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Item 1. Business

2022-03-10 compared with 2021-03-25 · 265 added, 322 removed, 496 unchanged (54% of the section changed)

We are a clinical stage, immunology focused biopharmaceutical company developing drugs and antibodies that target the most critical cellular elements of the immune system.

Our strategy is to focus our efforts on the development of immune modulator product candidates to treat COVID-19, T-cell lymphomas, other cancers and autoimmune diseases.

We are a clinical stage biopharmaceutical company.

Our strategy is to focus our efforts on the development of immune modulator product candidates with the potential to treat solid cancers, T-cell lymphomas, autoimmune diseases and infectious diseases.

We have built a pipeline of five programs, three of which are in clinical development.

Our lead product candidate is CPI-006, a potent humanized monoclonal antibody that is designed to react with a specific site on CD73.

In both preclinical and in vivo studies in cancer patients and patients with COVID-19, CPI-006 has demonstrated binding to various immune cells and the inducement of a humoral adaptive immune response.

We believe CPI-006 has the potential to be an important new therapeutic agent with a novel mechanism of action for the treatment of a broad range of infectious diseases and cancers.

We are evaluating CPI-006 in a global, randomized, double-blind, Phase 3 trial designed to evaluate the efficacy and safety of CPI-006 compared to placebo in hospitalized patients with mild-to-moderate COVID-19.

The primary endpoint of the trial is the proportion of patients progressing to respiratory failure or death during the 28 days after dosing.

The trial was designed based on feedback received from the U.S.

Food and Drug Administration, or FDA.

Our lead product candidate is mupadolimab (formerly CPI-006), a humanized monoclonal antibody that is designed to react with a specific site on CD73.

In both preclinical and in vivo studies in cancer patients and patients with COVID-19, mupadolimab has demonstrated binding to various immune cells and the enhancement of immune responses by activating B cells.

We believe mupadolimab has the potential to be an important new therapeutic agent with a novel mechanism of action for the treatment of a broad range of cancers and infectious diseases.

Our next product candidate, CPI-818, is a selective, covalent inhibitor of ITK and is in a multi-center Phase 1/1b clinical trial in patients with various malignant T-cell lymphomas.

CPI-818 is designed to inhibit the proliferation of certain malignant T-cells, and we believe it also has the potential to regulate the growth of abnormal T cells involved in autoimmunity.

CPI-818 is designed to inhibit the proliferation of certain malignant T-cells, and we believe it also has the potential to regulate the growth of abnormal T cells involved in autoimmunity and allergy.

Our third product candidate, ciforadenant (formerly CPI-444), is an oral, small molecule antagonist of the A2A receptor for adenosine with which we completed a Phase 2 expansion protocol in combination with Genentech, Inc.’s cancer immunotherapy, Tecentriq® (atezolizumab) for patients with either advanced or refractory renal cell cancer (“RCC”).

We have identified a novel biomarker that may enable us to select patients that we believe will be most likely to benefit from ciforadenant.

In studies presented at the American Society of Oncology (“ASCO”) meeting in June 2020, patients expressing this marker in their tumor had a 17% response rate.

Activity was seen with both CPI-444 as a monotherapy and in combination with Tecentriq.

We have refined our strategy with ciforadenant and plan to collaborate with an academic consortium to evaluate ciforadenant in a front line RCC Phase 2 trial as a triplet combination with pembrolizumab and a tyrosine kinase inhibitor (“TKI”).

Our product candidates are designed to exhibit a high degree of specificity, which we believe has the potential to provide greater safety compared to other cancer therapies and may facilitate their development either as monotherapies or in combination with other cancer therapies such as immune checkpoint inhibitors or chemotherapy.

Ciforadenant is designed to disable a tumor’s ability to subvert attack by the immune system by blocking the binding of immunosuppressive adenosine in the tumor microenvironment to the A2A receptor.

Our molecularly targeted product candidates are designed to exhibit a high degree of specificity, which we believe has the potential to provide greater safety compared to other cancer therapies and may facilitate their development either as monotherapies or in combination with other cancer therapies such as immune checkpoint inhibitors or chemotherapy.

We believe the breadth and status of our pipeline demonstrates our management team’s expertise in understanding and developing immunology focused assets as well as in identifying product candidates that can be in-licensed and further developed internally to treat many types of cancer.

We hold worldwide rights to all of our product candidates (other than in greater China).

Our diverse and versatile product candidates have also enabled us to address markets in foreign markets.

In October 2020, we announced the formation and launch of Angel Pharmaceuticals Co., Ltd.

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Such cash is not available for our use.

Contemporaneously with the financing, Angel Pharmaceuticals licensed the rights to develop and commercialize our three clinical-stage candidates – CPI-006, CPI-818 and ciforadenant – in greater China and obtained global rights to our BTK inhibitor preclinical programs.

Under the collaboration, we

currently have a 49.7% equity interest in Angel Pharmaceuticals, excluding 7% of Angel’s equity reserved for issuance under the Employee Stock Ownership Plan (“ESOP”), and are entitled to designate three individuals on Angel’s five-person Board of Directors.

Contemporaneously with the financing, Angel Pharmaceuticals licensed the rights to develop and commercialize our three clinical-stage candidates – mupadolimab, CPI-818 and ciforadenant – in greater China and obtained global rights to our BTK inhibitor preclinical programs.

Under the collaboration, we currently have a 49.7% equity interest in Angel Pharmaceuticals, excluding 7% of Angel’s equity reserved for issuance under the Employee Stock Ownership Plan (“ESOP”), and are entitled to designate three individuals on Angel’s five-person Board of Directors.

Product Pipeline

Our product candidate pipeline includes the following:

CPI-006, B-Cell Activating anti-CD73 antibody.

CPI-006 is an investigational, humanized, engineered anti CD73 monoclonal antibody that is designed to activate various immune cells including B cells, which are the cells responsible for antibody production.

CPI-006 is also designed to inhibit the production of adenosine by blocking catalytic conversion of adenosine monophosphate to adenosine.

We in-licensed this antibody from Scripps in December 2014.

We have modified CPI-006 to potentially improve binding to CD73 and increase its inhibition of catalytic activity.

Mupadolimab, B-Cell Activating anti-CD73 antibody.

CD73 is an ectonucleotidase often found on lymphocytes, tumors and other tissues and is believed to play an important role in tumor immune suppression by catalyzing the production of extracellular adenosine.

CD73 is a cellular adhesion molecule involved in lymphocyte activation and trafficking to lymphoid tissues.

CD73 also is a cellular adhesion molecule involved in lymphocyte activation and trafficking to lymphoid tissues.

CD73 is expressed in lymph nodes where it plays a role in immune response to antigens.

These functions of CD73 are independent of adenosine production.

CPI-006 is designed to activate B cells and other immune cells resulting in the proliferation, migration and differentiation of B cells into antibody producing plasma cells and memory B cells.

In preclinical and clinical studies, both cancer patients and patients with COVID-19 treated with CPI-006 experienced activation of B cells into antigen specific antibody producing cells.

Enhancement of antibody production and development of memory B cells are thought to improve immunity to diseases such as viral infections and cancer, and also lead to immunologic memory preventing reinfection upon subsequent exposure to pathogens.

As depicted above, Phase 1 study results, along with preclinical research, shows that CPI-006 activates antigen specific B cells, triggering the body’s inherent immune response to generate a robust and durable humoral response to the SARS-CoV-2 virus.

These results included the stimulation of the generation of high titers of durable, polyclonal IgG and IgM antibody responses to SARS-CoV-2 and increased levels of memory B cells.

This novel mechanism of action has several advantages over passively administered monoclonal antibodies and could potentially be used to treat other infectious diseases.

As compared to other anti-CD73 antibodies, in in vitro studies using human immune cells, CPI-006 led to activation of B cells and differentiation into antibody producing plasmablasts.

Changes on monocytes were also observed and included increased expression of cell surface markers involved in enhanced antigen presentation.

Together, we believe these results suggest that CPI-006 has the potential to function as an immunostimulant.

We are not aware of any other anti-CD73 antibody that has been reported to possess these properties.

We believe that CPI-006 may have distinct advantages for the treatment of COVID-19, including:

● designed to enhance anti-SARS-CoV-2 antibodies to multiple viral variants;

● has the potential to improve long term immunity and protection from re-infection;

● could accelerate viral clearance and reduce the risk of spreading;

● potential to increase cross-protection to mutants of SARS-COV-2 and other coronaviruses.

Based on all of these properties and early results, we believe that CPI-006 could, if successfully developed and approved, become a foundational therapy for the treatment or prevention of COVID-19 and possibly, other infectious diseases.

CPI-006 COVID-19 Phase 1 Clinical Trial

In June 2020, we initiated a Phase 1 clinical trial to investigate CPI-006 as a novel immunotherapy approach for the treatment of patients with COVID-19 based on CPI-006’s potential immunomodulatory effects.

The open-label, Phase 1 clinical trial has enrolled 29 hospitalized COVID-19 high-risk patients with mild to moderate symptoms as of March 4, 2021.

Cohorts of patients received a single dose of CPI-006, with doses of 0.3, 1.0, 2.0, 3.0 and 5.0 mg/kg.

Patients received medications, therapies, and interventions per standard treatment protocols for COVID-19 for the duration of the study.

The primary efficacy endpoint was the change in serum immunoglobulin (IgM and IgG) anti-SARS-CoV-2 levels compared to baseline at day 28.

Safety and clinical outcomes were also assessed.

No drug related toxicities were observed at any of the dosing levels.

Of the 29 patients, no patients progressed to requiring mechanical ventilation and the median time to discharge from the hospital was three days.

These results are favorable, as published reports suggest that approximately 20% of such patients will progress to requiring invasive mechanical ventilation.

Patients in the study generated high titers of polyclonal antibodies against a diverse range of targets on the SARS-CoV-2 virus that were sustained over several months.

They also had increased levels of circulating memory B cells, which could produce long-term immunity.

Our Phase 1 data showed that this response occurred quickly.

We believe the polyclonal antibody response and the potential mechanism of action of CPI-006 could reduce the potential for immune evasion due to viral mutation and emergence of variants.

Magnitude and Duration of Anti-SARS-Cov2 Responses

The diagram below shows the anti-SARS-CoV-2 response generated in patients treated with CPI-006 in the Phase 1 study.

The level and duration of antibody production has been shown in other third-party studies to be a good predictor of clinical outcome.

In the four panels on the left of the slide, the serum titers over time from the pre-treatment to the day 28, day 66 and day 84 for IgG and IgM antibodies to trimeric spike protein and its receptor binding domain, or RBD, are shown.

Cohorts are color coded, with 0.3 mg/kg in green, 1 mg/kg in blue, 3 mg/kg in purple and 5 mg/kg in brown, with a convalescent plasma control on the far right in gray.

A dose response was observed from the lowest dose of 0.3mg/kg to higher doses and titers are higher than those seen in convalescent plasma samples tested.

Antibody responses were increased out to day 28 to very high titers and these high titers were sustained for 84-plus days.

Titers well above 100,000 were observed.

For example, at 1 mg/kg, Day 56 IgG to spike was >200,000 and IgM to spike was >100,000.

We observed a dose response with 0.3mg/kg being least effective and a plateau being reached at 1-3mg/kg.

We reported data from the Phase 1 clinical trial in November at the 2020 Society for Immunotherapy of Cancer Annual Meeting (“SITC”).

The data presented at SITC included results from 22 patients enrolled in the Phase 1 study utilizing a cut-off date of November 4, 2020.

This included enrollment in four dosing cohorts of the study (0.3, 1.0, 3.0 and 5.0 mg/kg).

All patients received a single dose of CPI-006 administered via a 5-10 minute intravenous (“IV”) infusion.

The median age of the patients was 58 years (range 23-76 years).

All of the patients had comorbidities that increased their COVID-19 risk including diabetes, coronary disease, hypertension, obesity, chronic kidney disease, chronic lung disease and/or cancer.

95% of patients were from minority populations that are at high risk of COVID-19 complications.

The key highlights of the data reported include:

Results Support the Further Evaluation of CPI-006 in COVID-19

● All patients had relatively low titers of anti-SARS-CoV-2 antibodies at the time of hospitalization despite having varying durations of prior COVID-19 symptoms from 1-21 days (median 5 days);

all patients had a confirmed COVID-19 diagnosis by positive PCR nasal swab testing.

● All evaluable patients showed prompt anti-SARS-CoV-2 antibody responses within 7 days of administration of CPI-006 at all dose levels.

● All patients recovered and were discharged from the hospital at a median of 3.5 (range 2-23) days.

● As of the November 4, 2020 cut-off date, there were no drug-related toxicity or safety issues reported.

Antibody Response Results

● Four of four evaluable patients that received the 0.3 mg/kg dose had sustained high titers of IgG antibodies to trimeric spike (“TS”) protein out to 84+ days (one patient 100+ days), without evidence of diminution of response.

In these patients, IgM antibody titers peaked at 28-56 days and remained elevated out to 84+ days.

Similar trends were seen in IgG and IgM antibody response to receptor binding domain (“RBD”).

● A dose response was observed comparing the 3.0 and 1.0 mg/kg dose to the 0.3 mg/kg dose.

Higher and more sustained titers of both IgG and IgM to both spike protein and RBD were seen out to 56 days when comparing the 1.0 to 0.3 mg/kg doses.

The IgM responses were noteworthy for the sustained prolonged elevation.

● Antibody responses from 3.0 and 5.0 mg/kg doses appeared similar to the 1.0 mg/kg dose, but the follow up period for such doses was shorter as of the cut-off date.

● In viral neutralization assays, three of three patients developed anti-viral antibody responses out to day 56 that blocked infectivity of receptor bearing cells in a pseudovirus neutralization assay.

● Memory B cells were elevated in 6 of 6 tested patients following treatment with CPI-006.

Memory T effector cells were also elevated following treatment and produced interferon-gamma and interleukin-2 in response to SARS-CoV-2 antigen consistent with antigen specific Th1 biasing.

Polyclonal Antibody Response

The magnitude and diversity of the polyclonal responses were evaluated by mapping of antibody responses to the subdomains of the TS protein including the N-terminal, RBD, S1 and S2 subdomains.

Polyclonality and reactivity to multiple antigenic determinants on the virus were found, which have the potential to lead to viral neutralization and elimination and to reduce the potential for escape due to emergence of mutant forms of the virus.

The mapping shows:

● IgG responses were polyclonal, polyspecific and directed to all subdomains.

● IgM responses were polyclonal and directed to all subdomains but are preferentially directed to the RBD.

We believe the totality of the data from the Phase 1 clinical trial supports the potential of CPI-006 as a treatment for COVID-19.

CPI-006, when administered at low doses, and has demonstrated a boost in antibody responses to the SARS-CoV-2 virus.

The responses were long-lived and the data reflect a dose response relationship with the 1.0 mg/kg dose having produced higher and more prolonged titers than the 0.3 mg/kg dose.

CPI-006 COVID-19 Phase 3 Clinical Trial

In February 2021, we initiated a randomized double-blind Phase 3 clinical trial of CPI-006 for the treatment of hospitalized patients with COVID-19.

The Phase 3 study will evaluate the efficacy and safety of CPI-006 compared to placebo in hospitalized patients with mild-to-moderate COVID-19 and is expected to enroll approximately 1,000 patients at sites in North America, Europe, South Africa and Latin America.

Patients will be randomized in a 1:1:1 ratio to receive a single intravenous dose of either 2.0 mg/kg or 1.0 mg/kg dose of CPI-006 intravenously or placebo;

all patients will receive standard of care treatments for COVID-19.

The primary endpoint is the proportion of patients progressing to respiratory failure or death during the 28 days after dosing.

Respiratory failure is defined as requiring non-invasive or invasive mechanical ventilation.

Additional secondary endpoints include time to recovery, time to resolution of COVID-19 symptoms, anti-viral antibody responses, etc.

An interim futility and efficacy analysis will be conducted by an independent data monitoring committee when approximately 60% of subjects complete the 28-day post-treatment visit.

We expect to complete enrollment in the study in the fourth quarter of 2021.

CPI-006 Oncology Phase 1/1b Clinical Trial

In February 2018, we initiated a Phase 1/1b clinical trial with CPI-006 administered alone and in combination with ciforadenant and in combination with pembrolizumab and in a triplet combination of CPI-006, ciforadenant and pembrolizumab.

As of February 2021, we have enrolled over 95 patients on this trial at doses of up to 24 mg/kg every

Key findings from this trial as of March 4, 2021 include the observation that CPI-006 was well-tolerated and evidence of B-cell activation and lymphocyte trafficking was observed in patients that received single doses as low as 1 mg/kg.

Treatment with CPI-006 was also associated with increases in memory B-cells, the emergence of new B-cell clones and, in some patients, the production of novel anti-tumor antibodies.

Anti-tumor activity was observed in certain patients receiving triplet combination therapy.

With our current focus on our Phase 3 trial with CPI-006 to treat COVID-19, we do not plan any further enrollment in this trial at this time.

Mupadolimab is an investigational, humanized, engineered anti CD73 monoclonal antibody that is designed to bind to a critical epitope involved in B cell signaling, which are the cells responsible for antibody production and presentation of antigens to T cells, which are involved in cell mediated immunity to cancers and infectious agents.

In preclinical studies, mupadolimab bound to B cells and triggered signaling, that resulted in activation of B cells and expression of cell surface markers involved in lymphocyte trafficking.

In clinical studies, both cancer patients and patients with COVID-19 treated with mupadolimab experienced activation of B cells into antigen specific antibody producing cells.

In patients, mupadolimab activated B cells, resulting in morphological and surface marker changes consistent with B cell differentiation into antibody secreting plasma cells and memory B cells, the cells responsible for immunologic memory.

Mupadolimab is also designed to inhibit the production of adenosine by blocking the catalytic conversion of adenosine monophosphate to adenosine.

In the tumor microenvironment, inhibition of the production of adenosine is believed to reduce tumor mediated immunosuppression.

● Mupadolimab has potential features that we believe could distinguish it from other reported anti-CD 73 antibodies in clinical development:

o Designed to activate B cells;

o Absence of a “hook effect.” This suggests that mupadolimab may exhibit consistent blocking of enzymatic activity over broad range of antibody concentrations with no loss of antibody binding or enzyme inhibition at higher antibody concentrations;

o Did not induce loss of CD 73 target from cell surface in preclinical studies.

Our work in both cancer and viral diseases, such as COVID-19, have provided important insights and data into how we may best utilize the potential properties of our antibody candidate in the clinic.

Our studies have uncovered a novel potential mechanism of action:

mupadolimab is designed to activate B cells which may then be driven into antibody producing plasma cells by the presence of tumor associated antigens within the tumor.

Recent work by several groups have highlighted the importance of B cells in anti-tumor immunity.

As published in Nature in 2020, investigators have shown that B cell infiltration in some tumors were strong predictors of response to immunotherapies and predictors of favorable outcomes.

Cancer cells are known to express neoantigens.

These antigens are derived from mutations that occur in the genome of the cancer cells.

We believe that if sufficient immune responses to these antigens can be generated, it could have a beneficial effect on tumor growth or response to therapies.

Various immunotherapies are now approved to enhance immune responses to tumor antigens such as anti-PD1 antibodies.

In addition to neoantigens resulting from mutations, viruses can also lead to cancers, which express viral antigens that are potential targets of immunotherapies.

Human papilloma virus (HPV) for example, is associated with oropharyngeal, cervical, anal, vulvar, penile and other cancers.

Recent data from others have revealed that B cells in the tumor microenvironment of oropharyngeal cancers are producing antibodies to HPV related antigens that are expressed within the tumors.

The findings that mupadolimab stimulated immune responses through B cell activation has motivated us to conduct further studies of this agent in combination with anti PD1 antibodies.

The rationale is that synergies may be achieved by combining activation of B cells, or stimulation of immune response, with checkpoint inhibitors such as anti PD1 antibodies, which remove the brakes on immune system.

We believe mupadolimab has the potential to improve on existing immunotherapies by simultaneously stepping on the gas (stimulating) and simultaneously releasing the brakes of the immune system.

Mupadolimab Oncology Phase 1/1b Clinical Trial

In February 2018, we initiated a Phase 1/1b clinical trial with mupadolimab administered alone and in combination with ciforadenant, and in combination with pembrolizumab, and in a triplet combination of mupadolimab, ciforadenant and pembrolizumab.

As of March 1, 2022, we have enrolled over 110 patients on this trial at doses of up to 24 mg/kg every three weeks.

Key findings from this trial as of March 1, 2022 include the observation that mupadolimab was well-tolerated and evidence of B-cell activation and lymphocyte trafficking was observed in patients that received single doses as low as 1 mg/kg.

Treatment with mupadolimab was also associated with increases in memory B-cells in the blood, the emergence of new B-cell clones and, in some patients, the production of novel anti-tumor antibodies.

In our ongoing Phase 1/1b cancer clinical trial with mupadolimab, we have observed evidence of anti-tumor activity in NSCLC and in oropharyngeal head and neck cancers.

Based on these findings, during the second quarter, we began enrolling an expansion cohort of up to 15 patients with advanced, HPV+ head and neck cancer that have failed treatment with anti-PD-1 therapy and chemotherapy.

In this cohort, mupadolimab will be given in combination with pembrolizumab.

Our objective is to evaluate response rate in this expansion cohort.

In the third quarter of 2021, we began enrolling an expansion of up to 15 patients with relapsed refractory NSCLC who have failed therapies with anti-PD(L)-1 therapy and chemotherapy.

In this cohort, mupadolimab will be given in combination with pembrolizumab.

Our objective is to evaluate response rate in this expansion cohort.

At the 2021 Annual Meeting of the Society for Immunotherapy of Cancer (“SITC”) in November 2021, we presented interim data demonstrating anti-tumor activity in NSCLC and head and neck cancer (“HNSCC”) patients treated with 12 mg./kg.

or greater of mupadolimab as a single agent, in combination with ciforadenant, in combination with pembrolizumab or in combination with pembrolizumab and ciforadenant.

These patients had advanced refractory disease and failed a median of three prior therapies.

All but one had failed therapy with prior anti PD(L)-1 antibodies.

There were sixteen evaluable NSCLC and HNSCC patients.

Seven patients achieved tumor regression, which did not meet the criteria for partial response by RECIST.

However, for the patients that showed tumor regression, six patients had progressive disease as their best response to their last treatment prior to entering the Phase 1/1b clinical trial, which indicates that the tumors in these patients were not responsive to their last therapy.

The seven patients who showed tumor regression on the trial were treated for a period of 4.5 to 12.5 months.

Based on the interim results presented at SITC, we plan to initiate a randomized Phase 2 clinical trial of

mupadolimab as a front-line therapy for the treatment of patients with advanced NSCLC.

The randomized, blinded trial will compare standard chemotherapy plus pembrolizumab (anti-PDL-1) with or without mupadolimab.

The trial is planned to enroll approximately 150 patients with any tumor PDL-1 expression.

The primary endpoint for the study will be progression free survival (“PFS”) and secondary endpoints will include objective response rate and overall survival.

In February 2021, we initiated a Phase 3 trial evaluating a single dose of mupadolimab in a global, randomized, double-blind trial designed to evaluate the efficacy and safety of mupadolimab compared to placebo in hospitalized patients with mild-to-moderate COVID-19.

On July 15, 2021, we announced that we discontinued our Phase 3 clinical trial due to positive trends exhibited by COVID-19 vaccines in lowering serious infection and hospitalizations due to COVID-19.

The discontinuation was not related to any safety or efficacy issues observed in the trial patients.

On September 21, 2021, we published preliminary results of our discontinued Phase 3 trial.

The primary endpoint of the trial was the proportion of patients free from respiratory failure or death within 28 days after receiving either mupadolimab 2mg/kg, 1mg/kg or placebo.

Forty patients were enrolled in the clinical trial.

In the 2mg/kg cohort, 93.3% of patients were alive and free from respiratory failure compared to 85.7% in the 1mg/kg cohort and 81.1% in the placebo.

Secondary endpoints also favored mupadolimab treatment cohorts.

Due to the number of participants enrolled in the trial before it was discontinued, the foregoing results were not sufficiently powered for statistical significance.

We hold a nonexclusive, worldwide license (except for greater China) for all fields of use under Scripps’ rights in a hybridoma clone expressing an anti-CD73 antibody, and to progeny, mutants or unmodified derivatives of such hybridoma and any antibodies expressed by such hybridoma.

In 2016, we filed a patent application covering the composition of matter of CPI 006.

In 2019, we filed patent applications covering the use of CPI-006 for immunomodulation and enhancement of anti-tumor immunity.

In 2016, we filed a patent application covering the composition of matter of mupadolimab.

In 2019, we filed patent applications covering the use of mupadolimab for immunomodulation and enhancement of anti-tumor immunity.

In 2020, we filed a provisional U.S.

patent application directed to the use of CPI-006 in the treatment of COVID-19 and other infectious diseases.

patent application directed to the use of mupadolimab in the treatment of COVID-19 and other infectious diseases.

CPI-818, ITK Inhibitor.

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One of the key survival mechanisms of tumors is believed to be the reprogramming of T cells to create an inflammatory environment that inhibits anti-tumor immune response and favors tumor growth.

We believe highly selective inhibitors of this enzyme will facilitate induction of T cell anti-tumor immunity and also may be useful in the treatment of T cell lymphomas.

ITK is an enzyme expressed predominantly in T cells where it plays a key role in T cell signaling.

We believe highly selective inhibitors of this enzyme will facilitate induction of T cell anti-tumor immunity and may be useful in the treatment of T cell lymphomas.

T cell signaling involving ITK is required in the development of T cells within the thymus, where ITK regulates the production of various T cell subsets and functions.

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In our preclinical studies of CPI-818, objective tumor responses were observed in dogs with spontaneous T-cell lymphomas.

CPI-818 is orally bioavailable and has achieved cellular occupancy of the target in vivo in various animal models.

CPI-818 is orally bioavailable and has achieved cellular occupancy of the target in vivo in various animal

Pre-clinical studies have demonstrated that CPI-818 was well-tolerated in vivo and resulted in inhibition of T-cell activation.

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CPI-818 is currently being studied in a Phase 1/1b clinical trial that was designed to select the recommended dose of CPI-818 and evaluate its safety, pharmacokinetics (“PK”), target occupancy, biomarkers and efficacy.

The study employed an adaptive, expansion cohort design, with an initial phase that evaluated escalating doses (100, 200, 400, 600

mg taken twice a day) in successive cohorts of patients, followed by a second phase that is designed to evaluate safety and tumor response to the recommended dose of CPI-818 in disease-specific patient cohorts.

The study employed an adaptive, expansion cohort design, with an initial phase that evaluated escalating doses (100, 200, 400, 600 mg taken twice a day) in successive cohorts of patients, followed by a second phase that is designed to evaluate safety and tumor response to the recommended dose of CPI-818 in disease-specific patient cohorts.

By protocol design, treatment is discontinued after one year or upon disease progression.

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The patient received CPI-818 for 12 months and the CR persisted beyond discontinuation of therapy (per the study protocol, the patient stopped receiving therapy after 12 months on study).

As of December 1, 2020, this patient was off all therapy for lymphoma and remains disease free at 14+ months.

o One patient who failed multiple prior therapies achieved a partial response at four months on therapy and remained on study as of October 5, 2020.

o One patient who failed multiple prior therapies achieved a partial response at four months on therapy.

This patient then went on to receive a bone marrow transplant.

● Of the 11 evaluable patients with CTCL:

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● There was a dose dependent increase in receptor occupancy, with trough occupancy >75% observed at the 200, 400 and 600 mg doses.

● No dose limiting toxicities and no grade 3 or 4 treatment related adverse events were observed as of October 5, 2020.

Based on the interim results from our Phase 1/1b clinical trial, Angel Pharmaceuticals, together with us, plans to initiate a global Phase 2 study of CPI-818 in peripheral T cell lymphomas.

● No dose limiting toxicities and no grade 3 or 4 treatment related adverse events have been observed to date.

Based on the interim results from our Phase 1/1b clinical trial, Angel Pharmaceuticals, has joined this clinical trial with a goal of enrolling patients with PTCL.

PTCL is more common in China than the United States representing approximately 26% of non-Hodgkins lymphomas in China.

Presentation of Preclinical Data in ALPS at ASH meeting December 2020

Autoimmune lymphoproliferative syndrome (“ALPS”) is a rare genetic disease affecting children that manifests with lymphadenopathy, splenomegaly, cytopenias (low blood counts) and autoimmunity.

The disease is caused by a mutation in the Fas gene, which provides instructions for making a signaling protein involved in the induction of apoptosis.

The mutation results in immune dysregulation due to abnormally high levels of “double negative” T cells (CD4 and CD8 double negative), which infiltrate the blood, spleen and lymphoid tissues.

A similar mutation occurs in Fas-deficient MRL/lpr mice, which are used as a model for this disease.

These mice are frequently also used as a model for autoimmune disease.

CPI-818 has been studied in vivo in MRL/lpr mice and in vitro using abnormal cells from ALPS patients.

These data were presented in December 2020 at the American Society of Hematology Annual Meeting.

Key highlights from the presentation include:

● ITK was expressed in double negative T cells from ALPS patients.

● In vitro , CPI-818 inhibited the activation of stimulated abnormal double negative T cells in ALPS patients.

● In vivo studies in MRL/lpr mice demonstrated that treatment with CPI-818 reduced lymphadenopathy, splenomegaly, and autoimmune skin and kidney disease.

The animal preclinical data and in vitro data with lymphocytes from ALPS patients support the use of CPI-818 in autoimmunity and potentially as a treatment for ALPS.

In January 2022, Angel Pharmaceuticals announced the enrollment of the first patient in the clinical trial.

We have filed patent applications covering composition of matter and uses of our ITK inhibitors and hold exclusive worldwide rights (except for greater China) for all indications.

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In these studies, orally administered ciforadenant inhibited tumor growth in multiple mouse models of cancer as a single agent, in combination with anti-PD-1, in combination with anti-PD-L1, in combination with other immuno oncology agents and in combination with certain chemotherapy drugs.

We also have shown in vitro that ciforadenant bound potently and selectively to human activated T cells and blocked adenosine mediated immunosuppression by restoring T cell function.

We also have shown in vitro that ciforadenant blocked adenosine mediated immunosuppression by restoring T cell function.

In addition, we have shown anti-tumor activity in mice for a significant time following oral administration, which appeared to be mediated through a long lasting memory immune response.

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In addition, several preclinical tumor model studies have shown that treatment with A2A receptor inhibitors leads to tumor regression that is enhanced when administered in combination with various other checkpoint inhibitors, such as anti-PD-1 therapies and anti-CTLA 4 therapies.

Preclinical studies in animal tumor models have examined use of ciforadenant in combination with anti PD1, in combination with anti CTLA4 and as a triplet of ciforadenant, anti PD1 and anti CTLA-4 antibodies.

In our published studies in Cancer Immunology Research, combinations of ciforadenant with anti CTLA-4 have resulted in a high portion of cured animals, even when administered to animals with established tumors.

These results provided the rationale for the use of ciforadenant in combination with nivolumab and ipililumab in renal cell cancer patients.

In January 2016, we began enrolling patients in a large expansion cohort trial for ciforadenant.

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Interim Results Published in the Journal Cancer Discovery

Results in 68 patients with treatment-refractory RCC demonstrated an overall survival (“OS”) of 90% at more than 25 months follow-up with ciforadenant administered in combination with atezolizumab.

The OS for patients receiving ciforadenant alone was over 69% at 16 months.

At the time of enrollment, study participants had advanced refractory disease and a poor prognosis.

They had been treated with a median of three prior therapies (range:

1 to 5), and approximately 72% had failed prior anti-PD-(L)1 therapy.

The results from this study were published in January 2020 in the journal Cancer Discovery.

Results in 68 patients with treatment-refractory RCC were published in January 2020 in the journal Cancer Discovery.

Key findings from the published results include:

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● Progression-free survival (as assessed by RECIST criteria) was 5.8 months with combination therapy and 4.1 months with monotherapy.

● OS was 90% at 25 months follow-up with combination therapy and 69% at 16 months follow-up with monotherapy.

● Overall survival (OS) was 90% at 25 months follow-up with combination therapy and 69% at 16 months follow-up with monotherapy.

● Combination therapy was superior to monotherapy with respect to OS, response rate, disease control rate and progression-free survival.

● The recently described adenosine gene signature showed a statistically significant correlation with tumor response and disease control rates (p<0.008).

● The recently described adenosine gene signature (AdenoSig) showed a statistically significant correlation with tumor response and disease control rates (p<0.008).

We evaluated adenosine gene signatures in pretreatment biopsies from 30 patients.

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The studies also demonstrate that RCC exhibited high levels of adenosine pathway related genes.

We expect to be able to utilize this biomarker in future studies to target patients most likely to benefit from therapy with ciforadenant.

Updated Data at the ASCO20 Virtual Scientific Program

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The key updates from the presentation include:

● 31 patients (30 evaluable) were positive for the and 20 patients were negative.

● 31 patients (30 evaluable) were positive for the adenosine signature and 20 patients were negative.

Patients had a median of three prior therapies, including 86% that failed a prior anti-PD-(L)1 therapy.

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● In the AdenoSig positive group, the progression free survival curve plateaued at 23% at 40 weeks, compared to declining to 0% in the AdenoSig negative group.

Refractory, late-line RCC has become a crowded space, with several recently approved drugs resulting in extensive patient heterogeneity and complexities, making development of combinations with new agents difficult.

Given these considerations, our prioritization of CPI-006 in COVID-19, and the potential mechanism of action and safety results for ciforadenant, we have decided to pursue a strategy in front line RCC.

In front line RCC, the field is most interested in strategies that increase response rate;

especially complete response rate or deep responses.

We are now planning a Phase 2 study of ciforadenant in a triplet combination with pembrolizumab and lenvatinib.

We plan to do this study with the Kidney Cancer Consortium.

We are now planning a Phase 1b/2 clinical trial of ciforadenant in a triplet combination with ipilimumab, and nivolumab.

We plan to conduct this clinical trial with the Kidney Cancer Consortium.

The trial is planned to enroll approximately 60 patients.

The endpoint goal will be to show that 35% or more of the patients achieve deep tumor responses, defined as greater than 80% reduction of tumor volume.

This compares to historical levels of 20% of patients achieving a deep response with pembro plus TKIs.

The adenosine signature biomarker will also be evaluated.

Ciforadenant is also being evaluated in combination with the anti-CD38 antibody, daratumumab (Darzalex) in patients with advanced refractory multiple myeloma.

The objective of this Phase 1 clinical trial is to evaluate whether ciforadenant can overcome resistance in patients who have failed daratumumab treatment.

The endpoint of the trial is deep response rate defined as greater than 50% reduction of tumor volume.

Deep response rates in renal cell cancer have been found to correlate with long term progression free survival.

The adenosine signature biomarker will also be evaluated in tumor biopsy specimens.

The issued U.S.

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We believe these data support the role of CXCR in inflammatory diseases and demonstrate that CPI-182 may have the potential to treat these conditions.

This product candidate is now in Investigational New Drug application (“IND”)-enabling studies and scale-up manufacturing.

This product candidate is now in Investigational New Drug application (“IND”)-enabling studies and scale-up

manufacturing.

CPI-935, Adenosine A2B Receptor Antagonist.

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This strategy allows us to maintain a more efficient infrastructure, avoid depending on our own manufacturing facility and equipment while simultaneously enabling us to focus our expertise on developing our products.

Although we believe we have multiple potential sources for the

manufacturing of our product candidates, we currently rely on several different manufacturers who supply different components of the ciforadenant and CPI-818 molecules, on one manufacturer for CPI-006 drug substance and other third-party manufacturers to produce our other product candidates.

Although we believe we have multiple potential sources for the manufacturing of our product candidates, we currently rely on several different manufacturers who supply different components of the ciforadenant and CPI-818 molecules, on one manufacturer for mupadolimab drug substance and other third-party manufacturers to produce our other product candidates.

The pharmaceutical and biotechnology industries are characterized by intense competition and rely heavily on the ability to move quickly, adapt to changing medical and market needs, and develop and maintain strong intellectual property positions.

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Astra Zeneca, Bristol-Myers Squib, and Novartis, in partnership with Surface Oncology, have initiated clinical trials with anti-CD73 antibodies in cancer patients.

Recently, Astra Zeneca reported positive results in a Phase 2 clinical trial in Stage 3 NSCLC with the combination of durvalumab and their anti CD73 antibody, oleclumab.

More generally, in the field of immuno-oncology, there are large pharmaceutical companies with approved products or products in late-stage development that target other immune checkpoints, including PD-1, PD-L1 or CTLA-4.

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We strive to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from our collaborators or other third parties.

We do not yet own any issued patents relating to our product candidates.

Our policy is to seek to protect our proprietary position by, among other methods, filing patent applications in the United States and in jurisdictions outside of the United States covering our proprietary technology, inventions, improvements and product candidates that are important to the development and implementation of our business.

Our policy is to seek to protect our proprietary

position by, among other methods, filing patent applications in the United States and in jurisdictions outside of the United States covering our proprietary technology, inventions, improvements and product candidates that are important to the development and implementation of our business.

We also rely on trade secrets and know-how relating to our proprietary technology and product candidates, continuing innovation, and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of immuno-oncology.

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We also possess and in-license substantial know-how and trade secrets relating to the development and commercialization of our product candidates, including related manufacturing processes and technology.

As of March 2, 2020, our owned and licensed patent portfolio consisted of fourteen licensed U.S.

issued patents, four licensed U.S.

pending patent applications, twelve owned U.S.

pending patent applications, four owned U.S.

provisional patent applications, and seven owned PCT International patent applications directed to ciforadenant, CPI-006, and CPI-818, and certain of our other proprietary technology, inventions, improvements or other potential product candidates.

In addition, our owned and licensed patent portfolio included forty-four licensed patents, nine licensed patent applications, and sixty-three owned patent applications pending in jurisdictions outside of the United States that are foreign

counterparts to one or more of the foregoing U.S.

As of January 20, 2022, our owned and licensed patent portfolio consisted of fourteen licensed U.S.

issued patents, one licensed U.S.

pending patent applications, six owned U.S.

issued patents, twelve owned U.S.

pending patent applications, and one owned U.S.

provisional patent applications directed to mupadolimab, CPI-818 and ciforadenant, and certain of our other proprietary technology, inventions, improvements or other potential product candidates.

In addition, our owned and licensed patent portfolio included thirty-eight licensed patents, eight licensed patent applications, three owned patents, and seventy-one owned patent applications pending in jurisdictions outside of the United States that are foreign counterparts to one or more of the foregoing U.S.

patents and patent applications.

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The term of patents outside of the United States varies in accordance with the laws of the foreign jurisdiction, but typically is also 20 years from the earliest effective filing date.

The issued United States patents we license from Vernalis directed to the composition of matter of ciforadenant and its method of use for treating disorders treatable by purine receptor blocking are expected to expire between January 2022 and July 2029, excluding any patent term extension that may be available.

The pending U.S.

patent application and PCT International patent applications, if granted as patents, that we own directed to the composition of matter and methods of treatment for CPI-006 are expected to expire between December 2036 and June 2037, excluding any patent term extension that may be available.

The pending U.S.

The issued United States patents we license from Vernalis directed to the composition of matter of ciforadenant and its method of use for treating disorders treatable by purine receptor blocking are expected to expire between May 2022 and July 2029, excluding any patent term extension that may be available.

The granted U.S.

and foreign patents and pending U.S.

and foreign patent application and PCT International patent applications, if granted as patents, that we own directed to the composition of matter and methods of treatment for mupadolimab are expected to expire between December 2036 and June 2037, excluding any patent term extension that may be available.

The granted U.S.

and foreign patents and pending U.S.

and foreign patent applications, if granted as patents, that we own directed to the composition of matter and methods of treatment for CPI 818 are expected to expire November 2037, excluding any patent term extension that may be available.

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The relevant patent laws and their interpretation outside of the United States is also uncertain.

Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our technology or product candidates and enforce the patent rights that we license, and could affect the value of such intellectual property.

Changes in either the patent laws or their interpretation in the United States and other countries may diminish

our ability to protect our technology or product candidates and enforce the patent rights that we license, and could affect the value of such intellectual property.

In particular, our ability to stop third parties from making, using, selling, offering to sell, or importing products that infringe our intellectual property will depend in part on our success in obtaining and enforcing patent claims that cover our technology, inventions, and improvements.

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For these reasons, we may face competition with respect to our product candidates.

force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides.

Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any particular product candidate can be commercialized, any patent protection for such product may expire or remain in force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides.

Licenses and Collaborations

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We have also agreed to pay Vernalis tiered incremental royalties based on the annual net sales of licensed products containing ciforadenant on a product-by-product and country-by-country basis, subject to certain offsets and reductions.

The tiered royalty rates for products containing ciforadenant range from the mid-single digits up to the low-double digits on a country-by-country net sales basis.

The tiered royalty rates for products containing ciforadenant range from the mid-single digits up to the

low-double digits on a country-by-country net sales basis.

The royalties on other licensed products that do not include ciforadenant also increase with the amount of net sales on a product-by-product and country-by-country basis and range from the low-single digits up to the mid-single digits on a country-by-country net sales basis.

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Scripps Licensing Agreement

In December 2014, we entered into a license agreement with Scripps, pursuant to which we were granted a non-exclusive, world-wide license for all fields of use under Scripps’ rights in certain know-how and technology related to a mouse hybridoma clone expressing an anti-human CD73 antibody, and to progeny, mutants or unmodified derivatives of such hybridoma and any antibodies expressed by such hybridoma, from which we developed CPI-006.

Scripps also granted us the right to grant sublicenses in conjunction with other proprietary rights we hold, or to others collaborating with or performing services for us.

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The aggregate potential milestone payments are $2.6 million.

We are also required to pay royalties on net sales of licensed products (including CPI-006) sold by us, our affiliates and our sublicensees at a rate in the low-single digits.

We are also required to pay royalties on net sales of licensed products (including mupadolimab) sold by us, our affiliates and our sublicensees at a rate in the low-single digits.

In addition, should we sublicense the rights licensed under the agreement, we have agreed to pay a percentage of sublicense revenue received at single digit percentages based on the achievement of development milestones.

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Genentech will supply Tecentriq.

At this time, no further patients are being enrolled in this trial.

As part of the agreement, we granted Genentech certain rights of first negotiation to participate in future clinical trials that we may conduct evaluating the administration of ciforadenant in combination with an anti-PD-1 or anti-PD-L1 antibody.

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We also granted Genentech certain rights of first negotiation should we decide to license development and commercialization rights to ciforadenant.

Should we not reach agreement on the terms of such a license within a specified time period, we retain the right to enter into a license with another third party.

We and Genentech each have the right to terminate the agreement for material breach by the other party.

In addition, the agreement may be terminated by either party due to safety considerations, if directed by a regulatory authority or if development of ciforadenant or Tecentriq is discontinued.

Further, the agreement will expire after a set period of time following the provision by us of the final clinical study report to Genentech.

Should we not reach agreement

on the terms of such a license within a specified time of period, we retain the right to enter into a license with another third party.

This agreement will expire after a set period of time following the provision by us of the final clinical study report to Genentech, which has not yet been finalized.

In May 2017, we entered into a second clinical trial collaboration agreement with Genentech.

Under the new agreement, ciforadenant administered in combination with Tecentriq will be evaluated in a Phase 1b/2 randomized, controlled clinical study as second-line therapy in patients with NSCLC who are resistant and/or refractory to prior therapy with an anti-PD-(L)1 antibody.

It is anticipated that the study will enroll up to 65 patients in the treatment arm.

Genentech will be responsible for the conduct of the study and we will share the cost of the Phase 1b/2 trial, which began enrolling patients in the fourth quarter of 2017.

This study has completed patient enrollment of 16 patients.

Genentech was responsible for the conduct of the study and we will share the cost of the Phase 1b/2 trial, which began enrolling patients in the fourth quarter of 2017.

We are responsible for supplying ciforadenant and retain global development and commercialization rights to ciforadenant.

We and Genentech each have the right to terminate the agreement for material breach by the other party.

In addition, the agreement may be terminated by either party due to safety considerations, if directed by a regulatory authority or if development of ciforadenant or Tecentriq is discontinued.

Further, the agreement will expire after a set period of time following the provision by us of the final clinical study report to Genentech.

This agreement will expire after a set period of time following the provision by Genentech of a final study report to us.

Monash License Agreement

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requirements at any time during the product development process, approval process or after approval may subject an applicant to administrative or judicial sanctions.

These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls,

product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

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

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● submission to the FDA of an IND, which must become effective before human clinical trials may begin;

● a pproval by an institutional review board (“IRB”) or ethics committee at each clinical site before the trial is

● a pproval by an institutional review board (“IRB”) or ethics committee at each clinical site before the trial is commenced;

● performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice (“GCP”) regulations to establish the safety and efficacy of the proposed drug, or safety, purity and potency of the proposed biologic for its intended use;

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An IND sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND.

The sponsor will also include a protocol detailing, among other things, the objectives of the first phase of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, if the first phase lends itself to an efficacy evaluation.

The sponsor will also include a protocol detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, if the clinical trial lends itself to an efficacy evaluation.

Some preclinical testing may continue even after the IND is submitted.

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

Sponsors sometimes designate their Phase 1 trials as Phase 1a or Phase 1b.

Phase 1b trials are typically aimed at confirming dosing, pharmacokinetics and safety in larger number of patients.

Some Phase 1b studies evaluate biomarkers or surrogate markers that may be associated with efficacy in patients with specific types of diseases.

The product candidate is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and appropriate dosage .

The product candidate is administered to an expanded patient population to provide statistically significant evidence of clinical efficacy and further test for safety, generally at geographically dispersed clinical study sites.

These clinical trials are intended to establish the overall risk-benefit ratio of the product candidate and provide, if appropriate, an adequate basis for product labeling .

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

Post-approval trials, sometimes referred to as Phase 4 studies, may be conducted after initial marketing approval.

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

While the IND is active and before approval, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.

While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.

There are also requirements governing the reporting of ongoing clinical trials and completed trial results to public registries.

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The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations.

The approval process is lengthy and often difficult, and the FDA may refuse to approve an NDA or BLA if the applicable regulatory criteria are not satisfied or may require additional clinical or other data and information.

Even if such data and information are submitted, the FDA may ultimately decide that the NDA or BLA does not satisfy the criteria for approval.

After the FDA evaluates an NDA or BLA, it will issue an approval letter or a Complete Response Letter.

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A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form.

A Complete Response Letter usually describes the specific deficiencies in the NDA or BLA identified by the FDA and may require additional clinical data, such as an additional pivotal Phase 3 trial or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing.

A Complete Response Letter usually describes the specific deficiencies in the NDA or BLA identified by the FDA and may require additional clinical data, such as an additional clinical trial or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing.

If a Complete Response Letter is issued, the sponsor must resubmit the NDA or BLA, addressing all of the deficiencies identified in the letter, or withdraw the application.

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Marketing approval may be withdrawn for non-compliance with regulatory requirements or if problems occur following initial marketing.

The Food and Drug Administration Safety and Innovation Act (“FDASIA”) made permanent the Pediatric Research Equity Act (“PREA”), which requires a sponsor to conduct pediatric clinical trials for most drugs and biologics, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration.

In addition, the Pediatric Research Equity Act (“PREA”), which requires a sponsor to conduct pediatric clinical trials for most drugs and biologics, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration.

Under PREA, original NDAs, BLAs and supplements thereto must contain a pediatric assessment unless the sponsor has received a deferral or waiver.

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The sponsor or FDA may request a deferral of pediatric clinical trials for some or all of the pediatric subpopulations.

A deferral may be granted for several reasons, including a finding that the drug or biologic is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin.

A deferral may be granted for

several reasons, including a finding that the drug or biologic is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin.

The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation.

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

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities.

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities.

The designation of such drug or biologic also entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

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

Orphan drug status in the European Union has similar but not identical benefits in that jurisdiction.

Expedited Development and Review Programs

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The FDA may consider for review sections of the NDA or BLA for a Fast Track review designation on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA or BLA, the FDA agrees to accept sections of the NDA or BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA or BLA.

Any product candidate submitted to the FDA for approval, including a product candidate with a Fast Track designation, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval.

A product candidate is eligible for priority review if it is designed to treat a serious condition, and if approved, would provide a significant improvement in safety or effectiveness compared to marketed products.

A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for Breakthrough Therapy designation to expedite its development and review.

A product candidate can receive Breakthrough Therapy designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers.

Any product candidate submitted to the FDA for approval, including a product candidate with a Fast Track designation or Breakthrough Therapy designation, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval.

A BLA or NDA is eligible for

priority review if the product candidate is designed to treat a serious condition, and if approved, would provide a significant improvement in safety or effectiveness compared to marketed products.

The FDA will attempt to direct additional resources to the evaluation of an application designated for priority review in an effort to facilitate the review.

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As a condition of approval, the FDA may require that a sponsor of a drug or biologic receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials.

A product receiving accelerated approval may be subjected to expedited

withdrawal procedures if the sponsor fails to conduct any required post-marketing trials in a timely manner, or if such trials fail to verify the predicted clinical benefit.

A product receiving accelerated approval may be subjected to expedited withdrawal procedures if the sponsor fails to conduct any required post-marketing trials in a timely manner, or if such trials fail to verify the predicted clinical benefit.

In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

FDASIA established a category of drugs and biologics referred to as “breakthrough therapies” that may be eligible to receive Breakthrough Therapy designation.

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

The designation includes all of the Fast Track program features, as well as more intensive FDA interaction and guidance.

The Breakthrough Therapy designation is a distinct status from both accelerated approval and priority review, which can also be granted to the same drug if relevant criteria are met.

If a product is designated as breakthrough therapy, the FDA will expedite the development and review of such drug.

All requests for breakthrough therapy designation will be reviewed within 60 days of receipt, and the FDA will either grant or deny the request.

Fast Track designation, Breakthrough Therapy designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process.

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Drug and biologics manufacturers and other entities involved in the manufacture and distribution of approved drugs and biologics are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP regulations and other laws and regulations.

Any drug products manufactured or distributed by us or our partners pursuant to FDA approvals will be subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements.

Any drug products manufactured or distributed pursuant to FDA approvals will be subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements.

The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market and imposes requirements and restrictions on drug and biologics manufacturers, such as those related to direct-to-consumer advertising, the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.

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FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical hold, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties.

Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of FDA approval of our product candidates, some of the U.S.

patents that we may be granted in the future may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments.

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

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

The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA or BLA, plus the time between the submission date of an NDA or BLA and the approval of that application, less any time the applicant did not act with due diligence.

Only one patent applicable to an approved drug is eligible for the extension, and the extension must be applied for prior to expiration of the patent.

The United States Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.

In the future, we intend to apply for restorations of patent term for patents that may be issued to us, depending on the expected length of clinical trials and other factors involved in the filing of the relevant marketing application.

Marketing Exclusivity

Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain marketing applications.

The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity.

The FDCA provides a five-year period of non-patent data exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity.

A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.

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Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical study or studies.

Interchangeability requires that a product is biosimilar to the reference product

and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

However, complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval pathway that are still being addressed by the FDA.

Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA.

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At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

The BPCIA is complex and continues to be interpreted and implemented by the FDA.

In addition, recent government proposals have sought to reduce the twelve-year reference product exclusivity period.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation.

As a result, the ultimate impact, implementation and meaning of the BPCIA is subject to significant uncertainty.

FDA Regulation of Companion Diagnostics

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

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

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

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

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

The FDA may also determine that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted and then the data submitted in an amendment to the PMA.

The FDA may also determine that

additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted and then the data submitted in an amendment to the PMA.

Once granted, PMA approval may be withdrawn by the FDA if compliance with post approval requirements, conditions of approval or other regulatory standards is not maintained or problems are identified following initial marketing.

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Government Regulation Outside of the United States

In addition to regulations in the United States, we will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical studies and any commercial sales and distribution of our product candidates.

Whether or not we obtain FDA approval for a product candidate, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical studies or marketing of the product candidates in those countries.

The requirements and process governing the conduct of clinical studies, product licensing, pricing and reimbursement vary from country to country.

In addition to regulations in the United States, we are be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials, and any commercial sales and distribution of our product once approved.

Whether or not we obtain FDA approval for a product candidate, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product candidates in those countries.

The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.

Failure to comply with applicable foreign regulatory requirements, may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Clinical Trials

Non-Clinical Studies and Clinical Trials

Similar to the U.S., the various phases of non-clinical and clinical research in the European Union (“EU”) are subject to significant regulatory controls.

Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances.

Non-clinical studies must be conducted in compliance with the principles of good laboratory practice (“GLP”) as set forth in EU Directive 2004/10/EC.

In particular, non-clinical studies, both in vitro and in vivo, must be planned, performed, monitored, recorded, reported and archived in accordance with the GLP principles, which define a set of rules and criteria for a quality system for the organizational process and the conditions for non-clinical studies.

These GLP standards reflect the Organization for Economic Co-operation and Development requirements

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

In the European Union (“EU”), for example, a clinical trial authorization (“CTA”) must be submitted to each country’s national health authority and an independent ethics committee, much like the FDA and the IRB, respectively.

Once the CTA is approved by the national health authority and the ethics committee has granted a positive opinion in relation to the conduct of the trial in the relevant member state(s),in accordance with a country’s requirements, clinical study development may proceed.

The CTA must include, among other things, a copy of the trial protocol and an investigational medicinal product dossier containing information about the manufacture and quality of the medicinal product under investigation.

Currently, CTAs must be submitted to the competent authority in each EU member state in which the trial will be conducted.

Under the new Regulation on Clinical Trials, which is currently expected to take effect by early 2022, there will be a centralized application procedure where one national authority takes the lead in reviewing the application and the other national authorities have only limited involvement.

Any substantial changes to the trial protocol or other information submitted with the CTA must be notified to or approved by the relevant competent authorities and ethics committees.

Medicines used in clinical trials must be manufactured in accordance with GMP.

Other national and European Union-wide regulatory requirements may also apply.

Clinical studies of medicinal products in the European Union must be conducted in accordance with EU and national regulations and the International Conference on Harmonization (“ICH”) guidelines on GCP as well as the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

Clinical studies of medicinal products in the EU must be conducted in accordance with EU and national regulations and the International Conference on Harmonization (“ICH”) guidelines on GCP as well as the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

If the sponsor of the clinical trial is not established within the EU, it must appoint an EU entity to act as its legal representative.

The sponsor must take out a clinical trial insurance policy, and in most EU countries, the sponsor is liable to provide ‘no fault’ compensation to any study subject injured in the clinical trial.

Marketing Authorizations

To obtain regulatory approval of an investigational medicinal product under European Union regulatory systems, we must submit a marketing authorization application.

The application used to file the NDA or BLA in the United States is similar to that required in the European Union, with the exception of, among other things, country-specific document requirements.

The regulatory landscape related to clinical trials in the EU has been subject to recent changes.

The EU Clinical Trials Regulation (“CTR”) which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.

Unlike directives, the CTR is directly applicable in all EU member states without the

need for member states to further implement it into national law.

The CTR notably harmonizes the assessment and supervision processes for clinical trials throughout the EU via a Clinical Trials Information System, which contains a centralized EU portal and database.

While the Clinical Trials Directive required a separate clinical trial application (“CTA”) to be submitted in each member state, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application to all member states concerned.

The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state.

The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules.

Each member state’s decision is communicated to the sponsor via the centralized EU portal.

Once the CTA is approved, clinical study development may proceed.

The CTR foresees a three-year transition period.

The extent to which ongoing and new clinical trials will be governed by the CTR varies.

For clinical trials whose CTA was made under the Clinical Trials Directive before January 31, 2022, the Clinical Trials Directive will continue to apply on a transitional basis for three years.

Additionally, sponsors may still choose to submit a CTA under either the Clinical Trials Directive or the CTR until January 31, 2023 and, if authorised, those will be governed by the Clinical Trials Directive until January 31, 2025.

By that date, all ongoing trials will become subject to the provisions of the CTR.

Medicines used in clinical trials must be manufactured in accordance with Good Manufacturing Practices (“GMP”).

Other national and EU-wide regulatory requirements may also apply.

Marketing Authorization

In the EU, medicinal products can only be placed on the market after obtaining a marketing authorization (“MA”).

To obtain regulatory approval of an investigational medicinal product under EU regulatory systems, we must submit a marketing authorization application (“MAA”).

The process for doing this depends, among other things, on the nature of the medicinal product.

The centralized procedure results in a single marketing authorization, issued by the European Commission, based on the opinion of the EMA’s Committee for Human Medicinal Products (“CHMP”), which is valid across the entire territory of the EU.

The centralized procedure is compulsory for human medicines that are:

(i) derived from biotechnology processes, such as genetic engineering, (ii) contain a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions and viral diseases, (iii) designated orphan medicines and (iv) advanced therapy medicinal products, or ATMPs, such as gene therapy, somatic cell therapy or tissue-engineered medicines.

The centralized procedure may at the request of the applicant also be used in certain other cases.

It is likely that the centralized procedure would apply to the products we are developing.

“Centralized MAs” are issued by the European Commission through the centralized procedure, based on the opinion of the European Medicines Agency’s (“EMA”) Committee for Human Medicinal Products (“CHMP”) and are valid across the entire territory of the EU.

The centralized procedure is compulsory for human types of medicines such as:

(i) medicinal products derived from biotechnology processes, such as genetic engineering, (ii) medicinal products that contain a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions and viral diseases, (iii) designated orphan medicines and (iv) advanced therapy medicinal products (“ATMPs”), such as gene therapy, somatic cell therapy or tissue-engineered medicines.

The centralized procedure may at the request of the applicant also be used in certain other cases and in particular for any other products containing new active substances not authorized in the EU or for product candidates which constitute a significant therapeutic, scientific, or technical innovation or for which the granting of authorization would be in the interests of public health in the EU.

It is likely that the centralized procedure would apply to the product candidates we are developing.

Under the centralized procedure, the maximum timeframe for the evaluation of a MAA by the EMA is 210 days.

In exceptional cases, the CHMP might perform an accelerated review of a marketing authorization in no more than 150 days (not including clock stops).

In exceptional cases, the CHMP might perform an accelerated review of a MAin no more than 150 days (not including clock stops).

Innovative products that target an unmet medical need and are expected to be of major public health interest may be eligible for a number of expedited development and review programs, such as the PRIME scheme, which provides incentives similar to the breakthrough therapy designation in the U.S.

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It is based on increased interaction and early dialogue with companies developing promising medicines, to optimize their product development plans and speed up their evaluation to help them reach patients earlier.

Product developers that benefit from PRIME designation can expect to be eligible for accelerated assessment but this is not guaranteed.

The benefits of a PRIME designation include the appointment of a CHMP rapporteur before submission of a marketing authorization application, early dialogue and scientific advice at key development milestones, and the potential to qualify products for accelerated review earlier in the application process.

Product developers that benefit from

PRIME designation can expect to be eligible for accelerated assessment but this is not guaranteed.

Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated MAA assessment once a dossier has been submitted.

Importantly, a dedicated contact and rapporteur from the CHMP is appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s committee level.

An initial meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.

MAs have an initial duration of five years.

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Data and Marketing Exclusivity

The European Union also provides opportunities for market exclusivity.

Upon receiving marketing authorization, new chemical entities generally receive eight years of data exclusivity and an additional two years of market exclusivity.

If granted, data exclusivity prevents regulatory authorities in the European Union from referencing the innovator’s data to assess a generic or biosimilar application.

During the additional two-year period of market exclusivity, a generic or biosimilar marketing authorization application can be submitted, and the innovator’s data may be referenced, but no generic or biosimilar product can be marketed until the expiration of the market exclusivity.

The overall ten-year market exclusivity period may be extended to a maximum of eleven years if, during the first eight years a new therapeutic indication with significant clinical benefit over existing therapies is approved.

However, there is no guarantee that a product will be considered by the European Union’s regulatory authorities to be a new chemical entity, and products may not qualify for data exclusivity.

The EU also provides opportunities for market exclusivity.

Upon receiving MA, reference products generally receive eight years of data exclusivity and an additional two years of market exclusivity.

If granted, data exclusivity prevents generic or biosimilar applicants from relying on the preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar MA in the EU during a period of eight years from the date on which the reference product was first authorized in the EU.

During the additional two year period of market exclusivity, a generic or biosimilar MAA can be submitted, and the innovator’s data may be referenced, but no generic or biosimilar product can be marketed until 10 years have elapsed from the initial MA of the reference product in the EU.

The overall ten-year market exclusivity period may be extended to a maximum of eleven years if, during the first eight years of those 10 years, the MA holder obtains an authorization for one or more new therapeutic indication with significant clinical benefit over existing therapies is approved.

However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical entity, and products may not qualify for data exclusivity.

There is a special regime for biosimilars, or biological medicinal products that are similar to a reference medicinal product but that do not meet the definition of a generic medicinal product, for example, because of differences in raw materials or manufacturing processes.

For such products, the results of appropriate preclinical or clinical trials must be provided, and guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product.

There are no such guidelines for complex biological products, such as gene or cell therapy medicinal products, and so it is unlikely that biosimilars of those products will currently be approved in the EU.

However, guidance from the EMA states that they will be considered in the future in light of the scientific knowledge and regulatory experience gained at the time.

Orphan Medicinal Products

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

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

A medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life threatening or chronically debilitating condition;

(2) either (a) such condition affects no more than five in 10,000 persons in the European Union when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the European Union to justify investment;

and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the European Union, or if such a method exists, the product will be of significant benefit to those affected by the condition.

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

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

During the ten-year market exclusivity period, the EMA cannot accept a marketing authorization application for the same indication, in respect of a similar medicinal product.

An orphan product can also obtain an additional two years of market exclusivity in the European Union for pediatric studies.

and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to those affected by the condition.

The application for orphan drug designation must be submitted before the MAA.

Orphan medicinal products are eligible for incentives such as reduction of fees or fee waivers, protocol assistance, and access to the centralized procedure and are, upon grant of a MA, entitled to ten years of market exclusivity for the approved therapeutic indication.

During the ten-year market exclusivity period, the regulatory authorities cannot accept another MAA, or grant a MA, or accept an application to extend an existing MA for a period of ten years for the same indication, in respect of a similar medicinal product.

An orphan product can also obtain an additional two years of market exclusivity in the EU for orphan medicinal products that have also complied with an agreed pediactric investigation plan (“PIP”).

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

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

The 10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.

In addition, marketing authorization may be granted to a similar product for the same indication at any time if (1) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior;

Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review

and approval process.

In addition, MA may be granted to a similar product for the same indication at any time if (1) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior;

(2) the applicant consents to a second orphan medicinal product application;

or (3) the applicant cannot supply enough orphan medicinal product.

Pediatric Development

In the EU, MAAs for new medicinal products have to include the results of trials conducted in the pediatric population, in compliance with a PIP agreed with the EMA’s Pediatric Committee (“PDCO”).

The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which an MA is being sought.

The PDCO can grant a deferral of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults.

Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients.

Once the MA is obtained in all member states and study results are included in the product information, even when negative, the product is eligible for a six-months supplementary protection certificate extension (if any is in effect at the time of approval) or, in the case of orphan pharmaceutical products, a two year extension of the orphan market exclusivity is granted.

Post-Approval Requirements

Similar to the United States, both marketing authorization holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the member states.

Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the member states.

The holder of a marketing authorization must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system.

Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.

All new marketing authorization applications must include a risk management plan, or RMP, describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.

The regulatory authorities may also impose specific obligations as a condition of the marketing authorization.

Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports (“PSURs”).

All new MAAs must include a risk management plan (“RMP”), describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.

The regulatory authorities may also impose specific obligations as a condition of the MA.

Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies.

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Although general requirements for advertising and promotion of medicinal products are established under EU directives, the details are governed by regulations in each member state and can differ from one country to another.

Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, marketing authorization of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.

These penalties could include delays or refusal to authorize the conduct of clinical trials, or to grant marketing authorizations, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the marketing authorization, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.

Approval and Regulation of Companion Diagnostics

In the EU, in vitro diagnostic medical devices are regulated by Directive 98/79/EC which regulates the placing on the market, the CE-marking, the essential requirements, the conformity assessment procedures, the registration obligations for manufactures and devices as well as the vigilance procedure.

Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.

of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.

The aforementioned EU rules are generally applicable in the European Economic Area (“EEA”), which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.

For other countries outside of the EU, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.

In all cases, again, the clinical trials are conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Regulation of Companion Diagnostics

In the EU, in vitro diagnostic medical devices are regulated by Directive 98/79/EC which regulates the placing on the market, the CE marking, the essential requirements, the conformity assessment procedures, the registration obligations for manufacturers and devices as well as the vigilance procedure.

In vitro diagnostic medical devices must comply with the requirements provided for in the Directive, and with further requirements implemented at national level (as the case may be).

The regulation of companion diagnostics will be subject to further requirements as of the entry into force of the in-vitro diagnostic devices Regulation (No 2017/746) which introduces a new classification system for companion diagnostics which are now specifically defined as diagnostic tests that support the safe and effective use of a specific medicinal product, by identifying patients that are suitable or unsuitable for treatment.

The regulation of companion diagnostics will be subject to further requirements once the in-vitro medical diagnostic devices Regulation (No 2017/746) (“IVDR”) will become applicable on 26 May 2022.

However on October 14, 2021, the European Commission proposed a “progressive” roll-out of the IVDR to prevent disruption in the supply of in vitro diagnostic medical devices.

The European Parliament and Council voted to adopt the proposed regulation on December 15, 2021 and the regulation entered into force on January 2022.

The IVDR will fully apply on May 26, 2022 but there will be a tiered system extending the grace period for many devices (depending on their risk classification) before they have to be fully compliant with the regulation.

The IVDR introduces a new classification system for companion diagnostics which are now specifically defined as diagnostic tests that support the safe and effective use of a specific medicinal product, by identifying patients that are suitable or unsuitable for treatment.

Companion diagnostics will have to undergo a conformity assessment by a notified body.

Before it can issue a CE certificate, the notified body must seek a scientific opinion from the EMA on the suitability of the companion diagnostic to the medicinal product concerned if the medicinal product falls exclusively within the scope of the centralized procedure for the authorization of medicines, or the medicinal product is already authorized through the centralized procedure, or a marketing authorization application for the medicinal product has been submitted through the centralized procedure.

Before it can issue a CE certificate, the notified body must seek a scientific opinion from the EMA on the suitability of the companion diagnostic to the medicinal product concerned if the medicinal product falls exclusively within the scope of the centralized procedure for the authorization of medicines, or the medicinal product is already authorized through the centralized procedure, or a MMA for the medicinal product has been submitted through the centralized procedure.

For other substances, the notified body can seek the opinion from a national competent authorities or the EMA.

The aforementioned EU rules are generally applicable in the European Economic Area (“EEA”), which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.

For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical studies, product licensing, pricing and reimbursement vary from country to country.

In all cases, again, the clinical studies are conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

The aforementioned EU rules are generally applicable in the EEA.

Other Healthcare Laws

In addition to FDA restrictions on marketing of pharmaceutical and biological products, other U.S.

federal and state healthcare regulatory laws restrict business practices in the pharmaceutical industry, which include, but are not limited to, state and federal anti-kickback, fraud & abuse, false claims, price reporting, consumer fraud and physician payment transparency laws.

federal and state and foreign healthcare regulatory laws restrict business practices in the pharmaceutical industry, which include, but are not limited to, state and federal anti-kickback, fraud & abuse, false claims, consumer fraud and transparency laws regarding drug pricing and payments or other transfers of value made to physicians and other licensed healthcare professionals.

These laws may affect our sales, marketing and other promotional activities by limiting the kinds of financial arrangements we may have with physicians, customers and third party payors including discount practices, customer support, education and training programs, physician consulting and other service arrangements.

In addition, manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label.

inaccurate billing or coding information to customers or promoting a product off label.

These laws are broadly written, and it is often difficult to determine precisely how these laws will be applied to specific circumstances.

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Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation ;

● The Physician Payments Sunshine Act, which imposed, among other things, new annual reporting requirements for covered manufacturers for certain payments and “transfers of value” provided to physicians (as defined by statute) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members and will be expanded to include certain other healthcare professionals in 2022 for payments made in 2021;

● The Physician Payments Sunshine Act, which imposed, among other things, new annual reporting requirements for covered manufacturers for certain payments and “transfers of value” provided to physicians (as defined by statute), certain non-physician practitioners including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

● Analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.

If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs and

individual imprisonment, any of which could adversely affect our ability to operate our business and our financial results.

To the extent that any of our product candidates, once approved, are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals.

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Since its enactment, there have been judicial, executive and Congressional legislative challenges to certain aspects of the ACA.

For example, the Tax Cuts and Jobs Act was enacted, which, among other things, removed penalties for not complying with the ACA’s individual mandate to carry health insurance.

On December 14, 2018, a U.S.

District Court Judge in the Northern District of Texas, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Act, the remaining provisions of the ACA are invalid as well.

On December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit upheld the District Court's decision that the individual mandate was unconstitutional but remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well.

Supreme Court is currently reviewing the case, although it is unclear how the Supreme Court will rule.

It is also unclear how other efforts, if any, to challenge, replace, modify, repeal or otherwise invalidate the ACA will impact the law or our business.

In addition, the Budget Control Act of 2011 and the Bipartisan Budget Act of 2015 led to aggregate reductions of Medicare payments to providers of up to 2% per fiscal year that will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021, unless additional Congressional action is taken.

On June 17, 2021, the U.S.

Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

In addition, the Budget Control Act of 2011 and the Bipartisan Budget Act of 2015 led to aggregate reductions of Medicare payments to providers of 2% per fiscal year that will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken.

On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context.

In general, however, the healthcare budgetary constraints in most EU member states have resulted in restrictions on the pricing and reimbursement of medicines by

relevant health service providers.

In general, however, the healthcare budgetary constraints in most EU member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers.

Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could restrict or regulate post-approval activities and affect the ability of pharmaceutical companies to commercialize their products.

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In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, including HIPAA, and federal and state consumer protection laws and regulations (e.g., Section 5 of the FTC Act), that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners.

In addition, certain state and non-U.S.

In addition, certain

state and non-U.S.

laws, such as the California Consumer Privacy Act, or the CCPA, the California Privacy Rights Act, or the CPRA, and the EU General Data Protection Regulation, or the GDPR, govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

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As of December 31, 2021, we had 28 total employees, all of whom were full-time and 21 of whom were primarily engaged in research and development activities.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.

We strive to attract and retain the most talented employees in the industry by offering competitive compensation and benefits that support their health, financial and emotional well-being.

The principal purposes of our compensation plans are to attract, retain and motivate selected employees and directors.

We use a combination of fixed and variable compensation including base salary, cash-based performance bonuses and stock-based compensation awards.

We currently lease a total of approximately 27,280 square feet of office and research and development facilities in Burlingame, California.

7,585 square feet are subleased to Angel Pharmaceuticals through February 2023.

Our lease expires in 2025.

We regularly explore alternatives which would provide us with additional space to accommodate our anticipated growth.

Legal Proceedings

We are not currently a party to any material legal proceedings.

Corporate Information

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The information on our website is not incorporated by reference in this Annual Report on Form 10 K or in any other filings we make with the SEC.

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act).

We will remain an emerging growth company until the earlier of (1) December 31, 2021, (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (3) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such fiscal year, or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies.

As an emerging growth company,

● We may present only two years of audited consolidated financial statements, plus unaudited condensed consolidated financial statements for any interim period, and related management’s discussion and analysis of financial condition and results of operations;

● We may avail ourselves of the exemption from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”);

● We may provide less extensive disclosure about our executive compensation arrangements;

● We may not require stockholder non-binding advisory votes on executive compensation or golden parachute arrangements.

We have chosen to opt out of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards.

Section 107 of the JOBS Act provides that our decision to opt out of the extended transition periods for complying with new or revised accounting standards is irrevocable.

We are a “smaller reporting company” as defined in the Exchange Act.

We take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100 million

during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter.

Financial Information about Segments

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Available Information

We file electronically with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q and

current reports on Form 8-K pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended.

We file electronically with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended.

We make available on our website at http://www.corvuspharma.com, free of charge, copies of these reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

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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