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Item 1. Business

2021-02-26 compared with 2020-03-16 · 517 added, 302 removed, 324 unchanged (72% of the section changed)

Immunic, Inc.

("Immunic" or the "Company") is a clinical-stage biopharmaceutical company focused on the development of selective oral therapies in immunology with the goal of becoming a leader in treatments for chronic inflammatory and autoimmune diseases.

Immunic is headquartered in New York with its main operations in Planegg-Martinsried near Munich, Germany.

("Immunic" or the "Company") is a clinical-stage biopharmaceutical company developing a pipeline of selective oral immunology therapies aimed at treating chronic inflammatory and autoimmune diseases, including relapsing-remitting multiple sclerosis ("RRMS"), ulcerative colitis ("UC"), Crohn’s disease ("CD") and psoriasis.

Immunic is headquartered in New York with its main operations in Gräfelfing, Germany.

Immunic currently has 28 employees.

The Company’s business, operating results, financial condition and growth prospects are subject to significant risks and uncertainties, including the failure of its clinical trials to meet their endpoints, failure to obtain regulatory approval and needing additional funding to complete the development and commercialization of the Company's three development programs.

Going Concern and Financial Condition

Immunic has no products approved for commercial sale and has not generated any revenue from product sales.

Immunic has never been profitable and has incurred operating losses in each year since inception (2016).

Immunic has an accumulated deficit of approximately $59.9 million as of December 31, 2019 and $25.0 million as of December 31, 2018.

Substantially all of Immunic’s operating losses resulted from expenses incurred in connection with its research and development programs and from general and administrative costs associated with its operations.

Immunic expects to incur significant expenses and increasing operating losses for the foreseeable future as it initiates and continues the preclinical and clinical development of its product candidates and adds personnel necessary to advance its clinical pipeline of product candidates.

Immunic expects that its operating losses will fluctuate significantly from quarter-to-quarter and year-to-year due to timing of clinical development programs.

From inception through December 31, 2019, Immunic has raised net cash of approximately $72.3 million from private and public offerings of preferred and common stock.

As of December 31, 2019, Immunic had cash and cash equivalents of approximately $29.4 million.

With these funds, Immunic expects to be able to fund its operations into but not beyond the first quarter of 2021 based on its available working capital as of the date of this evaluation.

The ability of the Company to continue its operations through the first quarter of 2021 and beyond is dependent on management’s ability to raise capital, which likely includes an equity-based financing.

However, there is no assurance that the Company will be successful in raising sufficient capital.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Reverse Acquisition

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changed its name to “Immunic, Inc.” and its ticker symbol to “IMUX”.

Immediately prior to the closing of the Transaction, (i) each Immunic AG preferred share was converted into one Immunic AG ordinary share, and (ii) each Immunic AG ordinary share was converted into the right to receive 17.17 shares of Vital’s common stock, after giving effect to the Reverse Stock Split (as defined below).

The exchange ratio was determined through arm’s-length negotiations between Vital and Immunic AG.

The aggregate consideration issuable in the Transaction, after giving effect to the Reverse Stock Split, was 8,927,130 shares of Vital’s common stock.

Following the Transaction and after giving effect to the Reverse Stock Split, the former shareholders of Immunic AG owned approximately 88.25% of the common stock of the Company, and the shareholders of Vital immediately prior to the Transaction owned 1,059,269 shares (plus 127,500 restricted stock units (“RSUs”) all of which have been issued to date) of the common stock of the Company or approximately 11.75%.

The issuance of shares of Vital’s

common stock in the Transaction was registered with the SEC on a Registration Statement on Form S-4 (Registration No.

Immediately prior to the closing of the Transaction, Immunic AG issued, in a private placement transaction, an aggregate of 2,197,742 ordinary shares to certain of its shareholders for aggregate consideration of €26.7 million (approximately $29.9 million), pursuant to the terms of the Investment and Subscription Agreement, dated as of January 6, 2019, between Immunic and the shareholders and investors party thereto (the “Subscription Agreement”).

The Transaction has been accounted for as a reverse acquisition under the acquisition method of accounting.

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Unless otherwise noted, all references to common stock share and per share amounts have also been adjusted to reflect the exchange ratio of 17.17.

Immunic is currently pursuing three development programs.

These include the IMU-838 program, focused on the development of oral formulations of small molecule inhibitors of dihydroorotate dehydrogenase (“DHODH”);

the IMU-935 program, focused on an inverse agonist of RORgt, an immune cell-specific isoform of RORg (retinoic acid receptor-related orphan nuclear receptor gamma), and the IMU-856 program, involving the development of a drug targeting the restoration of intestinal barrier function.

These product candidates are being developed to address diseases such as relapsing-remitting multiple sclerosis (“RRMS”), ulcerative colitis (“UC”), Crohn’s disease (“CD”), and psoriasis.

In addition to these large markets, Immunic’s products are also being developed to address certain rare diseases with high unmet medical needs, such as primary sclerosing cholangitis (“PSC”).

Liquidity and Financial Condition

Immunic has no products approved for commercial sale and has not generated any revenue from product sales.

Immunic has never been profitable and has incurred operating losses in each year since inception (2016).

Immunic has an accumulated deficit of approximately $103.9 million as of December 31, 2020 and approximately $59.9 million as of December 31, 2019.

Immunic expects that its operating losses will fluctuate significantly from quarter-to-quarter and year-to-year due to timing of clinical development programs.

From inception through December 31, 2020, Immunic has raised net cash of approximately $216.8 million from private and public offerings of preferred and common stock.

As of December 31, 2020, Immunic had cash and cash equivalents of approximately $127.5 million.

With these funds, Immunic expects to be able to fund its operations beyond twelve months from the date of the issuance of the accompanying audited consolidated financial statements.

Immunic is currently pursuing three development programs, all orally available small molecule inhibitors in the clinical development phase.

These include the IMU-838 program, which is focused on the development of oral formulations of small molecule inhibitors of the enzyme dihydroorotate dehydrogenase (“DHODH”);

the IMU-935 program, which is focused on an inverse agonist of RORγt, an immune cell-specific isoform of retinoic acid receptor-related orphan nuclear receptor gamma (“RORγ”), and the IMU-856 program, which involves the development of a drug targeting the restoration of intestinal barrier function.

These product candidates are being developed to address diseases such as RRMS, UC, CD, and psoriasis.

In addition to these large markets, these products are also being developed to address certain rare diseases with high unmet medical needs, such as primary sclerosing cholangitis (“PSC”), and Guillain-Barré syndrome (“GBS”).

Immunic is also investigating IMU-838 as a potential treatment option for coronavirus disease 2019 (“COVID-19”).

The following table summarizes the potential indications, clinical targets and clinical development status of Immunic’s three product candidates:

Immunic’s most advanced drug candidate, IMU-838, targets DHODH, a key enzyme in the intracellular metabolism of immune cells in the body.

IMU-838’s lead indications are RRMS and inflammatory bowel disease ("IBD"), where the drug candidate is currently being studied in Phase 2b trials, EMPhASIS and CALDOSE-1, respectively.

An investigator-sponsored proof-of-concept clinical trial for IMU-838 in PSC is ongoing at the Mayo Clinic.

If approved, Immunic believes that IMU-838 has the potential to be a first-in-class DHODH inhibitor in IBD and a best-in-class DHODH inhibitor in RRMS.

DHODH represents a proven target for drug development, with other DHODH inhibitors (e.g.

Aubagio ® , Sanofi) available commercially for the treatment of conditions outside of IBD, such as multiple sclerosis ("MS").

In addition, prior clinical data with IMU-838 in rheumatoid arthritis ("RA"), has contributed to understanding of the safety profile of the drug at doses consistent with those currently under evaluation for the treatment of RRMS and IBD.

Immunic’s second drug candidate, IMU-935, has the potential to be a highly potent and selective inverse agonist of a transcription factor called RORgt with additional activity on DHODH.

Immunic believes that the nuclear receptor RORgt is the main driver for the differentiation of Th17 cells and the expression of cytokines involved in various inflammatory and autoimmune diseases.

Immunic believes this target is an attractive alternative to approved antibodies for targets such as interleukin-23 ("IL-23"), IL-17 receptor and IL-17 itself.

Immunic expects to continue to lead most of its research and development activities from its Gräfelfing, Germany location, where its dedicated scientific, regulatory, clinical and medical teams conduct their activities.

Due to these teams' key relationships with local and international service providers, Immunic anticipates that this will result in timely, cost-effective execution of Immunic’s development programs.

In addition, Immunic is using its subsidiary in Melbourne, Australia to expedite the early clinical trials for IMU-935 and IMU-856.

Immunic's subsidiary also conducts preclinical work in Halle/Saale, through a collaboration with the Fraunhofer Institute.

Key Status Updates

Phase 2 Trial of IMU-838 in RRMS (EMPhASIS Trial)

On August 2, 2020, Immunic announced positive top-line data from its Phase 2 EMPhASIS trial of IMU-838 in patients with RRMS.

The trial achieved statistical significance on all primary and key secondary endpoints, indicating activity in RRMS patients.

In particular, the study met its primary endpoint, demonstrating a statistically significant reduction in the cumulative number of combined unique active ("CUA") magnetic resonance imaging ("MRI") lesions up to week 24 in patients receiving 45 mg of IMU-838 once daily, by 62% (p=0.0002), as compared to placebo.

The study also met its key secondary endpoint, showing a statistically significant reduction in the cumulative number of CUA MRI lesions for the 30 mg once daily dose by

70% (p<0.0001), as compared to placebo.

On September 11, 2020, the Company published the full unblinded clinical data set from its Phase 2 EMPhASIS trial of IMU-838 in patients with RRMS.

The data confirmed and expanded on the previously announced top-line results.

Given the relative equal performance of the two doses tested and to allow for pharmacodynamic modeling of the dose-response relationship, data from a lower dose in the effective dose range would be beneficial to complete a dose-effect assessment of IMU-838 in RRMS.

For this reason, Immunic has started an additional, small Cohort 2 sub-trial to obtain exploratory data on the expanded dose response of IMU‑838, as previously announced.

This additional, double-blind assessment includes a cohort of approximately 60 patients who receive 10 mg/day of IMU-838 or placebo for 24 weeks.

An unblinded interim analysis of selected MRI data is planned after all Cohort 2 patients have completed week 12 MRI assessments.

This additional study cohort is already fully enrolled and the Company expects the 12-week data to be available at the end of March or in early April 2021.

Immunic intends to submit formal end-of-Phase 2 meeting requests to discuss the proposed Phase 3 program with major regulatory authorities around the end of the first quarter of 2021.

The outcome of the end-of-Phase 2 meetings are expected to be available in or about May 2021.

Based on the Phase 2 results in RRMS and if approved for commercial use by regulatory agencies, Immunic believes that IMU-838 has the potential to be a best-in-class oral drug with a unique balance between robust efficacy and favorable safety profile for patients with early Multiple Sclerosis (“MS”).

The mechanism of action of IMU-838 (inhibition of the enzyme DHODH) represents a proven target for drug development, with other DHODH inhibitors (e.g., Aubagio ® , Sanofi) available commercially for the treatment of conditions such as RRMS.

Envisaged Phase 3 Program of IMU-838 in RRMS

As previously announced, in parallel to the preparation and execution of the regulatory discussions, Immunic is currently performing formal feasibility activities for a Phase 3 program of IMU-838 in RRMS, including country and site selection, as well as other preparatory activities.

For this purpose and after a comprehensive selection process, a global contract research organization ("CRO") focused on regions of particular interest and with broad experience in MS trials was formally engaged.

This will help ensure that a potential Phase 3 program can be executed efficiently following regulatory advice.

The Company also believes that this feasibility assessment will help ensure an expeditious execution of the development strategy for IMU-838.

Immunic intends to maintain a competitive selection process for a clinical CRO to conduct the potential Phase 3 program.

Immunic plans to announce details on the design of the envisaged Phase 3 program in RRMS after its end-of-Phase 2 meetings with the regulatory authorities.

The Phase 3 program is currently expected to start in the second half of 2021.

Phase 2 Trial of IMU-838 in UC (CALDOSE-1 Trial)

The trial is ongoing and enrolling patients.

Recruitment is expected to be completed in the second half of 2021 and top-line data of the induction phase is expected to be available in the first half of 2022, as previously announced.

Phase 2 Trial of IMU-838 in Moderate COVID-19 (CALVID-1 Trial)

On February 17, 2021, Immunic announced that IMU-838 has shown evidence of clinical activity in hospitalized patients with moderate COVID-19.

This planned main analysis of the Company’s Phase 2 CALVID-1 trial was based on data from 204 randomized patients and included top-line clinical efficacy, safety, disease marker, and virology data.

Although no formal statistical analysis was pre-specified for this main analysis, endpoints were analyzed descriptively.

A final analysis of the complete randomized patient population of 223, which will comprise data on all endpoints, including subgroup and sensitivity analyses, is expected to be available in the second quarter of 2021.

While primary and key secondary endpoints of the trial were not evaluable due to the very low rates of serious complications in the population of hospitalized patients with moderate COVID-19, the data did show clinical activity of IMU-838 based on multiple secondary endpoints, including clinically meaningful improvements in time to clinical recovery and time to clinical improvement.

In addition, high-risk patients and patients over 65 years of age experienced a more substantial treatment effect of IMU-838.

An anti-viral effect of IMU-838 on SARS-CoV-2 was observed by viral titers at the end of the treatment period (day 14) and at the end of the study (day 28).

A robust anti-inflammatory effect was also observed, based on a more effective reduction of C-reactive protein (“CRP”) in IMU-838 treated patients, as compared to placebo.

A more effective reduction of D-dimer, a well-known prognostic disease marker for COVID-19, was observed in IMU-838 treated patients, as compared to placebo.

Initial data from a post hoc analysis of “Long COVID” symptoms, the frequently remaining symptoms of

COVID-19 after elimination of the virus, indicated that IMU-838 may have the potential to contribute to the prevention of long-term fatigue.

Finally, IMU-838 was found to be safe and well-tolerated in hospitalized patients with moderate COVID-19.

Phase 2 Trial of IMU-838 in Primary Sclerosing Cholangitis (“PSC”)

On February 18, 2021, Immunic announced positive top-line data from its investigator-sponsored proof-of-concept clinical trial of IMU-838 in PSC, which was conducted at Mayo Clinic in Arizona and Minnesota, both of which are tertiary referral centers for PSC patients.

As previously announced, due to the COVID-19 pandemic, only 18 of the targeted 30 patients were enrolled in the study (intent-to-treat population, “ITT”), of whom only 11 patients completed the full IMU-838 treatment course and were evaluable over the 24-week treatment period (per-protocol population, “PP”).

The PP population experienced a statistically significant decrease in serum alkaline phosphatase (“ALP”) levels (p=0.041) after 24 weeks of treatment using 30 mg IMU-838 once daily, as compared to baseline.

A consistent individual pattern of a stable decrease in ALP values was observed in the PP population between baseline and week 24, without any single patient showing an increase of more than 20% of ALP.

As per definition of the primary objective of the study, 27.3% of the patients in the PP population had a clinically relevant reduction of serum ALP higher than 25% at week 24, without an increase in liver biochemistry of more than 33%, as compared to baseline.

Regarding the secondary objectives of the study, no changes in aspartate aminotransferase (“AST”), alanine aminotransferase (“ALT”), or total, direct or indirect bilirubin were observed in the ITT or PP populations, as compared to baseline.

In addition, despite the limited scope of the data, encouraging results were observed regarding symptoms of inflammatory bowel disease (“IBD”), a common comorbidity for PSC patients, and patient assessments of health-related quality of life.

The study also found that IMU-838 is a safe and well-tolerated oral drug for PSC patients and treatment-emergent adverse events were rare and generally mild.

During the COVID-19 pandemic, recruitment for this study was hampered, as patients with PSC are at a high risk of COVID-19 infections and were advised to avoid travel and unnecessary social contacts such as those required to participate in a clinical trial.

Together with the investigators, Immunic determined to readout data of the 18 patients who were enrolled prior to the COVID-19 pandemic.

The ongoing pandemic situation also triggered the principal investigator’s decision to terminate the study in late 2020, before the intended recruitment goal of 30 patients was reached.

Immunic’s second drug candidate, IMU-935, has the potential to be a highly potent and selective inverse agonist of a transcription factor called RORγt with additional activity on DHODH.

Immunic believes that the nuclear receptor RORγt is the main driver for the differentiation of T helper 17 (“Th17”) cells and the expression of various cytokines involved in various inflammatory and autoimmune diseases.

Immunic believes this target is an attractive alternative to approved antibodies for targets such as interleukin-23 ("IL-23"), IL-17 receptor and IL-17A as well as IL-17F cytokine directly.

Immunic has observed strong cytokine inhibition targeting both Th1 and Th17 responses in preclinical testing, as well as indications of activity in animal models for psoriasis and IBD.

Preclinical experiments indicated that, while leading to a potent inhibition of Th17 differentiation and cytokine secretion, IMU-935 did not affect thymocyte maturation.

Based on these preclinical data, Immunic believes that IMU-935 has potential to be a best-in-class therapy for various autoimmune diseases.

A Phase 1 clinical trial exploring the pharmacokinetics and safety of IMU-935 is currently ongoing.

Preclinical experiments indicated that, while leading to a potent inhibition of Th17 differentiation and cytokine secretion, IMU-935 did not affect thymocyte maturation, one of the physiological functions of RORγt, and therefore reduces the risk for thymoma development in patients.

Based on these preclinical data, Immunic believes that IMU-935 has potential to be a best-in-class therapy for various autoimmune diseases and beyond.

A clinical Phase 1 trial exploring safety, pharmacodynamics and pharmacokinetics of IMU-935 is currently ongoing and progressing.

Subsequent to the ongoing single and multiple ascending dose parts of the trial in healthy volunteers, Immunic plans to extend this trial to assess safety and exploratory disease endpoints in patients with psoriasis.

Upon completion of at least the first two cohorts of the multiple ascending dose portion in healthy volunteers, the Company anticipates that it may also begin a Phase 2a proof-of-concept clinical trial of IMU-935 in an orphan autoimmune indication.

After a thorough review of suitable autoimmune conditions, Immunic has prioritized GBS as additional indication for IMU-935, as previously announced.

Immunic’s third program, IMU-856, which Immunic believes to be novel and highly innovative, is an orally available, small molecule modulator that targets a protein which serves as a transcriptional regulator of intestinal barrier function.

Immunic has not yet disclosed the molecular target for IMU-856.

Based on preclinical data, Immunic believes this compound represents a new and potentially disruptive treatment approach, as the mechanism of action targets the restoration of the intestinal barrier function in patients suffering from diseases like IBD, irritable bowel syndrome with diarrhea, immune checkpoint inhibitor induced colitis and other intestinal barrier function associated diseases.

Based on preclinical data, Immunic believes this compound represents a new and potentially disruptive treatment approach, as the mechanism of action targets the restoration of the intestinal barrier function in patients suffering from diseases like IBD, diarrhea-predominant irritable bowel syndrome (“IBS-D”), immune checkpoint inhibitor (“ICI”)-induced colitis, and other intestinal barrier function associated diseases.

Immunic believes that because IMU-856 avoids suppression of the immune functions, it should therefore maintain immune surveillance for patients.

Acquisition History

Our wholly-owned subsidiary Immunic AG acquired IMU-838 and IMU-935 in September 2016 from 4SC AG (hereinafter, 4SC), a publicly traded company based in Planegg-Martinsried near Munich, Germany, through asset acquisitions.

On August 20, 2020, Immunic announced dosing of the first healthy volunteer in a clinical Phase 1 trial of IMU-856.

Immunic Australia Pty Ltd.

received clearance from the Bellberry Human Research Ethics Committee in Australia to begin a Phase 1 trial of IMU-856 under the Clinical Trial Notification scheme of the Australian Therapeutic Goods Administration.

The clinical Phase 1 trial is ongoing and progressing.

The trial includes single and multiple ascending dose parts in healthy volunteers to assess safety, pharmacodynamics and pharmacokinetics of IMU-856.

Subsequently, Immunic plans to extend this trial to assess biomarkers, disease symptoms, safety and drug trough levels in patients with several conditions involving an impaired bowel barrier function.

Product Acquisition History

Immunic’s wholly-owned subsidiary Immunic AG acquired IMU-838 and IMU-935 in September 2016 from 4SC AG (hereinafter, 4SC), a publicly traded company based in Planegg-Martinsried, Germany, through asset acquisitions.

As part of the transaction, 4SC is entitled to receive a royalty on net sales if products originating from these acquisitions achieve market approval.

Immunic’s rights to IMU-856 are secured pursuant to an option and license agreement (the “Daiichi Sankyo Option”) with Daiichi Sankyo Co., Ltd.

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The license also grants Immunic AG the rights to Daiichi Sankyo’s patent application related to IMU-856.

Concurrent with the option exercise, Immunic AG paid to Daiichi Sankyo a one-time upfront licensing fee.

Going forward, Daiichi Sankyo is eligible to receive future development, regulatory and sales milestone payments, as well as royalties related to IMU-856.

Financial terms of the agreement have not been disclosed.

Commercialization Strategy

Immunic’s products are being developed with the aim of delivering proof-of-efficacy in state-of-the-art clinical trials with multiple compounds in multiple indications.

Subsequent pivotal trials may be conducted by Immunic alone or with a potential partner.

Immunic expects to continue to lead most of its research and development activities from its Planegg-Martinsried location, where its dedicated scientific, regulatory, clinical and medical teams conduct their activities.

Due to these teams' key relationships with local service providers, Immunic anticipates that this will result in timely, cost-effective execution of Immunic’s development programs.

In addition, Immunic intends to use its subsidiary in Melbourne, Australia to expedite the early clinical trials for IMU-935 and IMU-856.

Immunic also conducts preclinical work in Halle/Saale, Germany, through a collaboration with the Fraunhofer Institute.

Immunic is led by a team of dedicated and committed experienced professionals with an entrepreneurial spirit and track record of successful licensing transactions in the healthcare industry worldwide (EU, the United States and Asia).

brings together more than 90 years of leadership experience in the pharmaceutical industry with a strong scientific background and sound knowledge in drug discovery, product development, chemistry, manufacturing and controls processes, intellectual property, clinical trial design, health economics and market access, merger and acquisitions, capital markets, corporate finance, business development, regulatory affairs and project valuation.

The team brings together several decades of leadership experience in the pharmaceutical industry with a strong scientific background and sound knowledge in drug discovery, product development, chemistry, manufacturing and controls processes, intellectual property, clinical trial design, health economics and market access, merger and acquisitions, capital markets, corporate finance, business development, regulatory affairs and project valuation.

Immunic’s team members are inventors on project-related patents and have successfully published project-related scientific publications.

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IMU-838 is a small molecule investigational drug (vidofludimus calcium) under development as an oral tablet formulation for the treatment of RRMS, IBD and other chronic inflammatory and autoimmune diseases.

By inhibiting DHODH, a key enzyme of pyrimidine de novo biosynthesis, metabolically activated T and B immune cells experience metabolic stress, and the release of T helper 1 cells ("Th1"), a lineage of effector T cells that promote cell-mediated immune responses and secrete IFNg and TNFa, and T helper 17 cells ("Th17"), a subset of pro-inflammatory T helper cells defined by their production of IL-17, key cytokines including IL-17A, IL-17F and IFNg is inhibited, thereby reducing the inflammation associated with IBD.

By inhibiting DHODH, a key enzyme of pyrimidine de novo biosynthesis, highly metabolically activated T and B immune cells experience metabolic stress, which leads to a modulation of their activity and function.

Thereby, pro-inflammatory cytokines such as interferon gamma (“IFN γ ”), tumor necrosis factor alpha (“TNF α ”), IL-17A and IL-17F, produced by activated Th1 and Th17 cells, which represent subtypes of so-called T helper cells, are repressed and thereby reduce the inflammation associated with IBD, MS and other chronic inflammatory diseases.

In preclinical studies of vidofludimus, the active ingredient of IMU-838, apoptosis (or programmed cell death) was induced in activated T cells, which Immunic believes may also play a crucial role in the activity of the drug in IBD by further dampening the inflammatory response.

Immunic believes that a key advantage of DHODH inhibition in general is that the sensitivity of specific immune cells to DHODH inhibition correlates with their intracellular metabolic activation state, and therefore may not negatively impact “normal” bone marrow cells.

Immunic believes that a key advantage of DHODH inhibition, in general, is that the sensitivity of specific immune cells to DHODH inhibition correlates with their intracellular metabolic activation state, and therefore may not negatively impact “normal” immune and bone marrow cells.

In animal studies of IMU-838, animals treated with large doses of the active moiety of IMU-838 were shown to lack detrimental effects on bone marrow, supporting the lack of an unspecific anti-proliferative effect regularly seen with many traditional immunomodulators.

Based on the selectivity toward metabolically activated cells (with a high need for ribonucleic acid and deoxyribonucleic acid production), DHODH inhibition also leads to a direct antiviral effect, which has been observed in various virus infected cells, such as influenza virus infections, cytomegalovirus infections and even hemorrhagic fever-causing viruses, such as Lassa virus.

Based on the selectivity toward metabolically activated cells (with a high need for ribonucleic acid and deoxyribonucleic acid production), DHODH inhibition also leads to a direct antiviral effect, which has been observed in various virus infected cells, such as hepatitis C virus infections, cytomegalovirus infections and even hemorrhagic fever-causing viruses, such as Arena virus infections.

Treatment with IMU-838 may avoid virus reactivation, one of the major drawbacks of the long-term use of traditional immunomodulators in IBD patients.

Efficacy of vidofludimus, the active moiety and free acid form of IMU-838, has been observed in several animal disease models for IBD, as well as systemic lupus erythematosus and transplant rejection.

Initial clinical trials were conducted by 4SC using a free acid formulation of the active moiety of IMU-838, vidofludimus, and an amorphous material.

In total, 4SC’s clinical trial data encompasses more than 250 patients treated with the active moiety, helping generate a safety database to encourage further development of IMU-838.

4SC conducted a Phase 2 double-blinded, randomized, placebo-controlled study in patients with RA (the COMPONENT trial), where it was observed that there was no increased rate of infections in the vidofludimus arm versus the placebo arm.

In addition, 4SC conducted a small single-arm, open-label, uncontrolled Phase 2a study in corticosteroid-dependent IBD patients (the ENTRANCE trial).

In this study, following steroid tapering during 12-week treatment with vidofludimus, approximately 50% of IBD patients were able to discontinue steroids completely and an additional approximately 35% of patients were able to significantly reduce their daily steroid dose below their previous personal threshold dose.

After the consummation of the asset acquisition from 4SC, Immunic developed and patented a new specific polymorph of the calcium salt formulation of vidofludimus, IMU-838, which Immunic believes exhibits improved physicochemical and pharmacokinetic properties.

Immunic has used and continues to use its IMU-838 formulation in its drug development activities.

Previous filings by Immunic with the SEC have summarized the development history of vidofludimus and the previous amorphous formulation of the free acid form of

vidofludimus.

After the consummation of the asset acquisition from 4SC, Immunic developed and filed a patent application for a new specific polymorph of the calcium salt formulation of vidofludimus, IMU-838, which Immunic believes exhibits improved physicochemical and pharmacokinetic properties.

In 2017, Immunic completed two Phase 1 studies of single or repeated once-daily doses of IMU-838 in healthy volunteers, where Immunic observed results supporting tolerability of repeated daily dosing of up to 50 mg of IMU-838.

A Phase 2b study in patients with RRMS is currently ongoing, with enrollment of 210 patients completed in October 2019 and unblinded top-line data expected to be available in the third quarter of 2020.

A second Phase 2b study in patients with UC is also ongoing, with enrollment initiated in April 2018 and top-line data expected to be available during the fourth quarter of 2021.

A third Phase 2b trial in patients with CD is being considered.

Furthermore, Immunic’s collaboration partner, the Mayo Clinic, has started an investigator-sponsored proof-of-concept clinical trial testing IMU-838 activity in patients with PSC.

Multiple Sclerosis

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(2019), MS affects more than 700,000 people in the United States, and more than 2.2 million people worldwide.

The disease has a large economic impact as it affects mainly young adults in the prime working age, although MS can occur in children and in adults.

The disease has a large economic impact as it affects mainly young adults in the prime working age, peaking around 30 years old, although MS can occur in children and in adults.

MS is at least two to three times more common in women than in men.

MS affects twice as many women and men in certain age cohorts and is more common in areas inhabited by people of northern European ancestry, such as Europe, the United States, Canada, New Zealand and parts of Australia.

Current Treatment Options

There are currently two main types of treatment for RRMS.

There are currently two main treatment types available for RRMS.

Some therapies, such as short-term corticosteroid medications, are used for treating relapses of MS symptoms.

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The main first-line treatment options for RRMS patients are beta interferons (either as interferon beta-1a or interferon beta-1b) or glatiramer acetate, all of which are given by injection.

For patients requiring more advanced treatment options, there are now several oral medications (such as dimethyl fumarate, fingolimod and cladribine) and biologics (such as natalizumab and alemtuzumab) approved for commercial use in MS in various countries.

In 2012, teriflunomide, an orally available DHODH inhibitor, was approved by the U.S.

Food and Drug Administration ("FDA") for the treatment of patients with RRMS.

Teriflunomide had shown efficacy across key measures of MS disease activity, including reducing relapses, slowing the progression of physical disability, and reducing the number of brain lesions as detected by MRI.

Global sales of teriflunomide (Aubagio ® ) in 2017 and 2018 were approximately $1.8 billion each year.

Clinical data of teriflunomide indicate that the use of DHODH inhibition may be an effective treatment for RRMS.

However, teriflunomide’s adverse effects include diarrhea in 13-14% of patients, hair loss (alopecia) in 10-13% of patients, and neutropenia (low number of white blood cells) in 4-6% of patients.

Leflunomide (and its active metabolite, teriflunomide) is also known to show several off-target effects at therapeutically relevant concentrations, including inhibition of kinases such as epidermal growth factor receptor tyrosine kinase.

The active moiety of IMU-838 has not yet been shown to be an inhibitor of kinases at doses of up to 100 µM, a concentration largely exceeding the blood concentrations for doses of IMU-838 currently tested in Phase 2 studies.

Immunic also has not observed any increased rates of diarrhea, alopecia or neutropenia in its clinical trials to date.

The median blood half-life of teriflunomide in RRMS patients was estimated to be 18 and 19 days after repeated daily doses.

This long half-life may lead to the need for accelerated elimination, e.g.

with cholestyramine when a patient requires quick drug discontinuation (for example, for change of therapies or when a patient becomes pregnant).

In Phase 1 studies, IMU-838 had a blood half-life of 30-40 hours, allowing quick elimination of the drug at a required treatment discontinuation.

Based on these differences between teriflunomide and IMU-838, and depending on the results of future clinical trials, Immunic believes that IMU-838 has the potential to demonstrate medically important advantages compared with teriflunomide, particularly for a drug class that is potentially intended for long-term therapy in RRMS patients.

Ozanimod is an investigational, oral, selective sphingosine 1-phosphate ("S1P"), receptor modulator that has been tested by Celgene in two Phase 3 clinical trials in RRMS.

Both trials evaluated the efficacy and safety of ozanimod versus interferon beta-1a in patients with RRMS and demonstrated an advantage in annualized relapse rate.

In early 2018, Celgene received an FDA-issued Refusal to File letter regarding insufficient data for ozanimod.

Celgene announced the resubmission of its New Drug Application ("NDA") in 2019.

Immunic expects that regulatory approval for ozanimod as an additional oral treatment option in RRMS patients may occur in 2020.

For patients requiring more advanced treatment options, there are several oral medications, such as dimethyl fumarate, fingolimod, siponimod, teriflunomide, ozanimod or cladribine, and biologics, such as natalizumab, ocrelizumab, ofatumumab or alemtuzumab, approved for commercial use in MS in various countries.

In addition, some of these drugs, such as fingolimod, already have generic versions available in some countries and other drugs will become generic in the next years.

There is no specific guidance on which therapies or medications are used in which sequence of the MS disease course.

Typically, treatments are escalated over time, considering:

• Persistent high MS disease activity under treatment with base medications (relapse(s), disability worsening, MRI lesions),

• Risks of long-term immunosuppression,

• Patient preferences or risks perceptions, and

• Safety/tolerability aspects.

Despite many therapies approved and nearing approval for relapsing forms of MS, many opportunities remain for a safe, oral, well-tolerated, robust anti-inflammatory, with neuroprotective properties beyond what would be expected by reducing inflammation.

DHODH inhibitors have already shown a particular advantage in the inhibition of disability worsening.

Currently, only a few new oral treatment options for RRMS patients are in advanced clinical development, the most advanced being a Bruton's tyrosine kinase (“BTK”) inhibitor developed by Sanofi.

This BTK inhibitor (SAR442168) is an oral, brain-penetrant, selective small molecule that met both the primary and secondary endpoints in a Phase 2b trial evaluating efficacy and safety in participants with relapsing forms of MS.

It significantly reduced disease activity associated with MS, as measured by MRI.

Sanofi has now initiated a global, randomized, double-blind efficacy and safety trial comparing SAR442168 to teriflunomide in 900 participants with relapsing forms of MS.

The trial will assess efficacy of daily SAR442168 treatment, as compared to a daily dose of 14 mg teriflunomide measured by annualized adjudicated relapse rate (“ARR”) in participants with relapsing forms of MS.

Secondary objectives will assess efficacy of SAR442168, as compared to teriflunomide, on disability progression, MRI lesions, cognitive performance and quality of life.

Evobrutinib, a BTK inhibitor developed by EMD Serono, and BIIB091, a BTK inhibitor developed by Biogen, are currently in phase 2 clinical development.

In addition, Roche is developing fenebrutinib in a phase 3 program for RRMS and primary progressive MS in clinical Phase 3.

Many drugs approved for patients with RRMS have reported a rare and often lethal viral disease of the brain called progressive multifocal leukoencephalopathy ("PML").

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Subject to further clinical trials, Immunic believes that this could be a “class effect” of the DHODH inhibitors and if shown, could be an important potential differentiator against other drug classes in RRMS.

Depending on the results of future clinical trials, Immunic believes that IMU-838 has the potential to demonstrate medically important advantages compared with other treatments, particularly for the early treatment of RRMS patients, due to its placebo like safety profile and its robust anti-inflammatory and neuroprotective properties.

IMU-838 could provide RRMS patients with a distinctive combination of robust efficacy and favorable safety and tolerability including the following properties:

• A robust MRI lesion suppression of IMU-838 compares favorably to other first-line and oral base medications commercially available in RRMS.

• A very low discontinuation rate for IMU-838-treated RRMS patients, substantially below placebo, indicates an encouraging combination of tolerability and efficacy.

• The absence of hepatotoxicity signals and other relevant adverse events leading to discontinuations distinguishes IMU-838 well from other oral RRMS treatments.

• A robust decrease in serum neurofilament light chain, a biomarker for axonal damage, was observed for IMU-838 and provides evidence of IMU-838’s potential neuroprotective activity.

Current Development Plan and Ongoing Studies

Phase 2 Trial of IMU-838 in RRMS (EMPhASIS Trial)

Immunic is developing IMU-838 for use in RRMS.

The Phase 2 clinical trial design in RRMS depends on well-established MRI endpoints (i.e., the difference between 45 mg/day IMU-838 and placebo in the cumulative number of combined unique active MRI lesions up to week 24).

The clinical Phase 2 trial design in RRMS is based on well-established MRI endpoints (i.e., the difference between the two dose groups of 30 mg/day and 45 mg/day of IMU-838 and placebo in the cumulative number of combined unique active MRI lesions up to week 24).

Immunic has not obtained formal regulatory advice for the Phase 2 study of IMU-838 in RRMS.

Phase 2b Study of IMU-838 in RRMS (EMPhASIS)

EMPhASIS is a Phase 2 dose-finding, multicenter, double-blind, placebo-controlled, randomized, parallel-group trial to assess the efficacy and safety of IMU-838 in patients with RRMS and evidence of active disease.

The trial consists of a blinded 24-week main treatment period, during which five MRI examinations are performed.

The primary endpoint of this study is the cumulative number of combined unique active MRI lesions up to week 24.

Patients discontinuing or completing the blinded treatment period have an option to enroll in a long-term open-label extended treatment.

Further information regarding Immunic’s RRMS study can be found on ClinicalTrials.gov under the identifier NCT03846219.

The study is currently ongoing, with enrollment initiated in February 2019 and enrollment completed in October 2019.

In total, 210 patients in 36 centers across four European countries were enrolled, compared with a targeted enrollment of 195 patients.

The data will be unblinded after all patients have completed the main treatment portion and the study database has been locked.

Immunic anticipates unblinded top-line data becoming available during the third quarter of 2020.

On August 2, 2020, Immunic announced positive top-line data from its Phase 2 EMPhASIS trial of IMU-838 in patients with RRMS.

The study achieved statistical significance on all primary and key secondary endpoints, indicating activity in RRMS patients.

In particular, the study met its primary endpoint, demonstrating a statistically significant reduction in the cumulative number of CUA MRI lesions up to week 24 in patients receiving 45 mg of IMU-838 once daily, by 62% (p=0.0002), as compared to placebo.

The study also met its key secondary endpoint, showing a statistically significant reduction in the cumulative number of CUA MRI lesions for the 30 mg once daily dose by 70% (p<0.0001), as compared to placebo.

September 11, 2020, the Company published the full unblinded clinical data set from its Phase 2 EMPhASIS trial of IMU-838 in patients with RRMS.

The data confirmed and expanded on the previously announced top-line results.

Activities Relating to the Preparation of a Phase 3 Program of IMU-838 in RRMS

Phase 2 Trial of IMU-838 in RRMS (EMPhASIS Trial) and Related Activities

The results of the Phase 2 trial of IMU-838 in RRMS were publicized on August 2, 2020 and September 11, 2020.

Based on these results, 30 and 45 mg/day doses of IMU-838 appear to be equally safe and efficacious in patients with RRMS.

Based on established regulatory guidance that the lowest effective dose should be considered for future clinical trials, Immunic may propose the dose of 30 mg/day of IMU-838 for investigation in a Phase 3 program.

Currently, the Company considers this to be the most likely conclusion based on the Phase 2 data of IMU-838 in RRMS.

For this reason, Immunic has started an additional, small Cohort 2 sub-trial to obtain exploratory data on the expanded dose response of IMU‑838, as previously announced.

This additional, double-blind assessment includes a cohort of approximately 60 patients who receive 10 mg/day of IMU-838 or placebo for 24 weeks.

The still-active sites of the Phase 2 trial of IMU-838 in RRMS continue to be used and, as a result, Immunic currently expects that this assessment can be executed in an accelerated fashion.

The results of this additional, small patient cohort are not expected to change any conclusions for dosing of IMU-838 in a future Phase 3 program.

Rather, they are expected to provide additional data to address any potential regulatory requests for pharmacodynamic modeling of the dose-response relationship in the context of the design of a Phase 3 program.

An unblinded interim analysis of selected MRI data is planned after all Cohort 2 patients have completed week 12 MRI assessments.

In the main analysis done for this trial in August and September 2020, a recognizable reduction of the number of CUA and gadolinium-enhancing lesions by IMU-838, as compared to placebo, was already observed at week 12.

This additional interim analysis will, therefore, provide a beneficial assessment of the dose-response of the 10 mg/day of IMU-838 dose and may facilitate expeditious regulatory review for the execution of a Phase 3 program.

This additional study cohort is already fully enrolled and the Company expects the 12-week data to be available at the end of March or in early April 2021.

Immunic believes that the foregoing strategy for IMU-838 in RRMS will enable risk reduction for end-of-Phase 2 discussions with regulatory agencies.

The Company currently does not expect any significant delays for the start of a Phase 3 program.

Preparation for End-of-Phase 2 Discussions with Regulatory Agencies

In addition to providing data from Phase 2 trials, Immunic must also conduct end-of-Phase 2 discussions with regulatory agencies and provide the opportunity to discuss the necessary aspects of a Phase 3 program.

Immunic intends to submit formal end-of-Phase 2 meeting requests to discuss the proposed Phase 3 program with major regulatory authorities around the end of the first quarter of 2021.

The outcome of the end-of-Phase 2 meetings are expected to be available in or about May 2021.

The execution of clinical Phase 3 trials usually requires the use of a commercial formulation of the investigational drug manufactured at commercially usable quantities.

Immunic has developed and manufactured a roller compactor formulation of IMU-838 which would allow commercially usable production batches.

An experimental Phase 1 bioequivalence study between the previous wet granulation and the new roller compactor version of IMU-838 has completed the experimental phase and the evaluation of the results is currently ongoing.

In addition, a confirmatory relative bioavailability and food effect study is currently being prepared.

The results will further characterize the roller compactor formulation of IMU-838 in preparation for a Phase 3 program.

Additional investigations regarding metabolite characterization, metabolic modeling and potential drug-drug interactions, as well as other activities relating to clinical pharmacology are also being finalized at this time in anticipation for presentation to regulatory authorities.

Immunic is currently working with clinical advisors to propose a pediatric development plan for IMU-838 in RRMS in the near future.

Envisaged Phase 3 Program of IMU-838 in RRMS

For this purpose and after a comprehensive selection process, a global CRO focused on regions of particular interest and with broad experience in multiple sclerosis trials was formally engaged.

This will help ensure that a potential Phase 3 program can be executed efficiently following regulatory advice.

The Company also believes that this feasibility assessment will help ensure an expeditious execution of the development strategy for IMU-838.

Immunic intends to maintain a competitive selection process for a clinical CRO to conduct the potential Phase 3 program.

Immunic plans to announce details on the design of the envisaged Phase 3 program in RRMS after its end-of-Phase 2 meetings with the regulatory authorities.

The Company currently expects the Phase 3 program to start in the second half of 2021.

Ulcerative Colitis

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UC is most commonly diagnosed in late adolescence or early adulthood, but it can occur at any age.

According to Burisch/Munkholm (2015), the occurrence of UC worldwide has increased over the past few years, particularly in Latin America, Asia and Eastern Europe.

The occurrence of UC worldwide has increased over the past few years, particularly in Latin America, Asia and Eastern Europe (Burisch et al.

Recent estimates note that there are more than 700,000 patients affected by UC in the United States, as well as 1.5 million in Europe ( Understanding Ulcerative Colitis , available at https://www.crohnsandcolitis.com/ulcerative-colitis (last accessed July 16, 2019);

Burisch et al.

The burden of inflammatory bowel disease in Europe.

J Crohns Colitis .

(2013 May)) and more than 100,000 in Canada (Rocchi, et al.

Inflammatory bowel disease:

a Canadian burden of illness review.

Can J Gastroenterol .

2013) and more than 100,000 in Canada (Rocchi et al.

UC is almost equally distributed between genders (Kappelman et al.

The prevalence and geographic distribution of CD and UC in the United States.

Clin Gastroenterol Hepatol.

Current Treatment Options

The severity and extent of UC are characterized based on clinical and endoscopic findings.

Treatment approach often depends on disease severity and typically follows a stepwise treatment regimen.

The treatment approach often depends on disease severity and typically follows a stepwise treatment regimen.

Patients with mild disease may initially receive aminosalicylates or non-systemic steroids such as budesonide.

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If patients fail to respond to these therapies, treatment may be escalated to the use of biologics.

The most common category of biologics used to treat UC includes anti-tumor necrosis factor-alpha ("TNFa") antibody drugs, such as infliximab or adalimumab.

The most common category of biologics used to treat UC includes TNF α antibody drugs, such as infliximab or adalimumab.

New biologic options are alpha-4-beta-7 (α4ß7) integrin-specific antibodies, such as vedolizumab and anti-IL-12/IL-23 antibodies, such as ustekinumab.

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IMU-838 is being developed to be a new treatment option for patients with moderate to severe UC who have failed current therapies and are now candidates for therapy with biologics.

Currently there are several new oral treatment options for UC patients in advanced clinical development.

Most of them fall into one of two categories:

Currently, there are several new oral treatment options for UC patients in advanced clinical development or in regulatory review.

Most of them fall into one of the following two categories:

S1P agonists, such as ozanimod or etrasimod, or JAK inhibitors, such as upadacitinib or filgotinib.

Some of these drug candidates may be approved by regulatory authorities for commercial use before IMU-838 may receive approval.

However, depending on the results of future clinical trials, Immunic believes that IMU-838 has the potential to demonstrate medically important advantages compared with other treatments, particularly for long-term therapy in UC patients, due to the selectivity of DHODH targeting of metabolically activated lymphocytes, the absence of general detrimental effects on bone marrow and the direct antiviral activity.

However, depending on the results of future clinical trials, Immunic believes that IMU-838 has the potential to demonstrate medically important advantages compared with other treatments,

particularly for long-term therapy in UC patients, due to the selectivity of DHODH targeting of metabolically activated lymphocytes, the absence of general detrimental effects on bone marrow and the direct antiviral activity.

Tofacitinib, marketed as Xeljanz by Pfizer, is a first-in-class inhibitor of kinases called JAK kinases.

Tofacitinib is particularly active on the isoform JAK3.

Based on two Phase 3 trials, tofacitinib was approved in 2018 in the United States and Europe for the treatment of UC.

Since IBD is still a substantially underserved market, several innovative late-stage projects are currently in Phase 2 and Phase 3 testing in patients with UC and/or CD.

• Filgotinib:

A JAK1 inhibitor developed by Gilead and Galapagos which delivered promising Phase 2 data in a clinical trial in UC.

However, filgotinib led to a substantial number of herpes zoster virus reactivations in patients, which may have a negative impact on the number of patients treated with this drug, if it is approved in the future.

Additional side effects are reported to have occurred during preclinical development.

A S1P1 receptor agonist which was developed by Receptos and acquired by Celgene in a $7.2 billion acquisition.

Ozanimod is approved for use in RRMS and is currently being tested for UC and CD.

• Upadacitinib:

A JAK1 kinase inhibitor developed by AbbVie which delivered promising clinical Phase 2 data in patients with UC.

In February of 2019, AbbVie initiated a Phase 3 study and is currently actively recruiting patients.

As was the case with filgotinib, upadacitinib has also demonstrated reactivation of viruses such as herpes zoster in clinical trials.

Further relevant immuno-modulators are in late-stage development for UC and CD.

These include S1P targeting drugs and JAK/TYK2 inhibitors.

Immunic is not aware of other DHODH inhibitors currently in development for IBD.

Immunic believes that the only approved DHODH inhibitor, Aubagio ® , and its predecessor molecule Arava ® , are unlikely to be successful for IBD due to its side effect profile, which includes diarrhea.

Clinical Development Plan and Ongoing/Planned Clinical Studies

Immunic has prepared a clinical development plan for IBD, including UC, in collaboration with a group of well-known and experienced physicians from North America and Europe.

Immunic also sought regulatory advice on its development program from the FDA, and BfArM ( Bundesinstitut für Arzneimittel und Medizinprodukte , the German drug regulatory agency), before commencing its development program.

Under an agreement between Immunic and the FDA, reached during the company’s pre-Investigational New Drug (“IND”) meeting in 2017, the UC Phase 2b trial was designed to begin enrollment with three active dosing arms of 10 mg, 30 mg and 45 mg, respectively, in addition to a placebo arm.

Based on preclinical target engagement data, Immunic had hypothesized 30 mg to be the lowest effective dose.

The 10 mg dose was added to the trial at the suggestion of the FDA to include a lower dose than the expected effective doses.

An interim dosing analysis was to be conducted after approximately 60 patients were evaluable following their ten-week induction treatment.

At the time, Immunic anticipated that the lowest, 10 mg dose might be found to be likely ineffective in this interim dosing analysis, and therefore discontinued.

At the end of August 2019, the interim dosing analysis was performed by an unblinded and independent data review committee, which has concluded that the 10 mg dose appeared not to be likely ineffective, the 45 mg dose was not intolerable, and no safety signal was identified for any of the trial’s three doses of IMU-838.

The data review committee has not shared with the company any of the unblinded data underlying these conclusions, and the study remains blinded to the company, the investigators and the enrolled patients.

The interim dosing analysis was not designed to be a futility analysis nor was the primary endpoint or any other endpoint of the study tested statistically.

As a result of these findings, the trial’s steering committee has recommended continuation of all three dosing arms, which recommendation was implemented by Immunic.

Expansion of IMU-838’s potentially effective dose range required inclusion of a third dosing arm to the study’s second enrollment period and increased the overall number of patients expected to be included in the ongoing trial from a previously anticipated 195 patients, to a total of approximately 240 anticipated patients.

Phase 2b Study in UC (CALDOSE-1)

The CALDOSE-1 study is a Phase 2b, dose-finding, multicenter, double-blind, placebo-controlled study including a blinded induction and maintenance phase, with double randomization (initial randomization for induction and second randomization for maintenance).

Immunic also sought regulatory advice on its development program from the U.S.

Food and Drug Administration (“FDA”), and the Bundesinstitut für Arzneimittel und Medizinprodukte (“BfArM”), before commencing its development program.

Phase 2 Trial of IMU-838 in UC (CALDOSE-1 Trial)

The CALDOSE-1 trial is a Phase 2b, dose-finding, multicenter, double-blind, placebo-controlled study including a blinded induction and maintenance phase, with double randomization (initial randomization for induction and second randomization for maintenance).

The study also includes an option for an open-label treatment extension for patients discontinuing from or completing blinded treatment.

The primary endpoint of the study consists of a patient-reported outcome and an endoscopy-assessed outcome, both to be evaluated following ten weeks of induction treatment comparing IMU-838 to placebo.

Immunic has an active Investigational New Drug (“IND”) application for IMU-838 in UC with the FDA.

Further information regarding Immunic’s UC study can be found on ClinicalTrials.gov under the identifier NCT03341962.

CALDOSE-1 is being conducted in approximately 85 study centers throughout nine countries (including the United States and countries in Western, Central and Eastern Europe).

Immunic has an active IND for IMU-838 in UC from the FDA and the study is currently enrolling subjects in the United States and other countries.

Enrollment in the study also includes a central, blinded and independent assessment of endoscopy at screening to confirm patient eligibility.

CALDOSE-1 is being conducted in more than 100 study centers throughout 14 countries, including the United States and countries in Western, Central and Eastern Europe.

Enrollment in the study includes a central, blinded and independent assessment of endoscopy at screening to confirm patient eligibility.

Immunic believes that it has taken prudent steps to ensure that the study is conducted in a manner that is consistent with the study protocol in all countries in which the study is being conducted, even though such countries have varying healthcare systems and practices.

A total of approximately 240 patients are planned to be randomized in CALDOSE-1.

The first patient was enrolled in April 2018 and top-line data is expected during the fourth quarter of 2021.

As outlined above, an interim dosing analysis was performed in August 2019 by an unblinded and independent data review committee, which has concluded that the 10 mg dose appeared not to be likely ineffective, the 45 mg dose was not intolerable, and no safety signal was identified for any of the trial’s three doses of IMU-838.

The first patient was enrolled in April 2018.

Although the recruitment of this trial has continued during the COVID-19 pandemic, the pandemic has affected, among other things, access to endoscopy sites or hospitals in some countries, which has interfered with recruitment speed, new site activations and clinical site access.

As a result, recruitment is expected to be completed in the second half of 2021 and top-line data of the induction phase is expected to be available in the first half of 2022, as previously announced.

Under an agreement between Immunic and the FDA, reached during the company’s pre-IND meeting in 2017, the UC Phase 2b trial was designed to begin enrollment with three active dosing arms of 10 mg, 30 mg and 45 mg, respectively, in addition to a placebo arm.

At the end of August 2019, an interim dosing analysis was performed by an unblinded and

independent data review committee, which has concluded that the lowest dose of 10 mg appeared not to be likely ineffective, the highest dose of 45 mg was not intolerable, and no safety signal was identified for any of the trial’s three doses of IMU-838.

The interim dosing analysis was not designed to be a futility analysis nor was the primary endpoint or any other endpoint of the study tested statistically.

As a result of these findings, the trial’s steering committee has recommended continuation of all three dosing arms, which recommendation was implemented by Immunic.

Expansion of IMU-838’s potentially effective dose range required continuation of all three dose groups and increased the overall number of patients expected to be included in the ongoing trial from a previously anticipated 195 patients, to a total of approximately 240 anticipated patients.

Crohn’s Disease

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There are now some approved treatments, such as alofisel, that target the specific structural complications of CD, including fistulas.

Leflunomide is used off-label in patients with CD and has shown an initial suggestion of the value of DHODH inhibition in this patient population.

Holtmann MH, Gerts AL, Weinman A, Galle PR, Neurath MF.

Treatment of Crohn's disease with leflunomide as second-line immunosuppression :

a Phase 1 open-label trial on efficacy, tolerability and safety.

2008 Apr;53(4):1025-32.

Epub 2007 Oct 13.

Prajapati DN, Knox JF, Emmons J, Saeian K, Csuka ME, Binion DG.

Leflunomide treatment of Crohn's disease patients intolerant to standard immunomodulator therapy.

J Clin Gastroenterol.

2003 Aug;37(2):125-8.

Leflunomide is used off-label in patients with CD and has shown an initial suggestion of the value of DHODH inhibition in this patient population (Holtmann, et al 2008, Prajapati, et al 2003).

In two small investigator trials of leflunomide in CD patients, investigators observed DHODH inhibitor activity in the treatment of moderate to severe CD in patients who have failed or are intolerant to traditional immunomodulator therapy.

However, the side effect profile of leflunomide included diarrhea.

The prescribing information for teriflunomide, a compound related to leflunomide and approved for patients with MS, lists a 15-18% rate of diarrhea, which makes it one of the most prevalent side effects of this DHODH inhibitor.

The prescribing information for teriflunomide, leflunomide’s active metabolite, lists a 15-18% rate of diarrhea, which makes it one of the most prevalent side effects of this DHODH inhibitor.

Immunic believes that despite the findings of efficacy for leflunomide in the investigator trials in CD patients, the side effect profile makes it unlikely that this type of DHODH inhibitor can be developed in the indication of IBD, and particularly in CD.

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Immunic is considering its development strategy for IMU-838 for the treatment of CD.

During the previously noted discussions with the FDA regarding the Company’s UC trial, Immunic and the FDA reached agreement that the Phase 2b study of IMU-838 in CD could commence when the interim dosing analysis for the Phase 2b CALDOSE-1 study in UC has been completed.

This would allow Immunic to execute its Phase 2b study of IMU-838 in CD with the remaining active dose groups from CALDOSE-1 and placebo, thereby potentially allowing more efficient recruitment into this trial.

Immunic had also received additional written advice from the FDA regarding patient-reported outcomes to be used in this Phase 2b trial, called CALDOSE-2.

Given the outcome of the interim dosing analysis of the CALDOSE-1 study, Immunic is currently re-evaluating the study design in CD using three active dose groups in the overall clinical development plan of IMU-838.

Other Studies

During the previously noted discussions with the FDA regarding the Company’s UC trial, Immunic and the FDA reached agreement that a clinical trial of IMU-838 in CD could commence when the interim dosing analysis for the Phase 2b CALDOSE-1 trial in UC has been completed.

This would allow Immunic to execute its development of IMU-838 in CD with the remaining active dose groups from CALDOSE-1 and placebo, thereby potentially allowing more efficient recruitment into this trial.

Immunic had also

received additional written advice from the FDA regarding patient-reported outcomes to be used in this trial, called CALDOSE-2.

Given the outcome of the interim dosing analysis of the CALDOSE-1 trial, Immunic is currently re-evaluating the study design in CD and also considering an evaluation of the upcoming CALDOSE-1 results prior to the start of a potential CALDOSE-2 clinical trial.

In addition, Immunic is evaluating the optimal time for efficiently executing such study following the COVID-19 pandemic.

Diagnosis and Prevalence

The World Health Organization (“WHO”) declared SARS-CoV-2 infections causing COVID-19 a pandemic on March 11, 2020.

At present, the total number of cases is difficult to accurately quantify but continues to rise and, according to Johns Hopkins University & Medicine (2020), has grown to more than 100,000,000 cases globally.

Main clinical symptoms include fever, cough, myalgia or fatigue, expectoration, and dyspnea, but a range of other symptoms have been connected to COVID-19 as well.

While a majority of patients do not experience severe symptoms, one meta-analysis found that approximately 18 % of cases were severe (Sun et al.

The symptoms of COVID-19 typically appear within 3 to 14 days after initial exposure to SARS-CoV-2.

If any patient develops characteristic symptoms of COVID-19 or was exposed to a person with COVID-19, infection with SARS-CoV-2 leading to COVID-19 has to be considered.

As there are no specific clinical features that can reliably distinguish COVID-19 from other viral respiratory infections, the patient will then need to undergo specific testing for SARS-CoV-2.

Although several testing methods have been developed, polymerase chain reaction testing remains the primary and most reliable COVID-19 diagnostic testing method in the United States and in most developed countries.

Generally, a sample from the nose (nasopharyngeal swab) or throat (throat swab) is taken and then sent to a laboratory for testing.

Current Treatment Options

As of January 2021, at least two vaccines have been authorized and recommended by the FDA for preventing COVID-19:

• Pfizer-BioNTech's COVID-19 vaccine (BNT162b2)

• Moderna’s COVID-19 vaccine (mRNA-1273)

However, many questions still remain open on the efficacy of these and other COVID-19 vaccines.

It will still take a substantial amount of time to produce, distribute and administer the vaccines worldwide and, as a result, to protect a broad basis of the global population.

It is also still unclear if the vaccines will enable a 100% protection;

some vaccinated individuals may still become ill or transmit the virus.

In addition, there are people who do not want to be vaccinated or who cannot be vaccinated, such as those with pre-existing conditions, cancer therapy patients, or individuals undergoing long-term immunosuppressive therapies for autoimmune diseases.

It is also still unclear how long the vaccine protection will last which may have a significant effect on the practicalities and logistics of immunization.

Finally, it is unclear whether SARS-CoV-2 will disappear completely or whether genetic changes to the virus may occur in the future which could have an impact on the efficacy of available vaccines.

On February 7, 2021, the government of South Africa halted rollout of AZD1222 vaccine given that the protection in patients with an emerging mutant form B.1.351 was found not to prevent mild or moderate cases of COVID-19.

Current approaches to COVID-19 therapies generally fall into two categories:

antivirals, which prevent the virus from multiplying, and immune modulators, which help the immune system to fight the virus or stop it from overreacting dangerously.

Some potential therapies act in a different way or via multiple mechanisms.

In May 2020, the FDA issued an Emergency Use Authorization (“EUA”) for emergency use of remdesivir (Veklury ® ) for the treatment of hospitalized patients with severe COVID-19.

Remdesivir is a direct acting antiviral drug that inhibits viral RNA synthesis.

On November 20, 2020, the WHO issued a conditional recommendation against the use of remdesivir in hospitalized COVID-19 patients, regardless of disease severity, as there is currently no evidence that remdesivir improves survival and other outcomes in these patients.

In November 2020, Eli Lilly's neutralizing antibody bamlanivimab (LY-CoV555) received EUA from the FDA for the treatment of recently diagnosed COVID-19 patients.

Bamlanivimab is authorized for the treatment of recently diagnosed, mild

to moderate COVID-19 in high-risk patients.

However, the ACTIV-3 trial, which is evaluating multiple investigational agents in hospitalized patients with COVID-19, stopped randomizing patients to treatment with LY-CoV555 based on an analysis suggesting that the antibody was not beneficial in this population.

Although numerous pharmacological interventions have obtained an EUA and several are still under clinical investigation, clear efficacy has not yet been determined for any of the COVID-19 drugs.

Each of Pfizer/BioNTech and Moderna have estimated that they will be able to produce up to 1 billion does of their respective vaccines in 2021.

However, many millions of people at high risk of the disease will not be immunized any time soon, necessitating the continued research and development of efficacious drug therapies.

Although the first clinical trials for COVID-19 therapies started in early 2020, only about 7% of the trials testing therapies for the disease have read out so far, according to the BioCentury COVID-19 Resource Center.

Of the over 1,300 ongoing trials, 37% are due to complete by the end of the first half of 2021.

As of January 2021, there are around 55 classes of therapies currently in clinical trials with immunosuppressants being the class with the highest number of ongoing trials.

Studies have shown that it is vital to combine antiviral therapy with immune suppressants because using molecules that control only cytokine storms may make viral clearance difficult.

A recent publication from scientists in Wuhan, China (Xiong et al.

2020) shows promising activity of DHODH inhibitors against SARS-CoV-2 in in vitro cellular studies.

New DHODH inhibitors (PTC299 and PP001) are currently being tested in addition to established DHODH inhibitors, such as leflunomide and Brequinar.

However, due to unfavorable pharmacokinetic profiles (leflunomide) and toxicity (Brequinar), these drugs are not perceived as suitable acute antiviral treatments.

In addition, although the new DHODH inhibitors seem promising, so far, no animal safety data and no human safety data are available.

Therefore, developing new DHODH inhibitors may take significant time, even if accelerated by support of regulatory authorities.

Regarding IMU-838, currently in phase 2 for COVID-19, more than 800 individuals have been dosed to date and a placebo like safety profile has been observed across the entire IMU-838 development program.

Current Development Plan and Ongoing Studies

On April 21, 2020, Immunic announced that IMU-838 had successfully demonstrated preclinical activity against SARS-CoV-2.

Specifically, IMU-838 was observed to inhibit replication of clinical isolates of SARS-CoV-2 associated with COVID-19.

In cellular assays, IMU-838 demonstrated this antiviral activity at concentrations which are well below the blood concentrations associated with IMU-838 dosing regimens studied in ongoing and previous clinical trials.

These positive, broad in vitro antiviral results of IMU-838 had encouraged the Company to start a clinical Phase 2 trial to explore IMU-838 as a potential treatment option for hospitalized patients with moderate COVID-19.

Phase 2 Trial of IMU-838 in Moderate COVID-19 (CALVID-1 Trial)

On June 15, 2020, Immunic announced the first patients had been dosed in its Phase 2, CALVID-1 clinical trial of IMU-838 in COVID-19.

This was a prospective, multicenter, randomized, placebo-controlled, double-blind clinical trial in hospitalized patients with moderate COVID-19, designed to evaluate efficacy, safety and tolerability of IMU-838.

CALVID-1 received regulatory allowance from the BfArM, from the FDA and from regulatory authorities in other European countries involved in the study.

The trial was conducted under an IND application accepted by the FDA using a single global protocol with clinical sites in the United States, Germany and a range of other European countries.

On November 2, 2020, Immunic announced that the enrollment goal of 200 patients was reached, pre-specified in the protocol as sufficient to perform the main efficacy analysis of the Phase 2 part of the CALVID-1 trial.

Enrollment benefited from country selection for this trial, which included additional countries outside of the United States and Western Europe with a less competitive trial environment but increasing infection numbers in fall 2020.

Immunic believes that this country selection strongly contributed to the ability to timely execute the recruitment of this trial.

Further information regarding the COVID-19 study can be found on ClinicalTrials.gov under the identifier NCT04379271.

The aim of the CALVID-1 trial was to investigate IMU-838 as an oral treatment option for COVID-19 and to support

potential use of IMU-838 as a treatment for current and potential future viral pandemic threats.

The prospective, multicenter,

randomized, placebo-controlled, double-blind Phase 2 trial was designed to evaluate efficacy, safety and tolerability of

IMU-838 in patients with moderate COVID-19.

Patients were enrolled at 20 sites in eleven countries, including the United

States, Germany, and a range of other European countries.

Patients were randomized to receive either 22.5 mg of IMU-838

twice daily (45 mg/day), or placebo twice daily, for 14 consecutive days.

Patients in both arms were also eligible to receive

investigator’s choice of standard-of-care therapy throughout the duration of the study.

Inclusion criteria called for hospitalized

adult patients with a confirmed SARS-CoV-2 infection fulfilling clinical status category 3 or 4, as assessed with the

nine-category ordinal scale proposed by the World Health Organization (WHO) COVID-19 Therapeutic Trial Synopsis, as well

as certain additional clinical and laboratory criteria.

On February 17, 2021, Immunic announced that IMU-838 has shown evidence of clinical activity in hospitalized patients with moderate COVID-19.

This planned main analysis of the Company’s Phase 2 CALVID-1 trial was based on data from 204 randomized patients and included top-line clinical efficacy, safety, disease marker, and virology data.

Although no formal statistical analysis was pre-specified for this main analysis, endpoints were analyzed descriptively.

The primary endpoint of the randomized, placebo-controlled, double-blind trial was defined as the proportion of patients without any need for invasive ventilation through day 28.

In contrast to the relatively high rates of ventilation reported in the first COVID-19 wave in early 2020, the CALVID-1 trial found an actual rate of less than 1% of invasive ventilation for hospitalized patients with moderate COVID-19.

This very low event rate, consistent with the findings of many recent third-party trials in COVID-19, prevented the primary endpoint from being evaluable.

Regarding the key secondary endpoints, the trial was designed to investigate IMU-838's ability to reduce the probability of major complications for COVID-19 patients, such as 28-day mortality, survival without respiratory failure, and probability of use of intensive care unit ("ICU") treatment.

Similar to the low ventilation rates discussed above, the trial found a rate of less than 2% for 28-day mortality, balanced between the two arms, and less than 4.5% of patients required an ICU stay.

Based on the very low complication rates in this trial and due to the known variability of the disease course, Immunic believes that the evaluation of these key secondary endpoints is also not feasible.

Despite the low mortality and invasive ventilation rates observed in this trial, clinical activity of IMU-838 was confirmed based on the assessment of multiple secondary clinical endpoints, including clinically meaningful improvements in time to clinical recovery and time to clinical improvement.

In addition, high-risk patients and patients aged over 65 years experienced a more substantial treatment effect of IMU-838.

An anti-viral effect of IMU-838 on SARS-CoV-2 was observed by viral titers at the end of the treatment period (day 14) and at the end of the study (day 28).

A robust anti-inflammatory effect was also observed, based on a more effective reduction of CRP in IMU-838 treated patients, as compared to placebo.

A more effective reduction of D-dimer, a well-known prognostic disease marker for COVID-19, was observed in IMU-838 treated patients, as compared to placebo.

Initial data from a post hoc analysis of “Long COVID” symptoms, the frequently remaining symptoms of COVID-19 after elimination of the virus, indicated that IMU-838 may have the potential to contribute to the prevention of long-term fatigue.

IMU-838 was found to be safe and well-tolerated in hospitalized patients with moderate COVID-19.

No general safety signals regarding new or more severe adverse events were observed for IMU-838 in this patient population, as compared to placebo.

In addition, IMU-838’s rate of serious adverse events and adverse events leading to treatment discontinuation was not increased, as compared to placebo.

The trial also found fewer COVID-19 related adverse events with increased intensity in IMU-838 treated patients (7.1%), as compared to placebo (12.6%) and IMU-838 did not intensify any hematological effects of COVID-19.

In addition, IMU-838 did not increase the rate of infections and infestations as well as the rate of liver events in patients with COVID-19, as compared to placebo.

A total of 204 patients were included in the main analysis of the CALVID-1 trial, as per the protocol requirement of approximately 200 patients.

202 patients received at least one dose of study drug, of whom 99 patients received 45 mg/day of IMU-838 and 103 patients received placebo.

The main analysis contains top-line data for the treatment period until day 14 and the follow-up period until day 28 as well as the full safety data until day 28.

Additional data will be reported after the full analysis of all 223 randomized patients, which is expected to be available in the second quarter of 2021.

This supplemental data set will contain full efficacy, virology, and drug trough level data, as well as the safety follow-up until day 60.

Investigator-Sponsored Clinical Phase 2 Trial of IMU-838 in Combination with Oseltamivir for the Treatment of Patients with Moderate-to-Severe COVID-19 (IONIC Trial)

On July 27, 2020, Immunic announced enrollment of the first patients in an investigator-sponsored clinical Phase 2 IONIC trial of IMU-838 for the treatment of patients with COVID-19.

This trial is run by sponsor and lead site, University Hospitals Coventry and Warwickshire NHS Trust, and is a prospective, randomized, parallel-group, open-label Phase 2b trial, designed to evaluate efficacy and safety of IMU-838 in combination with the neuraminidase inhibitor, Oseltamivir (Tamiflu Ⓡ ), in

approximately 120 adult patients with moderate-to-severe COVID-19.

On February 5, 2021, the investigators informed the Company that 30 patients have been enrolled in the trial, pre-specified in the protocol as sufficient to perform a first interim analysis.

Primary Sclerosing Cholangitis

Immunic is also exploring the use of IMU-838 in orphan diseases that may allow for an accelerated path to commercialization.

Immunic is exploring such orphan diseases in conjunction with interested investigators.

Diagnosis and Prevalence

PSC is a rare liver disease in which the bile ducts in the liver become inflamed, narrow and prevent bile from flowing properly.

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Progressive biliary and hepatic damage results in portal hypertension and hepatic failure in a significant majority of patients over a 10-15 year period from initial diagnosis.

Current Treatment Options

Treatment of PSC is supportive, with a focus on monitoring the disease progression and treating symptoms and complications as they arise.

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Although many trials have failed to meet their endpoints in PSC, there are now a few studies for medications (such as obeticholic acid) that have shown limited activity in PSC.

Immunic has entered into a collaboration with investigators at Arizona State University and the Mayo Clinic to explore the use of IMU-838 in PSC.

The principal investigator of the trial, Keith Lindor, M.D., Senior Advisor to the Provost and Professor of Medicine, College of Health Solutions, Arizona State University, was awarded a grant from the National Institutes of Health for the study.

The study is sponsored by Elizabeth Carey, M.D., Professor of Medicine, Division of Gastroenterology and Hepatology, Department of Internal Medicine, Mayo Clinic, who has received IND approval from the FDA and has been granted Institutional Review Board ("IRB") approval to conduct the study.

The investigator-sponsored proof-of-concept clinical trial of IMU-838 in PSC is being conducted at the Mayo Clinic in Arizona (Dr.

Carey) and Minnesota (John E.

Eaton, M.D.), both of which are tertiary care centers for PSC patients.

This is a single arm, open-label, exploratory study of IMU-838 planning to enroll a total of 30 patients with PSC, aged 18 to 75 years, who will receive 30 mg IMU-838 once daily for a period of six months.

The primary endpoint is the change in serum alkaline phosphatase at six months compared to baseline.

The first patient was enrolled in August 2019.

At this time, more than half of

the projected 30 patients have been enrolled.

Immunic supports this study by providing IMU-838 and reference to its active IND.

Current Development Plan and Ongoing Studies

Immunic has entered into a collaboration with investigators at the Mayo Clinic to explore the use of IMU-838 in PSC.

An investigator-sponsored proof-of-concept clinical trial of IMU-838 in PSC, for which Immunic provided the study medication, was conducted at the Mayo Clinic in Arizona and Minnesota, both of which are tertiary referral centers for PSC patients.

The study was led by Elizabeth Carey, M.D., Professor of Medicine, Division of Gastroenterology and Hepatology, Department of Internal Medicine, Mayo Clinic, who had received Investigator IND approval from the FDA and had been granted Institutional Review Board ("IRB") approval to conduct the study.

The study was supported by a grant from the National Institutes of Health (“NIH”).

Further information regarding the PSC study can be found on ClinicalTrials.gov under the identifier NCT03722576.

On February 18, 2021, Immunic announced positive top-line data from the study which was designed to investigate IMU-838's potential to improve various biochemical parameters in PSC patients and help determine whether any such activity warrants further investigation randomized PSC trials.

The primary objective of this study was to determine whether IMU-838 reduces serum alkaline phosphatase (“ALP”) in adult patients diagnosed with PSC.

The main analysis for the primary objective was whether patients could achieve a reduction of ALP at week 24 which is greater or equal to 25%, as compared to baseline, with an AST increase at week 24 of no more than 33%, as compared to baseline.

This positive primary outcome was achieved by 3 of 11 patients in the PP population (27.3%, 95% CI:

By virtue of inclusion criteria, patients at baseline had to have an elevated ALP value of at least 1.5 times the upper limit of normal.

In addition, time from baseline was calculated as a continuous variable and treated as the primary predictor using a random intercept model which was adjusted for age at baseline and gender.

For this longitudinal analysis of ALP from baseline to week 24 in the PP population, the ALP value statistically significantly (p=0.041) decreased by an average of 5.76 IU/L every 30 days (95% CI:

-11.29, -0.23;

statistical model).

The time trend was not statistically significant in the ITT analysis (p=0.578) due to missing data following the high rate of treatment discontinuations during the COVID-19 pandemic.

Secondary objectives were to investigate the liver biochemistry parameters, AST, ALT, and total/direct/indirect bilirubin, as well as the concentrations of proinflammatory cytokines, as compared to baseline.

The longitudinal analysis of both AST and

ALT as well as total, direct and indirect bilirubin values showed a stable pattern in the PP population with no statistically significant change over time and the confidence interval to include the no-change scenario (AST:

average 30 day change 1.22 IU/L, 95% CI:

-0.53, 2.97, p=0.170;

average 30 day change 0.85 IU/L, 95% CI -1.46, 3.15, p=0.467, total bilirubin:

average 30 day change 0.00 mg/dL, 95% CI -0.01, 0.02, p=0.561, direct bilirubin:

average 30 day change 0.00 mg/dL, 95% CI -0.01, 0.01, p=0.861, indirect bilirubin:

average 30 day change 0.00 mg/dL, 95% CI -0.01, 0.01, p=0.556).

Similar results were found in the ITT population.

In addition, a decrease in the Ulcerative Colitis Clinical Score was observed in evaluated patients, although the number of assessed patients was limited.

The study also found that IMU-838 is a safe and well-tolerated oral drug for PSC patients and treatment-emergent adverse events were rare and generally mild.

The study, for which Immunic provided the study medication, planned to enroll 30 patients with PSC, aged 18 to 75 years, who received 30 mg of IMU-838 once daily for a period of 24 weeks.

Enrollment for the study took place between July 2019 and September 2020, but almost all enrollment occurred in 2019 and early 2020.

Together with the investigators, Immunic determined to readout data of the 18 patients who were enrolled prior to the COVID-19 pandemic.

The ongoing pandemic situation also triggered the principal investigator’s decision to terminate the study in late 2020, before the intended recruitment goal of 30 patients was reached.

Registration Plan

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• the submission of an NDA for a drug;

• the approval by the FDA of an NDA or a biologics license application.

• the approval by the FDA of an NDA.

The FDA reviews all available data relating to safety, efficacy and quality and assesses the risk/benefit profile of a product candidate before granting approval.

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In many countries outside of the United States, coverage, pricing and reimbursement approvals are also required.

Immunic currently conducts two Phase 2b trials for IMU-838 in RRMS and UC, and one investigator-sponsored proof-of-concept clinical trial in PSC.

The Company is considering whether to conduct another Phase 2b study in CD.

Immunic announced positive top-line data from its Phase 2 EMPhASIS trial of IMU-838 in patients with RRMS on August 2, 2020 and expects to have end-of-Phase 2 discussions with regulatory agencies in May of 2021 to discuss the necessary aspects of a Phase 3 program.

Immunic also has ongoing Phase 2b trials for IMU-838 in UC and COVID-19, and one investigator-sponsored proof-of-concept clinical trial in PSC.

The Company is also considering whether to conduct another clinical trial in CD.

If any of these studies meet their primary endpoint and demonstrate general safety and efficacy of IMU-838, Immunic intends to conduct pivotal trials to be initiated either by Immunic itself or by Immunic in collaboration with a potential partner.

For most indications listed above, marketing approval would require completion of two successful, well-controlled Phase 3 studies.

For our lead indications RRMS and IBD, marketing approval would require completion of two successful, well-controlled Phase 3 studies.

Completing such studies would require substantial financial and resource investments and may take several years to complete.

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There are also additional steps required to develop and validate large-scale manufacturing capabilities as well as manufacturing controls.

The first Phase 2b study to read-out data for IMU-838 will be in the indication of RRMS.

Immunic has begun interactions with regulatory agencies as well as with clinical, regulatory and statistical experts to draw out potential Phase 3 trial options in RRMS patients that may be acceptable as pivotal trials.

These discussions are ongoing and no firm decisions on a Phase 3 program have been made yet.

However, Immunic is preparing to execute such Phase 3 program if positive Phase 2b data from the EMPhASIS trial are obtained, regulatory agreements have been made and if appropriate funding for the program is available.

The FDA may grant accelerated approval for drugs that address life-threatening diseases without effective therapies, based on findings from surrogate endpoints reasonably expected to predict clinical outcomes.

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Manufacturing and Formulation

IMU-838 is provided as a white, uncoated tablet.

Dose strengths for clinical trials are 5 mg, 15 mg and 22.5 mg, compared with placebo.

The tablets are packaged in 30 mL polyethylene bottles containing 85 tablets each.

IMU-838 has been synthesized in batches up to 18 kg, or approximately 40,000 tablets.

IMU-838 is provided as a white, uncoated immediate release tablet.

Dose strengths for clinical trials are 5 mg, 15 mg, 22.5 mg, 30 mg and 45 mg, compared with placebo.

The tablets are packaged in polyethylene bottles.

Vidofludimus calcium, the active ingredient of IMU-838, has been synthesized in batches up to 250 kg of active pharmaceutical ingredient (“API”) and a drug product batch size of 500,000 tablets has been produced.

The Company has the capacity for batch sizes of up to several million units.

Commercialization Strategy

Immunic’s products are being developed with the aim of delivering proof-of-efficacy in state-of-the-art clinical trials with multiple compounds in multiple indications.

Subsequent pivotal trials may be conducted by Immunic alone or with a potential partner.

A recent unpublished report by the National Multiple Sclerosis Society suggests that the prevalence of MS in the United States is about 1 million.

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According to a recent market study, Global Multiple Sclerosis Drugs Market Size, Market Share, Application Analysis, Regional Outlook, Growth Trends, Key Players, Competitive Strategies and Forecasts, 2017 to 2025 .

the global MS market in expected to be worth $27.4 billion by 2025.

the global MS market is expected to be worth $27.4 billion by 2025.

The United States holds the largest portion of the global market share for MS treatments, which is expected to continue to grow rapidly due to the increasing incidence of MS, technological advances, and rising drug costs in the United States.

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Rocchi 2012), almost 4.1 million patients suffer from IBD in the United States, Europe and Canada.

Worldwide, according to GBD 2015 Lancet.

1545–1602 (2016), around 11.2 million patients are affected by IBD.

Worldwide, according to GBD 2015 Lancet (2016), around 11.2 million patients are affected by IBD.

In total, the global market for IBD is estimated to be $7.6 billion in 2023, according to Global IBD Market Forecast 2018.

Immunic believes that IMU-838 has the potential to be differentiated from current treatment options as it is being developed to potentially (i) provide a convenient, oral delivery and (ii) avoid viral reactivation.

Tofacitinib, marketed as Xeljanz by Pfizer and Takeda, is a first-in-class inhibitor of kinases called JAK kinases.

Tofacitinib is particularly active on the isoform JAK3.

Based on two Phase 3 trials, tofacitinib was approved in 2018 in the United States and Europe for the treatment of UC.

Since IBD is still a substantially underserved market, several innovative late-stage projects are currently in Phase 2 and Phase 3 testing in patients with UC and/or CD.

• Filgotinib:

A JAK1 inhibitor developed by Gilead and Galapagos delivered promising Phase 2 data in a clinical trial of UC.

a potentially best-in-class S1P1 receptor agonist was developed by Receptos and was acquired by Celgene in a $7.2 billion acquisition.

Ozanimod completed Phase 3 testing in RRMS and is currently being tested for UC and CD.

• Upadacitinib:

A JAK1 kinase inhibitor developed by AbbVie delivered promising Phase 2 clinical data in patients with UC.

In February of 2019, AbbVie initiated a Phase 3 study and is currently actively recruiting patients.

As was the case with filgotinib, upadacitinib has also demonstrated reactivation of viruses such as herpes zoster in clinical trials.

Further relevant immuno-modulators are in late stage development for UC and CD.

These include S1P targeting drugs and JAK/TYK2 inhibitors.

Immunic is not aware of other DHODH inhibitors currently in development for IBD.

Intellectual Property, Licenses and Royalties

IMU-838 is covered by four layers of patents and applications all either granted or filed in the United States, EU and other territories.

Immunic’s first layer of protection over IMU-838 is a granted patent claiming the composition of matter of IMU-838’s active moiety, vidofludimus, the free acid form of IMU-838.

IMU-838 is covered by several layers of patents and applications, all either granted or filed in the United States, the European Union and other territories.

Initially, IMU-838 is protected by a granted patent claiming the composition of matter of IMU-838’s active moiety, vidofludimus, the free acid form of IMU-838.

This patent is granted in most major markets and expires in 2022 in most of these jurisdictions.

A second layer of applications was filed to cover IMU-838’s active ingredient, the calcium salt of vidofludimus.

Additionally, a second layer of applications was filed to cover IMU-838’s active ingredient, the calcium salt of vidofludimus.

These applications are granted in some jurisdictions and cover IMU-838 until 2031, and U.S.

Patent Term Extension and/or European Supplementary Protection Certificates could provide prolonged protection from generic entry up to 2036, depending on NDA submission time and IND filing in the United States and analogous filings in the European Union.

A third layer consists of patent applications filed in early 2018 and directed to a method of production of the clinical material for IMU-838, including a newly-identified, specific polymorph of IMU-838.

Finally, a patent application covering a dosing scheme currently used with IMU-838 was filed in 2017, based on unexpected findings from Phase 1 and preclinical investigations.

Another layer consists of patent applications filed in early 2018 and directed to composition of matter of a newly-identified, specific polymorph of IMU-838 and a related method of production of the clinical material for IMU-838, which is now the

active ingredient of the currently used IMU-838 formulation.

In addition, a patent application covering a dosing scheme currently used with IMU-838 was filed in 2017, based on unexpected findings from Phase 1 and preclinical investigations.

If issued, this patent could extend patent protection for IMU-838 to 2038.

IMU-838 and IMU-935 were acquired in a transaction with the originator 4SC in September 2016.

As part of the transaction, 4SC is entitled to receive a royalty on net sales if products originating from this contract achieve market approval.

IMU-935 – Targeting RORgt and Th17

As part of the transaction, 4SC is entitled to receive a royalty on net sales if products originating from these acquisitions achieve market approval.

Immunic has subsequently submitted additional patent applications for independently developed intellectual property relating to each of IMU-838 and IMU-935.

IMU-935 – Targeting RORγt and Th17

Mechanism of Action and Key Mechanistic Data

The target RORg (RORC), has three known main functions:

The target RORγ (RORC) has three known main functions:

(i) is a key regulator of Th17 cell differentiation, (ii) is the crucial transcription factor for the genes encoding IL-17A and IL-17F, and (iii) drives normal thymocyte maturation.

Preclinical results confirm that IMU-935 is a highly potent and selective inverse agonist of RORgt with an IC50 (the concentration of drug that inhibits 50% of the activity of the target) of around 24 nM with additional activity on DHODH (IC50 of 240 nM).

The resulting effect of IMU-935 in vitro on IL-17A, IL-17F, IFNg and TNFa cytokine release from stimulated human lymphocytes is in the low single-digit nanomolar range.

Preclinical results confirm that IMU-935 is a highly potent and selective inverse agonist of RORγt with an IC 50 (the concentration of drug that inhibits 50% of the activity of the target) of around 24 nM with additional activity on DHODH (IC 50 of 240 nM).

The resulting effect of IMU-935 in vitro on IL-17A, IL-17F, IFNγ and TNF α cytokine release from stimulated human lymphocytes is in the low single-digit nanomolar range.

The dual target activity of IMU-935 may offer the opportunity to increase the therapeutic window of IMU-935 compared with pure RORC inhibitors.

Furthermore, IMU-935 potently inhibits Th17 differentiation and has demonstrated dose dependent activity in several cellular test systems and in psoriasis/IL-17F and IBD animal models.

One of the potential risks of drugs targeting RORgt was identified in prior research suggesting that RORgt knockout or inhibition impacts to the same extent Th17 differentiation, IL-17 transcription and thymocyte maturation.

More recent research published in Nature Immunology in 2017 suggests that these functions are differentially mediated by small structural changes of the RORgt protein impacting the interaction with co-factors and other proteins.

One of the potential risks of drugs targeting RORγt was identified in prior research suggesting that RORγt knockout or inhibition impacts Th17 differentiation, IL-17 transcription and thymocyte maturation to the same extent.

More recent research published in Nature Immunology (2017) suggests that these functions are differentially mediated by small structural changes of the RORγt protein impacting the interaction with co-factors and other proteins.

In preclinical testing, IMU-935 was found to fully maintain the T cell maturation function.

Immunic believes that this may potentially be an important differential feature to other RORgt inhibitors, and may provide a better safety profile, however this needs to be confirmed in future clinical trials .

Immunic believes that RORgt is an attractive target in the field of autoimmune diseases since it is the key transcription factor and nuclear receptor for regulation of Th17 cell differentiation and production of the IL-17 family of cytokines.

The imbalance between regulatory T cells and Th17 cells is a hallmark of autoimmune diseases, and by preventing differentiation towards Th17 cells and impairing their function, IMU-935 targets this imbalance in a beneficial manner.

Therefore, Immunic believes that IMU-935 has the potential to provide a safe and cost-effective oral treatment in psoriasis and other autoimmune disorders.

The preclinical effect of targeting RORgt has been demonstrated in several preclinical trials of competing RORgt modulators.

Immunic believes that this may potentially be an important differential feature to other RORγt inhibitors, and may provide a better safety profile, however this needs to be confirmed in future clinical trials .

The preclinical effect of targeting RORγt has been demonstrated in several preclinical experiments of competing RORγt modulators.

Some molecules progressed to clinical stage.

However, to date, only a limited number of products have reached Phase 2 clinical studies.

However, to date, only a limited number of products have reached clinical Phase 2 studies.

Diagnosis and Prevalence

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Plaques vary from a few millimeters in diameter to several centimeters and can be localized to a specific area or extend over most of the body surface.

According to Di Meglio, P.;

Villanova, F.;

Cold Spring Harb.

(2014), psoriasis is one of the most common chronic inflammatory skin diseases.

Psoriasis is one of the most common chronic inflammatory skin diseases (Di Meglio et al.

The disease prevalence varies between geographic regions.

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Topical therapies, such as corticosteroids and vitamin D3 analogues, reduce inflammation, which slows the proliferation of keratinocytes and reduces itching.

Oral therapies such as methotrexate, cyclosporine, apremilast and tofacitinib target anti-inflammatory processes.

Oral therapies such as methotrexate, cyclosporine, apremilast and tofacitinib target anti-inflammatory

Biologics block proteins produced by keratinocytes, dendritic cells, Th17 lymphocytes or other immune cells.

Examples of biologics include anti-TNFa biologics such as infliximab, etanercept and adalimumab.

Examples of biologics include anti-TNF α biologics such as infliximab, etanercept and adalimumab.

More recently approved monoclonal antibodies, such as secukinumab, ixekizumab and brodalumab, have been developed to target the pro-inflammatory cytokine IL-17.

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Immunic intends to develop IMU-935 as an oral and more convenient treatment option for patients with moderate to severe psoriasis with a mechanism of action and efficacy that approximates those of IL-17 antibodies.

Currently, several RORgt inverse agonists are in preclinical development for the treatment of psoriasis, but only a few are in clinical development.

Currently, several RORγt inverse agonists are in preclinical development for the treatment of psoriasis, but only a few are in clinical development.

To Immunic’s knowledge, these are:

• BOS172767 / ARN-6039 in Phase 2 (Boston Pharmaceuticals, licensed from Arrien Pharmaceuticals)

• JTE-451 in Phase 2 (Japan Tobacco)

• JTE-451 Phase 2 completed (Japan Tobacco)

• AUR-101 in Phase 2 (Aurigene Discovery)

• BI 730357 in Phase 2 (Boehringer Ingelheim)

• AUR-101 in Phase 1 (Aurigene)

• SAR441169 in Phase 1(Lead Pharma/Sanofi)

• RTA-1701 in Phase 1 (Reata Pharmaceuticals)

• ESR-114 Phase 1/2 completed (Escalier Biosciences)

• BOS172767 / ARN-6039 Phase 1 completed (Boston Pharmaceuticals, licensed from Arrien Pharmaceuticals)

• RTA-1701 Phase 1 completed (Reata Pharmaceuticals)

• ABBV-157 in Phase 1 (AbbVie)

• Molecule in Phase 1 (Bristol Myers Squibb)

Immunic believes that IMU-935 is a unique modulator of RORgt as compared to previous and current competitors.

IMU-935 is an inverse agonist (and not an antagonist) and is unable to completely block RORgt activity, thereby allowing a basal remaining RORgt activity to support normal T cell maturation.

• SAR-441169 in Phase 1 (Lead Pharma/Sanofi)

Guillain-Barré Syndrome

Diagnosis and Prevalence

Historically, GBS was considered a single disease entity.

It is now known to be a heterogeneous syndrome with several variant forms.

Acute inflammatory demyelinating polyradiculopathy is the most common form in North America, Europe and most of the developed world, where it accounts for approximately 90% of cases.

GBS is thought to result from an immune response to a preceding infection that cross-reacts with peripheral nerve components.

The exact mechanisms are unknown.

However, cellular and humoral immune responses are of relevance in the pathogenesis of GBS.

The clinical manifestation of GBS is characterized by an acute or subacute onset of a progressive, symmetric weakness in limbs or cranial nerve-innervated muscles, accompanied by absent or depressed deep tendon reflexes, and a characteristic profile in the cerebrospinal fluid and electrodiagnostic studies (Hughes et al.

Patients usually present a few days to a week after onset of symptoms.

The weakness can vary from mild difficulty with walking to nearly complete paralysis of all extremity, facial, respiratory, and bulbar muscles.

GBS occurs worldwide with an overall incidence of 0.16 to 3.0 per 100,000 person-years (McGrogan et al.

Thus, it is considered a rare disease.

The incidence increases by approximately 20% with every 10-year increase in age beyond the first decade of life (Sejvar et al.

In addition, the incidence is slightly greater in males than in females.

Current Treatment Options

Current treatments for patients with GBS include plasma exchange (also called plasmapheresis) and administration of intravenous immune globulin (“IVIg”).

Over the past three decades, no other therapies have been found to be effective for GBS.

To Immunic’s knowledge, there are currently no other RORγt inverse agonists in clinical development for the treatment of GBS.

According to ClinicalTrials.gov (last assessed January 18, 2021), the following new treatments are being evaluated in clinical trials:

• ANX005 in Phase 1 (Annexon Biosciences, monoclonal antibody inhibiting complement factor C1q)

• CK0801 in Phase 1 (Cellenkos, allogeneic cord blood derived T-reg cells)

• Imlifidase in Phase 2 (Hansa Biopharma, bacterial endopeptidase cleaving human immunoglobulin)

Clinical Development Plan and Ongoing/Planned Clinical Studies

Immunic believes that IMU-935 is a unique modulator of RORγt, as compared to previous and current competitors.

IMU-935 is an inverse agonist (and not an antagonist) and is unable to completely block RORγt activity, thereby allowing a basal remaining RORγt activity to support normal T cell maturation.

Immunic believes this mechanism of action may avoid unwanted side effects.

In addition, because IMU-935 blocks two separate pathways relevant to the function of Th17 cells (RORgt and DHODH), it was shown in preclinical studies to have single nanomolar activity of inhibition of cytokine release in human peripheral blood mononuclear cells.

In addition, because IMU-935 blocks two separate pathways relevant to the function of Th17 cells (RORγt and DHODH), it was shown in preclinical studies to have single nanomolar activity of inhibition of cytokine release in human peripheral blood mononuclear cells.

Given these properties, Immunic believes that IMU-935 may provide a reasonable therapeutic window between an effective dose and an intolerable dose.

Clinical Development Plan and Ongoing/Planned Clinical Studies

Immunic’s current development plan for IMU-935 focuses on two initial goals:

(i) to rapidly obtain human safety and pharmacokinetic data for IMU-935 in order to evaluate the safety profile of this development candidate, and (ii) to obtain preliminary clinical activity data using safe doses.

Immunic is performing early clinical trials with IMU-935, including single-dose and multiple-dose trials, through its Australian subsidiary.

Immunic believes that this development approach allows it to accelerate the studies due to certain unique regulatory requirements and processes in Australia.

In the third quarter 2019, Immunic’s Australian subsidiary has received clearance from the Bellberry Human Research Ethics Committee in Australia to begin Phase 1 trials of IMU-935 under the Clinical Trial Notification scheme of the Australian Therapeutic Goods Administration.

The first healthy volunteer in the Phase 1 clinical program of IMU-935 was dosed in September 2019.

The trial is currently ongoing and active.

Several single-dose cohorts have successfully been completed.

Data from this ongoing Phase 1 trial of IMU-935 are still blinded, however at this

time no safety signals have been identified that would, in the assessment of the safety monitoring group of the trial, preclude from potential evaluation in a first multiple-dose cohort.

Phase 1 Single Ascending Dose Study

The first Phase 1 trial is a single ascending dose, double-blind, placebo-controlled study of IMU-935 in healthy volunteers.

The trial is designed to evaluate the drug’s safety and pharmacokinetic profile and will also include the evaluation of food effects.

Phase 1 Multiple Ascending Dose Study

Following the Phase 1 single ascending dose trial, Immunic plans to initiate a second Phase 1 trial which will be a multiple ascending dose, double-blind, placebo-controlled study in healthy volunteers with IMU-935 given daily for 14 consecutive days.

This study will assess the safety, pharmacodynamic and pharmacokinetic properties of IMU-935.

Phase 1b/2a Study in Psoriasis Patients

The company expects to extend these multiple ascending dose studies in the first half of 2020 by including mild-to-moderate psoriasis patients given IMU-935 daily over 28 consecutive days, in order to assess safety and mechanism-related biomarkers in patients with psoriasis.

Other Studies (Orphan Indications)

Immunic is currently performing early clinical trials with IMU-935, including single and multiple ascending dose trials, through its Australian subsidiary.

Immunic believes that this development approach allows it to accelerate the program due to certain unique regulatory requirements and processes in Australia.

In the third quarter of 2019, Immunic’s Australian subsidiary received clearance from the Bellberry Human Research Ethics Committee in Australia to begin Phase 1 trials of IMU-935 under the Clinical Trial Notification scheme of the Australian Therapeutic Goods Administration.

The first healthy volunteer in the clinical Phase 1 trial of IMU-935 was dosed in September 2019.

The trial is currently ongoing and recruiting trial subjects.

Several single ascending dose cohorts have successfully been completed.

Data from this ongoing Phase 1 trial of IMU-935 are still blinded, however at this time no safety signals have been identified that would, in the assessment of the safety monitoring group of the trial, preclude from potential evaluation in a first multiple ascending dose cohort.

In February 2021, Immunic received clearance from the Bellberry Human Research Ethics Committee in Australia to commence multiple ascending dose cohorts, which are expected to start in the first quarter of 2021.

Unblinded safety data from the single and multiple ascending dose parts in healthy volunteers is expected to be available in the second half of 2021.

The clinical Phase 1 trial of IMU-935 is comprised of three parts:

Single Ascending Dose Part

The first part of the Phase 1 trial is a single ascending dose, double-blind, placebo-controlled study of IMU-935 in healthy volunteers.

This part is designed to evaluate the drug’s safety and pharmacokinetic profile and will also include the evaluation of food effects.

Multiple Ascending Dose Part

Following the single ascending dose part, Immunic plans to initiate a second portion of the Phase 1 trial which will be a multiple ascending dose, double-blind, placebo-controlled study in healthy volunteers with IMU-935 given daily for 14 consecutive days.

This part will assess the safety and pharmacokinetic properties of IMU-935.

Psoriasis Patients

The Company expects to extend these multiple ascending dose studies around mid-2021 by including mild-to-moderate psoriasis patients given IMU-935 daily over 28 consecutive days, in order to assess safety and exploratory disease endpoints in patients with psoriasis.

Potential Phase 2 Trial in GBS

Immunic believes that the mechanism of action of IMU-935 may also support its evaluation for the treatment of potential orphan indications.

Immunic is currently investigating various options for developing IMU-935 in certain orphan indications.

However, no decision has been made to date regarding the most appropriate orphan indication.

Discussions with medical experts to identify targets are ongoing.

An orphan indication would potentially offer an accelerated path to commercialization of IMU-935.

Upon completion of the single and multiple ascending dose portions of the ongoing Phase 1 trial, Immunic anticipates that it may also begin a Phase 2a proof-of-concept clinical trial of IMU-935 in an orphan autoimmune indication.

This orphan approach may allow for an accelerated path to approval, in parallel to IMU-935’s previously planned development in psoriasis.

After a thorough review of suitable autoimmune conditions, Immunic has targeted GBS as additional indication for IMU-935, as previously announced.

GBS is an acute neurological disorder in which the body's immune system attacks its peripheral nervous system, and for which very few therapies exist.

The Company plans to announce additional details as soon as design and timing of the envisaged trial are further defined.

Manufacturing and Formulation

IMU-935 is a small molecular weight compound and was successfully synthesized in a kilogram scale.

Single ascending dose and multiple ascending dose studies are expected to be supplied via a capsule formulation.

However, Immunic may also switch to a potentially updated formulation at any point.

IM105935, the API of the IMU-935 drug product, is a small molecule compound and is currently synthesized at up to 20 to 30kg scale.

Single and multiple ascending dose studies are supplied with a spray dried dispersed formulation dosed in gastro-resistant capsules.

However, Immunic may also switch to a potentially updated dosage form, such as tablets, for future usage.

Commercialization Strategy

According to the World Health Organization, psoriasis affects 2-3% of the world’s population and according to the National Psoriasis Foundation over 8 million people in the United States have psoriasis.

Intellectual Property, Licenses and Royalties

Immunic filed a patent application covering composition of matter for IMU-935 and related molecules in September 2017 with the European Patent Office, and this application entered the international phase in September 2018.

According to the WHO, psoriasis affects 2-3% of the world’s population and according to the National Psoriasis Foundation over 8 million people in the United States have psoriasis.

GBS occurs worldwide with an overall incidence of 0.16 to 3.0 per 100,000 person-years.

Immunic believes that RORγt is an attractive target in the field of autoimmune diseases since it is the key transcription factor and nuclear receptor for regulation of Th17 cell differentiation and production of the IL-17 family of cytokines.

Therefore, Immunic believes that IMU-935 has the potential to provide a safe and cost-effective oral treatment in psoriasis and other autoimmune disorders.

Intellectual Property ("IP"), Licenses and Royalties

Immunic filed a patent application covering composition of matter for IMU-935 and related molecules with the European Patent Office in September 2017, and this application entered the international phase in September 2018.

Assuming this patent issues with sufficient claim coverage, IMU-935 is expected to be under patent protection until 2037, with further extension possible.

Basic rights to IMU-838 and IMU-935 were acquired in a transaction with 4SC in September 2016.

As part of the transaction, Immunic is required to pay 4SC a royalty on net sales of certain products.

IP related to IMU-838 and IMU-935 was acquired in a transaction with the originator 4SC in September 2016.

As part of the transaction, 4SC is entitled to receive a royalty on net sales if products originating from these acquisitions achieve market approval.

Immunic has subsequently submitted additional patent applications for independently developed intellectual property relating to each of IMU-838 and IMU-935.

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IMU-856, which Immunic believes to have paradigm-changing potential for multiple diseases, is an orally available, small molecule modulator that targets a protein which serves as a transcriptional regulator of the intestinal barrier function.

Immunic has not yet disclosed the target for IMU-856.

patients suffering from diseases like IBD, irritable bowel syndrome with diarrhea ("IBS-D"), immune checkpoint inhibitor ("ICI"), induced colitis and other barrier function associated diseases.

Immunic has not yet disclosed the molecular target for IMU-856.

Based on preclinical data, this compound appears to represent a new and potentially disruptive treatment approach, as the mechanism of action targets the restoration of the intestinal barrier function in patients suffering from diseases like IBD, IBS-D, ICI-induced colitis and other barrier function associated diseases.

Immunic believes that because IMU-856 has not been shown to cause suppression of the immune functions, it should therefore maintain immune surveillance for patients.

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Bowel permeability is suspected to be involved in the initiation of many chronic inflammatory or autoimmune conditions, as the impaired intestinal barrier function may be one of the preconditions for antigens of the microbiome to be recognized by the body’s immune system.

This is not true only for diseases of the bowel;

This is not only true for diseases of the bowel;

the interaction of the immune system with components of the microbiome is suspected for many diseases throughout the body.

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This would trigger an initial inflammation event.

It is hypothesized that in IBD patients, the initial inflammatory response is abnormally sustained from lack of efficient apoptosis of immune cells, but this mechanism is not yet fully understood.

It is hypothesized that in IBD patients, the initial inflammatory response is abnormally sustained from lack

of efficient apoptosis of immune cells, but this mechanism is not yet fully understood.

Ultimately, patients develop a chronic and systemic immune response.

The presence of certain “bad bacteria”, which may contain certain epitopes in the microbiota, or the overall makeup of the microbiome, which lack “good bacteria”, are also known to contribute to the sustained and overshooting inflammation in IBD.

Additionally, it has been shown that IBD patients in endoscopic remission still display IBD symptoms if bowel tightness is not normalized.

Additionally, it was shown that IBD patients in endoscopic remission still display IBD symptoms if bowel tightness is not normalized.

Episodes of impaired bowel wall barrier function are also correlated with relapse weeks later.

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Acute symptoms usually coincide with the acute inflammation that leads to chronic abdominal pain, diarrhea and bloating.

Immune checkpoint inhibitors (“ICIs”) have been one of the major advances of cancer care in recent years.

ICIs have been one of the major advances of cancer care in recent years.

ICIs are monoclonal antibodies that inactivate repressors of the anti-cancer immune response.

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Clinical Development Plan and Planned Studies

Immunic expects to perform early clinical trials of IMU-856, including single-dose and multiple-dose Phase 1 trials, through its Australian subsidiary.

Immunic expects this development approach will allow it to accelerate the initiation of first-in-man studies due to certain unique regulatory requirements and processes in Australia.

Immunic is performing early clinical trials of IMU-856, including Phase 1 single and multiple ascending dose trials, through its Australian subsidiary.

Immunic believes that this development approach will allow it to accelerate the studies due to certain unique regulatory requirements and processes in Australia.

The development activities for IMU-856 are intended to largely follow established processes and service provider relationships established for the IMU-935 development program.

This may lead to operational and financial synergies in study preparation and execution.

IMU-856 is currently in advanced preclinical testing.

Completion of the preclinical and manufacturing activities that are necessary for the initiation of Phase 1 clinical studies of IMU-856 is expected during the first half of 2020.

See below for the anticipated IMU-856 studies that are planned to be performed.

Phase 1 Single Ascending Dose Study

This would be a double-blind, placebo-controlled study with four or five ascending dose levels of IMU-856.

A single dose of study drug would be investigated.

Safety and pharmacokinetic properties would be assessed in healthy volunteers.

One dose level would evaluate intra-individual differences between fast and fed conditions.

Phase 1 Multiple Ascending Dose Study

This would be a double-blind, placebo-controlled study with two ascending dose levels of IMU-856.

The study drug would be given daily for 14 consecutive days.

Safety, pharmacodynamic and pharmacokinetic properties would be assessed in healthy volunteers.

Phase 2a Study in Patients with Conditions Involving Impaired Bowel Barrier Function

In the third quarter of 2020, Immunic’s Australian subsidiary received clearance from the Bellberry Human Research Ethics Committee in Australia to begin Phase 1 trials of IMU-856 under the Clinical Trial Notification scheme of the Australian Therapeutic Goods Administration.

The first healthy volunteer in the clinical Phase 1 trial of IMU-856 was dosed in August 2020.

The trial is currently ongoing and active.

Unblinded safety data from the single and multiple ascending dose parts in healthy volunteers is expected to be available in the second half of 2021.

The clinical Phase 1 trial of IMU-856 is comprised of three parts:

Single Ascending Dose Part

The first part of the Phase 1 trial is a single ascending dose, double-blind, placebo-controlled study in healthy volunteers with up to five ascending dose levels of IMU-856.

This part is designed to assess safety, pharmacodynamic and pharmacokinetic properties of IMU-856.

One dose level evaluates intra-individual differences between fasted and fed conditions.

Multiple Ascending Dose Part

This part is designed to assess safety, pharmacodynamic and pharmacokinetic properties of IMU-856 and is expected to start in the first quarter of 2021.

Patients with Conditions Involving Impaired Bowel Barrier Function

The Company plans to extend these single and multiple ascending dose studies in the second half of 2021 to include patients with several diseases involving bowel barrier dysfunction.

This would be a double-blind, placebo-controlled study with partial parallel group design.

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The change in bowel permeability would be evaluated as change from baseline and comparing one or two active dose groups to placebo.

Additionally, biomarker, safety and drug trough levels would be assessed.

Immunic expects that this study would provide an early indication of pharmacodynamic feasibility with IMU-856 by measuring barrier function surrogate markers in IBS-D, UC and CD patients.

Additionally, biomarkers, disease symptoms, safety and drug trough levels would be assessed.

Immunic expects that this would provide an early indication of pharmacodynamic feasibility of IMU-856 by measuring barrier function surrogate markers in IBS-D, UC and CD patients.

Manufacturing and Formulation

IMU-856 is a small molecular weight compound and is currently synthesized in kilogram scale.

It is formulated as a tablet.

SPIM-15, the API of the IMU-856 drug product, is a small molecule compound and is currently synthesized at up to 6 kg scale.

It is formulated as an immediate release tablet.

Commercialization Strategy

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• preclinical laboratory tests, in vitro and in vivo preclinical studies and formulation and stability studies;

• the submission to the FDA of an application for human clinical testing, which is known as an investigational new drug application (“IND”);

• the submission to the FDA of an application for human clinical testing, which is known as an IND application;

• adequate and well-controlled human clinical trials to demonstrate the safety and effectiveness of the drug;

• the submission to the FDA of a new drug application (“NDA”) for a drug;

• the submission to the FDA of an NDA for a drug;

• satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current GMP (“cGMP”), requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

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Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies.

Preclinical trials must also be conducted in accordance with FDA and comparable foreign authorities’ legal requirements, regulations or guidelines, including Good Laboratory Practice (“GLP”), an international standard meant to harmonize the conduct and quality of non-clinical studies and the archiving and reporting of findings.

Before human clinical testing can begin, a sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND, a request for authorization from the FDA to administer an investigational new drug product to humans.

Preclinical trials must also be conducted in accordance with FDA and comparable foreign authorities’ legal requirements,

regulations or guidelines, including Good Laboratory Practice (“GLP”), an international standard meant to harmonize the conduct and quality of non-clinical studies and the archiving and reporting of findings.

An 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.

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The FDA may impose a clinical hold at any time before or during clinical trials due to safety concerns about proposed or ongoing clinical trials or non-compliance with FDA requirements, and the trials may not commence 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 pursuant to protocols detailing, among other things, the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated.

All clinical trials must be conducted under the supervision of one or more qualified investigators pursuant to protocols detailing, among other things, the objectives of the trial, dosing procedures, subject selection, inclusion/exclusion criteria and the safety and effectiveness criteria to be evaluated.

The trial sponsor submits the protocol, as well as any subsequent protocol amendments, to the FDA as part of the IND.

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Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

In Phase 1 studies, the product candidate is initially introduced into healthy human volunteers and tested for safety, dosage and tolerability, absorption, distribution, metabolism and excretion and, effect on the body.

Phase 2 studies are conducted in a limited patient population.

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The FDA or the sponsor may suspend a clinical trial at any time for various reasons, including a finding that the research subjects or patients are being exposed to an unacceptable health risk.

Similarly, an IRB may suspend or terminate approval of a clinical trial at an

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.

Similarly, an IRB may suspend or terminate approval of a clinical trial at an 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, known as a data safety monitoring board or committee, which monitors data from the trial to ensure patient safety and data integrity and may also make recommendations to alter or terminate a trial based on concerns for patient safety.

Before obtaining marketing approval for the commercial sale of any drug product, a sponsor must demonstrate in preclinical studies and well-controlled clinical trials that the product is safe and effective for its intended use and that the manufacturing facilities, processes and controls are adequate to preserve the drug’s identity, strength, quality and purity.

The results these preclinical 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 results of these preclinical 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 ($2,875,842 for 2021) ;

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Research and Development

We recognized $22.5 million and $9.6 million in research and development expenses in the years ended December 31, 2019 and 2018, respectively.

Immunic recognized $38.6 million and $22.5 million in research and development expenses in the years ended December 31, 2020 and 2019, respectively.

Geographic Information

Substantially all our long-lived assets were located within both the U.S.

and Germany in 2019, and within Germany in 2018.

As of March 1, 2020, we had 26 employees, two of whom held M.D.

Of our employees, 15 were engaged in research and development and 11 in administration.

We consider our employee relations to be good.

Substantially all of Immunic’s long-lived assets were located within both the United States and Germany in 2020 and 2019.

As of March 1, 2021, Immunic had 28 employees, three of whom held M.D.

Of the employees, 18 were engaged in research and development and 10 in administration.

The Company considers its employee relations to be good.

Corporate Information and Website

We maintain a website at www.imux.com.

The information contained on, or that can be accessed through, our website is not a part of this Annual Report on Form 10-K.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through the investor relations page of our internet website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Immunic maintains a website at www.imux.com.

The information contained on, or that can be accessed through, the website is not a part of this Annual Report on Form 10-K.

Immunic’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through the investor relations page of the internet website as soon as reasonably practicable after the Company electronically files such material with, or furnish it to, the SEC.

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

What changed 10-K

Item 1. Business