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Item 1. Business

2024-03-07 compared with 2023-03-23 · 341 added, 219 removed, 605 unchanged (48% of the section changed)

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Our INDUKINE molecules are intended to remain inactive in peripheral tissue yet activate selectively in the tumor microenvironment, or TME.

Our most advanced clinical stage product candidates, WTX-124 and WTX-330, are systemically delivered, conditionally activated Interleukin-2 (IL-2), and Interleukin-12 (IL-12) INDUKINE molecules, respectively, for the treatment of solid tumors.

We are currently conducting a Phase 1/1b clinical trial to evaluate the safety and tolerability of WTX-124 in patients with advanced or metastatic solid tumors as a single agent and in combination with an immune checkpoint inhibitor, and a Phase 1 clinical trial to evaluate the safety and tolerability of WTX-330 in patients with advanced or metastatic solid tumors or lymphoma resistant to checkpoint inhibitors or for which checkpoint inhibitors are not approved.

We have also recently nominated WTX-712 as our next development candidate.

We are currently conducting a Phase 1/1b clinical trial to evaluate the safety and tolerability of WTX-124 in patients with immunotherapy sensitive advanced or metastatic solid tumors as a single agent and in combination with pembrolizumab, and a Phase 1 clinical trial to evaluate the safety and tolerability of WTX-330 in patients with advanced or metastatic solid tumors or lymphoma resistant to checkpoint inhibitors or for which checkpoint inhibitors are not approved.

We have licensed the worldwide right to develop and commercialize JZP898, formerly WTX-613, a differentiated, conditionally activated interferon alpha, or IFNα, INDUKINE molecule, to Jazz Pharmaceuticals Ireland Limited, or Jazz.

We have also nominated two development candidates, WTX-712 and WTX-518.

WTX-712 is a systemically delivered, conditionally activated Interleukin-21 (IL-21) INDUKINE molecule that is being developed to minimize the severe toxicities that have been observed with recombinant IL-21 therapy and maximize clinical benefit when administered as monotherapy or in combination with checkpoint inhibitors in refractory and/or immunologically unresponsive tumors.

WTX-518 is a systemically delivered, conditionally activated Interleukin-18 (IL-18) INDUKINE molecule in development for the treatment of cancer and is designed to promote activation of immune cells in the TME, resulting in antitumor immunity.

We are building our PREDATOR platform to generate a pipeline of innovative therapeutics that cover a diversity of immune stimulating mechanisms with the potential to address significant unmet medical need in cancer.

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This selection is based on our extensive screening in preclinical studies to identify protease-cleavable linkers that are efficiently cleaved by a broad array of human tumor tissues with minimal cleavage in non-tumor tissues.

We are leveraging our novel PREDATOR platform to engineer conditionally activated proinflammatory immunomodulators, or INDUKINE molecules, which are delivered systemically but activated only in the TME, with the goal of generating potent anti-tumor response while minimizing toxicities.

We have worldwide rights to our PREDATOR platform and our portfolio of INDUKINE product candidates, all of which we have developed internally.

Except for JZP898, which we have licensed to Jazz, we have worldwide rights to our PREDATOR platform and our portfolio of INDUKINE product candidates, all of which we have developed internally.

We believe our approach has the potential to overcome current limitations of systemic proinflammatory immunomodulatory therapies, such as cytokines, for the treatment of cancer.

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Using our PREDATOR platform, we have identified and are continuing to develop four initial product candidates:

WTX-124, WTX-330, JZP898 (formerly WTX-613) and WTX-712.

WTX-124, WTX-330, WTX-712 and WTX-518.

In addition to these product candidates, we are pursuing additional immune-oncology discovery programs in which we are applying our novel engineering approach to other targets.

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• Advancing WTX-330 through clinical development in selected solid tumors and lymphoma.

• Continuing our collaboration with Jazz Pharmaceuticals Ireland Limited, or Jazz, as Jazz develops and commercializes JZP898 (formerly WTX-613), a differentiated, conditionally activated interferon alpha (IFNα) INDUKINE™ molecule.

• Advancing WTX-712 through preclinical development.

• Continuing our collaboration with Jazz, as Jazz develops and commercializes JZP898.

• Advancing WTX-712 and WTX-518 through preclinical development.

• Establishing a leading position in protein engineering and developing optimized conditionally activated molecules.

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The goal of immunotherapy is to harness an individual’s immune system to better enable it to identify, attack and kill tumor cells and to form long-term immunologic memory against tumors.

The immune system is generally divided into the innate and adaptive arms, which are responsible for driving immediate and lasting anti-tumor responses, respectively.

The immune system is generally divided into the innate and adaptive arms, which are responsible for driving immediate and lasting antitumor responses, respectively.

The innate immune system involves a diverse set of cells, including natural killer, or NK, cells, mast cells, eosinophils, basophils, neutrophils, macrophages and dendritic cells, or DCs, all of which generate a rapid local response to a foreign body, pathogen or tumor cell and release signals to activate and recruit cells, specifically lymphocytes, from the adaptive immune system.

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Many of the recent advances in immuno-oncology, such as immune checkpoint inhibitors, have focused on improving the function of T cells.

Over the past decade, the development of immune checkpoint inhibitors, in particular programmed cell death protein 1, or PD-1, and programmed death-ligand 1, or PD-L1, inhibitors, has revolutionized the treatment of many cancers.

The development of immune checkpoint inhibitors, in particular programmed cell death protein 1, or PD-1, and programmed death-ligand 1, or PD-L1, inhibitors, revolutionized the treatment of many cancers.

The efficacy of these T cell targeted immunomodulators, both as single agents or in combination with standard of care therapies, including chemotherapy, has resulted in many of these regimens moving up the treatment paradigm to become first- or second-line treatment options in numerous cancer types, and the landscape for immunotherapy continues to rapidly evolve.

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These proteins regulate immune responses by acting as chemical messengers for the body’s immune cells through receptor site binding.

Interleukins, such as IL-2 and IL-12, IFNα and IL-21 are specific types of cytokines, produced primarily by cells of the immune system to signal and organize the immune response.

Interleukins, such as IL-2 and IL-12, IFNα, IL-21 and IL-18 are specific types of cytokines, produced primarily by cells of the immune system to signal and organize the immune response.

In cancer, cytokines facilitate the ability of the immune system to recognize tumor cells as abnormal and harmful to the host.

Cytokines further increase the proliferation of, enhance the survival of and direct a variety of immune cell types to infiltrate the TME and promote potent anti-tumor immune responses resulting in tumor cell killing and tumor clearance.

Cytokines further increase the proliferation of, enhance the survival of and direct a variety of immune cell types to infiltrate the TME and promote potent antitumor immune responses resulting in tumor cell killing and tumor clearance.

Two cytokine therapies have received U.S.

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(1) aldesleukin for the treatment of metastatic renal cell carcinoma, or RCC, and metastatic melanoma and (2) interferon alfa-2b for the treatment of several malignancies, including advanced melanoma.

However, despite promising anti-tumor activity, the clinical utility of approved cytokine therapies is limited due to toxicity and poor pharmaceutical properties, such as short half-life, reduced exposure of active drug in the tumor and the requirement for frequent administration.

However, despite promising antitumor activity, the clinical utility of approved cytokine therapies is limited due to toxicity and poor pharmaceutical properties, such as short half-life, reduced exposure of active drug in the tumor and the requirement for frequent administration.

The efficacy observed is often accompanied by side effects that can be severe and can make treatment difficult for many patients to tolerate, which limits the ability of patients to remain on therapy long-term.

The need to improve the pharmaceutical properties of cytokines to achieve increased therapeutic indexes provides an opportunity to address a large unmet need for safer, and potentially more efficacious, cytokine therapeutics for the treatment of cancer.

Our PREDATOR platform allows us to engineer cytokines that can be delivered

systemically and have activity selectively upon reaching the TME, thus potentially limiting systemic toxicity.

Our PREDATOR platform allows us to engineer cytokines that can be delivered systemically and have activity selectively upon reaching the TME, thus potentially limiting systemic toxicity.

We believe this unique profile will help overcome the limitations seen with other cytokine approaches.

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We designed our PREDATOR platform to overcome the current limitations of systemic proinflammatory therapies.

We use our PREDATOR platform to design molecules with superior tolerability and optimal pharmaceutical properties when administered systemically as inactive pro-drugs.

We use our PREDATOR platform to design molecules with superior tolerability and optimal pharmaceutical properties when administered systemically as inactive prodrugs.

They then undergo transformation to an active state upon reaching the TME, thereby delivering the full biological potency of antitumor immune modulation for maximum therapeutic potential.

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• Cytokine Domain :

An immunostimulatory molecule with no muteins or sequence alteration.

An immunostimulatory molecule.

Upon tumor specific conditional activation, the released cytokine works as a fully potent agonist, displaying the expected pro-inflammatory mechanism and pharmacology.

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Leveraging this screening process, we initially screened several thousand linker sequences for optimal biochemical properties, and then screened the lead sequences for cleavage by a panel of primary human tumor specimens and normal non-tumor tissues.

Linker sequences that were not efficiently cleaved by human tumor samples (for example, the linker shown as Linker 1 in the diagram below) were eliminated in the screening and those that were efficiently cleaved by human tumors but not cleaved by normal serum or tissues (for example, the linker shown as Linker 3 in the diagram below) were selected for incorporation into our INDUKINE

molecules to confirm their activity in vitro and in vivo .

We have selected linkers for our INDUKINE molecules with characteristics similar to those of Linker 3 in the table below.

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We have rationally engineered INDUKINE molecules to have four key characteristics that we believe provide our product candidates with a unique profile and potential advantages in clinical settings when compared to other cytokines currently approved or in development:

• Optimized Anti-tumor Activity :

The active portion of our INDUKINE molecules consists of a wild-type cytokine.

We believe that delivery of a fully potent and functional cytokine molecule, as opposed to a mutein or cytokine with sequence alterations, into the TME will enable our product candidates to capture the full proinflammatory and immunomodulatory potential of cytokines and potentially result in optimal anti-tumor activity.

• Optimized Antitumor Activity :

The active portion of our INDUKINE molecules consists of a fully potent and functional cytokine molecule delivered directly into the tumor.

We believe that delivery of a cytokine molecule into the TME will enable our product candidates to capture the full proinflammatory and immunomodulatory potential of cytokines and potentially result in optimal antitumor activity.

• Enhanced Tolerability :

To improve tolerability, our INDUKINE molecules are designed to be administered as inactive pro-drugs that employ a tailored, high affinity blockade to minimize off-target toxicity.

To improve tolerability, our INDUKINE molecules are designed to be administered as inactive prodrugs that employ a tailored, high affinity blockade to minimize off-target toxicity.

We aim to prevent peripheral pathway activation, as well as target-mediated disposition in normal tissues, with the goal of minimizing potential toxicity.

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Upon reaching the TME, INDUKINE molecules are activated via cleavage of our proprietary linkers by tumor-specific proteases which results in release of the cytokines in the tumor.

We select our linkers to be specifically cleaved in the tumor and be stable in circulation and normal non-tumor tissues, with the goal enhancing the tolerability profile of our INDUKINE molecules.

We select our linkers to be

specifically cleaved in the tumor and be stable in circulation and normal non-tumor tissues, with the goal enhancing the tolerability profile of our INDUKINE molecules.

Our IL-2 INDUKINE Molecule

Our lead product candidate, WTX-124, is a systemically delivered, conditionally activated IL-2 INDUKINE molecule that we are developing to minimize the severe toxicities observed with rhIL-2 therapy and maximize clinical benefit when administered as monotherapy or in combination with immune checkpoint inhibitors in advanced or metastatic tumors.

We believe that these properties will also allow WTX-124 to have potential applicability in indications beyond those for which rhIL-2 therapy is currently approved.

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WTX-124 consists of wild-type human IL-2, an IL-2Rß blockade element that eliminates binding to both high and medium affinity IL-2Rs expressed in normal tissues to neutralize IL-2 activity in the periphery, an antibody fragment that extends the circulation half-life and a proprietary linker for cleavage in the TME.

As a prodrug, WTX-124 is conditionally activated in the TME to release an IL-2 cytokine to stimulate an anti-tumor immune response but with reduced peripheral toxicities.

In preclinical studies, WTX-124 has exhibited favorable pharmacokinetic and tolerability profile with robust anti-tumor activity driven by the differentiation, activation and expansion of T effector and memory lymphocyte immune responses.

As a prodrug, WTX-124 is conditionally activated in the TME to release an IL-2 cytokine to stimulate an antitumor immune response but with reduced peripheral toxicities.

In preclinical studies, WTX-124 exhibited favorable pharmacokinetic and tolerability profile with robust antitumor activity driven by the differentiation, activation and expansion of T effector and memory lymphocyte immune responses.

Market Opportunity

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If successfully developed and approved, we believe WTX-124 represents a promising therapeutic option for patients with life-threatening diseases with high unmet medical need, either as monotherapy or in combination with immune checkpoint inhibitors or current or potential future standard of care agents.

We have the opportunity to potentially expand upon the patient populations and indications beyond those for which Proleukin is approved.

We have the opportunity to potentially expand upon the patient populations and indications beyond those for which Proleukin (aldesleukin) is approved.

We intend to develop WTX-124 as monotherapy and in combination with pembrolizumab, and eventually in combination with other standard of care therapeutics across different lines of therapy.

According to the Checkpoint Inhibitors Global Market Report 2023, the global checkpoint inhibitors market is expected to reach $46.27 billion in 2026 at a CAGR of 17.9%.

According to the Checkpoint Inhibitors Global Market Report 2024, the global checkpoint inhibitors market is expected to grow to $55.64 billion in 2028 at a CAGR of 10.1%.

WTX-124 Preclinical Results

The preclinical data for WTX-124 has been presented in Cancer Immunology Research “Discovery of a Conditionally Activated IL-2 that Promotes Antitumor immunity and Induces Tumor Regression (Nirschl et al., Cancer Immunol Res (2022) 10(5):581-596).

The preclinical data for WTX-124 was presented in Cancer Immunology Research “Discovery of a Conditionally Activated IL-2 that Promotes Antitumor Immunity and Induces Tumor Regression” (Nirschl et al., Cancer Immunol Res (2022) 10(5):581-596).

Preclinical data from the manuscript for WTX-124 demonstrated that:

• WTX-124, a pro-drug containing wild-type IL-2, is selectively processed and activated in tumors and is efficacious in murine models, even in the presence of regulatory T cells;

• WTX-124 activity is dependent on the processing of the pro-drug, as a non-cleavable version of WTX-124 (WTX-124-NC) is not efficacious in our models;

• WTX-124, a prodrug containing wild-type IL-2, is selectively processed and activated in tumors and is efficacious in murine models, even in the presence of regulatory T cells;

• WTX-124 activity is dependent on the processing of the prodrug, as a non-cleavable version of WTX-124 (WTX-124-NC) is not efficacious in our models;

• Mechanistically, WTX-124 induces intratumoral activation of NK cells and CD8+ T cells and generates long-term memory in treated animals;

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These data were used to support the investigational new drug, or IND, submission in the second quarter of 2022 and the clinical biomarker plan for the Phase 1/1b first-in-human study.

Clinical Development Plan for WTX-124

WTX-124 Clinical Development Plan and Interim Results

We submitted an IND for WTX-124 to the FDA in the second quarter of 2022 and subsequently received FDA clearance.

We have designed our clinical development strategy for WTX-124 with the goal of achieving rapid proof-of-concept in historically immunotherapy-sensitive tumor types, including melanoma and RCC, indications for which aldesleukin is approved.

We have initiated a Phase 1/1b clinical trial of WTX-124 for the treatment of relapsed or refractory advanced or metastatic solid tumors as monotherapy and combination therapy with pembrolizumab.

We designed our clinical development strategy for WTX-124 with the goal of achieving rapid proof-of-concept in historically immunotherapy-sensitive tumor types, including melanoma and RCC, indications for which aldesleukin is approved.

We initiated a Phase 1/1b clinical trial of WTX-124 for the treatment of relapsed or refractory advanced or metastatic solid tumors as monotherapy and combination therapy with pembrolizumab.

This Phase 1/1b clinical trial is designed to assess safety, tolerability and preliminary efficacy.

Additionally, we will conduct concurrent biomarker analysis to evaluate proof of mechanism and tumor-selective conditional activation.

We announced the initiation of patient dosing in September 2022.

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Other expansion arms may be added to enroll additional indications of interest.

We anticipate reporting interim safety, tolerability and preliminary efficacy data from these monotherapy cohorts in the fourth quarter of 2023.

In November 2023, at the 38th Annual Meeting of the Society for Immunotherapy Cancer, or SITC, we presented preliminary first-in-human clinical data from the initial monotherapy dose-escalation cohorts in the Phase 1/1b clinical trial.

The preliminary data established proof of mechanism for WTX-124 and proof of concept for our INDUKINE design, and included assessments of safety and tolerability, pharmacokinetics, relevant biomarkers and preliminary antitumor activity.

The preliminary data, collected as of October 18, 2023, from 16 heavily pretreated patients from the first four monotherapy dose escalation cohorts (1, 3, 6, and 12 mg), was supportive of continued dose escalation.

The preliminary data demonstrated that WTX-124 was generally well tolerated up to and including the 12 mg dose level, with no Grade 3 or higher treatment-emergent adverse events.

At the 12 mg dose level, WTX-124 shrank treatment-refractory tumor metastatic deposits in three of five patients evaluable as of the data cutoff date of November 1, 2024.

Dose escalation is ongoing in the monotherapy and combination therapy arms of the trial.

In the first half of 2024, we expect to report updated interim data from the monotherapy dose-escalation arms of the Phase 1/1b clinical trial, select a recommended dose for expansion and initiate monotherapy dose expansion arms, and report initial data from the combination dose escalation cohorts of the Phase 1/1b clinical trial.

The rationale for our clinical development strategy is as follows:

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However, due to the toxicity associated with aldesleukin, which is noted in a black box warning, the drug is used infrequently.

We believe, based on the mechanism of action of WTX-124, that it may be able to achieve higher intratumoral exposures of IL-2 than aldesleukin with minimal systemic toxicity, leading to monotherapy anti-tumor immune responses in patients with historically immunotherapy-sensitive tumor types who have progressed on, or subsequent to, immune checkpoint inhibitor therapy.

Our preclinical data with WTX-124 show that WTX-124 has single agent anti-tumor activity in mouse tumor models and was well-tolerated.

WTX-124 was also tolerated in NHPs at doses greater than predicted to be required for anti-tumor activity based on modeling the mouse tumor data.

Single agent activity with competitor IL-2 compounds has been limited, potentially affording an opportunity for us to pursue an expedited clinical development and regulatory strategy for WTX-124 if we can show positive single arm efficacy data in a relapsed or refractory tumor type with high unmet medical need.

• IL-2 agonists and immune checkpoint inhibitors may act synergistically to enhance anti-tumor immune response .

We believe, based on the mechanism of action of WTX-124, that it may be able to achieve higher intratumoral exposures of IL-2 than aldesleukin with minimal systemic toxicity, leading to monotherapy antitumor immune responses in patients with historically immunotherapy-sensitive tumor types who have progressed on, or subsequent to, immune checkpoint inhibitor therapy.

Our preclinical data with WTX-124 show that WTX-124 has single agent antitumor activity in mouse tumor models and was well-tolerated.

WTX-124 was also tolerated in NHPs at doses greater than predicted to be required for antitumor activity based on modeling the mouse tumor data.

The data in our Phase 1/1b clinical trial has demonstrated monotherapy antitumor activity at doses safely delivered in the outpatient setting.

Single agent activity with competitor IL-2 compounds has been limited, potentially affording an opportunity for us to pursue an expedited clinical development and regulatory strategy for WTX-124 if we can continue to show positive single arm efficacy data in a relapsed or refractory tumor type with high unmet medical need.

• IL-2 agonists and immune checkpoint inhibitors may act synergistically to enhance antitumor immune response .

Clinical results have shown that aldesleukin induces responses as a single agent in patients who have progressed on immune checkpoint inhibitors.

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Our IL-12 INDUKINE Molecule

Our second product candidate, WTX-330, is a systemically delivered, conditionally activated IL-12 INDUKINE molecule that we are developing to minimize the severe toxicities observed with rhIL-12 therapy and maximize clinical benefit when administered as monotherapy or in combination with standard of care therapies including checkpoint inhibitors in relapsed or refractory advanced or metastatic solid tumors or lymphoma.

Our second product candidate, WTX-330, is a systemically delivered, conditionally activated IL-12 INDUKINE molecule that we are developing to minimize the severe toxicities observed with recombinant human IL-12, or rhIL-12, therapy and maximize clinical benefit when administered as monotherapy or in combination with standard of care therapies including checkpoint inhibitors in relapsed or refractory advanced or metastatic solid tumors or lymphoma.

IL-12 is a potent, pleiotropic cytokine for immune-mediated killing of cancer cells, whose mechanism of action includes stimulation of both innate and adaptive immune responses.

IL-12 is a heterodimeric cytokine (p70) containing two subunits (p35 and p40).

A subset of antigen-presenting cells, such as DCs, produce IL-12 upon activation, during the antigen presentation process.

Binding of IL-12 to the IL-12R expressed on multiple immune cell populations activates the JAK/STAT signaling pathway resulting in helper T cell differentiation, activation of cytotoxic NK and T cells, and inhibition or reprograming of immunosuppressive cells such as tumor-associated macrophages or myeloid-derived suppressor cells.

IL-12 also increases the expression of antigen-presentation machinery, which is necessary to initiate an immune response in tumors that have not naturally stimulated an anti-tumor immune response, also referred to as “cold” tumors.

A subset of antigen-presenting cells, such as DCs, produce IL-12 upon activation, during the antigen

presentation process.

Binding of IL-12 to the IL-12R expressed on multiple immune cell populations activates the JAK/STAT signaling pathway resulting in helper T cell differentiation, activation of cytotoxic NK and T cells, and inhibition or reprogramming of immunosuppressive cells such as tumor-associated macrophages or myeloid-derived suppressor cells.

IL-12 also increases the expression of antigen-presentation machinery, which is necessary to initiate an immune response in tumors that have not naturally stimulated an antitumor immune response, also referred to as “cold” tumors.

IL-12 induces the production of interferon gamma, or IFNγ, a potent proinflammatory mediator of the downstream activities of IL-12 signaling.

IFNγ, in turn, increases the production of IL-12 by mature DCs aiding in their antigen presentation capacity and driving activation of effector T cells.

Numerous studies conducted by others have demonstrated that IL-12 treatment has significant anti-tumor activity in a range of preclinical models, with the induction of a long-lasting anti-tumor immune memory.

Due to the robust anti-tumor activity seen in preclinical studies, there has been significant interest in developing rhIL-12 therapy for advanced solid tumors.

Numerous studies conducted by others have demonstrated that IL-12 treatment has significant antitumor activity in a range of preclinical models, with the induction of a long-lasting antitumor immune memory.

Due to the robust antitumor activity seen in preclinical studies, there has been significant interest in developing rhIL-12 therapy for advanced solid tumors.

In early clinical trials conducted by a third party, the use of systemically administered rhIL-12 produced evidence of clinical activity in several tumor types, including RCC, melanoma and non-Hodgkin’s lymphoma.

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The prodrug is designed to remain inactive while circulating in the periphery and is activated preferentially in the TME to release an IL-12 cytokine.

We believe activation of WTX-330 in the TME has the potential to stimulate a robust anti-tumor immune response while minimizing the peripheral toxicities that have been associated with systemic administration of rhIL-12 therapy.

We believe activation of WTX-330 in the TME has the potential to stimulate a robust antitumor immune response while minimizing the peripheral toxicities that have been associated with systemic administration of rhIL-12 therapy.

Key features of WTX-330 include high affinity blockade of IL-12 – IL-12R interaction in systemic circulation and non-tumor tissues, half-life extension for optimal tumor exposure and conditional protease activation due to our proprietary linker.

In preclinical studies, we have observed high anti-tumor activity of an IL-12 INDUKINE surrogate molecule across a broad range of preclinical tumor models and that it has a favorable pharmacokinetic and tolerability profile.

In preclinical studies, we have observed high antitumor activity of an IL-12 INDUKINE surrogate molecule across a broad range of preclinical tumor models and that it has a favorable pharmacokinetic and tolerability profile.

WTX-330 Preclinical Results

The preclinical data for WTX-330 was presented at two annual meetings in 2022.

In April 2022, we presented “WTX-330 is a Conditionally Activated IL-12 Prodrug that Fundamentally Reprograms Tumor Infiltrating CD8+ T cells and Drives Tumor Regression” at the American Association for Cancer Research, or AACR, 2022 Annual Meeting.

In November 2022, we presented “mWTX-330, an IL-21 INDUKINETM Molecule, Selectively Activates Tumor Infiltrating Lymphocytes and Reprograms the Tumor Microenvironment in Murine Syngeneic Tumor Models” at the 37th Annual Meeting of the Society for Immunotherapy of Cancer, or SITC.

Based on the preclinical data summarized in these presentations for WTX-330, we concluded that:

• WTX-330 demonstrates anti-tumor activity in syngeneic mouse models and expands the therapeutic window compared to rIL-12;

The preclinical data for WTX-330 was presented in Cancer Immunology Research “mWTX-330, an IL-12 INDUKINE Molecule, Activates and Reshapes Tumor-Infiltrating CD8 + T and NK Cells to Generate Antitumor Immunity” (Nirschl et al., Cancer Immunol Res (2023) 11(7):962-977).

Preclinical data from the manuscript for WTX-330 demonstrated that:

• WTX-330 demonstrates antitumor activity in syngeneic mouse models and expands the therapeutic window compared to rIL-12;

• WTX-330 potently inhibits tumor growth in MC38, CT26, B16F10 and EMT6 mouse tumor models;

• Changes in immune profiles in mouse tumors after IL-12 INDUKINE therapy support a mechanism of action similar to rIL-12;

• Systemic administration of mWTX-330 results in increased tumor infiltration as well as significantly increased IL-12 and IFNγ signaling by intratumoral CD8+ T cells;

• Systemic administration of mWTX-330 results in significant increase in the frequency of polyfunctional CD8+ T cells among intratumoral CD8+ T cells as well as significantly increased IL-12 and IFNγ signaling by intratumoral CD8+ T cells;

• mWTX-330 treatment metabolically reinvigorates effector cells in the TME, significantly increasing mitochondrial respiration by tumor infiltrating CD8+ T cells as well as NK cells;

• WTX-330, a fully human IL-12 INDUKINE™ molecule, has inducible activity and is preferentially activated in the presence of primary human dissociated tumor samples.

These data were used to support our IND submission in the third quarter of 2022 for WTX-330.

Clinical Development Plan for WTX-330

We submitted an IND for WTX-330 to the FDA in the third quarter of 2022 and subsequently received FDA clearance.

We have initiated a Phase 1 clinical trial of WTX-330 for the treatment of immunotherapy resistant advanced or metastatic solid tumors or lymphoma, to be followed by expansion arms in relapsed/refractory tumors following treatment with checkpoint inhibitors or tumors for which checkpoint inhibitors are not approved.

We announced the initiation of patient dosing in February 2023.

The trial is currently open for enrollment.

In this Phase 1 trial, we plan to evaluate safety and tolerability, pharmacokinetics, biomarker changes and preliminary signs of anti-tumor activity.

WTX-330 Clinical Development Plan

We submitted an IND for WTX-330 to the FDA in the third quarter of 2022 and subsequently received FDA clearance in the fourth quarter of 2022.

In February 2023, we initiated patient dosing in our Phase 1 clinical trial of WTX-330 for the treatment of immunotherapy resistant advanced or metastatic solid tumors or lymphoma, and enrollment in the dose escalation cohorts is ongoing.

In this Phase 1 trial, we are evaluating safety and tolerability, pharmacokinetics, biomarker changes and preliminary signs of antitumor activity.

We believe the administration of WTX-330 to patients with relapsed or refractory advanced or metastatic solid tumors or lymphoma, in particular those who are resistant to checkpoint inhibitors or for whom checkpoint inhibitors are not indicated, could demonstrate clinical benefit as monotherapy, with the potential for us to pursue an expedited clinical development and regulatory strategy if we are able to show positive single arm efficacy data in a relapsed or refractory tumor type with high unmet medical need.

JZP898 (formerly WTX-613):

We plan to report initial data from the Phase 1 clinical trial in the second quarter of 2024.

IFNα INDUKINE Molecule Licensed Globally to Jazz Pharmaceuticals

JZP898 (formerly WTX-613) is a systemically delivered, conditionally activated IFNα INDUKINE molecule that we are collaborating with Jazz to develop to minimize the severe toxicities that have been observed with rhIFNα therapy and maximize clinical benefit when administered as monotherapy or in combination with checkpoint inhibitors or other standard of care therapy.

IFNα is a member of the type-I IFN family and a proinflammatory cytokine that exerts dual mechanisms of inhibiting tumor cell growth through both cytotoxic effects directly on tumor cells as well as driving anti-tumor immune responses.

JZP898 (formerly WTX-613) is a systemically delivered, conditionally activated IFNα INDUKINE molecule that we are collaborating with Jazz to develop to minimize the severe toxicities that have been observed with recombinant human IFNα, or rhIFNα, therapy and maximize clinical benefit when administered as monotherapy or in combination with checkpoint inhibitors or other standard of care therapy.

While IFNα can inhibit proliferation and induce direct cell apoptosis of some cancer cell types, this mechanism by itself is unlikely to be sufficient to fully control tumor growth.

The additional ability of IFNα to activate and engage different cells of the immune system makes IFNα a potentially effective anti-tumor agent.

The additional ability of IFNα to activate and engage different cells of the immune system makes IFNα a potentially effective antitumor agent.

IFNα activation of the immune response can occur directly by engagement of IFNARs on immune cells or indirectly by the induction of chemokines that attract immune cells to the tumor site.

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In our preclinical studies, we observed the potential benefit of IFNα treatment in syngeneic mouse tumor models using colon, melanoma and breast tumor cell lines and the superior response obtained by the INDUKINE molecule format when compared to the dosing of recombinant cytokine.

Jazz Pharmaceuticals Global License

In April 2022, we entered into a licensing agreement with Jazz under which Jazz acquired exclusive global development and commercialization rights to JZP898 (formerly WTX-613), our differentiated, conditionally activated interferon alpha (IFNα) INDUKINE molecule, which has subsequently been designated JZP898 (formerly WTX-613), as well as products containing certain isolated recombinant polypeptides comprising IFNα that meet specified criteria.

Pursuant to the terms of the licensing agreement, we are responsible for certain pre-clinical development activities with respect to JZP898 (formerly WTX-613) and other development activities specified in mutually agreed upon development plans.

Jazz Pharmaceuticals Global Collaboration and License

In April 2022, we entered into a global collaboration and license agreement, or the Collaboration Agreement, with Jazz under which Jazz acquired exclusive global development and commercialization rights to WTX-613, which has subsequently been designated JZP898, as well as products containing certain isolated recombinant polypeptides comprising IFNα that meet specified criteria (each such product, a Licensed Product).

Pursuant to the terms of the Collaboration Agreement, we are responsible for certain preclinical development activities with respect to JZP898 and other development activities specified in mutually agreed upon development plans.

Jazz will generally reimburse us for the cost of such activities.

JZP898 (formerly WTX-613) is currently in preclinical development, and Jazz is responsible for global clinical development and commercialization.

Jazz expects to submit an IND for JZP898 (formerly WTX-613) to the FDA in 2023.

Jazz will be responsible for all other development and commercialization activities conducted to exploit the Licensed Products.

Jazz received IND application clearance from the FDA for JZP898 in the third quarter of 2023 and initiated a Phase 1 clinical trial in the fourth quarter of 2023.

Our IL-21 INDUKINE Molecule

WTX-712 is a systemically delivered, conditionally activated Interleukin-21 (IL-21) INDUKINE molecule.

IL-21 is a pluripotent cytokine that activates anti-tumor T cell responses, induces B cell activation, and promotes generation and maintenance of germinal centers and tertiary lymphoid structures.

WTX-712 is a systemically delivered, conditionally activated IL-21 INDUKINE molecule.

IL-21 is a pluripotent cytokine that activates antitumor T cell responses, induces B cell activation, and promotes generation and maintenance of germinal centers and tertiary lymphoid structures.

A member of the common g-chain family of cytokines, IL-21 acts on a broader range of cells than IL-2 and does not induce vascular leak syndrome.

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WTX-712 is being developed to minimize the severe toxicities that have been observed with recombinant IL-21 therapy and maximize clinical benefit.

We plan to present preclinical data from WTX-712 in the first half of 2024.

Our IL-18 INDUKINE Molecule

We have recently nominated WTX-518 as our next preclinical development candidate.

WTX-518 is a systemically delivered, conditionally activated IL-18 INDUKINE molecule in development for the treatment of cancer and is designed to promote activation of immune cells in the tumor microenvironment resulting in antitumor immunity.

We plan to present preclinical data from WTX-518 in the first half of 2024.

Our Early Stage Programs

In addition to IL-2, IL-12, IFNα and IL-21, we are also applying our novel engineering approach to other targets and modalities.

In addition to IL-2, IL-12, IFNα, IL-21 and IL-18, we are also applying our novel engineering approach to other targets and modalities.

We believe that additional pro-inflammatory cytokines have the potential to empower the immune system in its fight against cancer and inflammatory diseases.

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Proleukin (aldesleukin) has been approved and is marketed for the treatment of both metastatic RCC and metastatic melanoma.

In addition, we are aware of numerous clinical and preclinical IL-2 molecules using different platforms being developed for oncology indications, including programs from Alkermes Plc, BioNTech SE, Medicenna Therapeutics Corp., Synthekine Inc, Asher Biotherapeutics, Inc., F.

Hoffman La-Roche AG, Genentech Inc.

and Xilio Therapeutics, Inc.

In addition, we are aware of numerous clinical and preclinical IL-2 molecules using different platforms being developed for oncology indications, including programs from Anaveon AG, Anwita Biosciences, Inc., Ascendis Pharma A/S, Asher Biotherapeutics, Inc., Aulos Bioscience, Inc., BioNTech SE, Cue Biopharma, Inc., DEKA Biosciences, Inc., Merck & Co., Inc., Medicenna Therapeutics Corp., Mural Oncology PLC, F.

Hoffmann-La Roche AG, Synthekine, Inc., and Xilio Therapeutics, Inc.

There are no approved IL-12 therapies currently on the market for the treatment of cancer.

However, if approved, WTX-330 may face competition from other IL-12 cytokine programs in clinical and pre-clinical development for oncology indications, including programs from Sanofi S.A.

(Amunix), DragonFly Therapeutics, Inc., Juno Therapeutics, Inc.

(Bristol-Myers Squibb Company), Oncorus, Inc., Turnstone Biologics Corp.

(partnered with Takeda Pharmaceutical Corporation, or Takeda), Oncosec Medical Incorporated, Xilio Therapeutics, Inc.

and Sonnet BioTherapeutics, Inc.

However, if approved, WTX-330 may face competition from other IL-12 cytokine programs in clinical and preclinical development for oncology indications, including programs from Sanofi S.A.

(Amunix), DEKA Biosciences, Inc., DragonFly Therapeutics, Inc., Juno Therapeutics, Inc.

(Bristol-Myers Squibb Company), Turnstone Biologics Corp.

(partnered with Takeda Pharmaceutical Company Limited), Philogen S.p.A., OncoSec Medical Incorporated, Sonnet BioTherapeutics, Inc., Xilio Therapeutics, Inc., and Zymeworks Inc.

We are developing WTX-124 and WTX-330 as potential monotherapies in relapsed or refractory tumor types or in combination with checkpoint inhibitors or other standard of care therapies in advanced or metastatic malignancies with high unmet medical need.

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We do not have and we do not currently plan to acquire or develop the facilities or capabilities to manufacture cGMP drug substance or filled drug product for use in human clinical trials.

Going forward, we will rely on third-party contract manufacturers to manufacture some of our preclinical product candidate supplies and will rely on third-party contract manufacturers to manufacture all of our clinical trial product supplies.

As a result, we rely on third-party contract manufacturers to manufacture some of our preclinical product candidate supplies and rely on third-party contract manufacturers to manufacture all of our

clinical trial product supplies.

We will also contract with additional third parties for the filling, labeling, packaging, storage and distribution of our product candidates investigational drug products.

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

Our patent portfolio includes patents and patent applications with composition of matter and method of use claims with respect to our product candidates, WTX-124, WTX-330, JZP898 (formerly WTX-613) and WTX-712, and claims directed to our PREDATOR platform technology.

Our patent portfolio includes patents and patent applications with composition of matter and method of use claims with respect to our product candidates, WTX-124, WTX-330, JZP898, WTX-712 and WTX-518, and claims directed to our PREDATOR platform technology.

For our product candidates, we will, in general, initially pursue patent protection covering compositions of matter and methods of use.

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The patent positions of therapeutic polypeptide companies like ours are generally uncertain and involve complex legal, scientific and factual questions.

In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its

scope can be reinterpreted or further altered even after patent issuance.

In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted or further altered even after patent issuance.

Consequently, we may not obtain or maintain adequate patent protection for any of our future product candidates or for our platform technology.

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Moreover, we cannot provide any assurance that any patents will be issued from our pending or any future applications or that any current or future issued patents will adequately protect our products.

Our patent portfolio, including patents and patent applications that we own and comprises about sixteen patent families that are in various stages of the patent application filing and examination process in various jurisdictions worldwide, and include claims to our product candidates and claims directed to our PREDATOR platform technology for potential products and developments.

Our patent portfolio, including patents and patent applications that we own and comprises about 23 patent families that are in various stages of the patent application filing and examination process in various jurisdictions worldwide, and include claims to our product candidates and claims directed to our PREDATOR platform technology for potential products and developments.

The status of our patent portfolio changes frequently in the ordinary course of patent prosecution.

As of March 9, 2023, our patent portfolio included approximately five issued patents in the United States, approximately 16 pending U.S.

provisional or non-provisional patent applications, five pending international patent applications filed under the PCT and approximately 85 pending foreign patent applications, including pending applications in Australia, Brazil, Canada, China, European Patent Office, Hong Kong, India, Israel, Japan, Republic of Korea, Mexico, Russian Federation, Singapore, South Africa and Taiwan.

As of February 29, 2024, our patent portfolio included approximately six (6) issued patents in the United States, approximately thirty (30) pending U.S.

provisional or non-provisional patent applications, five (5) pending international patent applications filed under the PCT and approximately ninety five (95) pending foreign patent applications, including pending applications in Australia, Brazil, Canada, China, European Patent Office, Hong Kong, India, Israel, Japan, Republic of Korea, Mexico, Russian Federation, Singapore, South Africa and Taiwan.

These patent applications, if issued, are expected to expire on various dates from 2039 through about 2044, in each case without taking into account any possible patent term extension that may be available.

Our patent portfolio on our PREDATOR platform technology includes two patent families directed to protease cleavable linkers and libraries of protease cleavable linkers, as well as polypeptides that contain such linkers and methods of making libraries and screening libraries to identify linkers with desired properties.

One of the patent families includes pending applications in the United States, Australia, Brazil, Canada, China, European Patent Office, Israel, India, Japan, Republic of Korea, Mexico and Singapore.

One of the patent families includes one issued U.S.

patent with claims directed to protease cleavable linkers, and pending applications in the United States, Australia, Brazil, Canada, China, European Patent Office, Israel, India, Japan, Republic of Korea, Mexico and Singapore.

The 20-year term for patents in this family runs through 2040, excluding any extension of patent term that may be available.

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We own five patent families directed to IL-2 INDUKINE molecules and our WTX-124 product candidate.

One of the families includes 3 issued U.S.

patents with certain composition of matter claims with respect to IL-2 INDUKINE molecules and WTX-124.

One of the families includes patents issued in the U.S.

(three patents), Australia, and Europe with certain composition of matter claims with respect

to IL-2 INDUKINE molecules and WTX-124.

We have also filed pending U.S.

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The 20-year term for patents in this family runs through to 2040, excluding any extension of patent term that may be available.

A third patent family that we co-own currently includes a pending PCT application that claims certain pharmaceutical compositions and methods of use of IL-2 INDUKINE molecules and our WTX-124 product candidate.

We intend to file national applications in the United States and other jurisdictions before applicable deadlines.

A third patent family that we co-own currently includes a pending PCT application and pending applications in Canada, Japan, and the U.S.

that claim certain pharmaceutical compositions and methods of use of IL-2 INDUKINE molecules and our WTX-124 product candidate.

We intend to file national applications in other jurisdictions before applicable deadlines.

The 20-year term for patents in this family will run through to 2042, excluding any extension of patent term that may be available.

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The 20-year term for patents in this family will run through to 2042, excluding any extension of patent term that may be available.

Our fifth patent family also includes a pending PCT application and a pending application in Taiwan that claim certain methods of use with respect our IL-2 INDUKINE molecules and our WTX-124 product candidate.

Our fifth patent family also includes a pending PCT application and pending applications in Australia, Canada, Japan, Taiwan, and the U.S.

that claim certain methods of use with respect our IL-2 INDUKINE molecules and our WTX-124 product candidate.

This family also claims certain methods of use with respect to IL-12 INDUKINE molecules and our WTX-330 product candidate, and INF-a INDUKINE molecules and WTX-613.

We intend to file national applications in the United States and other jurisdictions based on the PCT application before applicable deadlines.

We intend to file national applications in other jurisdictions based on the PCT application before applicable deadlines.

The 20-year term for patents in this family will run through to 2042, excluding any extension of patent term that may be available.

We own four families directed to IL-12 INDUKINE molecules and our WTX-330 product candidate.

One of the families includes two issued U.S.

patent with certain composition of matter claims with respect to IL-12 INDUKINE molecules.

We own five families directed to IL-12 INDUKINE molecules and our WTX-330 product candidate.

One of the families includes patents issued in the U.S.

(two patents) with certain composition of matter claims with respect to IL-12 INDUKINE molecules.

We have also filed a pending U.S.

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A second patent family currently includes pending patent applications in the U.S., Australia, Brazil, Canada, China, European Patent Office, India, Israel, Japan, Republic of Korea, Mexico, Russian Federation, Singapore and South Africa with claims directed to certain compositions of matter and methods of use with respect to WTX-330.

The 20-year term for patents in

this family runs through to 2041, excluding any extension of patent term that may be available.

Our third patent family currently includes two pending U.S.

provisional applications that claim certain methods of use with respect to IL-12 INDUKINE molecules and our WTX-330 product candidate.

We intend to file PCT and national applications in the United States and other jurisdictions before applicable deadlines.

Our fourth patent family currently includes a pending PCT application and a pending application in Taiwan that claim certain methods of use of IL-12 INDUKINE molecules and our WTX-330 product candidate.

The 20-year term for patents in this family runs through to 2041, excluding any extension of patent term that may be available.

Our third patent family currently consists of an international application filed under the PCT directed to certain methods of use with respect to IL-12 INDUKINE molecules and our WTX-330 product candidate.

We intend to file national applications in the United States and other jurisdictions before applicable deadlines.

The 20-year term for patents based on this international application will run through 2043, excluding any extension of patent term that may be available.

Our fourth patent family currently includes a pending PCT application and pending applications in Australia, Canada, Japan, Taiwan, and the U.S.

that claim certain methods of use of IL-12 INDUKINE molecules and our WTX-330 product candidate.

This family also claims certain methods of use with respect to INF-a INDUKINE molecules and WTX-613, and IL-2 INDUKINE molecules and our WTX-124 product candidate.

We intend to file national applications in the United States and other jurisdictions based on the PCT application before applicable deadlines.

We intend to file national applications in other jurisdictions based on the PCT application before applicable deadlines.

The 20-year term for patents in this family will run through to 2042, excluding any extension of patent term that may be available.

We own four patent families directed to our INF-a INDUKINE molecules and our WTX-613 product candidate.

We own five patent families directed to our INF-a INDUKINE molecules and our WTX-613 product candidate.

We own a first patent family that includes pending foreign applications in United States, Australia, Brazil, Canada, China, European Patent Office, Hong Kong, India, Israel, Japan, Republic of Korea, Mexico, Russian Federation, Singapore and South Africa that claim certain compositions of matter and methods of use with respect to INF-a INDUKINE molecules and WTX-613.

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The 20-year term for patents in this family runs through 2040, excluding any extension of patent term that may be available.

We filed a pending application in the United States that combined the disclosures of the first and second families and claims compositions of matter and certain methods of use with respect to WTX-613.

We filed a pending application in the United States that combined the disclosures of the first and second families and claims compositions of matter

and certain methods of use with respect to WTX-613.

The 20-year term for patents based on the pending U.S.

application will run through to 2039 or 2040, depending on the particular claims, excluding any extension of patent term that may be available.

Our third patent family includes a pending PCT application and a pending application in Taiwan that claim certain compositions of matter and methods of use with respect our INF-a INDUKINE molecules.

We intend to file national applications in the United States and other jurisdictions based on the pending PCT application before applicable deadlines.

Our third patent family includes a pending PCT application and pending applications in Canada, Japan, Taiwan, and the U.S.

that claim certain compositions of matter and methods of use with respect our INF-a INDUKINE molecules.

We intend to file national applications in other jurisdictions based on the pending PCT application before applicable deadlines.

The 20-year term for patents in this family will run through to 2042, excluding any extension of patent term that may be available.

Our fourth patent family also includes a pending PCT application and a pending application in Taiwan that claim certain methods of use with respect to INF-a INDUKINE molecules and WTX-613.

Our fourth patent family also includes a pending PCT application and pending applications in Australia, Canada, Japan, Taiwan, and the U.S.

that claim certain methods of use with respect to INF-a INDUKINE molecules and WTX-613.

This family also claims certain methods of use of with respect to IL-12 INDUKINE molecules and our WTX-330 product candidate, and IL-2 INDUKINE molecules and our WTX-124 product candidate.

We intend to file national applications in the United States and other jurisdictions based on the PCT application before applicable deadlines.

We intend to file national applications in other jurisdictions based on the PCT application before applicable deadlines.

The 20-year term for patents in this family will run through to 2042, excluding any extension of patent term that may be available.

Our fifth patent family currently consists of a pending U.S.

provisional application directed to certain methods of use with respect to WTX-613.

We own a patent family directed to our IL-21 INDUKINE molecules and our WTX-712 product candidate.

This patent family includes a pending PCT application that claims certain compositions of matter and method of use with respect to WTX-712.

We intend to file national phase applications in the United States and various foreign jurisdictions based on this PCT application before applicable deadlines.

This patent family includes a pending U.S.

provisional application that claims certain compositions of matter and method of use with respect to WTX-712.

We intend to file an international application under the PCT before the applicable deadline.

The 20-year term for patents in this family runs through to 2043, excluding any extension of patent term that may be available.

We own a patent family directed to our IL-18 INDUKINE molecules and our WTX-518 product candidate.

This patent family includes a pending U.S.

provisional application that claims certain compositions of matter and method of use with respect to WTX-518.

We intend to file an international application under the PCT before applicable deadlines.

In-Licensed Patents

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The 20-year term for the licensed patents runs through 2037, excluding any extension of patent term that may be available.

See the discussion under “License Agreement with Harpoon Therapeutics, Inc.”, below, and Item 13.

Certain Relationships and Related Transactions, and Director Independence, within this Annual Report for more information regarding our license agreement with Harpoon.

See the discussion under “License Agreement with Harpoon Therapeutics, Inc.” for more information regarding our license agreement with Harpoon.

Patent Term and Patent Term Extensions

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We seek to protect our proprietary information, in part, using confidentiality agreements with our commercial partners, collaborators, employees and consultants and invention assignment agreements with our employees and selected consultants.

We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.

We also seek to preserve the integrity and

confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.

While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached and our trade secrets and other proprietary information may be disclosed.

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Under the Harpoon Agreement, we agreed to pay to Harpoon an upfront fee of $0.5 million and, if we commercialize any products covered by these licensed patents, a low single digit percentage royalty on net sales of such products by us or any of our affiliates or licensees, subject to an obligation to make a minimum annual royalty payment at an amount in the low hundreds of thousands of dollars beginning with the first commercial sale of any such product by us.

In October 2018, we and Harpoon amended the Harpoon Agreement by entering into a First Amended and Restated Assignment and License Agreement, which amended certain terms of the original agreement, but did not change the terms of the license to the Company, patent assignments between the parties or payments due to Harpoon.

In October 2018, we and Harpoon amended the Harpoon Agreement by entering into a First Amended and Restated Assignment and License Agreement, which amended certain terms of the original agreement, but did not change the terms of the license to us, patent assignments between the parties or payments due to Harpoon.

In December 2019, we and Harpoon amended the Harpoon Agreement by entering into a Second Amended and Restated Assignment and License Agreement, or the Second Amended Harpoon Agreement, which granted to us an additional worldwide, exclusive, irrevocable, royalty-bearing, transferable, assignable, sublicensable license under certain patents owned by Harpoon and related to certain proteins, to make, have made, use, sell, offer for sale and import products that are covered by such patents in the field of molecules comprising a certain protein.

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In December 2017, in connection with our sale of convertible promissory notes, we entered into a royalty transfer agreement with MPM Oncology Impact Fund Charitable Foundation, Inc., or MPM Charitable Foundation, and UBS Optimus Foundation, or the Royalty Transfer Agreement.

Under the Royalty Transfer Agreement, we agreed to pay a royalty of 0.5% of net sales of our products to each of MPM Charitable Foundation and UBS Optimus Foundation.

Under the Royalty Transfer Agreement, we agreed to pay a royalty of 0.5% of net sales of

our products to each of MPM Charitable Foundation and UBS Optimus Foundation.

In August 2019, we amended the Royalty Transfer Agreement by entering into an amended and restated royalty transfer agreement, or the Amended Royalty Transfer Agreement, which provided that only products in our product pipeline at the time of our initial public offering or a change in control would be subject to the royalty on net sales.

Under the Amended Royalty Transfer Agreement, our obligation to pay a royalty expires on a product-by-product and country-by-country basis upon

the later of the 12th anniversary of the first commercial sale of such product in such country and expiration of the last valid claim in such country covering such product.

Under the Amended Royalty Transfer Agreement, our obligation to pay a royalty expires on a product-by-product and country-by-country basis upon the later of the 12th anniversary of the first commercial sale of such product in such country and expiration of the last valid claim in such country covering such product.

The royalty rate is subject to a specified reduction for lack of any valid claim covering such product in a country.

The obligation to pay royalties under the Amended Royalty Transfer Agreement shall not apply to any product that would only infringe our intellectual property rights that are discovered or developed after this offering or to any product of an acquirer, assignee of the agreement or merger partner of the company so long as such product does not incorporate any of our pre-acquisition intellectual property.

The obligation to pay royalties under the Amended Royalty Transfer Agreement shall not apply to any product that would only infringe our intellectual property rights that are discovered or developed after our initial public offering or to any product of an acquirer, assignee of the agreement or merger partner of us so long as such product does not incorporate any of our pre-acquisition intellectual property.

Government Regulation and Product Approval

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In the United States, the FDA approves and regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and related regulations.

Biological products are licensed for marketing under the Public Health Service Act, or PHSA, and subject to regulation under the FDCA and related regulations.

Biological products, or biologics, are licensed for marketing under the Public Health Service Act, or PHSA, and subject to regulation under the FDCA and related regulations.

A company, institution, or organization which takes responsibility for the initiation and management of a clinical development program for such products, and for their regulatory approval, is typically referred to as a sponsor.

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• approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated;

• submission to the FDA of an NDA for a drug candidate product and a biological licensing application, or BLA, for a biological product requesting marketing for one or more proposed indications;

• performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCPs, to establish the safety and efficacy of the proposed drug product for each proposed indication and the safety, potency and purity of the proposed biological product for each proposed indication;

• submission to the FDA of a new drug application, or NDA, for a drug candidate product and a biological license application, or BLA, for a biological product requesting marketing for one or more proposed indications;

• review of the request for approval by an FDA advisory committee, where appropriate or if applicable;

• completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with cGMPs to assure the product’s identity, strength, quality and purity;

• completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current good manufacturing practice, or cGMP, requirements to assure the product’s identity, strength, quality and purity;

• completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;

• payment of user fees and securing FDA approval of the NDA or BLA;

• FDA review and approval of the NDA or BLA;

• compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.

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Before a sponsor begins testing a compound with potential therapeutic value in humans, the product candidate enters the preclinical testing stage.

Preclinical studies include laboratory evaluation of the purity and stability of the manufactured substance or active pharmaceutical ingredient and the formulated product, as well as in vitro and animal studies to assess the safety and activity of the product candidate for initial testing in humans and to establish a rationale for therapeutic use.

safety and activity of the product candidate for initial testing in humans and to establish a rationale for therapeutic use.

These studies are generally referred to as IND-enabling studies.

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The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin.

This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects and patients will be exposed to unreasonable health risks.

At any time during this 30-day period, or thereafter, the FDA may raise concerns or questions about the conduct of the trials as outlined in the IND and impose a clinical hold or partial clinical hold.

This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects and patients will be exposed to unreasonable health risks and to address any other issues, including chemistry, manufacturing and controls, or CMC, for the proposed product.

At any time during this 30-day period, the FDA may raise concerns or questions about the conduct of the trials as outlined in the IND and impose a clinical hold or partial clinical hold.

In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin.

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Following commencement of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that trial.

Clinical holds are imposed by the FDA whenever there is concern for patient safety and may be a result of new data, findings, or developments in clinical, nonclinical, and/or chemistry, manufacturing, and controls, or CMC.

Clinical holds imposed by the FDA may be a result of new data, findings, or developments in clinical, nonclinical, and CMC.

A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation.

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The FDA will base that determination on information provided by the sponsor correcting the deficiencies previously cited or otherwise satisfying the FDA that the investigation can proceed.

A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND.

When a foreign clinical study is conducted under an IND, all IND requirements must be met unless waived.

When a foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an IND or application for marketing approval in the United States.

The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the quality and integrity of the resulting data.

They further help ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies.

In addition to the foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the trial at least annually.

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An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

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

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

This group provides authorization for whether a trial may move forward at designated check points based on access that only the group maintains to available data from the trial.

Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk.

Other reasons for suspension or termination may be made based on evolving business objectives and/or competitive climate.

Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk or for other reasons.

Human Clinical Studies in Support of an NDA or BLA

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Generally, pivotal trials are Phase 3 trials, but they may be Phase 2 trials if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur.

In addition, IND safety reports must be submitted to the FDA for any of the following:

serious and unexpected suspected adverse reactions;

findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug;

and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the protocol or investigator

The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

In March 2022, the FDA released final guidance entitled “Expansion Cohorts:

Use in First-In-Human Clinical Trials to Expedite Development of Oncology Drugs and Biologics,” which outlines how developers can utilize an adaptive trial design commonly referred to as a seamless trial design in early stages of oncology biological product development (i.e., the first-in-human clinical trial) to compress the traditional three phases of trials into one continuous trial called an expansion cohort trial.

Information to support the design of individual expansion cohorts are included in IND applications and assessed by FDA.

Information to support the design of individual expansion cohorts are included in IND applications and assessed by the FDA.

Expansion cohort trials can potentially bring efficiency to biological product development and reduce developmental costs and time.

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In addition to these requirements, the legislation directs the FDA to issue new guidance on diversity action plans.

In January 2024, the FDA issued draft guidance setting out its policies for the collection of race and ethnicity data in clinical trials.

In June 2023, the FDA issued draft guidance with updated recommendations for GCPs aimed at modernizing the design and conduct of clinical trials.

The updates are intended to help pave the way for more efficient clinical trials to facilitate the development of medical products.

The draft guidance is adopted from the International Council for Harmonisation’s recently updated E6(R3) draft guideline that was developed to enable the incorporation of rapidly developing technological and methodological innovations into the clinical trial enterprise.

In addition, the FDA issued draft guidance outlining recommendations for the implementation of decentralized clinical trials.

Finally, sponsors of clinical trials are required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the U.S.

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In particular, information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial.

The failure to submit clinical trial information to clinicaltrials.gov, as required, is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues.

Although the FDA has historically not enforced these reporting requirements due to the long delay by the Department of Health and Human Services, or HHS, in issuing final implementing regulations, those regulations have now been issued and the FDA has issued several Notices of Noncompliance to manufacturers since April 2021.

Although the FDA has historically not enforced these reporting requirements due to the long delay by the Department of Health and Human Services, or HHS, in issuing final implementing regulations, those regulations have now been issued and the FDA has issued several pre-notices for voluntary corrective action and several notices of non-compliance during the past two years.

While these notices of non-compliance did not result in civil monetary penalties, the failure to submit clinical trial information to clinicaltrials.gov, as required, is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues.

Concurrent with clinical trials, companies often complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the candidate product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

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

Interactions with FDA During the Clinical Development Program

Following the clearance of an IND and the commencement of clinical trials, the sponsor will continue to have interactions with the FDA.

Progress reports detailing the results of clinical trials must be submitted annually within 60 days of the anniversary dates that the IND went into effect and more frequently if serious adverse events occur.

These reports must include a development safety update report.

In addition, IND safety reports must be submitted to the FDA for any of the following:

serious and unexpected suspected adverse reactions;

findings from other trials or animal or in vitro testing that suggest a significant risk in humans exposed to the product;

and any clinically important increase in the occurrence of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all.

The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

In addition, sponsors are given opportunities to meet with the FDA at certain points in the clinical development program.

Specifically, sponsors may meet with the FDA prior to the submission of an IND (pre-IND meeting), at the end of Phase 2 clinical trial (EOP2 meeting) and before a BLA is submitted (pre-BLA meeting).

Meetings at other times may also be requested.

There are five types of meetings that occur between sponsors and the FDA.

Type A meetings are those that are necessary for an otherwise stalled product development program to proceed or to address an important safety issue.

Type B meetings include pre-IND and pre-BLA meetings, as well as end of phase meetings such as EOP2 meetings.

A Type C meeting is any meeting other than a Type A or Type B meeting regarding the development and review of a product, including for example meetings to facilitate early consultations on the use of a biomarker as a new surrogate endpoint that has never been previously used as the primary basis for product approval in the proposed context of use.

A Type D meeting is focused on a narrow set of issues, which should be limited to no more than two focused topics, and should not require input from more than three disciplines or divisions.

Finally, INTERACT meetings are intended for novel products and development programs that present unique challenges in the early development of an investigational product.

The FDA has indicated that its responses, as conveyed in meeting minutes and advice letters, only constitute mere recommendations and/or advice made to a sponsor and, as such, sponsors are not bound by such recommendations and/or advice.

Nonetheless, from a practical perspective, a sponsor’s failure to follow the FDA’s recommendations for design of a clinical program may put the program at significant risk of failure.

Clinical Studies Outside the United States in Support of FDA Approval

In connection with our clinical development program, we may conduct trials at sites outside the United States.

When a foreign clinical study is conducted under an IND, all IND requirements must be met unless waived.

Specifically, the studies must be conducted in accordance with GCP, including undergoing review and receiving approval by an independent ethics committee, or IEC, and seeking and receiving informed consent from subjects.

GCP requirements encompass both ethical and data integrity standards for clinical studies.

The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the quality and integrity of the resulting data.

They further help ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies.

The acceptance by the FDA of study data from clinical trials conducted outside the United States in support of U.S.

approval may be subject to certain conditions or may not be accepted at all.

In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S.

population and U.S.

medical practice;

(ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations;

and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.

In addition, even where the foreign study data are not intended to serve as the sole basis for approval, the FDA will not accept the data as support for an application for marketing approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary.

Many foreign regulatory authorities have similar approval requirements.

In addition, such foreign trials are subject to the applicable local laws of the foreign jurisdictions where the trials are conducted.

Manufacturing and cGMP requirements

Concurrent with clinical trials, sponsors usually complete additional animal safety studies, develop additional information about the chemistry and physical characteristics of the product candidate and finalize a process for manufacturing commercial quantities of the product candidate in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other criteria, the sponsor must develop methods for testing the identity, strength, quality, and purity of the finished product.

Additionally, appropriate packaging must be

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

The FDA’s regulations require that pharmaceutical products be manufactured in specific approved facilities and in accordance with cGMPs.

The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products.

Manufacturers and other entities involved in the manufacture and distribution of approved pharmaceuticals are required to register their establishments with the FDA and some state agencies and they are subject to periodic unannounced inspections by the FDA for compliance with cGMPs and other requirements.

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.

Changes to the manufacturing process, specifications or container closure system for an approved product are strictly regulated and often require prior FDA approval before being implemented.

The FDA’s regulations also require, among other things, the investigation and correction of any deviations from cGMP and the imposition of reporting and documentation requirements upon the sponsor and any third-party manufacturers involved in producing the approved product.

The PREVENT Pandemics Act, which was enacted in December 2022, clarifies that foreign drug manufacturing establishments are subject to registration and listing requirements even if a drug or biologic undergoes further manufacture, preparation, propagation, compounding, or processing at a separate establishment outside the United States prior to being imported or offered for import into the United States.

Pediatric Studies

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The FDA or the sponsor may request an amendment to the plan at any time.

In May 2023, the FDA issued new draft guidance that further describes the pediatric study requirements under PREA.

For investigational products intended to treat a serious or life-threatening disease or condition, the FDA must, upon the request of a sponsor, meet to discuss preparation of the initial pediatric study plan or to discuss deferral or waiver of pediatric assessments.

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The FDA is required to send a PREA Non-Compliance letter to sponsors who have failed to submit their pediatric assessments required under PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request approval for a required pediatric formulation.

Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although the FDA has recently taken steps to limit what it considers abuse of this statutory exemption.

FDARA also established new requirements to govern certain molecularly targeted cancer indications.

Any company that submits an application three years after the date of enactment of that statute must submit pediatric assessments with the application if the product is intended for the treatment of an adult cancer and is directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer.

The investigation must be designed to yield clinically meaningful pediatric study data regarding the dosing, safety and preliminary efficacy to inform pediatric labeling for the product.

Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although the FDA has taken steps to limit what it considers abuse of this statutory exemption.

Further, Section 505B of the FDCA, as amended by the FDA Reauthorization Act of 2017, or FDARA, requires that any original NDA or BLA submitted on or after August 18, 2020, for a new active ingredient, must contain reports on the molecularly targeted pediatric cancer investigation, unless the requirement is waived or deferred, if the drug that is the subject of the application is:

(1) intended for the treatment of an adult cancer, and (2) directed at a molecular target that the Secretary determines to be substantially relevant to the growth or progression of a pediatric cancer in accordance with FDA guidance.

The FDA also maintains a list of diseases that are exempt from PREA requirements due to low prevalence of disease in the pediatric population.

Submission and Review of an NDA or BLA by the FDA

In order to obtain approval to market a drug or biological product in the United States, a marketing application must be submitted to the FDA that provides data establishing the safety and effectiveness of the proposed drug product for the proposed indication, and the safety, purity and potency of the biological product for its intended indication.

The application includes all relevant data available from pertinent preclinical and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls and proposed labeling, among other things.

Data can come from company-sponsored clinical trials

intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators.

The application includes all

relevant data available from pertinent preclinical and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls and proposed labeling, among other things.

Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators.

The application is the vehicle through which sponsors formally propose that the FDA approve a new product for marketing and sale in the United States for one or more indications.

Every new product candidate must be the subject of an approved NDA or BLA before it may be commercialized in the United States.

Under federal law, the fee required for the submission and review of an application under the Prescription Drug User Fee Act, or the PDUFA, is substantial (for example, for fiscal year 2023 this application fee is approximately $3.25 million), and the sponsor of an approved application is also subject to an annual program fee, currently more than $394,000 per eligible prescription product.

Under federal law, the fee required for the submission and review of an application under the Prescription Drug User Fee Act, or the PDUFA, is substantial (for example, for federal fiscal year 2024 this application fee is approximately $4.05 million), and the sponsor of an approved application is also subject to an annual program fee, currently more than $416,000 per eligible prescription product for federal fiscal year 2024.

Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small businesses.

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The FDA has agreed to specified performance goals in the review process of NDAs and BLAs.

Under that agreement, 90% of applications seeking approval of New Molecular Entities, or NMEs, are meant to be reviewed within ten months from the date on which FDA accepts the NDA for filing, and 90% of applications for NMEs that have been designated for “priority review” are meant to be reviewed within six months of the filing date.

The review process and the Prescription Drug User Fee Act goal date may be extended by the FDA for three additional months to consider new information or clarification provided by the sponsor to address an outstanding deficiency identified by the FDA following the original submission.

Under that agreement, 90% of applications seeking approval of New Molecular Entities, or NMEs, are meant to be reviewed within ten months from the date on which the FDA accepts the NDA for filing, and 90% of applications for NMEs that have been designated for “priority review” are meant to be reviewed within six months of the filing date.

The review process and the PDUFA goal date may be extended by the FDA for three additional months to consider new information or clarification provided by the sponsor to address an outstanding deficiency identified by the FDA following the original submission.

In connection with its review of an application, the FDA typically will inspect the facility or facilities where the product is or will be manufactured.

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Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP standards and the integrity of the clinical data supporting the application.

With passage of FDORA, Congress clarified the FDA’s authority to conduct inspections by expressly permitting inspection of facilities involved in the preparation, conduct, or analysis of clinical and non-clinical studies submitted to the FDA as well as other persons holding study records or involved in the study process.

With the passage of FDORA, Congress clarified the FDA’s authority to conduct inspections by expressly permitting inspection of facilities involved in the preparation, conduct, or analysis of clinical and non-clinical studies submitted to the FDA as well as other persons holding study records or involved in the study process.

The FDA may also refer an application for a novel product to an advisory committee or explain why such referral was not made.

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To reach this determination, the FDA must determine that the expected benefits of the proposed product outweigh its potential risks to patients.

This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s safety and efficacy in the NDA or BLA.

This “benefit-risk” assessment is informed by the extensive body of evidence about the product in the NDA or BLA.

If the FDA decides not to license or approve the application, it will issue a CRL.

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In issuing the CRL, the FDA may recommend actions that the applicant might take to place the application in condition for approval, including requests for additional information or clarification.

The FDA may delay or refuse approval of an application if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.

may delay or refuse approval of an application if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.

If a CRL is issued, the applicant will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application withdrawn or, in its discretion, grant the applicant an additional six month extension to respond.

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The FDA may grant accelerated approval to a product for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit.

The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.

lack of alternative treatments.

Products granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

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With passage of FDORA in December 2022, Congress modified certain provisions governing accelerated approval of drug and biologic products.

studies to the FDA every six months until the study is completed, and use expedited procedures to withdraw accelerated approval of an NDA or BLA after the confirmatory trial fails to verify the product’s clinical benefit.

Specifically, the new legislation authorized the FDA to require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded, require a sponsor of a product granted accelerated approval to submit progress reports on its post-approval studies to the FDA every six months until the study is completed, and use expedited procedures to withdraw accelerated approval of an NDA or BLA after the confirmatory trial fails to verify the product’s clinical benefit.

Further, FDORA requires the FDA to publish on its website “the rationale for why a post-approval study is not appropriate or necessary” whenever it decides not to require such a study upon granting accelerated approval.

In March 2023, the FDA issued draft guidance that outlines its current thinking and approach to accelerated approval.

The agency indicated that the accelerated approval pathway is commonly used for approval of oncology drugs due to the serious and life-threatening nature of cancer.

Although single-arm trials have been commonly used to support accelerated approval, a randomized controlled trial is the preferred approach as it provides a more robust efficacy and safety assessment and allows for direct comparisons to an available therapy.

To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended to support accelerated approvals of oncology therapeutics.

While this guidance is currently only in draft form and will ultimately not be legally binding even when finalized, sponsors typically observe the FDA’s guidance closely to ensure that their investigational products qualify for accelerated approval.

Post-Approval Regulation

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There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

In addition, manufacturers and other entities involved in the manufacture and distribution of approved products are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements.

Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented.

In addition, changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented.

FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use.

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Once 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;

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;

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• injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market.

In addition, the distribution of prescription pharmaceutical products is subject to a variety of federal and state laws.

The Prescription Drug Marketing Act, or the PDMA, was the first federal law to set minimum standards for the registration and regulation of drug distributors by the states and to regulate the distribution of drug samples.

Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

In November 2013, the federal Drug Supply Chain Security Act became effective in the United States, mandating an industry-wide, electronic, interoperable system to trace prescription drugs through the pharmaceutical distribution supply chain with a ten-year phase-in process.

Manufacturers were required by November 2023 to have such systems and processes in place but, in August 2023, the FDA set a one-year period in which it would exercise its enforcement discretion with respect to these requirements.

Finally, the FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market.

Products may be promoted only for the approved indications and in accordance with the provisions of the approved label.

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In September 2021, the FDA published final regulations which describe the types of evidence that it will consider in determining the intended use of a drug or biologic.

It may be permissible, under very specific, narrow conditions, for a manufacturer to engage in nonpromotional, non-misleading communication regarding off-label information, such as distributing scientific or medical journal information.

Moreover, with passage of the Pre-Approval Information Exchange Act, or PIE Act, in December 2022, sponsors of products that have not been approved may proactively communicate to payors certain information about products in development to help expedite patient access upon product approval.

Previously, such communications were permitted under FDA guidance, but the new legislation explicitly provides protection to sponsors who convey certain information about products in development to payors, including unapproved uses of approved products.

If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities.

This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products.

Moreover, with passage of the Pre-Approval Information Exchange Act in December 2022, sponsors of products that have not been approved may proactively communicate to payors certain information about products in development to help expedite patient access upon product approval.

In addition, in October 2023, the FDA published draft guidance outlining the agency’s non-binding policies governing the distribution of scientific information on unapproved uses to healthcare providers.

This draft guidance calls for such communications to be truthful, non-misleading, factual, and unbiased and include all information necessary for healthcare providers to interpret the strengths and weaknesses and validity and utility of the information about the unapproved use.

Generic Drugs

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Under the Hatch-Waxman Amendments, the FDA may not approve an ANDA until any applicable period of non-patent exclusivity for the RLD has expired.

The FDCA provides a period of five years of non-patent data exclusivity for a new drug containing a new chemical entity.

For the purposes of this provision, a new chemical entity, or NCE, is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA.

This interpretation of the FDCA by the FDA was confirmed with enactment of the Ensuring Innovation Act in April 2021.

The FDCA provides a period of five years of non-patent data exclusivity for a new drug containing a new chemical entity, or NCE.

For the purposes of this provision, an NCE is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA.

This interpretation of the FDCA by the FDA was confirmed

with enactment of the Ensuring Innovation Act in April 2021.

An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance.

cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the sponsor may submit its application four years following the original product approval.

In cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the sponsor may submit its application four years following the original product approval.

The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the sponsor and are essential to the approval of the application.

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To date, the FDA has approved a number of biosimilars and several interchangeable biosimilar products.

Under the BPCIA, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product.” In order for the FDA to approve a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity, and potency.

For the FDA to approve a biosimilar product as interchangeable with a reference product, the FDA must find that the biosimilar product can be expected to produce the same clinical results as the reference product, and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

In December 2022, Congress clarified through FDORA that the FDA may approve multiple first interchangeable biosimilar biological products so long as the products are all approved on the first day on which such a product is approved as interchangeable with the reference product.

Under the BPCIA, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product.” In order for the FDA to license a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity, and potency.

For the FDA to license a biosimilar product as interchangeable with a reference product, the FDA must find that the biosimilar product can be expected to produce the same clinical results as the reference product, and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

In December 2022, Congress clarified through FDORA that the FDA may license multiple first interchangeable biosimilar biological products so long as the products are all licensed on the first day on which such a product is approved as interchangeable with the reference product.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date of approval of the reference product.

The FDA may not approve a biosimilar product until 12 years from the date on which the reference product was approved.

The FDA may not license a biosimilar product until 12 years from the date on which the reference product was licensed.

Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.

The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products.

The BPCIA also created certain exclusivity periods for biosimilars licensed as interchangeable products.

There have been recent government proposals to reduce the 12-year reference product exclusivity period, but none has been enacted to date.

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Orphan drug designation does not shorten the PDUFA goal dates for the regulatory review and approval process, although it does convey certain advantages such as tax benefits and exemption from the PDUFA application fee.

If a product with orphan designation receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product generally will receive orphan drug exclusivity.

If a product with orphan drug designation receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product generally will receive orphan drug exclusivity.

Orphan drug exclusivity means that the FDA may not approve another sponsor’s marketing application for the same drug for the same indication for seven years, except in certain limited circumstances.

Orphan exclusivity does not block the approval of a different product for the same rare disease or condition, nor does it block the approval of the same product for different indications.

Orphan drug exclusivity does not block the approval of a different product for the same rare disease or condition, nor does it block the approval of the same product for different indications.

If a drug or biologic designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.

Orphan exclusivity will not bar approval of another product under certain circumstances, including if a company with orphan drug exclusivity is not able to meet market demand and in cases where a subsequent product with the same drug or biologic for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care.

Under Omnibus legislation signed by President Trump on December 27, 2020, the requirement for a subsequent product to show clinical superiority in order to break the previous product’s orphan drug exclusivity applies to drugs and biologics that received orphan drug designation before enactment of FDARA in 2017 but have not yet been approved or licensed by FDA.

Orphan drug exclusivity will not bar approval of another product under certain circumstances, including if a company with orphan drug exclusivity is not able to meet market demand and in cases where a subsequent product with the same drug or biologic for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care.

Under Omnibus legislation signed by President Trump on December 27, 2020, the requirement for a subsequent product to show clinical superiority in order to break the previous product’s orphan

drug exclusivity applies to drugs and biologics that received orphan drug designation before enactment of FDARA in 2017 but have not yet been approved or licensed by FDA.

In September 2021, the Court of Appeals for the 11th Circuit held that, for the purpose of determining the scope of market exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the “indication or use.” Although there have been legislative proposals to overrule this decision, they have not been enacted into law.

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Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of regulatory exclusivity.

For drug products, the six-month exclusivity may be attached to the term of any existing patent or regulatory exclusivity.

For drug products, the six-month period of exclusivity may be attached to the term of any existing patent or regulatory exclusivity.

For biologic products, the six-month period may only be attached to any existing regulatory exclusivities but not to any patent terms.

This six-month exclusivity may be granted if an NDA or BLA sponsor submits pediatric data that fairly respond to a

written request from the FDA for such data.

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

The data do not need to show the product to be effective in the pediatric population studied;

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Arrangements with providers, consultants, third-party payors and customers are subject to broadly applicable fraud and abuse, anti-kickback, false claims laws, patient privacy laws and regulations and other health care laws and regulations that may constrain business and/or financial arrangements.

Restrictions under applicable federal and state health care laws and regulations, include the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal health care program such as Medicare and Medicaid;

the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government;

the Foreign Corrupt Practices Act, or FCPA, which prohibits companies and their intermediaries from making, or offering or promising to make, improper payments to non-U.S.

officials for the purpose of obtaining or retaining business or otherwise seeking favorable treatment;

and the federal transparency requirements known as the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

As of January 1, 2022, these federal transparency reporting obligations were extended to include transfers of value made during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives.

In addition, the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended, among other things, imposes limitations on certain covered healthcare providers, health plans, and healthcare clearinghouses and their respective business associates and their covered subcontractors that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information.

Further, some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring manufacturers to report information

related to payments to physicians and other health care providers or marketing expenditures.

Restrictions under applicable federal and state healthcare laws and regulations, including certain laws and regulations applicable only if we have marketed products, include the following:

• federal false claims, false statements and civil monetary penalties laws prohibiting, among other things, any person from knowingly presenting, or causing to be presented, a false claim for payment of government funds or knowingly making, or causing to be made, a false statement to get a false claim paid;

• federal healthcare program anti-kickback law, which prohibits, among other things, persons from offering, soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for, or the purchasing or ordering of, a good or service for which payment may be made under federal healthcare programs such as Medicare and Medicaid;

the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

• federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs;

• federal Open Payments (or federal “sunshine” law), which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with certain healthcare providers to the Center for Medicare & Medicaid Services, or the CMS, within the HHS for re-disclosure to the public, as well as ownership and investment interests held by physicians and their immediate family members;

• federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

• analogous state laws and regulations, including:

state anti-kickback and false claims laws;

state laws requiring pharmaceutical companies to comply with specific compliance standards, restrict financial interactions between pharmaceutical companies and healthcare providers or require pharmaceutical companies to report information related to payments to health care providers or marketing expenditures;

and state laws governing privacy, security and breaches of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts;

• laws and regulations prohibiting bribery and corruption such as the Foreign Corrupt Practices Act, which, among other things, prohibits U.S.

companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations or foreign government-owned or affiliated entities, candidates for foreign public office, and foreign political parties or officials thereof.

Similar healthcare laws and regulations exist in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers and laws governing the privacy and security of personal information.

Additionally, some state and local laws require the registration of pharmaceutical sales representatives in the jurisdiction.

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In particular, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information.

Violation of the laws described above or any other governmental laws and regulations may result in significant penalties, including civil, criminal, and administrative penalties, damages, fines, the curtailment or restructuring of operations, the exclusion from participation in federal and state healthcare programs, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, imprisonment, and additional reporting requirements and oversight if a manufacturer becomes subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws.

Furthermore, efforts to ensure that business activities and business arrangements comply with applicable healthcare laws and regulations can be costly.

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There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and biologics and other medical products, government control and other changes to the health care system in the United States.

In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, or the PPACA, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the ACA.

In March 2010, President Obama signed into law the ACA.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted.

In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress including aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031.

These Medicare sequester reductions were suspended and reduced through the end of June 2022, with the full 2% cut resuming thereafter.

The American Taxpayer Relief Act of 2012, 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.

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The Consolidated Appropriations Act, which was signed into law by President Biden in December 2022, made several changes to sequestration of the Medicare program.

Section 1001 of the Consolidated Appropriations Act delays the 4% Statutory Pay-As-You-Go Act of 2010, or PAYGO, sequester for two years, through the end of calendar year 2024.

Section 1001 of the Consolidated Appropriations Act delays the 4% Statutory Pay-As-You-Go Act of 2010 sequester for two years, through the end of calendar year 2024.

Triggered by enactment of the American Rescue Plan Act of 2021, the 4% cut to the Medicare program would have taken effect in January 2023.

The Consolidated Appropriations Act’s health care offset title includes Section 4163, which extends the 2% Budget Control Act of 2011 Medicare sequester for six months into fiscal year 2032 and lowers the payment reduction percentages in fiscal years 2030 and 2031.

Since enactment of the PPACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law.

Since enactment of the ACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law.

For example, with enactment of the Tax Cuts and Jobs Act of 2017, or the TCJA, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.

In December 2018, a U.S.

District Court judge in the Northern District of Texas ruled that the individual mandate portion of the PPACA is an essential and inseverable feature of the PPACA, and therefore because the mandate was repealed as part of the TCJA, the remaining provisions of the PPACA are invalid as well.

After appeal, in June 2021, the U.S.

Supreme Court dismissed this action after finding that the plaintiffs do not have standing to challenge the constitutionality of the ACA.

Litigation and legislation over the PPACA are likely to continue, with unpredictable and uncertain results.

On June 17, 2021, the U.S.

Supreme Court dismissed a judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.

The Trump Administration also took executive actions to undermine or delay implementation of the ACA, including directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.

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There have been several recent U.S.

congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more

transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.

congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.

In 2020, President Trump issued several executive orders intended to lower the costs of prescription products and certain provisions in these orders have been incorporated into regulations.

These regulations include an interim final rule implementing a most favored nation model for prices that would tie Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced countries, effective January 1, 2021.

These regulations included an interim final rule implementing a most favored nation

model for prices that would tie Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced countries, effective January 1, 2021.

That rule, however, has been subject to a nationwide preliminary injunction and, on December 29, 2021, CMS issued a final rule to rescind it.

With issuance of this rule, CMS stated that it will explore all options to incorporate value into payments for Medicare Part B pharmaceuticals and improve beneficiaries' access to evidence-based care.

In addition, in October 2020, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.

The final rule is currently the subject of ongoing litigation, but at least six states (Vermont, Colorado, Florida, Maine, New Mexico, and New Hampshire) have passed laws allowing for the importation of drugs from Canada with the intent of developing SIPs for review and approval by the FDA.

In addition, in October 2020, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program to import certain prescription drugs from Canada into the United States.

That regulation was challenged in a lawsuit by the Pharmaceutical Research and Manufacturers of America, or PhRMA, but the case was dismissed by a federal district court in February 2023 after the court found that PhRMA did not have standing to sue HHS.

Nine states (Colorado, Florida, Maine, New Hampshire, New Mexico, North Dakota, Texas, Vermont and Wisconsin) have passed laws allowing for the importation of drugs from Canada.

Certain of these states have submitted Section 804 Importation Program proposals and are awaiting FDA approval.

On January 5, 2024, the FDA approved Florida’s plan for Canadian drug importation.

Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The final rule would eliminate the current safe harbor for Medicare drug rebates and create new safe harbors for beneficiary point-of-sale discounts and pharmacy benefit manager, or PBM, service fees.

It originally was set to go into effect on January 1, 2022, but with passage of the Inflation Reduction Act of 2022, or the IRA, has been delayed by Congress to January 1, 2032.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.

Pursuant to court order, the removal and addition of the aforementioned safe harbors were delayed and recent legislation imposed a moratorium on implementation of the rule until January 1, 2026.

The Inflation Reduction Act of 2022, or IRA, further delayed implementation of this rule to January 1, 2032.

On July 9, 2021, President Biden signed Executive Order 14063, which focuses on, among other things, the price of pharmaceuticals.

The Order directs HHS to create a plan within 45 days to combat “excessive pricing of prescription pharmaceuticals and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the federal government for such pharmaceuticals, and to address the recurrent problem of price gouging.” On September 9, 2021, HHS released its plan to reduce pharmaceutical prices.

The Order directed HHS to create a plan within 45 days to combat “excessive pricing of prescription pharmaceuticals and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the federal government for such pharmaceuticals, and to address the recurrent problem of price gouging.” On September 9, 2021, HHS released its plan to reduce pharmaceutical prices.

The key features of that plan are to:

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and (c) foster scientific innovation to promote better healthcare and improve health by supporting public and private research and making sure that market incentives promote discovery of valuable and accessible new treatments.

More recently, on August 16, 2022, the IRA was signed into law by President Biden.

On August 16, 2022, the IRA was signed into law by President Biden.

The new legislation has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage.

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The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D.

CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond.

CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Medicare Part D drugs in 2027, 15 Medicare Part B or Medicare Part D drugs in 2028, and 20 Medicare Part B or Medicare Part D drugs in 2029 and beyond.

This provision applies to drug products that have been approved for at least nine years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition.

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The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year.

On June 6, 2023, Merck & Co.

filed a lawsuit against the HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution.

Subsequently, a number of other parties, including the U.S.

Chamber of Commerce, Bristol Myers Squibb Company, the PhRMA, Astellas, Novo Nordisk, Janssen Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits in various courts with similar constitutional claims against the HHS and CMS.

We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.

At the state level, legislatures are increasingly passing legislation and implementing 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.

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We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

Federal and State Data Privacy Laws

There are multiple privacy and data security laws that may impact our business activities, in the United States and in other countries where we conduct trials or where we may do business in the future.

These laws are evolving and may increase both our obligations and our regulatory risks in the future.

In the health care industry generally, under HIPAA, the HHS has issued regulations to protect the privacy and security of protected health information used or disclosed by covered entities including certain healthcare providers, health plans and healthcare clearinghouses.

HIPAA also regulates standardization of data content, codes and formats used in healthcare transactions and standardization of identifiers for health plans and providers.

HIPAA also imposes certain obligations on the business associates of covered entities that obtain protected health information in providing services to or on behalf of covered entities.

HIPAA may apply to us in certain circumstances and may also apply to our business partners in ways that may impact our relationships with them.

Our clinical trials are regulated by the Common Rule, which also includes specific privacy-related provisions.

In addition to federal privacy regulations, there are a number of state laws governing confidentiality and security of health information that may be applicable to our business.

In addition to possible federal civil and criminal penalties for HIPAA violations, state attorneys general are authorized to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions.

In addition, state attorneys general (along with private plaintiffs) have brought civil actions seeking injunctions and damages resulting from alleged violations of HIPAA’s privacy and security rules.

State attorneys general also have authority to enforce state privacy and security laws.

New laws and regulations governing privacy and security may be adopted in the future as well.

At the state level, California has enacted the California Consumer Privacy Act, or CCPA, which creates new individual privacy rights for consumers (as that word is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.

The CCPA went into effect on January 1, 2020 and requires covered companies to provide new disclosures to California consumers, provide such consumers new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches.

Additionally, effective starting on January 1, 2023, the California Privacy Rights Act, or CPRA, significantly modified the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information.

The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA.

The CCPA and CPRA could impact our business activities depending on how it is interpreted and exemplifies the vulnerability of our business to not only cyber threats but also the evolving regulatory environment related to personal data and individually identifiable health information.

These provisions may apply to some of our business activities.

In addition to California, eleven other states have passed comprehensive privacy laws similar to the CCPA and CPRA.

These laws are either in effect or will go into effect sometime before the end of 2026.

Like the CCPA and CPRA, these laws create obligations related to the processing of personal information, as well as special obligations for the processing of “sensitive” data, which includes health data in some cases.

Some of the provisions of these laws may apply to our business activities.

There are also states that are strongly considering or have already passed comprehensive privacy laws during the 2024 legislative sessions that will go into effect in 2025 and beyond.

Other states will be considering similar laws in the future, and Congress has also been debating passing a federal privacy law.

There are also states that are specifically regulating health information that may affect our business.

For example, the State of Washington passed the My Health My Data Act in 2023 which specifically regulated health information that is not otherwise regulated by the HIPAA rules, and the law also has a private right of action, which further increases the relevant compliance risk.

Connecticut and Nevada have also passed similar laws regulating consumer health data, and more states are considering such legislation in 2024.

Human Capital

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We conduct annual performance and development reviews for each of our employees to discuss the individual’s strengths and development opportunities, career development goals and performance goals.

In addition, each regular full-time employee is

encouraged to attend appropriate job-related trainings and other professional development courses, seminars, meetings, and similar sessions.

In addition, each regular full-time employee is encouraged to attend appropriate job-related trainings and other professional development courses, seminars, meetings, and similar sessions.

The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards.

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Corporate Information

Our principal offices are located at 200 Talcott Ave, 2nd Floor, Watertown, MA 02472, and our telephone number is (617) 952-0555.

Our principal offices are located at 200 Talcott Ave, 2nd Floor, Watertown, Massachusetts, 02472, and our telephone number is (617) 952-0555.

Our website address is www.werewolftx.com.

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

What changed 10-K

Item 1. Business