What changed in this filing

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Item 1. Business

2023-03-24 compared with 2022-03-11 · 262 added, 233 removed, 319 unchanged (61% of the section changed)

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was formed and is our wholly owned subsidiary.

The mailing address of our principal executive office is 47 Thorndike Street, Suite B1-1, Cambridge, MA 02141.

Our telephone number is 617-714 -0360 and our website address is www.leaptx.com (the information contained therein or linked thereto shall not be considered incorporated by reference in this Form 10-K).

We are a biopharmaceutical company developing novel therapies designed to treat patients with cancer by inhibiting fundamental tumor-promoting pathways and by harnessing the immune system to attack cancer cells.

On January 17, 2023, we entered into a merger agreement with Flame Biosciences, Inc., a privately held, biotechnology corporation (“Flame”), whereby Flame became a wholly owned subsidiary under the name Flame Biosciences, LLC.

We are a biopharmaceutical company developing novel biomarker-targeted antibody therapies designed to treat patients with cancer by inhibiting fundamental tumor-promoting pathways, targeting cancer-specific cell surface molecules, and harnessing the immune system to attack cancer cells.

Our strategy is to identify, acquire, and develop molecules that will rapidly translate into high impact therapeutics that generate durable clinical benefit and enhanced patient outcomes.

Our lead clinical stage program is DKN-01, a monoclonal antibody that inhibits Dickkopf-related protein 1, or DKK1.

DKK1 is a protein that regulates the Wnt signaling pathways and enables tumor cells to proliferate and spread, as well as suppresses the immune system from attacking the tumor.

When DKN-01 binds to DKK1, an anti-tumor effect can be generated.

DKN-01-based therapies have generated responses and clinical benefit in several patient populations.

We are currently studying DKN-01 in multiple ongoing clinical trials in patients with esophagogastric cancer, gynecologic cancers, or prostate cancer.

In January 2020, we entered into an Option and License Agreement with BeiGene, Ltd., or BeiGene, which granted BeiGene the right to develop and commercialize DKN-01 in Asia (excluding Japan), Australia, and New Zealand.

We intend to apply our extensive experience identifying and developing transformational products to aggressively develop DKN-01 and build a pipeline of programs that have the potential to change the practice of cancer medicine.

Our lead clinical stage program is DKN-01, a monoclonal antibody that inhibits Dickkopf-related protein 1 (“DKK1”).

We are currently studying DKN-01 in multiple ongoing clinical trials in patients with esophagogastric cancer, gynecologic cancers, or colorectal cancer.

Our second clinical stage program is FL-301, a monoclonal antibody that targets cells that express Claudin18.2 on their cell surface.

We also have two preclinical antibody programs, FL-302 and FL-501.

We intend to apply our extensive experience identifying and developing transformational products to build a pipeline of programs that have the potential to change the practice of cancer medicine.

Cancer is the general name for a group of more than 100 diseases in which cells grow and divide out of control.

Over 16 million people in the United States have cancer.

The National Cancer Institute, or NCI, estimated that approximately 1.8 million people developed cancer and that nearly 610,000 people died of cancer in 2020.

The National Cancer Institute (NCI), estimated that approximately 1.9 million people developed cancer and that nearly 610,000 people died of cancer in 2022.

While progress has been made from the War on Cancer to the Human Genome Project, and despite advances in early detection and new cancer cell targeted treatments, cancer generally remains an incurable disease.

Esophagogastric Cancer (EGC)

Esophageal cancer, or EC, and gastric cancer, or GC, are malignancies of the digestive tract.

Esophageal cancer (“EC”), and gastric cancer (“GC”), are malignancies of the digestive tract.

According to the GLOBOCAN database in 2020, there were about 18,300 new patients diagnosed in the United States with EC and 26,300 new patients with GC each year.

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Substantial weight loss can result from reduced appetite, poor nutrition and having an active cancer.

Pain may be severe, occur almost

daily, and be worsened by swallowing any form of food.

Pain may be severe, occur almost daily, and be worsened by swallowing any form of food.

The disruption of normal swallowing can lead to aspiration of food content, nausea, vomiting and an increased risk of pneumonia.

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In advanced stages, the cancer frequently spreads into the liver or lungs.

The frequently-used therapies in patients who have not had many previous courses of treatment have low objective response rates, defined as patients with a greater than 30% reduction in tumor volume as determined by the Response Evaluation Criteria in Solid Tumors v1.1, known as RECIST.

Published data has demonstrated that paclitaxel monotherapy generated a response rate of 6.7% in second-line EC patients and 16% in second-line GC patients.

Studies have also demonstrated that anti-PD-1 antibody monotherapy generated a response rate of 9% in GC patients who have tumors that are not microsatellite instability high.

Recently, the anti-PD-1 antibody, nivolumab, in combination with fluoropyrimidine- and platinum-containing chemotherapy was approved by the US FDA in first-line EGC with a 47% response rate, 7.7 month median progression free survival, and 13.8 month overall survival.

In addition, nivolumab in combination with chemotherapy was approved in Europe for patients with PD-L1 expression designated by a combined positive score, or CPS, greater than or equal to 5.

In the KEYNOTE-062 clinical study, the anti-PD-1 antibody, pembrolizumab, in combination with fluoropyrimidine- and platinum-containing chemotherapy achieved a 48.6% response rate, 6.9 month median progression free survival, and 12.5 month median overall survival in patients with PD-L1 CPS greater than or equal to 1, in a study that did not achieve statistical significance over its comparator.

Gynecologic Cancers

There are numerous forms of gynecologic cancers, but two of the most prevalent types are cancers of the uterus or ovaries.

GLOBOCAN estimates that in 2020 there were 61,700 patients diagnosed with uterine cancer and 23,800 patients diagnosed with ovarian cancer each year in the United States.

In 2021, the anti-PD-1 antibody nivolumab in combination with fluoropyrimidine- and platinum-containing chemotherapy was approved by the US FDA in first-line EGC with a 47% overall response rate (“ORR”), 7.7 month median progression free survival (“PFS”), and 13.8 month overall survival (“OS”).

In addition, nivolumab in combination with chemotherapy was approved in Europe for patients with PD-L1 expression designated by a combined positive score (“CPS”), greater than or equal to 5.

In the Rationale-305 study, tislelizumab, an anti-PD-1 antibody being developed by BeiGene and Novartis, in combination with chemotherapy demonstrated statistically significant benefit over chemotherapy alone in patients with CPS greater than or equal to 5, with a 50.4% ORR, 7.2 months PFS, and 17.2 months OS.

Despite this progress, overall survival expectations for newly diagnosed advanced gastric cancer patients is poor at less than 2 years, and better outcomes are particularly needed for patients with low PD-L1 expression.

Endometrial Cancers

Endometrial cancer is a malignancy arising in the inner lining of the uterus.

In 2023, according to the American Cancer Society, 66,200 new cases of endometrial cancer will be diagnosed and 13,030 women will die from the disease.

There are currently very few treatment options for these patients, typically consisting of chemotherapy, local radiation therapy, and hormonal agents, and poor treatment outcomes.

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These β-catenin mutations are often driver mutations leading to rapid disease progression and poor outcomes.

Recently, the anti-programmed cell death-1, or PD-1, antibody dostarlimab-gxly was granted accelerated approval by FDA for endometrial cancer patients with microsatellite instability high, or MSI-H, or mismatch repair deficient, or dMMR, disease who had progression on or after a chemotherapy regimen.

In addition, the combination of lenvatinib and pembrolizumab was approved in second line non-MSI-H or mismatch repair proficient endometrial carcinoma patients with a 30% response rate, 6.6 month median progression free survival, and 17.4 month median overall survival.

Recently, the anti-programmed cell death-1 (“PD-1”), antibody dostarlimab-gxly was granted accelerated approval by the FDA for endometrial cancer patients with microsatellite instability high (“MSI-H”), or mismatch repair deficient, (“dMMR”), disease who had progression on or after a chemotherapy regimen.

However, this combination has been associated with significant toxicity with an 89% rate of grade 3 or higher treatment-emergent adverse events, including a 6% rate of fatal adverse events.

Prostate Cancer

Prostate cancer is one of the most common types of cancer in men.

There are several types of prostate cancer, but the vast majority are adenocarcinomas that arise from the gland cells that produce prostate fluid as part of the male reproductive system.

GLOBOCAN estimates that in 2020 there were 210,000 cases diagnosed in the United States.

Treatment options include the surgical removal of the prostate, radiation, as well as hormonal agents;

many of which can result in poor side effects, such as urinary incontinence and erectile dysfunction.

Most prostate cancer tumors eventually become resistant to hormonal treatments.

At this stage, which is referred to as metastatic castration-resistant prostate cancer, or mCRPC, chemotherapies, usually taxanes, offer the next line of treatment offering objective response rates of 30% or less.

After progressing through taxanes, the next line of treatment consists of cabazitaxel or Radium-223, both of which are associated with significant toxicity.

DKK1 is upregulated in prostate cancers with low androgen receptor, or AR, expression, including aggressive variant prostate cancer, or AVPC, and prostate cancers with co-occuring beta-catenin mutations Research has shown that, in the AVPC subtype, patients with higher DKK1 levels have a loss of certain immune system cells that could target the cancer.

Lung cancer is one of the most prevalent cancers in the United States and world.

The two main types are Non-small cell lung cancer, or NSCLC, and Small cell lung cancer, or SCLC.

About 85% of all cases are NSCLC, while SCLC accounts for 10-15%.

GLOBOCAN estimates that in 2020 there were 228,000 cases diagnosed in the United States and there were 138,000 deaths, making

up roughly 25% of all annual cancer deaths.

Smoking is one of leading contributory factors in developing lung cancer.

In contrast to SCLC, NSCLC’s, which can further be broken down primarily into squamous, adenocarcinoma, and large cell carcinoma, are more likely to be cured by surgical resection.

However, once metastatic, NSCLC is largely unresponsive to systemic chemotherapies.

Targeted systemic therapies can offer hope to patients with known specific driver mutations, such as in the EGFR or ALK genes, or with immune-evasive biomarkers, such as PD-L1 expression.

Despite these targeted treatment advances, there is still a significant unmet medical need and improved treatments are needed.

DKK1 expression is associated with worse overall survival in lung cancer patients within The Cancer Genome Atlas project.

Cancer Therapies and New Targets

Older, established cancer therapies, or chemotherapies, target rapidly dividing cells.

While chemotherapies can attack and kill cancer cells, these drugs also attack and destroy rapidly dividing non-cancer normal cells and, unfortunately, are associated with unwanted side effects.

Even though outcomes can often be improved by giving a cancer patient two or more chemotherapies in combination, physicians and patients desire new drugs with greater efficacy and fewer side effects.

Recently, a revolution in the understanding of cancer biology has generated compelling new anti-cancer targets that are based on fundamental mechanisms used by cancer cells to grow, spread, and survive, which are:

● cell signaling pathways that promote tumor growth, and

● evading detection and avoiding destruction by the immune system.

Cancer Cell Signaling

Cancer cells often hijack proteins that are involved in cell signaling pathways, the complex communication system that governs basic cellular functions and activities, such as cell division, cell movement, cell responses to specific stimuli, and even cell death.

By blocking signals that tell cancer cells to grow and divide uncontrollably, to generate new blood vessels, a process referred to as angiogenesis, or to spread to other parts of the body, a process referred to as metastasis, a new generation of cancer therapies is seeking to help stop cancer progression, which could lead to cancer cell death.

By focusing on cellular signaling pathways and molecules that are used by cancer cells, these targeted cancer therapies may be more effective than other types of treatment, including chemotherapy, and less harmful to normal cells.

Several small molecule and monoclonal antibodies that target cell signaling pathways have been approved by the FDA as cancer therapies for specific patient populations.

Cancer Immunotherapy

The immune system has evolved a dynamic ability to identify and attack cells which pose a danger to the body.

Often these dangerous cells are foreign, or non-self, cells, but a person’s own cells can become a danger, such as with cancer.

Ideally, the immune system identifies cancer cells as dangerous and removes them before they can grow into tumors.

However, cancer cells can evade or suppress the body’s natural immune response by secreting anti-inflammatory molecules and by using receptors on the cell membrane of either immune system cells or cancer cells known as immune checkpoints.

Cancer therapies known as checkpoint inhibitors, such as nivolumab, pembrolizumab, atezolizumab, and tislelizumab, are designed to block checkpoint receptors, such as PD-1, or its ligand, PD-L1, and prevent the cancer cell from evading the natural immune response, thus enabling the immune system to mount an attack on the tumor.

While there are several FDA-approved checkpoint inhibitors, there is a consensus in the scientific and medical communities that there remains room for improvement in response rate and efficacy.

In many cases, the lack of efficacy has been attributed to an insufficient immune response.

Colorectal Cancer

Colorectal cancer (“CRC”), is the third most frequent cancer globally and the second leading cause of death.

According to the WHO, there were nearly 2 million new cases of CRC in 2020, with nearly 1 million deaths.

CRC includes colon cancer (57.5%), rectal cancers (35%), and anal cancer (2.5%).

When the symptoms of CRC appear, such as rectal bleeding, anemia, or abdominal pain, most patients are already in the advanced stage where cancers are aggressive, malignant, and metastatic.

Mutations in the pathways modulated by DKK1, such as APC, and activation of the Wnt pathway are highly prevalent in CRC patients.

For patients who have non-MSI-H colorectal cancer, and who do not have a specific mutation that can be targeted with approved therapies, outcomes are extremely poor for patients who have progressed on first-line therapy.

A clinical trial of the antibody bevacizumab in combination with chemotherapy generated a response rate of approximately 5% and PFS of 5.7 months.

Our approach to treating cancer patients seeks to enhance the effectiveness of approved chemotherapies and immune checkpoint inhibitors by:

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● inhibiting immune suppression that would prevent an attack on the tumor;

● targeting cancer-specific cell surface markers to facilitate direct cancer cell killing.

Altering cell signaling.

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Enhancing anti-tumor immune cells.

A potential way to enhance an immune response against a tumor is by activating tumor-attacking immune cells, such as natural killer cells, or NK cells, or T lymphocytes, or T cells.

A potential way to enhance an immune response against a tumor is by activating tumor-attacking immune cells, such as natural killer cells (“NK cells”) or T lymphocytes (“T cells”).

This strategy is expected to overcome mechanisms that would prevent these immune cells from attacking a tumor.

Preclinical data has shown that DKK1 suppresses the activity of NK cells in the tumor microenvironment and that inhibition of DKK1 can enhance NK cell activity.

Our preclinical antibody, FL-302, is a bi-specific antibody designed to activate T cells in the tumor microenvironment to enhance their anti-tumor activity.

Antibodies that enhance the immune system have the potential to be combined with chemotherapy or checkpoint inhibitors to generate a more robust anti-tumor immune response.

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We believe that monoclonal antibodies that reduce the levels of anti-inflammatory molecules, such as DKK1, in the tumor microenvironment could result in the inhibition of immune suppressor cells and create a pro-inflammatory environment to enhance the immune system activity against the tumor.

By targeting novel pathways and immune cell types, our therapies are designed to combine with existing drugs and have the potential to significantly increase the survival and quality of life of cancer patients.

Targeting cancer-specific cell surface molecules.

Certain types of cancer cells have cell surface markers that are distinct from those found on normal, non-cancerous cells.

These cell surface markers can be the targets for therapies that will selectively kill the cells bearing those markers while sparing cells that do not bear those markers.

The expression of Claudin18.2 is very limited in normal tissue, as it is typically buried in the tight junction complex of gastric mucosal cells.

In the development of cancer, however, cells lose their polarity and structure.

As a result, Claudin18.2 may be exposed and accessible as a target for cancer therapy and is highly expressed on gastric cancer and pancreatic cancer cells.

Our antibodies FL-301 and FL-302 work to selectively target and kill those cancer cells which bear Claudin18.2 while sparing normal cells.

By targeting novel pathways, immune cell types, and biomarkers, our therapies are designed to combine with existing drugs and have the potential to significantly increase the survival and quality of life of cancer patients.

Our Product and Clinical Studies

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DKK1 also has a role in suppressing the immune system from effectively targeting and clearing the cancer.

Published data, including from TCGA and real world evidence from our collaboration with Tempus, indicates that DKK1 expression levels are significantly higher or have an important high DKK1 population in many cancers, including esophagogastric cancer, or EGC, non-small cell lung cancer, or NSCLC, endometrial cancer, colorectal cancer, or CRC, and prostate cancer.

Published data, including from TCGA and real world evidence from our collaboration with Tempus, indicate that DKK1 expression levels are significantly higher or have an important high DKK1 population in many cancers, including EGC, non-small cell lung cancer (“NSCLC”), endometrial cancer, CRC, and prostate cancer.

In addition, elevated DKK1 expression is associated with worse overall survival or time to treatment discontinuation for patients with EGC, NSCLC, endometrial cancer, CRC, prostate cancer, and other cancers.

Researchers have shown that when the DKK1 protein is added in certain animal models, the cancer grows larger.

Recent publications have also demonstrated a role for DKK1 in maintaining an environment around a tumor that suppresses the immune system’s ability to clear the tumor and to prevent metastasis.

DKK1 has been shown to activate the suppressive effects of myeloid-derived suppressor cells, or MDSC, a type of white blood cell that can potently block other immune system cells.

Publications have also demonstrated a role for DKK1 in maintaining an environment around a tumor that suppresses the immune system’s ability to clear the tumor and to prevent metastasis.

DKK1 has been shown to activate the suppressive effects of myeloid-derived suppressor cells (“MDSC”), a type of white blood cell that can potently block other immune system cells.

Other published data has shown that metastatic tumor cells with stem cell-like features avoid the immune system by overexpressing DKK1 and secreting it out of the cell.

Secreted DKK1 can then down-regulate certain molecules on tumor cells known as natural killer cell activating ligands, or NK cell ligands, that would activate the immune system, causing these cancer cells to remain invisible to NK cells and evade the immune system.

Secreted DKK1 can then down-regulate certain molecules on tumor cells known as natural killer cell activating ligands (“NK cell ligands”), that would activate the immune system, causing these cancer cells to remain invisible to NK cells and evade the immune system.

We have also identified DKK1 as being involved with the activity of T regulatory cells that can suppress anti-tumor T cells.

Through these multiple activities, research has shown that DKK1 helps protect the cancer cells from being targeted by the immune system.

Preclinical studies that we and others have conducted demonstrated that using an anti-DKK1 antibody can lead to clinical benefits in xenograft cancer models.

The anti-DKK1 antibody is believed to shift cell signaling to healthy levels, thereby resulting in an anti-tumor effect as well as a local anti-angiogenic effect in the diseased tissue.

The anti-DKK1 antibody is believed to shift cell signaling in multiple cell types, thereby resulting in an

anti-tumor immune effect.

In these models, researchers demonstrated that an anti-DKK1 antibody allowed the immune system to recognize and attack the cancer cells.

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We have shown that DKN-01 reduces free DKK1 levels and has demonstrated an anti-tumor effect in preclinical models.

On June 11, 2020, the FDA granted orphan drug designation to DKN-01 for the treatment of gastric and gastroesophageal junction cancer.

The FDA granted orphan drug designation to DKN-01 for the treatment of gastric and gastroesophageal junction cancer.

In addition, on September 24, 2020, the FDA granted Fast Track designation to DKN-01 in combination with BeiGene’s tislelizumab for the treatment of patients with gastric and gastroesophageal junction adenocarcinoma whose tumors express high DKK1, following disease progression on or after prior fluoropyrimidine- and platinum- containing chemotherapy and if appropriate, human epidermal receptor growth factor (HER2)/neu-targeted therapy.

First-in-human study

Our first -in-human study of DKN-01 was a single ascending dose Phase 1 trial in patients with low bone density.

DKN-01 was administered by intravenous infusion at doses from 7 mg to 300 mg and as a subcutaneous injection at a dose of 44 mg.

Eight subjects were treated per cohort, five of whom received DKN-01 and three of whom received placebo, for a total of 48 subjects in six cohorts.

There were no clinically significant safety signals observed with increasing doses of DKN-01, and all reported adverse events were mild in severity.

P100—Advanced Solid Tumors or Multiple Myeloma Study

We conducted study P100, a two-part dose-finding Phase 1 study, to establish the safety, maximum tolerated dose, and antitumor activity of DKN-01 as a monotherapy for patients with advanced malignancies.

Other endpoints were progression free survival, or PFS, overall response rate, or ORR, and overall survival, or OS.

Part A of the study was a dose escalation designed to evaluate increasing doses of DKN-01 between 75 mg and 600 mg administered weekly or biweekly in a 28 day cycle.

Part B of the study was an expansion cohort designed to evaluate the activity of DKN-01 as a single agent in patients with advanced NSCLC.

For Part B, DKN-01 was administered to refractory NSCLC patients at 300 mg on days 1 and 15 of each 28 day cycle.

We enrolled thirty-two patients in Parts A and B, twenty-four of whom were patients with NSCLC.

DKN-01 was well tolerated with no dose limiting toxicities, or DLTs, or serious adverse events, or SAEs, that were deemed by the physician to be related to DKN-01 treatment or treatment-emergent adverse events, or TEAEs, which lead to study discontinuation.

All of the treatment-related adverse events were Grade 1 or Grade 2, the two lowest severity levels.

TEAEs were generally those typically observed in cancer patients;

and the most frequently reported treatment-related TEAEs were fatigue and nausea.

DKN-01 as a single agent demonstrated clinical activity in patients with refractory NSCLC, with a clinical benefit rate of 45.9%, including one NSCLC patient (4.2%) with more than a 30% reduction in the size of their tumor, referred to as a partial response or PR.

In the Part B group of NSCLC patients who were dosed at a level of 300 mg every two weeks, the clinical benefit rate was 47.4%, including the patient with the PR (5.3%).

Median PFS in the evaluable Part B NSCLC patients was 2.2 months and median OS was 6.6 months.

P102—Esophagogastric Cancer (EGC)

We conducted study P102, a multi-part Phase 1/2 study of DKN-01 as a monotherapy and in combination with paclitaxel or KEYTRUDA ® (pembrolizumab) in advanced EGC patients, all of whom have had previous treatment with standard therapies.

Many of these subjects have had multiple lines of prior therapy and/or rapidly growing tumors, representing a difficult to treat population.

The study is intended to establish the safety and activity of DKN-01 as a monotherapy and in combination with paclitaxel or pembrolizumab and has the secondary endpoints of ORR, PFS, and OS.

Two DKN-01 monotherapy patients in the sub-study experienced PRs by central imaging analysis.

A patient who had previously been treated with prior immunotherapies, including an anti- PD -L1 antibody and an inhibitor of indoleamine-2,3-dioxygenase (IDO), achieved a PR and was on therapy for over one year, and an additional esophageal cancer patient experienced a single agent PR.

Six additional patients of the twenty evaluable for central imaging assessment were determined to have had a best response of stable disease (SD).

Paclitaxel Combination

In total, fifty-eight patients were treated with DKN-01 in combination with paclitaxel chemotherapy, with fifty-two patients evaluable for response.

Across all lines of prior therapy and tumor types, DKN-01 plus paclitaxel generated a 25.0% ORR, 13.4 weeks PFS, and 27.9 weeks OS.

The combination of DKN-01 plus paclitaxel generated a 46.7% ORR, 19.6 weeks PFS, and 61.1 weeks OS in fifteen evaluable patients as a second-line therapy.

One of our goals is to identify biomarkers or genetic alterations that could define a patient population more likely to respond to treatment with DKN-01.

In this study, four patients evaluated with genetic testing on pre-treatment biopsies were found to have activating/stabilizing mutations of beta-catenin, which is a molecule in the Wnt signaling pathway implicated in oncogenesis, metastasis, and immune suppression.

Of these four patients, two achieved PRs and one had prolonged SD.

One patient had a response exceeding 2.5 years, of which over 1.5 years was on DKN-01 monotherapy with continued tumor reduction.

Pembrolizumab Combination

Sixty-three patients were treated with DKN-01 plus pembrolizumab combination therapy.

Fifty-three patients had not received prior PD-1/PD -L1 therapy, and ten patients were refractory to PD-1/PD-L1 therapy.

All of the patients enrolled had tumors that were microsatellite stable or unknown.

Patients in the study were heavily pretreated having had received one to five prior lines of therapy, with nearly 64% having received a prior taxane regimen, 37% having received prior ramucirumab, and 24% having received prior trastuzumab.

The combination therapy was well tolerated with no new safety signals.

The combination of DKN-01 and pembrolizumab in gastroesophageal junction and gastric cancer patients demonstrated improved outcomes in patients whose tumors expressed high levels of DKK1 as measured by in situ hybridization RNAscope, or DKK1-high, and who had not previously been treated with PD-1/PD-L1 therapy.

DKK1-high patients experienced over 22 weeks median PFS and nearly 32 weeks OS, with a 50% ORR and an 80% disease control rate, or DCR, in ten evaluable patients.

Patients whose tumors expressed low levels of DKK1, or DKK1-low, experienced nearly 6 weeks median PFS and just over 17 weeks OS, with a 20% DCR in fifteen evaluable patients.

By independent central imaging review, two out of six DKK1-high PD-1/PD-L1 naïve esophageal cancer patients experienced a PR.

Both of these responses lasted over 200 days.

Of the ten PD-1/PD-L1 naïve esophageal cancer patients who had received more than one prior line of therapy, there was a 40% DCR in the five DKK1-high patients compared to a 0% DCR for the five DKK1-low patients.

The DKK1-high anti-PD-1/PD-L1 refractory patients treated with DKN-01 plus pembrolizumab experienced a significantly longer PFS of 12.8 weeks and OS of 46 weeks compared to the DKK1 -low patients who experienced a PFS of 6 weeks and OS of 16 weeks.

Among the six GEJ/GC patients who were refractory to PD-1/PD-L1 therapy, three DKK1-high patients had a best response of SD, whereas the three patients with DKK1-low tumors had progressive disease (PD).

PD-L1 Combined Positive Scores, or CPS, did not predict efficacy on the combination of DKN-01 plus pembrolizumab.

In multi- variate analysis, DKK1-high status correlated with longer PFS independent of PD-L1 CPS scores.

One-third of patients in the study were DKK1-high.

DisTinGuish (P205)—Tislelizumab Combination in GC/GEJ

As part of the collaboration with BeiGene, we are conducting P205, the DisTinGuish study, evaluating the combination of DKN-01 and BeiGene’s anti-PD-1 antibody, tislelizumab.

We are enrolling approximately forty patients with second-line GC/GEJ

whose tumors are DKK1-high, determined by a prospective biomarker analysis having a histology score, or H-score, of > 35.

In addition, we are evaluating the combination of DKN-01 with tislelizumab and capecitabine and oxaliplatin (CAPOX) in twenty-five patients with first-line GC/GEJ.

We initiated this clinical trial in the third quarter of 2020 and presented initial data at ESMO 2021 and ASCO GI 2022.

First Line – Combination with Tislelizumab and Chemotherapy

Twenty-five first-line GC/GEJ patients were treated with DKN-01 in combination with tislelizumab, capecitabine, and oxaliplatin.

As of December 10 th , 2021, the ORR among the 22 patients who received a full cycle of DKN-01 therapy was 68%, including one complete response, or CR, and 14 PRs.

The DKK1-high patient subgroup had a 90% response rate, with 9 PR and 1 patient non-evaluable, while the DKK1-low subgroup had a 56% response rate, 5 PR and 4 SD.

The preliminary median PFS was 10.7 months for the overall population, with the DKK1-high subgroup experiencing 11.9 months PFS and the DKK1-low subgroup experiencing 10.7 months PFS.

The median duration of response in DKK1-high patients was 10.7 months and 7.9 months in DKK1-low patients.

Overall survival had not yet been reached in any group.

Patients with low PD-L1 expression, defined as having a vCPS (visually-estimated Combined Positive Score, also known as Tumor Area Positivity (TAP) score - Ventana Medical Systems) of less than 5, had a response rate of 79% while patients with high PD-L1 expression, defined as having a vCPS of greater than or equal to 5, had a response rate of 67%.

Additional data is expected to be presented at a medical conference in the second half of 2022.

The combination was well tolerated.

The most common DKN-01-related adverse events were low grade (Grade 1 or 2):

We are developing DKN-01 in clinical trials in three different indications:

gastric cancer, endometrial cancer, and colorectal cancer.

Gastric Cancer

DisTinGuish Study

In collaboration with BeiGene, we are conducting P205, the DisTinGuish study, a three-part Phase 2 study of DKN-01 in combination with tislelizumab in patients with inoperable, locally advanced, gastric and gastroesophageal junction adenocarcinoma (“GEA”).

Part A enrolled 25 patients with first-line, HER2-negative gastric cancer who received DKN-01 in combination with tislelizumab and oxaliplatin and chemotherapy, also known as standard of care (“SOC”) chemotherapy.

Part B enrolled 52 patients with second-line, DKK1-high gastric cancer who received DKN-01 in combination with tislelizumab.

Part C is enrolling approximately 160 first-line, HER2-negative patients.

Patients will be randomized 1:1 to evaluate DKN-01 in combination with tislelizumab and SOC chemotherapy, compared to tislelizumab and SOC chemotherapy.

The primary objective is progression-free survival (“PFS”) in DKK1-high patients.

Secondary objectives of Part C include PFS in all patients regardless of DKK1 expression, as well as overall survival and objective response rate as measured by RECIST v1.1 in DKK1-high and all patients.

Part A –– First Line Combination with tislelizumab, capecitabine and oxaliplatin

Twenty-five first-line GEA patients were treated with DKN-01 in combination with tislelizumab, capecitabine and oxaliplatin (CAPOX) in Part A.

DKN-01 and tislelizumab plus CAPOX was well tolerated in first-line treatment for advanced GEA patients, with a safety profile consistent with previous reports for each of the therapies.

The most common DKN-01-related adverse events (AEs), were low grade (Grade 1 or 2):

fatigue, nausea, diarrhea, neutrophil count decrease, and platelet count decrease.

Second Line DKK1-high Patients –Tislelizumab Combination

As of December 10, 2021, the second-line GC/GEJ study of DKN-01 in combination with tislelizumab has enrolled 30 patients and is still actively enrolling patients with a target of 40 evaluable patients.

For those patients able to complete at least one full cycle of DKN-01 therapy 9n=20), the response rate was 25% (5 PRs), not including one patient who experienced a PR by iRECIST.

Additional data is expected to be presented at a medical conference in the second half of 2022.

The combination of DKN-01 and tislelizumab has been well tolerated with manageable toxicity across both the 300 mg and 600 mg doses of DKN-01.

The most common DKN-01-related adverse events were low grade (Grade 1 and 2):

As of July 31, 2022, the data cut-off date for our presentation at the European Society for Medical Oncology (ESMO) 2022 Annual Congress, the ORR among the 22 patients who received a full cycle of DKN-01 therapy was 68%, including 1 complete response (“CR”), and 14 partial responses (“PRs”).

The DKK1-high patient subgroup had a 90% response rate, with 9 PRs and 1 patient non-evaluable, while the DKK1-low subgroup had a 56% response rate, with 1 CR, 4 PRs and 4 patients with a best response of stable disease (“SD”).

The median PFS was 11.3 months for the overall population, with the DKK1-high subgroup experiencing 11.3 months PFS and the DKK1-low subgroup experiencing 12.0 months PFS.

The median duration of response (“DoR”) in DKK1-high patients was 10.7 months and 7.9 months in DKK1-low patients.

OS was not yet mature.

All 6 of the patients who were DKK1-high and PD-L1-low had responses.

The median PFS was 11.6 months for the PD-L1-high subgroup and the PD-L1-low subgroup experiencing 10.7 months PFS.

OS was not yet mature.

Part B –– Second Line DKK1-high patients tislelizumab combination

Fifty-two second-line, DKK1-high GEA patients were treated with DKN-01 in combination with tislelizumab in Part B.

The combination of DKN-01 and tislelizumab has been well tolerated with manageable toxicity across both the 300 mg and 600 mg doses

The higher DKN-01 dose at 600mg was not associated with higher frequency of AEs.

The most common DKN-01-related AEs were low grade (Grade 1 and 2):

fatigue and nausea.

P204—Gynecologic Malignancies

There were no Grade 5 treatment-emergent AEs (TEAE) and no TEAEs leading to study drug discontinuation or dose reduction.

As of August 31, 2022, the data cut-off date for our presentation at the Society for Immunotherapy in Cancer (“SITC”), Annual Meeting, the ORR for evaluable anti-PD-1/PD-L1 antibody naïve patients was 27%, median PFS was 1.4 months, and median OS was 7.7 months.

In the dual biomarker-high (DKK1-high/PD-L1 high with vCPS > 10) patients, the ORR was 55% ORR (n=12:

6 PR, 2 SD, 3 PD, 1 NE), median PFS was 7.7 months, with median OS having not been reached.

In DKK1-high/PD-L1 negative patients, the ORR was 27% (n=11:

3 PR, 1 SD, 7 PD), median PFS was 1.4 months, and median OS was 3.9 months.

In DKK1-high/PD-L1 medium patients with vCPS between 1 and 10, the ORR was 8% (n=18:

1 PR, 3 SD, 9 PD (irPR), 5 NE), median PFS was 1.4 months PFS, and median OS was 5.2 months.

Part C –– First Line Randomized Controlled Trial combination with tislelizumab and SOC chemotherapy

Part C of the DisTinGuish study will enroll approximately 160 first-line, HER2-negative GEA patients.

Patients will be randomized to receive either DKN-01 in combination with tislelizumab and SOC chemotherapy or to receive tislelizumab and SOC chemotherapy.

The primary objective is to determine the effect of adding DKN-01 on the endpoint of median PFS in DKK1-high patients.

Secondary objectives of Part C include PFS in all patients regardless of DKK1 expression, as well as OS and ORR as measured by RECIST v1.1 in DKK1-high and all patients.

Enrollment began in October 2022.

We currently anticipate completion of enrollment of the 160 patient study late this year, with initial response rate data being available year end 2023/early 2024 and PFS data in 2024.

WAKING Study – Investigator-Sponsored Trial in Second and Third Line Patients Combination with Tecentriq

The Royal Marsden Hospital in the United Kingdom is conducting the WAKING study that is evaluating DKN-01 in combination with Roche’s Tecentriq ® (atezolizumab) in patients with microsatellite stable esophagogastric cancer.

Roche is providing atezolizumab drug supply and funding the study as part of its imCORE network.

In a presentation at the ESMO 2022 Annual Congress, DKN-01 at 300 mg or 600mg every 2 weeks in combination with atezolizumab was considered safe.

No dose-limiting toxicity was observed, and no formal maximum tolerated dose was reached.

No treatment-related deaths occurred, and no dose reductions were required.

As of August 16, 2022, the time of the data cut off, 18 patients were enrolled in the study, and 12 patients that were treated in the initial phase were presented.

Ten patients were response evaluable at the time of data cut-off, and 1 patient had a PR and a DKK1 expression of 81% tumor-percentage score, which is a very high level of DKK1 expression.

The ORR was 10%, with an additional 4 patients (40%) having SD.

In the preliminary analysis, elevated baseline DKK1 expression (TPS > 20%) may be associated with clinical response, as the 4 DKK1-high patients had an ORR of 25% (1 PR, 1 SD, 1 PD, 1 NE).

Translational analyses and assessment of PD-L1 status are ongoing.

Endometrial Cancer

We conducted study P204, a Phase 2 basket study of DKN-01 as a monotherapy and in combination with paclitaxel in patients with advanced epithelial endometrioid cancer (“EEC”), epithelial ovarian cancer (“EOC”), and carcinosarcoma.

The study consisted of six dosing groups and enrolled 111 patients.

The study consisted of 6 dosing groups and enrolled 111 patients.

The primary objective in each independent study group was to determine the ORR.

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The study was designed to enroll at least 50% of patients whose tumors have predefined activating mutations or signaling alterations in the Wnt pathway.

Twenty-nine EEC patients, who had previously received one to ten lines of therapy, enrolled on DKN-01 monotherapy.

Twenty-nine EEC patients, who had previously received 1 to 10 lines of therapy, enrolled in DKN-01 monotherapy.

Tumoral DKK1 expression data was available for 23 patients.

In the group of eight patients with DKK1-high tumors, one patient (12.5%) has had a CR for over 3.5 years, one patient (12.5%) had a PR, three patients (37.5%) had SD, and three patients (37.5%) had PD, representing an ORR of 25.0% and a DCR of 62.5%.

In the group of fifteen patients with DKK1-low tumors, one patient (6.7%) had SD, eleven patients (93.3%) had PD, and three patients were non-evaluable.

In the group of 8 patients with DKK1-high tumors, one patient (12.5%) has had a CR for over 4.5 years, 1 patient (12.5%) had a PR, 3 patients (37.5%) had SD, and 3 patients (37.5%) had PD, representing an ORR of 25.0% and a Disease Control Rate (“DCR”), of 62.5%.

In the group of 15 patients with DKK1-low tumors, 1 patient (6.7%) had SD, 11 patients (93.3%) had PD, and 3 patients were non-evaluable.

The DKK1-high patients experienced PFS of 4.3 months, compared to the DKK1-low patients who experienced PFS of 1.8 months.

In the group of 24 EEC patients treated with DKN-01 plus paclitaxel, 72% of whom had received 3 or more prior systemic therapies, DKK1-high patients had improved median PFS (5.4 months vs.

1.8 months [HR 0.34;

0.12, 0.97]) compared to DKK1-low patients.

One patient with carcinosarcoma treated with DKN-01 and paclitaxel experienced a CR approximately two years on therapy, while another DKK1-high patient with carcinosarcoma treated with DKN-01 and paclitaxel experienced a PR.

Investigator-Initiated and Collaborative Group Studies

As part of our strategy to advance the development of DKN-01 in a cost-effective manner and on a global basis, we work with key opinion leaders and groups to initiate and conduct clinical trials in targeted patient populations and in combination with other therapies.

We currently have established relationships for four investigator-initiated studies (ISTs):

Prostate Cancer :

We have an IST led by David R.

Wise, M.D., Ph.D.

of the Perlmutter Cancer Center at NYU Langone Health evaluating DKN-01 in advanced metastatic castration-resistant prostate cancer patients.

Initial data is expected to be released at a medical conference in 2022.

Esophagogastric Cancer :

Roche is providing atezolizumab drug supply and funding the study as part of its imCORE network.

Investigator-Sponsored Trial in Second Line Patients Combination with Keytruda (pembrolizumab)

An investigator-initiated trial of DKN-01 in combination with pembrolizumab is being conducted at M.D.

Anderson Cancer Center and the University of Alabama, Birmingham Cancer Center.

The study is an open-label, Bayesian design, Phase 2 trial and will initially enroll 15 patients each into DKK1-high and DKK1-low cohorts.

If the efficacy criteria is met in either or both of the 15 patient cohort(s), then the cohort(s) will be expanded by an additional 15 patients.

The primary objective of the study is ORR.

Secondary objectives include clinical benefit rate, PFS, OS, and DOR.

Merck is providing pembrolizumab for the study.

Colorectal Cancer

We have evaluated DKN-01 in multiple preclinical CRC models as a monotherapy, in combination with chemotherapy, and in combination with an anti-PD-1 antibody.

DKN-01 showed additive activity with 5-fluorouracil (5-FU) chemotherapy, which is commonly used in CRC patients, and in two CRC models that were resistant to 5-FU therapy.

Treatment with DKN-01 can result in tumor regressions as a monotherapy and can overcome 5-FU-resistance to have further activity in combination with 5-FU chemotherapy.

We believe that these 5-FU-resistant models are reflective of the second-line CRC population currently being recruited in the DeFianCe clinical study.

In addition, DKN-01 as monotherapy or in combination with an anti-PD-1 antibody has generated tumor regressions in a CT26 syngeneic CRC model.

In this model, DKN-01 treatment increased PD-L1 expression, promoted substantial tumor necrosis, which was associated with a robust immune cell infiltrate, and generated a tumor immune infiltrate that contained a substantial number of CD3+ and CD8+ cells, implying the presence of an adaptive immune response to tumor antigen.

DeFianCe Study –Second Patients Combination with bevacizumab and chemotherapy

The DeFianCe study is a Phase 2, randomized, open-label, multicenter study of DKN-01 in combination with standard of care bevacizumab and chemotherapy in patients with advanced CRC who have received one prior systemic therapy.

The study is designed with an initial 20 patient cohort and is expected to expand into a 130-patient randomized controlled trial against bevacizumab and standard of care chemotherapy.

The primary objective is PFS.

Secondary objectives include ORR, DoR and OS.

We expect to complete enrollment in Part A of the DeFianCe study in the coming weeks and have initial data from Part A in the middle of 2023.

The cell surface molecule Claudin18.2 regulates barrier properties and contributes to cell-to-cell adhesion.

It is a key component of the tight junction for cell polarity and sealing the spaces between adjacent cells.

In normal tissue, expression of Claudin18.2 is very limited and largely inaccessible, as it is typically buried in the tight junction complex of gastric mucosal cells.

In the development of cancer, however, cells lose their polarity and structure.

As a result, Claudin18.2 may become exposed during tumorigenesis and accessible as a target for cancer therapy.

Claudin18.2 is highly expressed on gastric cancer and pancreatic cancer cells and can also be present in esophageal, lung, and ovarian cancers.

The expression pattern makes Claudin18.2 a highly selective biomarker for targeted cancer therapies.

Claudin18.2 is a validated target for cancer therapy, as randomized clinical trials from Astellas of their chimeric anti-Claudin18.2 antibody zolbetuximab have shown a survival benefit in combination with chemotherapy in first-line gastric cancer patients whose tumors express high (75% or greater) and intense levels of Claudin18.2.

However, since Claudin18.2 expression in tumors is heterogenous, expansion to patients with lower expression and improved efficacy in patients with higher expression would benefit from an antibody with higher affinity and improved killing activity.

FL-301 is a fully human monoclonal antibody that binds to and blocks Claudin18.2.

In nonclinical models presented at the American Association for Cancer Research (“AACR”) 2020 Annual Meeting, FL-301 was shown to have 10-20x higher affinity to Claudin18.2 than zolbetuximab and specificity to both gastric and pancreatic tumors.

Through Fc engineering, FL-301 has been

designed with enhanced antibody dependent cellular cytotoxicity, complement dependent cytotoxicity, and antibody dependent cellular phagocytosis, which are three mechanisms that can lead to improved cancer cell killing and greater potency relative to zolbetuximab in nonclinical models.

Food and Drug Administration has granted orphan drug designation to FL-301 for the treatment of gastric and gastroesophageal junction cancer and for the treatment of pancreatic cancer.

FL-301 is being developed through an exclusive license from NovaRock Biotherapeutics for territories excluding China and is currently in a Phase 1 clinical trial in cancer patients in China.

We expect to have initial clinical data to present later this year or early next year and intend to use this data to initiate clinically relevant combination studies in biomarker-selected cancer patients at appropriate dose levels.

FL-302 is a Claudin18.2/CD137 (also known as 4-1BB) bispecific antibody that is in preclinical development.

A bispecific antibody contains binding sites directed to two different targets or two different locations on one target.

CD137 (4-1BB) is an activating receptor found on T cells.

FL-302 is able to bind simultaneously both Claudin18.2 on tumor cells and CD137 on T cells and enhance the anti-tumor activity of T cells in the tumor microenvironment.

We believe that there is an opportunity to improve the activity of Claudin18.2 targeting antibodies through bispecific binding to T cell activation markers and generate additional synergy when used in combination with other immunotherapies, including immune checkpoint inhibitors and potentially DKN-01.

FL-302 is being developed through an exclusive license from NovaRock Biotherapeutics for territories excluding China.

FL-501 is a monoclonal antibody in preclinical development that targets growth and differentiation factor 15 (GDF15), which is a cytokine that is produced at elevated levels in response to various stresses, including chronic inflammation, obesity, cardiovascular diseases, cancers, and chemotherapy treatment.

High GDF15 expression is associated with cachexia including loss of appetite, nausea and weight loss, and is also a validated target with a successful randomized clinical trial from Pfizer.

We are particularly interested in the role of GDF15 in promoting an immunosuppressive tumor micro-environment, much like DKK1, and the broad range of cancers including gastric, colorectal, pancreatic and prostate, where elevated GDF15 also correlates with poor prognosis.

FL-501 is being developed through the collaboration agreement with Adimab.

Intellectual Property

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to preserve the confidentiality of our know-how and trade secrets;

and to operate without infringing the valid and enforceable patents and proprietary rights of third parties.

Our ability to prevent third parties from making, using, selling, offering to sell or importing competing products to ours, including a competitor to DKN-01, depends on the validity, enforceability and/or scope of our patents.

and to operate without infringing on the valid and enforceable patents and proprietary rights of third parties.

Our ability to prevent third parties from making, using, selling, offering to sell or importing competing products to ours, including a competitor to DKN-01 or FL-301, depends on the validity, enforceability and/or scope of our patents.

We have several patents and patent applications relating to DKN-01 and its therapeutic uses, and possess substantial know- how relating to the development and commercialization of DKN-01.

We are the licensee of patents and patent applications relating to DKN-01 and FL-301.

We cannot be sure that any of our pending patent applications or future patent filings will lead to the issuance of new patents, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be adequate to protect our market.

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We expect to use trademark protection for our products as they are marketed.

We exclusively license from Eli Lilly and Company, or Lilly, rights under 23 issued patents and 4 pending patent applications, all of which belong to the same patent family.

We exclusively license from Eli Lilly and Company (“Lilly”), rights under 25 issued patents and 2 pending patent applications, all of which belong to the same patent family.

The patents and applications in this patent family are directed to the composition of matter and use of DKN-01, and include (i) one issued U.S.

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Argentina, Australia, Canada, China, Eurasia, Europe, Gulf Cooperation Council, India, Israel, Japan, Lebanon, Macao, Mexico, New Zealand, Pakistan, Singapore, South Africa, Taiwan, Ukraine, Hong Kong and South Korea and (iii) pending applications in the following jurisdictions:

Brazil, Europe, Venezuela and Thailand.

Venezuela and Thailand.

The base 20-year term for patents in this family would expire in 2030.

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Patent term extensions for delays in marketing approval may also extend the terms of patents in this family.

We own pending applications directed to the use of a biomarker in patients receiving DKN-01 therapy in the following jurisdictions:

We own one issued U.S.

Patent and pending applications directed to the use of a biomarker in patients receiving DKN-01 therapy in the following jurisdictions:

Australia, Brazil, Canada, China, Europe, Hong Kong, India, Israel, Japan, Korea, Mexico, New Zealand, Russia, Singapore and the United States.

Any patents that may issue in the United States based on the pending U.S.

The issued U.S.

Patent and any additional patents that may issue in the United States based on the pending U.S.

Application will expire in 2037, absent any terminal disclaimer, patent term adjustment due to administrative delays by the United States Patent and Trade Office (“USPTO”) or patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act or Hatch-Waxman Amendment, and provided that all required maintenance fee payments are timely paid.

Any patents that may issue in foreign jurisdictions will likewise expire in 2037, provided that all required annuities are timely paid.

We also own two additional patent families both directed to the treatment of cancer using DKN-01 in specific subpopulations of patients.

In the first patent family, the patient subpopulation is defined by its DKK-1 expression level.

Applications are pending in the following jurisdictions:

the United States of America, China, Japan, South Korea, Australia, New Zealand, Canada, Hong Kong, Mexico, Brazil, Israel, India, Europe and Singapore.

In the second patent family, the patient subpopulation is defined as harboring a specific genetic mutation.

Applications are pending in the following jurisdictions:

the United States of America, China, Japan, South Korea, Australia, New Zealand, Canada, Mexico, Brazil, Israel, Europe and Singapore.

Any patents that may issue in the United States based on the applications in these two patent families will expire in 2040, absent any terminal disclaimers, patent term adjustment due to administrative delays at the USPTO or patent term extension under the Hatch-Waxman Act, and provided that all required maintenance fee payments are timely paid.

Any patents that may issue in foreign jurisdictions will likewise expire in 2040, provided that all required annuities are timely paid.

We also own one U.S.

Provisional patent application directed to treatment of colorectal cancer using combination therapy comprising DKN-01 and additional therapeutic agents.

If non-Provisional patent applications claiming the benefit of the pending U.S.

Provisional patent application referenced above are filed in 2023, any patent that may issue from such applications will expire no earlier than 2043 absent any terminal disclaimer.

Any patents issued in foreign jurisdictions will likewise expire in 2043.

We jointly own with BeiGene a pending international application filed under the PCT directed to the combination of DKN-01 and tislelizumab.

Any patents that may be issued in the United States based on the pending application will expire in 2042, absent any terminal disclaimers, patent term adjustment due to administrative delays at the USPTO or patent term extension under the Hatch-Waxman Act, and provided that all required maintenance fee payments are timely paid.

Any patents that may issue in foreign jurisdictions will likewise expire in 2042, provided that all required annuities are timely paid.

In addition, we exclusively license from NovaRock Biotherapeutics, Ltd.

(“NovaRock”), the rights under one issued patent and pending patent applications, all of which belong to the same patent family.

The patents and applications in this patent family are directed to the composition of matter and use of FL-301, and include (i) one issued U.S.

Patent, and (ii) pending applications in the following jurisdictions:

:Australia, Canada, Eurasia, Europe, Japan, South Korea, Singapore, and the United States of America .

The granted US patent and any additional patents that may issue in the United States based on the pending U.S.

Application will expire in 2040, absent any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act or Hatch-Waxman Amendment, and provided that all required maintenance fee payments are timely paid.

Any patents that may issue in foreign

jurisdictions will likewise expire in 2037, provided that all required annuities are timely paid.

We also own two pending international patent applications filed under the Patent Cooperation Treaty (PCT) directed to the treatment of cancer using DKN-01 in specific subpopulations of patients.

The PCT is 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 member states.

Although a PCT application is not itself examined and cannot issue as a patent, it allows the applicant to seek protection in any of the member states through national-phase applications.

In the first PCT application, the patient subpopulation is defined by its DKK-1 expression level.

In the second PCT application, the patient subpopulation is defined as harboring a specific genetic mutation.

Any patents than may issue in the United States based on the pending PCT applications will expire in 2040, absent any terminal disclaimers, patent term adjustment due to administrative delays at the USPTO or patent term extension under the Hatch-Waxman Act, and provided that all required maintenance fee payments are timely paid.

Any patents that may issue in foreign jurisdictions will likewise expire in 2040, provided that all required annuities are timely paid.

We have historically been developing a second pipeline product, TRX518, which is a monoclonal antibody that targets the glucocorticoid TNF- family receptor, or GITR.

We discontinued the active development of TRX518 in November 2019.

We own 67 patents and 5 pending patent applications relating to TRX518 and uses thereof.

The patents and applications primarily fall into two families.

The base 20 -year term for U.S.

patents in the first family would expire in 2026 and in the second family would expire in 2028 provided that all required maintenance fee payments are timely paid and no terminal disclaimers are filed.

Patent term extensions for delays in marketing approval may also extend the terms of patents in these two families.

The various patent applications and patents covering TRX518 include claims directed to compositions of matter (antibodies and antigen- binding fragments), pharmaceutical compositions, methods for inducing or enhancing an immune response, methods of treating a subject having a cancerous tumor, combination therapies, and uses of antibodies and antigen-binding fragments.

Patent applications and patents claiming these subject matters have been filed and/or granted in the following jurisdictions:

the United States, Australia, Canada, Europe (Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden, Switzerland, and the United Kingdom), Hong Kong, India and Japan.

The base term of a U.S.

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The term of a U.S.

patent can be lengthened by patent term adjustment, which compensates the owner of the patent for administrative delays at the United States Patent and Trademark Office (USPTO).

patent can be lengthened by patent term adjustment, which compensates the owner of the patent for administrative delays at the USPTO.

In some cases, the term of a U.S.

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Some foreign jurisdictions, including Europe, have patent extension provisions (e.g., supplementary protection certificates), which allow for extension of the protection of a patent that covers a drug approved by the applicable foreign regulatory agency.

In the future, if and when DKN-01 receives FDA approval, we expect to apply for patent term extension to extend the protection of one of our U.S.

patents covering DKN-01, its use, or a method of manufacturing this product.

In the future, if and when DKN-01 or any of our other products receives FDA approval, we expect to apply for patent term extension to extend the protection of one of our U.S.

patents covering the product, its use, or a method of manufacturing this product.

We also may pursue extensions in foreign jurisdictions where applicable.

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The license includes a right to sublicense, under certain Lilly intellectual property rights to further develop and commercialize, on a worldwide basis, pharmaceutical products containing such licensed compounds.

to the royalty rate in connection with third person intellectual property, sales of competing products, and sales of biosimilar or generic products.

Pursuant to the Lilly Agreement, we granted to Lilly 657,614 shares of common stock and agreed to pay Lilly a royalty in the low single digits of net sales of a particular product in the territory during the applicable royalty term, with certain adjustments to be made to the royalty rate in connection with third person intellectual property, sales of competing products, and sales of biosimilar or generic products.

We have not yet paid any royalties to Lilly pursuant to this agreement.

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Lilly may terminate the agreement (i) upon our material breach of the Lilly Agreement upon ninety (90) days written notice to us, unless we cure such breach or violation during such ninety day period or (ii) if we challenge, or materially assist any third person to challenge, the validity or enforceability of the licensed intellectual property that is the subject of the Lilly Agreement upon thirty (30) days written notice to us, unless we cure such breach or violation during such thirty (30) day period.

If Lilly terminates the Lilly Agreement or if we terminate the Lilly Agreement without cause, (i) all rights under the licensed intellectual property rights will terminate and immediately and automatically revert to Lilly, (ii) any sublicense will be assigned by us to Lilly so that such sublicense becomes a direct license between Lilly and such sublicensee, (iii) subject to certain limitations, we will be required to grant to Lilly an irrevocable, non-exclusive, perpetual, fully paid up license under all patent rights developed or acquired by us during the term of the Lilly Agreement that relate to the Lilly licensed intellectual property, (iv) subject to certain limitations, we will be required to grant to Lilly an irrevocable, non-exclusive, perpetual, fully paid up license to the results of data from all preclinical and clinical studies of any compound or product covered by the Lilly Agreement, (v) subject to certain limitations, we will be required to take all steps necessary to permit Lilly to commence marketing product covered by the Lilly Agreement, and (vi) we will be required to assign or re-assign to Lilly all Lilly patents covered by the Lilly Agreement and that were assigned by Lilly to us.

acquired by us during the term of the Lilly Agreement that relate to the Lilly licensed intellectual property, (iv) subject to certain limitations, we will be required to grant to Lilly an irrevocable, non-exclusive, perpetual, fully paid up license to the results of data from all preclinical and clinical studies of any compound or product covered by the Lilly Agreement, (v) subject to certain limitations, we will be required to take all steps necessary to permit Lilly to commence marketing product covered by the Lilly Agreement, and (vi) we will be required to assign or re-assign to Lilly all Lilly patents covered by the Lilly Agreement and that were assigned by Lilly to us.

If we terminate the Lilly Agreement for material breach by Lilly or Lilly’s bankruptcy, the licenses will remain in full force and effect and we will remain liable for the payment of all royalty obligations under the Lilly Agreement.

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In addition, in connection with DKN-01 manufactured by Lonza, or a strategic partner of Lonza, we agreed to pay (i) an annual payment to Lonza beginning on the date of initiation of Phase 1 clinical trials for DKN-01 and (ii) an increased annual payment to Lonza beginning on the date of initiation of Phase 2 clinical trials for DKN-01, for so long as Lonza, or a strategic partner of Lonza, manufactures DKN-01.

the sublicense exists and (ii) a low single- digit royalty calculated as a percentage of net sales of DKN-01.

In connection with DKN-01 manufactured by any other party, we agreed to pay (i) an annual amount to Lonza per sublicense beginning on the commencement date of such sublicense and continuing for so long as the sublicense exists and (ii) a low single- digit royalty calculated as a percentage of net sales of DKN-01.

All royalty amounts are subject to certain adjustments if, on a country-by -country basis, the manufacture and/or sale of DKN-01 are not protected by a valid claim.

All royalty obligations will expire on a country-by-country basis upon the later of (i) the expiration, revocation or complete rejection of all valid claims covering product in such country or (ii) ten (10) years from first commercial sale of DKN-01 in such country.

The Lonza Agreement will remain in force in each country of the world until either the expiration of the last valid patent claim or for so long as the know-how is identified and remains secret and substantial, whichever is later.

Upon expiration of the Lonza Agreement with respect to DKN-01 in a particular country, the licenses granted under the Lonza Agreement with respect to DKN-01 in that country will become fully paid and royalty free.

Either party may terminate the Lonza Agreement (i) if the other party commits a breach of the Lonza Agreement and such breach is not cured within forty-five (45) days of receiving notice of the breach (or thirty (30) days in the case of payment defaults) or (ii) if the other party is unable to pay its debts and enters into compulsory or voluntary liquidation or enters into a bankruptcy or takes other similar action.

We may terminate the Lonza Agreement by giving sixty (60) days written notice to Lonza.

Lonza may, at its option, immediately terminate any or all of the licenses granted under the Lonza Agreement if we knowingly oppose any patent application within the patent rights granted or dispute the validity of any patent under the Lonza Agreement or assist any third party to do so.

Termination of the Lonza Agreement will terminate all licenses granted under the Lonza Agreement.

The Lonza Agreement also contains certain standard confidentiality and indemnification provisions.

NovaRock License Agreement

On August 13, 2021, we entered into a strategic partnership and license agreement with NovaRock Biopharmaceuticals, Inc.

(the “NovaRock Agreement”), pursuant to which NovaRock granted us a world-wide, excluding the People’s Republic of China, Hong Kong, Macau, and Taiwan, exclusive license for certain intellectual property rights relating to FL-301 and FL-302.

Such license includes a right to sublicense.

Pursuant to the NovaRock Agreement, we agreed to pay NovaRock milestones upon the completion of development, regulatory and sales milestones for up to three different products (FL-301, FL-302 and potentially one additional target), along with a royalty in the mid-single digits of net sales of each product in the territory during the applicable royalty term, with certain adjustments to be made to the royalty rate in connection with the lack of coverage by a valid claim in the NovaRock patents, sales of biosimilar products, and third party intellectual property licenses.

We have not yet paid any royalties to NovaRock pursuant to this agreement.

The royalty term, with respect to each country in which a product is sold, on a country -by-country and product-by-product basis, begins on the first commercial sale of the product in the country and the later of (i) the expiration of the last-to-expire issued patent included within the patents licensed under the NovaRock Agreement having a valid claim covering the sale of the product in such country, and (ii) the tenth anniversary of the first date of commercial sale of the product in the territory.

The term of the NovaRock Agreement began on August 13, 2021, and, unless earlier terminated pursuant to the termination provisions described below, will continue on a product-by-product and country-by-country basis until we have no remaining royalty or other payment obligations in a specific country.

Upon expiration in a given country, the licenses granted with respect to such country shall become fully paid up, perpetual and irrevocable.

We may terminate the NovaRock Agreement on a product-by-product basis (i) at any time without cause upon ninety (90) days written notice to NovaRock or (ii) upon material breach of the NovaRock Agreement by NovaRock upon sixty (60) days written

notice to NovaRock, unless NovaRock cures such breach or violation during such sixty (60) day period, which shall be shortened to a thirty (30) day cure period for breaches of payment obligations.

NovaRock may terminate the agreement on a product-by-product basis upon our material breach of the NovaRock Agreement upon sixty (60) days written notice to us, unless we cure such breach or violation during such sixty-day period, which shall be shortened to a thirty (30) day cure period for breaches of payment obligations.

Either party may terminate the NovaRock Agreement with immediate effect if the other party enters into bankruptcy or takes similar action.

In the event of termination of the NovaRock by either party, all rights under the licensed intellectual property rights will terminate and immediately and automatically revert to NovaRock.

The NovaRock Agreement also contains certain standard representations and warranties and certain standard confidentiality and indemnification provisions.

Adimab Collaboration Agreement

On August 10, 2020, we entered into a collaboration agreement with Adimab, LLC (the “Adimab Agreement”), pursuant to which Adimab will conduct research programs to develop monoclonal antibodies to certain targets identified by us and provide us with an option to acquire exclusive rights to such antibodies.

Upon payment of an option fee, on a product-by-product basis, Adimab will grant us a world-wide, exclusive license for, or assign ownership to us of, certain intellectual property rights and grant us a non-exclusive license with respect to the Adimab platform technology.

Each such license includes a right to sublicense.

Pursuant to the Adimab Agreement, after exercising an option and making the option payment, we agreed to pay Adimab milestones upon the completion of clinical development and regulatory milestones, along with a royalty in the low-single digits of net sales of each product during the applicable royalty term, with certain adjustments to be made to the royalty rate in connection with third person intellectual property or a challenge to the royalty term.

FL-501 was discovered under the Adimab Agreement and is in the evaluation phase.

We have not yet paid any option payments or royalties to Adimab pursuant to this agreement.

The royalty term, with respect to each country in which a product is sold, on a country-by-country and product-by-product basis, begins on the first commercial sale of the product in the country and the later of (i) the expiration of the last-to-expire issued patent included within the patents licensed under the Adimab Agreement having a valid claim covering the sale of the product, and (ii) the twelfth anniversary of the first date of commercial sale of the product in the country.

The term of the Adimab Agreement began on August 10, 2020, and, shall, unless earlier terminated pursuant to the termination provisions described below, expire (a) in the event that no option payment is made by us on any program under the Adimab Agreement, the conclusion of the last-to-expire evaluation term or (b) in the event that an option is exercised, on a country-by-country basis until we have no remaining royalty payment obligations in a specific country.

Upon expiration in a given country, the licenses granted with respect to such country shall become fully paid up, perpetual and irrevocable.

Either we or Adimab may terminate the Adimab Agreement for the material breach of this Agreement by the other Party, if such breach remains uncured ninety (90) days following notice.

If the Adimab Agreement expires or terminates (other than following an option exercise after all applicable royalties have been paid), we shall not research, develop or commercialize any Adimab-related product except as if it were part of the Adimab Agreement, and we shall not grant any right or options to any third party regarding any Adimab-related product.

If we have entered into any sublicense and the Adimab Agreement is terminated, then such sublicenses will survive the termination of the Adimab Agreement and become direct licenses with Adimab.

If Adimab terminates the Adimab Agreement for our uncured material breach, then we shall assign to Adimab all right, title and interest in and to the intellectual property and all data with respect to Adimab-related products, transfer cell lines and manufacturing information to Adimab, transfer all filings with regulatory authorities, and Adimab shall pay us a royalty in low single digits.

The Adimab Agreement also contains certain standard representations and warranties and certain standard confidentiality and indemnification provisions.

The biotechnology and pharmaceutical industries are characterized by continuing technological advancement and significant competition.

While we believe that our product candidates, technology, knowledge, experience and scientific resources provide us with competitive advantages, we face competition from major pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others.

governmental agencies and public and private research institutions, among others.

Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

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For example, Novartis, Merck, Amgen, and Pfizer are all currently developing or have previously been developing anti-DKK1 monoclonal antibodies.

In addition, Astellas, Zai Labs, Amgen, Transcenta, and Elevation Oncology, among other companies, are all currently developing or have developed antibodies targeting Claudin18.2.

These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

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We do not have, and we do not currently plan to acquire or develop, the facilities or capabilities to manufacture clinical trial material for use in human clinical trials or finished drug product for commercialization.

We depend on third-party contract manufacturers, or CMOs, for the production of clinical trial material for our studies.

Our bulk drug substance, or DS, is produced at our CMO, Patheon Biologics, which is required to comply with the FDA’s Current Good Manufacturing Practice, or cGMP, regulations.

We depend on third-party contract manufacturers (“CMOs”), for the production of clinical trial material for our studies.

Our DKN-01 bulk drug substance (“DS”), is produced at our CMO, ThermoFisher Scientific, which is required to comply with the FDA’s Current Good Manufacturing Practice (“cGMP”) regulations.

Our finished drug product is produced at a contract fill/finisher provider, which is also required to comply with cGMP regulations.

Our FL-301 clinical trial material was manufactured at WuXi Biologics, a global CMO.

We have personnel with significant technical, manufacturing, analytical, quality and project management experience to oversee our third-party CMOs and to manage manufacturing and quality data and information for regulatory compliance purposes.

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We eventually may, however, choose to build (or obtain through strategic acquisition) our own sales and marketing team to commercialize some or all of our products if they receive FDA approval and if it is in our long -term interests.

We have entered into an Option and License Agreement with BeiGene pursuant to which BeiGene has the right to manufacture and commercialize DKN-01 in Asia (excluding Japan), Australia, and New Zealand.

We may choose to enter into distribution agreements with strategic partners with their own robust distribution channels for the United States, Europe, Japan, and other non-BeiGene territories.

We may choose to enter into distribution agreements with strategic partners with their own robust distribution channels for the United States, Europe, Japan, and other territories.

Government Regulation and Product Approval

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In addition, manufacturers of biopharmaceutical products participating in Medicaid and Medicare are required to comply with mandatory price reporting, discount, and rebate requirements.

The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources.

The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes and

regulations, require the expenditure of substantial time and financial resources.

The following is a summary of the primary government regulations applicable to our business.

FDA Regulation

In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act, or FDCA, the Public Health Services Act, or PHSA, and their implementing regulations.

In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act (“FDCA”), the Public Health Services Act (“PHSA”), and their implementing regulations.

Any product we may develop must be cleared by the FDA before it is marketed in the United States.

The process required by the FDA before product candidates may be marketed in the United States generally involves the following:

● completion of preclinical laboratory tests, animal studies, and formulation studies in compliance with the FDA’s Good Laboratory Practice, or GLP, regulations;

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

● approval by an Institutional Review Board, or IRB, for each clinical site, or centrally, before each trial may be initiated;

● completion of preclinical laboratory tests, animal studies, and formulation studies in compliance with the FDA’s Good Laboratory Practice (“GLP”), regulations;

● submission to the FDA of an Investigational New Drug application (“IND”), which must become effective before human clinical trials may begin;

● approval by an Institutional Review Board (“IRB”), for each clinical site, or centrally, before each trial may be initiated;

● adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed product candidates for its intended use, performed in accordance with GCPs;

● development of manufacturing processes to ensure the product candidate’s identity, strength, quality, and purity;

● submission to the FDA of a Biologics License Application, or BLA;

● submission to the FDA of a Biologics License Application (“BLA”);

● satisfactory completion of an FDA advisory committee review, if applicable;

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Clinical Trials

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with federal regulations and GCP requirements, which include the requirements that all research subjects provide their informed consent in writing for their participation in any clinical trial, as well as review and approval of the study by an IRB.

provide their informed consent in writing for their participation in any clinical trial, as well as review and approval of the study by an IRB.

Investigators must also provide certain information to the clinical trial sponsors to allow the sponsors to make certain financial disclosures to the FDA.

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We may also discontinue clinical trials as a result of risks to subjects, a lack of favorable results, or changing business priorities.

Information about certain clinical trials, including a description of the study and study results, must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their clinicaltrials.gov website.

Information about certain clinical trials, including a description of the study and study results, must be submitted within specific timeframes to the National Institutes of Health for public dissemination on their clinicaltrials.gov website.

Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee.

This group regularly reviews accumulated data and advises the study sponsor regarding the continuing safety of trial subjects, potential trial subjects, and the continuing validity and scientific merit of the clinical

The data safety monitoring board receives special access to unblinded data during the clinical trial and may advise the sponsor to halt the clinical trial if it determines there is an unacceptable safety risk for subjects or on other grounds, such as no demonstration of efficacy.

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

During the development of a new therapeutic, a sponsor may be able to request a Special Protocol Assessment, or SPA, the purpose of which is to reach agreement with the FDA on the Phase 3 clinical trial protocol design and analysis that will form the primary basis of product approval and an efficacy claim as well as preclinical carcinogenicity trials and stability studies.

During the development of a new therapeutic, a sponsor may be able to request a Special Protocol Assessment (“SPA”), the purpose of which is to reach agreement with the FDA on the Phase 3 clinical trial protocol design and analysis that will form the primary basis of product approval and an efficacy claim as well as preclinical carcinogenicity trials and stability studies.

An SPA may only be modified with the agreement of the FDA and the trial sponsor, or if the director of the FDA reviewing division determines that a substantial scientific issue essential to determining the safety or efficacy of the product was identified after the testing began.

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However, SPA agreements are not a guarantee of an approval of a product candidate or any permissible claims about the product candidate.

In particular, SPAs are not binding on the FDA if, among other reasons, previously unrecognized public

health concerns arise during the performance of the clinical trial, other new scientific concerns regarding the product candidate’s safety or efficacy arise, or if the sponsoring company fails to comply with the agreed upon clinical trial protocol.

In particular, SPAs are not binding on the FDA if, among other reasons, previously unrecognized public health concerns arise during the performance of the clinical trial, other new scientific concerns regarding the product candidate’s safety or efficacy arise, or if the sponsoring company fails to comply with the agreed upon clinical trial protocol.

BLA Submission, Review by the FDA, and Marketing Approval

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Product candidates that are designated as orphan drugs, which are further described below, are also not subject to application user fees unless the application includes an indication other than the orphan indication.

In addition, under the Pediatric Research Equity Act, or PREA, a BLA or supplement to a BLA for a new active ingredient, indication, dosage form, dosage regimen, or route of administration, must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

In addition, under the Pediatric Research Equity Act (“PREA”), a BLA or supplement to a BLA for a new active ingredient, indication, dosage form, dosage regimen, or route of administration, must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

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In this event, the application must be resubmitted with the additional information.

The resubmitted application is also subject to review before the FDA accepts it for filing.

The resubmitted application is also

subject to review before the FDA accepts it for filing.

Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA, the FDA has set the review goal of completing its review of 90% of all applications within ten months from the 60-day filing date for its initial review of an initial BLA.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA has set the review goal of completing its review of 90% of all applications within ten months from the 60-day filing date for its initial review of an initial BLA.

Such deadlines are referred to as the PDUFA date.

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Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than an applicant interprets the same data.

After evaluating the BLA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a Complete Response Letter, or CRL.

If a CRL is issued, the applicant may either:

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Biosimilars, Orphan Drugs, and Exclusivity

The Biologics Price Competition and Innovation Act of 2009, or BPCIA, creates an abbreviated approval pathway for biological products shown to be highly similar to or interchangeable with an FDA-licensed reference biological product.

The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), creates an abbreviated approval pathway for biological products shown to be highly similar to or interchangeable with an FDA-licensed reference biological product.

Biosimilarity sufficient to reference a prior FDA-approved product requires a high similarity to the reference product notwithstanding minor differences in clinically inactive components, and no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency.

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However, certain changes and supplements to an approved BLA, and subsequent applications filed by the same sponsor, manufacturer, licensor, predecessor in interest, or other related entity do not qualify for the twelve-year exclusivity period.

The Orphan Drug Act provides incentives for the development of products intended to treat rare diseases or conditions, which generally are diseases or conditions affecting less than 200,000 individuals annually in the United States, or affecting more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making the product

available in the United States will be recovered from United States sales.

Additionally, sponsors must present a plausible hypothesis for clinical superiority to obtain orphan designation if there is a product already approved by the FDA that is intended for the same indication and that is considered by the FDA to be the same as the already approved product.

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All promotional materials for drug or biologic candidates approved under accelerated regulations are subject to prior review by the FDA.

Moreover, under the provisions of the Food and Drug Administration Safety and Innovation Act, or FDASIA, enacted in 2012, a sponsor can request designation of a product candidate as a “breakthrough therapy”.

Moreover, under the provisions of the Food and Drug Administration Safety and Innovation Act (“FDASIA”), enacted in 2012, a sponsor can request designation of a product candidate as a “breakthrough therapy”.

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

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Post- approval Requirements

Any products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements related to manufacturing, recordkeeping, and reporting, including adverse experience reporting, shortage reporting, and periodic reporting, product sampling and distribution, advertising, marketing, promotion, certain electronic records and signatures, and post-approval obligations imposed as a condition of approval, such as Phase 4 clinical trials, REMS, and surveillance to assess safety and effectiveness after commercialization.

Any products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements related to manufacturing, recordkeeping, and reporting, including adverse experience reporting, shortage reporting, periodic reporting, product sampling and distribution, advertising, marketing, promotion, certain electronic records and signatures, and post-approval obligations imposed as a condition of approval, such as Phase 4 clinical trials, REMS, and surveillance to assess safety and effectiveness after commercialization.

After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval.

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Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Moreover, the enacted Drug Quality and Security Act, or DQSA, imposes obligations on manufacturers of biopharmaceutical products related to product tracking and tracing.

Moreover, the enacted Drug Quality and Security Act (“DQSA”) imposes obligations on manufacturers of biopharmaceutical products related to product tracking and tracing.

Among the requirements of this legislation, manufacturers are required to provide certain information regarding the products to individuals and entities to which product ownership is transferred, will be required to label products with a product identifier, and are required to keep certain records regarding the product.

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Manufacturers must also verify that purchasers of the manufacturers’ products are appropriately licensed.

Further, under this legislation, manufacturers will have product investigation, quarantine, disposition, and notification responsibilities related to counterfeit, diverted, stolen, and intentionally adulterated products that would result in serious adverse health consequences of death to humans, as well as products that are the subject of fraudulent transactions or which are otherwise unfit for distribution such that they would be reasonably likely to result in serious health consequences or death.

subject of fraudulent transactions or which are otherwise unfit for distribution such that they would be reasonably likely to result in serious health consequences or death.

Similar requirements additionally are and will be imposed through this legislation on other companies within the biopharmaceutical product supply chain, such as distributors and dispensers.

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Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in significant regulatory actions.

Such actions may include refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, cyber letters, modification of promotional materials or labeling, provision of corrective information, imposition of post-market requirements including the need for additional testing, imposition of distribution or other restrictions under a REMS, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, FDA debarment, injunctions, fines, consent decrees, corporate integrity agreements, debarment from receiving government contracts, and new orders under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement, or civil or criminal penalties, including fines and imprisonment, and result in adverse publicity, among other adverse consequences.

Such actions may include refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, cyber letters, modification of promotional materials or labeling, provision of corrective information, imposition of post-market requirements including the need for additional testing, imposition of distribution or other restrictions under a REMS, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, FDA debarment, injunctions, fines, consent decrees, corporate integrity agreements, debarment from receiving government contracts, new orders under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement, or civil or criminal penalties, including fines and imprisonment, and result in adverse publicity, among other adverse consequences.

Other Regulation

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Our total research and development expenses were $45.0 million and $32.2 million, during the years ended December 31, 2022 and 2021, respectively.

See Part II — Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for additional detail regarding our research and development activities.

See Part II — Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for additional details regarding our research and development activities.

As of December 31, 2022, we had 44 full-time employees, including 33 in research and development and 11 in general and administrative roles.

We have 3 employees who have an M.D., 12 employees who have a Ph.D., 1 employee who has a JD, and 11 employees with a master’s degree.

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

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

What changed 10-K

Item 1. Business