Entera Bio Ltd. 10-K

ITEM 1. BUSINESS Overview Entera is a clinical stage company focused on developing first-in-class oral tablet formats of peptides or protein replacement therapies. We focus on underserved, chronic medical conditions for which oral administration of a protein therapy has the potential to significantly shift a treatment paradigm. Our pipeline includes five differentiated, first-in-class oral peptide programs targeting PTH(1-34), GLP-1 and GLP-2: Currently, most protein therapies are administered via frequent intravenous, subcutaneous or intramuscular injections. In chronic diseases where patients require persistent management, these cumbersome, often painful and high-priced injections can create a major treatment gap. From a technical standpoint, oral delivery of therapeutic proteins is challenging due to the enzymatic degradation within the gastrointestinal tract and poor absorption into the blood stream due to the protein’s polarity and molecular weight. We leverage our N-Tab™ platform, which is designed to simultaneously stabilize the peptide in the gastrointestinal tract and promote its absorption into the bloodstream. 7 EB613 Program Our most advanced product candidate, EB613, oral PTH(1-34), is being developed as the first oral, osteoanabolic (bone building) once-daily tablet treatment for post-menopausal women with low bone mineral density (“BMD”) and high-risk osteoporosis. Anabolic drugs are indicated for the treatment of very high-risk osteoporosis patients as first line therapy and as second line treatment in osteoporosis patients who cannot tolerate or progress on other osteoporosis drugs. Despite the superior efficacy of anabolic drugs, existing treatments require daily or monthly subcutaneous injections and are used in a minority of very high-risk patients. EB613 is intended to provide an oral anabolic treatment earlier in an osteoporosis patient’s journey to increase skeletal mass, reduce the risk of fracture and consequently limit the progression of the disease, and its associated disability and mortality. A placebo controlled, dose ranging Phase 2 study of EB613 tablets (n= 161) met primary (pharmacodynamic/bone turnover biomarker) and secondary endpoints (BMD). The highest EB613 oral PTH tablet dose (2.5 mg), produced an increase in markers of bone formation while simultaneously decreasing the markers of bone breakdown. Significant gains in bone mineral density of the spine and hip were observed at the end of the 6-month study and there were no significant safety concerns. In April 2024, the phase 2 data was published in the Journal of Bone and Mineral Research (JBMR). Regulatory Background Initial approvals of drugs for the treatment of osteoporosis have required a placebo-controlled trial demonstrating reduction in the risk of fractures as the primary outcome measure in women with postmenopausal osteoporosis. The regulatory requirement for using fracture as the primary efficacy endpoint is challenging due to the patient types who would need to be studied: (1) very high risk patients may be randomized to placebo in a clinical trial, which poses an ethical concern; and (2) evaluation of moderate risk patients would require a very large sample size to evaluate treatment effectiveness. The last drug approval for osteoporosis occurred in 2019. In the United States, the Foundation for the National Institute of Health-American Society for Bone and Mineral Research-Study to Advance BMD as a Regulatory Endpoint (FNIH-ASBMR-SABRE, previously known as the FNIH-Bone Quality Project [FNIH-BQP], hereinafter SABRE) was launched in 2013. This initiative was established as a public-private partnership with the Federal Drug Administration (FDA) to study whether change in BMD at the lumbar spine, total hip or femoral neck in a placebo-controlled trial of an osteoporosis drug was predictive of vertebral, nonvertebral, hip and all clinical fracture risk reduction. SABRE aims to change the framework for how clinical trials of new anti-osteoporosis drugs are conducted and to promote innovation in the field of osteoporosis. The FNIH-ASBMR-SABRE working group obtained treatment group-level and patient-level BMD and fracture incidence data from the sponsors of most of the approved osteoporosis drug treatments including individual patient data from 53 clinical trials covering 176,750 individuals across seven osteoporosis drug classes (Black et al., 2020; Eastell et al., 2022; Vilaca & Eastell, 2024). Based on a meta-regression analysis to assess the relationship between change in total hip BMD (active-placebo) and the anti-fracture effect in randomized clinical trials for each fracture type, the SABRE group demonstrated that treatment-related change in total hip BMD is best associated with fracture reduction. Following Type C and Type D meetings with the FDA in March 2023, we announced the FDA’s concurrence that a 2-year, placebo-controlled phase 3 (registrational) study with Total Hip BMD as primary endpoint could support a new drug application (“NDA”) for EB613; however the SABRE BMD endpoint remained unqualified as a surrogate endpoint by FDA at that time. In November 2023, the ASBMR announced that the SABRE project team had submitted its full qualification plan to the FDA for the use of BMD as a surrogate endpoint for fractures in future trials of new anti-osteoporosis drugs. In March 2024, the ASBMR announced that the FDA had communicated to the SABRE project team that a ruling to qualify the treatment-related change in bone mineral density (BMD) as a surrogate endpoint for fractures in future trials of new anti-osteoporosis drugs would be provided within 10 months. The EB613 osteoporosis clinical program has been developed under the auspices of this new approach to osteoporosis drug development. We believe EB613 stands as the first program to potentially avail itself of the ASBMR-SABRE BMD endpoint. SABRE is expected to provide an update on its FDA interactions and the qualification of the BMD endpoint in 2025. 8 EB612 Program Our product candidate, EB612, is being developed as the first oral PTH(1-34) tablet peptide replacement therapy for patients with hypoparathyroidism. With respect to our EB612 program, we are currently testing new generations of our N-Tab™ Technology with the naked PTH(1-34) peptide to assess the effectiveness of once or twice a day dosing regimens, as well as collaborating with a third party on another peptide in this field. In June 2024, Phase 1 clinical data for EB612 was presented at the Endocrine Society ENDO 2024 Annual Meeting. The data reported from this Phase 1 clinical study include pharmacokinetic (PK), pharmacodynamic (PD) and safety results from the application of a new generation of Entera’s N-Tab™ technology platform and EB612, the active peptide fragment 1-34 of the N-terminal region of human parathyroid hormone (teriparatide) dosed twice a day (BID). Significant systemic exposure was reported following both administrations of EB612 tablets. Aside from positive PK measures, sustainable PD effects were reported, including serum levels of calcium (albumin corrected), phosphate, and 1,25(OH)2-Vitamin D (reaching +3.9%, -20.8%, and +73.2% change on average from baseline, respectively) and decreased endogenous serum PTH(1-84) (reaching -43.0% change on average from baseline). There were no treatment-emergent Adverse Events of hypercalcemia reported. There were no treatment-emergent Serious AEs. The only Study Drug-Related AE was mild headache, reported in two out of fifteen subjects. No significant findings were observed in blood and urine lab tests. All vital signs were within the normal range. To date, Entera’s proprietary PTH tablets have been safely administered to a total of 102 healthy subjects in Phase 1 studies and 153 patients in Phase 2 studies in osteoporosis and hypoparathyroidism, two diseases that remain underserved with the current standard of care and which disproportionately affect women. We believe these product candidates, if approved, hold the potential to become standards of care for patients with osteoporosis and hypoparathyroidism. Our ability to deliver our oral PTH(1-34) peptide in a simple tablet format with reproduceable, dose dependent pharmacokinetics and rapid biological responses across gender, age, and health status was highlighted as part of two poster sessions at the ASBMR 2023 Annual Meeting. We believe our work to date has built the foundation for our oral PTH(1-34) tablets to potentially treat diverse patient populations, including younger men and women athletes at risk of stress fractures. Oral GLP-2 and Oral GLP-1/Glucagon Programs in Collaboration with OPKO Health Oral GLP-2 In May 2023, the results from our oral glucagon-like-peptide 2 (GLP-2) program were published in the International Journal of Peptide Research and Therapeutics, “Oral Delivery Technology Enabling Gastro-Mucosal Absorption of Glucagon-Like-Peptide-2 Analog (Teduglutide, Gattex®) - A Novel Approach for Injection-Free Treatment of Short Bowel Syndrome.” We believe GLP-2 represents a strong candidate for our N-Tab™ technology and warrants further development as an injection-free alternative to patients suffering from short bowel syndrome and other gastrointestinal disorders where GLP-2 plays a role. In September 2023, we entered into a research collaboration agreement (the “2023 Collaboration Agreement”) with OPKO Biologics, Inc., a subsidiary of OPKO Health, Inc. (“OPKO”). Under the terms of this agreement, OPKO has agreed to supply its proprietary long-acting GLP-2 peptide and certain Oxyntomodulin (OXM) analogs for the development of oral tablet candidates using our proprietary N-Tab™ technology. In March 2024, we announced positive in vivo pharmacokinetic (PK) results from our collaborative research, combining a proprietary long acting GLP-2 agonist developed by OPKO with Entera’s proprietary N-Tab™ technology. The program is focused on developing the first GLP-2 peptide tablet alternative for patients suffering from short bowel syndrome and additional disorders involving mucosal inflammation and nutrient malabsorption. Currently, the only approved GLP-2 agonist, which is marketed under the name Gattex® (teduglutide), requires daily sub-cutaneous injections. Zealand Pharma and Ironwood are developing long acting GLP-2 therapies requiring once and twice weekly injections. Entera and OPKO completed a proof of concept (PoC) single dose pharmacokinetic study in rodents. Oral GLP-2 tablets exhibited significant systemic exposure. Furthermore, plasma levels achieved with the oral tablet form of the GLP-2 analogue were about 10-fold higher than therapeutic plasma concentrations reported for subcutaneously administered teduglutide (Gattex® label). The pharmacokinetic analysis of the data obtained following the IV injections of the GLP-2 peptide showed the plasma half-life in rats to be about six times longer than the half-life reported for teduglutide in the same animal model. This data is consistent with previously reported PK data relating to OPKO’s GLP-2 peptide’s long-acting profile, which had initially been developed as a weekly subcutaneous injection. Given the challenging compliance rates attributed to injectable GLP-2 therapy and heterogeneity of SBS patients, we believe a daily tablet format may address a significant unmet need in treating and titrating SBS patients more effectively than injectable alternatives. 9 Oral GLP-1/Glucagon OXM is a naturally occurring GLP-1/Glucagon dual agonist peptide hormone found in the small intestine that acts to suppress appetite, induce weight loss and has additional cardioprotective and anti-fibrotic attributes. The program is focused on developing the first oral dual agonist GLP-1/Glucagon peptide as a potential once-daily tablet treatment for patients with obesity and metabolic disorders using the N-Tab™ platform. Currently, there are no approved dual GLP-1/Glucagon agonists available. OPKO previously reported that weekly injections of pegylated OXM demonstrated significant weight loss and reduction in HbA1, triglyceride and cholesterol levels in 113 obese and diabetic patients in a Phase 2B study. The OXM agonist peptide (OPK-88006) is a GLP-1/Glucagon dual agonist peptide that has been modified to maintain its long-acting profile while increasing its potential potency. The program combines OPKO’s (OPK-88006) and Entera’s proprietary N-Tab™ technology. In September 2024, we jointly announced with OPKO topline pharmacokinetic/pharmacodynamic (PK/PD) results for the OXM program. Oral OXM exhibited significant systemic exposure across two in vivo models, a favorable PK profile and bioavailability. The high plasma concentrations with prolonged systemic exposure were consistent with the reported half-life for semaglutide (Rybelsus®), the only approved oral GLP-1 analog. Oral OXM showed a statistically significant reduction in plasma glucose levels compared with placebo. Additionally, in March 2025, we entered into a collaboration and license agreement with OPKO (the “2025 Collaboration Agreement”) with respect to the preclinical and clinical development and decision making related to the Oral OXM program for the treatment of obesity, metabolic and fibrotic disorders in humans. For additional information, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—License and Collaboration Agreement with OPKO, contained in this Annual Report. Given the scarcity of oral peptide treatments and potential safety challenges attributed to small molecule approaches, we believe Oral OXM may address a significant number of patients suffering from chronic metabolic diseases. We plan to file an Investigational New Drug application with the FDA later this year. Our Strategy Our goal is to develop first-in-class oral peptides and protein replacement therapies for underserved, chronic medical conditions for which a tablet treatment has the potential to significantly shift a treatment paradigm. We are developing our product candidates to potentially become the first oral, daily tablet peptide or protein replacement therapies designed for patients to live injection-free as they actively manage their chronic diseases. We aspire to continue to validate our platform across a variety of additional high value therapeutic proteins. Our strategy to achieve these goals includes: • Advancing EB613, Potentially the First Daily Anabolic PTH(1-34) Tablet Treatment into Phase 3 for the Treatment of Post-Menopausal Women with Low Bone Mass and Osteoporosis : Our six-month placebo-controlled Phase 2 double-blind, dose-ranging trial of EB613 in 161 patients with low bone mass and osteoporosis met both primary and secondary endpoints was selected for oral presentation at the ASBMR annual conference in 2021 and published at JBMR in March 2024. Based on the outcomes of our FDA meetings, we believe that EB613 may be the first osteoporosis program to be permitted by FDA to pursue a placebo controlled, BMD endpoint registrational Phase 3 study to support an NDA. We view this potential outcome as testament to the treatment gap and unmet need for a viable alternative to treat the millions of osteoporosis patients who, despite current guidelines and availability of highly efficacious injectable anabolic agents, remain undertreated. We are preparing to initiate a Phase 3 registrational study for EB613 pursuant to the FDA’s qualification of a quantitative BMD endpoint, which we currently expect to occur in 2025. 10 • Advancing the First Daily PTH(1-34) Peptide Replacement Tablet Therapy for the Treatment of Hypoparathyroidism: In 2015, we successfully completed a Phase 2a four-month trial in 19 patients with hypoparathyroidism which demonstrated clinical benefit, including a statistically significant reduction in calcium supplementation, maintenance of calcium levels above the lower target level for Hypoparathyroidism patients (>7.5 mg/dL) throughout the study and statistically significant rapid decline in median serum phosphate levels two hours following the first dose, which was maintained for the duration of the study. The FDA and the European Medicines Agency (“EMA”) have granted EB612 orphan drug designation for the treatment of hypoparathyroidism. With respect to our EB612 program, we are currently testing new generations of our N-Tab™ Technology with the naked PTH(1-34) peptide to assess the effectiveness of once or twice a day dosing regimens. In addition, we continue to collaborate productively with a third party on the oral tablet development of another PTH replacement treatment for hypoparathyroidism. • Identifying and Developing Potentially High Value Oral Peptides in Collaboration with Strategic Partners such as our Oral GLP-2 and Oxyntomodulin (Oral GLP-1/Glucagon ) Programs with OPKO: We intend to leverage our N-Tab™ platform by applying it to the development of additional, currently approved injectable peptides and therapeutic proteins with known mechanisms of action and established safety profiles. We believe this will allow us to advance our product candidates more efficiently and predictably through the research and clinical development cycle. For example, in collaboration with OPKO, we are focusing on the development of the first oral OXM, a dual targeted GLP1/glucagon peptide, in tablet form for the treatment of metabolic disorders and the first oral GLP-2 peptide tablet as an injection-free alternative for patients suffering from rare malabsorption conditions, such as short bowel syndrome. Both these peptides have well characterized pre-clinical PK/PD and toxicology. • Establishing Select Global and Regional Development and Commercial Partnerships : Our N-Tab™ Technology platform and intellectual property are designed to generate a pipeline of product candidates across various therapeutic indications. We intend to explore opportunities to diversify and shorten the preclinical and clinical development of these candidates in a capital-efficient manner, including selectively pursuing research and clinical development partnerships with biopharmaceutical companies with specific domain expertise as well as with biopharmaceutical companies with proven commercial footprints to de-risk our late-stage programs. PTH Parathyroid hormone (PTH) is an 84-amino acid hormone that regulates calcium and phosphate homeostasis and bone metabolism in the body. In healthy individuals, PTH is generally produced at very low basal levels, at a blood concentration of 15 - 25 pg/mL. On top of the basal PTH levels, there are physiological pulses two to three times per day that result in transient increases in PTH levels reaching up to 65 pg/mL. The changes in PTH secretion are in response to ionized calcium concentrations in the blood resulting from the entry of calcium from nutrients in the intestine and resorption of calcium from bone. PTH in Osteoporosis The effects of PTH on bone depends on the duration of exposure. The physiological pulses help encourage bone turnover through activation of both osteoblasts and osteoclasts, the two main types of cells responsible for bone remodeling. In the absence of adequate parathyroid function producing these pulses, it is difficult for the body to regulate homeostatic processes, and osteoporosis may ensue. The synthetic analog of PTH, human parathyroid hormone (1-34) peptide, Forteo ® (teriparatide), has been approved in the United States and the EU (Forsteo ® ) and has been a mainstay anabolic (bone forming) therapy for the treatment of osteoporosis patients since 2002 and 2003, respectively. Forteo® requires a daily subcutaneous injection. EB613: First Daily Osteoanabolic Tablet Treatment for the Treatment of Osteoporosis EB613 is the first once daily PTH (1-34, teriparatide) tablet treatment, and has the same amino acid sequence as Forteo ® (teriparatide daily subcutaneous injection), a leading anabolic agent which has been marketed for 23 years, and achieved peak annual sales of $1.7 billion prior to patent expiration in 2018. Osteoporosis is a disease characterized by low bone mass and structural deterioration of bone tissue, which leads to greater fragility of bones and an increase in fracture risk. Osteoporosis is a serious condition that can result in pain, permanent disability, loss of independence and often death. One in three women over age 50 will develop osteoporosis, and one in two women aged 50 and older will develop an osteoporosis-related fracture. 11 Osteoporosis is most frequently associated with menopause in women, aging in both women and men and glucocorticoid steroid use (greater than three months). The bone remodeling cycle can be separated into two distinct processes: (i) bone resorption, where cells called osteoclasts function in the resorption of mineralized tissue; and (ii) bone formation, where cells called osteoblasts are responsible for bone matrix synthesis and subsequent mineralization of the bone. In healthy individuals, bone resorption is matched by new bone formation. Osteoporosis develops as the balance between bone resorption by osteoclasts and bone formation by osteoblasts is not maintained, and not enough bone tissue is formed, leading to frail and fracture-prone bones. Prevalence The Bone Health & Osteoporosis Foundation estimates that approximately 10 million Americans have osteoporosis and that an additional 44 million have low bone mass. More than two million osteoporosis-related fractures occur annually in the United States, and more than 70% of these occur in women. In U.S. women 55 years of age and older, the hospitalization burden, including hospital costs of osteoporotic fractures, is greater than that of myocardial infarction, stroke, or breast cancer. Furthermore, it estimated that the number of fractures in the United States due to osteoporosis will rise to three million by 2025, resulting in an estimated $25.3 billion in costs each year. Worldwide, osteoporosis affects an estimated 200 million women, according to the International Osteoporosis Foundation (the “IOF”) and causes more than 8.9 million fractures annually, which is equivalent to an osteoporotic fracture occurring approximately every three seconds. The IOF has estimated that 1.6 million hip fractures occur worldwide each year, and by 2050 this number could reach between 4 to 6 million. The IOF estimates that, in Europe alone, the annual cost of osteoporotic fractures could surpass €76 billion by 2050. Current Osteoporosis Treatment Paradigm The goal of pharmacological treatment of osteoporosis is to maintain or increase bone mass and strength and to prevent fractures throughout a patient’s life. It is critical to identify patients who have significant bone loss. Pharmacologic therapy is strongly recommended for patients with a BMD T-score of -2.5 or lower in the spine, femoral neck, total hip, or 1/3 radius. Current osteoporosis drugs may be divided into two categories: antiresorptive and anabolic. Drugs that inhibit bone resorption (or bone degradation) include oral and injectable options such as estrogen (for postmenopausal women), oral and intravenous bisphosphonates, selective estrogen receptor modulators (SERMs), the RANK-ligand inhibitor (denosumab) and (salmon) calcitonin. According to the American Association of Clinical Endocrinology (AACE) 2020 Guidelines, injectable anabolic agents, such as teriparatide, abaloparatide or romosozumab, can be considered as an initial therapy for patients who are at very high fracture risk (which include women who have had multiple vertebral fractures or hip fractures and high-risk patients who have very low T-scores), and who have had an inadequate response to antiresorptive therapies. For patients undergoing treatment, stable or increasing BMD at the spine and hip indicates a satisfactory response. The three currently approved osteoanabolic drugs that stimulate bone formation all require daily or monthly subcutaneous injections: teriparatide (PTH(1-34) ), Forteo®); abaloparatide (a PTH-related protein analog, Tymlos®)); and romosozumab (an antibody that inhibits sclerostin and also inhibits bone resorption, Evenity®). It is estimated that less than 10% of currently treated osteoporosis patients agree to injectable osteoanabolic treatment despite guideline recommendations, their efficacy versus the anti-resorptives and the approval of lower cost generics. There are currently no FDA-approved oral anabolic treatments for osteoporosis. EB613 is positioned to potentially be the first, once daily osteoanabolic tablet treatment for women with high-risk post-menopausal osteoporosis. 12 Phase 1 Safety, PK and PD Data for Oral PTH(1-34) Tablet Programs Our Oral PTH(1-34) tablet candidates, including EB613 and EB612, have been administered collectively to a total of 102 healthy subjects in three Phase 1 studies. In the first two cohorts of a 2023 phase 1 study evaluating the current EB613 formulation, Forteo and new formulations for EB613 and EB612, 30 healthy subjects were administered various doses (PTH(1-34) 1.5 mg – 2.5 mg) and regimens (QD or BID) of oral PTH. No drug-related severe adverse events (SAEs) were reported, and four subjects reported four mild adverse events (AEs) of nausea (N=1), palpitation (N=1), and headache (N=2). These AEs are consistent with those reported with injectable PTH analogs. 13 Across Phase 1 studies, the PK profile of EB613 daily tablets was characterized by a rapid increase in plasma PTH(1-34) levels, with peak concentrations of the drug observed within 30 minutes after dose, and a rapid decline thereafter. The blood half-life of PTH(1-34) in humans is less than five minutes (see Forteo® USPI). Due to this very short elimination time and a short absorption phase, PTH(1-34) levels decrease below limit of quantitation within two hours after drug administration. As a result, no drug accumulation is expected with once daily tablet dosing. EB613 Phase 2 Study in Post-Menopausal Women with Low Bone Mass and Osteoporosis The Phase 2 clinical trial of EB613 was a dose-ranging, placebo-controlled, double-blind study in 161 postmenopausal women with osteoporosis or low BMD conducted at four leading medical centers in Israel. The trial evaluated 0.5 mg to 2.5 mg daily tablets on BMD, pharmacodynamic bone markers, including P1NP and Osteocalcin-bone formation markers, CTX - a bone resorption marker, and various safety endpoints. Safety The most common drug-related AEs reported were headache, nausea, dizziness and presyncope. There were no treatment emergent hypercalcemia adverse events, and serial serum chemistry evaluations found no increase in mean calcium or changes in calcium exceeding predefined limits in patients treated with EB613 2.5 mg daily tablets. 14 There were no reported drug-related SAEs. All adverse events were mild or moderate in intensity. Bone Biomarkers (PD Effect) The primary bone biomarker endpoint of the Phase 2 clinical study—change in P1NP at Month 3—was met. Statistically significant increases were observed in P1NP (key anabolic marker) at Month 1 (p<0.001), Month 2 (p<0.005) and Month 3 (p<0.05) for the 2.5 mg EB613 dose group. Similar to the increase in P1NP, a significant increase in Osteocalcin was also observed in the 2.5 mg group after 3 months (P <0.01). A statistically significant decrease also occurred in Serum CTX (marker of resorption) from baseline to Month 6 (p<0.01). The decrease in bone resorption (CTX) resulting from EB613 daily tablets was unanticipated based on historical results from subcutaneously daily injectable PTH, Forteo®; and indicates a potential dual mechanism of action for EB613 which seems to induce bone formation and decrease bone resorption, with a lower rate of bone turnover. Bone Mineral Density Dose-related changes in BMD were also observed at the total hip (TH), femoral neck (FN) and lumbar spine (LS) locations with a linear regression showing a statistically significant dose response at all sites; TH (p=0.008), FN (p=0.001), and LS (p<0.0001). Increases in TH (2.07%) and FN (2.92%) BMD in the 2.5 mg EB613 daily tablet titrated group were greater than those previously reported with Forteo® at six months (0.1% and 0.3%) (Leder, 2015). The increases in proximal femoral BMD (TH and FN) and cortical bone after six months of EB613 daily tablet treatment were unanticipated given that the reported subcutaneous Forteo® injection increases are typically small and not significant at six months. 15 The results of the Phase 2 study supported the selection of the 2.5 mg dose with a titration regimen to be used in the proposed pivotal Phase 3 study of EB613. FDA End of Phase 2 Meetings (EOP2) After successful completion of the Phase 2 dose ranging study of EB613, we held an end-of-Phase 2 meeting at the end of 2021 with the FDA to discuss various aspects of our nonclinical and clinical development plan. The meeting focused on the potential use of a 12-month non-inferiority head-to-head study versus Forteo® phase 3 study design to support an NDA under the 505(b)(2) regulatory pathway. We requested an additional EOP2 meeting with the FDA to seek agreement on the specifications and control of the drug substance, drug product and excipients to support the Phase 3 study and eventual product registration. The meeting request was granted, and we received a written response from the FDA towards the end of the first quarter of 2022, confirming that the specifications for the drug substance, excipients and drug product appear reasonable and that final determination on the adequacy of the proposed excipients and drug product specification will be made during the NDA review. The FDA also provided guidance regarding the proposed process scale-up, process qualification approach and stability plan for EB613. Early in the first quarter of 2022, Entera received additional EOP2 minutes from the FDA, suggesting that a non-inferiority head-to-head study versus Forteo® Phase 3 design may not be favorable to the success of the program and potential approvability of EB613 given EB613’s PK profile, PD (biomarker) profile and BMD outcomes from the phase 2. The FDA also commented on a possible exploration of a placebo-controlled phase 3 study and a potential Total Hip (TH) BMD endpoint given recently published 24-month Surrogate Threshold Effects (STEs) by the SABRE project team that are considered associated with fracture risk reduction and the SABRE ongoing qualification process with FDA of the BMD endpoint as a surrogate for fracture. 16 FDA Type C Meeting In October 2022, we announced the successful conclusion of our Type C meeting with the FDA and the FDA’s concurrence that a single Phase 3 placebo-controlled study with a BMD endpoint could support a NDA submission of EB613. The FDA also agreed (i) that TH BMD could serve as the primary endpoint for the registrational study of EB613 in post-menopausal women patients diagnosed with osteoporosis, (ii) with the proposed 2:1 randomization (EB613 vs. placebo) design and (iii) that 400 patients exposed to EB613 would be sufficient to support both the safety and efficacy assessments for the NDA. Furthermore, the FDA agreed with our proposed enrollment of post-menopausal women diagnosed with osteoporosis based on a BMD T-score of ≤-2.5 to -3.0 and no major fracture history. This patient population is consistent with that studied during our Phase 2 six-month dose ranging study of EB613, which met all primary and key secondary endpoints of biochemistry and BMD. FDA Type D Meeting In February 2023, we announced that a Type D meeting protocol review had been accepted by the FDA to provide responses by March 30th, 2023. The pivotal, Phase 3 study protocol is entitled “A 24-Month Phase 3, Randomized, Double-Blind, Global Multicenter Study Comparing the Effects of Oral PTH(1-34) (EBP05[EB613]) Daily Tablets vs. Placebo on Bone Mineral Density (BMD) in Postmenopausal Women with Osteoporosis.” The objective of the Type D meeting review was to confirm that the protocol met the FDA’s expectations, including the analysis of the primary endpoint and the population PK evaluations, ahead of potential initiation of the Phase 3 study. In April 2023, we reported that the FDA would not be opposed to Entera initiating the Phase 3 study under the proposed SABRE endpoint and that the Company’s proposed PK sampling scheme seemed reasonable. On the same day, we announced that we plan to continue our dialogue with the FDA and await the final qualification of the SABRE criteria and their guidance on the statistical evaluation of our BMD endpoint before initiating a Phase 3 study for EB613. In November 2023, we announced that the SABRE project team has submitted to the FDA its full qualification plan to use the treatment-related change in BMD as a surrogate endpoint for fractures in future trials of new anti-osteoporosis drugs. BMD is the first surrogate endpoint undergoing qualification by the FDA under the 21st Century Cures Act which was signed into law on December 13, 2016, to help accelerate medical product development and bring new innovations and advances to patients who need them faster and more efficiently. In March 2024, ASBMR announced that the FDA had communicated to the SABRE project team that a ruling to qualify the treatment-related change in bone mineral density (BMD) as a surrogate endpoint for fractures in future trails of new anti-osteoporosis drugs would be provided within 10 months. In September 2024, we presented new comparative pharmacological data for EB613 at the ASBMR 2024 Annual Meeting in Toronto. An update on FDA’s potential the qualification of BMD as a surrogate endpoint for fractures in future trials of new anti-osteoporosis drugs by SABRE is expected in 2025. EB612: First Daily PTH Replacement Therapy Tablets for the Treatment of Hypoparathyroidism Hypoparathyroidism is a rare condition in which the body either fails to produce sufficient amounts of PTH or the PTH produced lacks normal biologic activity. Individuals with a deficiency of parathyroid hormone may exhibit hypocalcemia and hyperphosphatemia. Hypocalcemia can cause weakness, muscle cramps, excessive nervousness, headaches and uncontrollable twitching and tetany. Hyperphosphatemia can result in soft tissue calcium deposition, which may lead to severe issues, including damage to the circulatory and central nervous systems. In contrast to osteoporosis, longer persistence of PTH in plasma is a desirable property for the treatment of hypoparathyroidism. Here, hormone replacement therapy is warranted. Prevalence It is estimated that hypoparathyroidism affects approximately 200,000 people across the United States, the European Union and Japan, with approximately 43% of cases characterized as mild, 39% characterized as moderate, and 18% characterized as severe. 17 Limitations of current treatments for hypoparathyroidism Historically, the treatments for hypoparathyroidism have been calcium supplements, vitamin D supplements and phosphate binders. Although calcium and vitamin D can help alleviate hypocalcemia, their chronic use can result in many serious side effects. Hypoparathyroid patients often need to take large doses of calcium throughout the day in order to maintain serum calcium near the lower limit of the normal range. Moreover, ordinary vitamin D is generally insufficient, as the body cannot produce adequate quantities of 1,25-dihydroxy vitamin D, the active hormone derived from vitamin D. Drugs like calcitriol and alfacalcitol must often be prescribed to stimulate calcium absorption. If excess calcium is absorbed, it then falls upon the kidneys to dispose of excess calcium. Endogenous PTH normally regulates renal calcium excretion, but this regulation is defective in patients with hypoparathyroidism. Over many years of treatment, kidney stones may develop, and kidney failure may ultimately occur due to either kidney stones or deposition of calcium phosphate in kidney tissue (called nephrocalcinosis). Despite the use of calcium and vitamin D supplements and other medications, many patients with hypoparathyroidism continue to experience physical and cognitive symptoms. An injectable form of full length human PTH (1-84) marketed under the name Natpara®, was approved for the treatment of hypoparathyroidism in 2015. However, it was recalled in 2019 due to a plastic particulate and was permanently phased out globally at the end of 2024. TransCon PTH, once-daily injectable, long-acting prodrug of parathyroid hormone (PTH(1-34)) developed by Ascendis Pharma A/S was FDA Approved in August 2023 and EU Approved in November 2023. Eneboparatide, once-daily injectable long-acting parathyroid hormone 1 (PTH1) receptor agonist, developed by Amolyt Pharma (acquired by AstraZeneca 2024) reported topline data that the primary endpoint for its Phase 3 study was met in March 2025. A long acting once weekly injectable PTH peptide prodrug (MBX2109) developed by MBX Biosciences, Inc. is in Phase 2 clinical testing with topline data expected in Q3 2025. Finally, oral small molecule PTHR1 (SEP786) developed by Septerna Inc, discontinued a Phase I trial in February 2025 due to safety. EB612 Our product candidate for hypoparathyroidism, EB612, is the first oral PTH (1-34) hormone replacement treatment developed in a tablet form. The FDA and the EMA have granted EB612 orphan drug designation for the treatment of hypoparathyroidism. We believe that EB612 may have inherent advantages compared to injectable forms because this is a protein replacement therapy requiring long term use, and we believe that patients have a preference for oral medication, and our tablets may enable more flexibility for titration and more individualized treatment in this heterogeneous disease. 18 Phase 2a Clinical Trial In 2015, we successfully completed a multicenter Phase 2a clinical trial of EB612 in hypoparathyroidism patients. This study demonstrated the safety and tolerability of EB612 administered four times daily for 16 weeks to patients with hypoparathyroidism. In this study, patients were titrated up to a maximum of 12 EB612 0.75 mg tablets a day (total daily dose of 9 mg) according to each subject’s albumin-adjusted serum calcium (ACa), and supplement treatment regimen. Of the 19 enrolled patients, 17 completed the trial. No drug-related serious adverse events were reported and most of the adverse events were not considered study drug-related. The study achieved its primary and secondary endpoints, including a reduction in calcium supplements, reductions in serum phosphate and 24-hour urine calcium excretion, maintenance of ACa within the reference range, and an improvement in quality of life. Specific results of this trial included: Phase 2 PK/PD Clinical Trial We initiated a two-part Phase 2 PK/PD trial in 2014. This trial was designed to provide a bridge from our completed Phase 2 study, which was conducted prior to the marketing approval of Natpara, and to allow us to better understand the relative strength and dose of EB612 as compared to the then marketed product, Natpara. The relevant endpoints for the PK/PD trial included an examination of levels of PTH(1-34), PTH(1-84) (Natpara), serum calcium, serum phosphate, urinary calcium and urinary phosphate. In November 2018, we announced the completion of part I of this Phase 2 PK/PD trial which showed (i) an increase in the serum calcium by an average of approximately 0.3 mg/dL over baseline, with such increase maintained over a 24-hour period; (ii) a decrease in serum phosphate by an average of 0.5 mg/dL below baseline with such decrease maintained over a 24-hour period; (iii) an increase in average levels of serum active vitamin D of approximately 90% on the day of treatment as compared to baseline; and (iv) a decrease in average levels of 24-hour urinary calcium of approximately 30% on the day of treatment as compared to baseline. The concentration of PTH(1-34) in blood after administration of EB612 in the trial was sufficient to produce the observed pharmacodynamic effects and did not induce hypercalcemia. No serious adverse events were reported. The second part of the PK/PD trial evaluated a variety of dosing treatment regimens with a high and low dose of EB612 as well as Natpara with patients also receiving calcium supplements and either alfacalcidol or calcitriol. There were no treatment-emergent adverse events of hypercalcemia, as well as no treatment-emergent serious adverse events reported in the trial. In September 2019, we presented the results of Part 2 at the American Society for Bone and Mineral Research (ASBMR) Annual Meeting. 19 Planned Additional Clinical Development and Regulatory Pathway We have since developed a new generation of EB612 based on new intellectual property of our N-Tab™ Technology, which we have designed to optimize its PK profile and the potential for reduced daily dosing. We initiated a PK study in May 2023, which tested various potential drug candidates based on our new platform, including several which could be developed for the treatment of hypoparathyroidism. In April 2024, we submitted pharmacokinetic (PK) and early PD Data from a Phase 1 study evaluating an unmodified PTH (1-34) peptide and a new generation of Entera's N-Tab™ platform to the Endocrine Society Annual Meeting (ENDO 2024). In June 2024, we presented Phase 1 clinical data at the ENDO 2024 Annual Meeting, that supports potentially moving the BID (twice-daily) tablet dose to Phase 2 development in patients with hypoparathyroidism. Additionally, we are also collaborating with a third party to combine our N-Tab™ Technology with another peptide for hypoparathyroidism. Intellectual Property Our success depends in part on our ability to protect the proprietary nature of our product candidates, technology, and know-how; operate without infringing on the proprietary rights of others and preventing others from infringing on our proprietary rights. We seek to protect our proprietary position by, among other methods, seeking patent protection in the United States and in certain other jurisdictions for our product candidates and other technology that we consider important to the development of our business, where such protection is available. We believe that our success will depend in part on our ability to obtain patent protection for our intellectual property. We also intend to rely on trade secret protection, know-how and the exploitation of in-licensing opportunities to develop our proprietary position. Patent Rights As of March 2025, our global patent portfolio included issued patents and patent applications. We believe that the granted patents as well as certain of the pending claims contained in our patent applications, if issued in substantially the same form, would cover our proprietary technology platform (N-Tab™) and the candidates used in various pipeline programs as indicated in the following table: Subject Mater # Pending Applications # Issued Patents Geographical Scope Nominal Patent Term EB613 80 49 United States, Europe, Japan, China, Canada, Singapore, United Arab Emirates, Israel, Brazil, Mexico, South Africa, India, Australia, New Zealand, Russia, South Korea and Hong Kong 2029 - 2044 EB612 73 44 United States, Europe, Japan, China, Canada, Singapore, United Arab Emirates, Israel, Brazil, Mexico, South Africa, India, Australia, New Zealand, Russia, South Korea and Hong Kong 2029 - 2044 GLP1/Glucagon 58 8 United States, Europe, Japan, China, Canada, Singapore, United Arab Emirates, Israel, Brazil, Mexico, South Africa, India, Australia, New Zealand, Russia, South Korea and Hong Kong 2036 - 2044 GLP2 57 8 United States, Europe, Japan, China, Canada, Singapore, United Arab Emirates, Israel, Brazil, Mexico, South Africa, India, Australia, New Zealand, Russia, South Korea and Hong Kong 2036 - 2044 Platform (N-Tab™) 116 56 United States, Europe, Japan, China, Canada, Singapore, United Arab Emirates, Israel, Brazil, Mexico, South Africa, India, Australia, New Zealand, Russia, South Korea and Hong Kong 2029 - 2044 20 Issued patents and any patent that may issue from the pending patent applications are currently expected to expire by the Nominal Patent Term as noted in the above table, assuming national phase filings are timely effected. The nominal patent term does not include potential patent extension and/or patent term addition when applicable. The term of individual patents depends upon the legal term for patents in the countries in which they are granted. In most countries, including the United States, the patent term is generally 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country. In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the United States Patent and Trademark Office, or USPTO, in examining and granting a patent or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date. The Drug Price Competition and Patent Term Restoration Act, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration date of a U.S. patent as partial compensation for the useful patent term lost, if any, during the FDA regulatory review process. However, a patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of the product’s approval by the FDA. The patent term extension period is generally one-half the time between the effective date of the IND and the submission date of the NDA for the product, plus the time between the submission date of the NDA and the approval of the application. Only one patent applicable to an approved drug is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent. Only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended. Moreover, we may not receive an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Similar provisions are available in the EU and certain other foreign jurisdictions to extend the term of a patent that covers an approved drug. However, the length of any extension, if granted, could be less than we request. Trade Secrets In addition to patent rights, we also rely on unpatented trade secrets and know-how to protect our proprietary technology. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology, in part, by entering into confidentiality agreements with our employees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers, members of our board of directors (the “Board”), technical review board and other advisors upon their engagement. These agreements generally provide that all confidential information developed or made known to the individual during the individual’s relationship with us is to be kept confidential and not to be disclosed to third parties except in specific limited circumstances. We also generally require signed confidentiality or material transfer agreements from any company that is to receive our confidential information. In the case of employees, consultants, and contractors, the agreements also generally provide that all inventions conceived by the individual while rendering services to us shall be assigned to us as our exclusive property. There can be no assurance, however, that we have entered into agreements with all applicable parties, that all persons who we desire to sign such agreements will sign, or if they do, that such agreements will not be breached, that we would have adequate remedies for any breach, or that our unpatented trade secrets or know-how will not otherwise become known or be independently developed by competitors. Additionally, to the extent that our commercial partners, collaborators, employees, and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. For this and a more comprehensive discussion of risks related to our intellectual property, see “Item 1A.—Risk Factors-Risks Related to Our Intellectual Property.” 21 Commercialization Strategy We hold global rights to our internally developed product candidates (including EB613 and EB612), and intend to maximize the value of these candidates commercially with strong partners that have the requisite commercial infrastructure within a specific therapeutic indication, target or geography. In relation to Oral GLP-1/Glucagon , under the terms of the 2025 Collaboration Agreement, OPKO and Entera hold 60% and 40% pro-rata ownership interests, respectively, in the program and be responsible for 60% and 40% of the program’s development costs, respectively. Following the completion of the Phase 1 stage, we have the option to continue to fund our 40% share to maintain our pro-rata ownership interest in the program. Should we opt-out, we will retain a 15% ownership interest in the Oral OXM program, while OPKO will retain 85% and be responsible for ongoing development activities and funding of the program. Our Oral GLP-2 program is governed by a 2023 MTA and Collaboration Agreement which we have shared responsibilities. Competition The medical and pharmaceutical industries in which we operate are highly competitive and subject to rapid and significant technological change and changes in practice. While we believe that our technology, knowledge, experience and scientific resources provide us with competitive advantages, we face competition from many different sources, including large pharmaceutical, specialty pharmaceutical, biotechnology, and generic drug companies and academic and government institutions. We believe that the key competitive factors that will affect the development and commercial success of our product candidates for osteoporosis, hypoparathyroidism and any other product candidates that we develop, are the efficacy, safety and tolerability profile, convenience in dosing, product labeling, price and availability of reimbursement from the government and other third-parties. Our commercial opportunity could be reduced or eliminated if our competitors have products that are better in one or more of these categories. We expect that, if approved, our oral PTH product candidates for osteoporosis, hypoparathyroidism and other product candidates that we are developing for metabolic disorders and short bowel syndrome, would compete with a number of existing products. Furthermore, we believe that we face competition in relation to our oral drug delivery platform, N-Tab™, as we believe that other non-invasive medical drug delivery technologies, including alternative oral delivery systems as well as transdermal patches, are being developed by other parties. Many of our potential competitors have substantially greater financial, technical, commercial and human resources than we do and significantly more experience in the discovery, development and regulatory approvals of product candidates, and the commercialization of those products. Accordingly, our competitors may be more successful than us in obtaining FDA approval for product candidates and achieving widespread market acceptance. See “Item 1A.—Risk Factors—Risks Related to Commercialization of Our Product Candidates.” The Israeli Innovation Authority (IIA) Grants We have received grants of approximately $0.5 million from the IIA to partially fund our PTH research and development for Osteoporosis. The grants are subject to certain requirements and restrictions under Encouragement of Industrial Research, Development and Technological Innovation in Industry Law 5744-1984 and the IIA regulations, which we refer to collectively as the “Research Law”. In general, until the grants are repaid with interest, royalties are payable to the Israeli government in the amount of 3% on revenues derived from sales of products or services developed in whole or in part using the IIA grants. The royalty rate may increase to 5%, with respect to approved applications filed following any year in which we achieve sales of over $70 million. The amount that must be repaid may be increased up to six times the amount of the grant received plus interest. The rate of royalties may be accelerated, and the royalty liability may increase (up to three times the amount of the grant amount and the interest) if manufacturing of the products developed with the grant money is transferred outside of the State of Israel. As of December 31, 2024, the total royalty amount that would be payable by the Company to the IIA, before interest and payments as described above, is approximately $460 thousand. As of December 31, 2024, we had paid royalties to the IIA in the amount of $96 thousand. 22 In addition to paying any royalties due, we must abide by other restrictions associated with receiving such grants under the Research Law that continue to apply even following repayment to the IIA. These restrictions may impair our ability to outsource manufacturing, engage in change of control transactions or otherwise transfer our IIA-related “know-how” (in its meaning under the Research Law) in or outside of Israel, and may require us to obtain the approval of the IIA for certain actions and transactions and pay additional royalties and other amounts to the IIA. We may not receive the required approvals for any proposed transfer and, even if received, we may be required to pay the IIA a portion of the consideration that we receive upon any transfer of such technology to a non-Israeli entity up to 600% of the grant amounts and the interest. In addition, as disclosed under “Manufacturing”, we have signed a contract with a U.K.-based contract manufacturing organization to produce and supply tablets for trials performed worldwide. We believe that, because production is not being done for commercial purposes, the entry into the production agreement in the U.K. will not affect the royalty rates to be paid to the IIA. Should it turn out that this position is not acceptable to the IIA, the maximum royalties to be paid to the IIA will be three times the amount of the grants and the interest. In addition, any change of control and any change of ownership of our Ordinary Shares that would cause a non-Israeli citizen or resident to become an interested party as defined in the Research Law (which includes any person who holds 5% or more of our outstanding shares) requires written notice to the IIA. Such a non-Israeli interested party is required to sign an undertaking towards the IIA in which it undertakes to comply with the Research Law. Notice or undertaking to the IIA may not be required in respect of purchase of Ordinary Shares in standard acquisition or trading in the stock exchange following to an IPO that was approved by the IIA. If we fail to comply with the Research Law, we may be forced to return the grants and/or be subject to other payments to the IIA, monetary fines and/or criminal charges. Oramed Patent Transfer Agreement In 2011, we entered into a patent transfer agreement with Oramed Ltd. (“Oramed”), which we refer to as the Patent Transfer Agreement, pursuant to which Oramed assigned to us all of its rights, title and interest in the patent rights Oramed licensed to us when we were originally organized, subject to a worldwide, royalty-free, exclusive, irrevocable, perpetual and sub-licensable license granted to Oramed under the assigned patent rights to develop, manufacture and commercialize products or otherwise exploit such patent rights in the fields of diabetes and influenza. Additionally, we agreed not to engage, directly or indirectly, in any activities in the fields of diabetes and influenza that involve the use of, or utilize, the patents underlying the Patent Transfer Agreement. Under the terms of the Patent Transfer Agreement, we agreed to pay Oramed royalties equal to 3% of our net revenues generated, directly or indirectly, from our exploitation of the assigned patent rights, including the sale, lease or transfer of the assigned patent rights or sales of products or services covered by the assigned patent rights. Manufacturing We do not own or operate facilities for large scale product manufacturing, storage and distribution, or testing, nor do we expect to in the future. Our current facility is limited to small-mid scale manufacturing, storage and distribution of materials and oral drug formulations for clinical studies. Our facility has ISO:9001:2015 quality management systems accreditation from The Standards Institution of Israel for the production and development of functional excipients and oral drug formulations to be used in clinical trials. The facility includes a dedicated Class D clean room for tablet production and a dedicated chemical synthesis room designed to meet ISO 8 specifications. Our manufacturing activities include the chemical synthesis of one of our non-active but functional drug components in our facility. In addition, we have a contract with a contract manufacturing organization, to produce and supply tablets for trials performed worldwide, including formulation and production of the final drug, packaging, storage and distribution. The manufacturer’s facility is an FDA/EMA inspected-GMP site and we expect future clinical studies with our oral PTH (1-34) tablets, as well as the potential commercial supply, if approved, will be provided by the same subcontractor. This contract is not exclusive and we may enter into additional contracts. Our research and development team supports the manufacturing activities and develops/optimizes analytical methods used by the contract manufacturer in order to meet regulatory requirements for our clinical trials. Various materials included in the drug formulation and materials procured for the chemical synthesis are commercially available from various accredited suppliers. We do not have supply contracts with all such vendors and are not bound to any specific vendor at this point in time. However, it is our intention to complete such contracts in anticipation of commercial manufacturing activities, so that if approved, we will have such contracts in place. Government Regulation and Product Approval Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the EU, extensively regulate, among other things, the research, development, testing, manufacture, pricing, quality control, approval, packaging, storage, recordkeeping, labelling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining regulatory approvals in the United States and in other countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources. Review and Approval of Drugs in the United States In the United States, our product candidates are regulated by the FDA as drugs under the Federal Food, Drug, and Cosmetic Act, or the FDCA, the Public Health Service Act, or the PHSA, and regulations implemented by the FDA. The failure to comply with the applicable requirements at any time during the product development process, including preclinical testing, clinical testing, the approval process or post-approval process, may subject an applicant to delays in the conduct of clinical trials, regulatory review and approval, and/or administrative or judicial sanctions. These sanctions may include, but are not limited to, the FDA’s refusal to allow an applicant to proceed with clinical testing, refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, warning letters, adverse publicity, customer notifications, product recalls, product seizures, refusal to grant export or import approval, total or partial suspension of production or distribution, consent decrees, injunctions, fines, and civil or criminal investigations and penalties brought by the FDA, Department of Justice, or other governmental entities. 23 The process required by the FDA before a new drug or biologic may be marketed in the United States generally involves satisfactorily completing each of the following steps: • preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practice regulations, or GLP; • submission to the FDA of an initial new drug, or IND, application for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent review board, or IRB, representing each clinical site before each clinical trial may be initiated; • performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product candidate for each proposed indication for use and conducted in accordance with Good Clinical Practice, or GCP, requirements; • submission of data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product in clinical development and proposed labeling; • preparation and submission to the FDA of a New Drug Application, or an NDA, or Biologics License Application, or BLA; • review of the product by an FDA advisory committee, where appropriate or if applicable; • satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practice, or cGMP, standards and to assure that the facilities, methods, and controls are adequate to preserve the product’s identity, strength, quality and purity; • satisfactory completion of any FDA audits of the non-clinical and clinical trial sites to assure compliance with GCP requirements and the integrity of clinical data in support of the NDA or BLA; • payment of user fees and securing FDA approval of the NDA or BLA for the proposed indication; and • compliance with any post-approval requirements, including risk evaluation and mitigation strategies, or REMS, and any post-approval studies required by the FDA. Preclinical Studies and Investigational New Drug Application Preclinical tests include laboratory evaluations of product chemistry, formulation, and stability, as well as animal studies to evaluate the potential for efficacy and toxicity. The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements, including GLP. The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND application. Some preclinical tests may continue even after submission of the IND application. The IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about the product or conduct of the proposed clinical trial, including concerns that human research volunteers will be exposed to unreasonable health risks. In that case, the IND sponsor and the FDA must resolve any outstanding FDA concerns before the clinical trial can begin. As a result, submission of the IND may result in the FDA not allowing the clinical trials to commence or allowing the clinical trial to commence on the terms originally specified by the sponsor in the IND. If the FDA raises concerns or questions either during this initial 30-day period, or at any time during the IND process, it may choose to impose a partial or complete clinical hold. This order issued by the FDA would delay a proposed clinical trial until all outstanding concerns have been adequately addressed and the FDA has notified the company that investigations may proceed. This could cause significant delays or difficulties in completing planned clinical trials in a timely manner. 24 Clinical Trials Clinical trials involve the administration of the investigational product candidate to healthy volunteers or patients with the disease to be treated under the supervision of a qualified principal investigator in accordance with GCP requirements. Clinical trials are conducted under trial protocols detailing, among other things, the objectives of the clinical trial, inclusion and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. A sponsor who wishes to conduct a clinical trial outside the United States may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. If a clinical trial outside the United States is not conducted under an IND, the sponsor may submit data from the clinical trial to the FDA in support of a NDA so long as the clinical trial is conducted in accordance with GCP and in compliance with an international guideline for the ethical conduct of clinical research known as the Declaration of Helsinki and/or the laws and regulations of the country or countries in which the clinical trial is performed, whichever provides the greater protection to the participants in the clinical trial. Further, each clinical trial must be reviewed and approved by an IRB either centrally or individually at each institution at which the clinical trial will be conducted. The IRB will consider, among other things, clinical trial design, patient informed consent, ethical factors, the safety of human subjects and, where appropriate, the protection of privacy of the human subjects. An IRB must operate in compliance with the FDA regulations. The FDA, IRB, the clinical trial sponsor, or the principal investigator may suspend or discontinue a clinical trial at any time for various reasons, including a finding that the clinical trial is not being conducted in accordance with FDA requirements or the subjects or patients are being exposed to an unacceptable health risk. Clinical testing also must satisfy extensive GCP rules and the requirements for informed consent. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data and safety monitoring board or committee. This group may recommend continuing the clinical trial as planned, make changes in clinical trial conduct, or cessation of the clinical trial at designated check points based on access to certain data from the clinical trial. Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be combined. Annual progress reports detailing the results of the clinical trials must be submitted to the FDA. Additional studies may be required after approval. • Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including adverse effects, dose tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics in healthy humans. For some products for severe or life-threatening diseases, especially if the product may be too toxic to administer to healthy humans, the initial clinical trials may be conducted in individuals having a specific disease for which use the tested product is indicated. • Phase 2 clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, evaluate the efficacy of the product candidate for specific targeted indications and determine dose tolerance and optimal dosage. Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more costly Phase 3 clinical trials. • Phase 3 clinical trials proceed if the Phase 2 clinical trials demonstrate that a dose range of the product candidate is potentially effective and has an acceptable safety profile. Phase 3 clinical trials are undertaken to further evaluate, in a larger number of patients, dosage, provide substantial evidence of clinical efficacy, and further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites. A well-controlled, statistically robust Phase 3 trial may be designed to deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a drug: such Phase 3 studies are referred to as “pivotal.” In some cases, the FDA may approve an NDA or a BLA for a product candidate but require the sponsor to conduct additional clinical trials to further assess the product candidate’s safety and effectiveness after NDA or BLA approval. Such post-approval trials are typically referred to as Phase 4 clinical trials. These studies are used to gain additional data from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations. If the FDA approves a product while a company has ongoing clinical trials that were not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement or to request a change in the product labeling. Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for products. 25 Compliance with Current Good Manufacturing Practice Requirements Before approving an NDA or a BLA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in full compliance with cGMP requirements and able to assure consistent production of the product within required specifications. The PHSA emphasizes the importance of manufacturing control for products like biologics whose attributes cannot be precisely defined. Manufacturers and others involved in the manufacture and distribution of products must also register their establishments with the FDA and certain state regulatory bodies. Both U.S. and non-U.S. manufacturing establishments must register and provide additional information to the FDA upon their initial participation in the manufacturing process. Any product manufactured by or imported from a facility that has not registered, whether U.S. or non-U.S., is deemed misbranded under the FDCA. Establishments may be subject to periodic unannounced inspections by government authorities to ensure compliance with cGMPs and other laws. Inspections must follow a “risk-based schedule” that may result in certain establishments being inspected more frequently. Manufacturers may also have to provide, on request, electronic or physical records regarding their establishments. Delaying, denying, limiting, or refusing inspection by the FDA may lead to a product being deemed to be adulterated. Review and Approval of a New Drug Application and Biologics License Application The results of product candidate development, preclinical testing and clinical trials, including negative or ambiguous results as well as positive findings, are submitted to the FDA as part of an NDA or a BLA requesting approval to market the product. The NDA or BLA also must contain extensive manufacturing information and detailed information on the composition of the product and proposed labeling as well as payment of a user fee. Under the Prescription Drug User Fee Act, or PDUFA, as amended, each NDA or BLA must be accompanied by a user fee, which the FDA adjusts on an annual basis. Fee waivers or reductions are available in certain instances, such as a waiver of the application fee for an initial application filed by a small business. Moreover, no user fees are assessed on NDAs or BLAs for products designated as orphan drugs, unless the product has a non-orphan indication for use. The FDA has 60 days after submission of the application to conduct an initial review to determine whether it is sufficient to accept for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission has been accepted for filing, the FDA begins an in-depth review of the application. Under the goals and policies under the PDUFA, the FDA has ten months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and six months for a priority review of the application. The FDA does not always meet its PDUFA goal dates for standard and priority applications. The review process may often be significantly extended by FDA requests for additional information or clarification. The review process and the PDUFA goal date may be extended by three months if the FDA requests, or the applicant otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date. Under the FDCA and the PHSA, the FDA may approve an NDA or a BLA if it determines that the product is safe, pure and potent and the facility where the product will be manufactured meets standards designed to ensure that it continues to be safe, pure and potent. On the basis of the FDA’s evaluation of the application and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. If the application is not approved, the FDA will issue a complete response letter, which will contain the conditions that must be met in order to secure final approval of the application, and, when possible, will outline recommended actions the sponsor might take to obtain approval of the application. Sponsors that receive a complete response letter may submit to the FDA information that represents a complete response to the issues identified by the FDA. Such resubmissions are classified under PDUFA as either Class 1 or Class 2. The classification of a resubmission is based on the information submitted by an applicant in response to an action letter. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has two months to review a Class 1 resubmission and six months to review a Class 2 resubmission from the date of receipt. The FDA will not approve an application until issues identified in the complete response letter have been addressed. The FDA may also refer the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides 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. 26 If the FDA approves a new product, it may limit the approved indications for use of the product. It may also require that contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may call for post-approval studies, including Phase 4 clinical trials, to further assess the product’s safety after approval. The agency may also require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including a REMS, to help ensure that the benefits of the product outweigh the potential risks. A REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use, or ETASU. ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patent registries. The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval. The Hatch-Waxman Act added Section 505(b)(2) to the FDCA, allowing a company to submit an NDA application that relies on clinical trial data not conducted by or for the application, such as previously published scientific literature and prior FDA findings of safety and efficacy of another company’s drug. An NDA application under Section 505(b)(2) is typically used when the applicant product modifies or improves a predicate drug leading to a new drug product. Because an application under Section 505(b)(2) can rely on prior clinical trial data and published scientific literature, FDA approval is generally quicker than a normal NDA application. However, an application under Section 505(b)(2) can also be delayed if the predicate drug is still under patent or exclusivity protections. Post-Approval Regulation Once regulatory approval for marketing of a product or new indication for an existing product is obtained, the sponsor will be required to comply with post-approval regulatory requirements, including any post-approval requirements that the FDA may have imposed as a condition of approval. The sponsor will be required to report certain adverse reactions and production problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and promotional labeling requirements. Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP regulations, which impose certain procedural and documentation requirements upon drug manufacturers. Accordingly, the sponsor and its third-party manufacturers must continue to spend time, money and effort in the areas of production and quality control to maintain compliance with cGMP regulations and other regulatory requirements. A product may also be subject to official lot release, meaning that the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official release, the manufacturer must submit samples of each lot, together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot, to the FDA. The FDA may in addition perform certain confirmatory tests on lots of some products before releasing the lots for distribution. Finally, the FDA will conduct laboratory research related to the safety, purity, potency, and effectiveness of pharmaceutical products. After an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical trials; • refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties. 27 The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs and biologics may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. Orphan Drug Designation Orphan drug designation in the United States is designed to encourage sponsors to develop drugs intended for rare diseases or conditions. In the United States, a rare disease or condition is statutorily defined as a condition that affects fewer than 200,000 individuals in the United States, or that affects more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available the drug for the disease or condition will be recovered from sales of the drug in the United States. Orphan drug designation qualifies a company for tax credits, waiver of the NDA user fee and may confer market exclusivity for seven years following the date of the drug’s marketing approval, if granted by the FDA, if a product that has orphan designation subsequently receives the first FDA approval of that drug for the disease for which it has such designation. This means that the FDA may not approve any other applications, including an NDA to market the same drugs or even in a different formulation for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority over the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity. An application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. A product becomes an orphan product when it receives orphan drug designation from the Office of Orphan Products Development, or OOPD, at the FDA based on acceptable confidential requests made under the regulatory provisions. The product must then go through the review and approval process like any other product. A sponsor may request orphan drug designation of a previously unapproved product or new orphan indication for an already marketed product. In addition, a sponsor of a product that is otherwise the same product as an already approved orphan drug may seek and obtain orphan drug designation for the subsequent product for the same rare disease or condition if it can present a plausible hypothesis that its product may be clinically superior to the first, approved product. More than one sponsor may receive orphan drug designation for the same product for the same rare disease or condition, but each sponsor seeking orphan drug designation must file a complete request for designation, and only the first sponsor that obtains approval for that drug for the orphan indication will obtain market exclusivity, effectively preventing the FDA from approving products under development by competitors for the same drug and same indication, unless the competitor is able to demonstrate that the product under development is clinically superior to the approved product or the approved product is not available in sufficient quantities. To permit the FDA to end another manufacturer’s orphan exclusivity period, the FDA must determine that the manufacturer has demonstrated clinical superiority by showing the later drug is safer, more effective, or otherwise makes a major contribution to patient care. The period of exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the indication for which the product has been designated. The FDA may approve a second application for the same product for a different use or a subsequent application for a different drug for the same indication. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. Regulation Outside the United States In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy that govern, among other things, clinical trials, marketing authorization, commercial sales and distribution of drug products. Whether or not it obtains FDA approval for a product, the company would need to obtain the necessary approvals by the comparable non-U.S. regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions. The approval process ultimately varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others. Regulation and Marketing Authorization in the European Union The EMA is the scientific agency of the European Union, or the EU, that coordinates the evaluation and monitoring of new and approved medicinal products such as drugs and biologics. It is responsible for the scientific evaluation of applications for EU marketing authorizations, as well as the development of technical guidance and the provision of scientific advice to sponsors. 28 The process regarding approval of medicinal products in the EU follows roughly the same lines as in the United States and likewise generally involves satisfactorily completing each of the following: • preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the applicable EU Good Laboratory Practice regulations; • submission to the relevant regulatory agencies in EU member states, or national authorities, of a clinical trial application, or CTA, for each clinical trial, which must be approved before human clinical trials may begin; • performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication; • submission to the relevant national authorities of a Marketing Authorisation Application, or MAA, which includes the data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product in clinical development and proposed labeling; • satisfactory completion of an inspection by the relevant national authorities of the manufacturing facility or facilities, including those of third parties, at which the product is produced to assess compliance with cGMP; • potential audits of the non-clinical and clinical trial sites that generated the data in support of the MAA; and • review and approval by the relevant national authority of the MAA before any commercial marketing, sale or shipment of the product. Preclinical Studies Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate the potential efficacy and toxicity in animals. The conduct of the preclinical tests and formulation of the compounds for testing must comply with the relevant EU regulations and requirements. The results of the preclinical tests, together with relevant manufacturing information and analytical data, are submitted as part of the CTA when seeking approval to start a clinical trial, and with the MAA when seeking marketing authorization. Clinical Trial Approval Requirements for the conduct of clinical trials in the EU including cGCP, are implemented in the current Clinical Trials Regulation (EU) No. 536/2014 to ensure that the rules for clinical trials are identical throughout the EU. Regulation (EU) No 536/2014 aims to simplify and streamline the approval of clinical trial in the EU. The main characteristics of the regulation include: • A streamlined application procedure via a single-entry point, known as the Clinical Trials Information System; • A single set of documents to be prepared and submitted for the application as well as simplified reporting procedures which will spare sponsors from submitting broadly identical information separately to various and different national authorities; • A harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts; • Strictly defined deadlines for the assessment of clinical trial application; and • The involvement of the ethics committees in the assessment procedure in accordance with the national law of the member state concerned but within the overall timelines defined by the Regulation (EU) No 536/2014. Marketing Authorization Authorization to market a product in the member states of the EU proceeds under one of four procedures: a centralized procedure, a mutual recognition procedure, a decentralized procedure or a national procedure. 29 Centralized Procedure The centralized procedure enables applicants to obtain a marketing authorization that is valid in all EU member states based on a single application. Certain medicinal products, including products developed by means of biotechnological processes must undergo the centralized authorization procedure for marketing authorization, which, if granted by the European Commission, based on the opinion of the EMA, is automatically valid in all EU member states. Sponsors may elect to file an MAA through the centralized procedures for other classes of products. The centralized procedure is mandatory for certain types of products such as, medicines derived from biotechnology processes such as genetic engineering, advanced-therapy medicines such as gene-therapy or tissue engineered medicine, orphan medicines, and medicinal products containing a new active substance indicated for the treatment of HIV, AIDS, cancer, diabetes, neurodegenerative disorders, autoimmune and other immune dysfunctions, and viral diseases. The centralized authorization procedure is optional for other medicinal products if they contain a new active substance, if the applicant shows that the medicinal product concerned constitutes a significant therapeutic, scientific or technical innovation, or that the granting of authorization is in the public interest of the EU. Administrative Procedure Under the centralized procedure, the EMA’s Committee for Human Medicinal Products, or CHMP serves as the scientific committee that renders opinions about the safety, efficacy and quality of medicinal products for human use on behalf of the EMA. The CHMP is composed of experts nominated by each member state’s national authority for medicinal products, with one of them appointed to act as Rapporteur for the coordination of the evaluation with the possible assistance of a further member of the Committee acting as a Co-Rapporteur. After approval, the Rapporteur(s) continue to monitor the product throughout its life cycle. The CHMP has 210 active days to adopt an opinion as to whether a marketing authorization should be granted. The process usually takes longer in case additional information is requested, which triggers clock-stops in the procedural timelines. The process is complex and involves extensive consultation with the regulatory authorities of member states and a number of experts. When an application is submitted for a marketing authorization in respect of a drug which is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation, the applicant may, pursuant to Article 14(9) Regulation (EC) No 726/2004, request an accelerated assessment procedure. If the CHMP accepts such request, the time-limit of 210 days will be reduced to 150 days but it is possible that the CHMP can revert to the standard time-limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment. Once the procedure is completed, a European Public Assessment Report, or EPAR, is produced. If the opinion is negative, information is given as to the grounds on which this conclusion was reached. After the adoption of the CHMP opinion, a decision on the MAA must be adopted by the European Commission, after consulting the EU member states, which in total can take more than 60 days. After a drug has been authorized and launched, it is a condition of maintaining the marketing authorization that all aspects relating to its quality, safety and efficacy must be kept under review. Conditional Approval In specific circumstances, EU legislation (Article 14(7) Regulation (EC) No 726/2004 and Regulation (EC) No 507/2006 on Conditional Marketing Authorisations for Medicinal Products for Human Use) enables applicants to obtain a conditional marketing authorization prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization. Such conditional approvals may be granted for products (including medicines designated as orphan medicinal products), if  (1) the risk-benefit balance of the product is positive, (2) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data, (3) the product fulfills unmet medical needs, and (4) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required. A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder, including obligations with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data. Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions and/or specific obligations. The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization. 30 Period of Authorization and Renewals A marketing authorization will be valid for five years in principle, and the marketing authorization may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by a national authority. To this end, the marketing authorization holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least nine months before the marketing authorization ceases to be valid. Once renewed, the marketing authorization will be valid for an unlimited period, unless the European Commission or the national authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. Any authorization that is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization will cease to be valid, the so-called “sunset clause.” Orphan Drug Designation and Exclusivity The European Commission can grant orphan medicinal product designation to products for which the sponsor can establish that it is intended for the diagnosis, prevention, or treatment of  (1) a life-threatening or chronically debilitating condition affecting not more than five in 10,000 people in the EU, or (2) a life threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that sales of the drug in the EU would generate a sufficient return to justify the necessary investment. In addition, the sponsor must establish that there is no other satisfactory method approved in the EU of diagnosing, preventing or treating the condition, or if such a method exists, the proposed orphan drug will be of significant benefit to patients. Orphan drug designation provides a number of benefits, including fee reductions, regulatory assistance, and the possibility to apply for a centralized EU marketing authorization, as well as 10 years of market exclusivity following a marketing authorization. During this market exclusivity period, neither the EMA, nor the European Commission nor the Member States can accept an application or grant a marketing authorization for a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. The market exclusivity period for the authorized therapeutic indication may be reduced to six years if, at the end of the fifth year, it is established that the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity. In addition, a competing similar medicinal product may be authorized prior to the expiration of the market exclusivity period, including if it is shown to be safer, more effective or otherwise clinically superior to the already approved orphan drug or if the holder of the marketing authorization for the already approved orphan drug is unable to supply sufficient quantities of the product. If the MAA of a medicinal product designated as an orphan drug includes the results of all studies conducted in compliance with an agreed PIP, and a corresponding statement is subsequently included in the marketing authorization granted, the ten-year period of market exclusivity will be extended to twelve years. Regulatory Data Protection EU legislation also provides for a system of regulatory data and market exclusivity. Upon receiving marketing authorization, new chemical entities approved on the basis of complete independent data package benefit from eight years of data exclusivity and an additional two years of market exclusivity. Data exclusivity prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic or biosimilar (abbreviated) application. During the additional two-year period of market exclusivity, a generic or biosimilar marketing authorization can be submitted, and the innovator’s data may be referenced, but no generic or biosimilar medicinal product can be marketed until the expiration of the market exclusivity. The overall ten-year period will be extended to a maximum of eleven years if, during the first eight years of those 10 years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. Even if a compound is considered to be a new chemical entity and the innovator is able to gain the period of data exclusivity, another company nevertheless could also market another version of the drug if such company obtained marketing authorization based on an MAA with a complete independent data package of pharmaceutical test, pre-clinical tests and clinical trials. However, products designated as orphan medicinal products enjoy, upon receiving marketing authorization, a period of 10 years of orphan market exclusivity. Depending upon the timing and duration of the EU marketing authorization process, products may be eligible for up to five-year supplementary protection certificates, or SPCs. Such SPCs extend the rights under the basic patent for the drug. Regulatory Requirements After a Marketing Authorization Has Been Obtained If we obtain authorization for a medicinal product in the EU, we will be required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products: Pharmacovigilance and Other Requirements We will, for example, have to comply with the EU’s stringent pharmacovigilance or safety reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed. 31 Other requirements relate to, for example, the manufacturing of products and active pharmaceutical ingredients (“APIs”) in accordance with good manufacturing practice standards. EU regulators may conduct inspections to verify our compliance with applicable requirements, and we will have to continue to expend time, money and effort to remain compliant. Non-compliance with EU requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties in the EU. Similarly, failure to comply with the EU’s requirements regarding the protection of individual personal data can also lead to significant penalties and sanctions. Individual EU member states may also impose various sanctions and penalties in case we do not comply with locally applicable requirements. Manufacturing The manufacturing of authorized drugs, for which a separate manufacturer’s license is mandatory, must be conducted in compliance with the EMA’s cGMP requirements and comparable requirements of other national authorities, which mandate the methods, facilities and controls used in manufacturing, processing and packing of drugs to assure their safety and identity. The EMA enforces its cGMP requirements through mandatory registration of facilities and inspections of those facilities. The EMA may have a coordinating role for these inspections while the responsibility for carrying them out rests with the member states competent authority under whose responsibility the manufacturer falls. Failure to comply with these requirements could interrupt supply and result in delays, unanticipated costs and lost revenues, and could subject the applicant to potential legal or regulatory action, including but not limited to warning letters, suspension of manufacturing, seizure of product, injunctive action or possible civil and criminal penalties. Marketing and Promotion The marketing and promotion of authorized drugs, including industry-sponsored continuing medical education and advertising directed toward the prescribers of drugs and/or the general public, are strictly regulated in the EU. The applicable regulations aim to ensure that information provided by holders of marketing authorizations regarding their products is truthful, balanced and accurately reflects the safety and efficacy claims authorized by the EMA or by the national authority of the authorizing member state. Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Clinical Testing in Israel In order to conduct clinical trials on humans in Israel, prior authorization must be obtained from the medical director of the institution (i.e., the Director of Hospital) in which the clinical trials are scheduled to be conducted. All clinical trials must first be approved by the Institutional Review Board / Independent Ethics Committee which may request additional prior approval from the Israeli Ministry of Health ("IMOH"), as required under the Guidelines for Clinical Trials in Human Subjects implemented pursuant to the Israeli Public Health Regulations (Clinical Trials in Human Subjects), 5740-1980, as amended from time to time (referred to as "The Israeli Public Health Regulations"). Pursuant to the Israeli Public Health Regulations, such authorization generally cannot be granted unless, among other things, the relevant institutions' ethics committee has provided its prior approval of the testing and that the trial complies with the standards set forth by the Declaration of Helsinki. The Institutional Review Board / Independent Ethics Committee and IMOH prioritizes the safety, rights and the wellbeing of the participants are addressed, as well as among other things, evaluating the anticipated benefits that are likely to be derived from the project to determine if it justifies the risks and inconvenience to be inflicted on the participating human subjects. The institution may also conduct audits to ensure that all international GCP and IMOH guidelines are being adhered to in order to maintain the proper conduct and accuracy of the information gathered in the course of the clinical testing. Other Healthcare Laws Health care providers, physicians and third-party payers play a primary role in the recommendation and prescription of drug products that are granted marketing approval. Arrangements with third-party payers and customers are subject to broadly applicable fraud and abuse and other health care laws and regulations. In the United States, such restrictions under applicable federal and state healthcare laws and regulations, include the following: 32 • the federal Anti-Kickback Statute prohibits, among other things, the knowing and willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (i) the referral of a person, (ii) the furnishing or arranging for the furnishing of items or services reimbursable under the Medicare, Medicaid or other governmental programs, or (iii) the purchase, lease or order or arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under the Medicare, Medicaid or other governmental programs. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; in addition, items or services resulting from a violation of the federal Anti-Kickback Statute may constitute a false or fraudulent claim for purposes of the False Claims Act; • the federal False Claims Act imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; • the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for health care benefits, items or services; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information that is stored or transmitted electronically; • the Physician Payments Sunshine Act, created under the Affordable Care Act, and its implementing regulations, which require specified 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, or CMS, information related to payments or other “transfers of value” made to physicians. All such reported information is publicly available; • analogous state and non-U.S. laws and regulations, such as state anti-kickback and false claims laws which may apply to items or services reimbursed by any payer, including commercial insurers; state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require pharmaceutical manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; and • regulation by the Centers for Medicare and Medicaid Services and enforcement by the U.S. Department of Health and Human Services Office of Inspector General or the U.S. Department of Justice. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our future business activities could be subject to challenge under one or more of such laws. Efforts to ensure that our business arrangements with third parties will comply with applicable laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other health care laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from government funded health care programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other providers or entities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded health care programs. 33 Environmental, Health and Safety We are further subject to various foreign, national, federal, state and local laws and regulations relating to environmental, health and safety matters, in a number of jurisdictions, governing, inter alia, (i) the use, storage, registration, handling, emission and disposal of chemicals, waste materials and sewage; and (ii) chemical, air, water and ground contamination, air emissions and the cleanup of contaminated sites, including any contamination that results from spills due to our failure to properly dispose of chemicals, waste materials and sewage. Our operations at our Jerusalem research and development facility use chemicals and produce waste materials and sewage. Our activities require permits from various governmental authorities including, local municipal authorities, the Ministry of Environmental Protection and the Ministry of Health. The Ministry of Environmental Protection and the Ministry of Health, local authorities and the municipal water and sewage company may conduct periodic inspections in order to review and ensure our compliance with the various regulations. Although we do not believe that we will be required to make material operating or capital expenditures in connection with such laws and regulations, we may be required to incur significant costs to comply with these laws and regulations in the future, and complying with these laws and regulations may result in a material adverse effect upon our business, financial condition and results of operations. Further, our failure to comply with such laws and regulations could have a material adverse effect on our business and reputation, result in an interruption or delay in the development or manufacture of our products, or increase the costs for the development or manufacture of our products. In addition, laws and regulations relating to environmental, health and safety matters are often subject to change. In the event of any changes or new laws or regulations, we could be subject to new compliance measures or to penalties for activities which were previously permitted. For instance, Israeli regulations were promulgated in 2011 relating to the discharge of industrial sewage into the sewer system. These regulations establish new and potentially significant fees for discharging forbidden or irregular sewage into the sewage system. Pharmaceutical Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any drug products for which we plan to seek regulatory approval. Sales of any of our product candidates, if approved, will depend, in part, on the extent to which the costs of the products will be covered by third-party payors, including government health programs such as Medicare and Medicaid, commercial health insurers and managed care organizations. Concerns about drug pricing have been expressed by both members of the United States Congress and the administration. The process for determining whether a payer will provide coverage for a drug product may be separate from the process for setting the price or reimbursement rate that the payer will pay for the drug product once coverage is approved. Third-party payers may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the approved drugs for a particular indication. In order to secure coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA, EMA or other comparable regulatory approvals. Our product candidates may not be considered medically necessary or cost-effective. A payer’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Third-party reimbursement may not be sufficient to enable us to maintain price levels high enough to realize an appropriate return on our investment in product development. The containment of healthcare costs has become a priority of governments, and the prices of drugs have been a focus in this effort. Third-party payers are increasingly challenging the prices charged for medical products and services and examining the medical necessity and cost effectiveness of medical products in addition to their safety and efficacy. If these third-party payors do not consider our products to be cost-effective compared to other available therapies, they may not cover our products if approved under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products at a profit. The U.S. government, state legislatures and non-U.S. governments have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. Adoption of such controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceuticals such as the product candidates that we are developing and could adversely affect our net revenue and results. 34 Pricing and reimbursement schemes vary widely from country to country. Some countries provide that drug products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies. The conduct of such studies could be expensive and result in delays in our commercializing efforts. The EU provides options for its member states to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU member states may approve a specific price for a drug product or may instead adopt a system of direct or indirect controls on the profitability of the company placing the drug product on the market. Other member states allow companies to fix their own prices for drug products, but monitor and control company profits. The downward pressure on health care costs in general, particularly prescription drugs, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert competitive pressure that may reduce pricing within a country. There can be no assurance that any country that has price controls or reimbursement limitations for drug products will allow favorable reimbursement and pricing arrangements for any of our products. The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and we expect that it will continue to increase the pressure on drug pricing. Coverage policies, third-party reimbursement rates and drug pricing regulation may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Health Care Reform In the United States, there have been and continue to be a number of significant legislative initiatives to contain healthcare costs. The Affordable Care Act was enacted in the United States in March 2010 and contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for drugs subject to the Medicaid Drug Rebate Program, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our drugs, if approved, and, accordingly, our financial operations. Moreover, recently there has been heightened governmental scrutiny over the way manufacturers set prices for their commercial products. There have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement methodologies for drugs. The FDA released a final rule on September 24, 2020, effective November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada. Further, on August 16, 2022, Congress enacted the Inflation Reduction Act allowing CMS to negotiate directly with drug manufacturers to lower the price of some of the costliest drugs under the Medicare program, as well as requiring drug manufacturers to provide Medicare with a rebate if the price of drugs increases faster than the rate of inflation. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Although a number of these, and other proposed measures may require authorization through additional legislation to become effective, Congress has indicated that it will continue to seek new legislative measures to control drug costs. Additionally, CMS issued a final rule, effective on July 9, 2019, that requires direct-to-consumer advertisements of prescription drugs and biological products, for which payment is available through or under Medicare or Medicaid, to include in the advertisement the Wholesale Acquisition Cost, or list price, of that drug or biological product if it is equal to or greater than $35 for a monthly supply or usual course of treatment. Prescription drugs and biological products advertisements that are in violation of these requirements will be included on a public list. Any adopted health reform measure could reduce the ultimate demand for our products, if approved, or put pressure on our product pricing. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. We expect that additional state and federal healthcare reform measures will be adopted in the future. We expect that additional state and federal healthcare reform measures, as well as legal changes by foreign governments, will be adopted in the future, any of which could limit the amounts that governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. 35 Employees As of December 31, 2024, we had a total of 20 employees, of whom 18 are full-time employees all based in Israel. In addition, we employ a number of specialized clinical, non-clinical, statistical, regulatory and development advisors based in the United States, the United Kingdom and Europe. The distribution of our full-time employees according to main areas of activity is set forth in the following table: Employees Area of Activity: Research and Development 16 General and Administrative 2 Total 18 Israeli labor laws govern the length of the workday and workweek, minimum wages for employees, procedures for hiring and dismissing employees, determination of severance pay, annual leave, sick days, advance notice of termination, payments to the National Insurance Institute, and other conditions of employment and include equal opportunity and anti-discrimination laws. While we are not, and none of our employees is, party to any collective bargaining agreements, certain provisions of the collective bargaining agreements between the Histadrut (General Federation of Labor in Israel) and the Coordination Bureau of Economic Organizations (including the Industrialists’ Associations) are applicable to our employees in Israel by order of the Israeli Ministry of the Economy. These provisions primarily concern pension fund benefits for all employees, insurance for work-related accidents, recuperation pay and travel expenses. We generally provide our employees with benefits and working conditions beyond the required minimums. We have never experienced any employment-related work stoppages and believe our relationships with our employees are good. Facilities For more information regarding our facilities, see “Item 2—Properties” contained in this Annual Report. Legal Proceedings For more information regarding legal proceedings, see “Item 3—Legal Proceedings” contained in this Annual Report. Additional Information Our website is at www.enterabio.com. We make available, free of charge, on our “Investor Relations” section under the heading “SEC Filings”, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our website address is included in this report only as an inactive textual reference. Information contained on, or available through, our website is not incorporated by reference in, or made a part of, this report.