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Item 1. Business

2024-03-28 compared with 2023-03-29 · 273 added, 285 removed, 173 unchanged (76% of the section changed)

(the “Company” or “Cocrystal”) is a clinical-stage biotechnology company seeking to discover and

develop novel antiviral therapeutics as treatments for serious and/or chronic viral diseases.

We employ unique structure-based technologies

and Nobel Prize winning expertise to create first- and best-in-class antiviral drugs.

These technologies are designed to efficiently

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

(the “Company” or “Cocrystal”) is a clinical-stage biotechnology company discovering and developing

novel antiviral therapeutics as treatments for serious and/or chronic viral diseases.

We employ unique structure-based technologies and

Nobel Prize winning expertise to create first- and best-in-class antiviral drugs.

These technologies are designed to efficiently deliver

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

We have identified promising discovery, preclinical

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

(“HCV”) infections.

Company operates in one segment.

Management uses cash flows as the primary measure to manage its business and does not segment its business

for internal reporting or decision-making.

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.

of coronavirus antiviral therapeutics, we target replication enzymes and proteases that are required for the viral replication and transcription.

To discover and design these inhibitors, we use a proprietary platform comprising computational chemistry, medicinal chemistry, X-ray

crystallography and our extensive know-how.

We determine the structures of cocrystals containing the inhibitors 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 may cause undesirable clinical side effects.

The 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 Chairman of both our Scientific Advisory Board and Board of Directors (the “Board”), in addition

to a 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 technology.

and clinical stage antiviral compounds for unmet medical needs caused by RNA viruses including influenza virus, coronaviruses (including

SARS-CoV-2 & MERS-CoV), norovirus, respiratory virus infections and hepatitis C virus (“HCV”) infections.

Company operates as one business entity.

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

and chronic viral diseases.

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

and developing drug candidates targeting required steps in the viral replication process.

Additionally, one of our goals is to decrease

the duration of HCV therapy.

To discover and design these virus replication inhibitors, we use a proprietary platform comprising computational

chemistry, medicinal chemistry, X-ray crystallography and our extensive know-how.

We determine the structures of cocrystals containing

the inhibitors bound to the viral 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 may cause undesirable clinical side effects.

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, pharmacology, virology, and enzymology are required.

We developed our proprietary structure-based

drug design under the guidance of Dr.

Roger Kornberg, our Chief Scientist and Chairman of both our Scientific Advisory Board (“SAB”)

and Board of Directors (the “Board”), who received the Nobel Prize in Chemistry in 2006.

Our drug discovery process focuses

on the highly conserved regions of the viral drug target 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 technology.

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

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resolution 3-D structure determination of drug binding pockets;

computational analysis of conservation of drug-binding pockets and critical molecular interactions between antiviral inhibitors and

amino acid residues of the target molecule’s drug-binding pocket;

computational analysis of conserved drug-binding pockets and critical molecular interactions between antiviral inhibitors and amino

acid residues of the target molecule’s drug-binding pocket;

structure determinations to inform hit identification, hit-to-lead, and lead optimization processes;

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against all viral subtypes that cause disease;

onset of action and/or shortened therapeutic time;

mechanism of action for therapeutic and/or prophylactic treatments;

safety and tolerability profile;

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influenza pandemic, the predominant strain was resistant to the best available therapies.

In the 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.

For example, the Omicron variant which arose as the dominant strain of COVID-19 in late 2021 until it diminished

in the winter of 2022 displayed increased resistance to available vaccines and treatments, resulting in the limitation or suspension

of emergency use authorizations by the FDA for certain therapeutic products.

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, and therefore, sensitive to change.

A mutation in these critical components

is likely to inactivate the replication protein and, in turn, render the virus incapable of replicating.

Because such mutations cannot

propagate, the virus cannot effectively develop resistance to the enzyme inhibitors we employ.

We test the effectiveness of our compounds

against potential viral mutations and select compounds with the highest barrier to resistance.

During the COVID-19 pandemic outbreak newly

emergent mutated coronaviruses have been identified, pointing out the ineffectiveness of vaccines and therapeutics.

Another example,

the Omicron variant which arose as the dominant strain of COVID-19 in late 2021 until it diminished in the winter of 2022 displayed increased

resistance to available vaccines and treatments, resulting in the limitation or suspension of emergency use authorizations by the FDA

for certain therapeutic products.

In early 2024, a new strain of COVID-19 named JN.1 rapidly grew to the predominant strain of the virus

in circulation, believed to be either more transmissible or better at evading the immune system than other circulating variants.

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

We identify and target

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

A mutation in these

critical residues is likely to inactivate or slow down the replication processes and, in turn, render the virus incapable of replicating.

Because such mutations cannot propagate, the virus cannot effectively develop resistance to the enzyme inhibitors we employ.

the effectiveness of our compounds against existing drug resistant variants and select compounds with the highest barrier to resistance.

effective against major strains responsible for a viral disease :

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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.

to design and develop drug candidates that will be effective on the broadest possible range of viruses causing the disease.

human respiratory pathogens that cause seasonal flu and hospitalizations, with influenza A viruses being solely responsible for past

influenza pandemics.

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 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

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

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

is essentially highly conserved among all strains of a given virus.

By targeting these highly conserved regions of the replication enzymes,

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and tolerability :

All drugs have side effects, also referred to as adverse effects.

These usually result from a drug’s ability

to bind to human molecules (usually proteins).

When this interaction is intentional (i.e., part of the drug’s mechanism of action),

the adverse effects are classified as on-target effects.

When this interaction is unintentional (i.e., resulting from the drug’s

interaction with an unintended human molecule), the effects are called off-target effects.

Our inhibitors target viral replication enzymes,

which are generally unique to viruses.

Because the targets are viral, not human, minimal adverse effects may be the result.

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 human homologous proteins.

In December 2022, we reported favorable safety and tolerability

results from a Phase 1 study of our oral antiviral CC-42344 developed for the treatment of both pandemic and seasonal influenza A.

All drugs potentially have side effects, also referred to as adverse effects.

These usually result from a drug’s

ability to interact and/or interfere the physiological functions of human proteins, causing undesirable effects.

When this interaction

is intentional (i.e., part of the drug’s mechanism of action), the adverse effects are classified as on-target effects.

interaction is unintentional (i.e., resulting from the drug’s interaction with an unintended human molecule), the effects are called

off-target effects.

Our inhibitors target viral replication enzymes, which are generally unique to viruses.

Because the targets are viral,

not human, minimal adverse effects 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 human homologous proteins.

of administration:

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

CC-42344, a novel oral PB2 inhibitor, was selected

as a preclinical lead for the treatment of pandemic and seasonal influenza A, and was advanced to a Phase 1 clinical trial in 2022 as

described in more detail below.

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

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 favorable pharmacokinetic and drug resistance profiles.

March 2022 enrollment was initiated in a randomized, double-blind, placebo-controlled Phase 1 study of CC-42344, which was conducted

in Australia.

In April 2022 we announced preliminary results from the first two cohorts of the single-ascending dose portion of the study

in which CC-42344 demonstrated a favorable safety and pharmacokinetic profile.

In December 2022, we reported favorable safety and tolerability

results from a Phase 1 study of CC-42344 for the treatment of both pandemic and seasonal influenza A.

addition, novel inhibitors effective against both influenza 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.

(“Merck”) to discover

and develop certain proprietary influenza A/B antiviral agents.

See “Item 1 – Business – Collaborations – Merck

Collaboration” for more information.

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

and that Merck would be 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 influenza

A/B antiviral compounds under the terms of our Collaboration Agreement and is legally protecting the intellectual property of the collaboration

CC-42344, a novel PB2 inhibitor, was selected as

a preclinical lead for the treatment of pandemic and seasonal influenza A.

Oral CC-42344 was advanced to a Phase 2a influenza human challenge

clinical study in 2023 as described in more detail below.

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

complex (PB1:

PA) and exhibits a novel mechanism of action.

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

including avian pandemic strains, Tamiflu® and baloxavir resistant strains, and has favorable pharmacokinetic and drug resistance

This drug candidate was specifically designed and developed using Cocrystal’s proprietary structure-based drug discovery

platform technology.

March 2022 enrollment was initiated in a randomized, double-blind, placebo-controlled Phase 1 study of orally delivered CC-42344, which

was conducted in Australia.

Later that year we reported favorable safety and tolerability results from the Phase 1 study of CC-42344

for the treatment of both pandemic and seasonal influenza A.

October 2023 we announced receipt of authorization from the United Kingdom Medicines and Healthcare Products Regulatory Agency (MHRA)

to initiate a Phase 2a human challenge trial with oral CC-42344 as a potential treatment for pandemic and seasonal influenza A.

2023 we announced achievement of first-patient-in for this Phase 2a human challenge clinical trial.

This ongoing randomized, double-blind,

placebo-controlled study is evaluating the safety, tolerability, viral and clinical measurements of influenza A infection in subjects

dosed with oral CC-42344 treatment.

Topline clinical results from the Phase 2a trial are expected in 2024.

addition to the oral CC-42344, we developed inhaled CC-42344 for the prophylactic treatment of pandemic and seasonal influenza A infections.

Our preclinical data of the inhaled CC-42344 showed excellent antiviral activity in influenza H1N1-infected human upper airway epithelium

with favorable safety profile.

We completed inhalation formulation development and are evaluating plans to initiate a Phase 1 study in

also continue developing novel broad-spectrum influenza antivirals targeting replication enzymes of influenza A and B strains.

and Norovirus Programs

October 2022 we announced the selection of a novel, broad-spectrum antiviral drug candidate CDI-988 for clinical development as an oral

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CDI-988 targets a highly conserved region in the active site of SARS-CoV-2

main (3CL) protease required for viral replication and was specifically designed and developed as an oral antiviral candidate for COVID-19

using Cocrystal’s proprietary structure-based drug discovery platform technology.

January 2022 we announced the selection of two investigational novel antiviral drug candidates, CDI-988 and CDI-873, for further

development as oral treatments for coronaviruses, including SARS-CoV-2, the virus that causes COVID-19.

Both compounds exhibited

superior in vitro potency against SARS-CoV-2 with activity maintained against recent variants of concern.

In preclinical studies,

both candidates demonstrated a favorable safety profile and pharmacokinetic properties supportive of daily oral dosing.

begin a randomized, double-blind, placebo-controlled Phase 1 study of CDI-988 during the first half of 2023.

December 2020 we announced the selection of CDI-45205 for further development against coronaviruses including SARS-CoV-2, that causes

CDI-45205 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.”

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 KSURF (see under Collaborations below).

We expect to select a preclinical lead in the first half of 2023.

main (3CL) protease required for viral replication and and was discovered to exhibit pan-coronavirus activity against MERS-CoV, SARS-CoV,

and common coronaviruses.

This drug candidate was specifically designed and developed as a pan-viral protease inhibitor using Cocrystal’s

proprietary structure-based drug discovery platform technology.

preclinical studies demonstrated that pan-coronavirus lead CDI-988 also showed broad-spectrum antiviral activity against the multiple

pandemic norovirus proteases.

High resolution crystal structures confirmed that CDI-988 binds to the highly conserved region of the norovirus

protease active site.

In August 2023 we announced the selection of pan-viral CDI-988 as a potential oral therapy for coronaviruses and

May 2023 we announced approval from the Australian Human Research Ethics Committee (HREC) to conduct a randomized, double-blind, placebo-controlled

Phase 1 study of CDI-988.

The study is designed to access the safety, tolerability and pharmacokinetics of CDI-988.

September 2023 we announced dosing of the first subjects in our Phase 1 clinical study with our oral, first-in-class pan-norovirus and

pan-coronavirus 3CL protease inhibitor CDI-988.

Topline clinical results from the Phase 1 trial are expected in 2024.

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

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 was expected to reach nearly $6.5 billion by 2022, increasing at a compound annual growth rate (CAGR) of 3.0% from

2017 through 2022.

Influenza A viruses are the only influenza viruses known

to cause influenza pandemics.

Each year there are approximately 1 billion cases of seasonal influenza worldwide, with 3-5 million severe

illnesses and up to 650,000 deaths, according to the World Health Organization (“WHO”).

On average about 8% of the U.S.

contracts influenza each season, according to the Centers for Disease Control and Prevention (“CDC”).

In addition to the

health risk, influenza is responsible for approximately $10.4 billion in direct medical costs in the U.S.

annually, according to the

National Institutes of Health (“NIH”).

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®) and zanamavir (Relenza®), baloxavir marboxil

(Xofluza®) have appeared, and in some cases predominated.

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.

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

neuraminidase (N).

Company selected CC-42344, a novel PB2 inhibitor, as a lead candidate and has clinically completed a Phase 1 study.

In December 2022,

the Company reported on the favorable safety and tolerability results of the CC-42344 Phase 1 study and plan to initiate a Phase 2a study

in the first half of 2023.

CC-42344 binds to a highly conserved PB2 site of the influenza polymerase (PB1:

PA), and exhibits a novel

mechanism of action.

CC-42344 has shown 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.

was approved as Xofluza in Japan on February 23, 2018, and in the US as baloxavir marboxil (trade name Xofluza ® ) on October

See “Item 1 – Business – Research 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.

that are resistant to the approved treatments oseltamivir phosphate (Tamiflu®) and zanamavir (Relenza®), baloxavir marboxil (Xofluza®)

have appeared, and in some cases are predominated.

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

to oseltamivir.

Oseltamivir inhibits influenza neuraminidase enzymes, which are not highly conserved between viral strains.

to the WHO, approximately 15% of the H1N1 isolated circulating worldwide were oseltamivir resistant.

Also, treatment-emergent resistance

to recently approved baloxavir has been observed during clinical trials and the potential transmission of resistant influenza variants

could significantly diminish baloxavir effectiveness.

Company developed CC-42344, a novel PB2 inhibitor, as a lead candidate for the treatment of influenza A.

We completed a Phase 1 study

with oral CC-42344 and in December 2022 reported on favorable safety and tolerability results from the CC-42344 Phase 1 study.

Upon approval

of United Kingdom MHRA, we initiated a randomized, double-blind, placebo-controlled influenza Phase 2a human challenge study in the first

half of 2023 and announced dosing of the first subjects in this study with oral CC-42344 in December 2023.

Topline clinical results from

the Phase 2a trial are expected in 2024.

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

a global pandemic with 760,360,956 COVID-19 confirmed cases globally, including 6,873,477 deaths, as of March 16, 2023, according

to the data reported by the World Health Organization (“WHO”).

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.

a global pandemic with 774,631,044 COVID-19 confirmed cases globally, including 7,031,216 deaths, as of February 27, 2024, according

to the data reported by the WHO.

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.

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of the pandemic.

Also, as demonstrated in Delta and Omicron variants, some variations allow the virus to spread more easily and make

it resistant to the treatments and vaccines.

Also, as demonstrated in Delta and Omicron variants as well as the more recent JN.1 strain, some variations allow the

virus to spread more easily and make it resistant to the treatments and vaccines.

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

is a nucleotide prodrug that inhibits viral replication and was previously evaluated in clinical trials for Ebola treatment in 2014.

In addition to Veklury, the FDA has issued emergency authorization use on several antibody and antiviral therapeutics, including Paxlovid

(nirmatrelvir and ritonavir) and Lagevrio (molpiravir).

We continue 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.

On May 25, 2023, the FDA approved Paxlovid (nirmatrelvir tablets and ritonavir tablets, co-packaged for oral use) for use to treat COVID-19

for the treatment of mild-to-moderate COVID-19 in adults who are at high risk for progression to severe COVID-19, including hospitalization

For certain hospitalized adults with COVID-19, the FDA has also approved Olumiant (baricitinib) and Actemra (tocilizumab).

In addition, the FDA issued emergency authorization use on several antibody and antiviral therapeutics, including and Lagevrio (molpiravir).

continue 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 worldwide public health problem responsible for close to 90% of epidemic, non-bacterial outbreaks of gastroenteritis around the world .

is a very common and highly contagious virus that causes symptoms of acute gastroenteritis.

among people of all ages.

infection can be much more severe and prolonged in specific risk groups including infants, children, the elderly, and people with

immunodeficiency.

Symptoms include nausea, vomiting, stomach pain and diarrhea as well as fatigue, fever and dehydration.

occur most commonly in semi-closed communities, having become notorious for their occurrence in hospitals, nursing homes, childcare

facilities, cruise ships, schools, disaster relief sites and military settings.

In the United States alone, noroviruses are

responsible for an estimated 21 million cases annually, including 109,000 hospitalizations, 465,000 emergency department visits and

nearly 900 deaths, according to the CDC.

The NIH estimates the annual burden to the United States at $10.6 billion.

Noroviruses are

responsible for up to 1.1 million hospitalizations and 218,000 deaths annually in children in the developing world.

immunosuppressed patients, chronic norovirus infection can lead to a debilitating illness with extended periods of nausea, vomiting

and diarrhea.

There is currently no effective treatment or effective vaccine for norovirus, and the ability to curtail outbreaks is

We have a candidate norovirus therapeutic in clinical testing.

A few companies have been developing vaccines and six

candidate vaccines are in stages of clinical testing by Vaxart Pharmaceutical, Moderna, Hillevax, Takeda Pharmaceuticals, Anhui

Zhifei Longcom Biopharmaceutical (China) and National Vaccine and Serum Institute (China).

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 and protease of norovirus.

Similar to the HCV polymerases, these enzymes are essential to viral replication

and are 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.

September 2023 we announced dosing of the first subjects in our Phase 1 clinical study with our oral, first-in-class pan-norovirus and

pan-coronavirus 3CL protease inhibitor CDI-988.

Topline clinical results from the Phase 1 trial are expected in 2024.

A large competitive market with opportunity for shorter treatment regimens .

is a highly competitive and changing market.

Currently, the standard treatment varies with the genotype of the HCV infection.

late 2013, treatment included peginterferon alpha and ribavirin, along with a protease inhibitor (either telaprevir, boceprevir, or simeprevir).

In late 2013, sofosbuvir, a drug belonging to a new class of drugs called “nucleoside analogs” or “Nucs,” was

approved to treat HCV.

In patients infected with HCV genotype 1 (the most common HCV genotype in the US), sofosbuvir was administered

in combination with peginterferon alpha and ribavirin.

In patients with HCV genotypes 2 and 3, however, sofosbuvir could be effectively

administered in combination with ribavirin, without the need for peginterferon alpha.

Since 2014, several new combinations of direct-acting

antiviral agents (“DAAs”) have been approved for the treatment of HCV infection.

These include Harvoni (sofosbuvir/ledipasvir)

12 weeks of treatment, Viekira Pak (ombitasvir/paritaprevir/ritonavir, dasabuvir) 12 weeks of treatment, Epclusa (sofosbuvir/velpatasvir)

12 weeks of treatment, Zepatier (elbasvir/grazoprevir) 12 weeks of treatment and Mavyret (glecaprevir/pibrentasvir) 8 weeks of treatment.

We believe the next improvements in HCV treatment will be ultra-short combination oral treatments of four to six weeks, the goal of our

Since 2014, several combinations of direct-acting antiviral agents (“DAAs”)

have been approved for the treatment of HCV infection.

These include Harvoni (sofosbuvir/ledipasvir) 12 weeks of treatment, Viekira Pak

(ombitasvir/paritaprevir/ritonavir, dasabuvir) twelve weeks of treatment, Epclusa (sofosbuvir/velpatasvir) twelve weeks of treatment,

Zepatier (elbasvir/grazoprevir) twelve weeks of treatment and Mavyret (glecaprevir/pibrentasvir) eight weeks of treatment.

the next improvements in HCV treatment will be ultra-short combination oral treatments of four to six weeks, which is the goal of our

anticipate a significant global HCV market opportunity that will persist through at least 2036, given the large prevalence of HCV infection

The 2017 World Health Organization Global Hepatitis Report estimates that 71 million people worldwide have chronic HCV infections.

In July 2023, WHO published that globally, an estimated 58 million people have chronic HCV infection, with about 1.5 million new infections

occurring per year, and an estimated 3.2 million adolescents and children with chronic HCV infection.

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

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

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

Such a combination treatment

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be an important component in a shortened duration all-oral HCV combination therapy.

Patient 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 –

Hepatitis C” for more information.

The Company has completed the Phase 2a final study

report as filed with the FDA.

See “Item 1 – Business – Research and Development Update – Hepatitis C” for

more information.

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 the world .

is a very common and highly contagious virus that causes symptoms of acute gastroenteritis including nausea, vomiting, stomach pain and

Other symptoms include fatigue, fever and dehydration.

Noroviruses are a major cause of gastrointestinal illness in closed

and crowded environments, having become notorious for their common occurrence in hospitals, nursing homes, childcare facilities, and

cruise ships.

In the United States alone, noroviruses are the most common cause of acute gastroenteritis, and are estimated to cause

19-21 million illnesses each year and contribute to 109,000 hospitalizations and 900 deaths.

Noroviruses are responsible for up to 1.1

million hospitalizations and 218,000 deaths annually in children in the developing world.

In immunosuppressed patients, chronic norovirus

infection can lead to a debilitating illness with extended periods of nausea, vomiting and diarrhea.

There is currently no effective

treatment or effective vaccine for norovirus, and the ability to curtail outbreaks is limited.

A few companies have been developing antiviral

treatments for this disease and four candidate vaccines are in stages of clinical testing by Vaxart Pharmaceutical, Takeda Pharmaceuticals,

Anhui Zhifei Longcom Biopharmaceutical (China) and National Vaccine and Serum Institute (China).

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 and protease of norovirus.

Similar to the HCV polymerases, these enzymes are essential to viral replication

and are 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.

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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 several 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.

with Influenza A, Influenza A/B, and norovirus/coronaviruses and HCV.

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

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and in Taiwan.

Aspects of this program are developed in collaboration with Merck, which is legally protecting the intellectual property

Aspects of this program were developed in collaboration with Merck, which is legally protecting the intellectual property

of the collaboration compounds.

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.

provisional applications.

our HCV program, our patent portfolio consists of several 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.

Collaborations

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January 2, 2019, we entered into an Exclusive License and Research Collaboration Agreement (the “Collaboration Agreement”)

with Merck to discover and develop certain proprietary influenza A/B antiviral agents.

with Merck Sharp & Dohme LLC (“Merck”) to discover and develop certain proprietary influenza A/B antiviral agents.

the terms of the Collaboration Agreement, Merck is funding research and development for the program at Cocrystal and Merck, including

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derived from 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.

Other than the initial upfront payment, to date we have not received any payments under this Collaboration

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 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 expertise.

December 15, 2023, we received written notice from Merck of Merck’s election to terminate the Collaboration Agreement, dated January

2, 2019, by and between the Company and Merck, with respect to the collaboration with Merck on the development of influenza A/B antiviral

The termination of the Agreement is effective on March 14, 2024.

The termination resulted from the inability to develop the

compounds to meet a specific aspect of Merck’s program.

State University Research Foundation

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

February 28, 2024, the Company provided notice to KSURF of the Company’s election to terminate the License Agreements.

The terminations,

which were made due to the Company’s determination that further development efforts under the License Agreements would be futile,

are effective on March 29, 2024.

The Company continues to clinically progress its fully owned compound CDI-988 for coronaviruses and

Business-Competition

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

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We know of several companies that have marketed or are developing

products for the 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.

Their products are widely considered

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.

A number of vaccines and treatments for COVID-19

have been commercialized under the FDA’s emergency use authorization.

At least one treatment and four vaccines for COVID-19 have

received FDA approval.

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.

Additionally, viral mutations can lead to new strains or variants of a virus that may be more resistant

to products we develop when compared to those of competitors.

See “Risk Factors” for more information on the risks we face

with respect to our competition.

products for the treatment of influenza, coronavirus, norovirus and HCV, including Roche, Gilead Sciences, Inc.

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

Their products are widely

considered effective.

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 began conducting

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

As a result of these efforts, a number of

vaccines and treatments for COVID-19 have been commercialized under FDA approval, or under the FDA’s emergency use authorization,

although certain of these approvals or authorizations are limited to specified circumstances.

At least four treatments and five vaccines

for COVID-19 have received FDA approval.

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.

Additionally, viral mutations can lead to new strains or variants of a

virus that may be more resistant to products we develop when compared to those of competitors.

See “Risk Factors” for more

information on the risks we face with respect to our competition.

date, we have not fully developed, received regulatory approval for or commercialized any of our product candidates.

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addition to the U.S.

requirements such as those enforced by the FDA with

respect to safety and efficacy of research, testing, development and production, we also must comply with applicable laws and regulations

of any foreign jurisdictions in which we operate.

For example, our Phase 1 trial in Australia in 2022 for CC-42344, our lead Influenza

A product candidate, caused us to be subject to the Australian government’s laws and regulations pertaining to the research and

development, including clinical testing on human subjects, of therapeutic product candidates.

Our presence in Australia has also subjected

us to more general laws applicable to operations abroad, such as the U.S.

Foreign Corrupt Practices Act (the “FCPA”) and comparable

legislation and regulation in foreign jurisdictions.

requirements such as those enforced by the FDA with respect to safety and efficacy of research, testing, development

and production, we also must comply with applicable laws and regulations of any foreign jurisdictions in which we operate.

as a result of our Phase 1 trial in Australia for CC-42344, our lead Influenza A product candidate, we are subject to the Australian

government’s laws and regulations pertaining to the research and development, including clinical testing on human subjects, of

therapeutic product candidates.

Further, our Phase 2a study for in the United Kingdom in 2023 for CC-42344 subjects us to similar laws

and regulations in the United Kingdom.

Our presence in foreign countries has also subjected us to more general laws applicable to operations

abroad, such as the U.S.

Foreign Corrupt Practices Act (the “FCPA”) and comparable legislation and regulation in foreign

jurisdictions.

In general, the FCPA prohibits U.S.

corporations and their representatives from offering,

promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate

to obtain or retain business abroad.

corporations and their representatives from offering, promising, authorizing or making

payments to any foreign government official, government staff member, political party or political candidate to obtain or retain business

The scope of the FCPA includes interactions with certain healthcare professionals in many countries.

Other countries have enacted similar anti-corruption laws and/or regulations.

Further, because of our reliance on one or more CROs and

CMOs with respect to our research and development activities both in the U.S.

and in foreign jurisdictions, we may have limited control

over compliance with such requirements in certain instances.

respect to coronavirus-related products as of the date of this Report, with the exception of Veklury (remdesivir), an antiviral drug

commercialized by Gilead, no treatment has been approved by the FDA for COVID-19 symptoms.

Instead, most existing treatments for COVID-19

that are or have been offered by competing companies have been made available under the FDA’s emergency use authorization.

FDA has, however, reduced or removed many of these authorizations, including for treatments using monoclonal antibodies such as the REGEN-COV

treatment commercialized by Regeneron Pharmaceuticals, Inc., due to waning efficacy against symptoms caused by the Omicron variant of

the virus which until recently was the dominant strain.

As the foregoing description demonstrates, our coronavirus programs and any product

candidates that we may develop therefrom are subject to uncertainty as to the FDA’s actions, which are in turn inherently unpredictable

given the unpredictable nature of the virus and its mutations, as well as their effects on treatment compounds.

Other countries have enacted

similar anti-corruption laws and/or regulations.

Further, because of our reliance on one or more CROs and CMOs with respect to our research

and development activities both in the U.S.

and in foreign jurisdictions, we may have limited control over compliance with such requirements

in certain instances.

of March 28, 2024, we employed 12 full-time employees.

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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