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Item 1. Business

2024-03-05 compared with 2023-03-22 · 444 added, 346 removed, 775 unchanged (50% of the section changed)

Cyclerion Therapeutics, Inc.

(“Cyclerion”, the “Company”

or “we”) is a biopharmaceutical company on a mission to develop treatments for serious diseases.

Cyclerion's portfolio includes novel soluble guanylate cyclase ("sGC") stimulators that modulate a key node in a fundamental signaling network in both the central nervous system ("CNS") and the periphery.

The nitric oxide ("NO") soluble guanylate cyclase ("sGC") cyclic guanosine monophosphate ("cGMP") signaling pathway is a fundamental mechanism that precisely controls key aspects of physiology throughout the body.

The NO-sGC-cGMP pathway regulates diverse and critical biological functions including mitochondrial function, neuronal function, inflammation, and hemodynamics.

Although this pathway has been successfully targeted with several drugs in the periphery, this mechanism has yet to be fully leveraged therapeutically, particularly in the CNS, where impaired NO-sGC-cGMP signaling is believed to play an important role in the pathogenesis of many neurodegenerative and neuropsychiatric diseases.

Zagociguat (previously CY6463) is a clinical-stage CNS-penetrant sGC stimulator that has shown rapid improvement in cerebral blood flow, functional brain connectivity, brain response to visual stimulus, cognitive performance, and biomarkers associated mitochondrial function and inflammation in clinical studies.

CY 3018 is a CNS-targeted sGC stimulator that preferentially localizes to the brain and has a pharmacology profile that suggests its potential for the treatment of neuropsychiatric diseases and disorders.

Praliciguat is a systemic sGC stimulator that is licensed to Akebia Therapeutics, Inc.

("Akebia") and being advanced in rare kidney disease.

Olinciguat is a clinical-stage vascular sGC stimulator that the Company intends to out-license for cardiovascular diseases.

Cyclerion is actively evaluating the best combination of capital, capabilities, and transactions available to it to advance the development of zagociguat and its other clinical development candidates and to maximize shareholder value.

The following table presents the status of our portfolio of sGC stimulators:

(“Cyclerion”, the “Company” or “we”) is a biopharmaceutical company on a mission to develop treatments for serious diseases.

Cyclerion became an independent public company on April 1, 2019 after Ironwood Pharmaceuticals, Inc., or Ironwood, completed a tax-free spin-off of its sGC business, which we refer to herein as the “Separation”.

led by an accomplished team, with a track record of discovering, developing, and commercializing meaningful therapies for patients while creating value for stockholders and with expertise and deep experience in the NO-sGC-cGMP pathway.

Drug development involves a high degree of risk and investment, and the status, timing and scope of our development programs are subject to change.

Important factors that could adversely affect our drug development efforts are discussed in the “Risk Factors”

section of this Annual Report on Form 10-K.

Cyclerion Securities Corporation, a wholly owned subsidiary, was incorporated in Massachusetts on November 15, 2019 and was granted securities corporation status in Massachusetts for the 2019 tax year.

At inception, Cyclerion was a biopharmaceutical company focused on the treatment of serious diseases with novel soluble guanylate cyclase ("sGC") stimulators in both the central nervous system (“CNS”) and the periphery.

The nitric oxide (“NO”) sGC cyclic guanosine monophosphate (“cGMP”) signaling pathway is a fundamental mechanism that precisely controls key aspects of physiology throughout the body.

The NO-sGC-cGMP pathway regulates diverse and critical biological functions in both the CNS and the periphery and has been successfully targeted with several drugs.

On July 28, 2023, the Company sold two of its CNS-penetrant sGC stimulator assets, - zagociguat and CY3018 – (the “Transferred Assets”) to Tisento in exchange for $8.0 million in cash consideration, $2.4 million as reimbursement for certain operating expenses related to the Transferred Assets for the period between signing and closing of the transaction, and 10% of all of Tisento’s parent’s outstanding equity securities at the time of the closing.

See “Tisento Asset Purchase Agreement” below.

Prior to the sale of the Transferred Assets, Cyclerion’s portfolio included novel sGC stimulators that modulate signaling networks in both the CNS and the periphery.

The following table is a high-level summary of Cyclerion’s portfolio assets prior to the sale:

Indication(s)

Zagociguat (CNS-penetrant)

MELAS syndrome (mitochondrial encephalopathy, lactic acidosis, and stroke-like episodes syndrome), cognitive impairment associated with schizophrenia, and Alzheimer's Disease with Vascular Pathology (ADV)

Zagociguat is a CNS-penetrant sGC stimulator that has shown rapid improvements across a range of endpoints reflecting multiple domains of disease activity, including mitochondrial disease-associated biomarkers.

Sold to Tisento as part of the Asset Purchase Agreement.

CY3018 (CNS-penetrant)

Neuropsychiatric

CY3018 is a CNS-penetrant sGC stimulator in preclinical development that has potential for the treatment of neuropsychiatric diseases and disorders.

Sold to Tisento as part of the Asset Purchase Agreement

Olinciguat (peripheral)

Cardiovascular

Olinciguat is a vascular sGC stimulator that the Company

Management plans to seek to out-license olinciguat

intends to out-license for cardiovascular diseases.

Praliciguat (peripheral)

Focal Segmental Glomerulosclerosis (FSGS)

Praliciguat is a systemic sGC stimulator that is licensed to Akebia for the treatment of rare kidney disease.

Out-licensed to Akebia

Although all assets that were within Cyclerion’s portfolio were sGC stimulators, the Transferred Assets sold to Tisento are uniquely different from the assets retained by Cyclerion (olinciguat and praliciguat).

The Transferred Assets have high exposure to the CNS (i.e., CNS-penetrant sGC stimulators) and the Cyclerion retained assets are peripheral sGC stimulators.

The retained assets are therefore not interchangeable with the Transferred Assets and do not provide the same benefit in CNS and correspondingly the Transferred Assets do not provide the same potential benefit for systemic/vascular diseases.

Cyclerion assets which have been retained are either currently out-licensed (praliciguat) or management is seeking to out-license (olinciguat).

The Company’s prior strategy to conduct research and development on sGC stimulators for CNS has been discontinued subsequent to the sale of the Transferred Assets.

Cyclerion does not intend to internally pursue research and development or commercialization with any type of sGC assets.

Cyclerion intends to utilize royalties and milestones from olinciguat and praliciguat out-licensing to build a new portfolio and advance the development of those new assets.

Research and Development Programs

Zagociguat is an orally administered CNS-penetrant sGC stimulator.

NO-sGC-cGMP is a fundamental signaling network, including in the brain where it is critical to basic CNS functions.

Deficient NO-sGC-cGMP signaling is believed to play an important role in the pathogenesis of many peripheral and CNS disorders.

As an sGC stimulator, zagociguat amplifies endogenous NO signaling by acting as a positive allosteric modulator to sensitize the sGC enzyme to NO and increase the production of cGMP.

By compensating for deficient NO-sGC-cGMP signaling, zagociguat may have broad therapeutic potential as a treatment for people with serious diseases.

On January 13, 2020, we announced positive results from our Phase 1 first-in-human study that provided the first clinical data supporting the development of zagociguat.

The results from this study indicate that zagociguat was well tolerated.

Pharmacokinetic data, obtained from both blood and cerebral spinal fluid, support once-daily dosing with or without food and demonstrated zagociguat penetration of the blood-brain-barrier with concentrations in the CSF expected to be pharmacologically active.

On October 14, 2020, we announced positive topline results from our zagociguat Phase 1 translational pharmacology study in healthy elderly participants.

Treatment with zagociguat for 15 days in this 24-subject study confirmed and extended results seen in the earlier first-in-human Phase 1 study:

once-daily oral treatment demonstrated blood-brain-barrier penetration with expected CNS exposure and target engagement.

Results also showed significant improvements in neurophysiological and objective performance measures as well as decreases in inflammatory biomarkers associated with aging and neurodegenerative diseases.

Zagociguat was safe and generally well tolerated in the study.

These results, together with nonclinical data, supported the continued development of zagociguat as a potential new medicine for serious diseases involving the CNS.

On June 10, 2022, we announced positive topline clinical data for zagociguat in our signal-seeking clinical study for the potential treatment of Mitochondrial Encephalomyopathy, Lactic Acidosis and Stroke-like episodes ("MELAS").

In this open-label, single-arm study of the oral, once-daily sGC stimulator in eight adults aged 18 or older with MELAS, improvements were seen across a range of endpoints reflecting multiple domains of disease activity, including mitochondrial disease-associated biomarkers such as lactate and GDF-15, a broad panel of inflammatory biomarkers, cerebral blood flow, and functional connectivity between neural networks.

These positive effects after 29 days of dosing were supported by correlations among several endpoints with each other and with zagociguat plasma concentrations.

Zagociguat was well tolerated with no serious or severe adverse events and no events leading to discontinuation.

Pharmacokinetics were consistent with the Phase 1 studies in healthy volunteers.

The positive data from this study support the potential of zagociguat to provide therapeutic benefit to people living with mitochondrial diseases, including MELAS.

On July 28, 2022, we announced positive topline data from our signal-seeking clinical study of zagociguat for the potential treatment of Cognitive Impairment Associated with Schizophrenia ("CIAS").

Data from the 14-day, double-blind, randomized, placebo-controlled, multiple-ascending-dose study in 48 adults aged 18-50 with stable schizophrenia on a stable, single, atypical antipsychotic regimen demonstrated that once-daily zagociguat was safe and well tolerated, with no reports of serious adverse events, severe adverse events, or treatment discontinuation due to adverse events.

We further announced that study data demonstrated a strong effect on cognitive performance after two weeks of 15mg once-daily dosing and that positive movement on inflammatory biomarkers was also observed.

These signals on exploratory endpoints are consistent with pro-cognitive and anti-inflammatory effects of zagociguat observed in preclinical studies and prior clinical trials and support the further development of oral, once-daily zagociguat.

In October 2022, the WHO International Nonproprietary Names committee and the United States Adopted Name council selected zagociguat as a nonproprietary name for CY6463.

On October 6, 2022, we announced that we had recently capped enrollment in our signal-seeking clinical study of zagociguat for the potential treatment of Alzheimer's disease with vascular pathology ("ADv").

Data from the ADv study are expected in the first half of 2023.

The ADv study is supported in part by a $2 million grant from the Alzheimer’s Association’s Part the Cloud-Gates Partnership Grant Program (the "PTC Grant").

On March 22, 2023, we announced that given the significant capital and capabilities necessary to ensure that the MELAS Phase 2b study is executed efficiently and with the highest quality, and the currently unfavorable capital market conditions, we are actively evaluating the best combination of capital, capabilities, and transactions available to us to advance the development of zagociguat and our other clinical development candidates and to maximize shareholder value.

CY3018 is a CNS-targeted sGC stimulator in preclinical development that preferentially localizes to the brain and has a pharmacology profile that suggests its potential for the treatment of neuropsychiatric diseases and disorders.

Praliciguat is an orally administered, once-daily systemic sGC stimulator.

On June 3, 2021, we entered into a license agreement with Akebia relating to the exclusive worldwide license to Akebia of our rights to the development, manufacture, medical affairs, and commercialization of pharmaceutical products containing praliciguat and other related products and forms thereof enumerated in such agreement.

Cyclerion is eligible to receive up to $585 million in total potential future development, regulatory, and commercialization milestone payments.

Cyclerion is also eligible to receive tiered, sales-based royalties ranging from single-digit to high-teen percentages.

Olinciguat is an orally administered, once-daily, vascular sGC stimulator that was evaluated in a Phase 2 study of participants with sickle cell disease.

We released topline results from this study in October 2020.

We intend to out-license olinciguat to an entity with strong cardiovascular and/or cardiopulmonary capabilities.

Our mission is to develop treatments for serious diseases.

The first step is identifying indications for clinical development where the scientific rationale is strong and the unmet need is high, creating a compelling opportunity.

We have several product opportunities including zagociguat for mitochondrial diseases, CY3018 for neuropsychiatric diseases, and olinciguat for cardiovascular/cardiopulmonary diseases.

Our focus right now is to find the best combination of capital, capabilities, and transactions that will enable the advancement of these assets for patients in a way that maximizes shareholder value.

The following table presents the status of our retained sGC stimulator assets:

In addition to activities related to the retained assets, Cyclerion continues to evaluate other activities to enhance shareholder value, which include potentially acquiring new assets which Cyclerion believes may have promise, as well as potential collaborations, licenses, mergers, acquisitions and/or other targeted investments.

Cyclerion GmbH, a wholly owned subsidiary, was incorporated in Zug, Switzerland on May 3, 2019.

The functional currency is the Swiss franc.

The liquidation process for Cyclerion GmbH has been concluded and the subsidiary is pending deregistration from the commercial registry.

Akebia License Agreement

On June 3, 2021, the Company and Akebia entered into a License Agreement (the “Akebia License Agreement”) relating to the exclusive worldwide license by the Company to Akebia of our rights to the development, manufacture, medical affairs and commercialization of pharmaceutical products containing the pharmaceutical compound known as praliciguat and other related products and forms thereof enumerated in the License Agreement.

Pursuant to the Akebia License Agreement, Akebia will be responsible for all future research, development, regulatory, and commercialization activities for the out-licensed Praliciguat products.

Akebia paid a $3.0 million up-front payment to the Company upon signing of the Akebia License Agreement and the Company is eligible to receive additional milestone cash payments of up to $585 million in total potential future development, regulatory, and commercialization milestone payments for Praliciguat.

In addition to these cash milestone payments, Akebia will pay the Company tiered royalty payments on net sales in certain major markets at percentages ranging from the mid-single digits to the high-teens, subject to certain reductions and offsets.

Unless earlier terminated, the Akebia License Agreement will expire on a product-by-product and country-by-country basis upon the expiration of the last royalty term, which ends upon the longest of (i) the expiration of the patents licensed under the Akebia License Agreement, (ii) the expiration of regulatory exclusivity for such product, and (iii) 10 years from first commercial sale of such product.

Akebia may terminate the Akebia License Agreement in its entirety or only with respect to a particular licensed compound or product upon 180 days’ prior written notice to Cyclerion, subject to certain obligations to license back to Cyclerion licensed compounds and candidates and related assets.

The parties also have customary termination rights, subject to a cure period, in the event of the other party’s material breach of the Akebia License Agreement or in the event of certain additional circumstances.

Tisento Asset Purchase Agreement

On May 11, 2023, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with an investor group that included Peter Hecht (our former CEO), JW Celtics Investment Corp and JW Cycle Inc.

which subsequently changed their names to Tisento Therapeutics Holdings Inc.

(“Tisento Parent”) and Tisento Therapeutics Inc.

Upon the closing on July 28, 2023 following receipt of approval by the Cyclerion stockholders of the transactions contemplated by the Asset Purchase Agreement, the Company sold to Tisento the Transferred Assets and Tisento assumed certain liabilities relating thereto, including, but not limited to (i) liabilities, costs and expenses arising after the date of the Asset Purchase Agreement relating to the employment of certain Cyclerion employees and the conduct of certain preclinical and clinical trial activities prior to the closing of the transactions contemplated by the Asset Purchase Agreement, and (ii) liabilities relating to such assets to the extent relating to the period after the closing of the transaction.

In consideration for such sale and assumption, at the closing the Company received proceeds of $8.0 million as cash consideration, $2.4 million as reimbursement for certain operating expenses related to such assets for the period between signing and closing of the Asset Purchase Agreement, and shares of common stock of Tisento Parent comprising 10% of the then issued and outstanding equity securities of Tisento Parent immediately following such closing, subject to certain protections against dilution.

Under the terms of the Asset Purchase Agreement, Cyclerion has agreed not to compete with Tisento from July 28, 2023 through the July, 2028 either alone or directly or indirectly with or through any affiliate or third party, initiate IND-enabling preclinical development, develop, commercially manufacture, commercialize, or otherwise exploit any compound or product that is (A) a CNS-penetrant sGC stimulator, (B) developed for the treatment of a program indication, and (C) reasonably expected to compete with any compound or product in a purchased program for the treatment of a program indication (any such compound or product, a “Cyclerion Competing Product”) anywhere in the world, or (ii) license, convey, grant, or otherwise transfer any rights to any third party to initiate IND-enabling preclinical development, develop, commercially manufacture, commercialize, or otherwise exploit a Cyclerion Competing Product anywhere in the world.

Although the Company has shifted its strategy to build a new portfolio of non-sGC stimulator assets within the CNS therapeutic area, our mission remains to advance treatments for serious diseases.

If the Company identifies suitable new assets outside of the sGC stimulator space, the Company will seek to raise funds and build an organization suitable to advance these assets.

The Company’s goal is to find the best combination of capital, capabilities, and transactions that will enable the advancement of current and any future assets the Company may acquire for patients in a way that maximizes shareholder value.

Intellectual Property

We vigorously protect the intellectual property and proprietary technology that we believe is important to our business, including by pursuing and maintaining U.S.

and foreign patents that cover our product candidates and compositions, their methods of use and the processes for their preparation, as well as any other relevant inventions and improvements that are commercially important to the development of our business.

We protect the intellectual property and proprietary technology that we believe is important to our business, including by pursuing and maintaining U.S.

and foreign patents that cover our product candidates and compositions,

their methods of use and the processes for their preparation, as well as any other relevant inventions and improvements that are commercially important to the development of our business.

We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Our commercial success depends in part on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions, improvements and know-how related to our business, defend and enforce our patents, preserve the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties.

We have twenty-six issued U.S.

patents, twenty-eight pending U.S.

patents applications (of which six are in the provisional stage), four pending Patent Cooperation Treaty, or PCT, application, and numerous foreign patents

and pending patent applications.

The PCT applications are filed under an international patent law treaty that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the 153 contracting states, followed by the process of entering national phase, which requires a separate application in each of the member states in which national patent protection is sought.

We have nineteen issued U.S.

patents, nine pending U.S.

patents applications and numerous foreign patents and pending patent applications.

Patent families are filed either as utility U.S.

patents or under an international patent law treaty (PCT) that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the 157 contracting states, followed by the process of entering national phase, which requires a separate application in each of the member states in which national patent protection is sought.

The technology underlying our sGC patents and pending patent applications has been developed by us and was not acquired from any in-licensing agreement.

We own all of the issued patents and pending applications.

The intellectual property portfolios for our most advanced product candidates are summarized below.

Zagociguat Patent Portfolio

Our patent portfolio includes four U.S.

issued patents, eight pending US applications, (including three provisional cases), one PCT application, and numerous foreign patents and pending patent applications.

Two of the issued U.S.

patents, US 10,858,363 and US 10,472,363 are directed to zagociguat and related compounds, and their pharmaceutical compositions thereof and will expire in 2037.

The terms of these U.S.

patents may be eligible for patent term extension as described below.

patent, US 11,466,015 is directed to polymorphs of zagociguat and will expire in 2039.

The fourth U.S.

patent, US 11,466,014, is directed to methods of manufacturing zagociguat, and will expire in 2039.

Two of the pending U.S.

patent applications are directed to solid forms and processes for the large-scale synthesis of zagociguat and, if issued, will expire in 2039.

Two other pending U.S.

patent application are directed to compounds related to zagociguat, and, if issued, will expire in 2037 and 2041, respectively.

An additional pending U.S.

patent application is directed to methods of treating mitochondrial diseases with sGC stimulators including zagociguat, and, if issued, will expire in 2039.

Three provisional patent applications are directed to additional methods of treatment using zagociguat.

One PCT pending application is directed to the treatment of cognition using zagociguat and if issued will expire in 2041.

Furthermore, we have one European issued patent expiring in 2037, which was validated in multiple countries, one granted patent in Japan, and eleven issued patents in other foreign jurisdictions, ten expiring in 2037, and two expiring in 2039.

All of these are directed to zagociguat and related compounds, polymorphs or manufacturing processes.

Some of these patents may be eligible for patent term extension depending on the jurisdiction.

CY3018 Patent Portfolio

Our CY3018 patent portfolio includes one pending U.S.

provisional application, two PCT applications and several applications in foreign jurisdictions.

The two PCT applications and foreign applications are directed to CY3018 and related compounds and their methods of use and if granted will expire in 2042.

Some of the resulting patents, if issued, may be eligible for patent term extension or the foreign jurisdiction equivalent, depending on the jurisdiction.

The intellectual property portfolios for our most advanced product candidates (praliciguat and olinciguat) are summarized below.

Praliciguat Patent Portfolio

Our praliciguat patent portfolio includes ten U.S.

issued patents, eight pending U.S.

Our praliciguat patent portfolio includes 13 U.S.

issued patents, five pending U.S.

patent applications, and numerous patents and pending patent applications in foreign jurisdiction.

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patent may be eligible for patent term extension as described below.

Two other U.S.

patents, US 8,748,442 and US 9,139,564, expire in 2031, and provide generic coverage of praliciguat and intermediates used in the preparation of praliciguat, respectively.

A fourth U.S.

Three other U.S.

patents, US 8,748,442, US 9,139,564, and 10,189,809, expire in 2031, and provide generic coverage of praliciguat and intermediates used in the preparation of praliciguat, as well as compounds related to praliciguat, respectively.

patent, US 10,183,021 will expire in 2034 and is directed to the treatment of resistant hypertension with praliciguat or combinations of praliciguat and known anti-hypertensives.

patent, US 209,639,308 will expire in 2034

and is directed to the treatment of diabetic nephropathy with praliciguat or combinations of praliciguat with other agents.

The sixth U.S.

patent, US 10,927,136 covers phosphorus prodrugs of praliciguat and will expire in 2037.

patent, US 209,639,308 will expire in 2034 and is directed to the treatment of diabetic nephropathy with praliciguat or combinations of praliciguat with other agents.

The seventh U.S.

Patent, US 11,389,449, is directed to the treatment of metabolic syndrome with praliciguat and will expire in 2038.

patent, US 10,927,136 covers phosphorus prodrugs of praliciguat and will expire in 2037.

The eighth U.S.

Patent, US 11,389,449, is directed to the treatment of metabolic syndrome with praliciguat and will expire in 2038.

The ninth U.S.

Patent, US 11,357,777, is directed to the treatment of NASH with praliciguat and other compounds and will expire in 2039.

The ninth and tenth U.S.

Patents, US 11,319,308 and 11,274,096, are directed to the syntheses of intermediates useful in the manufacture of praliciguat.

The tenth to thirteen, U.S.

Patents, US 11,319,308 (expiring in 2039), US 11,773,089 (expiring in 2037), US 11,274,096 (expiring in 2039) and US 11,708,361 (expiring in 2039) are directed to the syntheses of praliciguat or of intermediates useful in the manufacture of praliciguat.

Two pending U.S.

patent applications that, if issued, will expire in 2031 and 2034, respectively, provide generic coverage for praliciguat.

Two additional U.S.

patent applications that, if issued, will expire in 2037, and 2039, respectively, provide coverage for methods of large scale preparation of praliciguat.

One additional U.S.

patent application that, if issued, will expire in 2037 provides coverage for methods of large-scale preparation of praliciguat.

We also have a pending U.S.

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Another of the U.S.

pending applications is directed to methods of treating diabetic nephropathy with praliciguat, that if issued, will expire in 2040 or later.

The remaining two pending U.S.

applications are directed to prodrugs of praliciguat, and deuterated forms of praliciguat and, if issued, will expire in 2037 and 2040, respectively.

Furthermore, we have four granted European patents, one expiring in 2031, another one in 2032, a third one in 2034, and a fourth one in 2037, each of them validated in multiple countries;

five granted Japanese patents, one expiring in 2031, another in 2034, one in 2036 and two others in 2037;

six granted Chinese patents, two expiring in 2031, one in 2032, two in 2034, and one expiring in 2037;

and thirty-nine issued patents in other foreign jurisdictions, two expiring in 2032, twelve of them expiring in 2031, nine expiring in 2034, three expiring in 2036, and thirteen in 2037.

pending applications is directed to methods of treating diabetic nephropathy with praliciguat, and if issued, will expire in 2040 or later.

Furthermore, we have eight granted European patents, one expiring in 2031, another one in 2032, a third one in 2034, a fourth one in 2036, a fifth to seventh ones in 2037, and the eighth one in 2039, each of them validated in multiple countries or registered in multiple countries as an European Unitary Patent;

nine granted Japanese patents, one expiring in 2031, another in 2034, two in 2036, four others in 2037 and one in 2039;

seven granted Chinese patents, two expiring in 2031, one in 2032, three in 2034, and one expiring in 2037;

and a large number of

issued patents in foreign jurisdictions expiring between 2031 and 2039.

Some of these patents may be eligible for patent term extension depending on the jurisdiction.

1 unchanged sentence

Olinciguat Patent Portfolio

Our olinciguat patent portfolio includes nine U.S.

Our olinciguat patent portfolio includes thirteen U.S.

issued patents, five pending U.S.

patent applications, one PCT patent application and numerous patents and pending applications in foreign jurisdictions.

patent applications and numerous patents and pending applications in foreign jurisdictions.

One of the U.S.

2 unchanged sentences

patent may be eligible for patent term extension as described below.

Two other U.S.

patents, US 8,748,442 and US 9,139,564, expire in 2031, and provide generic coverage of olinciguat and intermediates used in the preparation of olinciguat, respectively.

Three other U.S.

patents, US 8,748,442, US 9,139,564, and US 10,189,809, expire in 2031, and provide generic coverage of olinciguat, intermediates used in the preparation of olinciguat, and compounds related to olinciguat, respectively.

patent, US 10,517,874, which will expire in 2034 is directed to the treatment of SCD using olinciguat alone or in combinations with other therapeutic agents.

issued patent, US 10,889,577, will expire in 2037 and is directed to polymorphs of olinciguat.

The sixth issued patent, US 11,207,323, will expire in 2034 and provides coverage for stereoisomers of olinciguat.

issued patents, US 11,319,308 and 11,274,096, are directed to the syntheses of intermediates useful in the manufacture of olinciguat and will expire in 2037 and 2039, respectively.

The ninth U.S.

Two additional U.S.

issued patents, US 10,889,577, and US 11,572,358, will expire in 2037 and are directed to polymorphs of olinciguat.

The eighth issued patent, US 11,207,323, will expire in 2034 and provides coverage for stereoisomers of olinciguat.

Four more U.S.

issued patents, US 11,319,308 (expiring in 2039), US 11,773,089 (expiring in 2037), US 11,274,096 (expiring in 2039), and US 11,834,444 (expiring in 2038 or potentially later) are directed to the chiral syntheses of olinciguat or the syntheses of intermediates useful in the manufacture of olinciguat.

The last U.S.

Patent, US 11,357,777, is directed to the treatment of NASH with olinciguat and other compounds and will expire in 2039.

Two pending U.S.

patent applications, if issued, will expired in 2037 and provide additional coverage for polymorphs of olinciguat.

One pending U.S.

patent application, if issued, will expire in 2037 and provides additional coverage for polymorphs of olinciguat.

Another pending U.S.

patent application, if issued, will expire in 2031, and provides generic coverage for olinciguat.

The remaining pending U.S.

patent applications are directed to deuterated forms of olinciguat and processes and synthetic intermediates for preparing olinciguat and, if issued, will expire in 2040 and 2037, respectively.

The PCT patent application is directed to the treatment of heart failure with preserved ejection fraction (HFpEF) in post-menopausal women with olinciguat and other sGC stimulators.

If issued, the corresponding patents will expire in 2042.

Furthermore, we have four granted European patents, one expiring in 2031, another in 2032, a third one in 2034, and a fourth one in 2037, each of them validated in multiple countries;

seven granted Japanese patents, one expiring in 2031, three others in 2034, and three expiring in 2037;

five granted Chinese patents, two expiring in

2031, another one in 2032, and two more in 2034;

and forty issued patents in other foreign jurisdictions, twelve of them expiring in 2031, two expiring in 2032, ten expiring in 2034, and sixteen expiring in 2037.

Two pending U.S.

patent applications are directed to processes and synthetic intermediates for preparing olinciguat and, if issued, will expire in 2039 and 2037, respectively.

A pending US application is directed to the treatment of heart failure with preserved ejection fraction (HFpEF) in post-menopausal women with olinciguat and other sGC stimulators.

If issued, the corresponding patent will expire in 2042.

Furthermore, we have nine granted European patents, one expiring in 2031, another in 2032, two in 2034, four in 2037, and one in 2039, each of them validated in multiple countries or registered in multiple countries as Unitary European Patents;

eight granted Japanese patents, one expiring in 2031, three others in 2034, three expiring in 2037 and one in 2039;

six granted Chinese patents, two expiring in 2031, another one in 2032, two more in 2034 and one in 2037;

and a large number of issued patents in other foreign jurisdictions, expiring between 2031 and 2039.

We also have numerous pending patent applications in foreign jurisdictions.

Some of these patents may be eligible for patent term extension or the foreign jurisdiction equivalent, depending on the jurisdiction.

Additional Intellectual Property

In addition to the patents and patent applications related to zagociguat, CY3018, praliciguat, and olinciguat, we currently have seven issued U.S.

eight patents granted in foreign jurisdictions, including European patents that have each been validated in several countries;

and a number of pending U.S.

(including provisional applications) and foreign pending patent applications directed to other sGC stimulator molecules and uses thereof.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.

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For a drug for which FDA approval is the first permitted marketing of the active ingredient, the Hatch-Waxman Act allows for extension of the term of one U.S.

patent that includes at least one claim covering the composition of matter of an FDA-approved drug (drug substance or drug product), an FDA-approved method of treatment using the drug and/or a method of manufacturing the FDA-approved drug.

FDA-approved drug.

The extended patent term cannot exceed the shorter of five years beyond the non-extended expiration of the patent or 14 years from the date of the FDA approval of the drug.

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In addition, our trade secrets may otherwise become known or be independently discovered by competitors.

To the extent that our commercial partners, collaborators, employees and consultants use intellectual

property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Government Regulation

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The conduct of nonclinical studies that determine the product safety information for administration to humans must comply with federal regulations and requirements, including GLP regulations.

The sponsor must submit the results of the nonclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical study protocol, to the FDA as part of an IND, which must become effective before clinical trials in

a given indication may be commenced.

The IND will become effective automatically 30 days after receipt by the FDA, unless the FDA raises concerns or questions about the content of the IND or the conduct of the proposed trial(s) as outlined in the IND prior to that time.

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The IRB will consider, among other things, ethical factors, the safety of human subjects and the possible liability of the institution.

The IRB also approves the informed consent form, including a privacy statement, that must be provided to each clinical trial participant or his or her legal representative, and must monitor the clinical trial until completed.

The IRB also approves the informed consent form, including a privacy statement, which must be provided to each clinical trial participant or his or her legal representative, and must monitor the clinical trial until completed.

Clinical trials are typically conducted in three sequential phases prior to approval, which may overlap or be combined:

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On the basis of the FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities, FDA will issue either an approval letter or a Complete Response Letter.

An approval letter authorizes commercial marketing of the drug and is accompanied by specific prescribing information for specific conditions of use.

An approval letter authorizes commercial marketing of the drug and is accompanied by specific prescribing

information for specific conditions of use.

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.

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Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process, though companies developing orphan drugs may be eligible for certain incentives, including tax credits for qualified clinical testing.

Generally, if a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same active moiety for the same indication for seven years from the date of such approval, except in limited circumstances.

Competitors, however, may receive approval of different active moieties for the same indication or obtain approval for the same active moiety for a different indication.

Generally, if a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same active component parts for the same indication for seven years from the date of such approval, except in limited circumstances.

Competitors, however, may receive approval of different active component parts for the same indication or obtain approval for the same active component parts for a different indication.

If one of our product candidates designated as an orphan drug receives marketing approval for an indication broader than that which is designated, it may not be entitled to orphan drug exclusivity.

Expedited Review and Approval

Expedited Review and Approval Application Process

The FDA has various programs that are intended to expedite development and approval of drugs intended for the treatment of serious or life-threatening diseases or conditions and that demonstrate the potential to address unmet medical needs.

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Fast track designation provides opportunities for more frequent interactions with the FDA review team and permits FDA to consider sections of the NDA on a rolling basis before the complete application is submitted.

In addition, a sponsor can request designation of a product candidate as a "breakthrough therapy." A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.

In addition, a sponsor can request designation of a product candidate as a “breakthrough therapy”.

A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.

The FDA must take certain actions with respect to breakthrough therapies, such as holding timely meetings with and providing advice to the product sponsor.

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Pediatric Exclusivity

regulatory exclusivity for both drugs and biologics, and also unexpired Orange Book listed patents in the case of drugs.

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity for both drugs and biologics, and also unexpired Orange Book listed patents in the case of drugs.

This six-month exclusivity may be granted if a sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

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rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted.

We are currently not anticipating acquiring any assets for severe pediatric applications.

Post-Approval Requirements

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The MAA for the product must include the results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies or a deferral has been granted, in which case the pediatric clinical trials must be completed at a later date.

Where the MAA includes the results of all pediatric studies conducted in accordance with the PIP and the results are reflected in the approved summary of product characteristics, the holder of a patent or supplementary protection certificate is entitled to receive a six-month extension of the protection under a supplementary protection certificate or, in the case of orphan medicinal products, the product is eligible for a two-year extension of the orphan market exclusivity.

market exclusivity.

This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.

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The Best Pharmaceuticals for Children Act (BPCA) also allows for agreement with FDA on a pediatric written request that, if fulfilled, may extend data exclusivity for the molecule for an additional 6 months.

We are currently not seeking to develop any new drug candidates for severe pediatric applications.

The biopharmaceutical industry is highly competitive within and across therapeutic categories and indications.

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Competition within target therapeutic areas .

We believe Biogen, Sage, Otsuka, Neumora, Tonix, Neurocrine, Pfizer, atai Life Sciences, Alto Neuroscience, Cerevel, Karuna, PTC Therapeutics, Khondrion B.V, Abliva AB, Reneo, Travere Therapeutics, Dimerix Limited, Vertex Pharmaceuticals, Chinook Therapeutics, Boehringer Ingelheim, Acelyrin, River 3 Renal Corp, Astellas, Pfizer, Eli Lilly, Novartis, AstraZeneca, Bayer and Merck are our most direct competitors with respect to zagociguat, CY3018, praliciguat, and olinciguat.

We believe PTC Therapeutics, Travere Therapeutics, Dimerix Limited, Vertex Pharmaceuticals, Chinook Therapeutics, Boehringer Ingelheim, River 3 Renal Corp, Astellas, Pfizer, Eli Lilly, Novartis, AstraZeneca, Bayer and Merck are our most direct competitors with respect to praliciguat, and olinciguat.

Competition within the sGC mechanism .

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Bayer and Merck have an active collaboration on sGC stimulators, focused primarily on cardiovascular, pulmonary, and renal indications.

They have two approved sGC stimulators, ADEMPAS® (riociguat), indicated for PAH and CTEPH, and VERQUVO® (vericiguat) for heart failure with reduced ejection fraction (HFrEF).

They have two approved sGC stimulators, ADEMPAS® (riociguat), indicated for pulmonary arterial hypertension (“PAH) and chronic thromboembolic pulmonary hypertension (“CTEPH”), which is a rare and potentially fatal form of elevated blood pressure in the lungs (known as pulmonary hypertension) and VERQUVO® (vericiguat) for heart failure with reduced ejection fraction (HFrEF).

We are not aware of any efforts to develop sGC modulators for treatment of CNS diseases.

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We do not own or operate, and currently have no plans to establish, any manufacturing facilities.

We depend on third-party contract manufacturing organizations, or CMOs, for all our requirements of raw materials, drug substance and drug product for our ongoing clinical trials and our nonclinical research.

We intend to continue to rely on CMOs for the supply of zagociguat and CY3018 for all stages of clinical development and commercialization, as well as for the supply of any other product candidates that we may identify.

We intend to depend on third-party contract manufacturing organizations, or CMOs, for all our requirements of raw materials, drug substance and drug products for clinical trials and nonclinical research.

We intend to continue to rely on CMOs for the supply of our retained assets for all stages of clinical development and commercialization, as well as for the supply of any other product candidates that we may identify.

We require all our CMOs to conduct manufacturing activities in compliance with current GMP requirements.

We believe that zagociguat and CY3018 drug substance and drug product may be manufactured from readily available raw materials and the processes are amenable to large-scale production and do not require unusual equipment or handling.

We believe adequate supply of zagociguat and CY3018 drug substance and drug product is readily available from our current CMOs to satisfy our immediate clinical and nonclinical demands.

We obtain our supplies from these CMOs on a purchase order basis and do not have arrangements in place for long-term supply or redundant supply of zagociguat and CY3018;

however, we are working with our CMOs to implement improvements to our drug substance and drug product manufacturing processes to further ensure product capacity adequate to meet further development demands.

We are evaluating CMOs for drug substance and drug product that could meet potential commercial demands.

Human Capital Resources

We have an exceptional and diverse team of individuals who have a passion for developing important new medicines that will have a profound impact on the lives of patients with serious CNS diseases.

As a small, innovative company, our success depends on attracting, retaining and motivating highly skilled and experienced scientific, medical and other personnel.

Our ability to recruit and retain such employees depends on a number of factors, including our distinct corporate culture, and our collaborative work environment.

We provide robust compensation and benefits programs which include competitive salaries, potential annual discretionary bonuses, stock awards, a 401(k) plan with employer match, healthcare and insurance benefits, health savings and flexible spending accounts, unlimited vacation time, among other benefits.

Our employees are further guided by our code of conduct and our cultural values of seeking to serve patients, acting with integrity, empowering people and innovating for solutions.

We are committed to our employees’

health, safety and wellness.

We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs.

In response to the COVID-19 pandemic, we implemented significant changes that were determined to be in the best interest of our

employees and the communities in which we live and work, while continuing to ensure the safety of patients in our trials.

As a small, innovative company, if in the future we elect to start growing our internal operations, our success will depend on attracting, retaining and motivating highly skilled and experienced scientific, medical and other personnel.

We plan to provide compensation and benefits programs which may include competitive salaries, potential annual discretionary bonuses, stock awards, a 401(k) plan with employer match, healthcare and insurance benefits, health savings and flexible spending accounts, unlimited vacation time, among other benefits.

Our employees will be further guided by our code of conduct and our cultural values of seeking to serve patients, acting with integrity, empowering people and innovating for solutions.

Employee Profile

As of December 31, 2022, we had sixteen (16) employees, of which eight (8) employees hold Ph.D.

Of the sixteen (16) employees, eight (8) are in our development organization, two (2) are in our strategy and corporate development organizations and six (6) are in general and administrative functions.

None of our employees are subject to a collective bargaining agreement or represented by a trade or labor union.

We consider our employee relations to be good.

During the year ended December 31, 2022, we initiated certain reductions in our workforce.

Refer to Note 12, Workforce Reduction, to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K for further details.

During the year ended December 31, 2023, we initiated major reductions in our workforce in connection with the sale of the Transferred Assets to Tisento and change to the Company’s strategy.

As of December 31, 2023, we had one employee and several consultants.

We may in the future seek to expand our employee base and also outsource certain functions to other firms.

Corporate Information

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Our telephone number is (857) 327-8778.

Our common stock is listed on the Nasdaq Capital Market under the symbol “CYCN.”

Available Information

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The SEC maintains an internet site that contains reports, proxy and information statements and other information.

The address of the SEC’s website is www.sec.gov.

Ris k Factors.

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• There is substantial doubt regarding our ability to continue as a going concern.

We will need to raise additional funding, which may not be available on acceptable terms, if at all to continue as a going

concern and advance our product candidates.

We will need to raise additional funding, which may not be available on acceptable terms, if at all to continue as a going concern and advance our current and any potential future product candidates.

Failure to obtain capital when needed may force us to delay, limit or terminate our product development efforts or other operations.

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• We may encounter substantial delays in our activities, or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities in the development of our compounds.

The COVID-19 pandemic may continue to disrupt our business, including our development activities.

• We could encounter difficulties in enrolling participants in our clinical studies, which could delay or prevent progress of our product candidates.

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• We may not succeed in our pursuit of capital, capabilities, and transactions for the development and commercialization of our assets.

Akebia may not be successful in developing any therapies through the praliciguat out-license with the Company.

• The risks in our investment in Tisento tied to Tisento developing, obtaining regulatory approval for, launching and commercializing their product candidates.

• The uncertainty as to any liquidity or monetizable value of our equity interest in Tisento, which faces all the risks of an early-stage pharmaceutical development company.

• Akebia may not be successful in developing and commercializing any therapies through the praliciguat out-license with the Company.

• We may enter into collaboration or license arrangements in the future that ultimately are not successful.

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• The impact of healthcare reform and other governmental and private payor initiatives may harm our business.

Our prospects for success depend on our ability to retain our management team and to attract, retain and motivate qualified personnel.

• Our prospects for success depend on our ability to attract, retain and motivate qualified personnel.

• We may need to expand our organization and we may experience difficulties in managing growth of our employee base.

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• We could fail to maintain proper and effective internal controls and our ability to produce accurate and timely financial statements could be impaired.

Our internal computer systems, or those of our third-party CROs, CMOs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product candidates' development programs.

• If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions;

fines and penalties;

interruptions to our commercial operations, clinical trials or other operations;

harm to our reputation;

loss of revenue or profits;

loss of sales and other adverse consequences.

• If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur.

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Foreign Corrupt Practices Act, or the FCPA, and other worldwide anti-bribery laws.

Our failure to regain compliance with Nasdaq's continued listing requirements, could result in the delisting of our common stock.

• Any future failure to comply with Nasdaq’s continued listing requirements could result in the delisting of our common stock.

• We have limited trading history and a relatively low-volume trading market for our shares and our common stock market price may fluctuate widely.

• We have adopted anti-takeover provisions in our articles of organization and bylaws and are subject to provisions of Massachusetts law that may frustrate any attempt to remove or replace our current board of directors or to effect a change of control or other business combination involving our company.

• The COVID-19 pandemic and future pandemics may disrupt our business, including our development activities.

Risks Related to Our Financial Position and Capital Needs

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We are a biopharmaceutical company that was incorporated in 2018.

Our business was conducted within Ironwood prior to that time, and we had no history as an independent company prior to the completion of the Separation.

Our business was conducted within Ironwood prior to that time, and we had no history as an independent company prior to the completion of the separation which occurred in 2019.

We are developing a pipeline of sGC stimulators, but we have no products approved for commercial sale, and we have never generated revenue from product sales.

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Our net losses for the years ended December 31, 2023 and 2022 were $5.3 million and $44.1 million, respectively.

We expect to incur significant losses for several years, as we continue our research activities and conduct development of, and seek regulatory approvals for, our product candidates.

Our ability to generate revenue from our product candidates and achieve profitability depends on our ability, alone or with strategic partners, to complete the development of, and obtain the necessary regulatory and essential pricing and reimbursement approvals to commercialize, our product candidates.

We expect to incur significant losses for at least several years, as we continue our research activities and conduct development of, and seek regulatory approvals for, our product candidates.

Our ability to generate revenue from our current and any potential future product candidates and achieve profitability depends on our ability, alone or with strategic partners, to complete the development of, and obtain the necessary regulatory and essential pricing and reimbursement approvals to commercialize, our product candidates.

We do not know when, if ever, we will generate revenues from sales of our product candidates.

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As of December 31, 2023, we had unrestricted cash and cash equivalents of approximately $7.6 million.

Our management believes that such cash and cash equivalents will not be sufficient to fund our operating expenses and capital requirements for one year after the date the financial statements are issued, whether or not we curtail efforts with respect to certain of our product candidates.

We will require significant additional funding to advance any of our product candidates beyond the short term and to sustain our operations.

We are seeking funds through collaborations, strategic alliances, or licensing arrangements with third parties, and such agreements may impact rights to our product candidates or technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

Such arrangements will limit our participation in the success of any of our product candidates that receive regulatory approval.

We intend to seek funds through collaborations, strategic alliances, or licensing arrangements with third parties.

Such agreements may adversely impact retained rights to our assets, technologies, future revenue streams and programs, especially those that receive regulatory approval.

We may also seek to raise such capital through public or private equity, royalty financing or debt financing.

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Risks Related to our Business and Industry

Our approach to the discovery and development of product candidates for the treatment of serious CNS diseases may never lead to marketable products.

We are focusing our research and development efforts on addressing serious CNS diseases.

The development of CNS therapies presents unique challenges, including an imperfect understanding of the biology, the presence of the blood-brain barrier that can restrict the flow of drugs to the brain, a frequent lack of translatability of

nonclinical study results in subsequent clinical trials and dose selection, and the product candidate having an effect that may be too small to be detected using the outcome measures selected in clinical trials or if the outcomes measured do not reach statistical significance.

Our future success is highly dependent on the successful development of our technology and our product candidates for treating CNS.

The scientific evidence to support the feasibility of developing our product candidates is both preliminary and limited.

Our approach to the discovery and development of product candidates for the treatment of serious diseases may never lead to marketable products.

The development of drug therapies presents unique challenges., including an imperfect understanding of the biology, a frequent lack of translatability of nonclinical study results in subsequent clinical trials and dose selection, and the product candidate having an effect that may be too small to be detected using the outcome measures selected in clinical trials or if the outcomes measured do not reach statistical significance.

Our future success is highly dependent on the successful development of our technology and our current and any potential future product candidates.

The scientific evidence to support the feasibility of developing our current product candidates is both preliminary and limited.

If we do not successfully develop and commercialize product candidates, we will not become profitable and the value of our common stock may decline.

Research and development of biopharmaceutical products is inherently risky.

We may encounter substantial delays in our activities, including our clinical studies, or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities in the development of zagociguat and CY3018 to treat patients with serious diseases.

Our business depends heavily on the successful development, clinical testing, regulatory approvals and commercialization of our product candidates.

Any of our current or potential product candidates, will require regulatory approvals based on substantial additional development and testing prior to commercialization.

Our business depends heavily on the successful development, clinical testing, regulatory approvals and commercialization of olinciguat and praliciguat (out-licensed to Akebia), our retained systemic sGC stimulators and any future potential product candidates we may acquire or license as well as both the Transferred Assets product candidates we have sold to Tisento.

Any of our current or potential product candidates will require regulatory approval.

Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex and expensive nonclinical and clinical studies that our product candidates are both safe and effective for use in each target indication.

Each product candidate must demonstrate an adequate benefit-risk profile for its intended use in its intended patient population.

In some instances, significant variability in safety or efficacy appear in different clinical studies of the same product candidate due to numerous factors, including changes in study protocols, differences in the number and characteristics of the enrolled study participants, variations in the dosing regimen and other clinical study parameters or the dropout rate among study participants.

In some instances, significant variability in safety or efficacy appear in different clinical studies of the same product candidate due to numerous factors,

including changes in study protocols, differences in the number and characteristics of the enrolled study participants, variations in the dosing regimen and other clinical study parameters or the dropout rate among study participants.

Product candidates in later stages of clinical studies often fail to demonstrate adequate safety and efficacy despite promising nonclinical testing and early clinical studies.

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If we fail to produce positive results in our clinical trials, the development timeline, regulatory approval and commercialization prospects of our assets and, correspondingly, our business and financial prospects, would be materially adversely affected.

The COVID-19 pandemic continues to disrupt our business, including our development activities.

Many nations, including the United States, continue to implement mitigation measures, that have limited and may continue to limit our ability to access patients and physicians at certain local clinical centers that are participating in our development activities.

We may continue to face limitations and difficulties enrolling patients in our planned and future clinical trials if the patient populations that are eligible for our clinical trials continue to be affected by the coronavirus and/or the COVID-19 vaccines.

COVID-19 restrictions and/or COVID-19 vaccination efforts at trial sites could delay our clinical studies.

In addition, if the patients enrolled in our clinical trials become infected with COVID-19, we may have more adverse events and deaths in our clinical trials as a result.

Vulnerable patients, including patients with serious diseases of the CNS, such as the patients enrolling in our clinical trials, may be at a higher risk of contracting COVID-19 and may experience more severe symptoms from the disease, adversely affecting our chances for regulatory approval or requiring further clinical studies.

The adverse effects that may occur from administration of COVID-19 vaccines to patients participating in our clinical trials may adversely affect our clinical trial outcomes or data analysis.

Furthermore, the extent to which the pandemic, or future outbreaks of infectious disease, hinders access to facilities, procurement of resources, raw materials or components necessary for research studies or preclinical or clinical development is not fully predictable.

Delays and disruptions from the pandemic, or future outbreaks of infectious disease, may increase our capital needs while potentially interfering with our access to capital.

In the event of difficulties in enrolling participants in any clinical studies conducted on our product candidates, those clinical trials could be delayed or prevented from proceeding.

Identifying and qualifying participants to participate in any clinical studies of our product candidates would be critical to the success of those clinical trials.

The timing of any clinical studies will depend in part on the speed at which participants can be recruited to participate in testing our product candidates.

Identifying and qualifying participants to participate in any clinical studies of our product candidates would be critical to the success of those clinical trials as well as the product candidates we have out-licensed to Akebia and the Transferred Assets sold to Tisento.

The timing of any clinical studies will depend in part on the speed at which participants can be recruited to participate in testing these product candidates.

Estimates of the prevalence of target indications may vary considerably.

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The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable.

If we or our licensees, as applicable, are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to generate product revenue and our business will be substantially harmed.

If we, Akebia and any other future licensees, as applicable, are ultimately unable to obtain regulatory approval for the product candidates, we will be unable to generate product revenue and our business will be substantially harmed.

A product candidate cannot be commercialized until the appropriate regulatory authorities have reviewed and approved the product candidate.

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Regulatory authorities have substantial discretion in the approval process and may refuse to accept an application for review or may decide that data are insufficient for approval and require additional nonclinical, clinical, or other information (e.g., product quality data or manufacturing controls).

No regulatory approval for any of our product candidates has been requested or obtained, and it is possible that none of our existing product candidates or any product candidates we or our licensees may seek to develop in the future will ever obtain regulatory approval.

No regulatory approval for any of our product candidates we own, licensed to Akebia or sold to Tisento has been requested or obtained, and it is possible that none of these existing product candidates or any product candidates we or our licensees or Tisento may seek to develop in the future will ever obtain regulatory approval.

Any ongoing clinical studies may not be completed on schedule, and any planned clinical studies may not begin on schedule, if at all.

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• difficulties obtaining EC or IRB approval(s) to conduct a clinical study at a prospective site or sites;

challenges in recruiting and enrolling participants in clinical studies, the proximity of participants to study sites, eligibility criteria for the clinical study, the nature of the clinical study protocol, the

availability of approved effective treatments for the relevant disease and competition from other clinical study programs for similar indications;

• challenges in recruiting and enrolling participants in clinical studies, the proximity of participants to study sites, eligibility criteria for the clinical study, the nature of the clinical study protocol, the availability of approved effective treatments for the relevant disease and competition from other clinical study programs for similar indications;

• severe or unexpected drug-related side effects experienced by participants in a clinical study;

• the presence of unanticipated metabolites in participants in a clinical study may require considerable nonclinical and clinical assessment;

we or our licensees may decide, or regulatory authorities may require the conduct of additional clinical studies or abandonment of product development programs;

• we, our licensees or Tisento may decide, or regulatory authorities may require the conduct of additional clinical studies or abandonment of product development programs;

• delays in validating, or inability to validate, any endpoints utilized in a clinical study;

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Clinical studies may also be delayed or terminated as a result of ambiguous or negative interim results.

In addition, a clinical study may be suspended or terminated by us, our licensees, the FDA or other comparable authorities, the IRBs or ECs overseeing a clinical study, a data and safety monitoring board overseeing the clinical study, or other regulatory authorities due to a number of factors, including, among others:

In addition, a clinical study may be suspended or terminated by us, our licensees, Tisento, the FDA or other comparable authorities, the IRBs or ECs overseeing a clinical study, a data and safety monitoring board overseeing the clinical study, or other regulatory authorities due to a number of factors, including, among others:

• failure to conduct the clinical study in accordance with regulatory requirements or clinical protocols;

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Some may result in label restrictions.

As with ADEMPAS® (riociguat), and VERQUVO® (vericiguat), the only FDA-approved sGC stimulators to date, our product candidates may cause serious birth defects or miscarriage if taken while pregnant, and clinical studies for these product candidates require stringent contraceptive safeguards to prevent pregnancy.

Additionally, undesirable side effects that may be observed with our product candidates could cause us, our licensees, or regulatory authorities to interrupt, delay or halt clinical studies and could result in restrictive label language or delay or denial of regulatory approval.

Changes in regulatory requirements, FDA guidance or unanticipated events during our nonclinical studies and clinical studies of our product candidates may occur, which may result in changes to nonclinical or clinical study protocols or additional nonclinical or clinical study requirements, which could result in increased costs and could delay development timelines.

Our current and any potential future product candidates, those licensed to Akebia and those sold to Tisento may cause serious side effects which could cause us, our licensees, Tisento, or regulatory authorities to interrupt, delay or halt clinical studies and could result in restrictive label language or delay or denial of regulatory approval.

Changes in regulatory requirements, FDA guidance or unanticipated events during nonclinical studies and clinical studies of our product candidates, those licensed to Akebia and those sold to Tisento may occur, which may result in changes to nonclinical or clinical study protocols or additional nonclinical or clinical study requirements, which could result in increased costs and could delay development timelines.

Changes in regulatory requirements, FDA guidance or unanticipated events during nonclinical studies and clinical studies may force amendment to nonclinical studies and clinical study protocols or the FDA may impose additional nonclinical studies and clinical study requirements.

Amendments or changes to clinical study protocols

would require resubmission to the FDA and IRBs for review and approval, which may increase the cost or delay the timing or successful completion of clinical studies.

Amendments or changes to clinical study protocols would require resubmission to the FDA and IRBs for review and approval, which may increase the cost or delay the timing or successful completion of clinical studies.

Similarly, amendments to nonclinical studies may increase the cost or delay the timing or successful completion of those nonclinical studies.

In the event of delays in completing, or the termination of, any of nonclinical or clinical studies, or if it is required that additional nonclinical or clinical studies be conducted, the commercial prospects for product candidates may be harmed and our ability to generate product revenue will be delayed.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that there will be success in obtaining regulatory approval of our product candidates in other jurisdictions.

Obtaining and maintaining regulatory approval of product candidates in one jurisdiction does not mean that there will be success in obtaining regulatory approval of our product candidates in other jurisdictions.

In order to market any product outside of the United States, compliance with the numerous and varying safety, efficacy and other regulatory requirements of other countries is required.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that obtaining or maintaining regulatory approval in any other jurisdiction will be possible, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.

Obtaining and maintaining regulatory approval of product candidates in one jurisdiction does not guarantee that obtaining or maintaining regulatory approval in any other jurisdiction will be possible, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.

For example, even if the FDA or other comparable foreign regulatory authority grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries.

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In some cases, the price intended to be charged for a product candidate is also subject to approval.

Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs and could delay or prevent the introduction of our product candidates in certain countries.

Failure to obtain marketing approval in other countries or any delay or other setback in obtaining such approval would impair the ability to market product candidates in such countries.

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Many of these have risk of loss of exclusivity if the competitive landscape changes or regulations are revised.

If we seek and are awarded orphan drug designation in the US and/or the EU based upon criteria in effect at the time, this designation may be rescinded if a similar drug or another therapy that confers a significant benefit over ours is subsequently approved.

If our product candidates were to fail to obtain orphan drug status, or lose such status after it is obtained, or the marketing exclusivity that such status provides, our business, prospects, financial condition and results of operations could be materially harmed.

If we, our licensees or Tisento seek and are awarded orphan drug designation in the US and/or the EU based upon criteria in effect at the time, this designation may be rescinded if a similar drug or another therapy that confers a significant benefit over these product candidates is subsequently approved.

If these product

candidates were to fail to obtain orphan drug status, or lose such status after it is obtained, or the marketing exclusivity that such status provides, our business, prospects, financial condition and results of operations could be materially harmed.

There are other types of data/market exclusivity rights granted after approval that may not confer exclusivity anticipated if the competitive landscape changes and our business, prospects, financial condition and results of operations could be materially harmed.

The COVID-19 pandemic and other future pandemics may disrupt our business, including our development activities.

Many nations, including the United States, continue to implement mitigation measures, that have in the past and may in the future limit our ability to access patients and physicians at certain local clinical centers that are participating in any future development activities.

We may face limitations and difficulties enrolling patients in our planned and future clinical trials if the patient populations that are eligible for our clinical trials are affected by the coronavirus and/or the COVID-19 vaccines or other pandemics.

Any such restrictions at trial sites could delay any future clinical studies.

In addition, if the patients enrolled in any future clinical trials become infected with COVID-19 or other viruses, we may have more adverse events and deaths in our clinical trials as a result.

Vulnerable patients may be at a higher risk of contracting COVID-19 and other viruses may experience more severe symptoms from the disease, adversely affecting our chances for regulatory approval or requiring further clinical studies.

The adverse effects that may occur from administration of vaccines to patients participating in our future clinical trials could adversely affect clinical trial outcomes or data analysis.

Furthermore, the extent to which the COVID-19 pandemic, or future outbreaks of infectious disease, hinders access to facilities, procurement of resources, raw materials or components necessary for research studies or preclinical or clinical development is not fully predictable.

Delays and disruptions from the COVID-19 pandemic, or future outbreaks of infectious disease, may increase our capital needs while potentially interfering with our access to capital.

Risks Related to Our Reliance on Third Parties

We may not succeed in our pursuit of capital, capabilities, and transactions for the development and commercialization of zagociguat and our other clinical stage assets, which would affect our financial condition.

We are seeking capital, capabilities, and transactions to advance the development of zagociguat and our other clinical stage assets.

There can be no assurance that this process will result in any effective negotiations toward, reaching terms of, executing agreements relating to, or completing any transaction or that any such

transaction will be successful.

We may not succeed in our pursuit of capital, capabilities, and transactions for the development and commercialization of our future clinical stage assets, which would affect our financial condition.

We intend in the future to seek capital, capabilities, and transactions to advance the development of product candidates we may acquire rights to in the future.

There can be no assurance that this process will result in any effective negotiations toward, reaching terms of, executing agreements relating to, or completing any transaction or that any such transaction will be successful.

Failure to complete any of the foregoing efforts would materially adversely affect our business, prospects, financial condition and results of operations.

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Cyclerion is eligible to receive up to $12 million upon the initiation of a phase 2 clinical trial.

Further milestone cash payments by Akebia are scheduled in the Agreement based on the initiation of phase 3 clinical trials in the U.S.

for such products for first and second indication, for FDA approvals, for approvals in certain other major markets, and for certain sales milestones.

In addition to these cash milestone payments, Akebia will pay Cyclerion tiered royalty payments on net sales in certain major markets at percentages ranging from the mid-single digits to the high-teens, subject to certain reductions and offsets.

The agreement may be terminated by either party in the event a material breach by the other party, by us in the event of certain patent disputes or the failure by Akebia to initiate phase 2 clinical trials within a set period of time, and by Akebia, subject to a notice period, at any time after one year from the effective date.

There can be no assurances that the agreement will result in any therapies or that it will not be terminated prior to the realization by us of any remaining eligible revenues.

Cyclerion is eligible to receive up to $585 million in total potential future development, regulatory, and commercialization milestone payments.

Akebia will pay Cyclerion tiered royalty payments on net sales in certain major markets at percentages ranging from the mid-single digits to the high-teens, subject to certain reductions and offsets.

The agreement may be terminated by either party in the event of a material breach by the other party or by us in the event of certain patent disputes.

There can be no assurances that the agreement will result in any therapies or that it will not be terminated prior to the realization by us of any remaining eligible revenues or that Akebia will be able to successfully bring any of the licensed product candidates to market due to financial limitations or other business factors in the future or if Akebia is unable to raise additional capital on favorable terms, if at all.

Akebia may at any time terminate the Akebia License Agreement upon 180 days written notice.

subject to Akebia’s obligation to grant Cyclerion a non-exclusive, royalty-free license, with the right

to grant multiple tiers of sublicenses, to certain licensed compounds or products as defined in the Akebia License Agreement as well as certain rights to regulatory submissions, product trademarks, contracts with third party suppliers and certain other rights.

Tisento may not be successful in developing any therapies and we may not realize any future value from the Tisento common stock we received under the Asset Purchase Agreement with Tisento.

Our investment in Tisento is subject to all of the risks associated with an earlier stage biotechnology company.

The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products.

While we believe that Tisento’s technology, development experience and scientific knowledge provide it with competitive advantages, it may face potential competition from many different sources, including large pharmaceutical and biotechnology companies, academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for the research, development, manufacturing and commercialization of similar products.

Any investigational products that we successfully develop and commercialize will compete with new immunotherapies that may become available in the future.

As a result, our investment in Tisento is risky and our equity interest in Tisento could be significantly diluted in the future if Tisento seeks to raise additional capital or is unable to raise additional capital on favorable terms, if at all.

If Tisento suffers adverse effects, it may not be able to continue as a going business concern, and we may lose our entire investment.

We lack operational control over Tisento.

Our investment in Tisento represents a minority or passive stake and we may have little to no participation, input or control over the management, policies, and operations of Tisento.

Further, we may lack sufficient ownership of voting securities to impact, without the vote of additional equity holders, any matters submitted to stockholders or members of such business for a vote.

There is inherent risk in making minority equity investments in companies over which we have little to no control.

Without control of the management and decision-making of these businesses, we cannot control their direction, strategy, policies and business plans, and we may be powerless to improve any declines in their performance, operating results and financial condition.

Any collaboration or license arrangements that we enter into in the future may not be successful, which could impede our ability to develop and commercialize our product candidates.

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• partners may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

collaboration and license arrangements may be terminated, and, if terminated, this may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates;

• collaboration and license arrangements may be terminated, and, if terminated, this may result in a need for additional capital to pursue further development or commercialization of the applicable current or any potential future product candidates;

• partners may own or co-own intellectual property covering products that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property;

• disputes may arise with respect to the ownership of any intellectual property developed pursuant to our collaboration or license arrangements;

a partner’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

We rely, and expect that we will continue to rely, on third parties to conduct any nonclinical or clinical studies for our product candidates.

If these third parties do not successfully carry out their contractual duties or meet expected deadlines, necessary regulatory approvals for or commercialization of our product candidates may not be obtainable and our business could be substantially harmed.

• a partner’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

We expect in the future to rely on third parties to conduct any nonclinical or clinical studies for any potential future product candidates.

If these third parties do not successfully carry out their contractual duties or meet expected deadlines, necessary regulatory approvals for or commercialization of any potential future product candidates may not be obtainable and our business could be substantially harmed.

We do not have the infrastructure or internal resources and capabilities to independently conduct nonclinical or clinical studies.

We rely on contract laboratories, medical institutions, clinical investigators, licensees and other third parties, such as CROs, to conduct nonclinical studies on our discovery compounds and product candidates and clinical studies on product candidates.

We rely heavily on such parties for execution of nonclinical and clinical studies and can control only certain aspects of their activities.

As a result, we have limited direct control over the conduct, timing and completion of our nonclinical and clinical studies and the management of data developed through these studies.

We expect to rely on contract laboratories, medical institutions, clinical investigators, licensees and other third parties, such as CROs, to conduct nonclinical studies on any future discovery compounds and product candidates and clinical studies on product candidates.

We expect to rely heavily on such parties for execution of nonclinical and clinical studies and as a result that we will only be able to control certain aspects of their activities.

As a result, we expect we will have limited direct control over the conduct, timing and completion of our nonclinical and clinical studies and the management of data developed through these studies.

Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.

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These factors may materially impede the willingness or ability of third parties to complete quality nonclinical and clinical studies and may subject us to unexpected cost increases that are beyond our control.

Nevertheless, we may be responsible for ensuring that each of our nonclinical and clinical studies is conducted in accordance with any applicable protocol, legal, regulatory and scientific requirements and standards, and our reliance on CROs and other third parties does not necessarily relieve us of our regulatory responsibilities.

We, our CROs and other third parties are required to comply with regulations and guidelines, such as good laboratory practices (GLPs), good clinical practices (GCPs), and current Good Manufacturing Practices.

Nevertheless, we may be responsible for ensuring that each of any future nonclinical and clinical studies is conducted in accordance with any applicable protocol, legal, regulatory and scientific requirements and standards, and our reliance on CROs and other third parties does not necessarily relieve us of our regulatory responsibilities.

We, and any future CROs and other third parties are required to comply with regulations and guidelines, such as good laboratory practices (GLPs), good clinical practices (GCPs), and current Good Manufacturing Practices.

These regulations are enforced by the FDA and comparable foreign regulatory authorities for any products in clinical development.

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If the FDA determines there was a failure to comply with the regulations the clinical data generated in any clinical studies may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require the performance of additional clinical studies before approving any marketing applications.

We cannot assure you that, upon inspection, the FDA will determine that any of our nonclinical studies, clinical studies or product manufacturing complies with these regulations.

We cannot assure you that, upon inspection, the FDA will determine that any potential future nonclinical studies, clinical studies or product manufacturing will comply with these regulations.

Our failure or the failure of our CROs or other third parties to comply with these regulations may require the repeat of those clinical studies, which would delay the regulatory approval process and could also result in enforcement action up to and including civil and criminal penalties.

Although we or our licensees may design or approve the designs of our product candidate clinical studies, CROs and other third parties conduct those clinical studies.

Although we or our current licensee or any future licensees may design or approve the designs of our product candidate clinical studies, CROs and other third parties conduct those clinical studies.

As a result, many important aspects of the execution of the development programs for our product candidates may be outside of our direct control.

In addition, the CROs, or other third parties, may not perform all of their obligations under arrangements with us or our licensees or in compliance with regulatory requirements, but we may remain responsible and are subject to enforcement action that may include civil penalties and criminal prosecution for any violations of FDA laws and regulations during the conduct of clinical studies.

If the CROs, or our licensees, do not perform clinical studies in a satisfactory manner, breach their obligations to us or fail to comply with regulatory requirements, the development and commercialization of our product candidates may be delayed or our development program materially and irreversibly harmed.

If the CROs, or our licensees, do not perform clinical studies in a satisfactory manner, breach their obligations to us or fail to comply with regulatory

requirements, the development and commercialization of our product candidates may be delayed, or our development program materially and irreversibly harmed.

We may not be able to control the amount and timing of resources these CROs or our licensees devote to our clinical products.

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If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to required clinical protocols, regulatory requirements or for other reasons, any clinical studies such CROs are associated with may be extended, delayed or terminated, and required regulatory approval for or successfully commercialization of our product candidates may not be obtainable.

As a result, we believe that our

financial results and the commercial prospects for our product candidates in the approved indication would be harmed, our costs could increase and our ability to generate revenue could be delayed, or lost.

As a result, we believe that our financial results and the commercial prospects for our product candidates in the approved indication would be harmed, our costs could increase and our ability to generate revenue could be delayed or lost.

Except as out-licensed, we must rely completely on third-party suppliers to manufacture any nonclinical and clinical drug supplies for our product candidates, and we intend to rely on third parties to produce commercial supplies of any product candidates that are approved.

We do not currently have, nor do we plan to acquire, the infrastructure or capability to internally manufacture the drug supply of our product candidates, or any future product candidates, for use in the conduct of our nonclinical and clinical studies.

We do not currently have, nor do we plan to acquire, the infrastructure or capability to internally manufacture the drug supply of our current or any potential future product candidates, for use in the conduct of our nonclinical and clinical studies.

We lack the internal resources and the capability to manufacture any product candidates on any scale.

We depend on third-party contract manufacturing organizations, or CMOs, for all our requirements of raw materials, drug substance and drug product for our future and/or ongoing nonclinical studies and clinical trials.

We do not have long-term supply agreements in place with our CMOs and each batch of our product candidates is individually contracted under a services agreement on a purchase order basis.

We expect to continue to rely on CMOs for the supply of later-stage development and commercialization, as well as for the supply of any other discovery compounds or product candidates that we may identify, and we may not be able to enter into long-term supply agreements with such CMOs on favorable terms.

As a further result, we are subject to price fluctuations for our clinical drug supplies.

We expect to depend on third-party contract manufacturing organizations, or CMOs, for all our requirements of raw materials, drug substances and drug product for any future nonclinical studies and clinical trials.

We do not have long-term supply agreements in place with any CMO and we expect that any potential future product candidates will be individually contracted under a services agreement on a purchase order basis.

We expect to rely on CMOs for the supply of later-stage development and commercialization, as well as for the supply of any other discovery compounds or product candidates that we may identify, and we may not be able to enter into long-term supply agreements with such CMOs on favorable terms.

As a further result, we are subject to price fluctuations for any clinical drug supplies.

If the prices charged by these CMOs increase, our business, prospects, financial condition and results of operations could be materially harmed.

We apply industry risk management practices to minimize the impact to nonclinical and clinical timelines associated with delays to our clinical supplies.

We expect in the future to apply industry risk management practices to minimize the impact to nonclinical and clinical timelines associated with delays to our clinical supplies.

However, these delays could still lead to clinical trials delays that could adversely impact our business.

In addition, the facilities used by our contract manufacturers to manufacture the active pharmaceutical ingredient and final drug product must complete a pre-approval inspection by the FDA and other comparable foreign regulatory agencies to assess compliance with applicable requirements, including current GMP, after we submit our new drug application, or NDA, or relevant foreign regulatory submission to the applicable regulatory agency.

In addition, any facilities which may be used by contract manufacturers to manufacture the active pharmaceutical ingredient and final drug product must complete a pre-approval inspection by the FDA and other comparable foreign regulatory agencies to assess compliance with applicable requirements, including current GMP, after we submit our new drug application, or NDA, or relevant foreign regulatory submission to the applicable regulatory agency.

If the FDA or an applicable foreign regulatory agency determines now or in the future that these facilities are noncompliant, we may need to find alternative manufacturing facilities, which would impede our ability to develop, obtain regulatory approval for or market our product candidates.

Our reliance on third parties requires us to share our confidential information, including trade secrets and know-how, which increases the possibility that our confidential information will be misappropriated or disclosed.

Because we rely on third parties to manufacture our product candidates, and because we collaborate with various CROs and other third parties to conduct our nonclinical studies and clinical trials, we must, at times, share our trade secrets or know-how with them.

Our anticipated reliance on third parties requires us to share our confidential information, including trade secrets and know-how, which increases the possibility that our confidential information will be misappropriated or disclosed.

Because we seek to involve third party licensees and collaborators on current and potential future product candidates, we expect we will rely on third parties to manufacture our product candidates, and because we expect to collaborate with various CROs and other third parties to conduct our nonclinical studies and clinical trials, we must, at times, share our trade secrets or know-how with them.

We seek to protect our confidential information, including know-how and trade secrets, in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with our collaborators, advisors and consultants prior to beginning our collaborations or disclosing confidential information to such parties.

These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets and know-how.

Despite these contractual provisions, the need to share our confidential information with third parties increases the risk that confidential information such as trade secrets and know-how becomes known by our competitors, is inadvertently incorporated into the technology of others, or is disclosed or used in violation of these agreements.

disclosed or used in violation of these agreements.

Given that our proprietary position is based, in part, on our confidential information including know-how and trade secrets, a competitor's discovery of our confidential information or other unauthorized use or disclosure could impair our competitive position and may have a material adverse effect on our business, prospects, financial condition and results of operations.

Risks Related to Our Intellectual Property Rights

If we or our licensees are unable to adequately protect proprietary technologies, or obtain and maintain issued patents that are sufficient to protect our product candidates, others could compete against us more directly, which would have a material adverse impact on our business, prospects, financial condition and results of operations.

Our success will depend significantly on our and our licensees ability to obtain and maintain patent and other proprietary protection in the United States and other countries for commercially important technology,

inventions and know-how related to our business, defend and enforce patents, should they issue, preserve the confidentiality of trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties.

If we or our licensees or Tisento are unable to adequately protect proprietary technologies, or obtain and maintain issued patents that are sufficient to protect our product candidates, others could compete against us, our licensees and Tisento more directly, which would have a material adverse impact on our business, prospects, financial condition and results of operations.

Our success will depend in part on our and our licensees and Tisento’s ability to obtain and maintain patent and other proprietary protection in the United States and other countries for commercially important technology, inventions and know-how related to our business, defend and enforce patents, should they issue, preserve the confidentiality of trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties.

We strive to protect and enhance the proprietary technologies that we believe are important to our business, including seeking patents intended to cover our product candidates and compositions, their methods of use and any other Inventions that are important to the development of our business.

We have twenty-six issued U.S.

patents, twenty-eight pending U.S.

patents applications (of which six are in the provisional stage), four pending Patent Cooperation Treaty, or PCT, applications, and numerous foreign patents and pending patent applications.

See “Business —

Intellectual Property.”

We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

We have nineteen issued U.S.

patents, nine pending U.S.

patents applications and numerous foreign patents and pending patent applications.

Patent families are filed either as utility US patents or under an international patent law treaty (PCT) that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the 157 contracting states, followed by the process of entering national phase, which requires a separate application in each of the member states in which national patent protection is sought.

See “Business — Intellectual Property.” We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

The patent positions of biotechnology and pharmaceutical companies, including ours, involve complex legal and factual questions, which in recent years have been the subject of much litigation, and, therefore, the issuance, scope, validity, enforceability and commercial value of any patent claims that we may obtain cannot be predicted with certainty.

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In addition, if any such claim were successfully asserted against us and we could not obtain such a license, we may be forced to stop or delay developing, manufacturing, selling or otherwise commercializing our product candidates.

Any claim relating to intellectual property infringement that is successfully asserted against us may require us to pay substantial damages, including treble damages and attorney's fees if we are found to be willfully infringing another party's patents, for past use of the asserted intellectual property and royalties and other consideration going forward if we are forced to take a license.

Any claim relating to intellectual property infringement that is successfully asserted against us may require us to pay substantial damages, including treble damages and attorneys’ fees if we are found to be willfully infringing another party’s patents, for past use of the asserted intellectual property and royalties and other consideration going forward if we are forced to take a license.

Any of these risks coming to fruition could have a material adverse effect on our business, prospects, financial condition and results of operations.

We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

Our employees, consultants, non-academic outside scientific collaborators and other advisors enter into confidentiality and intellectual property assignment agreements with us or have entered into confidentiality and intellectual property assignment agreements with Ironwood.

Our employee, consultants, non-academic outside scientific collaborators and other advisors enter into confidentiality and intellectual property assignment agreements with us or have entered into confidentiality and intellectual property assignment agreements with Ironwood.

We seek to have inventions assigned to us by the parties rendering services whenever possible.

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In such an event, competitors or other third parties might be able to enter the market earlier than would otherwise have been the case and this circumstance could have a material adverse effect on our business, prospects, financial condition and results of operations.

We and our licensees may not seek to protect our intellectual property rights in all jurisdictions throughout the world and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection.

We and our licensees and Tisento may not seek to protect our intellectual property rights in all jurisdictions throughout the world and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection.

The statutory deadlines for pursuing patent protection in individual foreign jurisdictions are based on the priority date of each of our patent applications and we may not timely file foreign patent applications.

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Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.

If unable to obtain a patent term extension or the term of any such extension is less than we request, the duration of patent protection obtained for our product candidates may not provide any meaningful commercial or competitive advantage, competitors may obtain approval of competing products earlier than they would otherwise be able to do so, and our ability to generate revenues could be harmed.

If unable to obtain a patent term extension or the term of any such extension is less

than we request, the duration of patent protection obtained for our product candidates may not provide any meaningful commercial or competitive advantage, competitors may obtain approval of competing products earlier than they would otherwise be able to do so, and our ability to generate revenues could be harmed.

Changes in U.S.

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As is the case with other biotechnology companies, our success is heavily dependent on intellectual property, particularly patents.

Obtaining and enforcing patents in the biotechnology industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain.

Obtaining and enforcing patents in the biotechnology industry involves both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain.

In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation:

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The America Invents Act includes a number of significant changes to U.S.

These provisions affect the way patent applications will be prosecuted and

may also affect patent litigation.

These provisions affect the way patent applications will be prosecuted and may also affect patent litigation.

It is not yet clear what, if any, impact the America Invents Act will have on the operation of our business.

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We may be subject to damages resulting from claims that we or our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers.

Our employees may have been previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

We also engage advisors and consultants who are concurrently employed at universities or who perform services for other entities.

Our current employee and any employees we may hire in the future may have been previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

We also engage and, in the future, intend to engage advisors and consultants who are concurrently employed at universities or who perform services for other entities.

We may be subject to claims that we or our employees, advisors or consultants have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third party.

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A loss of key personnel or their work product could hamper or prevent our ability to commercialize our product candidates, which would materially harm our commercial development efforts.

Risks Related to the Future Commercialization of Our Product Candidates

The incidence and prevalence for target patient populations of our product candidates have not been established with precision.

If the market opportunities for our product candidates are smaller than we estimate, or if any approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability may be harmed.

The incidence and prevalence for all the conditions we aim to address with our programs vary considerably.

Projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, are based on beliefs and estimates.

These estimates have been derived from a variety of sources, including the scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect.

Risks Related to the Future Commercialization of Our Current or Potential Future Product Candidates

The incidence and prevalence for target patient populations of our current and any potential future product candidates we may acquire have not been established with precision.

If the market opportunities for our current and potential future product candidates are smaller than we estimate, or if any approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability may be harmed.

The incidence and prevalence for all the conditions we aim to address with our current and any potential future programs vary considerably.

Projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates,

are based on beliefs and estimates.

These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect.

Further, new trials may change the estimated incidence or prevalence of these diseases.

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Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices.

In some countries, we or our partners may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.

In some countries, we or our partners may be required to conduct a clinical trial or other

studies that compare the cost-effectiveness of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.

Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries.

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Moreover, achieving and sustaining compliance with applicable federal and state privacy, security, fraud and reporting laws may prove costly.

We face significant competition in an environment of rapid technological and scientific change, and our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may harm our ability, or a licensee's ability, to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.

more effective than ours, which may harm our ability, or a licensee's ability, to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.

Our future success depends on our ability, or a licensee's ability, to demonstrate and maintain a competitive advantage with respect to the design, development and commercialization of our product candidates.

In many cases, our product candidates that may be commercialized will compete with existing, market-leading products.

development and commercialization of new drug products is highly competitive.

The development and commercialization of new drug products is highly competitive.

We may face competition with respect to any product candidates that are developed or commercialized in the future from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide.

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Bayer AG and Merck & Co., Inc.

(“Bayer/Merck”), have an active collaboration on sGC stimulators including ADEMPAS® (riociguat), which has been approved for the treatment of Pulmonary Arterial Hypertension, (PAH) and Chronic Thromboembolic Pulmonary Hypertension (CTEPH) and Verquvo® (vericiguat), which is approved for the treatment of heart failure with reduced ejection fraction.

Such sGC products may compete directly with our own product candidates in our non-CNS target indications.

Because Bayer/Merck already have experience conducting successful clinical trials and obtaining regulatory approvals for an sGC product, they may be able to conduct clinical trials and obtain regulatory approvals for additional product candidates and target indications more quickly or efficiently than we or our licensees can.

If our product candidates do not obtain regulatory approvals in target indications prior to these or any other competing product candidates, or if our product candidates do not demonstrate superior efficacy, safety or tolerability compared to these and any other approved therapeutics for our target indications, then those product candidates may not be able to compete effectively.

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The availability of our competitors' products could limit the demand, and the price that could be charged, for any of our product candidates that may be developed and commercialized.

See “—Risks Related to Our Intellectual Property Rights.”

The impact of healthcare reform and other governmental and private payor initiatives may harm our business.

See “—Risks Related to Our Intellectual Property Rights.”

The impact of healthcare reform and other governmental and private payor initiatives, as well as the Inflation Reduction Act of 2022 may harm our business.

Our revenue prospects could be affected by changes in healthcare spending and policy in the United States and abroad.

We operate in a highly regulated industry and new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to health care availability, the method of delivery or payment for health care products and services could harm our business, operations and financial condition.

payment for health care products and services could harm our business, operations and financial condition.

There is significant interest in promoting health care reform, as evidenced by the enactment in the United States of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act in 2010 and in reducing the costs of certain prescription drugs as evidenced by the Inflation Reduction Act of 2022.

It is likely that federal and state legislatures within the United States and foreign governments will continue to consider changes to existing health care legislation.

We cannot predict the reform initiatives that may be adopted in the future

or whether initiatives that have been adopted will be repealed or modified.

We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified.

The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect:

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and the level of taxes that we are required to pay.

Our future growth may depend, in part, on our, or a licensee's, ability to commercialize our product candidates outside the United States, where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future profitability may depend, in part, on our or a licensee's ability to commercialize our product candidates outside the United States for which we may rely on partnerships with third parties.

Our future growth may depend, in part, on our, or a licensee's, ability to commercialize any current and potential future product candidates outside the United States, where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future profitability may depend, in part, on our or a licensee's ability to commercialize our current and any potential future product candidates outside the United States for which we may rely on partnerships with third parties.

If we commercialize our product candidates outside the United States, we would be subject to additional risks and uncertainties, including:

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Risks Related to Our Business Operations

Our prospects for success depend on our ability to retain our management team and to attract, retain and motivate qualified personnel.

We are highly dependent on our management, scientific and development personnel.

Our prospects for success depend on our ability to retain Regina Graul, our President and in the future to attract, retain and motivate qualified personnel.

We are highly dependent on Regina Graul, Ph.D.

who is currently our sole employee.

Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice.

We recently have implemented reduction in force and operate with a relatively small team.

The loss of the services of any members of the team and an inability to find suitable replacements could result in operational limitations and harm our business.

Pursuant to their employment arrangements, or otherwise, each of our executive officers, and other employees may voluntarily terminate their employment at any time, with or without notice.

Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior managers as well as junior, mid-level and senior scientific and medical personnel.

Our success also depends on our ability to in the future attract, retain and motivate highly skilled junior, mid-level and senior managers as well as junior, mid-level and senior scientific and medical personnel.

We may not be able to attract or retain qualified management and scientific personnel in the future due to the competition for a limited number of qualified personnel among biopharmaceutical, biotechnology, pharmaceutical and other businesses.

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If we are unable to attract and retain high quality personnel, the rate and success at which we can develop and commercialize product candidates will be limited.

We may not have a sufficient employee base as needed from time to time, which could disrupt our operations.

As of December 31, 2022, we had 16 full-time employees and we will continue to align our workforce with our business priorities throughout 2022.

Whether our operations remain as they are or grow, we may not have a sufficient, or may need to expand our full-time employee base and hire more employees, consultants and contractors.

Our management may then need to allocate or divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing ongoing operations or this growth.

We may not be able to effectively manage our ongoing operations or the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees.

Our growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates.

If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate revenues could be adversely affected and we may not be able to implement our business strategy.

We face potential product liability exposure, and, if claims are brought against us, we may incur substantial liability.

The use of our product candidates in clinical studies and any sale thereof, if approved, exposes us to the risk of product liability claims.

The use of our current and any potential future product candidates in clinical studies and any sale thereof, if approved, exposes us to the risk of product liability claims.

Product liability claims might be brought against us by patients, healthcare providers or others selling or otherwise coming into contact with our product candidates.

For example, we may be sued if any product candidate we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale.

For example, we may be sued if any such product candidate we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale.

Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, including as a result of interactions with alcohol or other drugs, negligence, strict liability and a breach of warranties.

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loss of potential revenue;

and the inability to successfully commercialize our product candidates or any future product candidates, if approved.

and the inability to successfully commercialize our product candidates or any potential future product candidates, if approved.

We maintain product liability insurance coverage for our clinical studies through both domestic and international insurance policies, subject to an annual coverage limit.

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These investigations may interrupt our sales efforts, delay our regulatory approval process, or impact and limit the type of regulatory approvals our product candidates receive or maintain.

of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, prospects, financial condition and results of operations.

As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, prospects, financial condition and results of operations.

If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could result in sanctions or other penalties that would harm our business.

We are subject to the reporting requirements of the Securities Exchange Act of 1934, or The Exchange Act, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and the rules and regulations of the Nasdaq Capital Market.

We are an “emerging growth company”

and a “smaller reporting company.”

For so long as we remain either an emerging growth company or a smaller reporting company, we will be exempt from Section 404(b) of the Sarbanes-Oxley Act, which requires auditor attestation to the effectiveness of internal control over financial reporting.

We are an “emerging growth company” and a “smaller reporting company.” For so long as we remain either an emerging growth company or a smaller reporting company, we will be exempt from Section 404(b) of the Sarbanes-Oxley Act, which requires auditor attestation to the effectiveness of internal control over financial reporting.

We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total gross annual revenues of $1.07 billion or more;

(ii) December 31, 2024, the last day of our fiscal year following the fifth anniversary of the date of the Separation;

(iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years;

(iii) the date on which we have

issued more than $1 billion in nonconvertible debt during the previous three years;

or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

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Beginning with our annual report on Form 10-K for the fiscal year ended December 31, 2023, we must include a management assessment of the effectiveness of our internal control over financial reporting.

As of the expiration of our emerging growth company status and smaller reporting company status, we will be broadly subject to enhanced reporting and other requirements under the Exchange Act and Sarbanes-Oxley Act.

As of the expiration of our emerging growth company status, which status will end on December 31, 2024 and smaller reporting company status, we will be broadly subject to enhanced reporting and other requirements under the Exchange Act and Sarbanes-Oxley Act.

We have engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging.

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Our results of operations could be harmed by general conditions in the global economy and in the global financial markets.

A severe or prolonged economic downturn could result in a variety of risks to our business,

including, weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.

A severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption.

Any of the foregoing could harm our business, prospects, financial condition and results of operations.

Our internal computer systems, or those of our third-party CROs, licensees, CMOs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product candidates' development programs.

Despite the implementation of security measures, our internal computer systems and those of our third-party CROs, licensees, CMOs, business development partners and other contractors and consultants may be vulnerable to damage from computer viruses, unauthorized access, ransomware, natural disasters, terrorism, war and telecommunication and electrical failures.

If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our programs.

For example, the loss of clinical study data for our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

To the extent that any disruption or security breach results in a loss of or damage to our data or applications or other data or applications relating to our technology or product candidates, or inappropriate disclosure of confidential or proprietary information, we could incur liabilities and the further development of our product candidates could be delayed.

Insurance may not be adequate to fully cover costs to restore data and resume normal working operations, which could harm our business, prospects, financial condition and results of operation.

Our employees may engage in misconduct or other improper activities, including violating applicable regulatory standards and requirements or engaging in insider trading, which could significantly harm our business.

If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions;

fines and penalties;

interruptions to our commercial operations, clinical trials or other operations;

harm to our reputation;

loss of revenue or profits;

loss of sales and other adverse consequences.

In the ordinary course of our business, we and our third-party service providers may process proprietary, confidential, and sensitive data, including personal data (such as health-related data and data related to our clinical trials), intellectual property, and trade secrets (collectively, sensitive information).

Cyberattacks, malicious internet-based activity, and online and offline fraud are prevalent and continue to increase.

These threats are becoming increasingly difficult to detect.

These threats come from a variety of sources, including traditional computer “hackers,” threat actors, personnel (such as through theft or misuse), "hacktivists", organized criminal threat actors, sophisticated nation-states, and nation-state-supported actors.

Some actors now engage and are expected to continue to engage in cyberattacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.

During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyberattacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our products.

We and the third parties upon which we rely may be subject to a variety of other evolving threats, including, but not limited to, social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by artificial intelligence, and other similar threats.

In particular, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, ability to provide our products, disruption of clinical trials, loss of data (including data related to clinical trials), loss of income, significant extra expenses to restore data or systems, reputational loss and the diversion of funds.

To alleviate the financial, operational and reputational impact of a ransomware attack, it may be preferable to make extortion payments, but we may be unwilling or unable to do so (including, for example, if applicable laws prohibit such payments).

Additionally, hybrid and remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit, and in public locations.

Future or past business transactions (such as acquisitions or integrations) could also expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.

Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.

We rely upon third parties and technologies to operate critical business systems to process sensitive information in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, and other functions.

We also rely on third parties to provide certain products, including active pharmaceutical ingredients, to operate our business.

Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.

While we may be entitled to damages if the third parties upon which we rely fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.

We may share or receive sensitive information with or from third parties.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

We take steps designed to detect, mitigate and remediate vulnerabilities in our information security systems (such as our hardware and/or software, including that of third parties upon which we rely), but we may not be able to detect, mitigate, and remediate all such vulnerabilities including on a timely basis.

Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities.

Vulnerabilities could be exploited and result in a security incident.

Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties upon whom we rely.

A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our products.

We may expend significant resources or modify our

business activities (including our clinical trial activities) to try to protect against security incidents.

Certain data privacy and security obligations require us to implement and maintain specific security measures, industry-standard or reasonable security measures to protect our information technology systems and sensitive information.

Applicable data security and public company disclosure obligations may require us to notify relevant stakeholders of certain security incidents, including affected individuals, customers, regulators and investors.

Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.

If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences.

These consequences may include:

government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);

additional reporting requirements and/or oversight;

restrictions on processing sensitive information (including personal data);

litigation (including class claims);

indemnification obligations;

negative publicity;

reputational harm;

monetary fund diversions;

diversion of management attention;

interruptions in our operations (including availability of data);

financial loss and other similar harms.

For example, the loss of clinical trial data from completed or ongoing clinical trials for any of our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

Whether a cybersecurity incident is reportable to our investors may not be straightforward, may take considerable time to determine, and may be subject to change as the investigation of the incident progresses, including changes that may significantly alter any initial disclosure that we provide.

Moreover, experiencing a material cybersecurity incident and any mandatory disclosures could lead to negative publicity, loss of customer, investor or partner confidence in the effectiveness of our cybersecurity measures, diversion of management’s attention, governmental investigations, lawsuits, and the expenditure of significant capital and other resources.

Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.

In addition, our insurance coverage may not be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices or that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.

In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.

Sensitive information of us or our customers could also be leaked, disclosed, or revealed as a result of or in connection with our employee’s, personnel’s, or vendor’s use of generative AI technologies.

Our employee or future employees may engage in misconduct or other improper activities, including violating applicable regulatory standards and requirements or engaging in insider trading, which could significantly harm our business.

We are exposed to the risk of employee fraud or other misconduct.

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Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions, possible exclusions from participation in Medicare, Medicaid and other U.S.

If any such actions are

instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions, possible exclusions from participation in Medicare, Medicaid and other U.S.

federal healthcare programs, contractual damages and reputational harm.

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We could be delisted from Nasdaq, which would seriously harm the liquidity of our stock and ability to raise capital.

On June 1, 2022, the Company received a notice from the Nasdaq Stock Market ("Nasdaq") notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company's common stock listed on Nasdaq has been below the minimum $1.00 per share required for continued listing on the Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the "Bid Price Requirement").

On June 1, 2022, the Company received a notice from the Nasdaq Stock Market ("Nasdaq") notifying the Company that the closing bid price for the Company's common stock listed on Nasdaq has been below the minimum $1.00 per share required for continued listing on the Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the "Bid Price Requirement").

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided a period of 180 calendar days, or until November 28, 2022, to regain compliance with the Bid Price Requirement.

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On November 29, 2022, however, Nasdaq notified the Company of its eligibility for an additional 180 calendar day period, or until May 29, 2023 (the "Extended Compliance Date"), to regain compliance with the Bid Price Requirement.

Nasdaq’s determination was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market with the exception of the Bid Price Requirement, and the Company's written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

Effective November 25, 2022, the Company transferred its listing of the Company's common stock from the Nasdaq Global Market to the Nasdaq Capital Market, a continuous trading market that operates in substantially the same manner as the Nasdaq Global Market.

The Company’s common stock continues to trade under the symbol “CYCN”.

If at any time before May 29, 2023, the bid price of the Company's common stock closes at a $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq will provide written notification to the Company that it has regained compliance with the Bid Price Requirement.

If the Company does not regain compliance with the Bid Price Requirement by the end of the second compliance period, the Company's stock will be subject to delisting.

The Company’s common stock continues to trade under the symbol “CYCN”.

We effected a 20:1 reverse stock split in May 2023.

As a result, we have regained compliance with the Bid Price Requirement.

If the Company does not regain compliance with the Bid Price Requirement in the future, the Company's stock will again be subject to delisting.

The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Bid Price Requirement, including initiating a reverse stock split.

However, there can be no assurance that the Company will be able to regain compliance with the Bid Price Requirement, would receive sufficient shareholder support for a reverse stock split, or will otherwise be in compliance with other Nasdaq Listing Rules.

However, there can be no assurance that the Company will be able to maintain compliance with the Bid Price Requirement, would receive sufficient shareholder support for a reverse stock split, or will otherwise be in compliance with other Nasdaq Listing Rules.

The market price of our common stock may fluctuate widely and you could lose all or part of your investment in our common stock as a result.

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• results and timing of nonclinical studies and clinical studies of our product candidates;

the commercial performance of our product candidates, if approved, as well as the costs associated with such activities;

• the commercial performance of our product candidates, those out-licensed to third parties and the Transferred Assets sold to Tisento, if approved, as well as the costs associated with such activities;

• results of clinical studies of our competitors' products;

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In addition, if the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of operations, financial condition and prospects.

If any of the foregoing

occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

The market price for our common stock is particularly volatile.

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Several factors cause the volatility in our share price.

We are a speculative or “risky”

investment due to our short operating history, lack of revenues and the uncertain success (including of regulatory approval) of any of our product candidates.

We are a speculative or “risky” investment due to our short operating history, lack of revenues and the uncertain success (including of regulatory approval) of any of our product candidates.

As a consequence of this risk, more risk-averse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares of our common stock more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

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We may in the future be the target of such litigation.

Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.

We run the risk of inadvertently being deemed an investment company required to register under the Investment Company Act of 1940.

We run the risk of inadvertently being deemed an investment company required to register under the Investment Company Act of 1940 (the “Investment Company Act”) because a significant portion of our assets consists of investments in companies in which we own less than a majority interest.

The risk varies depending on events beyond our control, such as significant appreciation or depreciation in the market value of certain of our publicly traded holdings, adverse developments with respect to our ownership of certain of our subsidiaries, transactions involving the sale of certain assets and our participation in any partnership or other fund established to finance future broadband and real estate projects in which we may engage.

If we are deemed to be an inadvertent investment company, we may seek to rely on a safe harbor under the Investment Company Act that would provide us a one-year grace period to take steps to avoid being deemed to be an investment company.

In order to ensure we avoid being deemed an investment company, we have taken, and may need to continue to take, steps to reduce the percentage of our assets that constitute investment assets under the Investment Company Act.

These steps have included, among others, selling marketable securities that we might otherwise hold for the long term and deploying our cash in non-investment assets.

We have recently sold marketable securities, including at times at a loss, and we may be forced to sell our investment assets at unattractive prices or to sell assets that we otherwise believe benefit our business in the future to remain below the requisite threshold.

We may also seek to acquire additional non-investment assets to maintain compliance with the Investment Company Act, and we may need to incur debt, issue additional equity or enter into other financing arrangements that are not otherwise attractive to our business.

Any of these actions could have a material adverse effect on our results of operations and financial condition.

Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid being deemed to be an investment company in accordance with the safe harbor.

If we were unsuccessful, then we would have to register as an investment company, and we would be unable to operate our business in its current form.

We would be subject to extensive, restrictive, and potentially adverse statutory provisions and regulations relating to, among other things, operating methods, management, capital structure, indebtedness, dividends, and transactions with affiliates.

If we were deemed to be an investment company and did not register as an investment company when required to do so, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, that we would be unable to enforce contracts with third parties, and/or that third parties could seek to obtain rescission of transactions with us undertaken during the period in which we were an unregistered investment company.

Uncertainties in the interpretation and application of existing, new and proposed tax laws and regulations could materially affect our tax obligations and effective tax rate.

The tax regimes to which we are subject or under which we operate are unsettled and may be subject to significant change.

The issuance of additional guidance related to existing or future tax laws, or changes to tax laws or regulations proposed or implemented by the current or a future U.S.

presidential administration, Congress, or taxing authorities in other jurisdictions, including jurisdictions outside of the United States, could materially affect our tax obligations and effective tax rate.

To the extent that such changes have a negative impact on us, including as a result of related uncertainty, these changes may adversely impact our business, financial condition, results of operations, and cash flows.

The amount of taxes we pay in different jurisdictions depends on the application of the tax laws of various jurisdictions, including the United States, to our international business activities, tax rates, new or revised tax laws, or interpretations of tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.

The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions.

If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations.

Our financial statements could fail to reflect adequate reserves to cover such a contingency.

Similarly, a taxing authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable connection, often referred to as a “permanent establishment” under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.

Effective January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over 15 years of research activities conducted outside the United States.

Unless the United States Department of the Treasury issues regulations that narrow the application of this provision to a smaller subset of our research and development expenses or the provision is deferred, modified, or repealed by Congress, in future years we may experience a material decrease in our cash flows from operations and an offsetting similarly sized increase in our net deferred tax assets over these amortization periods.

The actual impact of this provision will depend on multiple factors, including the amount of research and development expenses we will incur and whether we conduct our research and development activities inside or outside the United States and our overall net operating loss position.

Our ability to use net operating loss carryforwards and certain other tax attributes to offset future taxable income and taxes may be subject to limitations.

Under current law, our federal net operating losses ("NOLs") generated in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of taxable income.

As of December 31, 2023, we had federal NOLs of $177 million.

It is uncertain if and to what extent various states will conform to federal tax laws.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change U.S.

tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited.

We are in the process of updating our analysis of owner shifts to determine whether an ownership change occurred since March 30, 2019.

It is possible that we have experienced an ownership change in the past.

In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.

As a result, our federal NOL carryforwards may be subject to a percentage limitation if used to offset income in tax years following an ownership change.

In addition, it is possible that we have in the past undergone, and in the future may undergo, additional ownership changes that could limit our ability to use all of our pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset our post-change

income or taxes.

Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes.

In addition, at the state level, there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

As a result, we may be unable to use all or a material portion of our NOL carryforwards and other tax attributes, which would harm our future operating results by effectively increasing our future tax obligations.

We maintain our cash at financial institutions, often in balances that exceed federally insured limits.

We maintain the majority of our cash and cash equivalents in accounts at banking institutions in the United States that we believe are of high quality.

Cash held in these accounts often exceeds the FDIC insurance limits.

If such banking institutions were to fail, we could lose all or a portion of amounts held in excess of such insurance limitations.

In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all.

Any inability to access or delay in accessing these funds could adversely affect our business and financial position.

If securities or industry analysts fail to initiate or maintain coverage of our stock, publish a negative report or change their recommendations regarding our stock adversely, our stock price and trading volume could decline.

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We do not expect to pay any cash dividends for the foreseeable future.

We do not anticipate that we will pay any cash dividends to holders of our common stock in the foreseeable future.

We have never paid cash dividends and we do not anticipate that we will pay any cash dividends to holders of our common stock in the foreseeable future.

Instead, we plan to retain any earnings to maintain and expand our operations.

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Unresolve d Staff Comments.

In April 2021 we completed our exit from our prior laboratory and office facilities in Cambridge Massachusetts and moved to an operating model under which we outsource our research and development laboratory work and we are currently leasing office space on an “as-needed”

Cybersecu rity.

Risk Management and Strategy

We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and data related to patients and clinical trials (“Information Systems and Data”).

Our officers and our IT vendors help identify, assess and manage our cybersecurity threats and risks.

We manage, identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and risk profile using various methods including, for example:

through the use of automated tools, including but not limited to tools for monitoring, geolocation, remote wiping, threat detection, intrusion detection and prevention (including through the use of machine learning, a form of artificial intelligence), patch management, distributed denial of service (DDoS) protection and forensics;

conducting (directly or through third parties) regular audits and threat assessments for internal and external threats;

subscribing to reports and services that identify cybersecurity threats;

analyzing reports of threats and actors;

conducting vulnerability assessments to identify vulnerabilities;

evaluating our and our industry’s risk profile;

conducting tabletop incident response exercises;

and evaluating threats reported to us.

Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example:

incident response plans and procedures, disaster recovery/business continuity plans, risk assessments, implementation of security standards and certifications, encryption of data, network security controls, data segregation, access controls, physical security, asset management, tracking and disposal, systems monitoring, vendor risk management program, employee training and penetration testing.

Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk management processes.

For example, cybersecurity risk is addressed as a component of our enterprise risk management program, and members of our management team and IT consultants work together to prioritize our risk management processes, mitigate cybersecurity threats that are more likely to lead to a material impact to our business, and report regularly to our board of directors on cybersecurity matters.

We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example managed cybersecurity service providers, threat intelligence service providers, dark web monitoring services, and other cybersecurity software providers.

We use third-party service providers to perform a variety of functions throughout our business, including but not limited to application providers, hosting companies, contract manufacturing organizations and contract research organizations.

We have a vendor management program to oversee, identify and manage cybersecurity risks associated with our use of these providers.

The program includes a risk assessment for vendors that may include, depending on the vendor and nature of services being performed, security questionnaires, review of the vendor's written security program, review of security assessments, audits and reports, vulnerability scans related to the vendor, security assessment calls with the vendor's security personnel, and the imposition of certain contractual obligations on the vendor, among other elements, in accordance with the processes outlined in our internal vendor selection, management, and oversight process policy and other internal guidelines.

More specifically, the level of assessment may depend on the following:

the nature of the services provided and the data the vendors may collect, retain, and utilize, the sensitivity of the Information Systems and Data at issue, and the identity of the provider.

For a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see our risk factors under Part 1.

Risk Factors in this Annual Report on Form 10-K, including the risk factor captioned “If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions;

fines and penalties;

interruptions to our commercial operations, clinical trials or other operations;

harm to our reputation;

loss of revenue or profits;

loss of sales and other adverse consequences.”

Our board of directors addresses our cybersecurity risk management as part of its general oversight function.

Our cybersecurity risk assessment and management processes are implemented and maintained by various members of our management team and IT consultants, which includes individuals who have a diverse combination of relevant expertise, experience, education and training.

Our team includes individuals with relevant experience in enterprise risk management and disclosure controls and procedures.

Additionally, certain members of our team have experience managing cybersecurity programs and are specifically assigned cybersecurity oversight.

Certain members of our management team are responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, communicating key priorities to relevant personnel, approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.

Our cybersecurity incident response processes are designed to escalate certain cybersecurity incidents to members of management.

Our cybersecurity incident management team, and other individuals as needed, work to help us mitigate and remediate cybersecurity incidents of which we are notified.

In addition, our incident response processes include a procedure for reporting certain cybersecurity incidents to the board of directors.

The board of directors receives regular reports from management concerning our cybersecurity risk management program.

The board also receives various summaries and/or presentations related to cybersecurity threats, risks and mitigation.

Commencing in 2024, our Audit Committee is taking the lead on behalf of the board of directors on oversight of our cybersecurity risk management program.

In April 2021 we completed our exit from our prior laboratory and office facilities in Cambridge Massachusetts and moved to an operating model under which we outsource our research and development laboratory work, and we are currently leasing office space on an “as-needed” basis.

Legal Proceedings

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What changed 10-K

Item 1. Business