What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-14 compared with 2022-03-25 · 264 added, 216 removed, 415 unchanged (54% of the section changed)

We are a clinical-stage biotechnology company focused on developing treatments for patients suffering from complex rare diseases using our novel cell penetrating peptide technology platform.

Our lead product candidate, CTI-1601, is a subcutaneously administered, recombinant fusion protein intended to deliver human frataxin ("FXN") an essential protein, to the mitochondria of patients with Friedreich’s ataxia.

Friedreich’s ataxia is a rare, progressive and fatal disease in which patients are unable to produce sufficient FXN due to a genetic abnormality.

There is currently no approved therapy for Friedreich’s ataxia.

We have completed two Phase 1 clinical trials in patients with Friedreich’s ataxia but the clinical development of CTI-1601 is currently subject to a clinical hold issued by the U.S.

Food and Drug Administration ("FDA") in May 2021.

We submitted a response to the clinical hold in January 2022 but were informed by the FDA in February 2022 that the clinical hold would remain in place and that additional data is needed to resolve the clinical hold.

We are evaluating how best to respond to their request.

We do not know when, or if, the clinical hold will be lifted.

We have received orphan drug status, fast track designation and rare pediatric disease designation, from the FDA for CTI-1601.

In addition, we received orphan drug and Priority Medicines ("PRIME") designations for CTI-1601 from the European Commission.

The receipt of such designations or positive opinions may not result in a faster development process, review or approval compared to products considered for approval under conventional FDA or European Medicines Agency ("EMA") procedures and does not assure ultimate approval by the FDA or EMA.

We believe that our cell penetrating peptide ("CPP") technology platform, which enables a therapeutic molecule to cross a cell membrane in order to reach intracellular targets, has the potential to enable the treatment of other rare and orphan diseases.

We are a clinical-stage biotechnology company focused on developing treatments for patients suffering from complex rare diseases using our novel cell penetrating peptide ("CPP") technology platform.

Our sole product candidate that has currently progressed beyond discovery, CTI-1601, is a subcutaneously administered, recombinant fusion protein intended to deliver human frataxin ("FXN") an essential protein, to the mitochondria of patients with FA.

FA is a rare, progressive and fatal disease in which patients are unable to produce sufficient FXN due to a genetic abnormality.

Currently, there are no treatment options that address the core deficit of FA, low levels of FXN.

CTI-1601 represents the first potential therapy designed to increase FXN levels in patients with FA.

We have completed two Phase 1 clinical trials in patients with FA and are in the process of conducting a Phase 2 dose exploration clinical trial.

We have received an orphan drug designation, fast track designation and rare pediatric disease designation, from the FDA for CTI-1601.

In addition, we received orphan drug designation for CTI-1601 from the European Commission and a Priority Medicines ("PRIME") designation from the EMA.

The receipt of such designations or positive opinions may not result in a faster development process, review or approval compared to products considered for approval under conventional FDA or EMA procedures and does not assure ultimate approval by the FDA or EMA.

In May 2021, we reported positive top-line data from our Phase 1 FA program after completing dosing of the single ascending dose ("SAD") trial in December 2020 and of the multiple ascending dose ("MAD") trial in March 2021.

Data from these trials demonstrate proof-of-concept by showing that daily subcutaneous injections of CTI-1601 for up to 13 days resulted in dose-dependent increases in FXN levels from baseline compared to placebo in all evaluated tissues (buccal cells, skin, and platelets).

FXN levels achieved in peripheral tissues (buccal cells) following daily 50 mg and 100 mg subcutaneous injections of CTI-1601 were at or in excess of FXN levels that would be expected in phenotypically normal heterozygous carriers.

There were no serious adverse events ("SAEs") associated with either the SAD or MAD trials.

Also in May 2021, the FDA placed a clinical hold on our CTI-1601 clinical program after we notified the agency of mortalities at the highest dose levels of the 26-week non-human primate ("NHP") toxicology study that was designed to support extended dosing of patients with CTI-1601.

At the time the clinical hold was placed, the toxicology study was still ongoing and we had no interventional clinical trials with patients enrolling or enrolled.

In February 2022, in response to the complete response we submitted, the FDA stated that it was maintaining the clinical hold and that additional data were needed to resolve the clinical hold.

We subsequently submitted a request to the FDA for a Type C meeting, which was granted and was held in July 2022.

We submitted a complete response to the FDA incorporating additional information requested by the FDA at the meeting as

well as information on a proposed dose exploration study in August 2022.

In September 2022, following the Type C meeting and the submission of our complete response, the FDA allowed the 25 mg cohort of a Phase 2, four-week, placebo-controlled, dose exploration trial of CTI-1601 in FA patients to proceed.

In connection with this decision, the FDA lifted its full clinical hold on the CTI-1601 clinical development program and imposed a partial hold.

The dose exploration trial is designed to further characterize CTI-1601’s safety, pharmacodynamics ("PD") and pharmacokinetics ("PK") profiles to provide information about the preferred long-term dose and dose regimen.

We have since initiated the 25 mg cohort of the Phase 2 dose exploration trial.

Initiation of the second cohort and/or other clinical trials is contingent on the FDA’s agreement based on its review of the trial's 25 mg cohort data and on review by the trial’s independent data monitoring committee.

We anticipate that we will provide an update that will outline the next steps for the clinical trial in the second quarter of 2023 and anticipate reporting top-line data in the second half of 2023.

We expect to initiate the Phase 2 trial’s second cohort in the second quarter of 2023 should the FDA and the independent data monitoring committee allow the second cohort of the Phase 2 dose exploration study to proceed as planned.

We believe that our CPP technology platform, which enables a therapeutic molecule to cross a cell membrane in order to reach intracellular targets, has the potential to enable the treatment of other rare and orphan diseases.

We intend to use our proprietary platform to target additional orphan indications characterized by deficiencies in or alterations of intracellular content or activity.

We have assembled an experienced management team, each of whom has over 20 years of pharmaceutical industry experience.

Our management team and consultants have significant expertise in discovery, non-clinical and clinical development, regulatory affairs and the development of manufacturing processes utilizing good manufacturing practices (GMPs") for biologics and small molecules.

Our management team and consultants have significant expertise in discovery, non-clinical and clinical development, regulatory affairs and the development of manufacturing processes utilizing current good manufacturing practices (cGMPs") for biologics and small molecules.

We believe that our management team’s diverse mix of skills provides for the implementation of effective approaches to drug and biologic development.

2 unchanged sentences

Advance CTI-1601 through clinical development and regulatory approval in the United States the European Union and other foreign jurisdictions.

We have completed two Phase 1 clinical trials of CTI-1601 in patients with Friedreich’s ataxia in the United States but the clinical development of CTI-1601 is currently subject to a clinical hold issued by the FDA in May 2021.

We do not know when or if the clinical hold will be lifted.

We are continuing to collaborate with key opinion leaders and seek guidance from regulatory authorities to develop and execute a clinical development plan for regulatory approval of CTI-1601 in the United States, the European Union, the United Kingdom, Australia and Canada.

We have completed two Phase 1 clinical trials of CTI-1601 in patients with Friedreich’s ataxia in the United States.

We are currently under a partial clinical hold for the CTI-1601 program, but we are currently conducting the first cohort of a Phase 2 dose exploration clinical trial.

While our current plan is to initiate the second cohort of this trial in the second quarter of 2023, the initiation of the second cohort and/or other clinical trials is contingent upon the FDA’s agreement based on its the review of the first cohort data as well as on review by the study's independent data monitoring committee.

We do not know if, or when, the FDA will lift the partial clinical hold on our CTI-1601 program, if it will allow additional cohorts of this dose exploration study or if it will ever allow further clinical development of CTI-1601.

If CTI-1601 receives regulatory approvals, commercialize CTI-1601 in the United States, the European Union, and other relevant countries independently or with third parties .

1 unchanged sentence

We may build our own internal sales force;

we may enter into a joint marketing

partnership with another pharmaceutical or biotechnology company, whereby we may jointly sell and market CTI-1601, if approved;

partner with a contract sales organization, and/or enter into a joint marketing partnership with another pharmaceutical or biotechnology company, whereby we may jointly sell and market CTI-1601, if approved;

or we may seek to out-license CTI-1601, whereby other pharmaceutical or biotechnology companies sell and market CTI-1601 and pay us milestone and/or royalty payments on sales.

5 unchanged sentences

We continue to improve the scientific understanding of our platform, including how our technology allows enhanced delivery of cargo proteins, thereby impacting the biological processes associated with the diseases we seek to treat.

In addition, with our expertise in the use of a CPP to effectively deliver proteins to intracellular targets, we believe that our scientists are well positioned to design and develop additional therapies that will address unmet medical needs associated with other rare diseases.

We also plan to continue to build our intellectual property portfolio to improve our protein replacement therapy platform.

Opportunistically evaluate enabling, adjacent or potential competing technologies, and where advantageous, seek licenses or collaborations regarding those technologies, to advance our platform.

We will continue to evaluate technologies that may enable or enhance our product candidates or our rare disease focus.

To facilitate the advancement of our CPP platform, we periodically engage in partnering and licensing discussions with a range of biotechnology or pharmaceutical companies and academic institutions and maintain awareness of complementary technologies, synergistic opportunities and "tuck-in" options.

Continue to Strengthen Key Relationships .

We partner with experts in every aspect of development.

We believe this expertise, along with our technology platform, will provide us with the ability to develop and commercialize the drug and biologic candidates we have under development and to maximize the value of our platform.

We believe this expertise, along with our technology platform, will provide us with the ability to develop and

commercialize the drug and biologic candidates we have under development and to maximize the value of our platform.

In addition to partnering with experts in drug and biologic development, we collaborate with key opinion leaders, academic institutions, experts in the field of rare diseases and with patient advocacy groups associated with the diseases that are being targeted.

14 unchanged sentences

We are utilizing this approach to identify therapeutic opportunities where our molecules and technology are more likely to be impactful.

Lead Product Candidate—CTI-1601 For the Treatment of Friedreich’s ataxia

CTI-1601 For the Treatment of Friedreich’s ataxia

Friedreich’s ataxia

1 unchanged sentence

Friedreich’s ataxia results from a deficiency of the mitochondrial protein, FXN.

FXN is an essential and phylogenetically conserved protein that is found in cells throughout the body, with highest levels found in the heart, spinal cord, liver, pancreas, and skeletal muscle.

FXN is an essential and phylogenetically conserved protein that is found in cells throughout the body, with the highest levels found in the heart, spinal cord, liver, pancreas, and skeletal muscle.

FXN is encoded in the nucleus of the cell, expressed in the cytoplasm and transported into the mitochondria, where it is processed to the mature form.

5 unchanged sentences

A hypertrophic cardiomyopathy is common and associated with early mortality, typically between 30 and 50 years of age.

As of February 2022, there are no medical treatment options approved for the treatment of Friedreich’s ataxia.

On February 28, 2023, the FDA approved omaveloxolone, the first drug indicated for the treatment of Friedreich’s ataxia.

CTI-1601, a biologic fusion protein that is administered subcutaneously, consists of a CPP genetically fused to human FXN, and includes a mitochondrial targeting sequence.

Using our proprietary peptide delivery technology, CTI-1601 carries the molecule from the intravascular space across the cell membrane and into the mitochondria where the CPP and the mitochondrial targeting sequence are cleaved off to yield mature FXN.

Using our proprietary peptide delivery technology,

CTI-1601 carries the molecule from the intravascular space across the cell membrane and into the mitochondria where the CPP and the mitochondrial targeting sequence are cleaved off to yield mature FXN.

See Figure 1.

We have completed two Phase 1 CTI-1601 clinical trials.

Clinical development of CTI-1601 is currently subject to a clinical hold issued by the FDA in May 2021.

We have completed two Phase 1 CTI-1601 clinical trials and are currently conducting a Phase 2 dose exploration study.

The CTI-1601 program remains under a partial clinical hold imposed by the FDA, and further clinical development of CTI-1601 is contingent upon FDA agreement based on its review of the data from the 25 mg cohort we are currently studying.

Based on the results of our non-clinical development program as well as results from our Phase 1 clinical trials, we believe that administering CTI-1601 may increase FXN levels in the mitochondria of patients with Friedreich’s ataxia and patients could potentially experience:

8 unchanged sentences

Knock-Out Mice and Other Non-clinical Studies

CTI-1601 has been demonstrated to prolong the life of knock-out mice or KO mice whose heart and skeletal muscles were deficient in FXN.

CTI-1601 has been demonstrated to prolong the life of knock-out mice ("KO") mice whose heart and skeletal muscles were deficient in FXN.

These mice, when untreated, develop a severe hypertrophic cardiomyopathy similar to patients with Friedreich’s ataxia and, like many Friedreich’s ataxia patients, die early in life.

47 unchanged sentences

This is demonstrated by the appearance of the green bars on Day 10 and 16 in the figure below.

This study demonstrates that CTI-1601 delivers human FXN to NHPs when administered subcutaneously and that we should be able to use our proprietary assay to evaluate changes in FXN levels in patients with Friedreich’s ataxia as CTI-1601 enters early-stage clinical trials.

This study demonstrated that CTI-1601 delivers human FXN to NHPs when administered subcutaneously and that we can use our proprietary assay to evaluate changes in FXN levels in patients with Friedreich’s ataxia.

Non-Human Primate and Rat Toxicology Studies

8 unchanged sentences

To support extended dosing of patients with CTI-1601, we conducted a 26-week NHP toxicology study in 2021.

In May 2021 we notified the FDA of certain mortalities which occurred at the highest dose levels in the then-ongoing study.

In May 2021, we notified the FDA of certain mortalities which occurred at the two highest dose levels in the then-ongoing study.

On May 25, 2021, the FDA placed a clinical hold on the CTI-1601 clinical program.

In the clinical hold letter, the FDA stated that it needed to review a full study report from the then-ongoing NHP study and that we could not initiate additional interventional clinical trials until we submitted such report and received notification from the FDA that additional clinical trials could commence.

In the clinical hold letter, the FDA stated that it needed to review a full study report from the then-ongoing NHP study and

that we could not initiate additional interventional clinical trials until we submitted such report and received notification from the FDA that additional clinical trials could commence.

At the time of the FDA clinical hold, we had no interventional clinical trials with patients enrolled or enrolling.

3 unchanged sentences

In February 2022, we received feedback from the FDA following our submission of the complete response which included a comprehensive study report from the 26-week NHP toxicology study.

The FDA stated that it was maintaining its clinical hold at this time and requested additional information.

We are evaluating how best to respond to their request and also are reassessing the timing of the planned open label extension and the pediatric MAD studies.

The FDA stated that it was maintaining its clinical hold at that time and requested additional information.

We subsequently submitted a request for an FDA Type C meeting, which was granted and was held in July 2022.

Following the Type C meeting, we submitted a complete response to the FDA.

In connection with this decision, the FDA lifted its full clinical hold on the CTI-1601 clinical development program and imposed a partial hold.

The dose exploration trial is designed to further characterize CTI-1601’s safety, PD and PK profiles to provide information about the preferred long-term dose and dose regimen.

We have since initiated the 25 mg cohort of the Phase 2 dose exploration trial.

We anticipate that we will provide an update that will outline the next steps for the clinical trial in the second quarter of 2023 and anticipate reporting top-line data in the second half of 2023.

Clinical Development

Non-Interventional Studies

We have conducted non-interventional studies to examine the range of tissue FXN concentrations in platelets, buccal cells and skin cells in individuals who are homozygous for the normal FXN gene.

We have conducted non-interventional studies to examine the range of tissue FXN concentrations in individuals who are homozygous for the normal FXN gene.

Tissue samples in these studies were collected using the same sampling techniques and proprietary assay used in the interventional studies.

1 unchanged sentence

In 2021 we initiated a second study that enrolled approximately 60 healthy adults.

Enrollment in this study was completed in early 2022.

Enrollment in this study was completed in 2022 and data is currently being evaluated.

Clinical Trials

Completed Initial Phase 1 Clinical Studies in Adults with Friedreich’s ataxia

We submitted our IND application for CTI-1601 and began Phase 1 clinical trials in 2019 in patients with Friedreich’s ataxia.

We completed two clinical studies of CTI-1601 in adult subjects with Friedreich’s ataxia, a single ascending dose ("SAD") study (completed in 2020) and a multiple ascending dose ("MAD") study (completed in 2021).

The primary objective for the SAD and MAD studies was to assess the tolerability of CTI-1601 at doses ranging from 25 mg to 100 mg administered via subcutaneous ("SC") injection.

The secondary objectives were to establish the pharmacokinetics ("PK") of CTI-1601 administration in humans and to explore the pharmacodynamics ("PD") of CTI-1601 administration by measuring tissue FXN concentrations in accessible tissues, namely buccal and skin cells, and in platelets.

Administration of CTI-1601 via SC injection appeared to be well tolerated up to doses of 100 mg administered daily for up to 13 days.

No serious adverse events ("SAEs") were reported in either study.

We submitted our IND application for CTI-1601 and began Phase 1 clinical trials in 2019 in patients with FA.

We completed two clinical studies of CTI-1601 in adult subjects with FA, a SAD study (completed in 2020) and a MAD study (completed in 2021).

The primary objective for the SAD and MAD studies was to assess the tolerability of CTI-1601 at doses ranging from 25 mg to 100 mg administered via subcutaneous injection.

The secondary objectives were to establish the PK of CTI-1601 administration in humans and to explore the pharmacodynamics PD of CTI-1601 administration by measuring tissue FXN concentrations in accessible tissues, namely buccal and skin cells, and in platelets.

Administration of CTI-1601 via subcutaneous {"SC"} injection appeared to be well tolerated up to doses of 100 mg administered daily for up to 13 days.

No SAEs were reported in either study.

The most common treatment emergent adverse events ("TEAEs") were injection site reactions ("ISRs") that were generally mild, self-limited, and usually resolved within approximately 1 hour.

There was rapid uptake of CTI-1601 into the circulation following SC injection, and exposure appears to be proportional to dose.

Data from the MAD study demonstrated that after 7 days of daily dosing of 50 mg and 100 mg of CTI-1601 in subjects with Friedreich’s ataxia, mean tissue FXN concentrations increased in the tissues studied by approximately 2- to 3-fold to levels that are similar to or exceed levels we would expect to see in asymptomatic heterozygous carriers (See Figure 9).

Patients in the 25 mg cohort were dosed once a day for the first 4 days followed by 1 dose every third day through Day 13 for a total of 7 doses, while the patients in the 50 mg cohort were dosed once a day for the first 7 days followed by 1 dose every other day through Day 13 for a total of 10 doses, and patients in the 100 mg cohort were dosed once a day for 13 days consecutively for a total of 13 doses.

(See Figure 10).

The study was designed in this fashion to ensure that the pharmacokinetics of CTI-1601 in patients with Friedreich’s ataxia were characterized at the lower doses before the dose was escalated.

This is typical of first in human studies such as multiple-ascending dose trials that evaluate a study drug’s clinical safety profile.

We believe the data provide preliminary clinical evidence of the potential of CTI-1601 as a treatment for patients with Friedreich’s ataxia and warrant continued evaluation of the potential benefits of sustained treatment.

CTI-1601 Development Plan

We are in the process of evaluating the timeline of the open label extension ("OLE") study which we refer to as the Jive study and the pediatric MAD placebo-controlled study.

The Jive study is a clinical trial that will enroll patients who participated in the SAD or MAD study if they are eligible and is designed to gather long-term data to assess safety and tolerability, dose, PK and PD, and potential efficacy of SC administration of CTI-1601 in subjects with Friedreich’s ataxia.

The pediatric MAD placebo-controlled study will be in patients from two to seventeen years of age.

There was rapid uptake of CTI-1601 into the circulation following subcutaneous injection, and exposure appears to be proportional to dose.

Data from the MAD study demonstrated that after 7 days of daily dosing of 50 mg and 100 mg of CTI-1601 in subjects with FA, mean tissue FXN concentrations increased in the tissues studied by approximately 2- to 3-fold to levels that are similar to or exceed levels we would expect to see in asymptomatic heterozygous carriers (See Figure 9).

The study was designed in this fashion to ensure that the PK of CTI-1601 in patients with FA were characterized at the lower doses before the dose was escalated.

This is typical of first in human studies such as multiple-ascending dose trials that evaluate a study drug’s clinical safety

We believe the data provide preliminary clinical evidence of the potential of CTI-1601 as a treatment for patients with FA and warrant continued evaluation of the potential benefits of sustained treatment.

Phase 2 Clinical Trial

When the FDA lifted the full clinical hold, it imposed a partial clinical hold.

We have since initiated the Phase 2 dose exploration trial, with top-line data expected in the second half of 2023.

The initiation of a second cohort and/or other CTI-1601 clinical trials is contingent on the FDA's agreement based on its review of the study’s 25 mg cohort data and on review by the study's independent data monitoring committee.

We expect to provide an update on

the study in the second quarter of 2023 and anticipate reporting top-line data in the second half of 2023.

CTI-1601 Clinical Development Plan

We are in the process of evaluating the timeline of an open label extension ("OLE") study which we refer to as the Jive study and a pediatric MAD placebo-controlled study.

The Jive study is a clinical trial that will enroll patients who participated in the SAD or MAD study, as well as the currently ongoing dose exploration study if they are eligible and is designed to gather long-term data to assess safety and tolerability, dose, PK and PD, and potential efficacy of SC administration of CTI-1601 in subjects with FA.

The pediatric MAD placebo-controlled study is currently planned to be in patients from two to seventeen years of age.

These patients may also be eligible to enroll in the Jive study after completing participation in the MAD study.

1 unchanged sentence

The design and protocol of the study will be based on the results of the earlier studies and will incorporate feedback from regulatory authorities in various countries.

The progression of the Jive study and the global registration study are pending lifting of the clinical hold.

The progression of the Jive study and the global registration study will be subject to FDA review of our CTI-1601 Phase 2 cohort 1 data, and possibly other data.

Intellectual Property

6 unchanged sentences

In addition, we require confidentiality or service agreements from third parties that receive our confidential information or materials.

As of February 1, 2022, our intellectual property portfolio was composed of numerous international and United States non-provisional applications and United States provisional patent applications that we own or co-own, and five issued patents and additional non-provisional patent applications in the United States that we license from academic institutions.

The issued patents in the United States licensed by us, which include issued patents generically covering the composition of matter for CTI-1601 and methods for treating Friedreich’s ataxia, have

expiration dates between 2024 and 2034.

As of February 1, 2023, our intellectual property portfolio was composed of numerous international (PCT).

foreign, and United States non-provisional applications and United States provisional patent applications that we own or co-own, six issued United States patents and additional non-provisional patent applications in the United States and in certain foreign jurisdictions that we license from academic institutions.

The issued patents in the United States licensed by us, which include issued patents covering the composition of matter for CTI-1601 and methods for treating FA, have expiration dates between 2024 and 2040 without taking potential patent term extension into consideration.

The international and the United States non-provisional patent applications licensed by us relate to composition of matter and methods of use for CTI-1601.

The additional patent applications we own or co-own which include international and United States non-provisional patent applications and United States provisional patent applications are related to the development of CTI-1601 and to our peptide-delivery platform technology.

If the non-provisional patent applications owned or co-owned by us result in issued patents, such patents are expected to expire between 2040 and 2041, without taking potential patent term adjustment or patent term extension into consideration.

The additional patent applications we own or co-own which include international (PCT), foreign and United States non-provisional patent applications and United States provisional patent applications are related to the development of CTI-1601 and to our peptide-delivery platform technology.

A provisional patent application allows for an effective filing date to be established with regard to an invention, but once a provisional patent application is filed, either a corresponding non-provisional patent application or a petition to convert the provisional patent application into a non-provisional patent application must be filed within 12 months or such effective filing date will be lost.

If we or our licensor timely files non-provisional patent applications in the United States and in countries outside of the United States with regard to our provisional patent applications and these non-provisional patent applications result in issued patents, such patents are expected to expire in 2041 and 2042, without taking potential patent term adjustment or patent term extension into consideration.

CTI-1601 is covered by licensed issued patents (composition of matter and methods of use) in the United States which, if properly maintained, will expire in 2024 and 2025 (respectively), excluding any patent term extensions that might be available following the grant of marketing authorizations.

If we or our licensor timely files non-provisional patent applications in the United States and in countries outside of the United States with regard to our provisional patent applications and these non-provisional patent applications result in issued patents, such patents are expected to expire in 2043, without taking potential patent term adjustment or patent term extension into consideration.

CTI-1601 is covered by licensed issued patents (composition of matter and methods of use) in the United States which, if properly maintained, will expire in 2024, 2025 and 2040, excluding any patent term extensions that might be available following the grant of marketing authorizations.

We also possess an exclusive license to non-provisional applications in the United States and certain countries outside the United States for CTI-1601 (composition of matter and methods of use).).

If the patent applications in the United States and other countries result in issued patents, those patents would be expected to expire in the United States and in countries outside of the United States in 2040, This estimated expiration excludes any patent term adjustment that might be available following the grant of the patent and any patent term extensions that might be available following the grant of marketing authorizations.

If these patent applications in the United States and other countries result in issued patents, those patents would be expected to expire in 2040.

This estimated expiration excludes any patent term adjustment that might be available following the grant of the patent and any patent term extensions that

might be available following the grant of marketing authorizations.

We cannot predict whether the patent applications we and our licensors are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors or other third parties.

4 unchanged sentences

In-License Agreements

We are party to a License Agreement ("WFUHS License") dated November 30, 2016 with Wake Forest University Health Sciences ("WFUHS") and a License Agreement ("IU License") dated November 30, 2016, as amended, with Indiana University ("IU").

We are party to a License Agreement dated November 30, 2016 with Wake Forest University Health Sciences ("WFUHS") and a License Agreement dated November 30, 2016, as amended, with Indiana University ("IU").

Such agreements provide for a transferable, worldwide license to certain patent rights regarding technology used by us with respect to the development of CTI-1601.

3 unchanged sentences

We are also obligated to reimburse WFUHS and IU for patent-related expenses.

In the event that we dispute the validity of any of the licensed patents, the royalty rate would be tripled during such

In the event that we dispute the validity of any of the licensed patents, the royalty rate would be tripled during such dispute.

We are also obligated to pay to IU a minimum annual royalty of less than $0.1 million per annum starting in the 2020 calendar year for the term of the agreement.

1 unchanged sentence

In the event that we are required to pay WFUHS consideration, then we may deduct 60% of such WFUHS consideration on a dollar-for-dollar basis from the consideration due to IU.

During the twelve months ended December 31, 2021 and 2020, no milestones were achieved, and no expense was recognized.

Both agreements continue from their effective date through the last to expire of the licensed patents unless earlier terminated by either party.

The biopharmaceutical industry is characterized by intense and dynamic competition to develop new technologies and proprietary therapies.

Any product candidates that we successfully develop into products and commercialize may compete with existing therapies and new therapies that may become available in the future.

While we believe that our platform technology, product candidates and scientific expertise in the field of rare diseases provide competitive advantages, we face competition from various sources, including larger and better-funded pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies, as well as from academic institutions, governmental agencies and public and private research institutions.

We expect to compete with Reata Pharmaceuticals’

SKYCLARYS tm (omaveloxolone), which was recently approved by the FDA for the treatment of Friedreich’s ataxia in adults and adolescents aged 16 and older.

Other competitors currently developing therapeutics to treat Friedrich's ataxia include, but are not limited to PTC Therapeutics, Inc., Design Therapeutics, Inc., Novartis, Pfizer, Voyager/Neocrine, and Takeda/StrideBio.

Many of our competitors have significantly greater financial, technical and human resources than we do.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated amongst a smaller number of our competitors.

Our commercial opportunity could be reduced or eliminated if our competitors develop or market products or other novel therapies that are more effective, safer or less costly than our product candidates or obtain regulatory approval for their products more rapidly than we may obtain approval for our product candidates.

Manufacturing and Supply

CTI-1601 is a biologic fusion protein that is produced in E.

We have worked with contract manufacturers to develop, in accordance with current good manufacturing practice ("cGMP") a manufacturing process and analytical methods for drug substance to support clinical trials.

The drug product manufacturing process was also developed and packaged into single use vials for the clinical program.

We have worked with contract manufacturers to develop, in accordance with cGMPs a manufacturing process and analytical methods for drug substance to support clinical trials.

We also use third party manufacturers for the clinical packaging, storage and distribution of CTI-1601.

We rely on third parties to store the CTI-1601 master cell bank and working cell bank, each stored at a different location.

We continue to advance the manufacturing of CTI-1601, obtain stability data, and produce drug product for toxicology studies and future clinical trials.

We continue to advance the manufacturing of CTI-1601, obtain stability data, and produce drug product for future clinical trials.

We are continually trying to optimize our manufacturing process to increase yields, decrease costs and increase reliability in supply chains.

3 unchanged sentences

We currently produce a frozen liquid form of drug product at another manufacturer.

We are undertaking a program with a third-party manufacturer to begin to produce a lyophilized version of the drug product from the same KBI drug substance, that, once available, we intend to use in certain of our future planned clinical trials.

We expect to undertake a program with a third-party manufacturer to begin to produce a lyophilized version of the drug product from the same KBI drug substance, that, once available, we intend to use in certain of our future planned clinical trials.

Human Capital Resources

2 unchanged sentences

To facilitate talent attraction and retention, we strive to make our company a safe and rewarding workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits, paid time-off and health and wellness programs, including programs that build connections between our employees.

In response to the COVID-19 pandemic, we implemented significant changes that we determined were in the best interest of our employees, and which comply with local and federal government regulations.

This includes having some of our non-laboratory employees work from home, while implementing additional safety measures for employees continuing critical on-site work.

As of February 1, 2022, we employed 31 full-time employees in the United States.

As of December 31, 2022, we employed 26 full-time employees in the United States, of which 20 are directly engaged in research and development with the rest providing administrative, business and operations support.

None of our employees are represented by a labor organization or under any collective-bargaining arrangements.

23 unchanged sentences

Professor of Neuroscience, Weil Cornell Medicine

Jill Ostrem, MD

Medical director and division chief of University of California San Francisco (UCSF) Movement Disorders and Neuromodulation Center.

Carlin and Ellen Wiegner Endowed Professor of Neurology.

Mark Payne, MD

2 unchanged sentences

Our office lease expires in August 2023 with an option to extend for three years, and our laboratory lease expires in December 2023.

We believe that we will need to increase both its office and laboratory facilities in the near term.

We believe that both appropriate office and laboratory space will be readily available on commercially reasonable terms.

As part of the Merger (as defined below) with Zafgen, Inc., we acquired a non-cancellable operating lease for approximately 17,705 square feet of office space at 3 Center Plaza, Boston, Massachusetts ("the Boston Lease").

We believe that we will need to increase our leased square footage in the near and intermediate term.

We believe that appropriate space will be readily available on commercially reasonable terms.

As part of the Merger (as defined below) with Zafgen, Inc ("Zafgen"), we acquired a non-cancellable operating lease for approximately 17,705 square feet of office space at 3 Center Plaza, Boston, Massachusetts (the "Boston Lease").

The Boston Lease expires on October 30, 2029.

21 unchanged sentences

Government Regulation

In the United States, drug and biologic products are licensed by the FDA for marketing under the Public Health Service Act, referred to as the PHS Act, and regulated under the Federal Food, Drug, and Cosmetic Act ("the FDCA").

Both the FDCA and the PHS Act and their corresponding regulations govern, among other things, the testing, manufacturing, safety, purity, potency, efficacy, labeling, packaging, storage, record keeping, distribution, marketing, sales, import, export, reporting, advertising and other promotional practices involving drug and biological products.

FDA clearance must be obtained before clinical testing of drug and biologic products.

FDA licensure also must be obtained before the marketing of drug and biological products.

In the United States, drug and biologic products are subject to extensive regulation by the FDA.

The Federal Food, Drug, and Cosmetic Act (“FDCA”) and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products.

Biological products used for the prevention, treatment, or cure of a disease or condition of a human being are subject to regulation under the FDCA, with the exception that the section of the FDCA that governs the approval of drugs via new drug applications (“NDAs”), does not apply to the approval of biologics.

In contrast, biologics are approved for marketing under provisions of the Public Health Service Act (“PHS Act”), via a Biologics License Application (“BLA”).

However, the application process and requirements for approval of BLAs are very similar to those for NDAs.

FDA approval or licensure also must be obtained before the marketing of drug and biological products.

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

1 unchanged sentence

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

completion of non-clinical laboratory tests and animal studies according to Good Laboratory Practices, or GLPs, and applicable requirements for the humane use of laboratory animals or other applicable regulations;

preparation of clinical trial material in accordance with Good Manufacturing Practices ("GMPs");

completion of non-clinical laboratory tests and animal studies according to Good Laboratory Practices ("GLPs"), and applicable requirements for the humane use of laboratory animals or other applicable regulations;

preparation of clinical trial material in accordance with cGMPs;

submission to the FDA of an application for an Investigational New Drug ("IND") application, which must become effective before human clinical trials may begin;

1 unchanged sentence

performance of adequate and well-controlled human clinical trials according to Good Clinical Practices ("GCPs") and any additional requirements for the protection of human research subjects and their health information, to establish the safety, purity, potency, and efficacy, of the proposed drug or biological product for its intended use;

submission to the FDA of New Drug Application ("NDA) or Biologics License Application ("BLA") for marketing approval that includes substantive evidence of safety, purity, potency, and efficacy from results of non-clinical testing and clinical trials;

satisfactory completion of an FDA inspection prior to NDA or BLA approval of the manufacturing facility or facilities where the drug or biological product is produced to assess compliance with GMPs, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity;

submission to the FDA of an NDA or BLA for marketing approval that includes substantive evidence of safety, purity, potency, and efficacy from results of non-clinical testing and clinical trials;

satisfactory completion of an FDA inspection prior to NDA or BLA approval of the manufacturing facility or facilities where the drug or biological product is produced to assess compliance with cGMPs, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity;

potential FDA audit of the non-clinical and clinical study sites that generated the data in support of the NDA or BLA;

8 unchanged sentences

An IND is an exemption from the FDCA that allows an unapproved product to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer an investigational product to humans.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA requests certain changes to a protocol before

the trial can begin, or the FDA places the clinical trial on a clinical hold within that 30-day time period.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns and lift the clinical hold before the clinical trial can begin.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the clinical trial on a clinical hold within that 30-day time period.

In such a case, the IND sponsor must resolve any deficiencies to the satisfaction of the FDA, and the FDA must lift the clinical hold before the clinical trial can begin.

The FDA may also impose clinical holds on a drug or biological product candidate at any time before or during clinical trials due to safety concerns or non-compliance.

16 unchanged sentences

These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling.

In drugs and biologics for rare diseases where patient populations are small and there is an urgent need for treatment, Phase 3 trials might not be required if an adequate risk/benefit can be demonstrated from the Phase 2 trial.

An Open Label Expansion study may also be conducted.

In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the safety and efficacy of the drug or biologic.

In rare instances, a single Phase 3 trial may be sufficient when either (1) the trial is a large, multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible, or (2) the single trial is supported by other confirmatory evidence.

In drugs and biologics for rare diseases where patient populations are small, Phase 3 trials might not be required if an acceptable adequate risk/benefit profile can be demonstrated from Phase 2 trials.

An OLE study may also be conducted.

An OLE study typically enrolls participants from previous clinical trials and is designed to gather the long-term safety and tolerability data on a potential new medicine beyond the time period of the original studies.

2 unchanged sentences

They provide additional information regarding risks, benefits and best use, including longer term safety data.

In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or BLA.

During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.

Annual progress reports detailing the results of the clinical trials must be submitted to the FDA.

Written IND safety reports must be promptly submitted to the FDA and the investigators for serious and unexpected adverse events, any findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects, or any clinically important increase in

the rate of a serious suspected adverse reactions over that listed in the protocol or investigator brochure.

The sponsor must submit an IND safety report within 15 calendar days after the sponsor determines that the information qualifies for reporting.

The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information.

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

The FDA or the sponsor or its data safety monitoring board may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk.

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

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the physical characteristics of the drug or biological product as well as finalize a process for manufacturing the product in commercial quantities in accordance with GMP requirements.

To help reduce the risk of the introduction of adventitious agents with use of biological products, the PHS Act emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined.

7 unchanged sentences

After the completion of clinical trials of a drug or biological product, FDA approval of an NDA, or BLA, must be obtained before commercial marketing of the product.

A BLA submission is planned for CTI-1601.

The NDA or BLA must include results of product development, laboratory and animal studies, human studies, information on the manufacture and composition of the product, proposed labeling and other relevant information.

The testing and approval processes require substantial time and effort and there can be no assurance that the FDA will accept the NDA or BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all.

Under the Prescription Drug User Fee Act, as amended, ("PDUFA") each NDA or BLA may be accompanied by a significant user fee.

Under federal law, the submission of most applications is subject to an application user fee.

The sponsor of an approved application is also subject to an annual program fee.

Under the Prescription Drug User Fee Act, as amended, ("PDUFA") each NDA or BLA may be accompanied by a significant application fee.

The applicant for an approved application is also subject to an annual program fee.

Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business.

Additionally, no user fees are assessed on NDAs or BLAs for product candidates designated as orphan drugs, unless the product candidate also includes a non-orphan indication.

Within 60 days following submission of the application, the FDA reviews an NDA or BLA submitted to determine if it is substantially complete before the agency accepts it for filing.

Within 60 days following submission of the application, the FDA reviews an NDA or BLA submitted to determine if it is substantially complete before the agency files it.

The FDA may refuse to file any NDA or BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information.

In this event, the NDA or BLA must be resubmitted with the additional information.

The resubmitted application is also subject to review before the FDA accepts it for filing.

The application also needs to be published and submitted in an electronic format that can be processed through the FDA’s electronic systems.

If the electronic submission is not compatible with FDA’s systems, the NDA or BLA can be refused for filing.

Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the NDA or BLA.

The FDA reviews the

NDA or BLA to determine, among other things, whether the proposed product is safe, potent, and effective, for its intended use, and has an acceptable purity profile, and whether the product is being manufactured in accordance with GMPs to assure and preserve the product’s identity, safety, strength, quality, potency and purity.

The resubmitted application is also subject to review before the FDA files it.

Once the submission is filed, the FDA begins an in-depth substantive review of the NDA or BLA.

The FDA reviews the NDA or BLA to determine, among other things, whether the proposed product is safe and effective (for drugs) or safe, potent, and effective (for biologics), for its intended use, and has an acceptable purity profile, and whether the product is being manufactured in accordance with cGMPs to assure and preserve the product’s identity, safety, strength, quality, potency and purity.

One of the performance goals agreed to by the FDA under the PDUFA is to review standard NDAs or BLAs in 10 months from filing and priority NDAs or BLAs in six months from filing, whereupon a review decision is to be made.

The review process may be extended by three months if the FDA classifies a response to an FDA request for additional information or clarification as a major amendment.

The FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

During the drug or biological product approval process, the FDA will also determine whether a Risk Evaluation and Mitigation Strategy ("REMS") is necessary to assure the safe use of the biological product.

During the review, the FDA will also determine whether a REMS is necessary to assure the safe use of the biological product.

If the FDA concludes a REMS is needed, the sponsor of the NDA or BLA must submit a proposed REMS;

1 unchanged sentence

Before approving an NDA or BLA, the FDA may inspect the facilities at which the product is manufactured.

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

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

Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical trial sites to assure that the clinical trials were conducted in compliance with IND study requirements and GCP requirements.

To assure GMP and GCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production, and quality control.

To assure cGMP and GCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production, and quality control.

Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the NDA or BLA does not satisfy its regulatory criteria for approval and deny approval.

9 unchanged sentences

As a condition for approval, the FDA may also require additional non-clinical testing as a Phase 4 commitment.

The FDA does not always meet its PDUFA goal dates for standard and priority NDAs or BLAs and its review goals are subject to change from time to time.

The review process and the PDUFA goal date may be extended by three months if the FDA requests or the NDA or BLA sponsor otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date.

Post-Approval Requirements

Maintaining substantial compliance with applicable federal, state, and local statutes and regulations requires the expenditure of substantial time and financial resources.

Rigorous and extensive FDA regulation of drug and biological products continues after approval, particularly with respect to GMP.

Rigorous and extensive FDA regulation of drug and biological products continues after approval, particularly with respect to cGMP.

We will rely, and expect to continue to rely, on third parties for the production of clinical and commercial quantities of any products that we may commercialize.

Manufacturers of our products are required to comply with applicable requirements in the GMP regulations, including quality control and quality assurance and maintenance of records and documentation.

Manufacturers of our products are required to comply with applicable requirements in the cGMP regulations, including quality control and quality assurance and maintenance of records and documentation.

Following approval, the manufacturing facilities are subject to biennial inspections by the FDA’s and such inspections may result in an issuance of FDA Form 483 deficiency observations, untitled letter, or a warning letter, which can lead to plant shutdown and other more serious penalties and fines.

2 unchanged sentences

Annual product reports are required to be submitted annually.

Other post-approval requirements applicable to drug and biological products, include reporting of GMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, reporting of adverse events, reporting updated safety and efficacy information, and complying with electronic record and signature requirements.

Other post-approval requirements applicable to drug and biological products, include reporting of cGMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, reporting of adverse events, reporting updated safety and efficacy information, and complying with electronic record and signature requirements.

After an NDA or BLA is approved, the product may also be subject to official lot release.

6 unchanged sentences

Defects in manufacturing of commercial products can result in product recalls.

We must also comply with the FDA’s advertising and promotion requirements, such as those related to direct-to-consumer advertising, the prohibition on promoting products for uses or inpatient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.

Manufacturers must also comply with the FDA’s advertising and promotion requirements, such as those related to direct-to-consumer advertising, the prohibition on promoting products for uses or inpatient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.

Discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions.

3 unchanged sentences

Any agency or judicial enforcement action could have a material adverse effect.

Drug and biologic product manufacturers and other entities involved in the manufacture and distribution of approved drug and biological products are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with GMPs and other laws.

Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality control to maintain GMP compliance.

Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality control to maintain cGMP compliance.

Discovery of problems with a product after approval may result in restrictions on a product, manufacturer, or holder of an approved NDA or BLA, including withdrawal of the product from the market.

5 unchanged sentences

ODD does not convey any advantage in or shorten the duration of the regulatory review and approval process.

If a product that has ODD receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same biological product for the same indication for seven years, except in limited circumstances, such as not being able to supply the product for patients or showing clinical superiority to the product with orphan exclusivity.

Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity.

Orphan product exclusivity also could block the approval of one of our products for seven years if a competitor obtains approval of the same drug or biologic product as defined by the FDA or if our product candidate is determined to be contained within the competitor’s product for the same indication or disease.

If a drug or biological product designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product exclusivity.

If a product that has ODD receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same indication for seven years, except in limited circumstances, such as showing clinical superiority to the product with orphan exclusivity by means of greater effectiveness, greater safety or providing a major contribution to patient care or in instances of drug supply issues.

Competitors, however, may receive approval of either a different product for the same indication or the same product for a different indication but that could be used off-label in the orphan indication.

Orphan drug exclusivity also could block the approval of our products for seven years if a competitor obtains approval before we do for the same product as defined by the FDA for the same indication we are seeking approval, or if our product is determined to be contained within the competitor’s scope of product for the same indication or disease.

If we pursue marketing approval for an indication broader than the orphan drug designation we have received, we may not be entitled to orphan drug exclusivity.

Expedited Review and Approval Programs

4 unchanged sentences

In addition to other benefits, such as the ability to have greater interactions with the FDA, the FDA may initiate review of sections of a fast track NDA or BLA before the application is complete, a process known as rolling review.

The FDA may give a priority review designation, such as a rare pediatric disease designation, to drug or biological products that treat a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

The FDA may give a priority review designation to drug or biological products that treat a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

A priority review means that the goal for the FDA to review an application is six months, rather than the standard review of ten months under current PDUFA guidelines.

Most products that are eligible for fast track designation may also be considered appropriate to receive a priority review.

In addition, drug and biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug or biological product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.

In addition, drug and biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug or biological product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of approval, the FDA may require a sponsor of a drug or biological product receiving accelerated approval to perform post-marketing studies to verify and describe the predicted effect on irreversible morbidity or mortality or other clinical endpoint, and the drug or biological product may be subject to accelerated withdrawal procedures.

Moreover, under the Food and Drug Administration Safety and Innovation Act enacted in 2012, a sponsor can request designation of a product candidate as a “breakthrough therapy.”

A breakthrough therapy is defined as a drug or biologic product that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug or biologic product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The Food and Drug Omnibus Reform Act (“FDORA”) was recently enacted, which included provisions related to the accelerated approval pathway.

Pursuant to FDORA, the FDA is authorized to require a post-approval study to be underway prior to approval or within a specified time period following approval.

FDORA also requires the FDA to specify conditions of any required post-approval study, which may include milestones such as a target date of study completion and requires sponsors to submit progress reports for required post-approval studies and any conditions required by the FDA not later than 180 days following approval and not less frequently than every 180 days thereafter until completion or termination of the study.

FDORA enables the FDA to initiate enforcement actions for the failure to conduct with due diligence a required post-approval study, including a failure to meet any required conditions specified by the FDA or to submit timely reports.

Moreover, a sponsor can request designation of a product candidate as a “breakthrough therapy.”

or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The FDA must take certain actions, such as holding timely meetings and providing advice, intended to expedite the development and review of an application for approval of a breakthrough therapy.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decides that the time period for FDA review or approval will not be

Furthermore, fast-track designation, priority review, accelerated approval and breakthrough therapy designation, do not change the standards for approval and may not ultimately expedite the development or approval process.

Rare Pediatric Disease Vouchers

The Rare Pediatric Disease Voucher Program is intended to encourage development of new drug and biological products for prevention and treatment of certain rare pediatric diseases.

Although there are existing incentive programs to encourage the development and study of drugs and biologics for rare diseases, pediatric populations, and unmet medical needs, this program provides an additional incentive for the development of drugs and biologics for rare pediatric diseases, which may be used alone or in combination with other incentive programs.

A rare pediatric disease is defined as a disease that is a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years, including age groups often called neonates, infants, children, and adolescents;

and is a rare disease or condition as defined in the FDCA, which includes diseases and conditions that affect fewer than 200,000 persons in the United States and diseases and conditions that affect a larger number of persons and for which there is no reasonable expectation that the costs of developing and making available the product in the United States can be recovered from sales of the product in the United States.

The sponsor of an application for a drug product that obtains rare pediatric disease designation may be eligible for a voucher that can be used or sold to obtain a priority review for a subsequent application submitted under section 505(b)(1) of the FDCA or section 351 of the PHS Act.

A rare pediatric disease drug product must meet certain eligibility requirements for a priority voucher at the time the sponsor seeks approval.

The rare pediatric disease priority review voucher program was most recently re-authorized by Congress through September 30, 2024, with the potential for priority review vouchers to be granted through September 30, 2026.

Pediatric Information and Pediatric Exclusivity

Under the Pediatric Research Equity Act (“PREA”), certain NDAs and BLAs and certain supplements to an NDA or BLA must contain data to assess the safety and efficacy of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The FDA may grant deferrals for submission of pediatric data or full or partial waivers.

The Food and Drug Administration Safety and Innovation Act (“FDASIA”), amended the FDCA to require that a sponsor who is planning to submit a marketing application for a drug that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan (“PSP”) within 60 days of an end-of-Phase 2 meeting or, if there is no such meeting, as early as practicable before the initiation of the Phase 3 or Phase 2/3 study.

The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.

The FDA and the sponsor must reach an agreement on the PSP.

A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials and/or other clinical development programs.

A drug or biologic product can also obtain pediatric market exclusivity in the United States.

Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms.

This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request”

for such a study.

Biologics Price Competition and Innovation Act

The Biologics Price Competition and Innovation Act of 2009 ("BPCIA") which was enacted as part of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 ("PPACA") created an abbreviated approval pathway for biological products that are demonstrated to be "biosimilar" or "interchangeable" with an FDA-licensed reference biological product via an approved BLA.

The Biologics Price Competition and Innovation Act of 2009 ("BPCIA") created an abbreviated approval pathway for biological products that are demonstrated to be "biosimilar" or "interchangeable" with an FDA-licensed

reference biological product via an approved BLA.

Biosimilarity to an approved reference product requires that there be no differences in conditions of use, route of administration, dosage form, and strength, and no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency.

1 unchanged sentence

The biosimilarity exercise tests the hypothesis that the investigational product and the reference product are the same.

If at any point in the stepwise biosimilarity process a significant difference is observed, then the products are not biosimilar, and the development of a stand-alone NDA or BLA is necessary.

If at any point in the stepwise biosimilarity process a significant difference is observed, then the products are not biosimilar, and the development of a stand-alone BLA is necessary.

In order to meet the higher hurdle of interchangeability, a sponsor must demonstrate that the biosimilar product can be expected to produce the same clinical result as the reference product, and for a product that is administered more than once, that the risk of switching between the reference product and biosimilar product is not greater than the risk of maintaining the patient on the reference product.

4 unchanged sentences

Most countries outside of the United States require that clinical trial applications be submitted to and approved by the local regulatory authority for each clinical study.

In the European Union, for example, an application must be submitted to the national competent authority and an independent ethics committee in each country in which we intend to conduct clinical trials, much like the FDA and IRB, respectively.

Under the new Clinical Trials Regulation (EU) No 536/2014, which replaced the Clinical Trials Directive 2001/20/EC on January 31, 2022, a single application is now made through the Clinical Trials Information System (“CTIS”), for clinical trial authorization in up to 30 European Union/European Economic Area ("EU/EEA") countries at the same time and with a single set of documentation.

The assessment of applications for clinical trials is divided into two parts (Part I contains scientific and medicinal product documentation and Part II contains the national and patient-level documentation).

Part I is assessed by a coordinated review by the competent authorities of all European Union Member States in which an application for authorization of a clinical trial has been submitted (Member States concerned) of a draft report prepared by a Reference Member State.

Part II is assessed separately by each Member State concerned.

The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the Member State concerned, however overall related timelines are defined by the Clinical Trials Regulation.

The new Clinical Trials Regulation also provides for simplified reporting procedures for clinical trial sponsors.

In addition, whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of countries outside the U.S.

1 unchanged sentence

The approval process and requirements vary from country to country, so the number and type of non-clinical, clinical, and manufacturing studies needed may differ, and the time may be longer or shorter than that required for FDA approval.

To obtain regulatory approval of an orphan drug under the European Union's regulatory system, we are mandated to submit a Marketing Authorization Application ("MAAs"), to be assessed in the Centralized Procedure.

The centralized procedure, which came into operation in 1995, allows applicants to obtain a marketing authorization that is valid throughout the European Union.

It is compulsory for medicinal products manufactured using biotechnological processes, for orphan medicinal products and for human products containing a new active substance which was not authorized in the Community before 20 May 2004 (date of entry into force of Regulation (EC) No 726/2004) and which are intended for the treatment of AIDS, cancer, neurodegenerative disorder or diabetes.

The centralized procedure is optional for any other products containing new active substances not authorized in the Community before 20 May 2004 or for products which constitute a significant therapeutic, scientific or technical innovation or for which a Community authorization is in the interests of patients at Community level.

When a company wishes to place on the market a medicinal product that is eligible for the centralized procedure, it sends an application directly to the European Medicines Agency ("EMA"), to be assessed by the Committee for Medicinal Products for Human Use ("CHMP").

The CHMP is responsible for conducting the assessment of whether a medicine meets the required quality, safety and efficacy requirements, and whether the product has a positive risk/benefit/risk profile.

The procedure results in a Commission decision, which is valid in all European Union Member States.

To obtain regulatory approval of product under the European Union's regulatory system, we are mandated to submit a Marketing Authorization Application ("MAA"), to be assessed in the Centralized Procedure.

The centralized procedure, which came into operation in 1995, allows applicants to obtain a marketing authorization that is valid throughout the European Union and the additional Member States of the European Area (Iceland, Liechtenstein and Norway) ("EEA").

It is compulsory for medicinal products manufactured using biotechnological processes, for orphan medicinal products, for advance therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines) and for human products containing a new active substance which are not authorized in the European Union and which are intended for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, auto-immune and other immune dysfunctions, viral diseases or diabetes.

The centralized procedure is optional for any other products containing new active substances not authorized in the European Union or for products which constitute a significant therapeutic, scientific or technical innovation or for which a centralized authorization is in the interests of patients at European Union.

When a company wishes to place on the market a medicinal product that is eligible for the centralized procedure, it sends an application directly to the EMA, to be assessed by the Committee for Medicinal Products for Human Use ("CHMP").

The CHMP is responsible for conducting the assessment of whether a medicine meets the required quality, safety and efficacy

requirements, and whether the product has a positive risk/benefit/risk profile.

The procedure results in a European Commission decision, which is valid in all European Union Member States.

Centrally authorized products may be marketed in all Member States.

Centralized procedure:

Full copies of the MA application are sent to a rapporteur and a co-rapporteur designated by the competent EMA scientific committee.

Full copies of the MAA are sent to a rapporteur and a co-rapporteur designated by the competent EMA scientific committee.

They coordinate the EMA's scientific assessment of the medicinal product and prepare draft reports.

Once the draft reports are prepared (other experts might be called upon for this purpose),

they are sent to the CHMP, whose comments or objections are communicated to the applicant.

The rapporteur is therefore the privileged interlocutor of the applicant and continues to play this role, even after the MA has been granted.

Once the draft reports are prepared (other experts might be called upon for this purpose), they are sent to the CHMP, whose comments or objections are communicated to the applicant.

The rapporteur is therefore the privileged interlocutor of the applicant and continues to play this role, even after the Marketing Approval ("MA") has been granted.

The rapporteur and co-rapporteur then assess the applicant's replies, submit them for discussion to the CHMP and, taking into account the conclusions of this debate, prepare a final assessment report.

1 unchanged sentence

When the opinion is favorable, it shall include the draft summary of the product's characteristics, the package leaflet and the texts proposed for the various packaging materials.

The time limit for the evaluation procedure is 210 days.

The EMA then has fifteen days to forward its opinion to the Commission.

This is the start of the second phase of the procedure:

the decision-making process.

The Agency sends to the Commission its opinion and assessment report, together with annexes containing:

the SmPC, or Annex 1;

the particulars of the MAH responsible for batch release, the particulars of the manufacturer of the active substance and the conditions of the marketing authorization, or Annex 2;

and the labelling and the package leaflet, or Annex 3.

The annexes are translated into the 22 other official languages of the European Union During the decision-making process, the Commission services verify that the marketing authorization complies with Union law.

The time limit for the evaluation procedure is 210 days (excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP).

The EMA then has fifteen days to forward its opinion to the European Commission which will make a binding decision on the grant of an MA within 67 days of the receipt of the CHMP.

The Commission has fifteen days to prepare a draft decision.

1 unchanged sentence

During this period, various Commission directorates-general are consulted on the draft marketing authorization decision.

The draft decision is then sent to the Standing Committee on Medicinal Products for Human Use, (Member States have one representative each in both of these committees) for their opinions.

The Centralized Procedure provides for the grant of a single marketing authorization that is valid for all European Union member states.

There are two other procedures in the European Union for the grant of an MAA in multiple European Union Member States.

The Decentralized Procedure provides for approval by one or more other, or concerned, member states of an assessment of an application performed by one member state, known as the reference member state.

3 unchanged sentences

If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to the public health, the disputed points may eventually be referred to the European Commission, whose decision is binding on all member states.

Applications from persons or companies seeking "orphan medicinal product designation" for products they intend to develop for the diagnosis, prevention, or treatment of life-threatening or very serious conditions that affect not more than 5 in 10,000 persons in the European Union are reviewed by the Committee for Orphan Medicinal Products, or COMP.

In addition, orphan drug designation can be granted if the drug is intended for a life threatening, seriously debilitating, or serious and chronic condition in the European Union and that without incentives it is unlikely that sales of the drug in the European Union would be sufficient to justify developing the drug.

Orphan drug designation is only available if there is no other satisfactory method approved in the European Union of diagnosing, preventing, or treating the condition, or if such a method exists, the proposed orphan drug will be of significant benefit to patients.

Where a product has already received a marketing authorization in one Member State, another Member State can recognize that marketing authorization under the mutual recognition procedure.

Applications from persons or companies seeking "orphan medicinal product designation" for products they intend to develop for the diagnosis, prevention, or treatment of life-threatening or chronically debilitating conditions that affect not more than 5 in 10,000 persons in the European Union are reviewed by the Committee for Orphan Medicinal Products, ("COMP").

In addition, orphan drug designation can be granted if the drug is intended for a life threatening, seriously debilitating, or serious and chronic condition in the European Union where without incentives it is unlikely that sales of the product in the European Union would be sufficient to justify the necessary investment in its development.

Orphan designation is only available if there is no other satisfactory method approved in the European Union of diagnosing, preventing, or treating the condition, or if such a method exists, the proposed orphan product will be of significant benefit to patients.

We have obtained orphan drug designation for CTI-1601.

Orphan drug designation provides opportunities for fee reductions, protocol assistance and access to the centralized procedure before and during the first year after marketing approval.

Orphan designation provides opportunities for fee reductions, protocol assistance and access to the centralized procedure before and during the first year after marketing approval.

Fee reductions are not limited to the first year after marketing approval for small and medium enterprises.

In addition, if a product which has an orphan drug designation subsequently receives EMA marketing approval for the indication for which it has such designation, the product is entitled to orphan market exclusivity, which means the EMA may not approve any other application to market a similar drug for the same indication for a period of 10 years.

A “similar medicinal product”

is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication.

The exclusivity period may be reduced to six years if the designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

Competitors may receive marketing approval of different drugs or biologics for the indications for which the orphan product has exclusivity.

In order to do so, however, they must demonstrate that the new drugs or biologics are clinically superior to the existing orphan product.

This demonstration of clinical superiority may be done at the time of initial approval or in post-approval studies, depending on the type of marketing authorization granted.

EMA offers a scheme that is intended to reinforce early dialogue with, and regulatory support from, EMA in order to stimulate innovation, optimize development and enable accelerated assessment of PRIority MEdicines ("PRIME").

It is intended to build upon the scientific advice scheme and accelerated assessment procedure offered by EMA.

Additionally, an MA may be granted to a similar medicinal product for the same indication if:

the second applicant can establish that its product, although similar to the authorized orphan product, is safer, more effective or otherwise clinically superior;

the MA holder of the authorized orphan product consents to a second orphan medicinal product application;

the MA holder of the authorized orphan product cannot supply enough orphan medicinal product

The EMA offers a scheme to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist.

The PRIority MEdicines, or PRIME, scheme is intended to encourage drug development in areas of unmet medical need and is intended to reinforce early dialogue with, and regulatory support from, EMA in order to stimulate innovation, optimize development and enable accelerated assessment of such product candidates.

It is intended to build upon the scientific advice scheme and accelerated assessment procedure offered by the EMA.

The scheme is voluntary and eligibility criteria must be met for a medicine to qualify for PRIME.

The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an initial marketing authorization application through the centralized procedure.

Eligible products must target conditions for which where is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the European Union or, if there is, the new medicine will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods or therapy or improving existing ones.

The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an MA through the centralized procedure.

Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the European Union or, if there is, the new medicine will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods or therapy or improving existing ones.

Applicants will typically be at the exploratory clinical trial phase of development and will have preliminary clinical evidence in patients to demonstrate the promising activity of the medicine and its potential to address to a significant extent an unmet medical need.

1 unchanged sentence

If a medicine is selected for the PRIME scheme, EMA:

Appoints a rapporteur from the Committee for Medicinal Products for Human Use ("CHMP") or from the Committee for Advanced Therapies ("CAT") to provide continuous support and to build up knowledge of the medicine in advance of the filing of a marketing authorization application;

Appoints a rapporteur from the CHMP or from the Committee for Advanced Therapies ("CAT") to provide continuous support and to build up knowledge of the medicine in advance of the filing of an MAA;

Issues guidance on the applicant’s overall development plan and regulatory strategy;

16 unchanged sentences

Scientific advice and protocol assistance at the Agency are free of charge for questions relating to the development of pediatric medicines.

left the EU on January 31, 2020 following which, existing EU medicinal product legislation continued to apply in the U.K.

during the transition period under the terms of the EU-UK Withdrawal Agreement.

A transition period, which ended on December 31, 2020, maintained access to the EU single market and to the global trade deals

negotiated by the EU on behalf of its members.

The transition period provided time for the U.K.

and EU to negotiate a framework for partnership for the future, which was then crystallized in the Trade and Cooperation Agreement ("TCA") and became effective on the January 1, 2021.

From January 1, 2021, the Medicines and Healthcare products Regulatory Agency ("MHRA") will be the U.K.’s standalone medicines and medical devices regulator.

As a result of the Northern Ireland protocol, different rules will apply in Northern Ireland than in England, Wales and Scotland (together Great Britain, or GB);

broadly, Northern Ireland will continue to follow the EU regulatory regime, but its national competent authority will remain the MHRA.

The MHRA has published a draft guidance on how various aspects of the U.K.

regulatory regime for medicines will operate in GB and in Northern Ireland following the expiry of the Brexit transition period on December 31, 2020.

The guidance includes clinical trials, marketing authorizations, importing, exporting and pharmacovigilance and is relevant to any business involved in the research, development or commercialization of medicines in the U.K.

The new guidance will be given effect via the Human Medicines Regulations (Amendment etc.) (EU Exit) Regulations 2019, or the Exit Regulations.

regulatory regime largely mirrors that of the EU.

The aforementioned European Union rules are generally applicable in the EEA.

The UK left the European Union on January 31, 2020 and the UK and the European Union concluded a trade and cooperation agreement (“TCA”), which was provisionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021.

The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of cGMP, inspections of manufacturing facilities for medicinal products and cGMP documents issued, but does not provide for wholesale mutual recognition of UK and European Union pharmaceutical regulations.

At present, Great Britain has implemented European Union legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the European Union regulatory framework continues to apply in Northern Ireland).

Except in respect of the new European Union Clinical Trials Regulation, the regulatory regime in Great Britain therefore largely aligns with current European Union medicines regulations, however it is possible that these regimes will diverge more significantly in future now that Great Britain’s regulatory system is independent from the European Union and the TCA does not provide for mutual recognition of UK and European Union pharmaceutical legislation.

However, notwithstanding that there is no wholesale recognition of European Union pharmaceutical legislation under the TCA, under the new framework mentioned below which will be put in place by the Medicines and Healthcare products Regulatory Agency (“MHRA”), the UK’s medicines regulator, from January 1, 2024, the MHRA has stated that it will take into account decisions on the approval of MAs from the EMA (and certain other regulators) when considering an application for a Great Britain MA.

On February 27, 2023, the UK government and the European Commission announced a political agreement in principle to replace the Northern Ireland Protocol with a new set of arrangements, known as the “Windsor Framework”.

This new framework fundamentally changes the existing system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the UK.

In particular, the MHRA will be responsible for approving all medicinal products destined for the UK market (Great Britain and Northern Ireland), and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland.

Once the Windsor Framework is approved by the EU-UK Joint Committee, the UK Government and the European Union will enact legislative measures to enact it into law.

The MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit patients, an accelerated assessment procedure and new routes of evaluation for novel products and biotechnological products.

All existing E.U.

MAs for centrally authorized products will automatically be converted (grand fathered) into U.K.

MAs free-of-charge on January 1, 2021.

There will be no pre-marketing authorization orphan designation.

MAs for centrally authorized products were automatically converted (grand fathered) into UK MAs free-of-charge on January 1, 2021.

For a period of three years from January 1, 2021, the MHRA may rely on a decision taken by the European Commission on the approval of a new MA in the centralized procedure, in order to more quickly grant a new Great Britain MA.

A separate application will, however, still be required.

On January 24, 2023, the MHRA announced that a new international recognition framework will be put in place from January 1, 2024, which will have regard to decisions on the approval of MAs made by the EMA and certain other regulators when determining an application for a new Great Britain MA.

There is now no pre-marketing authorization orphan designation in Great Britain.

Instead, the MHRA will review applications for orphan designation in parallel to the corresponding MA application.

The criteria are essentially the same, but have been tailored for the GB market, i.e., the prevalence of the condition in GB (rather than the EU) must not be more than 5 in 10,000.

The criteria are essentially the same, but have been tailored for the GB market, i.e.

the prevalence of the condition in GB (rather than the EU) must not be more than 5 in 10,000.

Should an orphan designation be granted, the period or market exclusivity will be set from the date of first approval of the product in GB or EU/European Economic Area, wherever is earliest.

6 unchanged sentences

Federal false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent;

HIPAA 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 or making any false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their implementing regulations, impose obligations on certain types of individuals;

the federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA") 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 or making any false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 ("HITECH") and their implementing regulations, impose obligations on certain types of individuals;

entities regarding the electronic exchange of information in common healthcare transactions, as well as standards relating to the privacy and security of individually identifiable health information;

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS information related to payments or other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Beginning in 2022, applicable manufacturers are also required to report such information regarding payments and transfers of value provided, as well as ownership and investment interests held, during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and certified nurse-midwives;

the federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare and Medicaid Services, the agency that administers the Medicare and Medicaid programs ("CMS") information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members and

The Foreign Corrupt Practices Act ("FCPA") prohibits U.S.

7 unchanged sentences

In recent years, Congress has considered reductions in Medicare reimbursement levels for drugs administered by physicians.

CMS, the agency that administers the Medicare and Medicaid programs, also has authority to revise reimbursement rates and to implement coverage restrictions for some drugs.

CMS also has authority to revise reimbursement rates and to implement coverage restrictions for some drugs.

Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products.

While Medicare regulations apply only to drug benefits for Medicare beneficiaries, private payers often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates.

Therefore, any reduction in reimbursement that results from federal legislation or regulation may result in a similar reduction in payments from private payers.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the Affordable Care Act substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacts the pharmaceutical industry.

The Affordable Care Act is intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and medical device manufacturers, and impose additional health policy reforms.

While Medicare regulations apply only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates.

Therefore, any reduction in reimbursement that results from federal legislation or regulation may result in a similar reduction in payments from private payors.

The Affordable Care Act substantially changed the way healthcare is financed by both governmental and private insurers, included provisions that affected the pharmaceutical industry.

Among other things, the Affordable Care Act expanded manufacturers’

rebate liability under the Medicaid Drug Rebate Program by increasing the minimum Medicaid rebate for both branded and generic drugs, expanded the 340B program, and revised the definition of average manufacturer price ("AMP"), which could increase the amount of Medicaid drug rebates manufacturers are required to pay to states.

The legislation also extended Medicaid drug rebates, previously due only on fee-for-service Medicaid utilization, to include the utilization of Medicaid managed care organizations and created an alternative rebate formula for certain new formulations of certain existing products that is intended to increase the amount of rebates due on those drugs.

On February 1, 2016, CMS issued final regulations to implement the changes to the Medicaid Drug Rebate program under the Affordable Care Act.

These regulations became effective on April 1, 2016.

Since that time, there have been significant ongoing efforts to modify or eliminate the Affordable Care Act.

On January 20, 2017, President Trump signed an executive order directing federal agencies to exercise existing authorities to reduce burdens associated with the Affordable Care Act pending further action by Congress.

In October 2017, he signed an Executive Order which directed federal agencies to modify how the Affordable Care Act is implemented.

The Tax Act, enacted on December 22, 2017, repealed the shared responsibility payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, as amended, or the Code, commonly referred to as the individual mandate,

rebate liability under the Medicaid Drug Rebate Program, expanded the 340B program, and increased the amount of Medicaid drug rebates manufacturers are required to pay to states.

Since that time, there have been significant ongoing legislative and executive efforts to modify or eliminate the Affordable Care Act.

The Tax Act of 2017, for example, repealed the shared responsibility payment provisions commonly referred to as the individual mandate.

Other legislative changes have been proposed and adopted since the passage of the Affordable Care Act.

The Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend proposals in spending reductions to Congress.

The Joint Select Committee did not achieve its targeted deficit reduction of an amount greater than $1.2 trillion for the fiscal years 2012 through 2021, triggering the legislation’s automatic reductions to several government programs.

These reductions included aggregate reductions to Medicare payments to healthcare providers of up to 2.0% per fiscal year, which went into effect in April 2013.

Subsequent legislation extended the 2% reduction, on average, to 2030 unless additional Congressional action is taken.

However, pursuant to the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") the 2% Medicare sequester reductions were suspended from May 1, 2020 through December 31, 2021 due to the COVID-19 pandemic.

The sequester will remain in place through 2030.

The Budget Control Act of 2011 and subsequent legislation has resulted in reductions to Medicare payments to healthcare providers of up to 2.0% per fiscal year which will remain in effect through 2031 unless additional Congressional action is taken.

On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, 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.

The Affordable Care Act also has been subject to challenges in court.

On December 14, 2018, a Texas U.S.

District Court Judge ruled that the Affordable Care Act is unconstitutional in its entirety because the “individual mandate”

was repealed by Congress.

On December 18, 2019, the Fifth Circuit U.S.

Court of Appeals held that the individual mandate is unconstitutional and remanded the case to the Texas District Court to reconsider its earlier invalidation of the entire Affordable Care Act.

An appeal was taken to the U.S.

Supreme Court.

On June 17, 2021, the Supreme Court ruled that the plaintiffs lacked standing to challenge the law as they had not alleged personal injury traceable to the allegedly unlawful conduct.

As a result, the Supreme Court did not rule on the constitutionality of the Affordable Care Act.

Further changes to and under the Affordable Care Act remain possible but it is unknown what form any such changes or any law proposed to replace or revise the Affordable Care Act would take, and how or whether it may affect our business in the future.

We expect that changes to the Affordable Care Act, the Medicare and Medicaid programs, changes allowing the federal government to directly negotiate drug prices and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry.

The IRA includes several provisions that will impact our business to varying degrees, including

provisions that reduce the out-of-pocket cap for Medicare Part D beneficiaries to $2,000 starting in 2025;

impose new manufacturer financial liability on certain drugs in Medicare Part D, allow the U.S.

to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic

or biosimilar competition, require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation, and delay the rebate rule that would limit the fees that pharmacy benefit managers can

Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation

program, but only if they have one rare disease designation and for which the only approved indication is for

that disease or condition.

We expect that changes to the Affordable Care Act, the Medicare and Medicaid programs, including recent changes that allow the federal government to directly negotiate drug prices and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

1 unchanged sentence

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