IDEAYA Biosciences, Inc. 10-K

Item 1. Business. Company Overview We are a synthetic lethality-focused precision medicine oncology company committed to the discovery and development of targeted therapeutics for patient populations selected using molecular diagnostics. Our approach integrates small molecule drug discovery with extensive capabilities in identifying and validating translational biomarkers to develop targeted therapies for select patient populations most likely to benefit. We are applying these capabilities to develop a robust pipeline in precision medicine oncology, with a research and development focus in synthetic lethality—which represents an emerging class of precision medicine targets. We believe synthetic lethality, as an emerging class of precision medicine, represents one of the most exciting, potentially impactful new areas of development in oncology, and we are investing a significant portion of our resources to become a leader in this emerging field. We are establishing a broad pipeline of clinical and preclinical programs directed to synthetic lethality targets. We are also investing in and enhancing our capabilities for identification and validation of new synthetic lethality targets. For targets of interest, we plan to discover therapeutic drugs and relevant biomarkers. Our most advanced synthetic lethality product candidate is IDE397, a clinical-stage methionine adenosyltransferase 2a, or MAT2A, inhibitor for patients with solid tumors having methylthioadenosine phosphorylase, or MTAP, deletions – a patient population estimated to represent approximately 15% of solid tumors. We are enrolling patients into a Phase 1 clinical trial designated as IDE397-001 to evaluate IDE397 under an investigational new drug application, or IND. We are leading research and development of IDE397 through early clinical development, in collaboration with GlaxoSmithKline pursuant to the Collaboration, Option and License Agreement, or the GSK Collaboration Agreement, with an affiliate of GlaxoSmithKline, GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4), Limited, or GSK. We are currently enrolling patients having tumors with MTAP deletion into Cohort 6 of the dose escalation portion of the IDE397 Phase 1 clinical trial. We have completed enrollment in Cohorts 1 through 5 without observing a dose limiting toxicity, or DLT, during the DLT window that begins following the first dose of IDE397. As considered across evaluated cohorts, we observed dose-proportional pharmacokinetic exposures and robust, dose- and/or exposure-dependent pharmacodynamic modulation of S-adenosyl methionine, or SAM, in plasma samples and of symmetric dimethyl arginine, or SDMA, in tumor biopsy samples. We have several preclinical synthetic lethality research programs in our pipeline advancing toward the clinic. We are targeting poly (ADP-ribose) glycohydrolase, or PARG, for patients having tumors with a defined biomarker based on genetic mutations and/or molecular signatures. We own or control all commercial rights in our PARG program. We are targeting DNA Polymerase Theta, or Pol Theta or POLQ, in collaboration with GSK, for solid tumors with homologous recombination deficiency, or HRD, including BRCA mutations. We are also targeting Werner Helicase, or WRN, in collaboration with GSK, in tumors with high microsatellite instability, or MSI high. Additionally, we have multiple wholly-owned early preclinical research programs targeting MTAP synthetic lethality, or MTAP-SL, target distinct DNA Damage Targets, or DDTs, for patients with solid tumors characterized by a proprietary biomarker or a gene signature. Another clinical-stage product candidate, darovasertib or IDE196, is a protein kinase C, or PKC, inhibitor that we are evaluating as a synthetic lethal combination therapy in patients having genetically-defined cancers having GNAQ or GNA11 gene mutations. Darovasertib, which we in-licensed from Novartis, is being clinically evaluated in a Phase 1/2 clinical trial designated as IDE196-001. Our current clinical strategy includes evaluation of darovasertib in metastatic uveal melanoma, or MUM patients, adjuvant primary uveal melanoma, or UM patients, and in skin melanoma patients having tumors with GNAQ or GNA11, or GNAQ/11, mutations. We are evaluating darovasertib in a Phase 1/2 clinical trial in combination with crizotinib, an investigational cMET inhibitor, pursuant to our Clinical Trial Collaboration and Supply Agreement, or Pfizer Agreement, with Pfizer in MUM and in skin melanoma patients having tumors with GNAQ/11 mutations. We have expanded our relationship with Pfizer. Subject to FDA guidance, we will evaluate darovasertib and Pfizer’s cMET inhibitor, crizotinib, as a combination therapy in MUM in a Phase 2 potentially registration-enabling clinical trial pursuant to a second Clinical Trial Collaboration and Supply Agreement, or the Second Pfizer Agreement. We also plan to evaluate, subject to preclinical validation, darovasertib and Pfizer’s cMET inhibitor, crizotinib, as a combination therapy in other cMET-driven tumors such as non-small cell lung cancer, or NSCLC, and/or in hepatocellular carcinoma, or HCC, in a Phase 1 clinical trial pursuant to a third Clinical Trial Collaboration and Supply Agreement, or the Third Pfizer Agreement, or collectively with the Pfizer Agreement and the 1 Second Pfizer Agreement, the Pfizer Agreements . We are planning to initiate evaluation of darovasertib in adjuvant UM patients through an investigator sponsor clinical trial, or IST. We are preclinically evaluating potential expansion opportunities in oncology for darovasertib, including in combination with a cMET inhibitor in certain cMET-driven solid tumors, and in combination with a KRAS inhibitor in certain KRAS-driven solid tumors. In addition, we are exploring potential expansion opportunities in GNAQ/11 rare diseases, such as Sturge Weber Syndrome, or SWS, and Port Wine Stain, or PWS. We have assembled a team of cancer biologists, drug discovery chemists, translational biologists and drug development professionals with broad experience at leading oncology organizations. Our team is led by our Chief Executive Officer, Yujiro S Hata. We are also guided by a renowned scientific advisory board made up of key scientific and clinical thought leaders. Strategy Our objective is to develop and commercialize innovative precision medicine drugs that indirectly or directly target the genetic drivers of cancer in order to provide therapies for defined patient populations. The principal components of our strategy are to: Continue to efficiently develop our clinical-stage product candidates, IDE397, an orally available small molecule inhibitor of MAT2A, and darovasertib, an orally available small molecule inhibitor of PKC. We are currently conducting a Phase 1 clinical trial evaluating IDE397 in patients with tumors having MTAP-deletion. We are also conducting a Phase 1/2 trial evaluating darovasertib as a combination therapy with crizotinib in patients with MUM and in skin melanoma with tumors harboring GNAQ or GNA11 mutations. We are planning to initiate evaluation of darovasertib in adjuvant primary UM through an IST, and are preclinically evaluating multiple potential expansion opportunities, including in cMET-driven solid tumors, and KRAS-driven solid tumors. Advance our preclinical pipeline of small molecule product candidates in synthetic lethality into clinical development. Our synthetic lethality pipeline includes multiple preclinical research programs, including our maturing PARG and Pol Theta programs. We are also continuing to invest in our earlier, broader portfolio of synthetic lethality programs, including programs targeting WRN, MTAP-SL and certain DNA Damage Targets. Broaden our pipeline of targeted therapies and apply our core capabilities to establish a leading franchise in the field of synthetic lethality. We are continuing our target identification and validation activities for advancing new synthetic lethality targets and associated biomarkers. We continue to invest in core functional capabilities, including in drug discovery, bioinformatics and translational biology. Collaborate with leaders in the field of diagnostics to enable the identification of defined patient populations for our product candidates. Our precision medicine approach leverages the availability or development of companion diagnostics to identify patients for which our product candidates will be most effective. Collaborate under our existing strategic partnerships and identify additional strategic collaborations to accelerate development timelines and maximize the commercial potential of our targeted product candidates. We have entered into a strategic partnership and collaboration with GSK for our synthetic lethality programs targeting MAT2A, Pol Theta and Werner Helicase pursuant to the GSK Collaboration Agreement. We have also entered into the Pfizer Agreements for evaluation of darovasertib combinations with crizotinib in MUM, other GNAQ/11 solid tumors and in cMET-driven solid tumors. We will selectively evaluate strategic collaborations for our targeted product candidates with biopharmaceutical partners whose research, development, commercial, marketing, and geographic capabilities complement our own. 2 Pipeline We are applying our capabilities and approach to develop a portfolio of targeted therapeutics for defined patient populations, with a focus in synthetic lethality. (1) Pursuant to GSK Collaboration, Option and License Agreement (2) Pursuant to CRUK/Manchester Agreement (3) Pursuant to Pfizer Agreements Our precision medicine pipeline includes clinical-stage assets IDE397, a MAT2A inhibitor being evaluated in a Phase 1 clinical trial in patients with solid tumors having MTAP deletion, and darovasertib, a PKC inhibitor being evaluated in a Phase 1/2 clinical trial in patients harboring certain GNAQ/11 mutations. Our pipeline also includes preclinical research programs directed to synthetic lethality targets PARG, Pol Theta, Werner Helicase, and certain DNA Damage Targets, the profiles of which are summarized below. All data and the status of each program are as of March 1, 2022, unless otherwise noted. IDE397 (MTAP Gene Deletion) • We are developing our synthetic lethality product candidate, IDE397, a clinical stage MAT2A inhibitor for patients with solid tumors having MTAP deletions, which represents approximately 15% of all solid tumors. • We have initiated a Phase 1 clinical trial designated as IDE397-001 to evaluate IDE397 in patients with solid tumors having MTAP deletion. We are currently enrolling into Cohort 6 of the dose escalation portion of the clinical trial and have not yet observed a DLT in prior Cohorts 1 through Cohort 5. We are targeting monotherapy cohort expansion and initiation of combination cohorts in the second or third quarter of 2022, or mid-year 2022. The timing of the expansion and/or combination cohorts may be influenced by when we define the maximum tolerated dose, or MTD . • We are targeting delivery of an IDE397 option data package to GSK mid-year 2022, subject to initiation of an expansion cohort or establishing the MTD. Delivery of the option data package would trigger an evaluation period for GSK to make an opt‐in decision. Subject to GSK’s election to opt‐in and, if required, HSR clearance, we are entitled to receive a $50 million opt‐in payment from GSK. • We observed preliminary clinical pharmacodynamic, or PD, response in early cohorts of the dose-escalation portion of the IDE397 monotherapy Phase 1 clinical trial including SAM, tumor SAM and SDMA. We have a program objective to obtain additional clinical PD data during dose escalation. • We are leading research and development of IDE397 through early clinical development, in collaboration with GSK pursuant to the GSK Collaboration Agreement . PARG Program (Defined Biomarker) • We are advancing our preclinical-stage synthetic lethality PARG program for patients having tumors with a defined biomarker based on genetic mutations and/or molecular signatures. 3 • We are targeting submission of an IND for our development candidate , IDE161, in the fourth quarter of 2022, subject to satisfactory completion of ongoing preclinical and IND-enabling studies . • We own or control all commercial rights in our PARG program, subject to certain economic obligations pursuant to our exclusive, worldwide license to certain PARG inhibitors, including IDE161, with Cancer Research UK and University of Manchester. Pol Theta Program (HRD, including BRCA) • We are pursuing our preclinical synthetic lethality Pol Theta program, in collaboration with GSK, for solid tumors with HRD, including BRCA mutations. • Subject to further preclinical studies, we are, in collaboration with GSK, targeting initiation of IND-enabling studies for our Pol Theta small molecule inhibitor in the first half of 2022. • We have the potential to receive up to $20 million in aggregate milestone payments from GSK for certain milestones, which we believe may occur as we, in collaboration with GSK, advance a Pol Theta helicase inhibitor from preclinical development into early Phase 1 clinical trials. • We plan to continue further research and development of our Pol Theta program in collaboration with GSK pursuant to the GSK Collaboration Agreement. WRN Program (MSI-High) • We are progressing our synthetic lethality Werner Helicase program, in collaboration with GSK, for patients with MSI-high tumors. • We observed Werner Helicase inhibitor in vivo efficacy in a cell derived xenograft, or CDX, model with approximately 100% tumor growth inhibition, and are, in collaboration with GSK, targeting nomination of a Werner Helicase inhibitor development candidate in 2023. • We have the potential to receive up to $20 million in aggregate milestone payments from GSK for certain milestones, which may occur as we, in collaboration with GSK, advance a Werner Helicase inhibitor from preclinical development into early Phase 1 clinical trials. • We plan to continue further research and development of our Werner Helicase program in collaboration with GSK pursuant to the GSK Collaboration Agreement. DNA Damage Targets (Defined Biomarkers) • We have initiated early preclinical research programs targeting multiple distinct DDTs for patients with solid tumors characterized by a defined biomarker based on genetic mutations and/or molecular signatures. • We own or control all commercial rights in our DDT programs. Synthetic Lethality Target and Biomarker Discovery Platform • We have established a comprehensive platform to computationally and empirically identify synthetic lethality target and biomarker pairs in defined patient populations. • We own or control all commercial rights in programs directed to targets identified in on our synthetic lethality and biomarker discovery platform. Darovasertib (GNAQ or GNA11 Mutations) • We are evaluating darovasertib, a clinical stage PKC inhibitor, in our ongoing Phase 1/2 clinical basket trial in patients having tumors harboring GNAQ or GNA11 mutations, such as MUM and skin melanoma, and plan to initiate an IST to evaluate darovasertib in adjuvant primary UM. • In metastatic uveal melanoma, or MUM, we are enrolling patients into a Phase 2 arm of the clinical trial evaluating IDE196 in combination with crizotinib, a cMET inhibitor, pursuant to the Pfizer Agreement. We are targeting to obtain guidance from the FDA in mid-year 2022 on a clinical trial design for enabling a potential registrational trial. We are planning to present additional interim clinical data from the Phase 2 4 darovasertib/crizotinib arm of the clinical trial in mid-year 2022. The timing of the clinical data and FDA guidance may be influenced by data maturity, including for example, appropriate interim assessments of median duration of response, or DOR, and/or median progression free survival, or mPFS. • We are preclinically evaluating potential expansion opportunities in cMET-driven solid tumors and KRAS-driven solid tumors. • We have expanded our relationship with Pfizer with additional agreements which will support clinical evaluation, subject to FDA guidance, of darovasertib and Pfizer’s cMET inhibitor, crizotinib, as a combination therapy in a planned MUM Phase 2 potential registration-enabling clinical trial pursuant to the Second Pfizer Agreement, and, subject to preclinical validation and FDA guidance, in other cMET-driven tumors such as HCC or NSCLC in a planned Phase 1 clinical trial pursuant to the Third Pfizer Agreement. • We currently own or control all commercial rights in our darovasertib program, subject to certain economic obligations pursuant to our exclusive, worldwide license to darovasertib with Novartis. Therapies Based on Synthetic Lethality Synthetic Lethality Pipeline Overview We are actively pursuing the discovery and development of small molecule inhibitors of selected targets based on synthetic lethality. Our pipeline in synthetic lethality comprises our clinical stage product candidate, IDE397, and multiple preclinical programs targeting PARG, Pol Theta, Werner Helicase and DNA Damage Targets, designated as DDT1 and DDT2. Our synthetic lethality pipeline is complemented by a robust target and biomarker discovery platform. For each synthetic lethality target, we are simultaneously pursuing identification and validation of both therapeutic and tumor-associated biomarker(s) for patient selection. In addition to these programs, we are actively identifying and validating novel synthetic lethality targets through our internal research as well as through collaborations with academic and clinical institutions, including the University of California, San Diego, the Broad Institute of MIT and Harvard, or Broad Institute, and Cancer Research UK. Scientific Rationale Synthetic lethality is emerging as an important therapeutic paradigm in the treatment of cancer. It was first defined by Calvin Bridges in 1922 based on the observation that certain combinations of gene mutations resulted in lethality despite the fact the single mutations in either gene were viable. Cancer cells often contain genetic changes that lead to alterations in pathways such as DNA repair and metabolism. These changes endow the cancer cells with certain properties such as the ability to replicate by bypassing normal control mechanisms. However, removing these important regulators of cell function may also make these cancer cells more dependent on backup pathways that can then be targeted to achieve a therapeutic effect. We are using small molecule inhibitors against targets in DNA damage repair, or DDR, pathways or in tumor metabolism pathways, that have potentially less effects on the viability of normal cells, but are designed to result in lethality in cancer cells having specific underlying genetic alterations. Cancer targets based on synthetic lethality are ideal for precision medicine approaches because each product candidate inherently has a tumor-associated genetic biomarker to facilitate patient selection. MAT2A Inhibitors in Tumors Containing MTAP Deletion Our most advanced synthetic lethality product candidate is IDE397, a clinical stage MAT2A inhibitor for patients with solid tumors having MTAP deletions. MTAP-null cells lack the ability to metabolize 5-methylthioadenosine, or MTA, which is an essential step in a biochemical pathway involved in salvaging metabolite S-adenosyl methionine, or SAM. Increased levels of MTA partially inhibit the methyltransferase PRMT5 for which SAM is the methyl-donor substrate for methylation of various proteins. This partial inhibition of PRMT5 by increased levels of MTA renders MTAP-null cells more dependent on the activity of methionine adenosyltransferase II alpha or MAT2A, an enzyme that is responsible for the synthesis of SAM. Because of this enhanced dependence, loss of MTAP results in synthetic lethality when MAT2A is pharmacologically inhibited. 5 The prevalence of MTAP deletions is estimated to be approximately 15% of all human tumors, translating to an estimated addressable population in major market countries, consisting of the US, EU5 (composed of Germany, Italy, Spain, France and the UK) and Japan, for patients having solid tumors with MTAP deletion to be approximately 75,000 annually. In China, the estimated addressable population for esophageal cancer with MTAP deletion is about 30,000 annually, and for non-small cell lung cancer, or NSCLC , with MTAP deletion is about 20,000 annually. We are leading development of IDE397 through early clinical development, in collaboration with GSK pursuant to the GSK Collaboration Agreement. Our initial clinical development plans to evaluate IDE397 include the ongoing dose escalation portion of the Phase 1 clinical trial. We are enrolling patients having solid tumors with MTAP deletion identified by commercial or institutional next generation sequencing, or NGS, panels or by MTAP immunohistochemistry, or IHC, assay with confirmation by NGS. We are currently enrolling patients into Cohort 6 of the dose escalation portion of the Phase 1 clinical trial. As of March 1, 2022, we have enrolled an aggregate total of 16 patients in the Phase 1 IDE397 clinical. These patients collectively have various solid tumor types with MTAP-deletion, including NSCLC, pancreatic cancer, thymic cancer, adenoid cystic carcinoma, gastroesophageal cancer, and bladder cancer. As of March 1, 2022, IDE397 has been generally well tolerated with mainly Grade 1/2 drug-related adverse events, and one patient who experienced drug-related Grade 3 asthenia that resolved after reducing the dose of IDE397. There were no reported drug-related serious adverse events, or SAEs, no observed DLTs, and IDE397 had not yet reached its MTD. Subject to satisfactory completion of the dose escalation portion of the Phase 1 clinical trial, we plan to enroll patients having solid tumors with MTAP deletion into one or more monotherapy expansion arms focused on one or more selected solid tumor indications. We also plan to evaluate IDE397 in combination with one or more combination agents in patients having tumors with MTAP-deletion. Potential solid tumors we are considering for future evaluation in one or more expansion arm(s) and/or combination arm(s) of the clinical trial evaluating IDE397 include NSCLC, head and neck cancer, bladder cancer, gastric cancer, pancreatic cancer and esophagogastric cancer, among others. We have submitted a protocol amendment to the FDA to support cohort expansion as monotherapy in NSCLC, esophagogastric cancer, and other indications, including potentially in one or more basket cohorts. This amendment will also support evaluation of IDE397 combination therapies with taxanes and other potential combination agents, for example, in NSCLC, esophagogastric and/or pancreatic cancer. We are obtaining patient biopsies from the dose escalation and expansion portions of the clinical trial for translational research, including evaluation of certain pharmacodynamic biomarkers, such as peripheral or plasma SAM, tumor SAM, and SDMA. We observed dose-proportional pharmacokinetic exposures across dose ranges of Cohort 1 through Cohort 5 of the Phase 1 dose escalation. The observed exposures at doses of Cohort 4 and Cohort 5 exceeded active exposure targets established from preclinical models. We observed preliminary clinical activity with monotherapy in early dose escalation cohorts, including pharmacodynamic response in plasma SAM, modulation of tumor SDMA, and tumor size reductions in multiple patients with MTAP deleted advanced or metastatic solid tumors. We observed a dose- and/or exposure-dependent pharmacodynamic modulation, reflected as a reduction in plasma SAM, a proximal pharmacodynamic marker, in evaluable plasma samples across dose ranges of Cohort 1 through Cohort 5 of the IDE397 Phase 1 dose escalation clinical trial, satisfying the clinical protocol threshold of approximately 60% or greater. The clinical protocol threshold was established based on IDE397 preclinical in vivo efficacy data in MTAP-deletion xenograft models. We have obtained tumor biopsy cohorts in the IDE397 Phase 1 clinical trial to evaluate tumor pharmacodynamic biomarkers, including SDMA. We observed robust, dose- and/or exposure-dependent pharmacodynamic modulation of symmetric dimethyl arginine, or SDMA, in evaluable tumor biopsies from Cohort 4 and Cohort 5. In an interim analysis, IDE397 showed exposure-dependent reduction of SDMA in target tumor types – including in biopsies from patients having pancreatic cancer (Cohorts 3 and 4) and NSCLC (Cohort 5). Treatment with IDE397 in a Cohort 5 patient resulted in a 95% reduction of tumor SDMA in NSCLC as measured by immunohistochemistry (IHC) score. 6 We also observed tumor shrinkage in multiple patients in early dose escalation Cohorts 2 and 3 (n=3, n=2, respectively), including in a Cohort 2 NSCLC patient (~15% reduction in target lesions) and in a Cohort 3 adenoid cystic carcinoma patient with a lung metastasis (~11% reduction in target lesions) , pursuant to RE C IST v1.1 criteria . We are leading research and development of IDE397 through early clinical development, in collaboration with GSK pursuant to the GSK Collaboration Agreement. Following initiation of an expansion cohort or establishing a MTD, we plan to submit an option data package to GSK, which would trigger an evaluation period for GSK to make a decision on whether to exercise its option to develop IDE397. The GSK option is exercisable within a certain period after we deliver a data package comprising preclinical data and clinical data from the IDE397 monotherapy dose escalation study of the Phase 1 clinical trial, including safety and tolerability data, pharmacokinetic data and pharmacodynamic modulation of SAM and tumor SDMA. Subject to GSK’s election to opt‐in and , if required, HSR clearance, we are entitled to receive a $50 million opt‐in payment from GSK. If GSK exercises its option and makes the related $50 million payment to us, GSK would lead later-stage global clinical development. We will be responsible for 20% of future development costs and GSK will be responsible for 80%. Assuming GSK decides to exercise the option, we will be eligible to receive future development and regulatory milestones of up to $465 million. If GSK decides to exercise its option and upon commercialization, we will also be entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales ranging from high single digit to sub-teen double digit percentages, as well as certain commercial milestones of up to $475 million. Our evaluation of IDE397 as a clinical candidate is supported by preclinical data. We have evaluated the efficacy of IDE397 as monotherapy in over forty solid tumor patient derived xenograft, or PDX, models with homozygous MTAP deletions. Results of this IDE397 MTAP-deletion PDX panel study were reported at AACR 2021 and showed in vivo efficacy in multiple MTAP-null xenograft models demonstrating tumor growth inhibition, or TGI, when MAT2A was pharmacologically inhibited with IDE397 as monotherapy. In this study, we observed greater than 60% tumor growth inhibition, or TGI, in approximately 75% of the models and greater than 75% TGI in approximately 50% of models, in each case across major solid tumor types. We also observed tumor regressions, with greater than 100% TGI, in multiple PDX models and across multiple solid tumor types, including in NSCLC as well as in bladder and gastric cancer PDX models. In NSCLC, data from the preclinical PDX panel study has shown > 60% TGI in 12 independent NSCLC PDX models out of 14 models evaluated, including in seven NSCLC adenocarcinoma PDX models out of nine evaluated and in five NSCLC squamous carcinoma PDX models out of five evaluated. Tumor regressions were observed in three of five NSCLC squamous PDX models, including a complete response in one model. We observed preclinical in vivo efficacy of IDE397 plus standard-of-care combination agents, including with paclitaxel in head and neck cancer. Additional preclinical combination tolerability and efficacy studies are ongoing, in collaboration with GSK, to evaluate IDE397 in combination with potential oncology agents. Additionally, we have observed preclinical dose-dependent modulation of selected pharmacodynamic biomarkers, including SDMA, ADMA and SAM, in these in vivo models, including in NSCLC and HCT-116 MTAP deletion CDX models. We also observed a correlation of in vivo efficacy with dose-dependent PD modulation in MTAP-deletion CDX model in NSCLC. We have ongoing mechanistic studies, including evaluating various pathway constituents such as SAM, MTA, SDMA, ADMA and other downstream metabolic and gene expression changes in in vitro and in vivo models. Through our participation in the DepMap (Cancer Dependency Map) consortium led by the Broad Institute, and in collaboration with GSK, we have conducted a PRISM screen of a panel of over 800 cell lines for pharmacological sensitivity to IDE397. This PRISM screen has identified differential selectivity across tumor lineages, potentially enabling additional biomarker discovery and clinical opportunity expansion for IDE397. Preclinical tolerability and efficacy studies are ongoing with IDE397 and various potential combination agents. Based on preliminary results, we have observed in vivo efficacy with enhanced tumor growth inhibition for IDE397 in combination with a taxane in a pancreatic cancer PDX model. We have also observed preclinical in vivo efficacy of IDE397 plus standard-of-care combination agents, including with paclitaxel in head and neck cancer PDX model. We have also observed in vivo efficacy with enhanced tumor growth inhibition in CDX / PDX models for IDE397 in combination with other DNA Damage Response, or DDR, target inhibitors, and for IDE397 in combination with certain precision medicine target inhibitors in tumors having certain identified genetic alterations as co-alterations with MTAP. 7 P ARG Inhibitors in Tumors with Defined Biomarker We are advancing our preclinical research for an inhibitor of poly (ADP-ribose) glycohydrolase, or PARG, for patients having tumors with homologous recombination deficiencies, or HRD, and potentially other genetic and/or molecular signatures. PARG is a novel target in a clinically validated biological pathway. PARG functions as a regulator of DNA repair in the same biochemical pathway as poly (ADP-ribose) polymerase, or PARP. In particular, PARG hydrolyzes poly (ADP-ribose), or PAR, chains that are polymerized by PARP enzymes, completing the PAR cycle. Small molecule inhibitors of PARG result in a dose dependent increase in cellular PAR after DNA damage. We are evaluating the efficacy of our PARG inhibitors as monotherapy across a number of solid tumor CDX and PDX models with specific genetic alterations. One of our PARG inhibitor compounds, designated as IDB-PARG, has been observed to show dose-dependent in vivo efficacy as monotherapy with tumor regression or stasis in multiple PDX models and in multiple CDX models. We observed tumor regressions (greater than 100% TGI) in multiple breast cancer PDX models with defined genetic and subtyping profiles. We also observed tumor regressions and enhanced TGI relative to niraparib in multiple CDX models, including in vivo efficacy in a niraparib-resistant resistant CDX model. We are preclinically evaluating and conducting IND-enabling studies for IDE161, our PARG inhibitor development candidate. Such studies include evaluation of IDE161 as monotherapy in in vivo efficacy studies ongoing in multiple genetic settings, as well as in cell panel studies to validate and potentially identify new biomarker hypotheses. We are supplementing our data set for indications and patient settings which are sensitive to pharmacological inhibition of our PARG inhibitors. In January 2022, we exercised our option under the Evaluation, Option and License Agreement between IDEAYA and Cancer Research Technologies, also known as Cancer Research United Kingdom, or Cancer Research UK, and the University of Manchester, pursuant to which we hold exclusive worldwide license rights covering a broad class of PARG inhibitors. We have an ongoing strategic collaboration with the Broad Institute focused on synthetic lethality target and biomarker discovery. Through this collaboration with the Broad Institute, we are evaluating paralog CRISPR knockdown in selected cell lines in conjunction with pharmacological inhibition of PARG to inform patient selection and combination strategies in ovarian and breast cancer. We own or control all commercial rights in our PARG program, subject to certain economic obligations pursuant to our exclusive, worldwide license with Cancer Research UK / University of Manchester. Pol Theta Inhibitors in Tumors with Homologous Recombination Deficiency We are progressing our program targeting DNA Polymerase Theta, or Pol Theta or POLQ, in collaboration with GSK for patients having solid tumors with BRCA or other homologous recombination deficiency, or HRD, mutations. Pol Theta is involved in a DNA repair process called microhomology mediated end joining, or MMEJ, that is utilized when homologous recombination mediated repair is compromised, as happens in the case of BRCA1 or BRCA2 mutations. The expression of Pol Theta is largely absent in normal cells, but tumor cells harboring double strand break repair defects, such as BRCA1 or BRCA2, show synthetic lethality when Pol Theta is knocked down with siRNA. Pol Theta is a large protein with two functional domains: a DNA polymerase domain and an ATP-dependent DNA helicase domain, sometimes referred to as an ATPase domain, linked by a RAD51 binding domain. We have established independent research programs to discover small molecule inhibitors of each of the Pol Theta polymerase domain and helicase or ATPase domain. We also have established an independent research approach based on a protein degradation. We have observed combination activity with multiple PARP inhibitors, including niraparib. We have observed synergistic in vivo efficacy of a Pol Theta inhibitor with niraparib: the combination of our Pol Theta inhibitor with niraparib enhanced the activity of niraparib in the DLD1 BRCA2-/- xenograft model. Tumor regressions were observed for all animals in the study which were administered the combination, which was well tolerated. We plan to continue further development of our POLQ program, including both protein degraders and small molecule inhibitors in collaboration with GSK pursuant to the GSK Collaboration Agreement. 8 WRN Inhibitors in Tumors with High Microsatellite Instability We are also continuing to advance our preclinical research in collaboration with GSK for an inhibitor targeting Werner Helicase protein, or WRN, for patients having tumors with high microsatellite instability, or MSI. WRN protein is a RecQ enzyme involved in the maintenance of genome integrity. Germline loss of function mutations in WRN lead to premature aging and pre-disposition to cancer. MSI is a change in the DNA content of a tumor cell in which the number of repeats of microsatellites, short repeated sequences of DNA, differ as cells divide. High MSI is present in about 15% of gastrointestinal tumor cancers, including in approximately 22% of stomach adenocarcinoma and 16% of colorectal cancer. Tumors with high MSI are routinely assessed in multiple diagnostic profiling tests. WRN is a protein having several functional domains, and we have shown that the helicase functional domain of WRN is responsible for this synthetic lethal interaction, as reflected in our publication in Cell Press - iScience, Werner Syndrome Helicase is Required for the Survival of Cancer Cells with Microsatellite Instability (March 2019). We have observed dose-dependent cellular viability effect and a dose-dependent cellular pharmacodynamic response in multiple endogenous MSI high cell lines. We have also observed in vivo efficacy and PD response in a relevant MSI high model, including approximately 100% TGI observed in a MSI high CDX model. For this program, we plan to continue further development in collaboration with GSK pursuant to the GSK Collaboration Agreement. DNA Damage Targets We have initiated early preclinical research programs to identify small molecule inhibitors for two distinct DNA Damage Targets, or DDTs, for patients with solid tumors characterized by a proprietary biomarker or a gene signature. Synthetic Lethality Target and Biomarker Discovery Platform Synthetic lethality has been since inception of our company, and continues to be, our core research focus. We have invested significantly and continue to invest in capabilities for identification and validation of new synthetic lethality targets and biomarkers for patient selection. For targets of interest, we advance our research to discover therapeutic drugs and to further qualify relevant biomarkers. Our synthetic lethality research platform integrates a broad set of computational and functional capabilities. These capabilities collectively reflect the convergence of advancements in biology, molecular biology, chemistry and information technologies. For example, molecular biology approaches such as gene knockdown using siRNA, gene editing using CRISPR, quantitative DNA/RNA analysis, protein expression profiling and genomic sequencing can be applied across broad cell lines to create substantial data sets. Data analytics and computational approaches are used to mine such data sets to identify novel targets and biomarker hypotheses. These hypotheses are experimentally validated by developing and applying relevant biological assays. We have established a comprehensive platform to computationally and empirically identify high value synthetic lethal pairs in defined patient populations. This platform integrates synthetic lethality relationship data across parallel data sets, each including orthogonal content based on particular screening efforts. These screens include evaluation of curated, genetically defined and preselected model cell sets indicative of targeted patient populations. Our platform includes a proprietary library and data set resulting from our DECIPHER™ Dual CRISPR Synthetic Lethality library constructed in collaboration with University of California, San Diego. The platform will also include data from our recently announced proprietary PAGEO™, or Paralogous Gene Evaluation in Ovarian cancer, library being developed in collaboration with the Broad Institute utilizing the Sellers laboratory CRISPR paralog screening platform to evaluate functionally redundant paralogous genes across ovarian cancer subtypes. Additionally, we are members of the DepMap (Cancer Dependency Map) consortium led by the Broad Institute, through which we have access to a comprehensive data set of genome-wide cell-based screens, including isogenic screens, conducted by the Broad Institute and other contributing institutes, including pre-publication access to new data releases. As a further component of our synthetic lethality platform, we are conducting computational data mining and analysis of relevant public databases, such as The Cancer Genome Atlas, or TCGA, cBioPortal, and Cancer Cell Line Encyclopedia, or CCLE, among others. Such computational approaches include our proprietary algorithms which enable us to determine synthetic lethality targets and biomarkers enabling patient stratification. We have established internal bioinformatics capabilities, which are supplemented by external resources. We are applying these capabilities and resources to integrate using proprietary algorithms and unsupervised machine learning across each of the orthogonal data sets in our platform. These integrated, comprehensive analysis efforts allow us to determine synthetic lethality target / biomarker pairs with the strongest signals across the data sets. Potential therapeutic targets are ranked based 9 on several factors, including the strength of the synthetic lethal interaction, potential drugability, potential clinical development path, and potential market opportunity. The most promising therapeutic targets are validated empirically. DECIPHER™ Dual CRISPER Synthetic Lethality Library – UCSD We have constructed our DECIPHER Dual CRISPR library for synthetic lethality target and biomarker discovery in collaboration with the University of California, San Diego, and bioinformatics analysis and validation are ongoing. The DECIPHER 1.0 library is focused on DNA Damage Repair targets across various tumor suppressor genes and oncogenes of interest that were selected based on their known prevalence and role in solid tumors, enabling evaluation of approximately 50,000 independent gene knockout combinations of DDR pathway related drug targets across known tumor suppressor genes. PAGEO™ Paralogous Gene Evaluation in Ovarian Cancer and Dep Map Consortium – Broad Institute We have an ongoing strategic collaboration with the Broad Institute focused on synthetic lethality target and biomarker discovery. This collaboration will use the large-scale CRISPR paralog screening platform developed at the laboratory of William R. Sellers, M.D., Core Institute Member, Broad Institute, to evaluate functionally redundant paralogous genes across ovarian cancer subtypes and to generate novel target and biomarker hypotheses. Dr. Sellers, who also serves on our Scientific Advisory Board, is the principal investigator for the strategic collaboration. We have also become a member of the Broad DepMap (Cancer Dependency Map) consortium led by the Broad Institute to further enhance our efforts in bioinformatics and cell-based screening for synthetic lethality target and biomarker discovery and validation. We are also continuing to invest in our capabilities to advance our research on newly identified synthetic lethality targets of interest, including to enable discovery of therapeutic drugs and relevant biomarkers. These investments include both additional research personnel and capital investments, which will enhance our capabilities broadly, including in target validation, biological assay development, protein synthesis, structural biology, computational chemistry, and analytical chemistry, among other core functional areas. In December 2021, we acquired our INQUIRE™ Chemical Library to enhance our synthetic lethality drug discovery platform INQUIRE is a proprietary, expert-curated small-molecule library of over 200,000 chemical compounds, which we believe will enhance our hit discovery capabilities across a broad range of novel synthetic lethality targets and historically difficult-to-drug target classes, such as helicases and endonucleases. Synthetic Lethality Combination Therapies Targeting Oncogenic Pathways Darovasertib Overview – PKC Inhibitor for Patients having Tumors with GNAQ or GNA11 Mutations Darovasertib is a potent and selective small molecule inhibitor of PKC for genetically-defined cancers having GNAQ or GNA11 gene mutations. PKC is a protein kinase that functions downstream of the GTPases GNAQ and GNA11. We initiated a Phase 1/2 clinical trial IDE196-001 in June 2019 to evaluate darovasertib in solid tumors harboring GNAQ or GNA11 hotspot mutations in a basket trial design, including in MUM and other solid tumor indications such as skin (cutaneous) melanoma. Our clinical trial strategy in MUM is to pursue darovasertib as a combination therapy with crizotinib, a cMET inhibitor, pursuant to the Pfizer Agreement. We have formed a joint development committee with Pfizer responsible for coordinating all regulatory and other activities under the Pfizer Agreement. If the clinical data from the combination study is positive, we plan to enter into good faith negotiations with Pfizer to determine a regulatory submission strategy. We are also evaluating darovasertib in combination with crizotinib in non-MUM cancers having GNAQ/11 mutations, with a current focus in skin melanoma. We also plan to initiate evaluation of darovasertib in adjuvant primary UM through an IST. Based on preliminary darovasertib monotherapy clinical data and its mechanism of action, we anticipate darovasertib clinical activity independent of Human Leukocyte Antigen, or HLA, status in GNAQ/11-mutation cancers. We are preclinically evaluating potential expansion opportunities in oncology for darovasertib – including in cMET-driven solid tumors such as HCC or NSCLC, and KRAS-driven solid tumors. In addition, we are exploring potential expansion opportunities in GNAQ/11 rare diseases, such as Sturge Weber Syndrome, or SWS, and Port Wine Stain, or PWS. 10 Scientific Rationale and Opportunity PKC belongs to a family of closely related protein kinases that are involved in various aspects of signal transduction, such as transmitting extracellular growth factor or cytokine signals to other protein kinases involved in cellular proliferation or transcription regulation. PKC is important for signal transduction and survival of cells with constitutively active mutations in GNAQ or GNA11. Inactivation of PKC by specific inhibitors or reduction in protein expression using RNA all highlight the essential role of PKC in cells with GNAQ or GNA11 mutations. Activating mutations in GNAQ or GNA11 are found in approximately 90% of uveal melanoma patients, resulting in a dependency on PKC activity which we believe may sensitize these tumors to the effects of darovasertib. Uveal melanoma is a cancer of the eye and the most common primary intraocular malignancy in adults. Treatment of the primary lesion involves radiation therapy, laser therapy and/or removal of the affected eye, and is effective in preventing local recurrence in over 80% of cases. However, approximately 50% of uveal melanoma patients treated in this manner will eventually develop metastatic disease, most commonly in the liver. We have estimated the addressable population in major market countries, consisting of the US, the twenty-eight countries in Europe, or EU28, and Japan, for patients having solid tumors with GNAQ or GNA11 mutations to include an annual incidence of about 4,200 in metastatic uveal melanoma. For skin melanoma in the US, EU28 and Japan, we believe about 1,300 patients annually have tumors with GNAQ or GNA11 “hotspot” mutations that are potentially pathogenic, based on the loci of such mutations relative to the loci of mutations in uveal melanoma. We believe the opportunity for treatment of adjuvant primary UM in the US, EU28 and Japan will add an additional 1,600 annual addressable patients. Thus, the total addressable population for MUM, skin melanoma and adjuvant UM in such major market countries is estimated to be about 7,100 patients. Patients with metastatic uveal melanoma have a very poor prognosis, and there are no FDA-approved therapies for this disease. Metastases are most frequently localized to the liver where curative surgical approaches are rare, and chemotherapy or immunotherapy has limited efficacy. Without treatment, median overall survival of patients with metastatic uveal melanoma is approximately two to eight months. Historical response rates for uveal melanoma generally range from 0% to 10% across treatment types. A meta-analysis of 29 Phase 2 clinical trials of various therapies in metastatic uveal melanoma from 1988 to 2015 demonstrated no improvement in clinical response, with a medium progression free survival of 3.29 months, median overall survival of 10.2 months, and a 1-year overall survival rate of only 43%. The poor prognosis associated with metastatic disease and the lack of effective therapies highlight the need for novel therapeutic approaches that specifically target metastatic uveal melanoma. Darovasertib / Crizotinib Synthetic Lethality Combination Therapy In December 2020, we initiated a combination arm of our Phase 1/2 clinical trial under the Pfizer Agreement to evaluate darovasertib in combination with crizotinib in patients having tumors harboring activating GNAQ or GNA11 hotspot mutations. An initial dose escalation portion of this arm of the clinical trial evaluated the safety and efficacy of darovasertib in combination with crizotinib at various dose combinations. We initiated a Phase 2 expansion cohort in June 2021 to evaluate darovasertib / crizotinib combination therapy in MUM. We are continuing patient enrollment into the Phase 2 clinical trial to evaluate the darovasertib / crizotinib combination in MUM and in patients having other solid tumors with activating GNAQ/11 mutations, with a focus on GNAQ/11 skin melanoma. As of March 1, 2022, we have enrolled an aggregate total of 53 MUM patients in the darovasertib / crizotinib combination arm of the Phase 1/2 clinical trial. In MUM, we reported preliminary clinical data from the Phase 2 expansion cohort evaluating darovasertib and crizotinib synthetic lethal combination in December 2021, based on a data and analyses cutoff on November 25, 2021. The preliminary interim data included: (i) 100% Disease Control Rate, or DCR: 16 of 16 evaluable patients with at least one post-baseline scan showed tumor shrinkage as determined by target lesion size reduction; (ii) 31% Overall Response Rate, or ORR: 4 of 13 patients with at least two post-baseline scans had a confirmed partial response, or PR as determined by RECIST 1.1 based on investigator or central review; and no patients have come off-treatment prior to the second scan; and (iii) 46% of patients (6 of 13) with at least two post-baseline scans observed greater than 30% tumor reduction, including one patient with an unconfirmed PR as determined by RECIST 1.1. The darovasertib and crizotinib combination therapy demonstrated a manageable side effect profile in MUM patients (n=22) as of the November 25, 2021 data cutoff, with predominantly Grade 1/2 drug-related adverse events. As of November 25, 2021, one patient experienced a drug-related serious adverse event of diarrhea. Eighteen patients experienced a drug-related adverse events, of which six patients experienced Grade 3 drug-related adverse events, and no patients observed Grade 4 or Grade 5 drug-related adverse events. These preliminary clinical data provide clinical proof-of-concept for the darovasertib and crizotinib synthetic lethal combination treatment in MUM. These data also inform potential expansion opportunities in other cMET-driven tumors. 11 These data are also consistent with the company’s translational research discovery that Phase 1 clinical response to darovasertib monotherapy associated with low cMET activity, as measured by gene signature score or cMET expression. We identified cMET as a potential biomarker and a cMET inhibitor as potential combination agent though our translational research studies, or darovasertib cMET Translational Studies . In these studies, w e observed preclinical synerg ies between darovasertib and crizotinib in relevant cell ular models under conditions simulating a tumor microenvironment in the liver, the site of approximately 90% of uveal melanoma metastases . Additionally, we conducted a retrospective analysis of human clinical samples from the Novartis IDE196 Phase 1 clinical trial , which also independently supported cMET expression / activation as potential biomarker / combination agent. We presented data summarizing the results of certain darovasertib cMET translational studies at AACR in April 2021. Darovasertib Monotherapy The monotherapy arm of the Phase 1/2 clinical trial was initiated in June 2019 to evaluate IDE196 in solid tumors harboring GNAQ or GNA11 hotspot mutations in a basket trial design. We have completed enrollment in the monotherapy arm of the Phase 1/2 clinical trial in MUM. We reported clinical data in April 2021 for darovasertib monotherapy in MUM patients enrolled across the IDEAYA and Novartis Phase 1/2 clinical trials. At the time of data and analyses cutoff on April 13, 2021, an aggregate of 88 patients were evaluable for safety and an aggregate of 81 patients were evaluable for efficacy pursuant to RECIST 1.1. In the MUM cohort of the monotherapy arm, as of April 13, 2021 data and analyses cutoff based on preliminary data from an unlocked database, we observed (i) a fifty-seven percent (57%) 1-Year overall survival (OS) in predominantly second line, third line and heavily pre-treated (out to 7 and 8 lines of prior treatment) MUM patients with ninety-five percent (95%) confidence interval (44%, 69%), (ii) a median OS of 13.2 months in predominantly second line, third line and heavily pre-treated (out to 7 and 8 lines of prior treatment) MUM patients with ninety-five percent (95%) confidence interval (10.7 months, not reached), and (iii) sixty-one percent (61%) (n=46) of MUM patients out of 75 evaluable had tumor reduction pursuant toRECIST 1.1guidelines, including 15 patients (20%) with greater than thirty percent (30%) target lesion reduction, including one confirmed complete response. Preliminary clinical data from darovasertib monotherapy arm indicates that darovasertib activity is independent of HLA status. In the skin melanoma monotherapy cohort, 80% (n=4) of evaluable patients (n=5) had tumor reduction per RECIST 1.1. evaluation, including one confirmed PR. The overall safety profile of darovasertib monotherapy, as of the April 13, 2021 data and analyses cutoff, was consistent with prior experience and included primarily common low grade but manageable gastrointestinal and skin toxicities. Drug-related adverse events observed with darovasertib as monotherapy include: serious adverse events of hypotension, nausea, vomiting, rash and liver toxicity; and adverse events that occurred in greater than 10% of patients of nausea, vomiting, diarrhea, fatigue, rash, edema, and abdominal distention. Darovasertib was initially developed as a monotherapy by Novartis, and we obtained an exclusive, worldwide license to darovasertib from Novartis in September 2018. Pursuant to our license agreement with Novartis, except for Novartis’ ongoing Phase 1 clinical trial, we control all future clinical development, and all commercial rights to darovasetib, and may rely on and incorporate data previously submitted to the FDA by Novartis into our own regulatory submissions. Novartis has completed enrollment in a Phase 1 clinical trial it is conducting to evaluate darovasertib in metastatic uveal melanoma. Phase 1 monotherapy data from Novartis was presented at the American Association for Cancer Research, or AACR, in April 2019. Regulatory / Potentially Registration-Enabling Clinical Trial We plan to evaluate additional clinical tolerability and efficacy data from the ongoing darovasertib and crizotinib combination therapy Phase 2 portion of the clinical trial in MUM patients, as well as potential strategic partnering of the darovasertib program, prior to initiation of a potentially registrational clinical trial in MUM. We are planning to obtain guidance from the FDA on a clinical trial design for enabling a potential registrational trial. Subject to feedback and guidance from the FDA, we are considering scenarios for potential registrational clinical studies. In one scenario, a single-arm Phase 2 clinical trial could comprise further enrollment of patients into the current single-arm Phase 2 clinical trial evaluating darovasertib and crizotinib as combination therapy in MUM. In an alternative scenario, a randomized Phase 2 clinical trial could comprise a darovasertib and crizotinib combination arm as well as comparative arm in MUM. The comparative agent could be, for example, darovasertib monotherapy. In either approach, we believe there may 12 be an opportunity to seek accelerated approval based on the Phase 2 ORR as a primary endpoint, with a post-approval randomized Phase 3 as a confirmatory study based on a progression free survival, or PFS, and/or overall survival, or OS, as endpoints. Other Potential Indications We are preclinically evaluating potential expansion opportunities in oncology for darovasertib – including in cMET-driven solid tumors such as HCC and NSCLC and KRAS-driven solid tumors. In addition, we are exploring potential expansion opportunities in GNAQ/11 rare diseases, such as Sturge Weber Syndrome, or SWS, and Port Wine Stain, or PWS. Impact of COVID-19 Pandemic on IDE397-001 Phase 1 Clinical Trial and IDE196-001 Phase 1/2 Clinical Trial We continue to monitor the COVID-19 pandemic and its potential impact on the ongoing IDE397 and darovasertib, clinical programs and timing of clinical data results. Generally, initiation of clinical trial sites, patient enrollment and ongoing monitoring of enrolled patients, including obtaining patient computed tomography, or CT, scans, may be impacted for our clinical trials evaluating IDE397 and darovasertib; the specific impacts are currently uncertain. For these clinical programs, patients enrolled in the ongoing clinical trials and sites affected by COVID-19 restrictions are adapting to logistical constraints on activities, such as travel and site visits. For example, patients are continuing on therapy, which are oral drugs and are being shipped to and self-administered by patients at home. Patients are being monitored through a combination of telemedicine visits and local visits. COVID‐19 infection rates have fluctuated over the course of the pandemic in the countries and states in which our clinical trial sites are located. Additionally, enrollment into these clinical trials, including the Phase 1 dose escalation arm for IDE397 as monotherapy or the Phase 2 expansion arm for darovasertib and crizotinib combination therapy in MUM and other solid tumors having GNAQ or GNA11 hotspot mutations, may be delayed by circumstances resulting from the COVID-19 pandemic, including for example, as a result of increases in COVID-19 infection rates in the states in which our clinical trial sites are located, and by clinical site-specific policies and practices related to COVID-19. The specific impact on enrollment into these clinical trials is currently uncertain. We plan to continue to use third-party service providers, including clinical research organizations, or CROs, and clinical manufacturing organizations, or CMOs, to carry out our preclinical and clinical development and manufacture and supply of our preclinical and clinical materials to be used during the development of our product candidates. To date, the COVID-19 pandemic has not materially affected our supply chain or development schedule, but further escalation of the health crisis has the potential to cause delays in our supply chain and manufacturing operations, which could materially adversely impact our business. Competition Our industry is very competitive and subject to change based on ongoing advances in technology. Although we believe that our approach, strategy, scientific capabilities, knowledge and experience provide us with competitive advantages, we expect to have substantial competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. Many of our competitors have significantly greater financial, technical and human resources. Smaller and early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. As a result, our competitors may discover, develop, license or commercialize products before or more successfully than we do. We face competition with respect to product candidates in our pipeline, and will face competition with respect to future product candidates, from segments of the pharmaceutical, biotechnology and other related markets that pursue targeted approaches to addressing activating genetic and other molecular alterations in cancer. For IDE397, Servier Pharmaceuticals, LLC, or Servier, is clinically evaluating a small molecule MAT2A inhibitor designated as AG270 in patients having tumors with MTAP deletion. AG270 was originally developed by Agios Pharmaceuticals, or Agios, which sold its commercial, clinical and research-stage oncology portfolio, including AG270, to Servier in April 2021. Agios presented initial data from its Phase 1 clinical trial evaluating AG270 in patients having tumors with MTAP deletion at the AACR/NCI/EORTC conference in October 2019. We believe that Servier has no current ongoing clinical trials to evaluate AG270 as monotherapy; their current clinical development efforts include evaluation of AG270 in combination with taxanes in selected tumor indications. 13 For our preclinical pipeline of synthetic lethality therapeutics, potential competition includes established companies as well as earlier-stage emerging biotechnology companies. Multiple established companies have been involved with research and development in synthetic lethality, such as AstraZeneca (Lynparza), Pfizer (Talzenna), GSK (Zejula) and Roche. Additionally, several other early-stage companies, including Mirati Therapeutics, Zai Labs, Breakpoint Therapeutics, Ryvu Therapeutics, Foghorn Therapeutics, Silicon Therapeutics (acquired by Roivant Sciences), Anticancer Bioscience, Artios, Cyteir, FoRx Therapeutics, KSQ, MetaboMed, NeoMed, Vividion Repare, Ribon, and Tango are performing research in synthetic lethality. For darovasertib, we are not aware of other companies actively developing clinical-stage therapeutics directed to PKC as a target for solid tumors. MingSight is developing a PKC beta inhibitor in chronic lymphocytic leukemia and diabetic macular edema, both in Phase 1 studies. Varian Biopharmaceuticals is advancing a preclinical-stage atypical PCK iota inhibitor, including as a dermatologic gel formulation for potential topical treatment of Basal Cell Carcinoma, or BCC. We are aware of other companies that are conducting research and development of potential therapies for metastatic uveal melanoma based on other targets and approaches. For example, Immunocore is developing Tebentafusp, also known under its branded name as Kimmtrak. Kimmtrak was approved by the FDA in January 2022 for the treatment of HLA-A*02:01-positive unresectable or metastatic uveal melanoma patients. Intellectual Property Intellectual property, including patents, trade secrets, trademarks and copyrights, is important to our business. We endeavor to establish, maintain and enforce intellectual property rights that protect our business interests. Our patent portfolio, including patents owned by or exclusively licensed to us, is built on a program-by-program basis with a goal of establishing broad protection that generally includes, for each product candidate compound and for selected alternative back-up compounds, claims directed to composition of matter, pharmaceutical compositions, and methods of treatment using such pharmaceutical compositions. For some programs, our portfolio may also include claims directed to methods of treatment involving biomarker-enabled patient identification or selection, methods of treatment involving particular dosing approaches, polymorphs, formulations and/or methods of synthesis. We are seeking and maintaining patent protection in the United States and key foreign jurisdictions. As of February 1, 2022, we own or exclusively in-license patents and patent applications, comprising approximately 45 distinct patent families, protecting our technology across our pipeline. Excluding applications that we are not currently prosecuting, our portfolio consists of 10 issued U.S. patents, approximately 33 pending U.S. applications, 12 pending applications under the Patent Cooperation Treaty, or PCT, 32 issued foreign patents and approximately 88 pending foreign applications in approximately 43 foreign jurisdictions, including without limitation countries included in major markets in North America, Europe, and Asia, each having expiration dates ranging from 2035 to 2042. Of these, we own approximately 42 distinct patent families, including approximately 30 pending U.S. patent applications and 12 PCT applications, nominally expiring between 2038 and 2042. The nominal expiration of our patents and patent applications does not account for any applicable patent term adjustments or extensions. As of February 1, 2022, the portion of our portfolio for IDE196, which we have in-licensed from Novartis, consists of four issued U.S. patents, approximately 23 issued foreign patents, approximately two pending U.S. applications and approximately 24 pending applications in approximately 20 foreign jurisdictions which we are currently prosecuting, including without limitation countries included in major markets in North America, Europe, and Asia. These in-licensed patents and applications are directed to composition of matter, pharmaceutical compositions and methods of treatment, including treatment of uveal melanoma. These in-licensed patents expire between 2035 and 2038, without taking into account any applicable patent term adjustments or extensions. In addition, the IDE196 portfolio also includes one pending U.S. patent application and two PCT applications solely owned by IDEAYA directed to methods of treatment, including dosing regimens, for patients having solid tumors, including tumors having mutations in GNAQ or GNA11. These solely owned patents expire between 2040 and 2041, without taking into account any applicable patent term adjustments or extensions. In addition, the IDE196 portfolio includes two U.S. provisional patent applications which are jointly owned with Pfizer directed to methods of treatment for certain combination treatments. As of February 1, 2022, the portion of our portfolio for programs in our synthetic lethality pipeline consists of U.S. patent applications directed to composition of matter, pharmaceutical compositions and/or methods of treatment of cancer for each of our MAT2A (MTAP), PARG (HRD), POLQ (HR), WRN (high MSI), and DDR1 programs, which we own. This portion of our portfolio also includes pending U.S. and foreign applications directed to composition of matter, pharmaceutical 14 compositions and methods of treatment of cancer for our PARG (HRD) program, which we have exclusively in-licensed from Cancer Research UK and University of Manchester . Strategic Relationships We have established a strategic partnership and collaboration with GSK for IDE397, our clinical stage synthetic lethality program targeting MAT2A, as well as for our preclinical synthetic lethality programs targeting Pol Theta and Werner Helicase. We have an in-license agreement for our PARG program with Cancer Research UK and University of Manchester. For darovasertib, our clinical stage PKC program, we have an in-license agreement with Novartis, and have established a clinical trial collaboration and supply agreements in support of our clinical evaluation of darovasertib in combination with binimetinib, and independently, in combination with crizotinib. For our PARG, DDT1 and DDT2 programs, our small molecule compounds are being discovered and/or developed internally with our own resources, as supplemented by certain service providers such as CROs. We have established collaborative relationships with other companies for access to their proprietary database of patient samples, and/or for their genetic screening services on their proprietary platform. We have also established a collaborative relationship with Ventana (Roche Diagnostics) for development of molecular diagnostics for various research programs. We have established certain development manufacturing and service relationships with CMOs for IDE397 and darovasertib. We have an agreement with STA Pharmaceutical Hong Kong Limited for the synthesis of the API and formulation for IDE397, and with Bioduro for the manufacturing of IDE397 drug product. We have an agreement with STA Pharmaceutical Hong Kong Limited for the synthesis of the API and formulation for darovasertib, and for the manufacturing of IDE196 drug product. We have established arrangements with CMOs as well for packaging, labeling and distribution of IDE397 anddarovasertib. We also have established clinical services relationship with CROs to support our conduct of clinical trials for our IDE397 program and our darovasertib program. In addition to these existing strategic license relationships, existing and planned development manufacturing and service arrangements, and existing and planned clinical services arrangements, we have various existing agreements and relationships with service providers, such as CROs, which are enabling execution of various research and development activities for each of our pipeline programs. In particular, such agreements are directed to chemistry and compound synthesis, compound analysis and characterization, structural biology, computational biology, biological assay and model development, in vitro screening, in vivo screening, translational biomarker diagnostic development, bioinformatics, toxicology and formulation, among other activities. We may also evaluate future strategic opportunities to accelerate development timelines and maximize the commercial potential of our product candidates. We plan to selectively evaluate strategic collaborations with biopharmaceutical partners whose research, development, commercial, marketing, and geographic capabilities complement our own. Agreements Collaboration, Option and License Agreement with GSK for Synthetic Lethality Programs IDE397(MAT2A), Pol Theta and Werner Helicase On June 15, 2020, we entered into the GSK Collaboration Agreement with GSK, pursuant to which we and GSK have entered into a strategic partnership and collaboration for our synthetic lethality programs targeting MAT2A, Pol Theta and Werner Helicase. On July 27, 2020, or the Effective Date, the GSK Collaboration Agreement became effective upon the parties’ receipt of Hart-Scott-Rodino Antitrust Improvements Act clearance, or HSR Clearance. We received from GSK an up-front payment of $100.0 million in cash following the Effective Date. GSK Collaboration – MAT2A Program For the MAT2A program, we will continue to lead research and development through early clinical development. GSK has an exclusive option to obtain an exclusive license to continue development of and commercialize MAT2A products arising out of the MAT2A program, or the Option, exercisable within a specified time period after we deliver to GSK a data package resulting from our conduct of a MAT2A Phase 1 monotherapy clinical trial. GSK’s exercise of the Option may be subject to HSR Clearance therefor at such time of exercise, and following exercise and HSR Clearance, GSK has agreed to pay us an option exercise payment of $50.0 million. 15 In January 2022, we and GSK entered into an Amendment No. 2 to the GSK Collaboration Agreement which amended certain elements of the Option Data Package, including conforming to GSK’s waiver of rights relating to the MAT2A Combination Trial. In January 2022, GSK waived its rights under the GSK Collaboration Agreement to initiate, or request that we initiate, prior to GSK’s exercise of the Option, a Phase 1 combination clinical trial for a MAT2A product and GSK’s Type I PRMT inhibitor (GSK3368715) product, or the MAT2A Combination Trial. Accordingly, we have no further obligation under the GSK Collaboration Agreement to supply MAT2A product for the MAT2A Combination Trial at our own cost. We will be responsible for the costs of research and early clinical development activities that we conduct for the MAT2A program prior to GSK’s exercise of the Option (including during any interim waiting period for HSR Clearance for such Option exercise, if applicable). Subject to GSK’s exercise of the Option (and HSR Clearance thereof, if applicable), GSK will lead later stage global clinical development for the MAT2A program, with IDEAYA responsible for 20% and GSK responsible for 80% of further development costs. The cost-sharing percentages will be adjusted based on the actual ratio of U.S. to global profits for MAT2A products, as measured three and six years after global commercial launch thereof. Subject to GSK’s exercise of the Option (and HSR Clearance thereof, if applicable), we will be eligible to receive future development and regulatory milestones of up to $465.0 million. If GSK decides to exercise its option and upon commercialization, we will also be entitled to receive commercial milestones of up to $475.0 million, with respect to each MAT2A product. Additionally, we are entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales of MAT2A products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. We have a right to opt-out of the 50% U.S. net profit share and corresponding development cost share for the MAT2A program, in which case we would be eligible to receive tiered royalties on U.S. net sales of MAT2A products by GSK, its affiliates and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the MAT2A program at the time of opt-out. GSK Collaboration - Pol Theta Program Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize POLQ products arising out of the POLQ program. GSK and we will collaborate on ongoing preclinical research for the POLQ program, and GSK will lead clinical development for the POLQ program. GSK will be responsible for all research and development costs for the POLQ program, including those incurred by us. We will be eligible to receive future development and regulatory milestones of up to $485.0 million, with respect to each POLQ product, including as applicable, for multiple POLQ products that target certain alternative protein domains or are based on alternative modalities. Included within such development and regulatory milestones, we have the potential to receive up to $20 million in aggregate milestone payments from GSK for certain milestones, which may occur as we, in collaboration with GSK, advance a Pol Theta helicase inhibitor from preclinical development into early Phase 1 clinical trials. Additionally, we are eligible to receive up to $475.0 million of commercial milestones with respect to each POLQ product. We are also entitled to receive tiered royalties on global net sales of POLQ products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. We believe there are potential synergies to evaluate a combination between our Pol Theta program and GSK’s approved PARP inhibitor, Zejula™, targeting the BRCA and HRD patient population. GSK Collaboration - Werner Helicase Program Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize WRN products arising out of the WRN program. We and GSK will collaborate on ongoing preclinical research for the WRN program, and GSK will lead clinical development for the WRN program, with IDEAYA responsible for 20% and GSK responsible for 80% of such global research and development costs. The cost-sharing percentages will be adjusted based on the actual ratio of U.S. to global profits for WRN products, as measured three and six years after global commercial launch thereof. 16 We will be eligible to receive future development milestones of up to $485.0 million, with respect to each WRN product, including as applicable, for multiple WRN products that are based on alternative modalities. Included within such development and regulatory milestones, we have the p otential to receive up to $20 million in aggregate milestone payments from G SK for certain milestones, which may occur as we, in collaboration with GSK, advance a WRN product from preclinical development in to early Phase 1 clinical trials. Additionally, we will be eligible to receive up to $475.0 million of commercial milestones with respect to each WRN product. We will be entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales of WRN products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. We will have a right to opt-out of the 50% U.S. net profit share and corresponding research and development cost share for the WRN program, and would be eligible to receive tiered royalties on U.S. net sales of WRN products by GSK, its affiliates and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the WRN program at the time of opt-out. GSK Collaboration - General Under the terms of the GSK Collaboration Agreement, subject to certain exceptions, we and GSK will not, directly or through third parties, develop or commercialize other products whose primary and intended mechanism of action is the modulation of WRN, POLQ, or MAT2A (unless GSK does not exercise the Option or HSR Clearance does not occur with respect thereto, in which case such restriction shall cease to apply with respect to MAT2A) for an agreed upon period of time. We and GSK will form a joint steering committee, joint development committees, and joint commercialization committees responsible for coordinating all activities under the GSK Collaboration Agreement. GSK’s royalty obligations continue with respect to each country and each product until the later of (i) the date on which such product is no longer covered by certain intellectual property rights in such country and (ii) the 10th anniversary of the first commercial sale of such product in such country. Each party has the right to sublicense its rights under the GSK Collaboration Agreement subject to certain conditions. The GSK Collaboration Agreement will continue in effect on a product-by-product and country-by-country basis until the expiration of the obligation to make payments under the GSK Collaboration Agreement with respect to such product in each country, unless earlier terminated by either party pursuant to its terms. Either we or GSK may terminate the GSK Collaboration Agreement for the other party’s insolvency or certain uncured breaches. We may terminate the GSK Collaboration Agreement if GSK or any of its sublicensees or affiliates challenge certain patents of the Company. GSK may terminate the GSK Collaboration Agreement in its entirety or on a target-by-target basis upon 90-day notice to us. The GSK Collaboration Agreement contains various representations, warranties, covenants, dispute resolution mechanisms, indemnities and other provisions generally customary for transactions of this nature. Exclusive License Agreement with Novartis for Darovasertib (PKC) On September 19, 2018, we entered into a license agreement with Novartis to develop products based on Novartis’ small molecule PKC inhibitors, including Novartis’ LXS196 oncology product candidate, which we have renamed as IDE196, and which has a non-proprietary name of darovasertib. Under the license agreement, Novartis granted to us a worldwide, exclusive, sublicensable license to research, develop, manufacture, and commercialize certain defined compounds and products, including IDE196 and certain other PKC inhibitors as well as companion diagnostic products, collectively referred to as the licensed products, for any purpose. The license grant is subject to Novartis’ retained rights to complete its ongoing Phase 1 clinical trial of IDE196. Novartis also agreed to transfer to us certain materials and know-how relating to the licensed products or arising from the ongoing Phase 1 clinical trial of darovasertib. We are solely responsible for the manufacturing and commercialization of the licensed products, subject to Novartis’ rights under the ongoing clinical trial of darovasertib. We have certain obligations to supply darovasertib and licensed products for compassionate use, named patient and similar programs in connection with the ongoing clinical trial. We are obligated to use commercially reasonable efforts to develop one licensed product and to commercialize and obtain regulatory approval for at least one licensed product in the United States and in specified European countries. All inventions, know-how, data and results resulting from our activities under the license agreement, including activities relating to our own clinical trials, will be exclusively owned by us. All inventions, know-how, data and results resulting from 17 Novartis’ activities connected with Novartis’ ongoing Phase 1 clinical trial for IDE196 will be exclusively owned by Novartis, and subject to the license to us. Ownership of all other inventions and know-how will be determined according to U.S. patent law, with Novartis’ interest subject to the license to us. We control the prosecution and maintenance of the patents exclusively licensed to us, with Novartis retaining step-in rights if we do not continue such prosecution and maintenance. If we fail to maintain or prosecute any exclusively licensed patent and Novartis exercises this step-in right, our license to the relevant patents will terminate in the relevant country. We have the first right to enforce any exclusively licensed patents, while Novartis retains the right to representation. If we do not bring an action to enforce any exclusively licensed patent, Novartis has the right to bring such action, and we will have the right to representation. We paid Novartis an upfront payment of $2.5 million and issued 263,615 shares of our Series B redeemable convertible preferred stock concurrently with the execution of the license agreement. Subject to completion of certain clinical and regulatory development milestones, we agreed to make milestone payments in the aggregate of up to $9.0 million, and subject to achievement of certain commercial sales milestones, we agreed to make milestone payments in the aggregate of up to $20.0 million. We also agreed to pay mid to high single-digit tiered royalty payments based on annual worldwide net sales of licensed products, payable on a licensed product-by-licensed product and country by country basis until the latest of the expiration of the last to expire exclusively licensed patent, the expiration of regulatory exclusivity, and the ten year anniversary of the first commercial sale of such product in such country. The royalty payments are subject to reductions for lack of patent coverage, loss of market exclusivity, and payment obligations for third-party licenses. The license agreement continues in force on a licensed product-by-licensed product and country by country basis until the latest of the expiration of the last to expire exclusively licensed patent, the expiration of regulatory exclusivity, and the ten year anniversary of the first commercial sale of such product in such country. We may terminate the license agreement in its entirety or on a licensed product-by-licensed product basis without cause on 60 days’ prior written notice. Either party may terminate the license agreement for the other party’s material breach that remains uncured for 90 days. In addition, Novartis has the right to terminate the license agreement immediately upon our insolvency. Upon termination by Novartis for material breach or for our insolvency, or upon termination by us without cause, at Novartis’ written request and in return for consideration that will be negotiated at such time, we will grant to Novartis a perpetual, irrevocable, worldwide, sublicensable, nonexclusive or exclusive license, under all patent rights and know-how controlled by us that are related to and actually used as of the date of termination in the development, manufacture, and commercialization of licensed products, for Novartis to develop, manufacture, and commercialize the licensed products. Clinical Trial Collaboration and Supply Agreements with Pfizer for Darovasertib (PKC) In March 2020, we entered into the Pfizer Agreement, pursuant to which the parties will work on combination studies, as portions of the Company’s Phase 1/2 clinical trial in MUM and other solid tumors harboring activating GNAQ or GNA11 hotspot mutations. The combination study specifically pertains to the clinical evaluation of our darovasertib clinical candidate in combination with Pfizer’s MEK inhibitor, binimetinib. In September 2020, we expanded the scope of our Pfizer Agreement to also evaluate darovasertib and Pfizer’s cMET inhibitor, crizotinib, as an additional, independent combination therapy. Under the agreement, we are sponsor of the combination studies, and will provide darovasertib and pay for the costs of the combination studies. Pfizer will provide binimetinib and crizotinib for the combination studies at no cost to us. We and Pfizer will jointly own clinical data from the combination studies and will also jointly own inventions, if any, relating to the combined use of darovasertib and binimetinib, or independently, to the combined use of darovasertib and crizotinib. We and Pfizer have formed a joint development committee responsible for coordinating all regulatory and other activities under the agreement. Pfizer may terminate the agreement if Pfizer believes binimetinib or crizotinib is being used in an unsafe manner. Either party may terminate the agreement for patient safety reasons, if any regulatory action prevents the supply of its drug or if a party ceases development of its drug. Either party may terminate the agreement for the other party’s material breach that remains uncured for thirty days. If the agreement is terminated, we must return any unused binimetinib or unused crizotinib, as applicable, to Pfizer. If Pfizer terminates the agreement because of our material breach, we will be required to reimburse Pfizer certain manufacturing costs for the binimetinib or crizotinib supplied under the agreement. We have further expanded the scope of our relationship with Pfizer, entering into additional agreements to facilitate evaluation of darovasertib in combination with crizotinib in MUM and in other cMET-driven tumor indications. 18 On March 11, 2022 and effective March 9, 2022, we and Pfizer entered into a second Clinical Trial Collaboration and Supply Agreement, or the Second Pfizer Agreement, pursuant to which we may, subject to FDA feedback and guidance, evaluate darovasertib and Pfizer’s cMET inhibitor, crizotinib , as a combination therapy in MUM in a planned Phase 2 potential registration-enabling clinical trial. Pursuant to the Second Pfizer Agreement, we are the sponsor of the planned combination trial and we will provide darovasertib and pay for the costs of the combination trial; Pfizer will provide crizotinib for the planned combination trial at no cost to us. We and Pfizer will jointly own clinical data from the planned c ombination trial and all inventions relating to the combined use of IDE196 and crizotnib . We and Pfizer will form a joint development committee responsible for coordinating all regulatory and other activities under the Second Pfizer Agreement. Separately, on March 11, 2022 and effective March 9, 2022, we and Pfizer also entered into a third Clinical Trial Collaboration and Supply Agreement, or the Third Pfizer Agreement, pursuant to which we may, subject to preclinical validation and FDA feedback and guidance, evaluate darovasertib and Pfizer’s cMET inhibitor, crizotinib, as a combination therapy in cMET-driven tumors such as NSCLC and/or HCC in a Phase 1 clinical trial. Pursuant to the Third Pfizer Agreement, we are the sponsor of the planned combination trial and we will provide darovasertib and pay for the costs of the combination trial; Pfizer will provide crizotinib for the planned combination trial at no cost to us. We and Pfizer will jointly own clinical data from the planned combination trial and all inventions relating to the combined use of darovasertib and crizotnib. We and Pfizer will form a joint development committee responsible for coordinating all regulatory and other activities under the Third Pfizer Agreement. Exclusive Option and License Agreement with Cancer Research UK On April 28, 2017, we entered into an Evaluation, Option and License agreement, or CRUK/Manchester Agreement, with Cancer Research UK and University of Manchester, which was amended on April 24, 2019 and on March 3, 2020, for the development and commercialization of licensed products comprising pharmaceutical preparations of PARG inhibitors for all therapeutic uses Under this agreement, Cancer Research UK and University of Manchester have granted to us, and we have in turn granted to Cancer Research UK and University of Manchester, non-exclusive, sublicensable, royalty-free licenses to carry out non-clinical research during the research term, currently ending in March 2021. The non-clinical research is to be governed by a joint research committee comprised of representatives from each party. During the research term, no party is to undertake a drug discovery program in PARG inhibitors other than under this agreement. Cancer Research UK also granted us the exclusive option to obtain an exclusive, sublicensable, worldwide, royalty-bearing license, under certain Cancer Research UK background intellectual property and Cancer Research UK’s interest in any intellectual property jointly developed under the agreement, to research, develop, manufacture, and commercialize licensed products, as well as a non-exclusive, sublicensable, royalty-free, freedom-to-operate license under related intellectual property. Cancer Research UK and University of Manchester retain certain rights under the licensed intellectual property for academic, non-commercial research and teaching. In the March 2020 second amendment to the CRUK/Manchester Agreement, the parties reduced the license fee due at exercise of our option, extended the research period to March 2021, and also extended the option period, during which IDEAYA has rights to exercise an option to certain license rights. The expanded collaborative research included evaluation of an IDEAYA proprietary small molecule PARG inhibitor in multiple in vitro and in vivo ovarian cancer xenograft models. This research is also evaluating replication stress signature as a potential patient selection biomarker. The extended option period was for up to four additional years from March 2020, including an initial one year period to March 2021 and an additional eighteen month extension to September 2022, which has now been elected pursuant to our certification of ongoing program research activities. In January 2022, we exercised our option under the CRUK/Manchester Agreement, pursuant to which we hold exclusive worldwide license rights covering a broad class of PARG inhibitors. Following our option exercise, we gained sole control and responsibility for the research, development, manufacture, and commercialization of the licensed PARG inhibitors. Cancer Research UK has also agreed to transfer its know how relating to the research, development or manufacturing of the licensed PARG inhibitors to us. We are obligated to use reasonable efforts to research a PARG inhibitor during the research term, and to develop a PARG inhibitor for the treatment of a cancer indication if we exercise the option. Each party is the sole owner of any intellectual property it develops solely under the agreement, and the parties will be joint owners of any jointly developed intellectual property. Each party grants the other a non-exclusive, fully-paid, royalty free, irrevocable, sublicensable, perpetual license to its rights in such jointly created intellectual property to make, use and sell 19 inventions claimed in the joint patents, except for those joint patents exclusively licensed to us under the agreement following our exercise of the option. We are obligated to use reasonable efforts to research a PARG inhibitor during the research term, and to develop a PARG inhibitor for the treatment of a cancer indication if we exercise the option. Each party is the sole owner of any intellectual property it develops solely under the agreement, and the parties will be joint owners of any jointly developed intellectual property. Each party grants the other a non-exclusive, fully-paid, royalty free, irrevocable, sublicensable, perpetual license to its rights in such jointly created intellectual property to make, use and sell inventions claimed in the joint patents, except for those joint patents exclusively licensed to us under the agreement following the exercise our option. Before our exercise of the option, Cancer Research UK was responsible for the prosecution and maintenance of Cancer Research UK background patents specifically relating to PARG, while we were responsible for the prosecution and maintenance of patents covering inventions developed under the agreement as project intellectual property. Cancer Research UK and University of Manchester had the first right to enforce the patents covering inventions developed under the agreement as project intellectual property and we had the right to participate in such actions. Following our exercise of the option, we have assumed Cancer Research UK’s prosecution and maintenance responsibilities for the Cancer Research UK background patents specifically relating to PARG and we obtained the first right to enforce such patents as well as the patents covering inventions developed under the agreement as project intellectual property, and Cancer Research UK will have the right to participate. We pay all expenses associated with prosecution and maintenance and each party bears its own costs for enforcement. If we abandon the patents covering inventions developed under the agreement as project intellectual property, Cancer Research UK will thereafter be responsible for prosecuting and maintaining such patents. If we abandon such patents, Cancer Research UK and University of Manchester will be responsible for paying the expenses associated with the prosecution and maintenance of such patents. In addition to an upfront fee of £100,000 and a one-time option exercise fee of £250,000, each of which have been paid, we have certain potential milestone-dependent financial obligations, including: (a) subject to completion of certain clinical and regulatory milestones, payments of up to £19.5 million per broad disease classification block – for example, in oncologic diseases, up to £13.0 million aggregate for a first achievement of such clinical and regulatory milestones and up to £6.5 million aggregate for a second achievement of such clinical and regulatory milestones; (b) subject to certain sales milestones, payments of up to £9 million per broad disease classification block – for example, in oncologic diseases, up to £6.0 million aggregate for a first achievement of such sales milestones and up to £3.0 million aggregate for a second achievement of such sales milestones; and (c) low single-digit tiered royalty payments based on aggregate worldwide net sales of all products, payable on a product-by-product and country-by-country basis until the later of the last-to-expire patent covering such product in such country and the ten year anniversary of the first commercial sale of such licensed product in such country. The royalty payments are subject to reductions for payment obligations in the event third-party licenses are required to develop or commercialize the product or if the product is not covered by certain patents. Following our exercise of the option, if we sublicense certain intellectual property developed under the agreement or Cancer Research UK background patents specifically relating to PARG, we will also have an obligation to pay to Cancer Research UK low double digit percentage of sublicense revenue we receive, if any. If the agreement is terminated due to our material breach, then we are eligible to receive a percentage of sublicensing revenue that Cancer Research UK receives for licensing intellectual property. If the agreement is terminated by Cancer Research UK and University of Manchester pursuant to any of their termination rights, then Cancer Research UK and University of Manchester will have exclusive, worldwide rights to project intellectual property. If we terminate the agreement for material breach, then the licenses we receive upon exercise of the option survive, and our payment obligations will be reduced. Following our exercise of the option, the licenses we receive upon exercise of the option survive expiration of the agreement. Sales and Marketing We intend to become a fully-integrated biopharmaceutical company. This will enable us to realize our goal of delivering transformative drugs to patients. We currently hold worldwide commercialization rights to each of our product candidates, and intend to retain significant rights in key markets. In light of our stage of development, we have not yet established sales and marketing capabilities. 20 We plan to build our own sales force to commercialize approved products, if any, in the United States and potentially in Europe and other selected foreign countries, and we expect to initiate commercial readiness activities in anticipation of receiving marketing approvals. We believe a moderately sized specialty sales force would enable us to reach oncologists who specialize in treating the patient populations for our product candidates. We may enter into distribution and other marketing arrangements with third parties for any of our product candidates that obtain marketing approval. We also plan to build a marketing and sales management organization to create and implement marketing strategies for any products that we market through our own sales organization and to oversee and support our sales force. Manufacturing We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates and our biomarker diagnostics for preclinical and clinical testing, as well as for future commercial manufacture of any drugs and diagnostics that we may commercialize. We do not own or operate, and currently have no plans to establish, any manufacturing facilities. In general, we plan to establish agreements with contract manufacturing organizations, or CMOs, for synthesis of the active pharmaceutical ingredient, or API, manufacturing of drug product comprising such API, as well as packaging, labeling and distribution. We have also established supply arrangements with one or more CMOs for IDE397 in support of our current clinical development needs. We have also established our own supply arrangements with one or more CMOs for IDE196 in support of our current clinical development needs. Our lead product candidates IDE397 and IDE196 are each small molecules that can be manufactured in reliable and reproducible synthetic processes from readily available starting materials. We believe the synthetic chemistry is amenable to scale-up using standard manufacturing equipment and processes. We expect that the compounds being discovered and developed for our other pipeline programs, including PARG, Pol Theta, and WRN, and other future programs, will also be small molecule product candidates that can be produced at contract manufacturing facilities. In many cases, we anticipate that the biomarker diagnostic may be commercially available on an existing third-party diagnostic panel or assay. In cases where such biomarker diagnostic is not already commercially available, we generally expect to establish agreements with strategic partners for clinical supply of companion diagnostics for biomarkers associated with the targeted therapeutics we are developing. Government Regulation Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, marketing and export and import of products such as those we are developing. A new drug must be approved by the FDA through the new drug application, or NDA, process before it may be legally marketed in the United States. U.S. Drug Development Process In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us. The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies and formulation studies in accordance with good laboratory practice, or GLP, regulations and other applicable regulations; 21 • submission to the FDA of an IND, which must become effective before clinical trials in humans may begin; • approval by an independent institutional review board, or IRB, at each clinical site before each clinical trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, regulations to establish the safety and efficacy of the proposed drug for its intended use; • submission to the FDA of an NDA; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current good manufacturing process, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and • FDA review and approval of the NDA. Once a pharmaceutical product candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND. The sponsor will also include a protocol detailing, among other things, the objectives of the first phase of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, if the first phase lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns about on-going or proposed clinical trials or non-compliance with specific FDA requirements, and the clinical trials may not begin or continue until the FDA notifies the sponsor that the hold has been lifted. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. They must be conducted under protocols detailing the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND, and timely safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events. An IRB at each institution participating in the clinical trial must review and approve each protocol before a clinical trial commences at that institution and must also approve the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his or her legal representative, monitor the clinical trial until completed and otherwise comply with IRB regulations. Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: • Phase 1: The product candidate is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain an early indication of its effectiveness. In the case of some products for severe or life-threatening diseases, such as cancer, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. Sponsors sometimes designate their Phase 1 clinical trials as Phase 1a or Phase 1b. Phase 1b clinical trials are typically aimed at confirming dosing, pharmacokinetics and safety in a larger number of patients. Some Phase 1b studies evaluate biomarkers or surrogate markers that may be associated with efficacy in patients with specific types of diseases. • Phase 2: This phase involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and appropriate dosage. • Phase 3: Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population, generally at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk-benefit ratio of the product candidate and provide, if appropriate, an adequate basis for product labeling. Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These clinical trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA. 22 The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. In addition, some clinical trials are overseen by an independent group of qualified experts organized by the sponsor, known as a data safety monitoring board or committee. Depending on its charter, this group may determine whether a clinical trial may move forward at designated check points based on access to certain data from the clinical trial. During the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points. These points may be prior to submission of an IND, at the end of Phase 2, and before an NDA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach agreement on the next phase of development. Sponsors typically use the meetings at the end of the Phase 2 clinical trial to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new drug. Concurrent with clinical trials, companies may conduct additional in vivo studies and also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug. In addition, 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. While the IND is active and before approval, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure. There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries. Sponsors of certain clinical trials of FDA-regulated products are required to register and disclose specified clinical trial information, which is publicly available at www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, clinical trial sites and investigators and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after completion. Disclosure of the results of these clinical trials can be delayed until the new product or new indication being studied has been approved. U.S. Review and Approval Process The results of product development, preclinical and other non-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product. The submission of an NDA is subject to the payment of substantial user fees; a waiver of such fees may be obtained under certain limited circumstances. The FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity. The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Under the Prescription Drug User Fee Act, or PDUFA, the FDA has agreed to certain performance goals in the review of NDAs through a two-tiered classification system, standard review and priority review. According to the current PDUFA performance goals for new molecular entity NDAs, the FDA endeavors to review and act on applications within ten months of the 60-day filing date under standard review, and within six months of the 60-day filing date under priority review. The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. Before approving an 23 NDA, the FDA will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements. After the FDA evaluates an NDA, it will issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form. A Complete Response Letter usually describes the specific deficiencies in the NDA identified by the FDA and may require additional clinical data, such as an additional pivotal Phase 3 clinical trial or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. If a Complete Response Letter is issued, the sponsor must resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the NDA does not satisfy the criteria for approval. If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may require a sponsor to conduct Phase 4 testing, which involves clinical trials designed to further assess a drug’s safety and effectiveness after NDA approval, and may require testing and surveillance programs to monitor the safety of approved products which have been commercialized. The FDA may also place other conditions on approval including the requirement for a risk evaluation and mitigation strategy, or REMS, to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS. The FDA will not approve the NDA without an approved REMS, if required. A REMS could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Marketing approval may be withdrawn for non-compliance with regulatory requirements or if problems occur following initial marketing. Pediatric Use Even when not pursuing a pediatric indication, under the Pediatric Research Equity Act, or PREA, an NDA or supplement thereto must contain data that is adequate to assess the safety and effectiveness of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. With the enactment of the Food and Drug Administration Safety and Innovation Act in 2012, sponsors must also submit pediatric trial plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric trials the sponsor plans to conduct, including trial objectives and design, any deferral or waiver requests, and other information required by regulation. The FDA must then review the information submitted, consult with the sponsor, and agree upon a final plan. The FDA or the sponsor may request an amendment to the plan at any time. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Separately, in the event the FDA issues a Written Request for pediatric data relating to a drug product, an NDA sponsor who submits such data may be entitled to pediatric exclusivity. Pediatric exclusivity is another type of non-patent marketing exclusivity which, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing exclusivity. U.S. Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States or, if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making the drug product available in the United States for the disease or condition will be recovered from sales of the product in the United States. Orphan designation must be requested before submitting an NDA. After the FDA grants orphan designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan designation does not convey any advantage in or shorten the duration of the regulatory review and approval process. If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan exclusivity, which means that the FDA may not approve any other 24 applications to market the same drug for the same indication for seven years, except in limited circumstances, such as a subsequent product showing of clinical superiority to the product with orphan exclusivity. The designation of such drug also entitles a party to financial incentives such as opportunities for grant funding, tax credits for certain clinical trial costs and user-fee waivers. However, competitors, may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. Orphan exclusivity also could block the approval of one of our product candidates for seven years if a competitor obtains approval of the same drug for the same rare disease or condition before we do. In addition, if an orphan designated product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan exclusivity. Exclusive marketing rights in the United States may also be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. U.S. Expedited Development and Review Programs New drug products are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a fast track product has opportunities for frequent interactions with the review team during product development and, once an NDA is submitted, the product may be eligible for priority review. A fast track product may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA. A product intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its development and review. A product can receive breakthrough therapy designation if preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product, including involvement of senior managers. After an NDA is submitted for a product, including a product with a fast track designation and/or breakthrough therapy designation, the NDA may be eligible for priority review. A product is eligible for priority review if it has the potential to provide a significant improvement in the treatment or prevention of a serious disease or condition compared to marketed products. If the drug contains a new molecular entity, priority review designation means the FDA’s goal is to take an action on the marketing application within six months of the 60-day filing date, compared with ten months under standard review. Additionally, products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, 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. As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. We expect to pursue breakthrough therapy designation for darovasertib and may explore some of these opportunities for our other product candidates as appropriate. U.S. Post-approval Requirements Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market. After approval, some types of changes to the approved product, such as adding new indications, certain manufacturing changes and additional 25 labeling claims, are subject to further FDA review and approval. Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP regulations and other laws and regulations. In addition, the FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization. Any drug products manufactured or distributed by us or our partners pursuant to FDA approvals will be subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements. The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market and imposes requirements and restrictions on drug manufacturers, such as those related to direct-to-consumer advertising, the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet. Discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant or manufacturer to administrative or judicial civil or criminal sanctions and adverse publicity. FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical holds on post-approval clinical trials, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties. U.S. Marketing Exclusivity Market exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not approve or even accept for review an abbreviated new drug application, or ANDA, or an NDA submitted under Section 505(b)(2) of the FDCA, or 505(b)(2) NDA, submitted by another company for another drug that contains the same active moiety. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement to one of the patents listed with the FDA by the innovator NDA holder. The FDCA alternatively provides three years of marketing exclusivity for a change to a previously approved drug, such as a new indication or condition of use, submitted in an NDA, or supplement to an existing NDA if one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application. This three-year exclusivity covers only the modification for which the drug received approval on the basis of the new clinical investigations and does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for drugs containing the active agent for the original indication or condition of use. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. Other types of non-patent exclusivity include seven-year orphan drug exclusivity and six-month pediatric exclusivity (each discussed above). FDA Regulation of Companion Diagnostics We are collaborating or expect to collaborate with strategic partners or CROs to manufacture and supply in vitro diagnostics to identify patients with biomarkers associated with the targeted therapeutics we are developing. These diagnostics, often referred to as companion diagnostics, are regulated as medical devices. In the United States, the FDCA and its implementing 26 regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance. Under the FDCA, medical devices are classified into one of three classes – Class I, Class II or Class III – depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurances with respect to safety and effectiveness. Class I devices are those for which safety and effectiveness can be reasonably assured by adherence to a set of regulations, referred to as General Controls, which require compliance with the applicable portions of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of adverse events and malfunctions, and appropriate, truthful and non-misleading labeling and promotional materials. Class II devices are those that are subject to the General Controls, as well as Special Controls, which can include performance standards, guidelines and postmarket surveillance. Most Class II devices are subject to premarket review and clearance by the FDA. Premarket review and clearance by the FDA is accomplished through the 510(k) premarket notification process. Under the 510(k) process, the manufacturer must submit to the FDA a premarket notification, demonstrating that the device is “substantially equivalent” to a predicate device. To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Class III devices include devices deemed by the FDA to pose the greatest risk such as life-supporting or life-sustaining devices, or implantable devices, in addition to new devices deemed not substantially equivalent following the 510(k) process. The safety and effectiveness of Class III devices cannot be reasonably assured solely by the General Controls and Special Controls. Therefore, these devices are generally subject to the premarket approval, or PMA, application process, which is generally more costly and time-consuming than the 510(k) process. Alternatively, a device might be the subject of a de novo classification request, which seeks marketing authorization and reclassification as a lower-risk Class I or Class II device for a new device that otherwise would automatically be regulated as a Class III device requiring a PMA approval. Specifically, medical device types that the FDA has not previously classified as Class I, II or III are automatically classified into Class III regardless of the level of risk they pose. The Food and Drug Administration Modernization Act of 1997 established a new route to market for low to moderate risk medical devices that are automatically placed into Class III due to the absence of a predicate device, called the “Request for Evaluation of Automatic Class III Designation,” or the de novo classification procedure. This procedure allows a manufacturer whose novel device is automatically classified into Class III to request down-classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring the submission and approval of a PMA application. If the use of a companion diagnostic is essential to the safe and effective use of a drug or biologic product, then the FDA generally will require approval or clearance of the diagnostic contemporaneously with the approval of the therapeutic product. On August 6, 2014, the FDA issued a final guidance document addressing the development and approval process for in vitro companion diagnostic devices. According to the guidance, for novel product candidates such as ours, a companion diagnostic device and its corresponding drug or biologic candidate should be approved or cleared contemporaneously by the FDA for the use indicated in the therapeutic product labeling. The guidance also explains that a companion diagnostic device used to make treatment decisions in clinical trials of a drug generally will be considered an investigational device, unless it is employed for an intended use for which the device is already approved or cleared. If used to make critical treatment decisions, such as patient selection, the diagnostic device generally will be considered a significant risk device under the FDA’s Investigational Device Exemption, or IDE, regulations. Thus, the sponsor of the diagnostic device will be required to comply with the IDE regulations. According to the guidance, if a diagnostic device and a drug are to be studied together to support their respective approvals, both products can be studied in the same investigational study, if the study meets both the requirements of the IDE regulations and the IND regulations. The guidance provides that depending on the details of the study plan and subjects, a sponsor may seek to submit an IND alone, or both an IND and an IDE. In July 2016, the FDA issued a draft guidance document intended to further assist sponsors of therapeutic products and sponsors of in vitro companion diagnostic devices on issues related to co-development of these products. The FDA generally requires companion diagnostics intended to select the patients who will respond to cancer treatment to obtain approval of a PMA for that diagnostic contemporaneously with approval of the therapeutic, though 510(k) clearance or grant of a de novo classification request are also possible. The review of these in vitro companion diagnostics in conjunction with the review of a cancer therapeutic involves coordination of review by the FDA’s Center for Biologics Evaluation and Research or Center for Drug Evaluation and Research and by the FDA’s Center for Devices and Radiological Health. The PMA process, including the gathering of clinical and preclinical data and the submission to and review by the FDA, can take several years or longer. It involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. PMA applications are subject to an application fee. In addition, PMAs for certain devices must generally include the results from extensive preclinical and adequate and well-controlled clinical trials to establish the safety and effectiveness of the device for each indication for which FDA approval is sought. In particular, for a diagnostic, the applicant must demonstrate that the diagnostic produces reproducible 27 results when the same sample is tested multiple times by multiple users at multiple laboratories. As part of the PMA review, the FDA will typically inspect the manufacturer’s facilities for compliance with the QSR, which imposes elaborate testing, control, documentation and other quality assurance requirements. If the FDA evaluations of both the PMA application and the manufacturing facilities are favorable, the FDA will either issue an approval letter or an approvable letter, which usually contains a number of conditions that must be met in order to secure the final approval of the PMA, such as changes in labeling, or specific additional information, such as submission of final labeling, in order to secure final approval of the PMA. If the FDA concludes that the applicable criteria have been met, the FDA will issue a PMA for the approved indications, which can be more limited than those originally sought by the applicant. The PMA can include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution. If the FDA’s evaluation of the PMA or manufacturing facilities is not favorable, the FDA will deny approval of the PMA or issue a not approvable letter. A not approvable letter will outline the deficiencies in the application and, where practical, will identify what is necessary to make the PMA approvable. The FDA may also determine that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the clinical trials are conducted and then the data submitted in an amendment to the PMA. Once granted, PMA approval may be withdrawn by the FDA if compliance with post approval requirements, conditions of approval or other regulatory standards is not maintained or problems are identified following initial marketing. PMA approval is not guaranteed, and the FDA may ultimately respond to a PMA submission with a not approvable determination based on deficiencies in the application and require additional clinical trials or other data that may be expensive and time-consuming to generate and that can substantially delay approval. If a companion diagnostic is the subject of a de novo classification request in lieu of a PMA, the FDA is required to classify the device within 120 days following receipt of the de novo submission. If the manufacturer seeks reclassification into Class II, the manufacturer must include a draft proposal for special controls that are necessary to provide a reasonable assurance of the safety and effectiveness of the medical device. The FDA may reject the reclassification petition if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or determines that the device is not low to moderate risk or that general controls would be inadequate to control the risks and special controls cannot be developed. If the de novo request is granted, the new device may be legally marketed (in compliance with applicable regulatory controls), a new classification regulation for the device type will be established, and the device may serve as a predicate device for 510(k) submissions for future devices of the same type. After a device is placed on the market, it remains subject to significant regulatory requirements. Medical devices may be marketed only for the uses and indications for which they are cleared or approved. Device manufacturers must also establish registration and device listings with the FDA. A medical device manufacturer’s manufacturing processes and those of its suppliers are required to comply with the applicable portions of the QSR, which cover the methods and documentation of the design, testing, production, processes, controls, quality assurance, labeling, packaging and shipping of medical devices. Domestic facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA. The FDA also may inspect foreign facilities that export products to the United States. Regulation Outside the United States To the extent that any of our product candidates, once approved, are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals. In order to market our future products in the European Economic Area, or EEA, (which is comprised of the 28 Member States of the European Union, or EU, plus Norway, Iceland and Liechtenstein) and many other foreign jurisdictions, we must obtain separate regulatory approvals. More concretely, in the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA. There are two types of marketing authorizations: • the Community MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use of the European Medicines Agency, or EMA, and which is valid throughout the entire territory of the EEA. The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases. The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU; and • National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized 28 Procedure. Where a product has already been authorized for marketing in a Member State of the EEA, this National MA can be recognized in another Member State through the Mutual Recognition Procedure. If the product has not received a National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedure. Under the above described procedures, before granting the MA, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy. Data and Marketing Exclusivity In the EEA, new products authorized for marketing, or reference products, qualify for eight years of data exclusivity and an additional two years of market exclusivity upon marketing authorization. The data exclusivity period prevents generic or biosimilar applicants from relying on the preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU during a period of eight years from the date on which the reference product was first authorized in the EU. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial authorization of the reference product in the EU. The 10-year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those 10 years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. Pediatric Investigation Plan In the EEA, marketing authorization applications for new medicinal products not authorized have to include the results of studies conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO. The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which marketing authorization is being sought. The PDCO can grant a deferral of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults. Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients. Once the marketing authorization is obtained in all Member States of the EU and study results are included in the product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension. Orphan Drug Designation In the EEA, a medicinal product can be designated as an orphan drug if its sponsor can establish that the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the EU when the application is made, or that the product is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the European Community and that without incentives it is unlikely that the marketing of the drug in the EU would generate sufficient return to justify the necessary investment. For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the drug will be of significant benefit to those affected by that condition. In the EEA, an application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. Marketing authorization for an orphan drug leads to a ten-year period of market exclusivity. During this market exclusivity period, the EMA or the member state competent authorities, cannot accept another application for a marketing authorization, or grant a marketing authorization, for a similar medicinal product for the same indication. The period of market exclusivity is extended by two years for medicines that have also complied with an agreed PIP. This period may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation, for example because the product is sufficiently profitable not to justify market exclusivity. Market exclusivity can be revoked only in very selected cases, such as consent from the marketing authorization holder, inability to supply sufficient quantities of the product, demonstration of “clinical superiority” by a similar medicinal product, or, after a review by the Committee for Orphan Medicinal Products, requested by a member state in the fifth year of the marketing exclusivity period (if the designation criteria are believed to no longer apply). Medicinal products designated as orphan drugs pursuant are eligible for incentives made available by the EU and its Member States to support research into, and the development and availability of, orphan drugs. 29 Companion D iagnostics In the EEA, in vitro medical devices are required to conform with the essential requirements of the EU Directive on in vitro diagnostic medical devices (Directive No. 98/79/EC, as amended). To demonstrate compliance with the essential requirements, the manufacturer must undergo a conformity assessment procedure. The conformity assessment varies according to the type of in vitro diagnostic medical device and its classification. The conformity assessment of in vitro diagnostic medical devices can require the intervention of an accredited EEA Notified Body. If successful, the conformity assessment concludes with the drawing up by the manufacturer of an EC Declaration of Conformity entitling the manufacturer to affix the CE mark to its products and to sell them throughout the EEA. On April 5, 2017, the European Parliament passed the In Vitro Device Regulation, or IVDR, which repeals and replaces Directive No 98/79/EC. Unlike directives, which must be implemented into the national laws of the EU member states, a regulation is directly applicable, i.e., without the need for adoption of EU member state laws implementing them, in all EEA member states. The IVDR, among other things, is intended to establish a uniform, transparent, predictable and sustainable regulatory framework across the EU for in vitro diagnostic medical devices and ensure a high level of safety and health while supporting innovation. The IVDR will not become fully applicable until five years following its entry into force. Once applicable, the IVDR will among other things: • strengthen the rules on placing devices on the market and reinforce surveillance once they are available; • establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; • improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; and • set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU. Healthcare Reform In the United States and certain foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system that could affect our future results of operations as we begin to directly commercialize our products. In March 2010, the Patient Protection and Affordable Care Act, or ACA, was signed into law which substantially changed the way healthcare is financed by both governmental and private insurers in the United States and significantly affected the pharmaceutical industry. The ACA contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement adjustments and fraud and abuse changes. Additionally, the ACA increases the minimum level of Medicaid rebates payable by manufacturers of brand name drugs from 15.1% to 23.1%; requires collection of rebates for drugs paid by Medicaid managed care organizations; requires manufacturers to participate in a coverage gap discount program, under which they must agree to offer 70 percent point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; imposes a non-deductible annual fee on pharmaceutical manufacturers or importers who sell “branded prescription drugs” to specified federal government programs, implemented a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected, expands of eligibility criteria for Medicaid programs, creates a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research and establishes of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Prior to the U.S. Supreme Court’s decision, President Biden issued an executive order initiating a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare. It is unclear how other healthcare reform measures enacted by Congress or implemented by the Biden administration, if any, will impact our business . Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year, which was temporarily suspended from May 1, 2020 through March 31, 2022 and a 1% reduction from April 1, 2022 through June 30, 2022, and reduced payments to several types of Medicare providers. Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted legislation 30 designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drug products. Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing. Other Healthcare Laws Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, and transparency laws and regulations with respect to drug pricing and payments and other transfers of value to physicians and other healthcare providers, as well as similar foreign laws in the jurisdictions outside the United States. If their operations are found to be in violation of any of such laws or any other governmental regulations that apply, they may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, the curtailment or restructuring of operations, exclusion from participation in governmental healthcare programs and imprisonment. Data Privacy and Security Laws Pharmaceutical companies may be subject to U.S. federal and state health information privacy, security and data breach notification laws, which may govern the collection, use, disclosure and protection of health-related and other personal information. Entities that are found to be in violation of the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as the result of a breach of unsecured protected health information, or PHI, a complaint about privacy practices or an audit by the United States Department of Health and Human Services, or HHS, may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. State laws may be more stringent, broader in scope or offer greater individual rights with respect to protected health information, or PHI, than HIPAA, and state laws may differ from each other, which may complicate compliance efforts. For example, the California Consumer Privacy Act, or CCPA, effective January 1, 2020, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States, which could increase our potential liability and adversely affect our business. Further, the California Privacy Rights Act, or CPRA, recently passed in California. The CPRA will impose additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required. In Europe, EU and European Economic Area, or EEA, member states, Switzerland and other countries have also adopted data protection laws and regulations, which impose significant compliance obligations. In the EEA, the collection and use of personal health data is governed by the provisions of the General Data Protection Regulation, or GDPR. The GDPR became effective on May 25, 2018, and, together with the national legislation of EU or EEA member states governing the processing of personal data, imposes strict obligations and restrictions on the ability to collect, analyze and transfer personal data, including health data from clinical trials and adverse event reporting. In particular, these obligations and restrictions impose stringent requirements relating to individual consent, the information that must be provided to the individuals, the transfer of personal data out of the EU and EEA, security and data breach notifications, as well as security and confidentiality of the personal data. The GDPR allows for the imposition of substantial fines of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater, as well as other corrective measures for breaches of the data protection obligations. Data protection authorities from the different EU member states may interpret the GDPR and national laws differently and impose additional requirements, which add to the complexity of processing personal data in the EU. Guidance on implementation and compliance practices are often updated or otherwise revised, and the efficacy and longevity of current transfer mechanisms between the EU and the United States remains uncertain. For example, in 2016, the EU and United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the European Union. Further, from January 1, 2021, companies have to comply with the GDPR and also the United Kingdom GDPR, or UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law. The UK GDPR mirrors the fines under the GDPR, e.g. fines up to the greater of €20 million (£17.5 million) or 4% of global turnover. The relationship between the 31 United Kingdom and the EU in relation to certain aspects of data protection law remains unclear, and it is unclear how United Kingdom data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the United Kingdom will be regulated in the long term. Currently there is a four to six-month grace period agreed in the EU and United Kingdom Trade and Cooperation Agreement, ending June 30, 2021 at the latest, whil e the parties discuss an adequacy decision. However, it is not clear whether (and when) an adequacy decision may be granted by the European Commission enabling data transfers from EU member states to the United Kingdom long term without additional measures. These changes may lead to additional costs and increase our overall risk exposure. Coverage and Reimbursement Sales of any product depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement for such product by third-party payors. Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. These third-party payors are increasingly reducing reimbursements for medical products, drugs and services. In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product. Decreases in third-party reimbursement for any product or a decision by a third-party payor not to cover a product could reduce physician usage and patient demand for the product and also have a material adverse effect on sales. In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. For example, the EU provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. We may face competition for our product candidates from lower-priced products in foreign countries that have placed price controls on pharmaceutical products. In addition, there may be importation of foreign products that compete with our own products, which could negatively impact our profitability. Furthermore, there can be no assurance that our products will be considered medically reasonable and necessary for a specific indication, that our products will be considered cost-effective by third-party payors, that an adequate level of reimbursement will be established even if coverage is available or that the third-party payors’ reimbursement policies will not adversely affect our ability to sell our products profitably. Human Capital At IDEAYA, we view our employees as among our most valuable assets. Our ability to hire and retain highly skilled professionals remains an important element to our success in discovering and developing targeted therapeutics. Our employees are at the heart of our values of passionate commitment, fearless innovation, courageous integrity, respectful teamwork, objective decision-making and empowered accountability. We offer our employees a challenging work environment, ongoing skills development, attractive career advancement, and a culture that rewards entrepreneurial initiative and exceptional execution. In 2020, we established an internal human resources department, including hiring a Vice President, Human Resources, as part of our commitment to our human resources programs and our employee work experience. We believe our employees and our company benefit from and excel in a diverse, inclusive and safe work environment. Our employees come from numerous countries and bring diversity to our workplace across many critical categories. We believe the variety of experiences, backgrounds and perspectives of our employees bring to their work every day makes IDEAYA stronger and more successful. As of December 31, 2021, females make up 43% of our workforce, 17% of our executive team, and 25% of our board of directors. As of December 31, 2021, we had a total of 81 employees. Of these employees, 64 were primarily engaged in research and development activities and 17 were primarily engaged in general and administrative activities. Of our total employees, 67 hold biology, chemistry or other relevant scientific degrees, including 41 Ph.D.’s. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good. 32 Corporate Information We were founded in June 2015 as a Delaware corporation. Our principal executive offices are located at 7000 Shoreline Court, Suite 350, South San Francisco, California 94080, and our telephone number is (650) 443-6209. Our website address is www.ideayabio.com. We file electronically with the Securities and Exchange Commission (“SEC”) our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. Our SEC filings are available to the public on the SEC’s website at www.sec.gov. At our corporate website, www.ideayabio.com, we make available free of charge a variety of information for investors, including copies of these reports, and any amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information on, or that can be accessed through, our website is not part of this report and is not incorporated by reference herein. We have included our website address as an inactive textual reference only. We also use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. We use IDEAYA Biosicences, Inc.®, the IDEAYA logo, and other marks as trademarks in the United States and other countries. This Annual Report on Form 10-K contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Annual Report on Form 10-K, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by any other entity. 33