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. Our innovative
therapeutic drug pipeline is being advanced through strong collaborations with 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), accumulates preferentially in pancreatic tissue, 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. A phase I clinical trial on the next-generation dual-action PRRT we licensed is also currently underway. The technology
was developed under the direction of Dr. Neil Bander, Professor of Urologic Oncology at Weill Cornell Medicine.
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.”
1
O ur 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 is designed to overcome 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 tissue 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. The Hirschberg Foundation for Pancreatic Cancer estimated in January 2021 that
60,430 Americans would be diagnosed with pancreatic cancer, and more than 48,220 would 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 vivo (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
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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 clinically relevant transgenic mouse
models. 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 purity. We have also developed a new procedure for producing large-scale
quantities of the key chemical intermediate in the synthesis. We are currently optimizing the procedure to ensure that DHA-dFdC can be
produced on the same scale as the intermediate. Once we confirm successful large-scale production, we plan to begin DHA-dFdC formulation
development, which will require limited animal testing to determine proper dosage and will require us to engage a contract research organization
for the purpose of such animal testing.
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 .
Portions of the published date 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.
3
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, the National Stage Entry of App. Serial No. 15/115,393, filed 7/29/2016
1/29/2014
N/A
Nucleobase Analogue Derivatives and Their Applications
U.S. Patent No. 11,219,633, issued
1/11/22 from App. Serial No. 16/576,127, filed 9/19/2019 as continuation of App. Serial No. 15/115,393, filed 7/29/2016
1/29/2014
5/28/2035
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 7/29/2016
1/29/2014
10/07/2035
Nucleobase Analogue Derivatives and Their Applications
U.S. App. Serial No. 17/539,682,
filed 12/1/2021 as continuation of App. Serial No. 16/576,127, filed 9/19/2019
1/29/2014
Nucleobase Analogue Derivatives and Their Applications
PCT App. No. PCT/US2020036603, filed
06/08/2020
6/06/2019
N/A
Lipid Nanoparticles Containing Pharmaceutical and/or Nutraceutical agents
and methods thereof
U.S. App. Serial No. 16/895,201,
filed 6/8/2020
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. Several candidate compounds with optimized chemical structures
have been identified and will be tested in vivo in clinically relevant mouse coronavirus models.
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 and 2021, the virus spread around the world with over 419 million cases and over 5.8 million
deaths confirmed worldwide by February 2022.* 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.
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
4
The year 2020 saw 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 over 419 million people and killed over 5.8 million people worldwide, with over 900,000 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 6/5/2020
US62/858,071, filed
6/6/2019, US62/909,352,
filed 10/2/2019
WO/2020/247860
Broad Spectrum Antiviral Compounds Targeting the SKI Complex
U.S. Serial No. 17/616,586, filed
12/3/2021
US62/858,071, filed
6/6/2019, US62/909,352,
filed 10/2/2019
Broad Spectrum Antiviral Compounds Targeting the SKI Complex
PCT Appl. No. PCT/US2021/06183
Int’l filing date 12/3/2021
U.S. 63/121,120, filed 12/3/2020
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 2021, an estimated 20,240 people of all ages (11,230 men and boys and 9,010 women and girls)
in the United States will be diagnosed with AML. AML is the second most common type of leukemia diagnosed in adults and children, but
most cases occur in adults. AML makes up 31% of all adult leukemia cases. The average age of diagnosis is age 68. AML can be diagnosed
at any age. An estimated 11,400 deaths (6,620 men and boys and 4,780 women and girls) from AML will occur this year. The majority will
be in adults. (https://www.cancer.net/cancer-types/leukemia-acute-myeloid-aml/statistics). ALL is a rare disease, making up less than
1% of cancers diagnosed in the United States. In 2021, an estimated 5,690 people of all ages (3,000 men and boys and 2,690 women and
girls) in the United States will be diagnosed with ALL. A person of any age can be diagnosed with ALL, but most cases occur in children.
In children and teens 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 1,580 deaths (900 men and boys and 680 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 the 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;
● Wake
Forest claims KPC34 targeted gemcitabine alone or cytarabine (another chemo drug) alone;
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 additional anticancer and antiviral conjugates, and could include a much broader range of indications,
but we have no such drug candidates in development. KPC34 Patent Coverage
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 expired on August 11, 2021. All five of the licensed patents will expire by late 2022, and no continuation applications will be filed.
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.
6
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, which is currently in progress, involves 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.
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 cGMP 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.
7
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.
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.
8
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.
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.
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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.
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.
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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, 2021, 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.