its research and development efforts primarily in three areas:

have several preclinical candidates under development for the treatment of influenza infection.

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We are currently

conducting additional preclinical IND enabling studies and plan to initiate a Phase 1 study during 2021.

addition, novel inhibitors effective against both strains A and B have been identified and are in the preclinical stage.

of these have potencies approaching single digit nanomolar.

On January 2, 2019, the Company entered into an Exclusive License

and Research Collaboration Agreement (the “Collaboration Agreement”) with Merck Sharp & Dohme Corp.

conducting additional preclinical IND enabling studies and plan to initiate a Phase 1 study in the third quarter of 2021.

addition, novel inhibitors effective against both influenza strains A and B have been identified and are in the preclinical stage.

Several of these have potencies approaching single digit nanomolar.

On January 2, 2019, the Company entered into an Exclusive

License and Research Collaboration Agreement (the “Collaboration Agreement”) with Merck Sharp & Dohme Corp.

(“Merck”)

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for more information.

February 24, 2020 the Company announced that it had entered into a license agreement with Kansas State University Research Foundation

(“KSURF”) to further develop certain proprietary broad-spectrum antiviral compounds for the treatment of Norovirus

and Coronavirus infections.

the terms of the agreement, Cocrystal has been granted an exclusive, royalty-bearing right and license to certain antiviral compounds

for humans covered by KSURF’s patents.

Cocrystal intends to pursue research and development of theses antiviral compounds,

including preclinical and clinical development.

This license advances the Company’s antiviral programs significantly by

providing potent compounds for further development.

We continue to identify

and develop non-nucleoside polymerase inhibitors using the Company’s proprietary structure-based drug design technology

In addition, we now have exclusive rights to norovirus protease inhibitors for use in humans obtained in the

license from Kansas State University Research Foundation (see under Collaborations below).

January 2021, we announced that we completed all research obligations under the Merck exclusive worldwide license and collaboration

agreement, and that Merck is now solely responsible for further development of the influenza A/B antiviral compounds that were

discovered using Cocrystal’s unique structure-based technologies and Nobel Prize-winning expertise.

Merck is continuing

development of the compounds under the terms of our Collaboration Agreement.

December 2020 we announced the selection of CDI-45205 as the lead compound for further development against coronaviruses including

SARS-CoV-2, that causes COVID-19.

was one of the broad-spectrum protease inhibitors that were obtained from Kansas State University Research Foundation (“KSURF”)

under an exclusive license agreement announced in April 2020.

That agreement provides Cocrystal with an exclusive, royalty-bearing

license to develop and commercialize therapeutic, diagnostic and prophylactic products against coronaviruses, caliciviruses and

picornaviruses based on antivirals discovered by KSURF.

See “Collaborations –

Kansas State University Research Foundation.”

The Company believes these protease inhibitors have the ability to convert the inactive SARS-CoV-2 polymerase replication enzymes

into an active form.

We are working toward pre-IND status with CDI-45205.

are also developing COVID-19 replication inhibitors using our drug discovery platform and expect to develop such additional

COVID-19 inhibitors with novel mechanism of action in 2021.

continue to identify and develop non-nucleoside polymerase and protease inhibitors using the Company’s proprietary structure-based

drug design technology platform.

In addition, we now have exclusive rights to norovirus protease inhibitors for use in humans

obtained in the license from Kansas State University Research Foundation (see under Collaborations below).

We expect to complete

proof-of-concept animal study in the first half of 2021.

A worldwide public health problem, including the potential for pandemic disease .

is a severe respiratory illness, caused primarily by influenza A or B virus.

The Centers for Disease Control and Prevention (the

“CDC”) estimates that influenza was linked to approximately 79,000 deaths and 960,000 hospitalizations in the United

States during the 2017-2018 flu season.

According to the report published by BCC Research in May 2018, the global influenza market

was valued at approximately $5.6 billion in 2017 and is expected to reach nearly $6.5 billion by 2022, increasing at a compound

annual growth rate (CAGR) of 3.0% from 2017 through 2022.

approved antiviral treatments for influenza are effective, but burdened with significant viral resistance.

Strains of influenza

virus that are resistant to the approved treatments osteltamivir phosphate (Tamiflu(R)) and zanamavir (Relenza(R)) have appeared,

and in some cases predominate.

For example, the predominant strain of the 2009 swine influenza pandemic was resistant to Tamiflu.

These drugs target viral neuraminidase enzymes, which are not highly conserved between viral strains.

In fact, different influenza

virus strains such as H1N1 and H5N1 are named according to their respective differences in hemagglutinin (H) and neuraminidase

Company has several preclinical candidates under development for the treatment of influenza infection.

CC-42344, a novel PB2 inhibitor,

has been selected as a preclinical lead.

This candidate binds to a highly conserved PB2 site of the influenza polymerase (PB1:

PA), and exhibits a novel mechanism of action.

CC-42344 showed excellent antiviral activity against influenza A strains,

including avian pandemic strains, and Tamiflu-resistant, Xofluza-resistant strains, and has a favorable pharmacokinetic profile.

In addition to Tamiflu, an approved antiviral product candidate that is a competitor for the Company’s influenza programs,

S-033188, being developed by Shionogi/Roche.

S-033188 was approved as Xofluza in Japan on February 23, 2018, and in the US as

baloxavir marboxil (trade name Xofluza ®

) on October 24, 2018.

See “Item 1 –

Business –

and Development Update –

Influenza”

for more information.

Xofluza-resistant strains emerged in both the US and Japan

within several months of Xofluza being on the market.

COVID-19 continues to be a global pandemic fueled by an emergence of new strains .

continues to be a global pandemic with 117,332,262 confirmed cases globally, including 2,605,356 deaths, as of March 10, 2021,

according to the data reported by the World Health Organization.

The COVID-19 pandemic and the measures taken by the federal,

state and foreign governments to stop the spread of the virus have caused a significant disruption to the U.S.

and global economy.

Coronaviruses

(CoV) are a large family of viruses that historically have been associated with illness ranging from mild symptoms similar to

the common cold to more severe respiratory disease.

Infection with the novel SARS-CoV-2 has been associated with a wide range

of responses, from no symptoms to more severe disease that has included pneumonia, severe acute respiratory syndrome, kidney failure,

The incubation period for SARS-CoV-2 is believed to be within 14 days after exposure, with most illness occurring within

about 5 days after exposure.

The ability of someone with no symptoms to transmit infection to another person has heightened the

public health challenge of COVID-19.

October 22, 2020, FDA approved the antiviral drug Veklury (remdesivir) for the treatment of COVID-19 requiring hospitalization.

Remdesivir is a nucleotide prodrug that inhibits viral replication and was previously evaluated in clinical trials for Ebola treatment

We are aggressively pursuing the development of novel antiviral compounds for the treatment of coronavirus infections

using our established proprietary drug discovery platform.

By targeting the viral replication enzymes and protease, we believe

it is possible to develop an effective treatment for all coronavirus diseases including COVID-19, Severe Acute Respiratory Syndrome

(SARS), and Middle East Respiratory Syndrome (MERS) - coronaviruses.

A large competitive market with opportunity for shorter treatment regimens .

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have chronic HCV infections.

are targeting the NS5B polymerase with an NNI, which could be developed as part of an all-oral, pan-genotypic combination regimen.

are targeting the viral NS5B polymerase with an NNI, which could be developed as part of an all-oral, pan-genotypic combination

Our focus is on developing what is now called ultrashort treatment regimens from 4 to 6 weeks in length.

Such a combination treatment

CC-31244 with different classes of approved DAAs has the potential to change the paradigm of treatment for HCV with a shorter

duration of treatment.

Combination strategies with approved drugs could allow us to expand CC-31244 into the HCV antiviral therapeutic

area globally and could lead to a high and fast cure rate, to improved compliance, and to reduced treatment duration.

To our knowledge

no competing company has yet developed a short HCV treatment of less than 8 weeks with a high (>95%) sustained virologic response

(SVR) at week 12.

CC-31244, an HCV NNI,

is a potential best in class pan-genotypic inhibitor of NS5B polymerase for the treatment of HCV.

The Company completed a Phase

1a/b study in Canada in September 2016, with favorable safety results in a randomized, double-blinded, Phase 1a/b study in healthy

volunteers and HCV-infected subjects.

The Company has completed a Phase 2a study in HCV genotype 1 subjects in the United

Such a combination

treatment CC-31244 with different classes of approved DAAs has the potential to change the paradigm of treatment for HCV with

a shorter duration of treatment.

Combination strategies with approved drugs could allow us to expand CC-31244 into the HCV antiviral

therapeutic area globally and could lead to a high and fast cure rate, to improved compliance, and to reduced treatment duration.

To our knowledge no competing company has yet developed a short HCV treatment of less than 8 weeks with a high (>95%) sustained

virologic response (SVR) at week 12.

an HCV NNI, is a potential best in class pan-genotypic inhibitor of NS5B polymerase for the treatment of HCV.

The Company completed

a Phase 1a/b study in Canada in September 2016, with favorable safety results in a randomized, double-blinded, Phase 1a/b study

in healthy volunteers and HCV-infected subjects.

The Company has completed a Phase 2a study in HCV genotype 1 subjects in the

United States.

Cocrystal presented the interim results from the Phase1a/b study at the APASL in February 2017.

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study suggest that CC-31244 could be an important component in a shortened duration all-oral HCV combination therapy.

enrollment has been completed in the Phase 2b.

enrollment has been completed in the Phase 2b and the final study report filed with the FDA.

See “Item 1 –

Business –

Research and Development Update –

1 unchanged sentence

for more information.

The Company is seeking a partner for further clinical development

A worldwide public health problem, including the potential for pandemic disease .

is a severe respiratory illness, caused primarily by influenza A or B virus.

The Centers for Disease Control and Prevention (the

“CDC”) estimates that influenza was linked to approximately 79,000 deaths and 960,000 hospitalizations in the United

States during the 2017-2018 flu season.

According to the report published by BCC Research in May 2018, the worldwide market for

antiviral drugs to treat influenza was valued at approximately $5.6 billion in 2017 and is expected to grow to $6.5 billion by

approved antiviral treatments for influenza are effective, but burdened with significant viral resistance.

Strains of influenza

virus that are resistant to the approved treatments osteltamivir phosphate (Tamiflu(R)) and zanamavir (Relenza(R)) have appeared,

and in some cases predominate.

For example, the predominant strain of the 2009 swine influenza pandemic was resistant to Tamiflu.

These drugs target viral neuraminidase enzymes, which are not highly conserved between viral strains.

In fact, different influenza

virus strains such as H1N1 and H5N1 are named according to their respective differences in hemagglutinin (H) and neuraminidase

In addition, the Company

has several preclinical candidates under development for the treatment of influenza infection.

CC-42344, a novel PB2 inhibitor,

has been selected as a preclinical lead.

This candidate binds to a highly conserved PB2 site of the influenza polymerase complex

PA), and exhibits a novel mechanism of action.

CC-42344 showed excellent antiviral activity against influenza A strains,

including avian pandemic strains and Tamiflu-resistant strains, and has a favorable pharmacokinetic profile.

product candidates that are competitors for the Company’s influenza programs are, VX-787, being developed by Janssen, and

S-033188, being developed by Shionogi/Roche.

S-033188 was approved as Xofluza in Japan on February 23, 2018, and in the

US as baloxavir marboxil (trade name Xofluza®) on October 24, 2018.

See “Item 1 –

Business –

Research and Development Update –

Influenza”

for more information.

The World Health Organization (WHO) has recently declared COVID-19 a pandemic.

On March 11, 2020 the

World Health Organization classified the coronavirus disease 2019 (COVID-19), a pandemic.

This announcement followed the

rapid worldwide rise of infected individuals after the initial identification of pneumonia associated with an unknown virus in

China in December 2019, later determined to be caused by infection with the virus named SARS-CoV-2.

Coronaviruses (CoV)

are a large family of viruses that historically have been associated with illness ranging from mild symptoms similar to the common

cold to more severe respiratory disease.

Infection with the novel SARS-CoV-2 has been associated with a wide range of responses,

from no symptoms to more severe disease that has included pneumonia, severe acute respiratory syndrome, kidney failure, and death.

The incubation period for SARS-CoV-2 is believed to be within 14 days after exposure, with most illness occurring within

about 5 days after exposure.

The ability of someone with no symptoms to transmit infection to another person has heightened the

public health challenge of COVID-19.

There is currently no

treatment recommended for COVID-19 or shown to be effective against other coronaviruses.

We are aggressively pursuing the development

of novel antiviral compounds for the treatment of coronavirus infections using our established proprietary drug discovery platform.

By targeting the viral replication enzymes and protease, we believe it is possible to develop an effective treatment for all coronavirus

diseases including COVID-19, Severe Acute Respiratory Syndrome (SARS), and Middle East Respiratory Syndrome (MERS) - coronaviruses.

Company has been seeking a partner for further clinical development of CC-31244 since completing Phase 2a trials.

A worldwide public health problem responsible for close to 90% of epidemic, non-bacterial outbreaks of gastroenteritis around

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in early stages of clinical testing by GlaxoSmithKline, Ligocyte and Takeda Pharmaceuticals.

By targeting viral replication

enzymes and a viral protease, we believe it is possible to develop an effective treatment for all genogroups of norovirus.

Also, because of the significant unmet medical need and the possibility of chronic norovirus infection in immunocompromised individuals,

new antiviral therapeutic approaches may warrant an accelerated path to market.

The Company is developing inhibitors of the RNA-dependent

RNA polymerase of norovirus.

Similar to the HCV polymerases, this enzyme is essential to viral replication and is highly conserved

between all noroviral genogroups.

Therefore, an inhibitor of this enzyme might be an effective treatment or short-term prophylactic

agent, when administered during a cruise or nursing home stay, for example.

We have developed X-ray quality norovirus polymerase

and protease crystals and have identified promising inhibitors.

We are implementing the platform and approaches that have proven

successful in our other antiviral programs.

Possible Effects of COVID-19

While our administrative and finance activities

are fully functional by our providing services from remote locations, our research laboratory is located in Bothell, Washington.

In his latest State of Emergency Proclamation, the Washington Governor issued a “Stay Home Stay Healthy Order”, the

effect of which includes shutting all non essential businesses until April 6th.

Our research laboratory is not an essential business

which means our team of scientists can not access our laboratory.

While they can continue to work from home and carry out other

duties, we estimate that by some time shortly after April 6 th without access to our laboratory, our ongoing research

will be suspended.

This will affect our research programs if the Order is extended.

For further information on COVId-19 risks,

“Risk Factors.”

Our success depends, in part, upon our

ability to protect our core technology.

To establish and protect our proprietary rights, we rely on a combination of patents,

patent applications, trademarks, copyrights, trade secrets and know-how, license agreements, confidentiality procedures, non-disclosure

agreements with third parties, employee disclosure and invention assignment agreements, and other contractual rights.

Our patent portfolio consists of issued

patents and pending applications in the areas primarily related to the treatment of disease associated with HCV, Influenza A,

Influenza B, and Norovirus/Coronavirus.

In our HCV program, our patent portfolio

consists of various patent families, with granted patents in the U.S.

and Europe, as well as China, Canada, Eurasia, Japan, and

Applications are pending in numerous other jurisdictions, including a pending PCT application.

In our Influenza A program, our patent

portfolio consists of various patent families, including pending international (PCT) applications and one family of pending applications

in in the U.S.

targeting viral replication enzymes and a viral protease, we believe it is possible to develop an effective treatment for all

genogroups of norovirus.

Also, because of the significant unmet medical need and the possibility of chronic norovirus infection

in immunocompromised individuals, new antiviral therapeutic approaches may warrant an accelerated path to market.

is developing inhibitors of the RNA-dependent RNA polymerase and protease of norovirus.

Similar to the HCV polymerases, these

enzymes are essential to viral replication and is highly conserved between all noroviral genogroups.

Therefore, an inhibitor of

these enzymes might be an effective treatment or short-term prophylactic agent, when administered during a cruise or nursing home

stay, for example.

We have developed X-ray quality norovirus polymerase and protease crystals and have identified promising inhibitors.

We are implementing the platform and approaches that have proven successful in our other antiviral programs.

success depends, in part, upon our ability to protect our core technology.

To establish and protect our proprietary rights, we

rely on a combination of patents, patent applications, trademarks, copyrights, trade secrets and know-how, license agreements,

confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements,

and other contractual rights.

patent portfolio consists of issued patents and pending applications in the areas primarily related to the treatment of disease

associated with HCV, Influenza A, Influenza B, and Norovirus/Coronavirus.

our HCV program, our patent portfolio consists of four patent families, with granted patents in the U.S.

and Europe, as well as

China, Canada, Eurasia, Japan, and Singapore.

Applications are pending in numerous other jurisdictions.

our Influenza A program, our patent portfolio consists of four patent families, including two pending international (PCT) applications

and two families of pending applications in the U.S.

and various foreign countries.

our Influenza A/B program, our patent portfolio consists of a number of patent families pending, variously, as international (PCT)

applications and in Taiwan.

Aspects of this program are developed in collaboration with Merck.

In our Influenza A/B program, our patent

portfolio consists of a number of patent families pending, variously, as international (PCT) applications and in Taiwan.

In our Norovirus and Coronavirus programs,

our patent portfolio consists of a pending U.S.

provisional application, and patent families licensed from Kansas State University

Research Foundation.

our Norovirus and Coronavirus programs, our patent portfolio consists of three pending families of U.S.

provisional applications,

and a portfolio of patent families licensed through KSURF.

Collaborations

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clinical development at Merck, and Merck is responsible for worldwide commercialization of any products derived from the collaboration.

The Company received an upfront payment of $4,000,000 and is eligible to receive milestone payments related to designated development,

regulatory and sales milestones with the potential to earn up to $156,000,000, as well as royalties on product sales.

The Collaboration

Agreement operates under a Research Operating Plan (ROP) which includes goals for both organizations.

The Company has achieved

anticipated goals in 2019.

“Item 1A.

Risk Factors - If our research collaboration with Merck is terminated or is otherwise unsuccessful, including

failure to reach milestones, we could lose the research program funding, and would not receive milestone payments or royalties,

which could materially and adversely affect our business, our ability to successfully develop and commercialize influenza A/B

product candidates and our future financial condition”

for the discussion of termination provisions of the Collaboration

The Company received an upfront payment of $4,000,000 in January 2019 and is eligible to receive milestone payments related to

designated development, regulatory and sales milestones with the potential to earn up to $156,000,000, as well as royalties on

product sales.

The Collaboration Agreement operates under a Research Operating Plan (ROP) which includes goals for both organizations.

In January 2021, the Company announced it had completed all research obligations under the Merck exclusive worldwide license and

collaboration agreement, and that Merck is now solely responsible for further development of the influenza A/B antiviral compounds

that were discovered in the collaboration using Cocrystal’s unique structure-based technologies and Nobel Prize-winning

State University Research Foundation

February 18, 2020, Cocrystal Pharma, Inc.

(the “Company”) entered into a License Agreement (the “Agreement”)

with Kansas State University Research Foundation (the “Foundation”) effective February 12, 2020.

to the terms of the Agreement, the Foundation granted the Company an exclusive royalty bearing license for human use to practice

under certain patent rights, including a patent and a patent application covering antivirals against coronaviruses and norovirus,

and related know-how, to make and sell therapeutic, diagnostic and prophylactic products.

Company agreed to pay the Foundation a one-time non-refundable license initiation fee of $80,000 and an annual license maintenance

fee of $20,000 per year, and agreed to reimburse the Foundation for third party expenses associated with the filing, prosecution

and maintenance of the patent rights in question.

The Company also agreed to make certain future milestone payments up to $3.1

million, dependent upon the progress of clinical trials, regulatory approvals, and initiation of commercial sales in the United

States and certain countries outside the United States.

Agreement will remain in effect until the expiration of the patent rights covered by the Agreement, unless earlier terminated

pursuant to customary terms.

University Collaboration

December 6, 2018, we notified Emory University (“Emory”) of the termination of our License Agreement with Emory, dated

March 7, 2013 (the “License Agreement”).

The License Agreement covered patents and patent applications for HCV inhibitors,

which we no longer consider essential to our HCV program.

As part of our HCV program, we continue to focus our efforts on CC-31244,

See “Item 1 –

Business ‒ Research and Development Update ‒ Hepatitis C.”

had the right to terminate the License Agreement at its sole discretion upon 90 days’

prior written notice and upon payment

of all amounts due Emory under the License Agreement through the date of termination.

As of the date of this Annual Report on

Form 10-K, the License Agreement has been terminated, no amounts were due under the License Agreement and none will be owed in

entered into a License Agreement with KSURF on February 18, 2020 to further develop certain proprietary broad-spectrum antiviral

compounds for the treatment of Norovirus and Coronavirus infections.

to the terms of the License Agreement, KSURF granted the Company an exclusive royalty bearing license to practice under certain

patent rights, under patent applications covering antivirals against coronaviruses, caliciviruses, and picornaviruses, and related

know-how, including to make and sell therapeutic, diagnostic and prophylactic products.

Company agreed to pay KSURF a one-time non-refundable license initiation fee of $80,000 under the License Agreement, and annual

license maintenance fees.

The Company also agreed to make certain future milestone payments of up to approximately $3.1 million,

dependent upon the progress of clinical trials, regulatory approvals, and initiation of commercial sales in the United States

and certain countries outside the United States.

April 19, 2020, the Company entered into a second License Agreement with KSURF in addition to the License Agreement entered into

in February 2020.

to the terms of the second License Agreement, KSURF granted the Company an exclusive royalty bearing license to practice under

certain patent rights under patent applications covering antivirals against coronaviruses, caliciviruses, and picornaviruses,

and related know-how, including to make and sell therapeutic, diagnostic and prophylactic products.

Company agreed to pay KSURF a one-time non-refundable license initiation fee and annual license maintenance fees.

also agreed to make certain future milestone payments of up to approximately $4.2 million, dependent upon the progress of clinical

trials, regulatory approvals, and initiation of commercial sales in the United States and certain countries outside the United

Discovery Collaboration with HitGen and InterX

has a drug discovery collaboration with HitGen, a biotech company with an innovative DNA Encoded Library technology, and InterX

Inc., a computer software company with a biomolecular simulation for drug discovery.

The collaboration was initiated in September

2017 and has a term through August 2023.

this collaboration, Cocrystal, HitGen and InterX scientists are applying HitGen’s DNA-encoded library (DEL) technology platform,

Cocrystal’s structure-based drug discovery platform technology, and InterX’s computational science to develop novel

antiviral lead candidates.

The DEL technology combines the power of molecular biology, combinatorial chemistry, high throughput

sequencing and advanced informatics to identify potential drug candidates.

Cocrystal applies its technology to determine the cocrystal

structures of the potential drug candidates identified from the DEL library.

This structural information is then combined with

InterX’s advanced computer algorithms to predict inhibitor-target interactions.

A Joint Steering Committee comprised of

representatives from all three companies is overseeing the collaboration.

biotechnology and pharmaceutical industries are subject to intense and rapidly changing competition as companies seek to develop

1 unchanged sentence

We know of several companies that have marketed or are developing products for the

treatment of HCV or influenza, including Roche, Gilead Sciences, Inc.

(“Gilead”), Merck & Co., Janssen Pharmaceuticals,

treatment of influenza, coronavirus and HCV, including Roche, Gilead Sciences, Inc.

(“Gilead”), Merck, Janssen Pharmaceuticals,

Inc., Bristol-Myers Squibb, Toyama Chemical Co., Shionogi/Roche and Abbvie, Inc.

In particular, Gilead and Abbvie dominate the

market for HCV with an estimated combined market share greater than 85%.

Their products are widely considered effective.

of the companies developing products for the other viral diseases that are of interest to us have substantially greater financial

resources, expertise and capabilities than we do.

Further, in the wake of the global COVID-19 pandemic a number of third parties, including large biotechnology and pharmaceutical

companies such as Pfizer Inc., Moderna, Inc., Janssen Pharmaceuticals, Inc., and academic institutions have been conducting research

aimed at development of an effective treatment for, or a vaccine against, COVID-19.

Many of the companies developing products

for the viral diseases that are the focus of our programs have substantially greater financial resources, including government

funding, expertise and capabilities than we do and have existing products in significantly more advanced stages of development.

authorities extensively regulate the research, development, testing, manufacturing and commercialization of drug products.

25 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business