Item 1. Business
Item 1.
BUSINESS.
Overview
AIkido
Pharma Inc. was initially formed in 1967. Since 2017, the Company has operated as a biotechnology company with a diverse portfolio
of small-molecule anticancer and antiviral therapeutics in development. The Company’s pipeline consists of patented technology
from leading universities and researchers. We are currently in the process of developing our innovative therapeutic drug pipeline
through strong partnerships with world renowned educational institutions, including the University of Texas at Austin, the University
of Maryland, Baltimore and Wake Forest University. Our oncology therapeutics include treatments for pancreatic cancer, acute myeloid
leukemia (AML) and acute lymphoblastic leukemia (ALL). The Company is also developing a broad-spectrum antiviral platform, in
which the lead compounds have activity against multiple viruses including Influenza virus, Ebolavirus and Marburg virus, SARS-CoV,
MERS-CoV, and SARS-CoV-2, the cause of COVID-19.
As
a result of the Company’s biotechnology research and development and associated investments and acquisitions, our business
portfolio now focuses on the treatment of three different cancers and multiple types of viral infections. Our pancreatic drug
candidate, DHA-dFdC, developed at and licensed from the University of Texas at Austin, is a new compound that we hope will become
the next generation of chemotherapy treatment for advanced pancreatic cancer. DHA-dFdC overcomes tumor cell resistance to current
chemotherapeutic drugs and is well tolerated in preclinical toxicity tests. Preclinical studies have also indicated that DHA-dFdC
inhibits pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current standard therapy), targets
pancreatic tumors and has demonstrated activities against other cancers, including leukemia, lung and melanoma. Our AML and ALL
compound, developed at the Wake Forest University, is a targeted therapeutic designed to overcome multiple resistance mechanisms
observed with the current standard of care.
Our
broad-spectrum antiviral platform was developed at the University of Maryland Baltimore (“UMB”), which granted the
Company an exclusive worldwide Master License Agreement (MLA”) to technology covered by three separate patent applications.
The licensed technology comprises broadly acting pan-viral inhibitory compounds targeting multiple viral pathogens. The technology
was invented by UMB scientists Drs. Matthew Frieman, Alexander MacKerell and Stuart Watson. The Company has also executed a Sponsored
Research Agreement with UMB to support the development of the technology under the direction of these inventors at UMB.
In
addition, we are constantly seeking to grow our pipeline of treatments in oncology indications. For example, in January 2021,
the Company invested in Convergent Therapeutics, Inc., which has exclusive rights to technology related to next-generation dual-action
peptide receptor radionuclide therapy (“PRRT”) for prostate cancer covered by multiple issued U.S. and foreign patents.
Convergent is currently conducting advanced human trials relating to prostate cancer treatments utilizing PRRT that targets the
prostate-specific membrane antigen (“PSMA”) present on prostate cancer cells. The technology was developed under the
direction of Dr. Neil Bander, Professor of Urologic Oncology at Weill Cornell Medicine. In addition, the Company was granted a
license to four patent applications for the use of psilocybin in cancer indications.
1
Additionally,
on January 6, 2021 the Company announced that it entered into an exclusive patent license agreement with Silo Pharma Inc. (“Silo
Pharma”) pursuant to which Silo Pharma granted the Company a worldwide exclusive, sublicensable, royalty-bearing license
to certain Silo Pharma owned provisional patent applications directed to the use of psilocybin in cancer treatment, and any patents
issuing therefrom, including all continuations, continuations-in-part, divisions, extensions, substitutions, reissues, re-examinations,
and any applications and all patents issuing from any applications and patents that claim domestic benefit or foreign priority
to the provisional patent applications. The license is for “Field of Use” (as defined in the exclusive patent license
agreement) of “treatment of cancer and symptoms caused by cancer, including but not limited to pain, nausea, neuroinflammation,
brain and neural dysfunction, depression, seizures, confusion, dizziness, numbness/tingling, dysfunction of the senses and all
other symptoms that are caused by cancer of any type.”
Our
Drugs in Development
DHA-dFdC
from the University of Texas at Austin
DHA-dFdC
(4-(N)-Docosahexaenoyl 2´, 2´-Difluorodeoxycytidine) is patented technology licensed to the Company from the University
of Texas at Austin. DHA-dFdC is a new compound we believe may become the next generation of second-line chemotherapy treatment
for advanced pancreatic cancer. DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic drugs and is well tolerated
in preclinical toxicity tests. Preclinical studies, referenced in subsection DHA-dFdC Published Data below, have
also indicated that DHA-dFdC inhibits pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current
standard therapy; for example, the IC 50 value of DHA-dFdC is more than 100,000-fold smaller than gemcitabine), targets
pancreatic tumors and has demonstrated activities against other cancer cell lines, including leukemia, lung and melanoma.
Background *
According
to the Hirshberg Foundation for Pancreatic Research, pancreatic cancer has the highest mortality rate of all major cancers. It
is currently the 3rd leading cause of cancer-related death in the United States after lung and colon cancer. In January 2020,
the Hirschberg Foundation estimated that 60,430 Americans will be diagnosed with pancreatic cancer, and more than 48,220 will
die from the disease. For all stages combined, the 5-year relative survival rate is 10%. Even for the small percentage of people
diagnosed with local disease, the 5-year survival is only 39%. The majority of patients are diagnosed at a distant stage, for
which the 5-year survival is 3%.
Pancreatic
cancer is one of the few cancers for which survival has not improved substantially over nearly 40 years. Treatment options for
pancreatic cancer include surgery, radiation therapy and chemotherapy, which extend survival or relieve symptoms, but seldom produce
a cure. Surgical removal of the tumor is possible in less than 20% of patients diagnosed with pancreatic cancer because detection
is often in late stages and has spread beyond the pancreas. The current state of the art chemotherapy treatment is gemcitabine,
Folfirinox cocktail or gemcitabine in combination with Abraxane.
The
University of Texas at Austin has identified a new drug, DHA-dFdC, that has shown positive results in preclinical studies (see
publications listed below), inhibiting pancreatic tumor growth in clinically relevant transgenic mouse models. In preclinical
studies, DHA-dFdC has:
●
inhibited
pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current standard therapy);
●
targets
pancreatic tumors;
●
has
overcome tumor cell resistance to current chemotherapeutic drugs;
●
is
well tolerated in preclinical toxicity test;
●
has
demonstrated activities against other cancers (e.g. leukemia, lung, melanoma); and
●
may
stimulate immunogenic cell death to activate host antitumor immunity.
*
Hirshberg
Foundation for Pancreatic Cancer Research
2
DHA-dFdC
Technology Summary
DHA-dFdC
is a conjugate molecule containing gemcitabine linked to a fatty acid called docosahexaenoic acid (DHA). The chemical structure
is shown in the following diagram:
The
DHA structure is illustrated above the dashed line in the graphic above and the gemcitabine structure is illustrated below the
dashed line. The DHA-dFdC published data indicates that DHA-dFdC was more effective than gemcitabine alone in killing cancer cells
in vitro and in vivo in a certain mouse model. In addition, conjugation of gemcitabine with fatty acids other than DHA did not
increase effectiveness over gemcitabine.
In
collaboration with our contract manufacturing organization, Parimer Scientific, we are currently optimizing the manufacturing
procedure for DHA-dFdC. We have now successfully replicated the synthesis as reported in the literature with satisfactory yield
and purity. We are currently optimizing the procedure to ensure batch-to-batch consistency. We plan to begin formulation development
in the second quarter of 2021, which will require limited animal testing to determine proper dosage. We expect to have manufactured
20,000 mg of purified DHA-dFdC during the second quarter of 2021 to use for such purposes. We plan to engage a contract research
organization for the purpose of such animal testing during the second quarter of 2021. Our goal is to have acceptable intravenous
and oral formulations developed in the fourth quarter of 2021.
DHA-dFdC
Published Data
The
science behind DHA-dFdC has been published in the following peer-reviewed scientific journals:
●
Naguib
et al. (2016) Synthesis, characterization, and in vitro and in vivo evaluations of 4-(N)-docosahexaenoyl 2 ́,
2 ́- difluorodeoxycytidine with potent and broad-spectrum antitumor activity, NeoPlasia 18: 33-48.
●
Valdes
et al. (2017) Preclinical evaluation of the short-term toxicity of 4-(N)-docosahexaenoyl 2 ́, 2 ́- difluorodeoxycytidine
(DHA-dFdC), Pharm. Res. 34: 1224-1232.
●
Valdes
et al. (2019) A solid lipid nanoparticle formulation of 4-(N)-docosahexaenoyl 2 ́, 2 ́- difluorodeoxycytidine
with increased solubility, stability, and antitumor activity, Int. J. Pharm. 570:118609.
●
Valdes et
al. (2020) Effect of a Solid Lipid Nanoparticle Formulation on the Bioavailability of 4-(N)-Docosahexaenoyl 2 ́,
2 ́-Difluorodeoxycytidine After Oral Administration, AAPS PharmSciTech 21:77 .
3
Portions
of the published data also indicate the following:
●
The
drug unexpectedly concentrates itself in the pancreas relative to other organs.
●
It
significantly increases the lifespan of mice with pancreatic cancer in either mice predisposed to develop the cancer, or into
which human pancreatic cancer has been injected.
●
It
significantly decreases the growth of pancreatic tumors in mice, better than gemcitabine, the current standard of care.
●
An
oral formulation using lipid nanoparticles is highly effective and stable and has outstanding bioavailability.
DHA-dFdC
Patent Coverage
DHA-dFdC
is covered by one issued patent on the drug itself and there is one application relating to the oral formulation, as listed in
the following table:
Number
Priority
Expiration
Title
PCT App. No. PCT/US2015013454,
filed 1/29/2015
1/29/2014
N/A
Nucleobase Analogue
Derivatives and Their Applications
App. Serial No. 16/576,127,
filed 9/19/2019 as continuation of App. Serial No. 15/115,393, filed 1/29/2015
1/29/2014
N/A
Nucleobase Analogue
Derivatives and Their Applications
U.S. Patent No. 10,463,684,
issued 11/5/2019 from App. Serial No. 15/115,393, filed 1/29/2015
1/29/2014
10/07/2035
Nucleobase Analogue
Derivatives and Their Applications
PCT App. No. PCT/US2020036603,
filed 06/08/2019
6/06/2019
N/A
Lipid Nanoparticles
Containing Pharmaceutical and/or Nutraceutical agents and methods thereof
Pursuant to the Patent License Agreement between
the Company and the University of Texas, as amended, the patents listed above have been exclusively licensed to the Company for commercial
development worldwide, in all fields, along with all future patent applications that are entitled to claim priority from the listed patents,
and all patents that issue from such applications (See also the Licenses section below).
Broad
Spectrum Antiviral Platform from University of Maryland, Baltimore
Scientists
at UMB have discovered that the SKI complex present in all mammalian cells, including human cells, is a broad-spectrum, host-directed,
antiviral drug target. Using computer modeling technology and database screening, the scientists identified binding pockets on
the SKI complex structure and designed compounds predicted to bind to the pockets. Tests of the designed compounds identified
several chemical structures that had antiviral activity against influenza A virus along with the filoviruses Ebola and Marburg
and two further coronaviruses, SARS-CoV and SARS-CoV-2, the cause of COVID-19. The tests are currently at an early stage and there
is no guarantee that the aintiviral platform will be effective on human cells. In conjunction with the MLA, the Company has also
executed a Sponsored Research Agreement SRA with UMB to support the development of the technology, which is currently ongoing
at UMB under the direction of the inventors. Under the MLA and SRA, to meet the first two milestones of the MLA the Company shall
make periodic payments for the support of the research outlined in the SRA totaling $3.1M over a period of two years. The research
under the SRA will entail initial development and optimization of the most effective compounds and will be performed by the scientists
who invented the licensed technology.
Background
At
the end of 2019, cases of pneumonia of unknown etiology were identified in China. In the first week of January 2020, a novel coronavirus
was identified as the cause and was found to be spreading between people. Throughout 2020, the virus spread around the world with
over 28 million cases by September 2020. Among many things that the SARS-CoV-2 (severe acute respiratory syndrome coronavirus-2)
outbreak has demonstrated is the immense need for both specific and broadly acting antiviral therapeutics to treat known viruses
and those yet to emerge in the human population.
4
Viral
infection can have a major burden on human health. Influenza has historically caused numerous large epidemics and pandemics such
as 1918 Spanish flu and swine flu. Ebola has caused sporadic outbreaks since the 1970s, but in recent years these have been growing
in scale. The 2014 West Africa Ebola outbreak saw over 28,000 people contract the disease causing over 11,000 deaths. Coronaviruses
have always posed a threat of mass spread because of their respiratory transmission. In 2002 to 2003, the emergence of SARS-CoV
infected over 8,000 people, killing around 10% in nine months, while MERS-CoV-has sporadically spread since 2012, causing around
2,500 infections with a case fatality rate of around 35%.
*
Weston
et al. (2020) The SKI complex is a broad-spectrum, host-directed antiviral drug target for coronaviruses, influenza,
and filoviruses PNAS 117 (48) 30687-30698, https://doi.org/10.1073/pnas.2012939117
The
year 2020 has seen the rapid emergence of the novel coronavirus, SARS-CoV-2, the cause of COVID-19, which rapidly spread after
its identification in Wuhan, China, caused a pandemic, and has infected almost 110 million people and killed over 2.4 million
people worldwide, with almost 490,000 deaths in the United States.
*
Johns
Hopkins University of Medicine, Coronavirus Resource Center, https://coronavirus.jhu.edu/
Scientists
at UMB, including Drs. Matthew Frieman, Alexander MacKerell and Stuart Watson have demonstrated that the SKI complex is a broad-spectrum
antiviral target and designed compounds using in silico drug design that target the SKI complex and inhibit replication
of several virus types, influenza A virus along with the filoviruses Ebola and Marburg and two further coronaviruses, SARS-CoV
and SARS-CoV-2.
UMB
has filed three separate patent applications on the resulting antiviral compounds and has granted the Company an exclusive worldwide
license to the technology. UMB recently filed the following PCT application claiming priority to the first two of the three applications:
Number
Priority
to
Publication
No.
Title
PCT App. No. PCT/US2020036482,
Int’l filing date 5/6/2020
US62/858,0710,
filed
6/6/2019, US62/909,352,
filed 2/10/2019
WO/2020/247860
Broad Spectrum Antiviral
Compounds Targeting the SKI Complex
KPC34
from Wake Forest University
Our
small molecule treatment for AML and ALL, developed at the Wake Forest University and called KPC34, is a next generation targeted
therapeutic designed to overcome multiple resistance mechanisms observed with the current standard of care.
Background
AML
is an uncommon cancer, making up about 1% of cancers. In 2020, an estimated 19,940 people of all ages (11,090 males and 8,850
females) in the United States were be diagnosed with AML. It is the second most common type of leukemia diagnosed in adults and
children, but most cases occur in adults. AML makes up 32% of all adult leukemia cases. AML can be diagnosed at any age, but it
is uncommon in people younger than 45. The average age of diagnosis is age 68. An estimated 11,180 deaths (6,470 men and boys
and 4,710 women and girls) from AML occurred in 2020. (https://www.cancer.net/cancer-types/leukemia-acute-myeloid-aml/statistics).
ALL is also a rare disease, making up only half of 1% of cancers diagnosed in the United States. In 2020, an estimated 6,150 people
of all ages (3,470 males and 2,680 females) in the United States were diagnosed with ALL. Most cases occur in children. In people
under age 20, ALL is the most common type of leukemia, accounting for 74% of all leukemia diagnosed in this age group. Children
younger than 5 have the highest risk of ALL. After a child grows into adulthood, the general risk of ALL rises again after age
50. About 4 out of every 10 people diagnosed with ALL are adults. An estimated 1,520 deaths (860 men and boys and 660 women and
girls) from ALL will occur this year. (https://www.cancer.net/cancer-types/leukemia-acute-lymphocytic-all/statistics).
5
KPC34
Technology Summary
KPC34,
a conjugate molecule made of a gemcitabine molecule linked to a phospholipid, has the following structure:
In
the illustration above, to the left of the dashed line is the phospholipid portion and to the right of the dashed line is gemcitabine.
Gemcitabine
is a chemotherapy drug used to treat a wide array of cancers, including breast cancer, ovarian cancer, non-small cell lung cancer,
pancreatic cancer and bladder cancer. The drug interferes with DNA and its function of the phospholipid to which the gemcitabine
is linked in KPC34, is to inhibit protein kinase C-type enzymes, which are involved in multiple signaling pathways in leukemia.
The
strategy behind targeting both DNA synthesis and protein kinase C with one molecule is to double-target different mechanisms of
action in leukemia cells and greatly reduce the possibility of development of resistance to the drug.
KPC34
is intended to treat the relatively small population of patients with AML and ALL. Because of the low patient population, FDA
orphan drug status can be sought, which provides expedited review and seven years of exclusivity from approval of the new drug
application.
Preliminary
data from preclinical studies at Wake Forest on the drug includes the following results:
●
kills
leukemia cells in vitro;
●
inhibits
protein kinase C in biochemical assays;
●
targets
ALL;
●
targets
central nervous system leukemia;
●
targets
AML exhibiting phosphorylated protein kinase C; and
●
KPC34
also appears to overcome resistance to gemcitabine; it is effective against gemcitabine-resistant cancer.
The
technology licensed is much broader than KPC34 represents, and includes both anticancer and antiviral conjugates, and could include
a much broader range of indications, but we have no such drug candidates in development other than KPC34.
6
KPC34
Patent Coverage
The
KPC34 license includes five issued patents, but only one of them covers KPC34. The patent is US7309696, entitled “Compositions
and methods for targeting cancer cells.” It expires on August 11, 2021. All five of the licensed patents will expire by
late 2022.
Licenses
On
April 12, 2018, CBM entered into a patent license agreement (the “UT Agreement”) with the University of Texas at Austin
on behalf of the Board of Regents of the University of Texas System. The UT Agreement granted to CBM an exclusive, royalty-bearing
license to certain patent applications related to nucleobase analogue derivatives and their applications, and specifically to
the DHA-dFdC drug candidate. On November 13, 2019, the University of Texas at Austin, the Company and CBM entered into an assignment
of agreement, whereby CBM assigned all of its rights, title and interest to, and obligations under the UT Agreement to the Company.
On
April 17, 2018, CBM entered into a license agreement (the “WF Agreement”) with Wake Forest University Health Sciences
(“WF”). The WF Agreement granted to CBM an exclusive, royalty-bearing license to WF’s and The University of
North Carolina at Chapel Hill’s patents relating to the KPC34 drug candidate. On November 13, 2019, WF, the Company and
CBM entered into an assignment of agreement, whereby CBM assigned all of its rights, title and interest to, and obligations under
the WF Agreement to the Company.
On
April 13, 2020, the Company executed a Master License Agreement (the “UMB License Agreement”) with UMB, pursuant to
which UMB agreed to license inventions collectively known as “Broad Spectrum Antiviral Compounds Which Target the SKI Complex”
(the “Inventions”) to the Company. The Inventions, which are covered by three patent applications on file with the
United States Patent and Trademark Office, are currently in the pre-clinical stage and seek to inhibit replication of multiple
viruses, including the Influenza virus, SARS-CoV, MERS-CoV, Ebolavirus and Marburg virus. In addition, the Company entered into
a Sponsored Research Agreement with UMB to support the development of various technologies. Pursuant to the UMB License Agreement,
UMB grants to the Company the ability to utilize the licensed products (“Licensed Products”) and patents associated
with the Inventions, subject to certain limitations described in the UMB License Agreement. All improvements to the Inventions
are solely owned by the party improving the Inventions, unless jointly made, in which case both parties jointly own the improvements;
however, the Company grants to UMB the royalty-free license to practice the Company’s improvements. The Company has agreed
to deliver to UMB a commercialization plan setting forth the Company’s plan for research and development required to develop
the Licensed Products and the Company’s overall commercialization strategy by December 31, 2022.
On
August 7, 2020, the Company entered into a fixed price agreement (the “Fixed Price Agreement”) with the University
of Kentucky Research Foundation (“UKRF”), pursuant to which the Company received an option to negotiate an exclusive
license with the UKRF for certain of its patents related to G4-1 for solid tumor treatment in exchange for $67,000. The research
shall involve testing of the drug G4-1 and its ability to increase the duration of survival of mice injected with tumor cells
relative to an FDA approved drug. The patents subject to the option do not expire until 2035.
Commercialization
Our
business success with our drug portfolio depends not only on the successful development and approval of the products but also
on the commercialization. At present, our plan anticipates us making the investments necessary to build an in-house marketing
and sales capability for the U.S. market for our drug pipeline, or to partner with a larger drug development company to commercialize
our drugs as they move through the FDA approval process. As our drug compounds make their way through clinical development in
the U.S., we intend to approach pharmaceutical and biotechnology companies outside the U.S. to negotiate and enter into strategic
partnerships that will enable development and commercialization of our platform outside the U.S., where we believe the market
opportunity is larger than that of the U.S. albeit far more complex to reach. We have no operations outside the U.S., nor are
we planning to have any non-U.S. operations.
7
Manufacturing
and Supply
We
do not have any manufacturing capabilities and therefore we will have to engage a third party to assist in manufacturing. Such
manufacturing will need to be done in accordance with good manufacturing practice requirements (“cGMP”) regulations,
to formulate and manufacture our product candidates. A list of third party manufacturers is currently being developed.
Government
Regulation
Governmental
authorities in the U.S. and other countries extensively regulate the research, development, testing, manufacture, labeling, promotion,
advertising, distribution and marketing of pharmaceutical products such as those being developed by us. In the U.S., the FDA regulates
such products under the FDCA and implements related regulations. Failure to comply with applicable FDA requirements, both before
and after approval, may subject us to administrative and judicial sanctions, such as a delay in approving or refusal by the FDA
to approve pending applications, warning letters, product recalls, product seizures, total or partial suspension of production
or distribution, injunctions and/or criminal prosecution.
U.S.
Food and Drug Administration Regulation
United
States Drug Development
In
the United States, the FDA regulates drugs, medical devices and combinations of drugs and devices, or combination products, under
the FDCA and its implementing regulations. Drugs are also subject to other federal, state and local statutes and regulations.
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign
statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable
U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant
to administrative or judicial sanctions. These sanctions could include, among other actions, the FDA’s refusal to approve
pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, requests for voluntary product
recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions,
fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial enforcement
action could have a material adverse effect on us.
The
process required by the FDA before a drug may be marketed in the United States generally involves the following:
●
completion
of extensive pre-clinical laboratory tests, animal studies and formulation studies in accordance with applicable regulations,
including the FDA’s Good Laboratory Practice regulations;
●
submission
to the FDA of an IND, which must become effective before human clinical trials may begin;
●
performance
of adequate and well-controlled human clinical trials in accordance with an applicable IND and other clinical study related
regulations, sometimes referred to as good clinical practices, or GCPs, to establish the safety and efficacy of the proposed
drug for its proposed indication;
●
submission
to the FDA of an NDA;
●
satisfactory
completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product, or components
thereof, are produced to assess compliance with the FDA’s cGMP requirements;
●
potential
FDA audit of the clinical trial sites that generated the data in support of the NDA; and
●
FDA
review and approval of the NDA prior to any commercial marketing or sale.
8
Once
a pharmaceutical product candidate is identified for development, it enters the pre-clinical testing stage. Pre-clinical tests
include laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies. An IND sponsor
must submit the results of the pre-clinical tests, together with manufacturing information, analytical data and any available
clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things,
the objectives of the initial clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to
be evaluated if the initial clinical trial lends itself to an efficacy evaluation. Some pre-clinical testing may continue even
after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns
or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day period. In such a
case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also
may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance, and may be imposed
on all drug products within a certain class of drugs. The FDA also can impose partial clinical holds, for example, prohibiting
the initiation of clinical trials of a certain duration or for a certain dose.
All
clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations.
These regulations include the requirement that all research subjects provide informed consent in writing before their participation
in any clinical trial. Further, an IRB must review and approve the plan for any clinical trial before it commences at any institution,
and the IRB must conduct continuing review and reapprove the study at least annually. An IRB considers, among other things, whether
the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits.
The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical
trial subject or his or her legal Representative and must monitor the clinical trial until completed.
Each
new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Protocols
detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria,
and the parameters to be used to monitor subject safety.
Human
clinical trials are typically conducted in three sequential phases that may overlap or be combined:
●
Phase
1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage
tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In
the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be
unavoidably toxic, the initial human testing may be conducted in patients.
●
Phase
2. Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily
evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and
schedule.
●
Phase
3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population
at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit
relationship of the product and provide an adequate basis for product labeling.
Post-approval
trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These studies are
used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances,
the FDA may mandate the performance of Phase 4 trials. Companies that conduct certain clinical trials also are required to register
them and post the results of completed clinical trials on a government-sponsored database, such as ClinicalTrials.gov in the United
States, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
9
Progress
reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA,
and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events, findings
from other studies that suggest a significant risk to humans exposed to the product, findings from animal or in vitro testing
that suggest a significant risk to human subjects, and any clinically important increase in the rate of a serious suspected adverse
reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed
successfully within any specified period, if at all. The FDA or the clinical trial sponsor may suspend or terminate a clinical
trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable
health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial
is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious
harm to patients. 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 provides authorization for whether a
trial may move forward at designated check points based on access to certain data from the study. The clinical trial sponsor may
also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.
Concurrent
with clinical trials, companies usually complete additional animal studies and must also develop additional information about
the chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities
in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the
product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and
purity of the final product. 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.
NDA
and FDA Review Process
The
results of product development, pre-clinical studies and clinical trials, along with descriptions of the manufacturing process,
analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of
an NDA for a new drug, requesting approval to market the product. The submission of an NDA is subject to the payment of a substantial
user fee, and the sponsor of an approved NDA is also subject to an annual program user fee; although a waiver of such fee may
be obtained under certain limited circumstances. For example, the agency will waive the application fee for the first human drug
application that a small business or its affiliate submits for review.
The
FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting
an NDA for filing. The FDA typically makes a decision on accepting an NDA for filing within 60 days of receipt. The decision to
accept the NDA for filing means that the FDA has made a threshold determination that the application is sufficiently complete
to permit a substantive review. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”),
the FDA’s goal to complete its substantive review of a standard NDA and respond to the applicant is ten months from the
receipt of the NDA. The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended
by FDA requests for additional information or clarification and may go through multiple review cycles.
After
the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product
is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMPs to assure and
preserve the product’s identity, strength, quality and purity. The FDA may refer applications for novel drug products or
drug products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes
clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and
under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations
carefully when making decisions. The FDA will likely re-analyze the clinical trial data, which could result in extensive discussions
between the FDA and us during the review process. The review and evaluation of an NDA by the FDA is extensive and time consuming
and may take longer than originally planned to complete, and we may not receive a timely approval, if at all.
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Before
approving an NDA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine
whether they comply with cGMPs. The FDA will not approve the product unless it determines that the manufacturing processes and
facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required
specifications. In addition, before approving an NDA, the FDA may also audit data from clinical trials to ensure compliance with
GCP requirements. After the FDA evaluates the application, manufacturing process and manufacturing facilities, it may issue an
approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing
information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete
and the application will not be approved in its present form. A Complete Response Letter usually describes all the specific deficiencies
in the NDA identified by the FDA. The Complete Response Letter may require additional clinical data and/or an additional pivotal
Phase 3 clinical trial(s), and/or other significant and time-consuming requirements related to clinical trials, nonclinical studies
or manufacturing. If a Complete Response Letter is issued, the applicant may either resubmit the NDA, addressing all the deficiencies
identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may ultimately
decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive,
and the FDA may interpret data differently than we interpret the same data.
There
is no assurance that the FDA will ultimately approve a product for marketing in the United States, and we may encounter significant
difficulties or costs during the review process. If a product receives marketing approval, the approval may be significantly limited
to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value
of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product
labeling or may condition the approval of the NDA on other changes to the proposed labeling, development of adequate controls
and specifications, or a commitment to conduct post-market testing or clinical trials and surveillance to monitor the effects
of approved products. For example, the FDA may require Phase 4 clinical trials to further assess drug safety and effectiveness
and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. The
FDA may also place other conditions on approvals, including the requirement for a risk evaluation and mitigation strategy (“REMS”),
to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS;
the FDA will not approve the NDA without an approved REMS, if required. A REMS could include medication guides, physician communication
plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization
tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or
dispensing of products. Product approvals may be withdrawn for non-compliance with regulatory requirements or if problems occur
following initial marketing.
Reimbursement
Potential
sales of any of our product candidates, if approved, will depend, at least in part, on the extent to which such products will
be covered by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations.
These third-party payors are increasingly limiting coverage and/or reducing reimbursements for medical products and services.
A third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate
will be approved. Further, one payor’s determination to provide coverage for a drug product does not assure that other payors
will also provide coverage for the drug product. In addition, the U.S. government, state legislatures and foreign governments
have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements
for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive
policies in jurisdictions with existing controls and measures, could further limit our future revenues and results of operations.
Decreases in third-party reimbursement or a decision by a third-party payor to not cover a product candidate, if approved, or
any future approved products could reduce physician usage of our products, and have a material adverse effect on our sales, results
of operations and financial condition.
In
the United States, the Medicare Part D program provides a voluntary outpatient drug benefit to Medicare beneficiaries for certain
products. We do not know whether our product candidates, if approved, will be eligible for coverage under Medicare Part D, but
individual Medicare Part D plans offer coverage subject to various factors such as those described above. Furthermore, private
payors often follow Medicare coverage policies and payment limitations in setting their own coverage policies.
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Healthcare
Laws and Regulations
Sales
of our product candidates, if approved, or any other future product candidate will be subject to healthcare regulation and enforcement
by the federal government and the states and foreign governments in which we might conduct our business. The healthcare laws and
regulations that may affect our ability to operate include the following:
●
The
federal Anti-Kickback Statute makes it illegal for any person or entity to knowingly and willfully, directly or indirectly,
solicit, receive, offer, or pay any remuneration that is in exchange for or to induce the referral of business, including
the purchase, order, lease of any good, facility, item or service for which payment may be made under a federal healthcare
program, such as Medicare or Medicaid. The term “remuneration” has been broadly interpreted to include anything
of value.
●
Federal
false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other things, any person
or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including
Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent.
●
Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”) created additional federal criminal statutes that
prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare
benefit program, including private third-party payors or making any false, fictitious or fraudulent statement in connection
with the delivery of or payment for healthcare benefits, items or services.
●
HIPAA,
as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their implementing regulations,
impose obligations on certain types of individuals and entities regarding the electronic exchange of information in common
healthcare transactions, as well as standards relating to the privacy and security of individually identifiable health information.
●
The
federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for
which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions,
to report annually to the Centers for Medicare & Medicaid Services information related to payments or other transfers
of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their
immediate family members.
Also,
many states have similar laws and regulations, such as anti-kickback and false claims laws that may be broader in scope and may
apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. Additionally,
we may be subject to state laws that require pharmaceutical companies to comply with the federal government’s and/or pharmaceutical
industry’s voluntary compliance guidelines, state laws that require drug manufacturers to report information related to
payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, as well as state
and foreign laws governing the privacy and security of health information, many of which differ from each other in significant
ways and often are not preempted by HIPAA.
Additionally,
to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws.
Employees
As
of December 31, 2020, we have four full-time employees and one part-time employee, none of which are represented by a labor union
or covered by a collective bargaining agreement.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.