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Item 1. Business

2025-03-11 compared with 2024-03-07 · 278 added, 203 removed, 743 unchanged (39% of the section changed)

Company Overview

We are an innovative biopharmaceutical company pioneering the development of therapeutics engineered to stimulate the body’s immune system for the treatment of cancer.

We are an innovative biopharmaceutical company pioneering the development of therapeutics engineered to stimulate the body’s immune system for the treatment of cancer and other immune-mediated conditions.

We are leveraging our proprietary PREDATOR platform to design conditionally activated molecules that stimulate both adaptive and innate immunity with the goal of addressing the limitations of conventional proinflammatory immune therapies.

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 multiple tumor types.

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.

Our molecules, which we refer to as INDUKINE molecules, are intended to activate selectively in the tumor microenvironment, or TME.

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

We are currently evaluating WTX-124 in a Phase 1/1b clinical trial as a monotherapy and in combination with Merck & Co., Inc.’s anti-PD-1 therapy KEYTRUDA (pembrolizumab) in patients with immunotherapy sensitive advanced or metastatic solid tumors who have failed standard of care treatment, including checkpoint inhibitor therapy.

In November 2023, we announced preliminary first-in-human clinical data from the initial monotherapy dose-escalation cohorts in the Phase 1/1b clinical trial establishing 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.

In June 2024, we reported updated interim data from the monotherapy dose-escalation arms of the Phase 1/1b clinical trial, selected a recommended dose for expansion and initiated monotherapy dose expansion arms, and reported initial data from the combination dose escalation cohorts of the Phase 1/1b clinical trial.

We completed the dose-escalation phase of our Phase 1/1b clinical trial and continue to enroll patients in the monotherapy and combination expansion arms of the Phase 1/1b clinical trial.

We have targeted full enrollment in the monotherapy dose expansion arm in the first half of 2025 and in the combination arm in the second half of 2025.

We plan to meet with regulatory authorities to discuss potential registrational pathways in the second half of 2025 and to release a monotherapy and combination therapy clinical data update in the fourth quarter of 2025.

We have evaluated WTX-330 in a Phase 1 clinical trial for the treatment of immunotherapy resistant advanced or metastatic solid tumors or lymphoma.

We reported initial data from the Phase 1 clinical trial in June 2024 and presented updated interim safety and efficacy data from the Phase 1 clinical trial at the Society for Immunotherapy of Cancer Annual Meeting held in November 2024, highlighting the tolerability profile and monotherapy efficacy signals of WTX-330.

Guided by these data, we expect to initiate a Phase 1/2 dose and regimen-finding clinical trial of WTX-330 in the first quarter of 2025 in patients with selected advanced or metastatic solid tumors.

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.

We continue to further the development of our preclinical product candidates, WTX-712, WTX-518, and WTX-921.

In April 2024, we presented preclinical data for WTX-712 at the American Association for Cancer Research, or AACR, annual meeting demonstrating that WTX-712 acts through a unique mechanism that robustly activates tumor-specific T lymphocytes with an expanded therapeutic window through its selective release of wild-type IL-21 in the TME.

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.

We are also expanding our platform capabilities to other therapeutic areas, including inflammatory diseases.

In April 2024, we also presented preclinical data for WTX-518 at the AACR Annual Meeting demonstrating that WTX-518 exhibits remarkable tumor-selective activation, resistance to IL-18BP and robust immune activation.

WTX-921 is a systemically delivered, conditionally activated Interleukin-10 (IL-10) INDUKINE molecule in development for the treatment of inflammatory bowel disease, or IBD, and potentially other inflammatory diseases.

We continue to build 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 therapeutic areas including new immuno-oncology, autoimmune, and inflammatory diseases.

Our PREDATOR platform consists of our protein engineering technologies and our know-how, which we use to generate INDUKINE molecules with multiple functional domains rationally engineered into a single protein to achieve the desired pharmaceutical profile.

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a cytokine, an inactivation domain, a half-life extension domain and a proprietary protease-cleavable linker.

Our INDUKINE molecules contain cytokines that mediate pro-inflammatory, anti-cancer mechanisms within the TME, with full potency and functionality observed in preclinical studies.

Our INDUKINE molecules for oncology contain cytokines that mediate pro-inflammatory, anti-cancer mechanisms within the TME, with full potency and functionality observed in preclinical studies.

The inactivation domain physically blocks the cytokine portion of the INDUKINE molecule in non-tumor tissue throughout the body, or the periphery, preventing it from binding to its receptor until it is cleaved and thereby activated in the TME.

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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.

We believe our approach has the potential to overcome current limitations of systemic proinflammatory immunomodulatory

therapies, such as cytokines, for the treatment of cancer and other immune-mediated conditions.

Our current pipeline is summarized below:

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

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.

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

WTX-124, WTX-330, WTX-712, WTX-518, and WTX-921.

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

We are also expanding our technology to other disease areas, such as inflammatory diseases.

Our goal is to utilize our proprietary PREDATOR platform to redefine the cancer treatment landscape with therapies to transform the lives of cancer patients.

Our goal is to utilize our proprietary PREDATOR platform to redefine the cancer treatment landscape with therapies to transform the lives of cancer patients, as well as to continue to develop our preclinical portfolio for the treatment of inflammatory bowel disease and potentially other inflammatory diseases.

Key elements of our strategy include:

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

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

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

• Advancing WTX-712, WTX-518, and WTX-921 through preclinical development.

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

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The adaptive immune system is the line of defense that is specific to a pathogen or tumor antigen and is composed of T cells and B cells, which work in concert to kill cells directly, produce antibodies and form immunologic memory.

The latter is critical for the body’s immune response upon re-exposure to the initial antigen or pathogen.

The latter is critical for the

body’s immune response upon re-exposure to the initial antigen or pathogen.

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

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We believe that the best way to improve outcomes for cancer patients is to stimulate additional or de novo immune cell responses within the innate and adaptive arms of the immune system to complement immune checkpoint inhibitor therapy.

Leveraging our PREDATOR platform and drug development capabilities, we are creating a portfolio of conditionally activated proinflammatory immunomodulators, including cytokines, designed to be optimized for the treatment of cancer.

Cytokines are small biologically active proteins that play an essential role in immune cell function of both the innate and adaptive arms of the immune system.

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, 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.

Interleukins, such as IL-2 and IL-12, IFNα, IL-21, IL-18, and IL-10 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 antitumor immune responses resulting in tumor cell killing and tumor clearance.

Two cytokine therapies have received U.S.

Three cytokine therapies have received U.S.

Food and Drug Administration, or FDA, approval for cancer treatment:

(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.

(1) aldesleukin for the treatment of metastatic renal cell carcinoma, or RCC, and metastatic melanoma;

(2) interferon alfa-2b for the treatment of several malignancies, including advanced melanoma;

and most recently (3) nogapendekin alfa inbakicept (IL-15 receptor agonist) for non-muscle invasive bladder cancer.

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.

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Currently, our patent portfolio for our PREDATOR platform technology includes two families of pending patent applications, which disclose and claim protease cleavable linkers and libraries of protease cleavable linkers, as well as polypeptides that contain such linkers, methods of making libraries and methods of screening libraries to identify linkers with desired properties.

These patent families were recently filed, and no patents have granted.

These patent families were recently filed, and no patents have been granted.

For more information see “Intellectual Property” described in this Part I, Item 1.

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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 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 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;

• WTX-124 possesses good PK characteristics in mouse models and is stable in the periphery, with minimal release of free IL-2.

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.

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 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.

During the dose escalation phase of the trial, we expect to identify safe and pharmacodynamically active doses of WTX-124 for the respective dose escalation arms, following which we will open expansion arms for both monotherapy and in combination with pembrolizumab in advanced or metastatic renal cell cancer and advanced or metastatic cutaneous malignant melanoma.

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

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.

In November 2023, we announced 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.

In June 2024, at the American Society of Clinical Oncology, or ASCO, Annual Meeting, we presented updated interim data from dose escalation, both monotherapy and combination therapy with pembrolizumab, in the Phase 1/1b clinical trial, and announced our recommended dose for expansion, or RDE, of 18 mg for monotherapy, and opening of monotherapy expansion arms.

As of May 1, 2024, 47 patients had been treated with at least one dose of WTX-124, 35 in monotherapy and 12 in combination dose escalation.

The data continued to demonstrate that WTX-124 was generally well-tolerated in the outpatient setting at monotherapy doses up to 28 mg and combination doses up to 12 mg, with no new safety signals in combination with pembrolizumab.

WTX-124 as a monotherapy produced objective clinical responses, including a durable confirmed complete response, or CR, and two partial responses, or PRs, at the active dose levels of 12 and 18 mg.

Both PRs were confirmed subsequent to the data cutoff, and one remained progression-free as of November 7, 2024.

Increased T cell activation signature for the combination suggested a potential for improved efficacy by combining WTX-124 with pembrolizumab.

Of the two previously disclosed PRs in combination therapy, one PR improved to a CR, and both combination responses remain ongoing at greater than eight months.

We have targeted full enrollment in the monotherapy dose expansion arm in the first half of 2025 and in the combination arm in the second half of 2025.

The rationale for our clinical development strategy is as follows:

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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.

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.

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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 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 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.

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.

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

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

In November 2024, at the 39th Annual Meeting of the Society for Immunotherapy Cancer, or SITC, we presented preliminary first-in-human clinical data from the Phase 1 clinical trial of WTX-330.

The preliminary data established proof of mechanism for WTX-330 and proof of concept for our second INDUKINE molecule, and included assessments of safety and tolerability, pharmacokinetics, relevant biomarkers and preliminary antitumor activity.

The preliminary data, collected as of October 7, 2024, was generated from 25 heavily pretreated patients from three dose escalation cohorts (0.016, 0.024, and 0.032 mg/kg) and two expansion arms at 0.024 mg/kg in patients resistant to checkpoint inhibitors or for whom checkpoint inhibitors were not indicated.

WTX-330 was generally well-tolerated, with the most common adverse events expected for IL-12 therapy, including cytokine release syndrome, pyrexia, and liver function test elevations.

WTX-330 delivered 22-fold more IL-12 than rhIL-12 therapy at its maximal tolerated dose.

Anti-tumor activity was noted, including one confirmed PR in metastatic melanoma and stable disease in patients with less immunosensitive tumors.

Biomarker data, including NanoString, showed pleiotropic immune activation in the TME, consistent with the mechanism of action of IL-12.

We expect to initiate a Phase 1/2 dose and regimen-finding clinical trial of WTX-330 in the first quarter of 2025 in patients with selected advanced or metastatic solid tumors.

Our IL-21 INDUKINE Molecule

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.

Despite being a potent inducer of immune activation, IL-21 development has been hampered by poor PK properties and adverse events at dose levels associated with antitumor activity.

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

In April 2024, we presented preclinical data for WTX-712 at the AACR annual meeting demonstrating that WTX-712 acts through a unique mechanism that robustly activates tumor-specific T lymphocytes with an expanded therapeutic window through its selective release of wild-type IL-21 in the TME.

Our IL-18 INDUKINE Molecule

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 TME, resulting in antitumor immunity.

In April 2024, we presented preclinical data for WTX-518 at the AACR annual meeting demonstrating that WTX-518 exhibits remarkable tumor-selective activation, resistance to IL-18BP and robust immune activation.

Our IL-10 INDUKINE Molecule

WTX-921 is a systemically delivered, conditionally activated IL-10 INDUKINE molecule for the treatment of inflammatory bowel disease and potentially other inflammatory diseases.

We have generated an IND-enabling data package, and WTX-921 is available for partnering opportunities.

Our Early Stage Programs

In addition to IL-2, IL-12, IFNα, IL-21, IL-18, and IL-10 INDUKINE molecules, we are also applying our novel engineering approach to other modalities with a focus on conditionally activated immune cell engagers.

We believe that our PREDATOR platform protein engineering principles can be extended to conditionally activated immune cell engagers, optimizing how immune cell engagers leverage the immune system to fight cancer.

Our goal is to better understand how the localized tumor delivery of immunomodulatory molecules might contribute to disease control while reducing the toxicity that in many cases accompany the systemic delivery of molecules such as cytokines or immune cell engagers.

Our Partnered Programs

IFNα INDUKINE Molecule Licensed Globally to Jazz Pharmaceuticals

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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 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).

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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 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.

Despite being a potent inducer of immune activation, IL-21 development has been hampered by poor PK properties and adverse events at dose levels associated with antitumor activity.

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.

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, 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.

Our goal is to better understand how the localized tumor delivery of these cytokines using our INDUKINE molecules might contribute to disease control while reducing the toxicity that in many cases accompany the systemic delivery of these cytokines.

In June 2024, we executed a transfer agreement, or the Transfer Agreement, to assign our rights in a development agreement with a contract manufacturer of our interferon alpha INDUKINE molecule JZP898 to Jazz.

The execution of this Transfer Agreement was the last material performance obligation required of us under the Collaboration Agreement.

As of the execution of the Transfer Agreement, we no longer have any material performance obligations under the Collaboration Agreement.

The pharmaceutical industry is characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary drugs.

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(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.

(Bristol-Myers Squibb Company), Mural Oncology, OncoSec Medical Incorporated, Philogen S.p.A., Sonnet BioTherapeutics, Inc., Turnstone Biologics Corp.

(partnered with Takeda Pharmaceutical Company Limited), 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.

Standard of care therapies include chemotherapy, targeted therapy, and more recently, immunotherapies, including monoclonal antibodies and bispecific formats, antibody drug conjugates, adoptive cellular therapies, and cytokines.

Standard of care therapies include chemotherapy, targeted therapy, and more recently, immunotherapies, including

monoclonal antibodies and bispecific formats, antibody drug conjugates, adoptive cellular therapies, and cytokines.

In addition, there are numerous investigational agents in clinical development.

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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.

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.

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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Our third-party manufacturers will also be subject to periodic inspections of facilities by the FDA and other authorities, including procedures and operations used in the testing and manufacture of our products to assess our compliance with applicable regulations.

In March 2024, we received alignment from the U.S.

Food and Drug Administration, or the FDA, on the comparability path for WTX-330 for an improved manufacturing process.

Commercialization Plan

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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, WTX-712 and WTX-518, 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, WTX-518, and WTX-921, 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.

Throughout the development of our product candidates, we will seek to identify additional opportunities for obtaining patent protection that would potentially enhance commercial success, including through additional methods of use, processes for manufacture, formulation and dosing regimen-related claims.

Throughout the development of our product candidates, we will seek to identify

additional opportunities for obtaining patent protection that would potentially enhance commercial success, including through additional methods of use, processes for manufacture, formulation and dosing regimen-related claims.

Our commercial success depends in part on our ability to obtain and maintain proprietary protection for our current and future product candidates, platform technologies, novel discoveries, product development technologies and know-how, to operate without infringing on the proprietary rights of others and to prevent others from infringing our proprietary rights.

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Regardless of the coverage we seek under our existing patent applications, there is always a risk that an alteration to the product or process may provide sufficient basis for a competitor to avoid infringement claims.

In addition, the coverage claimed in a patent application can be significantly reduced before a patent is issued, and courts can reinterpret patent scope after issuance.

In addition, the coverage claimed in a

patent application can be significantly reduced before a patent is issued, and courts can reinterpret patent scope after issuance.

Moreover, many jurisdictions, including the United States, permit third parties to challenge allowed or issued patents in administrative proceedings, which may result in further narrowing or even cancellation of patent claims.

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

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.

As of February 5, 2025, our patent portfolio included approximately eight (8) issued patents in the United States, approximately forty (40) pending U.S.

provisional or non-provisional patent applications, eight (8) pending international patent applications filed under the PCT and approximately one hundred nine (109) 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 2045, 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.

Our patent portfolio on our PREDATOR platform technology includes three 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 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.

patent with claims directed to protease cleavable linkers, and pending applications in the United States, Australia, Brazil, Canada, China, European Patent Office, Hong Kong, 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.

The second patent family currently consists of a pending U.S.

non-provisional application.

The 20-year term for patents in this family runs through 2044.

The third patent family currently consists of a pending U.S.

provisional application.

We plan to file an international patent application under the PCT based on this provisional application before applicable deadlines.

We plan to file an international patent application under the PCT based on this provisional application before the applicable deadlines.

Our platform technology patent portfolio also includes a patent family directed to conditionally activated immune cell engagers.

The patent family currently consists of a pending U.S.

provisional application.

We plan to file an international patent application under the PCT based on this provisional application before the applicable deadlines.

Our patent portfolio also includes patent and patent applications that we license from Harpoon Therapeutics, Inc., or Harpoon.

Our patent portfolio for each of the product candidates is summarized below.

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

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

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.

(four patents), Australia, Europe, Hong Kong, Japan, and Russian Federation 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 2039, excluding any extension of patent term that may be available.

A second patent family currently includes pending applications in U.S., Australia, Brazil, Canada, China, European Patent Office, India, Israel, Japan, Republic of Korea, Mexico, Russian Federation, Singapore and South Africa with claims direct to certain compositions of matter and methods of use with respect to IL-2 INDUKINE molecules and WTX-124.

A second patent family currently includes patents issued in the U.S.

(two patents), and pending applications in U.S., Australia, Brazil, Canada, China, European Patent Office, India, Israel, Japan, Republic of Korea, Mexico, Russian Federation, Singapore and South Africa with claims direct to certain compositions of matter and methods of use with respect to IL-2 INDUKINE molecules and WTX-124.

These applications also claim certain compositions of matter and method of use with respect to INF-a INDUKINE molecules and WTX-613.

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 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.

A third patent family that we co-own currently includes pending applications in the U.S., Australia, Canada, China, Europe, Japan, and Republic of Korea that claim certain pharmaceutical compositions and methods of use of IL-2 INDUKINE molecules and our WTX-124 product candidate.

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

A fourth patent family currently includes a pending PCT application that claims certain 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 fourth patent family currently includes pending applications in the U.S., Canada, Europe, Japan, and Republic of Korea that claims certain methods of use of IL-2 INDUKINE molecules and our WTX-124 product candidate.

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 pending applications in Australia, Canada, Japan, Taiwan, and the U.S.

Our fifth patent family also includes pending applications in the U.S., Australia, Canada, Europe, 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 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 five families directed to IL-12 INDUKINE molecules and our WTX-330 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.The 20-year term for patents in this family will run through to 2042, excluding any extension of patent term that may be available.

A fifth patent family includes a pending U.S.

provisional application that claims certain compositions of matter and method of use with respect to IL-2 INDUKINE molecules and our WTX-124 product candidate.

The 20-year term for patents in this family will run

through 2045, excluding any extension of patent term that may be available.

We plan to file an international patent application under the PCT based on this provisional application before the applicable deadlines.

A sixth patent family includes a pending U.S.

provisional application that claims certain compositions of matter and methods of use with respect to IL-2 INDUKINE molecules and our WTX-124 product candidate.

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

The 20-year term for patents in this family will run through 2045, excluding any extension of patent term that may be available.

We plan to file an international patent application under the PCT based on this provisional application before the applicable deadlines.

Our seventh patent family includes a pending U.S.

provisional application that claims certain methods of use with respect to our IL-2 INDUKINE molecules and our WTX-124 product candidate.

The 20-year term for patents in this family will run through 2045, excluding any extension of patent term that may be available.

We plan to file an international patent application under the PCT based on this provisional application before the applicable deadlines.

We own seven 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.

(two patents), Australia, Japan, and Russian Federation 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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The 20-year term for patents in this family runs through 2039, excluding any extension of patent term that may be available.

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.

A second patent family currently includes pending patent applications in the U.S., Australia, Brazil, Canada, China, European Patent Office, Hong Kong, 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 IL-12 INDUKINE molecules and 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 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.

Our third patent family includes pending applications in the U.S., Australia, Canada, European Patent Office, Japan, and Republic of Korea that claim certain methods of use with respect to IL-12 INDUKINE molecules and our WTX-330 product candidate.

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.

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

A fifth patent family includes a pending PCT application that claims certain methods of use of our IL-12 INDUKINE molecules and WTX-330 product candidate.

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

The 20-year term for patents in this family will run through 2044, excluding any extension of patent term that may be available.

A sixth patent family includes a pending U.S.

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

We plan to file an international patent application under the PCT based on this provisional application before the applicable deadlines.

The 20-year term for patents in this family will run through 2045, excluding any extension of patent term that may be available.

A seventh patent family includes a pending U.S.

provisional application that claims certain compositions of matter and methods of use with respect to IL-12 INDUKINE molecules and our WTX-330 product candidate.

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

The 20-year term for patents in this family will run through 2045, excluding any extension of patent term that may be available.

We plan to file an international patent application under the PCT based on this provisional application before the applicable deadlines.

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.

We own a first patent family that includes pending foreign applications in the 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.

The 20-year term for patents in this family runs through 2039, excluding any extension of patent term that may be available.

A second patent family currently includes pending patent applications in 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-613.

A second patent family currently includes patents issued in the U.S.

(two patents), and pending patent applications in the U.S., Australia, Brazil, Canada, China, European Patent Office, Hong-Kong, 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-613.

These applications also claim certain compositions of matter and method of use with respect to IL-2 INDUKINE molecules and our WTX-124 product candidate.

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

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 pending applications in Canada, Japan, Taiwan, and the U.S.

Our third patent family includes pending applications in the U.S., Canada, China, European Patent Office, Japan, and 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 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 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.

Our fourth patent family also includes pending applications in the U.S., Australia, Canada, European Patent Office, Japan, and Taiwan 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 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 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.

Our fifth patent family currently consists of a pending PCT application directed to certain methods of use with respect to WTX-613.

The 20-year term for patents in this family will run through 2045, excluding any extension of patent term that may be available.

We plan to file an international patent application under the PCT based on this provisional application before the applicable deadlines.

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

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 applications in other jurisdictions based on the pending PCT application before the applicable deadline.

The 20-year term for patents in this family runs through 2044, excluding any extension of patent term that may be available.

We have an exclusive option under our November 2022 collaboration agreement with Adimab LLC to acquire ownership of a patent family directed to our IL-18 INDUKINE molecules and our WTX-518 product candidate.

This patent family includes a pending PCT application that claims certain compositions of matter and method of use with respect to IL-18 INDUKINE molecules and WTX-518.

We intend to exercise the option and acquire ownership of this patent family before applicable deadlines and to file national applications in other jurisdictions based in the pending PCT application before applicable deadlines.

The 20-year term for patents in this family runs through 2044.

We own two patent families directed to our IL-10 INDUKINE molecules and our WTX-921 product candidate.

We own a first patent family that includes a pending PCT application that claims certain compositions of matter and method of use with respect to IL-10 INDUKINE molecules and WTX-921.

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

The 20-year term for patents in this family runs through 2044.

Our second patent family includes a pending U.S.

provisional application directed to certain compositions of matter and method of use with respect to IL-10 INDUKINE molecules and WTX-921.

The 20-year term for patents in this family will run through 2045, excluding any extension of patent term that may be available.

We plan to file an international patent application under the PCT based on this provisional application before the applicable deadlines.

In-Licensed Patents

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The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments, permits a patent term extension of up to five years beyond the expiration date set for the patent.

Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to each regulatory review period may be granted an extension and only those claims reading on the approved drug are extended.

extension and only those claims reading on the approved drug are extended.

Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug.

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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 Second Amended Harpoon Agreement, we agreed to pay to Harpoon a low single digit percentage royalty on net sales by us or any of our affiliates or licensees of any products that we commercialize covered by these additional licensed patents.

In addition, we also agreed to grant to Harpoon, and Harpoon agreed to grant to us, a perpetual, non-exclusive, irrevocable, royalty-free license under certain other patents directed to a certain binding domain of a certain protein, to make, have made, use, sell, offer for sale and import products that are covered by such patents in a field defined by a certain type of molecule with respect to each party.

In addition, we also agreed to grant to Harpoon, and Harpoon agreed to grant to us, a perpetual, non-exclusive, irrevocable, royalty-free license under certain other patents directed

to a certain binding domain of a certain protein, to make, have made, use, sell, offer for sale and import products that are covered by such patents in a field defined by a certain type of molecule with respect to each party.

Unless earlier terminated, our obligations to pay any royalties under the Second Amended Harpoon Agreement will expire on a country-by-country basis upon expiration of the last to expire valid claim of the relevant patents covering the manufacture, use or sale of such covered products in the applicable country.

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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.

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

The regulatory requirements applicable to product development, approval and marketing are subject to change, and regulations and administrative guidance often are revised or reinterpreted by the agencies in ways that may have a significant impact on our business.

Review and Approval of Drugs and Biologics in the United States

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• 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;

• payment of user application and program fees pursuant to the Prescription Drug User Fee Act, or PDUFA;

• securing FDA approval of the NDA or BLA authorizing marketing of the product in the United States or particular indications;

• 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.

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

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.

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

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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 data monitoring committee.

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

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 or for other reasons.

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

In December 2022, with the passage of Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.

In December 2022, with the passage of Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.

These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products.

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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 2024, as mandated by FDORA, the FDA issued draft guidance outlining the general requirements for DAPs.

Unlike most guidance documents issued by the FDA, the DAP guidance when finalized will have the force of law because FDORA specifically dictates that the form and manner for submission of DAPs are specified in FDA guidance.

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

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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.

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.

As of December 19, 2024, the FDA has issued six notices of non-compliance, thereby signaling the government’s willingness to begin enforcing these requirements against non-compliant clinical trial sponsors.

While these notices of non-compliance did not result in civil monetary penalties, the failure to submit clinical trial information to clinicaltrials.gov 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.

Violations may also result in injunctions and/or criminal prosecution or disqualification from federal grants.

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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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.

These reports must include a development safety update report, or DSUR, which is submitted on an annual basis to the FDA.

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

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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.

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.

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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.

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.

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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.

The FDA seeks to meet these timelines for review of an application but its ability to do so may be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel and statutory, regulatory and policy changes.

Average review times at the agency have fluctuated in recent years as a result.

For example, during the past decade, the U.S.

government has shut down several times and certain regulatory agencies, including the FDA, have had to furlough critical employees and stop critical activities, including the review of both NDAs and BLAs.

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.

These pre-approval inspections may cover all facilities associated with an NDA or BLA submission, including drug component manufacturing (e.g., active pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories.

The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

The FDA will not approve an application unless it determines that the manufacturing processes and

facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Moreover, the FDA will review a sponsor’s financial relationship with the principal investigators who conducted the clinical trials in support of the BLA or NDA.

Depending on the level of that compensation and any other financial interest a principal investigator may have in a sponsor, the sponsor may be required to report these relationships to the FDA.

The FDA will then evaluate that financial relationship and determine whether it creates a conflict of interest or otherwise affects the interpretation of the trial or the integrity of the data generated at the principal investigator’s clinical trial site.

If so, the FDA may exclude data from the clinical trial site in connection with its determination of the approvability of the application for the investigational product.

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.

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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.

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.

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.

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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Specifically, the FDA may designate a product for Fast Track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition.

For Fast Track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a Fast Track product’s application before the application is complete.

For Fast Track products, sponsors may have greater interactions

with the FDA and the FDA may initiate review of sections of a Fast Track product’s application before the application is complete.

This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective.

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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.

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

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

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

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.

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

Specifically, the new legislation authorized the FDA to require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded and to submit progress reports on its post-approval studies to the FDA every six months until the study is completed.

Moreover, FDORA established expedited procedures authorizing the FDA to withdraw an accelerated approval if certain conditions are met, including where a required confirmatory study fails to verify and describe the predicted clinical benefit or where evidence demonstrates the product is not shown to be safe or effective under the conditions of use.

The FDA may also use such procedures to withdraw an accelerated approval if a sponsor fails to conduct any required post-approval study of the product with due diligence, including with respect to “conditions specified by the Secretary.” The new procedures include the provision of due notice and an explanation for a proposed withdrawal, and opportunities for a meeting with the Commissioner or the Commissioner’s designee and a written appeal, among other things.

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

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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.

Subsequently, in December 2024 and January 2025, the FDA issued additional draft guidances relating to accelerated approval.

These guidances describe FDA’s views on what it means to conduct a confirmatory trial with due diligence and how the agency plans to interpret whether such a study needs to be underway at the time of approval.

While these guidances are 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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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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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.

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.

So as not to disrupt supply chains, the FDA has granted certain exemptions from enhanced drug distribution security requirements for eligible trading partners for particular periods of time.

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

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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

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.

In addition, in January 2025, the FDA published final guidance outlining its policies governing the distribution of scientific information to healthcare providers about unapproved uses of approved products.

The final guidance calls for such communications to be truthful, non-misleading and scientifically sound and to include all information necessary for healthcare providers to interpret the strengths and weaknesses and validity and utility of the information about the unapproved use of the approved product.

If a company engages in such communications consistent with the guidance’s recommendations, the FDA indicated that it will not treat such communications as evidence of unlawful promotion of a new intended use for the approved product.

Section 505(b)(2) NDAs

NDAs for most new drug products are based on two full clinical studies which must contain substantial evidence of the safety and efficacy of the proposed new product.

These applications are submitted under Section 505(b)(1) of the FDCA.

The FDA is, however, authorized to approve an alternative type of NDA under Section 505(b)(2) of the FDCA.

This type of application allows the sponsor to rely, in part, on the FDA’s previous findings of safety and effectiveness for a similar product or published literature.

Specifically, Section 505(b)(2) applies to NDAs for a drug for which the investigations made to show whether or not the drug is safe for use and effective in use and relied upon by the sponsor for approval of the application “were not conducted by or for the sponsor and for which the sponsor has not obtained a right of reference or use from the person by or for whom the investigations were conducted.”

Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and efficacy data that were not developed by the sponsor.

NDAs filed under Section 505(b)(2) may provide an alternate and potentially more expeditious pathway to FDA approval for new or improved formulations or new uses of previously approved products.

If the Section 505(b)(2) sponsor can establish that reliance on the FDA’s previous approval is scientifically appropriate, the sponsor may eliminate the need to conduct certain preclinical or clinical studies of the new product.

The FDA may also require companies to perform additional studies or measurements to support the change from the approved product.

The FDA may then approve the new drug candidate for all or some of the label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) sponsor.

Generic Drugs and Regulatory Exclusivity

In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress established an abbreviated regulatory scheme authorizing the FDA to approve generic drugs that are shown to contain the same active ingredients as, and to be bioequivalent to, drugs previously approved by the FDA pursuant to NDAs.

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ANDAs are “abbreviated” because they generally do not include preclinical and clinical data to demonstrate safety and effectiveness.

Instead, in support of such applications, a generic manufacturer may rely on the preclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference-listed drug, or RLD.

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, or NCE.

Instead, in support of such applications, a generic manufacturer may rely

on the preclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference-listed drug, or RLD.

Under the Hatch-Waxman Amendments, the FDA may not approve an ANDA or 505(b)(2) application until any applicable period of non-patent exclusivity for the RLD has expired.

The FDCA provides a period of five years of regulatory 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.

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.

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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.

Biosimilars and Regulatory Exclusivity

The 2010 Patient Protection and Affordable Care Act, or ACA, which was signed into law on March 23, 2010, included a subtitle called the Biologics Price Competition and Innovation Act of 2009, or BPCIA.

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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.

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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A decision by a third-party payor not to cover a product candidate could reduce physician utilization once the product is approved and have a material adverse effect on sales, results of operations and financial condition.

Additionally, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

Additionally, a payor’s decision to provide coverage for a product does not imply that an

adequate reimbursement rate will be approved.

Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor.

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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

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

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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.

However, President Biden’s Executive Order issued on January 28, 2021 rescinded the Executive Orders issued by President Trump and directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care, and consider actions that will protect and strengthen that access.

Under this Executive Order, federal agencies are directed to re-examine:

policies that undermine protections for people with pre-existing conditions, including complications related to COVID-19;

demonstrations and waivers under Medicaid and the ACA that may reduce coverage or undermine the programs, including work requirements;

policies that undermine the Health Insurance Marketplace or other markets for health insurance;

policies that make it more difficult to enroll in Medicaid and the ACA;

and policies that reduce affordability of coverage or financial assistance, including for dependents.

Thus, the ACA will remain in effect in its current form.

The nature and scope of health care reform in the second Trump administration remains uncertain but early actions suggest that efforts to undermine the ACA will be renewed and litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.

Pharmaceutical Price Reform

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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 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 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.

Seven states (Colorado, Florida, Maine, New Hampshire, New Mexico, Texas and Vermont) have passed laws allowing for the importation of products from Canada.

North Dakota and Virginia have passed legislation establishing workgroups to examine the impact of a state importation program.

As of May 2024, five states (Colorado, Florida, Maine, New Hampshire and New Mexico) had

submitted Section 804 Importation Program proposals to the FDA.

On January 5, 2023, the FDA approved Florida’s plan for Canadian product importation.

That state now has authority to import certain products from Canada for a period of two years once certain conditions are met.

Florida will first need to submit a pre-import request for each product selected for importation, which must be approved by the FDA.

The state will also need to relabel the products and perform quality testing of the products to meet FDA standards.

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.

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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 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:

(a) make pharmaceutical prices more affordable and equitable for all consumers and throughout the health care system by supporting pharmaceutical price negotiations with manufacturers;

(b) improve and promote competition throughout the prescription pharmaceutical industry by supporting market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase transparency;

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.

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

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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.

The first cycle of negotiations for the Medicare Drug Price Negotiation Program commenced in the summer of 2023.

On August 15, 2024, the HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis.

The prices of these ten drugs will become effective January 1, 2026.

On January 17, 2025, CMS announced its selection of 15 additional drugs covered by Part D for the second cycle of negotiations.

CMS issued a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new administration and CMS is committed to considering opportunities to bring greater transparency in the negotiation program.

The second cycle of negotiations with participating drug companies will occur during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027.

Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.

The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation.

In addition to the drug price negotiation program, the IRA established inflation rebate programs under Medicare Part B and Part D.

These programs require manufacturers to pay rebates to Medicare if they raise their prices for certain Part B and Part D drugs faster than the rate of inflation.

On December 9, 2024, with issuance of its 2025 Physician Fee Schedule final regulation, CMS finalized its rules governing the IRA inflation rebate programs.

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.

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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.

HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry.

Certain of these cases are now on appeal and, on October 30, 2024, the Court of Appeals for the Third Circuit heard oral argument in three of these cases.

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.

importation from other countries and bulk purchasing.

A number of states, for example, require drug manufacturers and other entities in the drug supply chain, including health carriers, pharmacy benefit managers, wholesale distributors, to disclose information about pricing of pharmaceuticals.

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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.

This is increasingly true with respect to products approved pursuant to the accelerated approval pathway.

State Medicaid programs and other payers are developing strategies and implementing significant coverage barriers, or refusing to cover these products outright, arguing that accelerated approval drugs have insufficient or limited evidence despite meeting the FDA’s standards for accelerated approval.

Federal and State Data Privacy Laws

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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.

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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.

In addition to California, at least eighteen 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.

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

These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.

Plaintiffs’ lawyers are also increasingly using privacy-related statutes at both the state and federal level to bring lawsuits against companies for their data-related practices.

In particular, there have been a significant number of cases filed against companies

for their use of pixels and other web trackers.

These cases often allege violations of the California Invasion of Privacy Act and other state laws regulating wiretapping, as well as the federal Video Privacy Protection Act.

Review and Approval of Biologics and Drugs Outside the United States

In addition to regulations in the United States, we are subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products outside of the United States.

Whether or not we obtain FDA approval for a product candidate, we must obtain approval by the comparable regulatory authorities of foreign countries or economic areas, such as the 27-member EU, or EU, before we may commence clinical trials or market products in those countries or areas.

In the EU, our product candidates also may be subject to extensive regulatory requirements.

As in the United States, medicinal products can be marketed only if a marketing authorization from the competent regulatory agencies has been obtained.

Similar to the United States, the various phases of preclinical and clinical research in the EU are subject to significant regulatory controls.

With the exception of the EU and European Economic Area, or EEA, applying the harmonized regulatory rules for medicinal products, the approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly between countries and jurisdictions and can involve additional testing and additional administrative review periods.

The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.

Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

Human Capital

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We value our employees and regularly benchmark total rewards we provide, such as short and long term compensation, 401(k) contributions, health, welfare and quality of life benefits, paid time off and personal leave, against our industry peers to ensure we remain competitive and attractive to potential new hires.

We are committed to diversity, equity and inclusion across all aspects of our organization, including in our recruitment, advancement and development practices.

Corporate Information

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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