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Item 1. Business

2022-03-11 compared with 2021-03-31 · 595 added, 647 removed, 414 unchanged (75% of the section changed)

We are a commercial stage pharmaceuticals company focused on developing novel, plant-based, non-opioid, and sustainably derived prescription medicines for people and animals with GI distress, specifically chronic, debilitating diarrhea.

Jaguar Health, Inc.

(“Jaguar” or the “Company”) is a commercial stage pharmaceuticals company focused on developing novel, plant-based, non-opioid, and sustainably derived prescription medicines for people and animals with GI distress, including chronic, debilitating diarrhea.

Jaguar Animal Health is a tradename of Jaguar Health.

Our wholly owned subsidiary, Napo Pharmaceuticals, Inc.

(“Napo”), focuses on developing and commercializing proprietary plant-based human gastrointestinal pharmaceuticals for the global marketplace from plants used traditionally in rainforest areas.

Our marketed drug Mytesi (crofelemer 125 mg delayed-release tablets) is a product approved by the U.S.

Food and Drug Administration (“FDA”) for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy and the only oral plant-based botanical prescription medicine approved under FDA Botanical Guidance.

Jaguar was founded in San Francisco, California as a Delaware corporation on June 6, 2013.

Napo formed Jaguar to develop and commercialize animal health products.

Effective as of December 31, 2013, Jaguar was a wholly-owned subsidiary of Napo, and Jaguar was a majority-owned subsidiary of Napo until the close of our initial

public offering on May 18, 2015.

On July 31, 2017, the merger of Jaguar Animal Health, Inc.

and Napo became effective, at which point Jaguar Animal Health’s name changed to Jaguar Health, Inc.

and Napo began operating as a wholly-owned subsidiary of Jaguar focused on human health and the ongoing commercialization of Mytesi, and development of follow-on indications for, crofelemer.

Most of the activities of the Company are now focused on the commercialization of Mytesi and development of follow-on indications for crofelemer and a second-generation anti-secretory product, lechlemer, that has yet to be approved by the FDA.

In the field of animal health, we have limited activities which are focused on developing and commercializing first-in-class gastrointestinal products for dogs, dairy calves, foals, and high value horses.

We believe Jaguar is poised to realize a number of synergistic, value adding benefits—an expanded pipeline of potential blockbuster human follow-on indications of crofelemer, and a second-generation anti-secretory agent, as well as a pipeline of potential animal health indications for crofelemer—upon which to build global partnerships.

As previously announced, Jaguar, through Napo, now holds extensive global rights for Mytesi, and crofelemer manufacturing is being conducted at a multimillion-dollar commercial manufacturing facility.

Additionally, several of the drug product candidates in Jaguar’s crofelemer pipeline are backed by what we believe are strong Phase 2 clinical proof of concept evidence from completed human clinical trials.

Mytesi is a novel, first-in-class anti-secretory agent which has a basic normalizing effect, acting locally in the gut, and this mechanism of action has the potential to benefit multiple disorders that cause diarrhea.

Mytesi is in development for multiple possible follow-on indications, including cancer therapy-related diarrhea (“CTD”);

orphan- drug indications for symptomatic relief of diarrhea in infants and children with congenital diarrheal disorders (“CDD”) and for adult and pediatric patients with short bowel syndrome (“SBS”);

and for supportive care for diarrhea relief in inflammatory bowel diseases (“IBD”);

(“Napo”), focuses on developing and commercializing proprietary plant-based human pharmaceuticals for the global marketplace from plants or plant products used traditionally in rainforest areas.

Napo’s marketed drug Mytesi (crofelemer 125 mg delayed-release tablets) is a first-in-class oral botanical drug product approved by the U.S.

Food and Drug Administration (“FDA”) for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy.

To date, this is the only oral plant-based botanical prescription medicine approved under the FDA’s Botanical Guidance.

Jaguar Animal Health’s Canalevia-CA1 (crofelemer delayed-release tablets) drug is the first and only oral plant-based prescription product that is FDA conditionally approved to treat chemotherapy-induced diarrhea (“CID”) in dogs.

Canalevia-CA1

is a canine-specific formulation of crofelemer.

Napo Therapeutics S.p.A., Napo’s majority owned Italian subsidiary, focuses on expanding crofelemer access in Europe.

Jaguar, formerly known as Jaguar Animal Health, Inc., was founded in San Francisco, California as a Delaware corporation on June 6, 2013 (inception).

The Company was a majority-owned subsidiary of Napo until the close of the Company's initial public offering on May 18, 2015.

The Company was formed to develop and commercialize first-in-class prescription and non-prescription products for companion and production animals and horses.

The Company's first non-prescription commercial products, Neonorm Calf and Neonorm Foal, were launched in 2014 and 2016, respectively.

On July 31, 2017, Jaguar completed a merger with Napo pursuant to the Agreement and Plan of Merger dated March 31, 2017, by and among Jaguar, Napo, Napo Acquisition Corporation (“Merger Sub”), and Napo's representative (the “Merger Agreement”).

In accordance with the terms of the Merger Agreement, upon the completion of the merger, Merger Sub merged with and into Napo, with Napo surviving as the wholly-owned subsidiary (the “Merger” or “Napo Merger”).

Immediately following the Merger, Jaguar changed its name from “Jaguar Animal Health, Inc.” to “Jaguar Health, Inc.” Napo now operates as a wholly-owned subsidiary of Jaguar focused on human health including the ongoing development of crofelemer and commercialization of Mytesi.

On March 15, 2021, Jaguar established Napo EU S.p.A (which changed its name in January 2022 to Napo Therapeutics S.p.A.

“Napo Therapeutics”) based in Milan, Italy as a subsidiary of Napo.

Napo Therapeutics’ mission is to provide access to crofelemer in Europe to address significant rare/orphan disease indications, including, initially, two key orphan target indications:

Short bowel syndrome with intestinal failure (“SBS-IF”), and congenital diarrheal disorders (“CDD”).

On November 3, 2021, Napo Therapeutics merged with Dragon SPAC S.p.A.

(“Dragon SPAC”).

On December 13, 2021, the European Medicines Agency (“EMA”) granted orphan-drug designation (“ODD”) for crofelemer for short bowel syndrome (“SBS”) indication in the European Union following review of the ODD application Napo submitted to the EMA in September 2021.

Following this decision from the EMA, Napo Therapeutics is initiating efforts to commence clinical development of crofelemer in both adult and pediatric SBS patients in support of the company’s key focus on leveraging the EMA’s accelerated conditional marketing authorization pathway in Europe for these rare diseases.

Napo Therapeutics has also agreed to support an investigator-initiated trial (“IIT”) which will provide proof of concept (“POC”) support for potential expanded access programs for crofelemer for patients with CDD and/or SBS patients with intestinal failure (“IF”).

The expanded access program will be initiated following completion of this study and upon publication of POC results, potentially in 2023.

Crofelemer previously received ODD in the U.S.

from the FDA for SBS.

SBS affects approximately 10,000 to 20,000 people in the U.S., according to the Crohn's & Colitis Foundation, and it is estimated that the population of SBS patients in Europe is approximately the same size.

Despite limited treatment options, the global SBS market exceeded $568 million in 2019 and is expected to reach $4.6 billion by 2027, according to a report by Vision Research Reports.

On December 21, 2021, we received conditional approval from the FDA to market Canalevia-CA1 (crofelemer delayed-release tablets), our oral plant-based prescription drug and the only drug for the treatment of CID in dogs.

We expect Canalevia-CA1 to be available to multiple leading veterinary distributors in the U.S.

in the second quarter of 2022 after we complete a post-approval update to the chemistry, manufacturing and controls (“CMC”) related to crofelemer.

This update will align with the CMC requirements related to crofelemer used as the active ingredient in Mytesi.

On January 4, 2022, we announced the launch of Canalevia-CA1 (crofelemer delayed-released tablets), which is being commercialized as a prescription drug product under the Company’s Jaguar Animal Health tradename.

Canalevia-CA1 is a tablet that is given orally and can be prescribed for home treatment of CID.

Canalevia-CA1 is a canine-specific formulation of crofelemer that is conditionally approved by the FDA under application number 141-552.

Conditional approval allows for commercialization of the product while Jaguar Animal Health continues to collect the substantial evidence of effectiveness required for a full approval.

We have received Minor Use in a Major Species (“MUMS”) designation from the FDA for Canalevia-CA1 to treat CID in dogs.

FDA has established a "small number"

threshold for minor use in each of the seven major species covered by the MUMS act.

The small number threshold is currently 70,000 for dogs, representing the largest number of dogs that can be affected by a disease or

condition over the course of a year and still have the use qualify as a minor use.

We expect Canalevia-CA1 to be available to multiple leading veterinary distributors in the U.S.

in the second quarter of 2022 after we complete a post-conditional-approval update to the CMC related to crofelemer.

In the field of animal health, we are continuing limited activities related to developing and commercializing first in class gastrointestinal products for dogs, dairy calves, foals, and high value horses.

Most of the activities of the Company are focused on the commercialization of Mytesi and Canalevia-CA1 and the ongoing clinical development of crofelemer for the prophylaxis of diarrhea in adult patients receiving targeted cancer therapy.

In June 2021, Napo Pharmaceuticals recruited Dr.

Darlene Horton, as the Chief Medical Officer (“CMO”) of Napo Pharmaceuticals to support the ongoing clinical development activities for prescription products for human health.

Horton is a 25-year veteran of the biotech and pharmaceutical industry.

Prior to joining Napo, she led clinical development and regulatory strategy as CMO at Coherus Biosciences, Itero Biopharmaceuticals, and SMC Biotechnology.

As Head of Clinical and Medical Affairs at Scios, she led the clinical development program that led to the approval of Natrecor® and was on the senior executive team when Scios was acquired by JNJ for $2.4B.

At JNJ, she co-led (with strategic marketing) the cardiovascular therapeutic area when JNJ in-licensed and began developing the blockbuster drug Xarelto®.

She also served as CEO at Nile Therapeutics and TulangCo Inc.

Horton completed her Pediatric Cardiology fellowship and Pediatrics Residency at UCSF.

She holds M.D.

in Microbiology degrees from the University of Florida.

We believe Jaguar is poised to realize a number of synergistic, value adding benefits—an expanded pipeline of potential blockbuster human follow on indications of crofelemer, and a second generation anti secretory agent—upon which to build global partnerships.

Jaguar, through Napo, holds global unencumbered rights for crofelemer, Mytesi, and Canalevia-CA1.

Additionally, several of the drug product opportunities in Jaguar’s crofelemer pipeline are backed by Phase 2 and proof of concept evidence from human clinical trials.

Crofelemer is a novel, first in class anti secretory agent which has a normalizing effect on electrolyte and fluid balance while acting locally in the gut, and this mechanism of action has the potential to benefit multiple disorders that cause gastrointestinal distress, including diarrhea and abdominal discomfort.

Crofelemer is also in development for possible follow on indications, including prophylaxis for cancer therapy related diarrhea (“CTD”);

for rare disease indications for symptomatic treatment of infants and children with CDD and for adult and pediatric patients with SBS-IF.

As mentioned above, crofelemer has received ODD for SBS in the US and in the European Union (“EU”).

Furthermore, the drug is being evaluated for management of diarrhea and abdominal discomfort in inflammatory bowel disease (“IBD”);

diarrhea-predominant irritable bowel syndrome (“IBS-D”);

and for idiopathic/functional diarrhea.

Additionally, the Company is exploring the conditional marketing authorization regulatory pathway in Europe to support development and commercialization of crofelemer for a proposed indication of diarrhea in acutely infected COVID-19 patients.

Subsequent clinical studies may also be conducted in post COVID recovery patients suffering from “long-hauler” syndrome.

A second-generation proprietary anti-secretory agent, lechlemer, is undergoing development for symptomatic relief of diarrhea resulting from cholera.

Crofelemer has previously also received an orphan-drug designation for treatment of diarrhea associated with SBS.

A second generation proprietary anti secretory agent, NP-300 (lechlemer), is undergoing preclinical development for symptomatic relief and treatment of diarrhea in patients with acute infection from cholera.

Napo has a direct sales force of 8 sales representatives and a national sales director covering U.S.

geographies with the highest commercial potential.

In November 2019, we hired Ian Wendt, a seasoned industry veteran with a broad range of experience that includes commercializing supportive care and HIV treatments, as Vice President of Commercial Strategy.

In 2019, we hired Ian Wendt, an industry veteran with a broad range of experience that includes commercializing supportive care and HIV treatments, as Vice President of Commercial Strategy.

He was promoted to Chief Commercial Officer in 2020.

With support provided by concomitant marketing, promotional activities, patient education programs and peer education initiatives described below, we expect continued growth in the number of patients treated with Mytesi.

Wendt will lead business development initiatives that pave the way for crofelemer’s final development for the cancer therapy-related diarrhea (“CTD”) market and our commercial role for this next important, potential indication for Mytesi.

The goal of Napo’s internal sales team is to deliver a frequent and consistent selling message to targeted, high-volume prescribers of antiretroviral therapies (“ART”) and to gastroenterologists who see large numbers of HIV patients.

In 2017 we released the results of a survey of 350 people living with HIV and AIDS regarding the topic of “ Talking to Your Doctor About Symptoms.

” The survey results show that diarrhea remains prevalent in those living with HIV/AIDS, with 27% of respondents reporting that they currently have diarrhea, and 56% reporting that they have had diarrhea in the past.

Wendt will lead disease state educational initiatives that will pave the way for crofelemer’s final development for the CTD market and our commercial role for this next important, potential indication for Mytesi.

Additionally, he is leading commercialization activities for Canalevia-CA1 in the U.S.

veterinary market.

A key component of our marketing strategies for Mytesi in 2021 was focused on the transition of Mytesi distribution to a closed network of specialty pharmacies rather than to wholesalers that resell the product to retail pharmacies.

This transition was intended to help remove access barriers for patients receiving Mytesi and includes services such as a higher level of support for prior authorizations, appeals, adherence counseling, and home delivery options.

While patients often visit retail pharmacies for short-term or uncomplicated medical needs, specialty pharmacies focus on serving patients with complex and chronic medical conditions like HIV.

The transition to a closed network of specialty pharmacies is expected to result in a meaningful reduction in Mytesi distribution costs and

prepare our U.S.

commercial distribution network for future indication expansion of crofelemer to other populations of patients with complex medical needs.

However, when we made the full transition on September 3, 2021, to selling to specialty pharmacies, it resulted in an underrepresentation of actual Mytesi utilization, as wholesalers depleted their inventory during the transition process.

The goal of Napo’s sales team is to deliver a frequent and consistent selling message to targeted, high volume prescribers of HIV antiretroviral therapies (“ART”) and to gastroenterologists who see large numbers of HIV patients.

In 2017 we released the results of a survey of 350 people living with HIV and AIDS regarding the topic of “Talking to Your Doctor About Symptoms.” The survey results show that diarrhea remains prevalent in those living with HIV/AIDS, with 27% of respondents reporting that they currently have diarrhea, and 56% reporting that they have had diarrhea in the past.

Additionally, the results of a 2017 Napo sponsored survey of 271 U.S.

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gastroenterologists see patients with HIV/AIDS in their practice.

Key to the success of our sales representatives in growing Mytesi sales is differentiating and targeting the right doctors—those HIV specialists who are high prescribers of ART and those gastrointestinal doctors who see large populations of people living with HIV/AIDS.

New York City/Long Island, Connecticut, New Jersey, Pennsylvania, Maryland, Kansas, Texas, Missouri, Chicago, Michigan, Atlanta, Louisiana, DC, Virginia, North Carolina, South Carolina, Indianapolis, and Ohio.

Medical education presentations led by health care providers (“HCPs”) participating in the Napo Speakers Bureau—a group that includes HIV/AIDS specialists, infectious disease specialists, gastroenterologists, colorectal surgeons, nurse practitioners, doctors of pharmacology, and physician assistants—focus on the prevalence and pathophysiology of gastrointestinal consequences of HIV infection and on the latest treatment options for HIV-related diarrhea.

Key to the success of our sales representatives in growing Mytesi sales is segmenting and targeting the right health care providers—those HIV treaters who are high prescribers of ART and those gastrointestinal doctors who see large populations of people living with HIV/AIDS.

The target list of prescribers for our sales reps includes a pool of approximately 1,300 high volume ART prescribing HIV specialists, and gastroenterologists who see the largest number of people living with HIV/AIDs, and we’ve strategically focused our sales force in the US geographies with the highest potential, including San Francisco, Sacramento, Seattle, southern California, Arizona, Nevada, Florida, New York City/Long Island, Connecticut, New Jersey, Pennsylvania, Maryland, Kansas, Texas, Missouri, Chicago, Michigan, Atlanta, Louisiana, DC, Virginia, North Carolina, South Carolina, Indianapolis, and Ohio.

Medical education presentations led by health care providers (“HCPs”) participating in the Napo Speakers Bureau—a group that includes HIV/AIDS treaters, infectious disease specialists, gastroenterologists, colorectal surgeons, nurse practitioners, doctors of pharmacology, and physician assistants—focus on the prevalence and pathophysiology of gastrointestinal consequences of HIV infection and on the latest treatment options for HIV related diarrhea.

Presentations given by patient advocate members provide information to HIV/AIDS patients about the prevalence of diarrhea in people living with HIV/AIDS (“PLWHA”) and offer guidance about talking to HCPs regarding diarrhea related concerns.

With the introduction of newer antiretroviral (“ARV”) drug therapy, there has been a reduction in the severity of ARV-induced diarrhea.

With the introduction of newer antiretroviral (“ARV”) drug therapies, there has been a reduction in the severity of ARV induced diarrhea.

However, a significant portion of this patient population still suffers from diarrhea caused by HIV enteropathy, which is due to the direct and indirect effects of HIV on the intestinal mucosa.

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According to data from the U.S.

Centers for Disease Control and Prevention, currently more than 70% of people living with HIV are over age 50.

Centers for Disease Control and Prevention, currently more than 70% of people living with HIV are over age 50 and have lived with HIV for more than 10 years.

Napo is on many AIDS Drug Assistance Program (“ADAP”) formularies.

ADAPs provide life-saving HIV treatments to low income, uninsured, and underinsured individuals living with HIV/AIDS in all 50 states and the territories.

ADAPs provide lifesaving HIV treatments to low income, uninsured, and underinsured individuals living with HIV/AIDS in all 50 states and the territories.

The ADAP program provides Mytesi free of charge to patients who qualify and copay support for some patients who have insurance coverage.

Based on data from healthcare research firm Decision Resource Group, approximately 86% of ADAP-eligible US lives now have access to Mytesi, which is now on the ADAP formularies for 30 states, including the five programs with the largest enrollment.

Napo has an agreement with the ADAP Crisis Task Force.

The agreement establishes a reduced price provided by Napo to ADAPs in all U.S.

states for purchases of Mytesi.

Formed in 2002, the Task Force negotiates reduced drug prices for all ADAPs.

Task Force membership is currently comprised of representatives from Arizona, California, Florida, Illinois, Massachusetts, New York, North Carolina, Tennessee, Texas, Virginia, and Washington state HIV/AIDS divisions.

Per the terms of the agreement, all state ADAPs are guaranteed the same reduced price for the drug.

ADAPs provide HIV related services and approved medications to more than half a million people in the U.S.

each year, and we expect this agreement to help further expand the number of patients able to benefit from the novel, first in class anti secretory mechanism of action of Mytesi.

As announced in May 2020, Napo launched a program to educate insurance companies about the benefits of Mytesi and negotiate better access to Mytesi for commercially insured patients.

We believe that our enhanced Mytesi market access strategy will engage select payors in contracting discussions with the objective of removing barriers for patients in order to allow them to more easily start on – and stay on – Mytesi.

This initiative represents a commercial opportunity to employ a strategic mechanism that is well-established in the U.S.

Based on data from healthcare research firm Decision Resource Group, approximately 86% of ADAP eligible US lives now have access to Mytesi, which is now on the ADAP formularies for 30 states, including the four programs with the largest enrollment.

In May 2020, Napo launched a program to educate insurance companies about the benefits of Mytesi and negotiate better access to Mytesi for commercially insured patients.

We believed that our enhanced Mytesi market access strategy engaged select payors in contracting discussions with the objective of removing barriers for patients in order to allow them to more easily start on – and stay on – Mytesi.

This initiative represented a commercial opportunity to employ a strategic mechanism that was well-established in the U.S.

pharmaceutical industry to help patients access Mytesi.

Napo expanded the NapoCares Patient Support Program for Mytesi in April 2020 as part of the Company's enhanced market access strategy.

The expansion meaningfully increased co-pay support for commercially insured patients, which includes allowing the co-pay amount to remain the same whether a patient fills a 30-day or a 90-day prescription of Mytesi.

The expansion also increased the income ceiling from two times the Federal poverty limit to five times the Federal poverty limit, which will allow more low-income patients to receive Mytesi at no cost.

The expansion meaningfully increased co-pay support for commercially insured patients, which also includes allowing the co-pay amount to remain the same whether a patient fills a 30-day or a 90-day prescription of Mytesi.

The expansion also increased the income ceiling from two times the Federal poverty limit to five times the Federal poverty limit for our patient assistance program, which will allow more low-income patients to receive Mytesi at no cost.

The co-pay program and patient assistance program are components of a comprehensive suite of patient support services Napo rolled out in the second quarter of 2020 with the support of AssistRx, a specialty therapy initiation and patient support company.

As announced in October 2020, Napo has launched a Web-based component of the NapoCares patient support program to automate and streamline the patient prescription process for Mytesi.

The iAssist platform is designed to simplify the prescription process for specialty therapies like Mytesi by providing electronic prescribing, prior authorizations, signatures and patient consent;

instant access to patient eligibility information;

electronic enrollment forms;

and access to all platform features at any time from a PC or mobile device.

Starting patients on specialty therapies like Mytesi can be a complex and time-consuming process.

Implementation of this new, cloud-based system supports the ongoing goal of our NapoCares program to remove barriers for patients to access Mytesi, making it faster and easier for patients to start and stay on the drug by streamlining communications between prescribers, pharmacies, patients, and payers.

iAssist helps patients begin their medication sooner, because the platform facilitates rapid fulfillment of prescriptions and enrollment in patient support services, along with real-time confirmation for commercially and government insured patients of benefits coverage.

The system provides visibility through the prescription process that allows patient status tracking and proactive follow-up support by their providers.

The iAssist platform is provided by AssistRx, a company with experience supporting HIV patients, and a significant percentage of Mytesi providers already leverage the iAssist platform as part of their practice workflow.

Jaguar and Napo are planning to develop and commercialize crofelemer for an indication of treatment of diarrhea in acutely infected COVID-19 patients.

Subsequent clinical studies may also be conducted in post COVID recovery patients suffering from long-hauler syndrome.

An estimated 20%-40% of people with COVID-19 experience diarrhea, nausea, or vomiting before other symptoms (Source:

https://www.ucsf.edu/magazine/covid-body).

The term “long-hauler”, also referred to as long COVID, Post-Acute Sequelae of SARS-CoV-2 infection (“PASC”), and chronic COVID syndrome (“CCS”) , refers to COVID-19 survivors who suffer with symptoms which may include gastrointestinal distress (i.e.

diarrhea, constipation, nausea, pain), fatigue, brain fog, forgetfulness, cardiovascular effects, and arthritis, for an extended period after recovery.

It is theorized that these symptoms may result when the immune system in COVID-19 survivors continues to overreact even though the infection has passed.

Long-hauler syndrome appears to be predominant in younger COVID-19 recovery patients and those who experienced a mild/asymptomatic case.

Our focus on the new potential indication of symptomatic relief of COVID-related diarrhea for crofelemer is driven primarily by the evidence of diarrhea in acute and long-hauler COVID-19 recovery patients.

Enteropathy, an intestinal inflammatory chronic syndrome typically affecting long-term HIV/AIDS survivors, manifests as chronic diarrhea.

We believe this situation is analogous to what we are seeing right now in acute and COVID-19 recovery patients, who report long-term diarrhea or other gastrointestinal dysfunctions.

Endpoints being explored for possible clinical trials of crofelemer would include symptomatic relief of diarrhea, as well as potential reduction in inflammatory gut markers, and explore possible gut biome changes, and/or reduction in viral fecal shedding.

Napo has conducted intellectual property filings in support of the development of crofelemer for the potential indication of addressing inflammatory diarrhea, including for example, in acute COVID and/or long-hauler post-COVID recovery situation.

As with all potential follow-on indications, Napo prioritizes IP protection.

On August 2021, Napo signed a license agreement with Napo EU S.p.A.

to study, develop, manufacture, and commercialize Napo’s plant-based crofelemer and lechlemer drug product candidates in the European Union (excluding Russia) and in specified non-EU countries in Europe for specific indications, which rights and obligations were assumed by the combined company formed by the merger of Napo Therapeutics with Dragon SPAC (the combined company uses the Napo Therapeutics name).

Per the terms of the license agreement, Napo will receive payment of up to $10 million as the initial license fee (to be paid in two installments, the first of which has already been received) as the initial license fee and is eligible to receive additional payments related to milestones, royalties, and product transfers.

In November 2021, Napo Therapeutics appointed Mr.

Massimo Mineo, a veteran of the European pharmaceutical industry for 20+ years, as general manager (the equivalent in Europe of chief executive).

He has significant experience in the field of orphan-drug development and commercialization activities and his leadership is expected to be instrumental in the ongoing development and commercialization activities for crofelemer for the planned SBS-IF indication in the EU.

Mineo is responsible for the strategy, planning, direction, and implementation of all Napo Therapeutics’ commercial, operational, and product development activities within Europe, with success defined by bringing crofelemer to market for key initial target indications, beginning with SBS-IF and CDD.

In November 2021, Napo Therapeutics announced the appointment of Annabella Amatulli as chief regulatory officer.

A recognized expert in global regulatory affairs, Ms.

Amatulli is responsible for both high-level strategic planning and hands-on support for Napo Therapeutics’ development programs and licensed products from a regulatory perspective and serves as the primary liaison between Napo Therapeutics and European health authorities.

In January 2022, Napo Therapeutics announced the appointment of Martire Particco, MD, a physician with 30+ years of experience in Europe’s pharmaceutical industry and in clinical practice, as its CMO for the EU-related development activities of Napo Therapeutics.

Particco possesses in-depth experience in the field of orphan and rare diseases, having been involved in the clinical development and launch of Pfizer’s pulmonary hypertension indication for sildenafil and the clinical development of Kerdion Biopharma’s ligneous conjunctivitis indication for plasminogen, with direct experience with patients and experts treating these rare pathologies.

In February 2022, Napo announced the completion of a third-party, investigator-initiated preclinical enterocyte (intestinal cell) in vitro study to evaluate the effects of crofelemer on cells with certain genetic defects that result in specific forms of CDD.

Jaguar believes that these study results will support certain requests received from the Office of Orphan Products Development at the U.S.

FDA in response to the ODD application Napo filed with the FDA for crofelemer for CDD in infants and children.

The data from this study will support the rare disease business model that Napo Therapeutics is pursuing in Europe under its exclusive license for crofelemer from Jaguar and Napo.

CDD patients have intestinal failure and morbidity resulting in a failure to thrive due to malabsorption of nutrients and need parenteral nutrition.

We believe the novel mechanism of action of crofelemer may have considerable potential to manage the severe secretory loss of electrolytes and fluid resulting in dehydration.

There are currently no therapies for CDD except parenteral nutrition.

Thus, crofelemer may reduce the associated morbidity and mortality of CDD and lessen the need for total parenteral nutrition (“TPN”).

Napo has actively ensured that its intellectual property (“IP”) filings in support of the development of crofelemer for various proposed indications are protected appropriately.

The IP portfolio for crofelemer includes the relief and treatment of HIV-associated diarrhea and chemotherapy-induced diarrhea as well as planned indications for inflammatory diarrhea, IBS-D, CID and SBS, with all indications, Napo prioritizes IP protection.

Napo currently holds approximately 143 patents, the majority of which do not expire until 2027 - 2031, and approximately 43 patents pending.

On February 18, 2021, Jaguar signed a memorandum of understanding (the “MOU”) with the lead sponsor of a to-be-formed special purpose acquisition company (the “Dragon SPAC”), which is pursuing listing on AIM Italia.

Per the MOU, Napo EU, Jaguar’s wholly-owned subsidiary in Italy, will be the named target of the Dragon SPAC and has granted the Dragon SPAC exclusivity to negotiate and finalize the documentation for a contemplated merger transaction.

Based on the MOU, Jaguar anticipates providing an exclusive license to Napo EU for the development, manufacture and commercialization of all planned crofelemer indications in Europe (excluding Russia), which rights and obligations shall be assumed by the combined company following a merger of Napo EU with the Dragon SPAC.

The cornerstone of the license agreement will be the proposed COVID-related indication;

however, the expected license will include all crofelemer pipeline indications of Napo Pharmaceuticals, Inc., Jaguar’s wholly owned U.S.-based subsidiary, with certain obligations to be met by Napo EU to maintain the license, indication by indication.

The Dragon SPAC is in the process of being formed with lead sponsorship by Josh Mailman.

A well-known, New York City-based impact investor.

Mailman co-founded Social Venture Network (now Social Venture Circle) in 1987, founded the Threshold Foundation in 1981, and founded Business for Social Responsibility in 1992.

He is also the managing director of Serious Change L.P., a $100 million privately held impact fund he started in 2006, serves on the boards of Benefithub, Giving Assistant, Baltix Design, and Red Rabbit, and is an advisor to Social Venture Circle and the Threshold Foundation.

It is estimated that as high as one-third of COVID-19-infected patients develop acute and/or chronic or long-hauler syndrome – a constellation of post-viral infection symptoms (Source:

Fauci Warns These COVID Symptoms Can Last for Months, Alex Korab, Newsbreak.

https://www.newsbreak.com/news/2104072336660/dr-fauci-warns-these-covid-symptoms-can-last-for-months).

According to a November 1, 2020 Wall Street Journal article, the majority of the more than 300 long-COVID patients being seen at New York City's Mount Sinai Health System Center for Post-Covid Care appeared to have developed a dysautonomia-like condition, and about 40% to 50% of these patients also reported symptoms such as gastrointestinal issues, headaches and shortness of breath (Source:

Doctors Begin to Crack Covid's Mysterious Long-Term Effects, Sarah Toy, Sumathi Reddy, Daniela Hernandez, Wall Street Journal , November 1, 2020.

https://www.msn.com/en-us/health/health-news/doctors-begin-to-crack-covid-s-mysterious-long-term-effects/ar-BB1aAS6V).

Based on these figures, the long-hauler population experiencing gastrointestinal distress could potentially range between 20 to 70 million people just in Europe.

Our intention is to focus clinical exploration for the proposed COVID-related indication for crofelemer in Europe, where single-payer healthcare systems are interested in preventative measures to diagnose and treat symptoms early that can potentially reduce the burden of chronic illness later.

The Company has engaged a regulatory agent in Europe and had a meeting with European regulatory authorities in March 2021.

As part of Jaguar’s investigation into the feasibility of the conditional marketing authorization pathway, which provides a fast-track clinical review process during public health emergencies, the Company plans to request meetings with the European Medicines Agency (“EMA”), Swiss Agency for Therapeutic Products (“Swissmedic”), and the Medicines and Healthcare products Regulatory Agency (“MHRA”) of the United Kingdom.

The EMA, in particular, has established regulatory approval schemes for COVID-19-related treatments.

The Company has engaged a European regulatory firm that has experience with the conditional approval pathway in Europe.

In October 2020, Napo initiated its pivotal Phase 3 clinical trial of Mytesi for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy.

The Phase 3 pivotal clinical trial is a 24-week (two 12-week stages), randomized, placebo-controlled, double-blind study to evaluate the safety and efficacy of Mytesi in providing prophylaxis of diarrhea in adult cancer patients with solid tumors receiving targeted cancer therapy-containing treatment regimens.

Mytesi or placebo treatment will start concurrently with the targeted cancer therapy regimen.

The primary endpoint will be assessed at the end of the initial (Stage I) 12-week double-blind placebo-controlled primary treatment phase.

In October 2020, Napo initiated its pivotal Phase 3 clinical trial of crofelemer (Mytesi) for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy (OnTarget study).

The Phase 3 OnTarget clinical trial is a 24-week (two 12-week stages), randomized, placebo-controlled, double-blind study to evaluate the safety and efficacy of crofelemer in the prophylaxis of diarrhea in adult cancer patients with solid tumors receiving targeted cancer therapy-containing treatment regimens.

Patients will be randomized to receive either crofelemer or matching placebo treatment that will start concurrently with the initiation of targeted cancer therapy regimen.

The primary endpoint will be assessed at the end of the initial (Stage I) 12-week double-blind placebo-controlled primary treatment phase after the last patient has completed 12 weeks of treatment.

After completing the Stage I treatment phase, the subjects will have the option to remain on their assigned treatment arm and reconsent to enter into the Stage II 12-week extension phase.

The safety and efficacy of orally administered Mytesi will be evaluated for the prophylaxis of diarrhea in adult cancer patients receiving targeted cancer therapies with or without standard chemotherapy regimens.

The assessment of the frequency of diarrhea will be measured by the number of loose and/or watery stools for the Stage I treatment period.

The safety and efficacy of orally administered crofelemer will be evaluated for the prophylaxis of diarrhea in adult cancer patients receiving targeted cancer therapies with or without standard chemotherapy regimens.

The assessment of the frequency of diarrhea will be measured by the average number of weekly loose and/or watery stools for the active (crofelemer) or placebo arms over 12-week Stage I treatment period.

A significant proportion of patients undergoing cancer therapy experience diarrhea.

Novel “targeted cancer therapy” agents, such as epidermal growth factor receptor (“EGFR”) antibodies and tyrosine kinase inhibitors (“TKIs”), with or without cycle chemotherapy agents, may activate intestinal chloride ion channel-mediated secretory pathways leading to increased electrolyte and fluid content in the gut lumen, which results in passage of loose/watery stools, i.e.

secretory diarrhea.

Many cancer patients on targeted therapy require drug holidays or dose reductions in their therapy due to diarrhea.

Reducing frequency of watery stools will provide symptomatic relief of diarrhea and should allow better adherence to the therapeutic dosing of any targeted therapies, potentially leading to better clinical outcomes.

We have learned from business development discussions with cancer drug manufacturers that adoption and continued use of

targeted cancer therapies is directly related to the ability of patients to tolerate use of the therapies – highlighting the importance of supportive care drugs like Mytesi to help manage cancer treatment-related diarrhea in this patient population.

As announced in June 2020, a preclinical study evaluating the effects of crofelemer (Mytesi) in providing symptomatic relief of diarrhea associated with the irreversible pan-HER TKI neratinib was presented as an e-poster at the American Association for Cancer Research Virtual Annual Meeting II, which took place June 22 - 24, 2020.

The study provides scientific rationale for the use of crofelemer in providing symptomatic relief of watery diarrhea in patients receiving a targeted cancer therapy drug like neratinib with or without cycle chemotherapy in future clinical studies.

This 28-day preclinical pharmacological study in healthy female dogs was designed to evaluate the scientific rationale for the use of crofelemer in reducing the severity and incidence of diarrhea associated with a tyrosine kinase inhibitor (neratinib).

The study was conducted without the prophylaxis or concomitant use of loperamide and demonstrated that crofelemer caused an approximate 30% reduction in the incidence and severity of diarrhea associated with daily oral administration of neratinib, which was statistically significant, within the 28-day period.

With increased approval of several novel targeted therapies, it is estimated that 13.6% of cancer patients in 2020 were eligible for targeted therapies with or without standard chemotherapy regimens, according to a paper published in April 2021 in the journal Annals of Oncology 1 .

According to the National Cancer Institute, in 2020, 1,806,590 new cases of cancer were diagnosed and nearly 250,000 of these newly diagnosed patients could be eligible for available targeted therapies.

Due to the chronic dosing and toxicity associated with targeted therapies, many cancer patients on targeted therapy require drug holidays or dose reductions in their therapy, including those due to diarrhea.

By improving stool consistency and reducing the frequency of watery stools, crofelemer is expected to provide improved adherence to the therapeutic dosing of any targeted therapies, potentially leading to better clinical outcomes.

We have learned from business development discussions with cancer drug manufacturers that the adoption and continued use of targeted cancer therapies is directly related to the ability of patients to tolerate these therapies—highlighting the importance of supportive care drugs like crofelemer to help manage cancer treatment-related diarrhea in this patient population.

As previously announced, an abstract regarding patient outcomes associated with cancer-related diarrhea (“CRD”) by Napo and Napo's collaborators was accepted for poster presentation at the American Society of Clinical Oncology (ASCO®) Annual Meeting, which was held virtually from June 4-8, 2021.

This study found that patients with CRD were 40% more likely to discontinue the chemotherapy or targeted therapy than patients without CRD.

The persistence of index cancer therapy and time to switch were also lower for patients with CRD.

Strategies to control CRD and continue cancer therapy are urgently needed 2 .

In addition, two CRD-related abstracts from Napo and its collaborators were accepted for online publication at ASCO.

One of these studies found that patients with CRD used significantly more resources, including outpatient services, ED visits, and hospitalizations.

Effective prevention of CRD remains an unmet strategy to reduce the overall

Prasad, Updated estimates of eligibility for and response to genome-targeted oncology drugs among US cancer patients, 2006-2020

Okhuysen, M.D., Lee Schwartzberg, M.D., FACP, Eric Roeland, M.D., FAAHPM , The impact of cancer-related diarrhea on changes in cancer therapy patterns:

Real world evidence

cost of cancer care 3 .

Findings from the other study indicated that patients with CRD had nearly 2.9 times higher all-cause total cost than patients without CRD after adjusting for covariates.

Prevention of CRD may result in a significant reduction in cancer-treatment cost 4 .

As previously announced in June 2020, the effects of crofelemer (Mytesi) were evaluated in reducing diarrhea associated with the irreversible pan-HER TKI neratinib in female dogs.

The data were presented at the American Association for Cancer Research (“AACR”) Annual Meeting II in 2020.

The results from the dog study provide further scientific support for the evaluation of crofelemer in providing symptomatic relief of watery diarrhea in patients receiving a targeted cancer therapy drug like neratinib with or without cycle chemotherapy, without the use of antimotility drugs like loperamide, in future clinical studies.

The dog study was conducted without the prophylaxis or concomitant use of loperamide and demonstrated that crofelemer caused an approximate 30% reduction in the incidence and severity of diarrhea associated with daily oral administration of neratinib, which was statistically significant, within the 28-day period.

Crofelemer also demonstrated significant improvement in the proportion of responder dogs, and there was a trend for fewer neratinib dose reductions in both crofelemer treatment groups when compared to the control group.

In October 2020, the Company held a “Diarrhea Dialogues” virtual event for the financial and business community to address the importance of diarrhea and supportive care for cancer patients as it relates to chronic lower GI tract distress, and the debilitating effects of diarrhea experienced as a result of cancer and/or cancer therapy.

Speakers addressed the impact of diarrhea on cancer patients;

common side effects of cancer therapies and management of symptoms;

data and experience of diarrhea in cancer patients and the importance of the patient and physician dialogue to the management of CTD.

A 28-day preclinical toxicology and safety study in dogs began January 6, 2021 to support development of lechlemer, Napo’s second generation, plant-based anti-secretory drug candidate for the symptomatic relief of diarrhea from cholera.

Napo is receiving preclinical services from the National Institute of Allergy and Infectious Diseases (“NIAID”) to support lechlemer development.

NIAID is part of the National Institutes of Health.

Under NIAID's suite of preclinical services, NIAID-funded contractors are conducting the 28-day dog study.

We are grateful for NIAID's support to conduct this important 28-day toxicity and safety study in dogs, which is expected to support the Investigational New Drug (“IND”) application we plan to file for lechlemer.

As previously announced, a 28-day preclinical toxicology study in rats to support lechlemer development for the symptomatic relief of diarrhea from cholera was initiated in July of last year.

Under NIAID's suite of preclinical services, NIAID-funded contractors also conducted the initial 7-day dog and rat toxicology studies, and completion of these shorter studies allowed for initiation of the longer-term, 28-day, IND-enabling toxicity studies.

We believe that lechlemer, which has the same mechanism of action as crofelemer and is significantly less costly to produce, may support development efforts to receive a priority review voucher from the FDA for an indication for the symptomatic relief of diarrhea from cholera.

Priority review vouchers are granted by the FDA as an incentive to develop treatments for neglected diseases and rare pediatric diseases.

Priority review vouchers are transferable and, in past transactions by other companies, have sold for prices ranging from $67 million to $350 million.

Additionally, we believe lechlemer represents a long-term pipeline opportunity as a second-generation anti-secretory agent, on a global basis, for multiple gastrointestinal diseases - especially in resource-constrained countries, in part, because requirements often exist in such regions for drug prices to decrease annually.

The results and finding from a clinical, third-party investigator-initiated Phase 2 study (called HALT-D) evaluated the effectiveness of crofelemer for reduction of diarrhea in HER2 positive breast cancer patients receiving trastuzumab, pertuzumab, and chemotherapy agents such as docetaxel or pacilitaxel with or without carboplatin.

The investigators of the HALT-D study, sponsored by Georgetown University and funded by Genentech, a member of the Roche Group, were presented at the San Antonio Breast Cancer Symposium on December 10, 2021.

It has been reported that these pertuzumab-containing regimens cause diarrhea in up to 80% of breast cancer patients and approximately 8 to 12% of patients reach grade 3, which often requires hospitalization.

No antidiarrheal medications are currently approved that specifically target the underlying mechanism of CID associated with pertuzumab-containing regimens.

Recent studies have shown that EGFR inhibitors cause increased chloride secretion into the lumen of the gut and Crofelemer through its unique and novel mechanism of reducing the chloride-secretory actions of the cystic fibrosis transmembrane conductance regulator (“CFTR”) and calcium-activated chloride channels (CaCC), was considered to be mechanistically- and physiologically-appropriate for reducing the loss of electrolyte and fluid in breast cancer patients receiving this regimen.

The Principal Investigator (“PI”), Paula Pohlmann, MD, PhD, Associated Professor at the University of Texas MD Anderson Cancer Center and formerly from Georgetown University, reported the results of the HALT-D study.

This clinical study evaluated 51 breast cancer patients that were eligible to receive at least three cycles of pertuzumab-containing regimen with chemotherapy that were randomly assigned to either crofelemer in cycles 1 and 2 or the control group, in which patients received standard of care.

Breakthrough anti-diarrheal medicines (“BAM”) were permitted but not given prophylactically.

Findings showed that the primary endpoint, the incidence of diarrhea for at least two consecutive days, was not statistically different for the two groups.

However, crofelemer patients demonstrated significantly better outcomes compared to control group patients across a number of key secondary endpoints including reductions in the incidence and severity of diarrhea in cycle 2 based on Investigator and Patient Reported Outcomes (“PRO”) (see Jaguar Health's November 19, 2021 press release).

In the presentation, additional findings were reported that showed that CID occurred significantly lesser (by 23%) in the crofelemer group during cycle 1 and crofelemer patients were 1.8 times more likely than control patients to have their diarrhea resolved.

These data provide concordance to the planned primary endpoint in Napo’s ongoing phase 3 OnTarget study.

Pohlmann commented that the HALT-D study showed benefits of crofelemer across a range of important diarrhea-related measures, including its incidence, severity and probability of resolving and that the lack of difference in the primary endpoint was because about 70% of the patients in both groups would have at least two consecutive days of diarrhea regardless of cycle or CID treatment group.

The incidence of two consecutive days of diarrhea is

3 Lee Schwartzberg, M.D., FACP, Eric Roeland, M.D., FAAHPM, Pablo C.

Okhuysen, M.D., Characterizing unplanned resource utilization associated with cancer-related diarrhea

4 Eric Roeland, M.D., FAAHPM, Pablo C.

Okhuysen, M.D., Lee Schwartzberg, M.D., FACP, Healthcare utilization and costs associated with cancer-related diarrhea

typical in cancer patient experiences from receiving chemotherapy regimens and is thus not clinically relevant as it does not differentiate the severity nor duration of CID among treatment groups.

Pohlmann also commented that the secondary endpoints provided a more relevant assessment of CID, which may guide future studies that address this significant comorbidity in cancer patients receiving such regimens.

Napo is also continuing to conduct preclinical and formulation activities to support the evaluation of its second generation, plant-based oral prescription drug product, NP-300 (lechlemer), for its planned evaluation in the symptomatic treatment of diarrhea associated with acute infections including that from Vibrio cholerae.

Cholera produces a devastating loss of electrolytes and fluid in patients and without appropriate reduction in loss of fluid and electrolytes, patients experience significant hospitalization and mortality.

Lechlemer provides the opportunity to treat cholera patients in combination with oral rehydration salts (“ORS”) and the recommended guidelines from the World Health Organization (“WHO”) for the use of appropriate antibiotics to reduce the burden of the pathogen.

Appropriate preclinical toxicity studies and formulation development activities are ongoing to support the conduct of clinical studies with lechlemer.

As previously mentioned, Napo completed 7-day and 28-day preclinical toxicology and safety studies in rats and dogs with lechlemer (NP-300) following repeated daily oral dosing.

Napo received partial support for preclinical services from the National Institute of Allergy and Infectious Diseases (“NIAID”) of the National Institutes of Health, and Napo is grateful for their partial support of lechlemer’s development.

Napo is currently conducting additional, prerequisite IND-enabling toxicity studies and also developing appropriate oral solid dosage forms to allow the clinical evaluation of lechlemer.

The Company plans to provide appropriate regulatory documents by end of the second quarter of 2022 to support the initiation of first-in-human (“FIH”) evaluation in the third quarter of 2022.

Cholera is an acute diarrheal illness caused by infection of the intestine with the bacterium Vibrio cholerae.

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Without treatment, death can occur within hours.

cholera outbreak in recorded history recently occurred in Yemen.

The largest cholera outbreak in recorded history recently occurred in Yemen.

According to Oxfam, the number of cholera cases in Yemen in 2019 was the second largest ever recorded in a country in a single year, surpassed only by the numbers in Yemen in 2017.

According to the Brookings Institution, cholera continues to spread in Yemen, with 180,000 new cases reported in the first eight months of 2020.

Lechlemer is a drug candidate under the botanical guidance of the FDA.

It is a standardized and proprietary Napo botanical extract that is distinct from Mytesi (crofelemer), the company's FDA-approved drug product, and lechlemer is sustainably derived from the same source as Mytesi:

the Croton lechleri tree.

The Company has previously presented Phase 2 data on crofelemer for the treatment of devastating dehydration in cholera patients from the renowned International Centre for Diarrhoeal Disease Research (icddr,b) in Bangladesh.

Napo plans to follow the same study design for lechlemer.

In September 2020, Jaguar launched the Entheogen Therapeutics (“ETI”) initiative to support the discovery and development of novel, natural medicines derived from psychoactive plant compounds for treatment of mood disorders, neuro-degenerative diseases, addiction, and other mental health disorders.

We expect that lechlemer will be significantly less expensive and would support development efforts to receive a tropical disease priority review voucher from the FDA for an indication for the symptomatic treatment of diarrhea from acute infections such as cholera.

Priority review vouchers are granted by the FDA as an incentive to develop treatments for neglected diseases and rare pediatric diseases.

Priority review vouchers are transferable and, in past transactions by other companies, have sold for prices ranging from $60 million to $350 million.

Additionally, we believe lechlemer may provide a long-term pipeline opportunity as a second-generation anti-secretory agent for multiple gastrointestinal diseases—especially in resource-constrained countries.

Napo received advice from the Division of Anti-Infectives at the U.S.

FDA in September 2021 as part of the pre-investigational New Drug Application (“Pre-IND”) discussion.

Napo plans to include the advice in its plans for the Phase 1 clinical trial in healthy volunteers, currently planned the second half of 2022.

The NP-300 (lechlemer) program is paired with funding from a promissory note related to the potential future sale of a possible TDPRV.

As previously announced, the Company also launched the Entheogen Therapeutics (“ETI”) initiative to support the discovery and development of novel, natural medicines derived from psychoactive and psychedelic plant compounds for treatment of mood disorders, neuro-degenerative diseases, addiction, and other mental health disorders.

The initiative is initially focused on plants with the potential to treat depression and leverages Napo’s proprietary library of approximately 2,300 plants with medicinal properties.

According to statistics available from the National Institute of Mental Health Disorders, part of the National Institutes of Health, approximately 9.5% of American adults ages 18 and over will suffer from a depressive illness (major depression, bipolar disorder, or dysthymia) each year.

Field research collaborations conducted in the past by members of the scientific strategy team (“SST”) of Jaguar’s predecessor company Shaman Pharmaceuticals, who are also members of the ETI SST, yielded possible applications for a compound called alstonine.

According to statistics available from the

National Institute of Mental Health Disorders, part of the National Institutes of Health, approximately 9.5% of American adults ages 18 and over will suffer from a depressive illness (major depression, bipolar disorder, or dysthymia) each year.

Field research collaborations have been conducted in the past by members of the scientific strategy team (“SST”) of Jaguar’s predecessor company Shaman Pharmaceuticals, who are also members of the ETI SST, yielded possible applications for a compound called alstonine.

Alstonine is derived from a plant used by traditional healers in Nigeria, and has demonstrated a potential novel mechanism of action for the treatment of difficult to manage conditions such as schizophrenia.

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Mood disorders and neurodegenerative diseases affect hundreds of millions of people around the globe and represent classic unmet medical needs.

While Jaguar and Napo remain steadfastly focused on the commercial success of Mytesi and on the development of potential crofelemer follow-on indications in the area of gastrointestinal health, the Company believes the same competencies and multi-disciplinary scientific strategy that led to the development of crofelemer will support collaborative efforts with potential partners to develop novel first-in-class prescription medicines derived from psychoactive plants.

Canalevia (crofelemer delayed-release tablets) is Jaguar’s oral plant-based drug candidate to treat chemotherapy-induced diarrhea (“CID”) in dogs and exercise-induced diarrhea (“EID”) in dogs.

As announced in August 2020, the FDA's Center for Veterinary Medicine (“CVM”) has confirmed the completeness of Jaguar's Reasonable Expectation of Effectiveness technical section for CID, as well as the Chemistry, Manufacturing and Controls (“CMC”) and Environmental Impact technical sections of the Company's applications for conditional approval of Canalevia for both CID and EID under the Minor Use/Minor Species (“MU/MS”) section of The Minor Use and Minor Species Animal Health Act of 2004.

We expect that Canalevia could be available under conditional approval to treat both CID and EID in the second half of 2021.

According to current estimates, more than 230,000 dogs in the U.S.

receive chemotherapy treatment for various cancers each year, and roughly one in four (more than 50,000 dogs) will experience diarrhea as a side effect of

There currently is no FDA-approved anti-secretory prescription product to manage this type of debilitating diarrhea in dogs.

Managing this type of debilitating diarrhea in dogs undergoing cancer treatment is not only a comfort issue for dogs, it may also help dogs better tolerate their chemotherapy once CID is under control and improve the home and living environment for dog owners.

For these reasons, we believe Canalevia will be an important treatment option for veterinary healthcare teams and dog owners.

While Napo and Jaguar remain steadfastly focused on the commercial success of Mytesi and Canalevia-CA1, respectively, and on the development of potential crofelemer follow-on indications in the area of gastrointestinal treatments, the Company believes the same competencies and multi-disciplinary scientific strategy that led to the development of crofelemer will support collaborative efforts with potential partners to develop novel first-in-class prescription medicines derived from psychoactive plants.

Our management team has significant experience in gastrointestinal product development for both humans and animals.

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Steven King, our chief sustainable supply, ethnobotanical research and intellectual property officer, and Lisa Conte, our founder, president and CEO, have worked together for more than 30 years.

Together, these dedicated personnel successfully transformed crofelemer, which is extracted from trees growing in the rainforest, to Mytesi, which is a natural, sustainably harvested, FDA-approved drug available from essentially any pharmacy in the United States.

We have buttressed the early founding team with the expertise and experiences of team members like Dr.

Darlene Horton and Dr.

Karen Brunke to support the continued development and commercialization activities of the Napo and Jaguar family.

We have assembled an impressive group of scientific advisory board (SAB) members that work closely with the Chair of Jaguar’s Scientific Advisory Board, Dr.

Pravin Chaturvedi, who also serves as the Chief Scientific Officer (“CSO”) of Jaguar.

Together, these dedicated personnel successfully transformed crofelemer, which is extracted from trees growing in the rainforest, to Mytesi and Canalevia-CA1, which are natural, sustainably harvested, FDA-approved drugs.

As announced in February 2020, the American Botanical Council named Napo the recipient of the 2019 Varro E.

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Pipeline within a product—crofelemer

According to the World Health Organization, there are nearly 1.7 billion cases of diarrheal disease globally every year, and the disease caused an estimated 1.5 million deaths in 2012.

Although not all types of diarrhea are secretory in nature, we view the current, initial approval of Mytesi as the opening of the door to an important pipeline—underscored by the current approval by the FDA of the CMC for this natural product, as well as acknowledgement by the FDA of the safety of the product for chronic use for the approved indication.

Crofelemer is in development for the symptomatic relief of cancer therapy-related diarrhea.

As announced in October 2020, Napo has initiated its pivotal Phase 3 clinical trial of crofelemer (Mytesi) for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy.

Crofelemer is currently being evaluated for the prophylaxis of CTD in adult patients receiving targeted therapy.

As announced in October 2020, Napo has initiated its pivotal Phase 3 clinical trial of crofelemer (Mytesi) for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy (OnTarget study).

A significant proportion of patients undergoing cancer therapy experience diarrhea.

Novel targeted cancer therapy agents, such as epidermal growth factor receptor antibodies and tyrosine kinase inhibitors, with or without cycle chemotherapy agents, may activate intestinal chloride secretory pathways leading to increased chloride secretion into the gut lumen, coupled with significant loss of water that would result in secretory diarrhea.

Novel targeted cancer therapy agents, such as epidermal growth factor receptor antibodies and tyrosine kinase inhibitors, with or without cycle chemotherapy agents, may

activate intestinal chloride secretory pathways leading to increased chloride secretion into the gut lumen, coupled with significant loss of water that would result in secretory diarrhea.

According to data appearing in “Treatment Guidelines for CID” (chemotherapy induced diarrhea) in the April 2004 issue of Gastroenterology and Endoscopy News, diarrhea is the most common adverse event reported in chemotherapy patients.

Approved third-party supportive care products for chemotherapy induced nausea and vomiting (“CINV”) include Sustol, Aloxi, Akynzeo and Sancuso.

According to Transparency Market Research, sales of therapeutics for the prevention of CINV approximated $620 million in 2013, and sales of such therapeutics are expected to reach $1 billion in 2020.

According to a report published by Allied Market Research, the global CINV market was valued at $1.66 billion in 2015 and is estimated to reach $2.66 billion by 2022.

Diarrhea has been reported as the most common side effect of the recently approved CDK 4/6 inhibitor abemaciclib and the pan HER TKI neratinib, with occurrence ranging from 86% to >95% and grade 3 over 40%, in published studies.

Diarrhea in this patient population has the potential to cause dehydration, potential infections, and non-adherence to treatment.

A novel anti diarrheal like Mytesi may hold promise for treating secretory diarrhea—and therefore also support long term cancer treatment adherence—in this population.

An ongoing investigator-initiated trial (“IIT”), HALT D, utilizing Mytesi is underway.

Enrollment is ongoing for this study in breast cancer patients receiving regimens containing Herceptin and Perjeta.

Top line results for the study are expected to be available in the second half of 2021.

This study, which is not required to support the clinical program for Mytesi for FDA approval for CTD, is sponsored by Georgetown University and funded by Genentech, a member of the Roche Group.

The study’s primary endpoint has an 81% power to detect a 40% difference in the percent and/or number of patients experiencing any grade of diarrhea for two consecutive days at a p value of 0.1.

(The statistical power of a study, sometimes referred to as a study’s sensitivity, is a measure of how likely the study is to distinguish an actual effect from one of chance).

For the sake of clarity, the estimates of the percent of patients experiencing such diarrhea is postulated to be 60% in the placebo patients and 20% in the study’s crofelemer treated arms.

An interim analysis was conducted to ensure that the study has a chance to ultimately achieve the primary endpoint.

Previously, Georgetown University's Data Safety Monitoring Committee (“DSMC”) reviewed the interim analysis for futility for the study and notified the Principal Investigator that the study is allowed to enroll to completion.

At that point in time, enrollment in the study exceeded 85%.

The treatment period for each patient is 3 months.

Napo expects to initiate a Phase 1/2 pediatric study of crofelemer in the second half of 2021 at US and Middle East sites for infants and children with CDD.

A novel antidiarrheal like crofelemer may hold promise for treating secretory diarrhea—and therefore also support long term cancer treatment adherence—in this population.

Napo has previously received orphan drug designation from the FDA for adult and/or pediatric SBS.

The Orphan Drug Act provides for granting special status to a drug or biological product to treat a rare disease or condition upon request of a sponsor.

Orphan drug designation qualifies the sponsor of the drug for various development incentives, including extended exclusivity, tax credits for qualified clinical testing, and relief of filing fees.

As mentioned above, Napo Therapeutics has licensed the rights for the orphan and rare diseases associated with SBS and CDD with IF.

Napo Therapeutics expects that an IIT in pediatric patients with CDD will study crofelemer in the second half of 2022.

This study will be initiated in the Middle East/North Africa (“MENA”) region with sites that treat infants and children with CDD and SBS with IF.

CDD is a group of rare, chronic intestinal channel diseases, with onset in early infancy, that are characterized by severe, lifelong diarrhea and a lifelong need for nutritional intake either parenterally or with a feeding tube.

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CDD is directly associated with serious secondary conditions including dehydration, metabolic acidosis, and failure to thrive, prompting the need for immediate therapy to prevent death and limit lifelong disability.

In December 2019, a clinical research study was initiated and sponsored by The University of Texas Health Science Center at Houston (“UTHealth”) and is being supported by Napo.

The study will evaluate the safety and effectiveness of crofelemer for treatment of chronic idiopathic diarrhea in patients.

A recent preclinical study shows that crofelemer reduces the chloride secretion in intestinal cells derived from patients with CDD and these preclinical results provide additional support and rationale for the use of crofelemer in treating patients with CDD and/or SBS with IF.

As previously announced (in 2019), a clinical research study sponsored by The University of Texas Health Science Center at Houston (“UTHealth”) is being supported by Napo.

This study evaluates the safety and effectiveness of crofelemer for treatment of chronic idiopathic diarrhea in patients.

Chronic idiopathic diarrhea is a common complaint of patients presenting to family practitioners and internists and is one of the most common reasons for referral to gastroenterologists.

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The American Gastroenterological Association Burden of Illness study (2012) showed that the estimated annual direct and indirect costs associated with chronic idiopathic diarrhea is up to $524 million per year and $136 million per year, respectively.

The principal investigator for the Study is Dr.

The principal investigator for this study is Dr.

Cash, MD, AGAF, FACG, FACP, FASGE, Chief – Division of Gastroenterology, Hepatology and Nutrition, Sterling Professor of Medicine, McGovern Medical School at UTHealth, Co-Director, Ertan Digestive Disease Center at Memorial Hermann-Texas Medical Center.

The Study is titled Yield of Diagnostic Tests and Management of Crofelemer for Chronic Idiopathic Diarrhea in Non-HIV Patients.

A Pilot Study, and is a single-center trial at UTHealth.

Crofelemer is also being evaluated in another investigator-initiated trial for the management of functional diarrhea in non-HIV patients.

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However, no more than 11 doses of 2 mg loperamide will be permitted during any given week per subject.

Topline results for this study are expected in the fourth quarter of 2021.

Napo has previously received orphan drug designation from the FDA for adult and/or pediatric SBS.

The Orphan Drug Act provides for granting special status to a drug or biological product to treat a rare disease or condition upon request of a sponsor.

Orphan drug designation qualifies the sponsor of the drug for various development incentives, including extended exclusivity, tax credits for qualified clinical testing, and relief of filing fees.

Jaguar’s and Napo’s portfolio development strategy involves meeting with Key Opinion Leaders (“KOLs”) to identify indications that are potentially high-value because they address important medical needs that are significantly or globally unmet, obtain input on protocol practicality and protocol generation, and then strategically sequencing indication development priorities, second-generation product pipeline development, and partnering goals on a global basis, as well as identifying possible opportunities for a Special Protocol Assessment (“SPA”) from the FDA.

When granted, SPA provides that, upon request, FDA will evaluate within 45 days certain protocols to assess whether they are adequate to meet scientific and regulatory requirements identified by the sponsor.

In 2007, under the SPA process, Napo obtained agreement with the FDA for the design of the pivotal study protocol for the currently approved indication of crofelemer (Mytesi) for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy.

The 2007 SPA agreement was an important milestone for Napo, allowing Napo to address and mitigate regulatory uncertainty prior to the completion of its final Phase 3 trial of crofelemer for its currently approved indication.

Mytesi is the only antidiarrheal drug that has been approved by the US FDA for the treatment of chronic, noninfectious diarrhea in adult HIV/AIDS patients receiving antiretroviral therapy (“ART”).

Jaguar’s and Napo’s portfolio development strategy involves meeting with Key Opinion Leaders (“KOLs”) to identify indications that are potentially high value because they address important medical needs that are significantly or globally unmet, obtain input on protocol practicality and protocol generation, and then strategically sequencing indication development priorities, second generation product pipeline development, and partnering goals on a global basis.

Mytesi is the only antidiarrheal drug that has been approved by the US FDA for the treatment of chronic, noninfectious diarrhea in adult HIV/AIDS patients receiving ART.

This approval was on the basis of the drug’s safety and efficacy in reducing the number of weekly and daily watery stools in patients and improvement of stool consistency, from unformed to formed stools, over a 24-week treatment period.

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Crofelemer is also the only approved antidiarrheal drug that is approved for chronic use.

Moreover, it is not an opioid, like other traditionally used treatments;

thus avoiding both the acute side effect of constipation and the potential for abuse.

Napo plans to ensure an adequate supply of Mytesi tablets to support any requests for administration of Mytesi to address the COVID-19 pandemic.

Napo’s HIV Scientific Advisory Board has focused primarily on physician education, and community and global awareness regarding the importance and availability of solutions for neglected comorbidities, such as the first-in-class anti-secretory mechanism of action of Mytesi for its currently approved indication.

According to a 2017 report from Research and Markets, the combined global market for prescription and OTC gastrointestinal agents is expected to reach $21 billion by 2025.

Jaguar estimates that a first in class anti secretory agent should be able to achieve a significant portion of the market share.

Moreover, it is not an opioid, like other traditionally used treatments, thus avoiding both the acute side effect of constipation and the potential for abuse.

Napo’s Scientific Advisory Board has focused primarily on physician education, and community and global awareness regarding the importance and availability of solutions for neglected comorbidities, such as the first in class anti secretory mechanism of action of Mytesi for its currently approved indication.

There are significant barriers to entry for Mytesi (crofelemer).

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We also have approximately 43 pending patent applications worldwide in the human health areas that are being prosecuted.

Mytesi is the first oral drug approved by the FDA under botanical guidance, which provides another barrier to entry from potential generic competition.

Mytesi is the first oral drug approved under the FDA’s Botanical Guidance, which provides another barrier to entry from potential generic competition.

The FDA requires that the manufacturer of crofelemer use a validated proprietary bioassay to release the drug substance and drug product of Mytesi.

While most generic products are fashioned to meet chemical release specifications that are in the public domain, the specifics of this assay are not publicly available.

There is no pathway by which a generic product can be developed for a drug approved under

botanical guidance.

There is no pathway by which a generic product can be developed for a drug approved under botanical guidance.

In addition, Mytesi is minimally absorbed systemically, so the classic approach of creating a generic drug by matching pharmacokinetic blood levels is not possible.

A generic player would have to conduct costly and risky clinical trials.

While Jaguar’s commercial and development efforts have evolved to focus primarily on Mytesi and human pipeline indications since its merger with Napo, the Company is continuing limited initiatives related to Canalevia, our drug product candidate for treatment of CID in dogs and EID in dogs.

CID in dogs is typically caused by the same mechanism of action as in humans, and hence the work in dogs serves as a preclinical proof of concept for the diarrhea in humans that is related to targeted cancer therapy.

While Jaguar’s commercial and development efforts have evolved to focus primarily on Mytesi and human pipeline indications since its merger with Napo, the Company has commenced launch initiatives related to Canalevia-CA1, our drug product which received conditional approval in December 2021 for treatment of CID in dogs.

CID in dogs is typically caused by the same mechanism of action as in humans, and hence the work in dogs serves as a

preclinical proof of concept for the diarrhea in humans that is related to targeted cancer therapy.

CID is an interesting model for human medical need and is being pursued as a prescription indication for animal health.

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Certain cancer treatment agents provided to dogs are human drugs or have the same mechanism of action as human cancer drugs, and these agents and mechanisms of action often have meaningful rates of diarrhea in humans as well.

As announced in August 2020, the FDA's CVM has confirmed the completeness of Jaguar's Reasonable Expectation of Effectiveness technical section for CID, as well as the CMC and Environmental Impact technical sections of the Company's applications for conditional approval of Canalevia for both CID and EID in dogs under the MU/MS section of The Minor Use and Minor Species Animal Health Act of 2004.

We expect that Canalevia could be available under conditional approval to treat both CID and EID in the second half of 2021.

The Target Animal Safety Technical Section contains data from a 2017 target animal safety study indicating that the no-observed-adverse-effect level (“NOAEL”) of Canalevia in dogs is approximately six times greater than previously demonstrated and that Canalevia is also safe for use in puppies.

The safety of veterinary drugs is most commonly addressed through the conduct of target animal safety studies that provide for the determination of the NOAEL.

The 2017 toxicology study is the first study to demonstrate the safety of Canalevia in puppies as young as 12 weeks of age.

Prior crofelemer toxicology studies only involved adult dogs.

As previously announced, Jaguar has received MUMS designation status from the FDA for Canalevia for the indication of CID in dogs.

As previously announced, Jaguar has received MUMS designation status from the FDA for Canalevia-CA1 for the indication of CID in dogs.

MUMS designation is modeled on the orphan drug designation for human drug development and offers possible financial incentives to encourage MUMS drug development, such as the availability of grants to help with the cost of developing the MUMS drug.

For Jaguar’s second proposed indication for Canalevia, EID in dogs, the Company is leveraging the use of many of the same major technical sections that have been submitted in support of the Company's application for Canalevia for the indication of CID in dogs.

For Jaguar Animal Health’s second proposed indication for Canalevia, exercise induced diarrhea (“EID”) in dogs, the Company is leveraging the use of many of the same major technical sections that have been submitted in support of the Company's application for Canalevia-CA1 for the indication of CID in dogs.

Conditional approval of Canalevia for EID, under the name Canalevia-CA2, is expected in the fourth quarter of 2022.

Crofelemer is extracted and purified from the Croton lechleri tree, which we sustainably harvest and manage through programs that we have been developing over the past 30 years.

This process has involved working with local and indigenous communities to plant trees, obtaining permits for export, and creating a supply network that is robust and reliable.

We continue to have working relationships with partners that began in the 1990s.

Our team continues to have relationships with partners that we began working with in the 1990s.

Additionally, through the establishment of a nonprofit called the Healing Forest Conservancy, our team has created a long term mechanism for benefit sharing that recognizes the intellectual contribution of Indigenous populations.

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Clinical trials demonstrated that nearly 80% of Mytesi users experienced an improvement in their diarrhea over a four week period.

At week 20 of the

pivotal trial, over half the patients had no watery stools, or a 100% decrease, and 83% had at least a 50% decrease in watery stools.

At week 20 of the pivotal trial, over half the patients had no watery stools, or a 100% decrease, and 83% had at least a 50% decrease in watery stools.

Our Mytesi pipeline currently includes prescription drug product candidates for four follow on indications, several of which are backed by Phase 2 evidence from completed Phase 2 trials.

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Initiated pivotal Phase 3 clinical trial in October 2020

Two investigator-initiated (“IIT”) clinical trials funded by Genentech-Roche

(HALT D study) & a third-party cancer agent manufacturer

Findings of Phase 2 HALT-D study presented in Q4 2021

Enrollment in Phase 3 trial ongoing

Top line results of HALT-D IIT expected in 2H 2021

Supportive care for IBD

Multiple Phase 2 studies completed in various secretory diarrhea (not IBD)

Protocol development with KOLs for discussions with FDA

Formulation of crofelemer

Novel lyophilized crofelemer product

Rare disease indications (SBS & CDD)

Phase 1 study

Previously received orphan drug designation for SBS

Initiate Phase 1/2 CDD study in 1H 2022

Phase 1 study

Orphan drug designation for SBS granted by FDA and EMA

Initiate Phase 2 proof of concept (POC) study in SBS and/or CDD in 2022

Two Phase 2 studies completed

Publication of supplemental analysis of Phase 2 data

Idiopathic/functional diarrhea

Initiated clinical study initiated at The University of Texas Health Science Center at Houston (“UTH”)

Multiple Phase 2 studies completed in various secretory diarrhea

IIT request accepted

Top line results of UTH trial expected Q4 2021

NP-300 (SB-300, lechlemer)

Second-generation anti-secretory agent for multiple indications including cholera

Animal and human studies in secretory diarrhea;

successful cholera trial design for anti-secretory mechanism of action with API

Pre clinical toxicology funded by NIAID

Formulation / POC

Potential business development opportunities

Chronic idiopathic diarrhea

Initiated clinical study at The University of Texas Health Science Center at Houston (“UTH”)

Top line results of UTH trial expected in 2022

Functional diarrhea

Initiated clinical study at Beth Israel Deaconess Medical Center, Harvard Medical School, Boston

Enrollment ongoing

Safety evidence from other chronic diarrhea indications

KOL discussions ongoing

NP-300 (lechlemer)

Second-generation antidiarrheal drug for infectious diarrhea including from cholera

Ongoing IND-enabling toxicology studies and formulation development

Initiate Phase 1 trial in the second half of 2022

*Clinical trials are funding dependent

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According to data from the U.S.

Centers for Disease Control and Prevention, by 2020 more than 70% of Americans with HIV are expected to be 50 and older (1).

Competitors for

Mytesi’s Approved/

Anticipated Labelled

Centers for Disease Control and Prevention, by 2020 more than 70% of Americans with HIV are expected to be 50 and older and have lived with HIV for more than 10 years (1).

Market Size/Potential

HIV-related Diarrhea

We estimate the U.S.

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Global CINV market projected to reach a valuation of $2.7 billion by 2022(4)

Estimated 1,171,000 Americans have IBD(5)

Most IBS products have an estimated revenue potential of greater than $1.0 billion(6)

Financial benefits of Orphan Drug Designation.

Cholera (hydration maintenance) PRV (SB-300)

The global SBS market exceeded $568 million in 2019 and is expected to reach $4.6 billion by 2027, according to a report by Vision Research Reports(5)

Most IBS products have an estimated revenue potential of greater than $1.0 billion(6)

Estimated 1,171,000 Americans have IBD(7)

Infectious Diarrhea from Cholera

In recent transactions by other companies, priority review vouchers have sold for $67 million to $350 million(8)

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Preventing Infections in Cancer Patients:

Information for Health Care Providers (cdc.gov/cancer/preventinfections/providers.htm)

Information for Health Care Providers (cdc.gov/cancer/prevent infections/providers.htm)

Heron Therapeutics, Inc.

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Report published by Allied Market Research, titled, "Chemotherapy-induced Nausea and Vomiting (CINV) Market-Global Opportunity Analysis and Industry Forecast, 2014-2022” (https://www.prnewswire.com/news-releases/chemotherapy-induced-nausea-and-vomiting-cinv-market-expected-to-reach-2659-million-by-2022-611755395.html)

Kappelman, M.

Recent Trends in the Prevalence of Crohn’s Disease and Ulcerative Colitis in a Commercially Insured US Population.

Short Bowel Syndrome Market – Global Industry Analysis, Size, Share, Trends, Revenue, Forecast 2020 to 2027 (https://www.mynewsdesk.com/us/medical-technology-news/pressreleases/short-bowel-syndrome-market-global-industry-analysis-size-share-trends-revenue-forecast-2020-to-2027-3069433)

Merrill Lynch forecasts peak US sales of roughly $1.5 bn for Ironwood’s Linzess (https://247wallst.com/healthcare-business/2015/04/27/key-analyst-sees-nearly-30-upside-in-ironwood/);

Rodman & Renshaw estimate peak annual sales of Synergy Pharmaceuticals’ Trulance at $2.3 bn in 2021 (https://www.benzinga.com/analyst-ratings/analyst-color/17/04/9304883/what-synergys-new-patents-mean-for-its-commercial-prospe)

Kappelman, M.

Recent Trends in the Prevalence of Crohn’s Disease and Ulcerative Colitis in a Commercially Insured US Population.

2015, AbbVie Inc.

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To accomplish this goal, we plan to:

Expand Mytesi by leveraging our significant gastrointestinal knowledge, experience and intellectual property portfolio

Mytesi is a novel, first-in-class anti-secretory agent which has a basic normalizing effect locally on the gut, and this mechanism of action has the potential to benefit multiple gastrointestinal disorders.

Expand Mytesi by leveraging our significant gastrointestinal product knowledge, experience and intellectual property portfolio

Mytesi is a novel, first in class anti secretory antidiarrheal agent which has a basic normalizing effect locally on the gut, and this mechanism of action has the potential to benefit multiple gastrointestinal disorders.

Our Mytesi (crofelemer) product is approved by the U.S.

FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy.

Jaguar, through Napo, holds extensive global rights for Mytesi.

Jaguar, through Napo, holds global unencumbered rights for Mytesi.

Mytesi is in development for multiple possible follow on indications, including diarrhea related to targeted cancer therapy;

orphan drug indications for infants and children with congenital diarrheal disorders and short bowel syndrome;

supportive care for inflammatory bowel disease;

inflammatory bowel disease;

irritable bowel syndrome;

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In addition, a second generation proprietary anti secretory agent is in development for cholera.

Our management team collectively has more than 100 years of experience in the development of gastrointestinal prescription drug and non-prescription products.

This experience covers all aspects of product development, including discovery, preclinical and clinical development, GMP manufacturing, and regulatory strategy.

Our management team collectively has extensive experience in the development of prescription drugs.

This experience covers all aspects of product development, including discovery, preclinical and clinical development, GMP manufacturing, regulatory affairs, and commercialization.

Key members of this team successfully developed Mytesi.

Establish and expand commercial capabilities in Mytesi sales and marketing efforts

Maintain commercial capabilities in Mytesi sales and marketing efforts

Napo’s direct sales organization is comprised of Mytesi field sales representatives strategically positioned to cover U.S.

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With support provided by concomitant marketing, promotional activities, patient empowerment programs, including an integrated social digital campaign, and medical education initiatives described below, we expect a proportional response in the number of patients treated with Mytesi.

Leverage our relationships with key opinion leaders regarding development of follow-on indications

Approximately 19 KOLs who are recognized specialists in HIV patient care, CTD, IBD, IBS, cholera, SBS, and CDD are currently participating in our scientific advisory board or KOL advisory program in some manner.

Leverage our relationships with Scientific Advisory Board (SAB) members for crofelemer commercialization and development in follow on indications

The Company has retained 10 SAB members that have extensive clinical experience in HIV, CTD, IBD, SBS, and CDD.

In addition, the Company engages key opinion leaders (KOLs) for specific turnkey needs.

Establish partnerships to support moving pipeline indications to pivotal clinical trials

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(“Knight”) entered into a Distribution, License and Supply Agreement that grants Knight the exclusive right to commercialize Mytesi and related products in Canada and Israel.

The License Agreement has a term of 15 years (with automatic renewals) and provides Knight with an exclusive right to commercialize current and future Jaguar human health products (including crofelemer, Lechlemer, and any product containing a proanthocyanidin or with an anti-secretory mechanism) in Canada and Israel.

Knight forfeited its right of first negotiation for expansion to Latin America.

Under the License Agreement, Knight is responsible for applying for and obtaining necessary regulatory approvals in the territory of Canada and Israel, as well as marketing, sales and distribution of the licensed products.

Knight will pay a transfer price for all licensed products, and upon achievement of certain regulatory and sales milestones, the Company may receive payments from Knight in an aggregate amount of up to approximately $18 million payable throughout the initial 15-year term of the agreement.

The Company did not have any license revenues since the execution of this agreement.

Although it is possible that we may enter into additional corporate partnering relationships related to Mytesi, our intention would be to retain all or co commercialization and promotional rights in the U.S., so that we do not become primarily a royalty collecting organization, and we are opposed to entering into any Mytesi partnering relationship that would require splitting indications.

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We believe this approach will lead to better long-term outcomes for our products in development.

We believe that Jaguar is poised to realize a number of synergistic, value adding benefits—and an expanded pipeline of important human follow-on indications and a second-generation anti secretory agent—upon which to build global partnerships.

In May 2016, the New Drug Application (“NDA”) and commercial rights for human applications of crofelemer (Mytesi) previously licensed to Salix Pharmaceuticals, Inc.

(“Salix”) were transferred to Napo.

The active pharmaceutical ingredient (“API”) in Mytesi is crofelemer, our proprietary gastrointestinal anti-secretory agent sustainably harvested from the rainforest.

Diarrhea is a common adverse event seen with targeted cancer drugs and/or chemotherapy agents typically used in breast and colon cancers, and in particular in the more recently introduced therapeutic classes of EGFR monoclonal antibodies and TKI often used for chronic adjuvant care management of cancer.

The increased need for and use of these agents has made diarrhea one of the most disabling issues for cancer patients.

We will seek partnerships outside the United States for the above indications while focusing on development and commercial access in the United States directly.

We will continue to seek partnerships outside the United States for the above indications while focusing on development and commercial access in the United States directly.

We are also focused on investigating (lechlemer) for various gastrointestinal indications.

Lechlemer is a proprietary Jaguar pharmaceutical product, a standardized botanical extract distinct from crofelemer, also sustainably derived from the Croton lechleri tree.

We believe lechlemer, which has the same mechanism of action as crofelemer and is significantly less costly to produce, may support efforts to receive a priority review voucher from the U.S.

FDA for a cholera indication.

Priority review vouchers are granted by the FDA to drug developers as an incentive to develop treatments for neglected diseases and rare pediatric diseases.

We believe lechlemer, which has a similar mechanism of action as crofelemer and is significantly less costly to produce, may support efforts to receive a priority review voucher from the U.S.

FDA for symptomatic treatment of diarrhea from cholera infection.

Priority review vouchers are granted by the FDA to drug developers for tropical disease indications (TDPRV) as an incentive to develop treatments for neglected diseases and rare pediatric diseases.

Additionally, we believe lechlemer represents a long-term pipeline opportunity as a second generation anti secretory agent, on a global basis, for multiple gastrointestinal diseases—especially in resource constrained countries where the cost of goods is a factor, in part, because requirements often exist in such regions for drug prices to decrease annually.

The Company has presented Phase 2 data on crofelemer for the treatment of devastating dehydration in cholera patients from the renowned International Centre for Diarrhoeal Disease Research (icddr,b) in Bangladesh, and Napo plans to follow the same study design for a trial conducted in association with icddr,b in support of the development of lechlemer for potential cholera-related indication.

As announced, a 28-day preclinical toxicology and safety study in dogs began January 6, 2021 to support development of lechlemer, Napo’s second generation, plant-based anti-secretory drug candidate for the symptomatic relief of diarrhea from cholera.

Napo is receiving preclinical services from the NIAID to support lechlemer development.

NIAID is part of the National Institutes of Health.

Under NIAID's suite of preclinical services, NIAID-funded contractors are conducting the 28-day dog study.

As previously announced, a 28-day preclinical toxicology study in rats to support lechlemer development for the symptomatic relief of diarrhea from cholera was initiated in July of last year.

The Company has previously presented Phase 2 data on crofelemer for the treatment of diarrhea in cholera patients from a study in Bangladesh.

Napo plans to follow a similar clinical study design to support the development of lechlemer (NP-300) for a cholera related indication.

Napo is conducting IND-enabling preclinical toxicology studies and developing novel NP-300 formulations that will support the initiation of clinical studies in 2022.

Our portfolio development strategy is based on identifying indications that are potentially high value because they address important medical needs that are significantly or globally unmet, and then strategically sequencing indication development priorities, second generation product pipeline development, and partnering goals on a global basis.

Our technology for proprietary gastrointestinal disease products is central to the product pipelines of both human and veterinary indications.

Crofelemer is also the API in Canalevia, our lead prescription drug product candidate, intended for the treatment of CID and EID in dogs.

Mytesi Clinical Data

Mytesi has been clinically demonstrated to have:

Minimal absorption, with plasma concentrations below the level of detection

No clinically relevant drug-drug interactions

No effect on viral load or CD4 counts

Adverse events comparable to those with placebo

The efficacy of Mytesi 125-mg delayed-release tablets twice daily was evaluated in a randomized, double-blind, 24-week, multicenter study (the ADVENT trial) comprised of a placebo-controlled (1 month) treatment period and a placebo-free (5 month) treatment period.

The study enrolled HIV-positive patients on stable ART with a

history of diarrhea for 1 month or more.

In the Mytesi 125mg bid group, more than twice as many patients (18% vs.

8% on placebo, p<0.01) achieved the highly rigorous endpoint defined as reduction to ≤2 watery stools per week for 2 out of the 4 weeks in the placebo-controlled period (the average baseline in the ADVENT population was 20 watery stools per week).

In a supplemental analysis of the ADVENT study population, 78% of patients in the Mytesi 125mg BID group experienced a decrease in watery stools at week 4.

Among these patients that experienced a decrease, 61% had at least a 50% decrease in watery stools.

At week 20, 89% of patients in the Mytesi BID group experienced a decrease in watery stools.

Among these patients that experienced a decrease, 83% had at least a 50% decrease in watery stools, and over half of patients had no watery stools at all (100% decrease).

Products in Development

Cancer Therapy-Related Diarrhea (“CTD”)

CTD is a common problem with a relevant mechanism for crofelemer

National Cancer Institute Criteria for Grading Severity of Diarrhea

Patients without a colostomy

Increase of <4 stools per day over pretreatment

Increase of 4 to 6 stools per day or nocturnal stools

Increase of ≥7 stools per day or incontinence;

need for parenteral support for hydration

Physiologic consequences requiring intensive care;

hemodynamic collapse

Diarrhea is a common adverse event seen with chemotherapy agents and/or targeted therapy drugs such as EGFR and TKI’s and EGFR monoclonal antibodies (for breast, lung, and other malignancies).

The increased need for and use of these agents has made diarrhea one of the most disabling issues for cancer patients.

Crofelemer offers the potential for an appropriate mechanism of action against this likely secretory diarrhea and has prompted interest among physicians concerned about this diarrheal symptom, stimulating the aforementioned investigator-initiated trials.

Diarrhea is also a common adverse event seen with chemotherapy agents used in colorectal and gastric cancers, and chronic maintenance chemotherapy.

There are currently no anti-diarrhea agents approved generally for chemotherapy-induced diarrhea.

Clinical Study

A study titled HALT-D:

DiarrHeA Prevention and ProphyLaxis with Crofelemer in HER2 Positive Breast Cancer Patients Receiving Trastuzumab, Pertuzumab, and Docetaxel or Paclitaxel with or without Carboplatin is currently underway in conjunction with Georgetown University.

The primary objective of the study is to characterize the incidence and severity of diarrhea in patients receiving investigational therapy in the setting of prophylactic anti-diarrheal management.

As we announced on August 19, 2019, statistically significant top line results have been achieved in a key preclinical pharmacological study to evaluate the effects of crofelemer on diarrhea induced in healthy dogs by a maximally tolerated dose of a specific TKI.

The results of the study, which was funded by a third-party cancer agent manufacturer of an FDA-approved TKI, are expected to provide additional scientific rationale and support for the use of crofelemer in providing symptomatic relief of noninfectious diarrhea in human patients receiving TKI-and/or-other targeted cancer therapy-containing regimens in future human clinical investigations.

The top line results of the study show that combined crofelemer groups demonstrated superior benefit for “responders” (p= 0.01).

The results from this key preclinical study show concordance and remarkable similarity to the substantial benefits that were observed in the pivotal human trial of crofelemer (ADVENT trial) that resulted in the approval of the drug for the symptomatic relief

of noninfectious diarrhea in adult patients with HIV/AIDS on antiretroviral therapy.

We are applying our lessons from the ADVENT trial and this preclinical study in our clinical study design that we are discussing with the FDA to allow the conduct of a single pivotal study for CTD in all solid tumor human patients.

As we announced on October 22, 2019, additional findings from the above preclinical study evaluating the effects of crofelemer on diarrhea induced by a specific TKI show that the animals in the crofelemer groups received approximately 20% higher doses of the TKI than the animals in the placebo group through the four weeks of the treatment period.

The TKI dose reductions over the four-week period were statistically higher for the control group compared to the crofelemer QID group and trending toward statistical significance in the BID group.

In general, the treatment effect of crofelemer was 1.5 to 2.5 times better than placebo for multiple endpoints in this study.

Specifically, the preclinical study showed that crofelemer treatment resulted in lesser incidence and severity of diarrhea with the maintenance and tolerability of a higher dose of the selected TKI.

The study points to potential benefits Jaguar hopes to see in future human studies of crofelemer's ability to provide symptomatic relief of noninfectious diarrhea in patients receiving a targeted cancer therapy in an adjuvant or metastatic setting.

Irritable Bowel Syndrome—Diarrhea Predominant (“IBS-D”)

Diarrhea is a common symptom of IBS, a frustrating, underdiagnosed and undertreated condition.

IBS-D is a subtype characterized mainly by loose or watery stools at least 25 percent of the time.

According to the U.S.

FDA, studies estimate that IBS affects 10 to 15 percent of adults in the United States.

Abdominal pain is the key symptom of IBS, and the pain, which is associated with a change in stool frequency or consistency, can be severe.

To improve the diagnosis and outcomes for IBS patients and to update clinicians on the latest research, Dr.

William Chey, a gastroenterologist and professor of medicine and nutrition sciences at the University of Michigan, along with an international team of collaborators, compiled Rome IV , an updated compendium of diagnostic criteria on functional GI disorders such as IBS.

Rome IV contains a chapter titled Centrally Mediated Disorders of Gastrointestinal Pain.

Although new agents for IBS-D have come on the market, there is an unmet medical need for long-term, safe management of the abdominal pain associated with IBS-D.

We recognize that patients suffering from IBS-D may require a poly-pharmacy approach to lifetime management of their disease.

Mytesi, which represents a novel mechanistic approach with the benefit of a long-term safety profile, could possibly be an important addition to the treatment of IBS-D, if approved for this indication.

Mytesi has been demonstrated to be safe for chronic use, and two studies provide statistically significant results of crofelemer use for abdominal pain in women.

The largest group of IBS sufferers are those with the subtype referred to as mixed diarrhea and constipation (“IBS-M”).

IBS-M is also referred to as IBS-A, because the condition often involves frequent alternating between IBS-D and constipation predominant (“IBS-C”).

IBS-M is distressing for patients as well as difficult to diagnose and manage, and is often associated with pain and urgency as well as significant abdominal distension and bloating.

No approved drugs currently exist for IBS-M.

Leading gastroenterologists have stated that IBS-C drugs may cause diarrhea in an IBS-M patient, and an IBS-D drug may cause significant constipation.

Since Mytesi has not caused constipation in clinical trials or real-world experience, we therefore, believe an opportunity exists for an IBS-M indication for Mytesi.

Resultingly, and due to the demonstrated safety of Mytesi for chronic use and its demonstrated benefit for abdominal pain in women, Napo is considering expanding development efforts to evaluate the IBS-M indication.

Clinical Study

Crofelemer has been tested in safety studies and two significant Phase 2 studies for IBS-D as detailed below.

Completed Studies—IBS-D

As we announced on January 8, 2020, a study appearing in the December 2019 issue of Clinical and Translational Gastroenterology , a peer-reviewed journal published by the American College of Gastroenterology, indicates that crofelemer could be a treatment option for abdominal pain associated with IBS-D.

This multicenter, phase 2, randomized, double-blind, placebo-controlled trial evaluated the effect of crofelemer on abdominal pain in women with IBS-D.

A total of 240 women were enrolled, and participants were randomized to crofelemer (125 mg) or placebo twice daily for 12 weeks.

Following an analysis by the FDA-issued revised recommendations for outcome measures in IBS clinical trials in 2010, the proportion of monthly abdominal pain responders was significantly higher in the crofelemer group during months 1 through 2 (58.3% vs 45.0%, p = 0.030) as well as during the entire 3 months (54.2% vs 42.5%, p = 0.037) when compared with placebo.

No significant differences were observed in the proportion of stool consistency monthly responders based on the revised FDA guidelines.

These observed trends of improvement in monthly abdominal pain responders suggest that crofelemer may have a use for treatment in abdominal pain in IBS-D patients without having significant changes to bowel habits.

Currently, there are very few treatment options to address the visceral pain associated with IBS-D.

Crofelemer has a distinct and novel antisecretory mechanism of action of modulation of cystic fibrosis transmembrane conductance regulator CFTR and/or calcium-activated chloride channels that may provide a new non-opiate or antibiotic-based option to treat the visceral abdominal pain and discomfort for IBS-D patients.

IBS is a gastrointestinal condition defined by abdominal pain and altered bowel habits in the absence of another disease that can account for these symptoms.

IBS is the most commonly diagnosed gastrointestinal condition and has a population prevalence of up to 12% in North America and is more prevalent in women than in men.

Currently, IBS is a clinical diagnosis based on abdominal pain associated with a change in bowel habits.

Patients with IBS, but particularly those with IBS-D, report significantly reduced quality of life, higher indirect costs, and greater impairments in daily and work activities.

Phase 2a—a randomized double-blind placebo-controlled, dose-ranging (placebo, 125 mg, 250 mg, and 500 mg bid) study over a 12-week treatment period in 246 patients with IBS-D (Rome II criteria), including both males and females, whose average age was 50 years old.

n = 245 subjects

62 125 mg crofelemer BID

59 250 mg crofelemer BID

62 500 mg crofelemer BID

IBS symptoms (pain, urgency, stool frequency and consistency, and adequate relief) were self-reported by the patients via an interactive voice response system.

Patients needed to exhibit active disease during the two-week baseline period as defined by a mean daily stool frequency greater than or equal to 2/day, pain score greater than or equal to 1 and stool consistency greater than or equal to 3 (5-point Lickert scale for pain and consistency) to be enrolled.

Patients received treatment for 12 weeks followed by a two-week treatment free period.

The protocol-specified primary efficacy measure was daily stool consistency.

Statistical analysis of the primary endpoint found no significant differences between placebo and any of the crofelemer dose groups (p ≥ 0.1434), and no significant dose relationship was seen with regard to change from Baseline to Month 3 in stool consistency scores (p = 0.1165) in the ITT population.

A supplementary analysis of Rome Foundation-defined stool consistency and abdominal pain showed positive results.

Responders were subjects who had a stool consistency score of ≥ 4 for < 25% of days in a given week and ≥ 30% improvement in abdominal pain scores in a given week (i.e., Rome Foundation-defined stool consistency and abdominal pain responders).

When we look at a supplemental analysis at a reduction in a composite abdominal pain/stool consistency endpoint, the regulatory endpoint in accordance with FDA guidance, we see at the 125 mg dose bid a significant 15% difference with just women patients compared to placebo;

and a significant 11% when we include both men and women.

The current IBS-D products on the market have a 7-8% reduction (Viberzi and Xifaxan).

In this analysis, Rome Foundation-defined stool consistency and abdominal pain responders were significantly more likely during the entire 3 months in the 125 mg BID group when compared with placebo (24.2% versus 13.1%, p = 0.0399) and there was a statistical trend in favor of crofelemer 125 mg BID during Months 1 through 2 (27.4% versus 16.4%, p = 0.0640).

Similar positive effects of crofelemer 125 mg BID were observed in female subjects (n = 183).

When the supplementary analysis was applied to the female patients, crofelemer at a dose of 125 mg BID was superior to placebo at Month 3 (26.1% vs 10.9%, p=0.0337).

The 125mg bid of crofelemer exhibited a consistent response during each month among most efficacy endpoints in women with IBS-D reaching statistical significance (p<0.05) for pain.

Crofelemer had little effect on the stool consistency score, though there was a trend toward reduced stool frequency.

Treatment benefits were not apparent in men, although relatively few men enrolled in the trial (13-16/group).

As with previous trials of crofelemer, no drug-related serious adverse events were reported.

Adverse event rates were similar across all dose groups, although, in the two highest doses (250 and 500 mg bid), there was a higher percentage of dropouts.

There were no drug-related or dose-related differences in constipation.

During the two-week treatment-free follow-up period symptoms approached baseline levels.

Crofelemer at doses of 125, 250 and 500 mg had a safety profile that was generally similar to placebo among men and women with IBS-D.

Phase 2—a Randomized, double-blind, placebo-controlled study to assess the safety and efficacy of crofelemer for the symptomatic treatment of diarrhea predominant irritable bowel syndrome (IBS-D) in 240 female subjects 18 years or older with active IBS-D according to the Rome II criteria for the diagnosis of IBS-D.

The study consisted of a 2-week screening period and a 12-week blinded treatment period followed by a 4-week treatment-free follow-up period.

During the 12-week treatment period, 240 subjects were given 125 mg of crofelemer BID or placebo BID and recorded daily assessments of their IBS symptoms in the interactive voice response system.

The primary endpoint was the change from baseline for the overall percentage of abdominal pain/discomfort free days (“PFDs”).

On a daily basis, respondents recorded the intensity of their abdominal pain/discomfort for that day using the 5-point Likert scale:

0=none, 1=mild, 2=moderate, 3=intense, 4=severe.

Any day that a score of zero (0) was recorded was considered a PFD.

Stool consistency and abdominal pain endpoints were analyzed using definitions of symptom improvement from a recent FDA guidance on IBS endpoints (March 2010) and recommendations of the Rome Foundation (letter dated 28 June 2010) concerning the IBS endpoints described in this guidance.

The overall increase in pain-free days (protocol-specified primary endpoint) for subjects in the crofelemer group was not statistically significant when compared with subjects in the placebo group (p = 0.5107)

A supplementary analysis of abdominal pain showed positive results.

Responders were subjects who had ≥ 30% improvement in abdominal pain scores a given week (i.e., FDA-defined abdominal pain responders;

this definition of abdominal pain responders was presented in the March 2010 guidance on IBS endpoints).

In this analysis, abdominal pain responders were significantly more likely during Months 1 through 2 (58.3% versus 45.0%, p = 0.0303) and during the entire 3 months (54.2% versus 42.5%, p = 0.0371) in the crofelemer group when compared to placebo.

The overall safety profile for crofelemer 125 mg BID for 12 weeks was comparable to that observed with placebo and was consistent with the IBS population under study.

Rare Pediatric Disease Indications:

CDD is a group of rare, chronic intestinal channel diseases, occurring in early infancy, that are characterized by severe, lifelong diarrhea and a lifelong need for nutritional intake either parenterally or with a feeding tube.

CDD is related to specific genetic defects inherited as autosomal recessive traits, and the incidence of CDD is much more prevalent in regions where consanguineous marriage is part of the culture.

CDD is directly associated with serious secondary conditions, including dehydration, metabolic acidosis, and failure to thrive, prompting the need for immediate therapy to prevent death and limit lifelong disability.

Potential Orphan-Drug:

Clinical Study—CDD

We have completed safety studies of crofelemer in children as young as 3 months of age, and Napo expects to initiate a Phase 1/2 study in the second half of 2021 at US and Middle East sites for an investigator-initiated trial of crofelemer, the active pharmaceutical ingredient in Mytesi, for CDD in pediatric patients.

A pre-clinical study in mice, conducted by an independent third-party investigator, is underway to support possible orphan-drug designation for crofelemer for CDD.

This animal model study is examining the effects of crofelemer on diarrhea caused by microvillous inclusion disease (“MVID”), a very rare autosomal recessive disorder which belongs to the CDD category.

SBS is a complex condition characterized by malabsorption of fluids and nutrients due to congenital deficiencies or surgical resection of small bowel segments.

Consequently, patients suffer from symptoms such as debilitating diarrhea, malnutrition, dehydration and imbalances of fluids and salts.

This could be due to either a genetic disorder or premature birth.

In countries such as the United Arab Emirates and Saudi Arabia, SBS occurs with much higher incidence.

We previously received orphan-drug status for Mytesi (crofelemer) for the proposed SBS pediatric indication and are pursuing orphan-drug status for CDD.

The mission of the FDA Office of Orphan Products Development is to advance the evaluation and development of products (drugs, biologics, devices, or medical foods) that demonstrate promise for the diagnosis and/or treatment of rare diseases or conditions.

IBD—Supportive Care:

KOLs identified an unmet need to treat diarrhea in IBD patients, particularly in specific subsets of patients.

KOLs felt all IBD patients who undergo ileal pouch-anal anastomosis surgery suffer severe, chronic diarrhea following the procedure.

Because this is a highly-motivated patient population with a low placebo-responder risk, we believe a relatively small proof-of-concept trial is the appropriate next step from a development standpoint.

KOLs felt crofelemer’s novel mechanism of action might also prove to be an effective treatment for diarrhea that results from bile acid malabsorption, which has been shown to occur in approximately 30% of patients with IBD.

Additionally, KOLs felt crofelemer’s novel mechanism of action might prove to be an effective treatment for diarrhea experienced by patients receiving IV infusions of Entyvio, a Takeda Pharmaceuticals prescription medicine used in adults with moderate to severe ulcerative colitis or Crohn’s disease.

Secretory diarrhea occurs when the intestine does not complete absorption of electrolytes and water from luminal contents.

This can happen when a nonabsorbable, osmotically active substance is ingested (“osmotic diarrhea”) or when electrolyte absorption is impaired (“secretory diarrhea”).

Secretory diarrhea can result from bacterial toxins, luminal secretagogues (such as bile acids or laxatives), reduced absorptive surface area caused by disease or resection, circulating secretagogues (such as various hormones, drugs, and poisons), and medical problems that compromise regulation of intestinal function.

These studies in acute diarrhea support the normalizing aspect of the mechanism of action, regardless of the cause of the diarrhea, and are supportive of the supportive care indication under development in IBD patients.

Clinical Study

Mytesi has safety studies that support chronic use for the currently approved indication and has demonstrated statistically significant results in multiple supportive care settings, though not specifically in IBD patients.

The next steps would include a Phase 2 proof of concept study for supportive care in patients with IBD.

Completed Study—Travelers’ Diarrhea (supportive care)

Phase 2—a study of crofelemer in 184 persons in a double-blind, placebo-controlled study for the symptomatic treatment of acute diarrhea among travelers to Jamaica and Mexico.

The study was designed to evaluate the effectiveness of crofelemer in the treatment of travelers’ diarrhea.

A total of 184 persons from the United States who acquired diarrhea in Jamaica or Mexico were enrolled in a double-blind, placebo-controlled study examining the effectiveness of three doses of crofelemer in reducing illness.

Subjects were treated with 125 mg, 250 mg, or 500 mg crofelemer or a matching placebo four times a day for 2 days.

Subjects kept daily diaries of symptoms and were seen each day for 3 days.

Of the subjects, 169 (92%) were included in the efficacy analysis.

The most common etiological agent identified was enterotoxigenic Escherichia coli, found in 19% of subjects.

The mean time interval from taking the first dose of medication until passage of the last unformed stool during 48-hour therapy (“TLUS48”) was 38.7 hours for the placebo group.

TLUS48 was shortened by crofelemer:

30.6 h for the 125-mg dose group (p = 0.005);

30.3 h for the 250-mg group;

32.6 h for the 500-mg group (p = 0.01).

Treatment failures were seen in 29.3% in the placebo group compared with 7.3% (p = 0.01), 4.3 (p = 0.002), and 9.8 (p = 0.026) in the three treatment groups.

Crofelemer was well tolerated at all doses.

The study provided statistically significant results of crofelemer use for shortening the duration of travelers’ diarrhea.

This antisecretory approach works directly against the pathophysiology of travelers’ diarrhea and is not likely to potentiate invasive forms of diarrhea or to produce posttreatment constipation.

Cholera/General Watery Diarrhea

According to the Centers for Disease Control and Prevention of the U.S.

Department of Health & Human Services, Cholera is an acute, diarrheal illness caused by infection of the intestine with the bacterium Vibrio cholerae .

An estimated 3-5 million cases and over 100,000 deaths occur each year around the world.

The infection is often mild or without symptoms, but can sometimes be severe.

Approximately one in 10 (5-10%) of infected persons will have severe disease characterized by profuse watery diarrhea, vomiting, and leg cramps.

In these people, rapid loss of body fluids leads to dehydration and shock.

Without treatment, death can occur within hours.

At this time, for example, the largest cholera outbreak in recorded history is occurring in Yemen.

We are investigating lechlemer for the indication of cholera/general watery diarrhea.

Lechlemer is a distinct and proprietary Napo pharmaceutical formulation of a standardized botanical extract, also sustainably derived from the Croton lechleri tree.

We believe lechlemer represents a long-term pipeline opportunity as a second-generation anti-secretory agent, on a global basis, for multiple gastrointestinal diseases.

Additionally, we believe lechlemer, which has the same mechanism of action as crofelemer and is significantly less costly to produce, may support efforts to receive a priority review voucher from the U.S.

FDA for a cholera indication.

Priority review vouchers are granted by the FDA to drug developers as an incentive to develop treatments for neglected diseases and rare pediatric diseases.

If approved for this indication, lechlemer could serve as long-term pipeline anti-secretory agent for cholera/general watery diarrhea in geographies where cost of goods is a critical factor, for example, in resource-constrained regions and countries in which a requirement exists for drug prices to decrease annually.

Clinical Study

We have initiated CMC and have multiple animal and human studies in secretory diarrheas.

We have also completed a successful trial design for cholera with an anti-secretory mechanism of action, published studies with crofelemer in patients with cholera and other acute severe watery diarrhea disease.

Napo is receiving preclinical services from the NIAID to support lechlemer development.

NIAID is part of the National Institutes of Health.

Under NIAID's suite of preclinical services, NIAID-funded contractors are conducting the 28-day dog study.

As previously announced, a 28-day preclinical toxicology study in rats to support lechlemer development for the symptomatic relief of diarrhea from cholera was initiated in July of last year.

Completed Studies—Cholera and Severe Acute Dehydrating Watery Diarrhea

Phase 2 study of crofelemer in the treatment acute, severely dehydrating watery diarrhea with confirmed cholera with the use of an antibiotic (azithromycin) and oral rehydration therapy in 100 adult patients between 18 and 55 in Bangladesh.

A total of 100 adult patients, from Bangladesh, between the ages of 18 and 55, with acute, severely dehydrating watery diarrhea with confirmed cholera were treated with crofelemer on a background of an antibiotic (azithromycin) and oral rehydration therapy.

After a four-hour period of rapid rehydration therapy, patients were randomized 1:2:2 to placebo or 125 mg or 250 mg oral dose of crofelemer.

Crofelemer or placebo doses were administered about one hour after the oral administration of azithromycin (1 gm dose).

The primary objective was to evaluate the safety and effects of crofelemer on reducing the watery stool output normalized to body weight (mL/kg) in the first 24 hours on the background of azithromycin and rehydration therapy.

Crofelemer was well tolerated and there were no drug related adverse events in this study.

Both doses of crofelemer produced approximately 25-30% reduction in median watery stool volumes in the 0-6 and 0-12 hour period following initiation of therapy.

Crofelemer showed a strong trend in the reduction of watery stool output in the 0-6 hour and 0-12 hour intervals (p=0.07).

exclusion of three outlier patients, the crofelemer dose of 125 mg produced a statistically significant reduction in the normalized stool output (p=0.028), and the dose of 250 mg crofelemer showed a strong trend for reduction of watery stool output (p=0.07).

In another study, the effects of crofelemer were evaluated in patients with acute dehydrating watery diarrhea caused by various bacterial pathogens, such as enterotoxic strains of Escherichia coli and Vibrio cholerae infection.

Crofelemer was evaluated in adult Indian patients with acute watery diarrhea of less than 24-hour duration with suspected bacterial infections, without the use of antibiotics.

In this study, patients received oral doses of placebo or crofelemer at a dose of 250 mg every 6 hours for 2 days on the background of oral rehydration therapy only.

The use of antibiotics was prohibited in this study.

A total of 98 patients were randomized into this study (47 in placebo group and 51 in the crofelemer group).

Primary endpoints for this study were changes in stool weight, frequency, consistency, duration of diarrhea.

Secondary endpoints included the assessment of clinical symptoms scored as a total of 7-item GI index.

Clinical success was defined as no diarrhea within 48 hours from the study start date, and treatment failure was defined as no improvement/worsening of symptoms after 24 hours, fever, bloody stools or dehydration.

98 patients (51 crofelemer, 47 placebo) were enrolled in the study.

Sixteen patients (4 in the crofelemer group and 12 in the placebo group) used antibiotics and were considered as treatment failures and were excluded from the “per protocol efficacy analysis.” Groups were similar in age, weight, vital signs, stool frequency, consistency, dehydration and GI index.

The crofelemer group had improvement over baseline and compared to placebo at day 3.

More specifically, crofelemer showed superior effects in reducing stool weight (61% vs 11%), stool frequency (65% vs 21%), reversion to soft stool (92% vs 49%) and improved the 7-item GI index (70% C vs 33% P), (all p<0.05).

Crofelemer was well tolerated with no related serious adverse events or concerning changes in lab values.

Progression to dehydration and report of fecal incontinence was more common in the placebo group (p<0.05).

Clinical success (cessation of diarrhea within 48 hours of 1st dose) was achieved in 79% of crofelemer patients compared to 28% placebo patients (p<0.05).

Crofelemer is also the API in Canalevia-CA1, our prescription drug product recently conditionally approved by the FDA and launched for CID in dogs, and also expected to be approved and launched, under the name Canalevia-CA2, for EID in dogs in the fourth quarter of 2022.

Napo Therapeutics Provides New Opportunities to Treat Orphan Indications Like Short Bowel Syndrome

Jaguar is strategically pursuing multiple important shots on goal for its drug development pipeline:

Crofelemer for CTD, led by Napo, and crofelemer for SBS and CDD, led by Napo Therapeutics.

Jaguar’s exclusive license agreement with Napo Therapeutics provides a perpetual, royalty-bearing license for Europe (excluding Russia), and includes traditional terms such as up-front fees, milestone payments, royalties on sales in Europe, and a supply agreement, and rights to utilized all data Napo Therapeutics generates for Jaguar development and approval activities globally.

There are several significantly larger pharmaceutical companies competing with us in the gastrointestinal segment.

These companies include GW Pharmaceuticals, Lexicon Pharmaceuticals, Valeant Pharmaceuticals International, Merck & Co., Inc., and Allergan plc, as well as smaller pharmaceutical companies.

Diarrhea in adult patients living with HIV/AIDs .

We are not aware of any other FDA approved drugs for the symptomatic relief of diarrhea in HIV/AIDs patients.

HIV/AIDs patients also use loperamide and over the counter anti-diarrheal remedies such as Mylanta or Kaopectate to treat their diarrhea, but these medicines affect motility and can result in rebound diarrhea.

Diarrhea predominant irritable bowel syndrome.

Two drugs were approved in 2015 for the treatment of diarrhea predominant irritable bowel syndrome, Allergan plc’s Virbezi and Xifaxan, which is marketed by Valeant Pharmaceuticals International.

Also, Lotronex was approved by the FDA in 2000 but was withdrawn from the market and later reintroduced in 2002 under a Risk Management Program.

With the exception of Lotronex, the sponsors of Verbezi and Xifaxan employ extensive media and print promotion for the commercialization of these products.

We are seeking a partner to further the clinical development and commercialization of crofelemer for IBS-D.

There are currently numerous trials ongoing for IBS-D.

Pediatric diarrhea.

Acute diarrhea in children is commonly treated by a change in diet, oral rehydration therapy and/or antibiotics, assuming the cause of the diarrhea is bacterial in nature.

Children aged 12 and younger are advised not to use anti-motility drugs (loperamide, for example) unless directed to do so by a physician.

recent clinical trials for probiotics and zinc sulfate.

Other recent anti-diarrheal studies in children include a safety and tolerability study of Fidaxomicin for C difficile associated diarrhea.

HIV/AIDs diarrhea patients may also use loperamide or Lomotil but these medications affect motility which can result in rebound diarrhea and are not indicated for chronic use.

Other agents’ patients may use include over the counter anti diarrheal remedies such as Mylanta or Kaopectate.

Cancer therapy related diarrhea.

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For example, FDA guidance suggests diarrhea prophylaxis prior to initiating adjuvant therapy with neratinib.

Congenital Diarrheal Disorders and Short Bowel Syndrome.

Short Bowel Syndrome and Congenital Diarrheal Disorders .

We are not aware of any FDA approved drugs specifically indicated for congenital diarrheal disorders.

In the U.S., Takeda Pharmaceuticals’ GATTEX® (teduglutide) is indicated for the treatment of adults and pediatric patients 1 year of age and older with short bowel syndrome who are dependent on parenteral support, and Zorbtive® is a recombinant human growth hormone indicated for the treatment of short bowel syndrome in adult patients receiving specialized nutritional support.

Diarrhea predominant irritable bowel syndrome .

Two drugs were approved in 2015 for the treatment of diarrhea predominant irritable bowel syndrome, Allergan plc’s Virbezi and Xifaxan, which is marketed by Valeant Pharmaceuticals International.

Also, Lotronex was approved by the FDA in 2000 but was withdrawn from the market and later reintroduced in 2002 under a Risk Management Program.

With the exception of Lotronex, the sponsors of

Verbezi and Xifaxan employ extensive media and print promotion for the commercialization of these products.

We are seeking a partner to further the clinical development and commercialization of crofelemer for IBS-D.

There are currently numerous trials ongoing for IBS-D.

Inflammatory Bowel Disorders.

We are not aware of any FDA approved drugs specifically indicated as an anti-secretory agent for use to address IBD.

Infectious Diarrhea from Cholera .

We are not aware of any FDA approved drugs specifically indicated as an anti-secretory agent for use to address the devastating dehydration in cholera patients.

Irritable Bowel Syndrome.

If we receive regulatory approval for Mytesi for IBS, we expect to compete with major pharmaceutical and biotechnology companies that operate in the gastrointestinal space, such as Sucampo AG, Takeda Pharmaceuticals, Allergan, Inc., Ironwood Pharmaceuticals, Inc., Synergy Pharmaceuticals Inc., Sebela Pharmaceuticals, Inc.

and Salix Pharmaceuticals.

Because Mytesi is approved with chronic safety and several of the other agents have safety concerns, there is likely to be an opportunity for a polypharmaceutical approach to long-term management of these patients, removing a direct competitive scenario from Mytesi’s potential entry to the marketplace and disease indication.

To our knowledge, there are currently no FDA-approved anti-secretory products, in particular which act locally in the gut with the chronic safety profile of crofelemer, in development or on the market.

Crofelemer represents a new tool in gastrointestinal disease management.

Distribution and Marketing Agreements

Effective January 16, 2019, Napo engaged Cardinal Health as its exclusive third party logistics distribution agent for commercial sales for the Company’s Mytesi product and to perform certain other services which include, without limitation, storage, distribution, returns, customer support, financial support, EDI and system access support (Exclusive Distribution Agreement).

In addition to the terms and conditions of the Agreement, Cardinal Health’s purchase of products, and assumption of title therein, is set forth in the Title Model Addendum.

The Title Model Addendum states that upon receipt of product at the 3PL Facility (Cardinal Health in La Vergne, Tennessee) from the Company, title and risk of loss for the Mytesi product purchased by Cardinal Health (excluding consigned inventory) shall pass to Cardinal Health, and title and risk of loss for consigned inventory shall remain with Client until purchased by Cardinal Health in accordance with this Addendum.

Napo considers Cardinal Health the Company’s exclusive customer for Mytesi products per the Cardinal Health Exclusive Distribution agreement.

Manufacturing

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Napo’s third party contract manufacturer, India based Glenmark Life Sciences Ltd.

(“Glenmark”), a research-driven, global, integrated pharmaceutical company, is Napo’s primary manufacturer of crofelemer, the active pharmaceutical ingredient in Mytesi.

(“Glenmark”), a research driven, global, integrated pharmaceutical company, is Napo’s manufacturer of crofelemer, the active pharmaceutical ingredient in Mytesi.

Glenmark processes CPL into crofelemer utilizing a proprietary manufacturing process.

The processing occurs at an FDA approved Glenmark facility.

Additionally, Napo plans to establish a second processing site, which will be operated by Indena S.p.A.

Additionally, Napo is establishing a second processing site, which will be operated by Indena S.p.A.

(“Indena”), a Milan, Italy based contract manufacturer dedicated to the identification, development and production of high quality active principles derived from plants, for use in the pharmaceutical, health food and personal care industries.

Indena has completed the required technology transfer and feasibility and preparing for validation activities to support commercial scale manufacturing.

As we announced on August 2, 2019, Indena has successfully developed an improved crofelemer manufacturing process, effectively increasing yield and realizing reduced cost through increased manufacturing efficiencies while retaining the same phytochemical profile without compromising product quality, safety, purity and efficacy.

The modified process allows Napo to support the increased crofelemer manufacturing demand expected if crofelemer receives FDA approval for new indications, including approval for the symptomatic relief of CTD.

The improved process supports Jaguar’s goal of increasing product yield, lowering the cost of goods, and securing manufacturing capacity to support future growth.

Canalevia will be manufactured using the same drug substance and drug product processes used to manufacture Mytesi.

In May 2014 and June 2014, and as amended in February 2015, we entered into binding memorandums of understanding with Indena S.p.A.

to negotiate a definitive commercial supply agreement for the manufacture of crofelemer and the botanical extract, SB-300.

We have contracts in place with all the manufacturers and third-party testing labs required to manufacture Mytesi and lechlemer.

We are finalizing a master service agreement with Indena for the manufacture of Crofelemer.We are evaluating alternate drug substance and drug product manufacturers to establish redundancy for DP manufacturing.

We have contracts in place with all the manufacturers and third-party testing labs required to manufacture Mytesi, Canalevia-CA1, and lechlemer.

We are finalizing a master service agreement with Indena for the manufacture of crofelemer.

We are evaluating alternate drug substance and drug product manufacturers to establish redundancy for DP manufacturing.

Proprietary Library of Medicinal Plants

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Mytesi is a registered trademark owned by Napo.

Jaguar Animal Health is a trademark owned by Jaguar.

License Agreements

Termination, Asset Transfer and Transition Agreement

On September 19, 2017 (the “Transfer Date”), Napo entered into the Termination, Asset Transfer and Transition Agreement (the “Glenmark Transition Agreement”) with Glenmark.

The Glenmark Transition Agreement supersedes the Glenmark Collaboration Agreement and returns to Napo certain rights which Napo licensed to Glenmark pursuant to the Glenmark Collaboration Agreement related to the development and commercialization of crofelemer for certain specified human indications in India and 140 other countries largely in developing regions (the “Transferred Assets”).

As a result of the execution of the Glenmark Transition Agreement, the Company, through Napo, now hold extensive global rights for Mytesi, and also hold commercial rights to the existing regulatory approvals for crofelemer in Brazil, Ecuador, Zimbabwe and Botswana.

Patent Portfolio

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or Calophyllum spp., including Mytesi (crofelemer).

The patent family associated with International Patent publication WO1998/16111 relates to enteric protected formulations of proanthocyanidin polymers isolated from Croton spp.

The patent family associated with International Patent publication WO1998/16111 relates to enteric protected formulations

of proanthocyanidin polymers isolated from Croton spp.

or Calophyllum spp., including crofelemer, and methods of treating watery diarrhea using these enteric protected formulations.

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In the U.S., there are two issued patents, US 8,962,680 and US 9,585,868, both of which expire October 31, 2031.

Outside the U.S., patent protection for methods of treating HIV associated diarrhea has been obtained in Australia, Europe, Hong Kong, Japan, Kenya, Mexico, Russia, Ukraine, South Africa, and Zimbabwe, with expiration dates of October 31, 2031, and applications are pending in Brazil, Hong Kong, Canada, China, and Malaysia.

Napo also has patent families related to methods of treating diarrhea predominant irritable bowel syndrome, methods of treating constipation predominant irritable bowel syndrome, and methods of treating inflammatory bowel disease, familial adenomatous polyposis and colon cancer, with proanthocyanidin polymers isolated from Croton spp.

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In particular, for diarrhea predominant irritable bowel syndrome, Napo has two issued U.S.

patents, US 8,846,113 and US 9,980,938, which expire on February 9, 2027, as well as issued patents in Australia, Canada, Europe, Gulf States, Hong Kong, Japan, South Korea, Mexico, New Zealand, Singapore, and Taiwan and pending applications in Bangladesh, Bolivia, Chile, Mexico, Panama, Peru, Paraguay, Thailand, and Venezuela, all of which are estimated to expire April 30, 2027;

patents, US 8,846,113 and US 9,980,938, which expire on February 9, 2027, as well as issued patents in Australia, Canada, Europe, Gulf States, Hong Kong, Japan, South Korea, Mexico, New Zealand, Singapore, and Taiwan and pending applications in Bangladesh, Bolivia, Chile, Paraguay, Thailand, and Venezuela, all of which are estimated to expire April 30, 2027;

for constipation predominant irritable bowel syndrome, Napo has three issued U.S.

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or Calophyllum spp., including crofelemer, Napo owns issued patents in India, South Africa, and Eurasia with terms at least until August 26, 2029.

Napo also owns issued patents in India, Russia, and South Africa and pending applications in Argentina, Brazil, and Venezuela that also cover methods of manufacturing proanthocyanidin polymers isolated from Croton spp.

Napo also owns issued patents in Brazil, India, Russia, and South Africa and pending applications in Argentina and Venezuela that also cover methods of manufacturing proanthocyanidin polymers isolated from Croton spp.

or Calophyllum spp., including crofelemer, with terms at least until January 17, 2032.

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patents covering a formulation of NP 500 (nordihydroguiaretic acid (“NDGA”)) and its use in treating a metabolic disorder that have terms until April 23, 2031.

Napo grants license to Napo Therapeutics S.p.A.

(formerly named Napo EU S.p.A.)

On August 2021, Napo signed a license agreement with Napo EU S.p.A.

The license agreement grants Napo Thera the rights for SBS-IF, HIV-related diarrhea, and the symptomatic relief and treatment of IF-related diarrhea in patients with congenital disorders.

The license agreement grants Napo Thera the right to study Per the terms of the license agreement, Napo will receive payment of up to $10 million as the initial license fee (to be paid in two installments, the first of which has already been received) as the initial license fee and is eligible to receive additional payments related to milestones, royalties, and product transfers.

The license fees will be eliminated in the consolidated financial statements.

Government Regulation

marketing and distribution of prescription drugs such as those Napo is developing.

The FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing and distribution of prescription drugs such as those Napo is that Jaguar and its subsidiaries are commercializing and/or developing.

These agencies and other federal, state and local entities regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post approval monitoring and reporting, sampling and export and import of Napo’s drug product candidates.

To comply with the regulatory requirements in each of the jurisdictions in which Napo is seeking to market and subsequently sell its prescription products, Napo is establishing processes and resources to provide oversight of the development, approval processes and launch of its products and to position those products in order to gain market share.

To comply with the regulatory requirements in each of the jurisdictions in which Napo is seeking to market and subsequently sell its prescription products, Napo has established processes and resources to provide oversight of the development, approval processes and launch of its products and to position those products in order to gain market share

Government Regulation

In the United States, the FDA approves and regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”), and its implementing regulations.

In the United States, the FDA approves and regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”), and it’s implementing regulations.

The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.

Failure to comply with the applicable U.S.

requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before a drug may be marketed in the United States generally involves the following:

requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending New Drug Applications (“NDAs”), withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before a human or animal health prescription drug may be marketed in the United States generally involves the following:

● completion of pre-clinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or good laboratory practices (“GLPs”) regulations;

submission to the FDA of an investigational new drug application, or IND, which must become approved before human clinical trials may begin;

approval by an institutional review board, or IRB, of the study protocol and informed consent forms for the clinical site before each trial may be initiated.

Multiple sites may necessitate the involvement of multiple IRBs and submissions;

● submission to the FDA of an investigational new drug application (“IND”) for human clinical trials, or an investigational new animal drug (“INAD”) for animal health studies;

● approval by an institutional review board (“IRB”) for human trials, and appropriate animal care and use committees for animal health studies.

Multiple sites may necessitate the involvement of multiple IRBs and submissions for human health products;

● performance of adequate and well controlled human clinical trials in accordance with good clinical practices (“GCPs”), requirements to establish the safety and efficacy of the proposed drug product for each indication;

submission to the FDA of an NDA which would include the study reports of the clinical trials, chemistry and manufacturing of the active pharmaceutical ingredient and the final dosage form as well as other required sections to be included in the NDA;

satisfactory completion of an FDA advisory committee review, if applicable;

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

FDA review and approval of the NDA.

● submission to the FDA of an NDA for marketing approval of human prescription drugs;

and a new animal drug application (“NADA”) for marketing authorization of animal health products;

● satisfactory completion of FDA advisory committees review, if applicable;

● satisfactory completion of an FDA pre-approval inspection (“PAI”) of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices (“cGMPs”), requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

● FDA review and approval of the NDA or NADA.

Pre-clinical Studies

Pre-clinical studies include laboratory evaluation of the drug product’s chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy.

Pre-clinical studies include laboratory evaluation of the drug product’s chemistry, toxicity and formulation, as well as animal studies to assess potential safety and effectiveness.

An IND sponsor must submit the results of the pre-clinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND.

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As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Clinical Trials

Clinical Trials for Human Prescription Drugs

Clinical trials involve the administration of the investigational new drug to human subjects pursuant to a clinical protocol, under the supervision of qualified investigators in accordance with GCPs requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.

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

Special Protocol Assessment

The special protocol assessment, or SPA, process is designed to facilitate the FDA’s review and approval of drugs by allowing the FDA to evaluate issues related to the adequacy of certain clinical trials, including Phase 3 clinical trials that can form the primary basis for a drug product’s efficacy claim in an NDA.

Upon specific request by

a clinical trial sponsor, the FDA will evaluate the protocol and respond to a sponsor’s questions regarding, among other things, primary efficacy endpoints, trial conduct and data analysis, within 45 days of receipt of the request.

Special Protocol Assessment for Human Health Prescription Drugs

clinical trials that can form the primary basis for a drug product’s efficacy claim in an NDA.

Upon specific request by a clinical trial sponsor, the FDA will evaluate the protocol and respond to a sponsor’s questions regarding, among other things, primary efficacy endpoints, trial conduct and data analysis, within 45 days of receipt of the request.

The FDA ultimately assesses whether the protocol design and planned analysis of the trial are acceptable to support regulatory approval of the product candidate with respect to effectiveness of the indication studied.

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A documented SPA may be modified, and such modification will be deemed binding on the FDA review division, except under the circumstances described above, if FDA and the sponsor agree in writing to modify the protocol and such modification is intended to improve the study.

Marketing Approval

Marketing Approval for Human Prescription Drugs

Assuming successful completion of the required clinical testing, the results of the pre-clinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.

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The FDA may request additional information rather than accept an NDA for filing.

In this event, the application must be resubmitted with the additional information.

The resubmitted application is also subject to review before the FDA

accepts it for filing.

In this event, the application must be

resubmitted with the additional information.

The resubmitted application is also subject to review before the FDA accepts it for filing.

Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

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After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Post-Approval Requirements

Post-Approval Requirements for Human Prescription Drugs

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.

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For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

unannounced inspections by the FDA and these state agencies for compliance with cGMPs requirements.

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

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

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Products, if deemed adulterated, can lead to serious consequences as set forth above as well as civil and criminal penalties.

Foreign Government Regulation

To the extent that any of Napo’s product candidates, once approved, are sold in a foreign country, Napo may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals.

In order to market Napo’s future products in the EEA (which is comprised of the 27 Member States of the EU plus Norway, Iceland and Liechtenstein) and many other foreign jurisdictions (e.g., in Europe, the United Kingdom and Switzerland), a sponsor must obtain separate regulatory approvals.

More concretely, in the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA.

There are two types of marketing authorizations:

the Community MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use of the European Medicines Agency, or EMA, and which is valid throughout the entire territory of the EEA.

The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases.

The Centralized Procedure is

optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU;

National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure.

Where a product has already been authorized for marketing in a Member State of the EEA, this National MA can be recognized in another Member State through the Mutual Recognition Procedure.

If the product has not received a National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedure.

Under the above-described procedures, before granting the MA, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

In the EEA, new products authorized for marketing, or reference products, qualify for eight years of data exclusivity and an additional two years of market exclusivity upon marketing authorization.

The data exclusivity period prevents generic or biosimilar applicants from relying on the pre-clinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU during a period of eight years from the date on which the reference product was first authorized in the EU.

The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial authorization of the reference product in the EU.

The 10-year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those 10 years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.

Animal Health Prescription Drugs

Under the Federal Food, Drug, and Cosmetic Act (the “Act”), the term "drug"

means articles recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary;

articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals;

and articles other than food intended to affect the structure or any function of the body of man or other animals.

It also includes articles intended for use as a component of a drug.

Once a product is determined to be a drug for animal use, the next step is to determine whether or not it is a new animal drug.

The Act defines a new animal drug (in part) as any drug intended for use for animals other than man, the composition of which is not generally recognized, among experts qualified by scientific training and experience, as safe and effective for use under the conditions prescribed, recommended, or suggested in its labeling.

By virtue of Supreme Court interpretations of the necessary basis for general recognition, there are, for all practical purposes, no animal drugs which are not also new animal drugs.

Under the Act, a new animal drug may not be legally introduced into interstate commerce unless it is the subject of either:

● an approved NADA or abbreviated new animal drug application (ANADA) under section 512 of the Act;

● a conditional approval under section 571 of the Act;

● a listing on the Legally Marketed Unapproved New Animal Drug Index for Minor Species (the Index) under section 572 of the Act;

● an emergency use authorization (“EUA”) under section 564 of the Act (an EUA may only be issued under very limited circumstances, more information regarding EUAs is available at this webpage:

Emergency Use Authorization) ;

● an investigational exemption under section 512(j) of the Act.

Three Regulatory Pathways in the U.S.

to Legal Marketing Status for Animal Health Drugs

An approved animal drug has gone through the New Animal Drug Application (NADA) process, or for an approved generic animal drug, the Abbreviated New Animal Drug Application (ANADA) process.

If the information in the application meets the requirements for approval, FDA approves the animal drug.

FDA’s approval means the drug is safe and effective when it is used according to the label.

FDA’s approval also ensures that the drug’s strength, quality, and purity are consistent from batch to batch, and that the drug’s labeling is truthful, complete, and not misleading.

Conditional Approval

Conditional approval is only available for some animal drugs for use in a minor species or in a major species under special circumstances.

A conditionally approved animal drug has gone through FDA's drug approval process except the drug has not yet met the effectiveness standard for full approval.

FDA’s conditional approval means that when used according to the label, the drug is safe and has a “reasonable expectation of effectiveness.” FDA's conditional approval also means that the drug is properly manufactured.

The conditional approval is valid for one year.

The drug company can ask FDA to renew the conditional approval annually for up to four more years, for a total of five years of conditional approval.

During the 5-year period, the drug company can legally sell the animal drug while collecting the remaining effectiveness data.

After collecting the remaining effectiveness data, the company submits an application to FDA for full approval.

The agency reviews the application and, if appropriate, fully approves the drug.

An indexed animal drug is a drug on FDA’s Index of Legally Marketed Unapproved New Animal Drugs for Minor Species, referred to simply as “the Index.” As the name says, a drug listed on the Index is unapproved but has legal marketing status.

It can be legally sold for a specific use in certain minor species.

Indexing is allowed for drugs for:

● Non-food-producing minor species, such as pet birds, hamsters, and ornamental fish.

These animals are typically not eaten by people or by other animals that produce food for people to eat;

● An early non-food life stage of a food-producing minor species, such as oyster spat (immature oysters).

Because people do not generally eat oyster spat, a drug to treat a disease in spat can be indexed, but a drug to treat a disease in adult oysters, which people commonly eat, cannot be indexed.

Indexing a drug is quite different from the drug approval process.

Indexing relies heavily on a panel of qualified experts outside FDA.

The experts review the drug’s safety in the specific minor species and the drug’s effectiveness for the intended use.

All experts on the panel must agree that, when used according to the label, the drug’s benefits outweigh the risks to the treated animal.

If FDA agrees with the panel, the agency adds the drug to the Index.

Animal Health Business Regulations

The development, approval and sale of animal health products are governed by the laws and regulations of each country in which we intend to seek approval, where necessary, to market and subsequently sell our prescription drug and non-drug products.

To comply with these regulatory requirements, we have established processes and resources to provide oversight of the development, approval processes and launch of our products and to position those products in order to gain market share in each respective market.

federal regulatory agencies are charged with oversight and regulatory authority of animal health products in the United States.

These agencies, depending on the product and its intended use, may include the FDA, the USDA and the Environmental Protection Agency.

The approval of prescription drugs intended for animal use is regulated by the FDA’s CVM.

In addition, the Drug Enforcement Administration regulates animal therapeutics that are classified as controlled substances.

In addition, the Federal Trade Commission may, in the case of non-drug products, regulate the marketing and advertising claims being made.

The FDA plays a significant role in regulating the labeling, advertising and promotion of animal drugs.

This is also true of regulatory agencies in the EU and other territories.

In addition, advertising and promotion of animal health products is controlled by regulations in many countries.

These rules generally restrict advertising and promotion to those claims and uses that have been reviewed and approved by the applicable agency.

We will conduct a review of advertising and promotional material for compliance with the local and regional requirements in the markets where we sell our product candidates.

EMA Regulation of Human Prescription Drugs

Napo and Napo Therapeutics intend to leverage the orphan medicines marketing authorization incentives from the EMA for the short bowel syndrome and congenital diarrheal disorders indications for crofelemer for the licensed territories in the European Union.

EMA has developed a regulatory procedure for sponsor eligibility for incentives available for drugs with ODD for the appropriate patient populations in an expedited manner.

The EMA is responsible for scientific evaluation of centralized marketing authorization applications (“MAA”).

Once granted by the European Commission, the centralized MAA is valid in all EU member states, Iceland, Norway and Liechtenstein.

Centralized authorization procedure

Under the centralized authorization procedure, pharmaceutical companies submit a single marketing authorization application to EMA.

This allows the marketing-authorization holder to market the medicine and make it available to patients and healthcare professionals throughout the EU on the basis of a single marketing authorization.

EMA's Committee for Medicinal products for Human Use (“CHMP”) or Committee for Medicinal products for Veterinary Use (“CVMP”) carry out a scientific assessment of the application and give a recommendation on whether the medicine should be marketed or not.

However, under EU law EMA has no authority to actually permit marketing in the different EU countries.

The European Commission is the authorizing body for all centrally authorized product, who takes a legally binding decision based on EMA's recommendation.

This decision is issued within 67 days of receipt of EMA’s recommendation.

Once granted by the European Commission, the centralized marketing authorization is valid in all EU Member States as well as in the European Economic Area (“EEA”) countries Iceland, Liechtenstein and Norway.

Commission decisions are published in the Community Register of medicinal products for human use.

Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, and medicinal products containing a new active substance indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases.

Conditional marketing authorization

The EMA supports the development of medicines that address unmet medical needs.

In the interest of public health, applicants may be granted a conditional marketing authorization for such medicines on less comprehensive clinical data than normally required, where the benefit of immediate availability of the medicine outweighs the risk inherent in the fact that additional data are still required.

Medicines for human use are eligible if they are intended for treating, preventing or diagnosing seriously debilitating or life-threatening diseases.

This includes orphan medicines.

Its use is also intended for a public health emergency (e.g.

For these medicines, less comprehensive pharmaceutical and non-clinical data may also be accepted.

The legal basis is Article 14-a of Regulation (EC) No 726/2004.

The provisions for granting a conditional marketing authorization are further elaborated in Regulation (EC) No 507/2006.

Criteria and conditions

EMA's CHMP may grant a conditional marketing authorization for a medicine if it finds that all of the following criteria are met:

● the benefit-risk balance of the medicine is positive;

● it is likely that the applicant will be able to provide comprehensive data post-authorization;

● the medicine fulfils an unmet medical need;

● the benefit of the medicine's immediate availability to patients is greater than the risk inherent in the fact that additional data are still required.

Conditional marketing authorizations are valid for one year and can be renewed annually.

Once a conditional marketing authorization has been granted, the marketing authorization holder must fulfil specific obligations within defined timelines.

These obligations could include completing ongoing or new studies or collecting additional data to confirm the medicine's benefit-risk balance remains positive.

EMA publishes the conditions of the marketing authorization in the medicine's European public assessment report.

The marketing authorization can be converted into a standard marketing authorization (no longer subject to specific obligations) once the marketing authorization holder fulfils the obligations imposed and the complete data confirm that the medicine's benefits continue to outweigh its risks.

Initially, this is valid for 5 years.

It can then be renewed for unlimited validity.

As for any medicine, if new data show that the medicine’s benefits no longer outweigh its risks, EMA can take regulatory action, such as suspending or revoking the marketing authorization.

EMA can also take regulatory action if the company does not comply with the imposed obligations.

Despite earlier approval, it guarantees that the medicine meets rigorous EU standards for safety, efficacy and quality and that comprehensive data is still generated post-approval.

It offers a robust post-authorization regulatory framework based on legally binding obligations, safeguards and controls.

These include:

● full prescribing information and package leaflet with detailed instructions for safe use and conditions for storage;

● a robust risk-management and safety monitoring plan;

● manufacturing controls including official batch controls for vaccines, as required;

● legally binding post-approval obligations (i.e.

conditions) for the marketing authorization holder and a clear legal framework for the evaluation of emerging efficacy and safety data;

● a pediatric investigation plan.

Guidance for applicants for conditional marketing authorization

EMA advises applicants to discuss their development plans with the Agency via scientific advice or protocol assistance early in the development process.

Involving health technology assessment bodies early is also encouraged, which is possible via EMA's parallel consultations procedure.

The applicant should indicate a request for conditional marketing authorization in their notification of intention to submit a marketing authorization application.

They should submit this 6 to 7 month before submitting the application.

EMA also encourages applicants to further discuss their plans with EMA as part of a pre-submission meeting.

For products deemed suitable for a conditional marketing authorization, EMA encourages applicants to also consider requesting accelerated assessment.

Applicants should include a formal request for a conditional marketing authorization in their marketing authorization application.

The CHMP will assess this request together with the application.

Guideline on the scientific application and the practical arrangements necessary to implement Regulation (EC) No 507/2006 on the conditional marketing authorization for medicinal products for human use falling within the scope of Regulation (EC) No 726/2004.

Distinction from authorization under exceptional circumstances

EMA may also grant a marketing authorization in absence of comprehensive data under exceptional circumstances.

Unlike conditional marketing authorization, where marketing approval is granted in the likelihood that the sponsor will provide such data within an agreed timeframe, EMA can grant authorization under exceptional circumstances when comprehensive data cannot be obtained even after authorization.

This authorization route normally does not lead to a standard marketing authorization.

Orphan drug development incentives from EMA

Protocol assistance

The Agency provides a form of scientific advice specifically for orphan medicines called protocol assistance.

This allows sponsors to get answers to their questions on the types of studies needed to demonstrate the medicine's quality, benefits and risks, and information on the significant benefit of the medicine.

Protocol assistance is available at a reduced charge for designated orphan medicines, linked to a fee-reduction scale that depends on the status of the sponsor.

There is no restriction on the number of times a sponsor can request protocol assistance.

The Agency encourages sponsors to consider coordinating the timing of protocol assistance from the Agency with request for scientific advice from the United States Food and Drug Administration (FDA).

Parallel scientific advice with the FDA is available.

Access to the centralized authorization procedure

All designated orphan medicines are assessed for marketing authorization centrally in the European Union.

This allows companies to make a single application to the European Medicines Agency, resulting in a single opinion and a single decision from the European Commission, valid in all EU Member States.

Sponsors may also have access via orphan designation to conditional approval, which is conducted under the centralized procedure.

Ten years of market exclusivity

Authorized orphan medicines benefit from ten years of protection from market competition with similar medicines with similar indications once they are approved.

This period of protection is extended by two years for

medicines that also have complied with an agreed pediatric investigation plan granted at the time of review of the orphan medicine designation.

Additional incentives for micro, small and medium-sized enterprises (“SMEs”)

Companies classified as SMEs benefit from further incentives when developing medicines with orphan designation.

These include administrative and procedural assistance from the Agency's SME office and fee reductions.

Fee reductions

Companies applying for designated orphan medicines pay reduced fees for regulatory activities.

This includes reduced fees for protocol assistance, marketing-authorization applications, inspections before authorization, applications for changes to marketing authorizations made after approval, and reduced annual fees.

Fee reductions are revised each year in relation to the budget available.

The Agency does not offer research grants for sponsors of orphan medicines, but funding is available from the European Commission and other sources:

● Horizon 2020, the EU Framework Programme for Research and Innovation;

● E-Rare, a transnational project for research programs on rare diseases.

● Grants are also available for sponsors considering research in the United States or Japan:

● United States:

Food and Drug Administration:

Orphan products grants program

National Institute of Biomedical Innovation:

Services to promote development of medicinal products for rare diseases

Incentives in Member States

Details on incentives available for designated orphan medicines in EU Member States are available in the European Commission's Inventory of Union and Member State incentives to support research into, and the development and availability of, orphan medicinal products.

Activities after orphan designation

Orphan designation makes the sponsor eligible for a number of orphan incentives.

Sponsors need to comply with various activities that take place after a designation has been granted.

Sponsors should submit all post-designation activities, including annual reports.

For information and guidance on using IRIS, see the IRIS homepage.

Sponsors must submit an annual report on development to the Agency summarizing the status of development of the medicine.

Sponsors of medicines with orphan designation should also remember to apply for a pediatric investigation plan (“PIP”), deferral or waiver at the appropriate time, as specified in the Pediatric regulation.

Sponsors also need to submit an application for maintenance of the orphan designation at the time of marketing authorization, in order to be eligible for the ten-year market exclusivity incentive.

A valid and completed PIP could make the sponsor eligible for the two-year marketing exclusivity extension to the ten-year marketing exclusivity which is granted at the time of review of the orphan medicinal designation.

Transfers of orphan designation from one sponsor to another are possible.

Transfers are free of charge.

Sponsors can also request removal of an orphan designation.

EMA Compassionate Use Program

Compassionate use is a treatment option that allows the use of an unauthorized medicine.

Under strict conditions, products in development can be made available to groups of patients who have a disease with no satisfactory authorized therapies and who cannot enter clinical trials.

The EMA provides recommendations through the Committee for Medicinal Products for Human Use (“CHMP”), but these do not create a legal framework.

Compassionate use programs are coordinated and implemented by Member States, which set their own rules and procedures.

Established by Article 83 of Regulation (EC) No 726/2004, this tool is designed to:

● facilitate and improve access to compassionate use programs by patients in the EU;

● favor a common approach regarding the conditions of use, the conditions for distribution and the patients targeted for the compassionate use of unauthorized new medicines;

● increase transparency between Member States in terms of treatment availability.

These programs are only put in place if the medicine is expected to help patients with life-threatening, long-lasting or seriously debilitating illnesses, which cannot be treated satisfactorily with any currently authorized medicine.

The medicine must be undergoing clinical trials or have entered the marketing-authorization application process and while early studies will generally have been completed, its safety profile and dosage guidelines may not be fully established.

How to request an opinion for Compassionate Use

National competent authorities can ask EMA for an opinion on how to administer, distribute and use certain medicines for compassionate use.

The CHMP also identifies which patients would benefit, and Member States should take note of these recommendations when making decisions.

Manufacturers and marketing-authorization applicants should not contact EMA to request an opinion, but they may wish to inform the Agency of applications underway at national level.

National competent authorities will inform the Agency if they are making a product available to a group of patients for compassionate use.

Comparison to individual basis treatment (Named Patient Program)

Compassionate use should not be confused with 'named-patient basis' treatments, which see doctors obtain medicines directly from manufacturers before authorization.

This is done on an individual basis under the direct responsibility of the doctor, and the Agency does not need to be informed.

In general, medicines that are not yet authorized are first made available through clinical trials and patients should always be considered for inclusion in trials before being offered compassionate use programs.

Compassionate use recommendations

EMA's recommendations cover how a medicine should be used in compassionate use programs across the EU, and the type of patient who may benefit from treatment.

EMA does not update its recommendations after a medicine receives marketing authorization, as all relevant information on the medicine's use is available in its European public assessment report (“EPAR”).

However, compassionate use programs may continue in certain Member States until the medicine becomes available on the market.

Rewards and incentives for pediatric medicines

Several rewards and incentives for the development of pediatric medicines for children are available in the EU.

Medicines authorized across the EU with the results of studies from a pediatric investigation plan included in the

product information are eligible for an extension of their supplementary protection certificate by six months.

This is the case even when the studies' results are negative.

For orphan medicines, the incentive is an additional two years of market exclusivity.

Scientific advice and protocol assistance at the Agency are free of charge for questions relating to the development of pediatric medicines.

Medicines developed specifically for children that are already authorized but are not protected by a patent or supplementary protection certificate are eligible for a pediatric-use marketing authorization (“PUMA”).

If a PUMA is granted, the product will benefit from 10 years of market protection as an incentive.

The above can be complemented by other incentives to support the research, development and availability of medicinal products for pediatric use.

Market exclusivity:

Orphan medicines

Orphan medicines benefit from ten years of market exclusivity once they receive a marketing authorization in the EU.

This measure is intended to encourage the development of medicines for rare diseases, by protecting them from competition from similar medicines with similar indications, which cannot be marketed during the exclusivity period.

Market exclusivity is an orphan incentive awarded by the European Commission to a specific clinical indication with an orphan designation.

Each indication with an orphan designation confers ten years' market exclusivity for the particular indication.

A medicine that has multiple orphan designations for different conditions will benefit from separate market exclusivity periods pertaining to its different orphan designations.

To benefit from market exclusivity, a medicine must maintain its orphan designation at the time of marketing authorization.

Extension of market exclusivity period

The market exclusivity period is extended by two additional years for an orphan-designated condition when the results of specific studies are reflected in the summary of product characteristics (“SmPC”) addressing the pediatric population and completed in accordance with a fully compliant PIP.

The European Commission grants the extension based on a positive compliance check from the Pediatric Committee and opinion from the Committee for Medicinal Products for Human Use (“CHMP”), and includes this information in the Community register of orphan medicinal products.

Review of market exclusivity period

Article 8(2) of the Orphan Regulation establishes the possibility for Member States to request that the market exclusivity be reduced from ten to six years, under certain circumstances.

Expiry of market exclusivity

When the period of market exclusivity for an indication ends, the orphan designation for that indication expires and the European Commission removes it from the Community register of orphan medicinal products.

Once all of the orphan designations associated with an approved medicine have expired or been withdrawn by the sponsor, the medicine ceases to be classified as an orphan medicine and no longer benefits from the orphan incentives.

European Union new chemical entity exclusivity

In the EU, new chemical entities, sometimes referred to as new active substances, qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity.

This data exclusivity, if granted, prevents regulatory authorities in the European Union from referencing the innovator’s data to assess a

generic application for eight years, after which a generic marketing authorization application can be submitted, and the innovator’s data may be referenced, but not approved for two years.

The overall ten-year period will be extended to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.

European Union orphan designation and exclusivity

In the EU, the EMA’s Committee for Orphan Medicinal Products grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in the European Union Community and for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or the product would be a significant benefit to those affected).

Additionally, designation is granted for products intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the medicinal product.

In the European Union, orphan drug designation entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity is granted following medicinal product approval.

This period may be reduced to six years if the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

Orphan drug designation must be requested before submitting an application for marketing approval.

Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

European Union Pediatric Plan

In the EEA, marketing authorization applications for new medicinal products not authorized have to include the results of studies conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee (“PDCO”).

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For orphan drug designated medicinal products, the 10 year period of market exclusivity is extended to 12 years.

Clinical Trials Regulation in Europe

In the EU, pursuant to the currently applicable Clinical Trials Directive 2001/20/EC and the Directive 2005/28/EC on GCP, a system for the approval of clinical trials in the EU has been implemented through national legislation of the EU member states.

Under this system, an applicant must obtain approval from the national competent authority of an EU member state in which the clinical trial is to be conducted, or in multiple member states if the clinical trial is to be conducted in a number of member states.

Furthermore, the applicant may only start a clinical trial at a specific study site after the independent ethics committee for each site has issued a favorable opinion.

The clinical trial application must be accompanied by an investigational medicinal product dossier with supporting information prescribed by Directive 2001/20/EC and Directive 2005/28/EC and corresponding national laws of the individual EU member states and further detailed in applicable guidance documents.

In April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 536/2014, which is set to replace the current Clinical Trials Directive 2001/20/EC.

It is anticipated that the new Clinical Trials Regulation (EU) No 536/2014 may come into effect in late 2021with a three-year transition period for some types of clinical trials.

It will overhaul the current system of

approvals for clinical trials in the EU.

Specifically, the new regulation, which will be directly applicable in all EU member states, aims at simplifying and streamlining the approval of clinical trials in the EU.

For instance, the new Clinical Trials Regulation provides for a streamlined application procedure via a single-entry point and strictly defined deadlines for the assessment of clinical trial applications

Healthcare Laws

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The term “remuneration” has been broadly interpreted to include anything of value.

The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on

the one hand and prescribers, purchasers, formulary managers and beneficiaries on the other.

The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, formulary managers and beneficiaries on the other.

Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly.

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Instead, the legality of the arrangement will be evaluated on a case by case basis based on a cumulative review of all its facts and circumstances.

Several courts have interpreted the statute’s intent requirement to mean that if anyone purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated.

Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated.

Additionally, the intent standard under the U.S.

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Companies also have been prosecuted for allegedly violating the Anti-Kickback Statute and False Claims Act as a result of impermissible arrangements between companies and healthcare practitioners or as a result of the provision of remuneration by the companies to the healthcare practitioners.

In addition, the civil monetary penalties statute imposes penalties against any person who is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

In addition, the civil monetary penalties statute imposes penalties against any person who is determined to have presented or caused to be presented a claim to a federal health

program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

Many states also have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

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Given the significant size of actual and potential settlements, it is expected that the government authorities will continue to devote substantial resources to investigating healthcare providers’ and manufacturers’ compliance with applicable fraud and abuse laws.

The federal Health Insurance Portability and Accountability Act (“HIPAA”) of 1996 created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up a material fact or making any

materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

The federal Health Insurance Portability and Accountability Act (“HIPAA”) of 1996 created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

Similar to the U.S.

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Adequate third party reimbursement may not be available to enable Napo to maintain price levels sufficient to realize an appropriate return on Napo’s investment in product development.

Additionally, coverage and

reimbursement for products can differ significantly from payor to payor.

Additionally, coverage and reimbursement for products can differ significantly from payor to payor.

One third party payor’s decision to cover a particular medical product or service does not ensure that other payors will also provide coverage for the medical product or service, or will provide coverage at an adequate reimbursement rate.

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extended the Medicaid Drug Rebate Program to the utilization of prescriptions of individuals enrolled in Medicaid managed care plans;

imposed mandatory discounts for certain Medicare Part D beneficiaries as a condition for manufacturers’ outpatient drugs covered under Medicare Part D;

imposed mandatory discounts for

certain Medicare Part D beneficiaries as a condition for manufacturers’ outpatient drugs covered under Medicare Part D;

subjected drug manufacturers to new annual fees based on pharmaceutical companies’ share of sales to federal healthcare programs;

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A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.

This included aggregate reductions of Medicare

payments to providers of 2% per fiscal year, which went into effect on April 1, 2013, and due to subsequent legislative amendments to the statute, will stay in effect through 2025 unless additional action is taken by Congress.

This included aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013, and due to subsequent legislative amendments to the statute, will stay in effect through 2025 unless additional action is taken by Congress.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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Napo expects that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for Napo’s products once approved or additional pricing pressures.

Animal Health Business

To comply with these regulatory requirements, we are establishing processes and resources to provide oversight of the development, approval processes and launch of our products and to position those products in order to gain market share in each respective market.

federal regulatory agencies are charged with oversight and regulatory authority of animal health products in the United States.

These agencies, depending on the product and its intended use, may include the FDA, the USDA and the Environmental Protection Agency.

The approval of prescription drugs intended for animal use is regulated by the FDA’s CVM.

In addition, the Drug Enforcement Administration regulates animal therapeutics that are classified as controlled substances.

In addition, the Federal Trade Commission may, in the case of non-drug products, regulate the marketing and advertising claims being made.

Marketing Exclusivity

We are currently planning on seeking MUMS designation for some of our prescription drug products, and if we receive such a designation, we will be entitled to a seven-year marketing exclusivity, which means that we will face no competition from another sponsor marketing the same drug in the same dosage form for the same intended use.

If we were to lose such designation or not receive such designation but our application as a new animal drug is found to be a new chemical entity that meets the criteria described by the FDA, we would be entitled to a five-year marketing exclusivity.

In order to receive this five-year exclusivity, the FDA would have to find in its approval of our application that our NADA contains an API not previously approved in another application, that the application itself is an original application, not a supplemental application, and that our application included the following studies:

one or more investigations to demonstrate substantial evidence of the effectiveness of the drug for which we are seeking approval;

animal safety studies and human food safety studies (where applicable).

If the NADA is seeking approval of a drug for which we have received conditional approval, we, upon approval would still be entitled to a five-year marketing exclusivity provided we meet the criteria as set forth above.

If, however, our NADA is for a drug for which the FDA has determined that the drug contains an API that has previously been approved, regardless of whether the original approval was for use in humans or not, we may only be entitled to a three-year marketing exclusivity provided that the NADA is an original, not supplemental, application and contains both safety and efficacy studies demonstrating the safety and efficacy of the drug which is the subject of the application.

We have received MUMS designation for Canalevia for the indication of chemotherapy-induced diarrhea, or CID, in dogs.

Additionally, the FDA has indicated that the use of Canalevia for the treatment of EID in dogs qualifies as a “minor use”, which means that Canalevia is also eligible for conditional approval for the indication of EID in dogs.

The FDA plays a significant role in regulating the labeling, advertising and promotion of animal drugs.

This is also true of regulatory agencies in the EU and other territories.

In addition, advertising and promotion of animal health products is controlled by regulations in many countries.

These rules generally restrict advertising and promotion to those claims and uses that have been reviewed and approved by the applicable agency.

We will conduct a review of advertising and promotional material for compliance with the local and regional requirements in the markets where we eventually may sell its product candidates.

Other Regulatory Considerations

We believe regulatory rules relating to human food safety, food additives, or drug residues in food will not apply to the products we currently are developing because our animal prescription drug product candidates are not intended for use in production animals, with the exception of horses, which qualify as food animals in Europe and Canada;

and our non-prescription products are not regulated by section 201(g) of the Federal Food, Drug, and Cosmetic Act, which the FDA is authorized to administer.

Our animal prescription drug product candidates currently in development, if approved, may eventually face generic competition in the United States and in the EU after the period of exclusivity has expired.

In the United States, a generic animal drug may be approved pursuant to an abbreviated new animal drug application (“ANADA”).

With an ANADA, a generic applicant is not subject to the submission of new clinical and safety data but instead must only show that the proposed generic product is a copy of the novel drug product, and bioequivalent to the approved novel product.

However, if our product candidates are the first approved by the FDA or the EMA as applicable for use in animals, they will be eligible for a five-year marketing exclusivity in the United States and 10 years in the EU, thereby prohibiting generic entry into the market.

If the product has MUMS designation, it has a seven-year marketing exclusivity.

We do not believe that our animal non-prescription products are currently subject to regulation in the United States.

and our nonprescription products are not regulated by section 201(g) of the Federal Food, Drug, and Cosmetic Act, which the FDA is authorized to administer.

We do not believe that our animal nonprescription products are currently subject to regulation in the United States.

The CVM only regulates those animal supplements that fall within the FDA’s definition of an animal drug, food or feed additive.

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Feed additives are defined as those articles that are added to an animal’s feed or water, as illustrated by the guidance documents.

Our non-prescription products are not added to food, are not ingredients in food, nor are they added to any animal’s drinking water.

Therefore, our non-prescription products do not fall within the definition of a food or feed additive.

The FDA seeks to regulate such supplements as food or food additives, depending on the intended use of the product.

The intended use is demonstrated by how the article is included in a food or added to the animals’ intake ( i.e., through its drinking water).

If the intended use of the product does not fall within the proscribed use making the product a food, it cannot be regulated as a food.

There is no intent to make our non-prescription products a component of an animal food, either directly or indirectly.

A feed additive is a product that is added to a feed for any reason, including the top dressing of an already prepared feed.

Some additives, such as certain forage, are deemed to be Generally Recognized as Safe (“GRAS”), and therefore, not subject to a feed Additive Petition approval prior to use.

However, the substances deemed GRAS are generally those that are recognized as providing nutrients as a food does.

We do not believe that our non-prescription products fit within this framework either.

Finally, a new animal drug refers to drugs intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in animals.

Our non-prescription products are not intended to diagnose, cure, mitigate, treat or prevent disease and therefore, do not fit within the definition of an animal drug.

Our non-prescription products are intended to support a healthy gut, support fluid retention, and normalize stool formation in animals suffering from scours.

Additionally, because a previously marketed human formulation of the botanical extract in our non-prescription products was considered a dietary supplement subject to the Dietary Supplement Health and Education Act of 1994 (and not regulated as a drug by the FDA), we do not believe that the FDA would regulate the animal formulation used in our non-prescription products in a different manner.

We do not believe that our non-prescription products fit the definition of an animal drug, food or food additive and therefore are not regulated by the FDA at this time.

Our nonprescription products are not added to food, are not ingredients in food, nor are they added to any animal’s drinking water.

There is no intent to make our nonprescription products a component of an animal food, either directly

or indirectly.

We do not believe that our nonprescription products fit the definition of an animal drug, food or food additive and therefore are not regulated by the FDA at this time.

In addition to the foregoing, we may be subject to state, federal and foreign healthcare and/or veterinary medicine laws, including but not limited to anti-kickback laws, as we may from time to time enter consulting and other financial arrangements with veterinarians, who may prescribe or recommend our products.

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From time to time, we may become involved in litigation relating to claims arising from the ordinary course of business.

Other than as set forth below, there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows.

July 2017 Complaint Relating to the Merger

On July 20, 2017, a putative class action complaint was filed in the United States District Court, Northern District of California, Civil Action No.

3:17-cv-04102, by Tony Plant (the “Plaintiff”) on behalf of shareholders of the Company who held shares on April 12, 2017 and were entitled to vote at the 2017 Special Shareholders Meeting, against the Company and certain individuals who were directors as of the date of the vote (collectively, the “Defendants”), in a matter captioned Tony Plant v.

Jaguar Animal Health, Inc., et al.

(Jaguar Health, Inc.

was formerly known as Jaguar Animal Health, Inc.), making claims arising under Section 14(a) and Section 20(a) of the Exchange Act and Rule 14a-9, 17 C.F.R.

§ 240.14a-9, promulgated thereunder by the SEC.

The claims alleged false and misleading information provided to investors in the Joint Proxy Statement/Prospectus on Form S-4 (File No.

333-217364) declared effective by the Commission on July 6, 2017 related to the solicitation of votes from shareholders to approve the merger and certain transactions related thereto.

The Company accepted service of the complaint and summons on behalf of itself and the United States-based director Defendants on November 1, 2017.

The Company has not accepted service on behalf of, and Plaintiff has not yet served, the non-U.S.-based director Defendants.

By order dated September 20, 2018, the court dismissed the lawsuit for failure to state a claim.

Plaintiff was entitled to amend that complaint within 20 days from the date of dismissal.

On October 10, 2018, Plaintiff filed a second amended complaint to focus on the Company’s commercial strategy in support of Equilevia and the related disclosure statements in the Form S-4 described above.

On November 6, 2018, the Defendants moved to dismiss the second amended complaint.

The court denied the Defendants’ motion to dismiss on June 28, 2019.

The Company answered the second amended complaint on August 2, 2019;

the answer denied the material allegations of the second amended complaint.

Following the completion of document discovery, the parties engaged in a mediation that resulted in an agreement in principle to settle the litigation on a class-wide basis for $2.6 million, subject to court approval.

Plaintiff filed a motion for preliminary approval of the proposed settlement on December 30, 2020.

The court preliminarily approved the proposed settlement, and authorized Plaintiff to provide settlement class members with notice of the proposed settlement, in an order dated February 2, 2021.

The final settlement approval hearing is currently scheduled for May 27, 2021.

Assuming that the court gives final approval to the proposed settlement following the final settlement approval hearing, the entire settlement consideration will be provided by the Company’s director and officer liability insurance carrier.

Other than as set forth in “Item 3.

LEGAL PROCEEDINGS”, there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows.

Corporate Information

We were incorporated in the State of Delaware on June 6, 2013.

Our principal executive offices are located at 200 Pine Street, Suite 400, San Francisco, CA 94014 and our telephone number is (415) 371-8300.

Our website address is https://jaguar.health.

The information contained on, or that can be accessed through, our website is not part of this prospectus.

Our principal executive office is located at 200 Pine Street, Suite 400, San Francisco, CA 94104 for human health prescription drugs and the telephone number is (415) 371 8300.

We have an additional office at 200 Pine Street, Suite 600, San Francisco, CA 94104 for Jaguar Animal Health.

Our website for the corporation is https://jaguar.health.

The information contained on, or that can be accessed through, our website is not part of this annual report.

Our voting common stock is listed on the NASDAQ Capital Market and trades under the symbol “JAGX.” On July 31, 2017, we completed the acquisition of Napo pursuant to the Agreement and Plan of Merger, dated March 31, 2017, by and among the Company, Napo, Napo Acquisition Corporation, and Napo’s representative (the “Merger”).

As of December 31, 2021, we had 52 employees.

Five employees hold D.V.M.

Eleven of our employees are engaged in research and development activities and 14 employees are engaged in sales and marketing.

Ten employees hold M.D., D.V.M and/or Ph.D.

Twenty-one of our employees are engaged in research and development activities and 17 employees are engaged in sales and marketing.

We have two employees within Napo Therapeutics in Italy.

None of our employees are represented by labor unions or covered by collective bargaining agreements.

Description of Properties

Our corporate headquarters are located in San Francisco, California, where we sublease 5,263 rentable square feet of office space from Peacock Construction, Inc.

Our corporate headquarters are located in San Francisco, California, where we currently lease 10,526 rentable square feet of office space from M & E, LLC.

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