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Item 1. Business

2024-03-14 compared with 2023-03-14 · 331 added, 263 removed, 416 unchanged (59% 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 ("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.

Our lead product candidate, nomlabofusp (nomlabofusp is the International Nonproprietary Name ("INN") and the United States Adopted Name ("USAN") for CTI-1601), is a subcutaneously administered, recombinant fusion protein intended to deliver tissue frataxin ("FXN"), an essential protein, to the mitochondria of patients with Friedreich's ataxia (“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.

Nomlabofusp represents the first potential therapy designed to increase FXN levels in patients with FA.

We believe that our CPP 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 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.

Our strategy is to become a leader in the treatment of rare diseases by leveraging our technology platform and applying our management team’s know how and expertise to the development of CTI-1601 and other future pipeline programs.

Since our inception, we have devoted substantially all of our resources to developing nomlabofusp, building our intellectual property portfolio, developing third-party manufacturing capabilities, business planning, raising capital, and providing general and administrative support for such operations.

As of December 31, 2023, we had cash, cash equivalents and marketable securities of $86.8 million.

In February 2024,we raised net proceeds of $161.6 million in an underwritten public offering of common stock, We anticipate the $161.6 million in net proceeds, together with $86.8 million of cash, cash equivalents and marketable securities on hand will fund operations into 2026.

Nomlabofusp Program Update

Clinical Trials

We have completed two Phase 1 clinical trials and a Phase 2 dose exploration trial, and recently initiated a Phase 2 OLE trial in patients with FA.

Data from these trials demonstrated proof-of-concept by showing that daily subcutaneous injections of nomlabofusp 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).

There were no serious adverse events associated with either the MAD or SAD trials.

In May 2023, we reported preliminary unblinded top-line data from the 25 mg cohort of our Phase 2 four-week, placebo-controlled, dose exploration trial of nomlabofusp in FA patients.

Data from the cohort indicated nomlabofusp was generally well tolerated and showed increases in FXN levels from baseline compared to placebo in all evaluated tissues (skin and buccal cells) at day 14.

In July 2023, following the FDA’s review of our complete response to the partial clinical hold, the FDA cleared initiation of a second cohort (50 mg) of our four-week, placebo-controlled, Phase 2 dose exploration trial of nomlabofusp in patients and the initiation of our OLE trial with daily dosing of 25 mg.

In February 2024, we reported positive top-line data and successful completion of our four-week, placebo-controlled Phase 2 dose exploration study of nomlabofusp in participants with FA.

Nomlabofusp was generally well tolerated and demonstrated dose dependent increases in FXN levels in all evaluated tissues (skin and buccal cells) after daily dosing of 14 days followed by every other day dosing until day 28 in the 25 mg and 50 mg cohorts.

Participants in the 25 mg (n=13) and 50 mg (n=15) cohorts were randomized 2:1 to receive subcutaneous injections of nomlabofusp or placebo.

Participants treated with 50 mg had individual frataxin levels in skin increase from less than 17% relative to healthy volunteers at baseline, to 33% to 59% of healthy volunteers after 14 days of treatment.

Patients treated with placebo showed no increase in their frataxin levels during this period.

Additionally, the majority of treated patients in both cohorts with quantifiable levels of frataxin at baseline and day 14 achieve at least

a 100% increase in tissue frataxin in skin cells, and at least a 30% increase in tissue frataxin levels in buccal cells.

With both skin and buccal cells, when dosing is switched to every other day the magnitude of the increase declines.

In January 2024, we initiated the OLE trial evaluating daily subcutaneous injections of 25 mg of nomlabofusp self-administered or administered by a caregiver, with the first patient dosed in March 2024.

Participants who completed treatment in the Phase 2 dose exploration trial, or who previously completed a prior clinical trial of nomlabofusp are potentially eligible to screen for the OLE.

The OLE will evaluate safety, tolerability, pharmacokinetics ("PK") and measures of frataxin levels in peripheral tissues as well as other exploratory PD (lipid profiles and gene expression data) following long-term subcutaneous administration of nomlabofusp.

Clinical measures collected during the trial will be compared to data from a matched control arm derived from participants in the Friedreich’s Ataxia Clinical Outcome Measures Study (FACOMS) database.

Dose escalation in the OLE trial will be considered based on safety, tolerability, PK, and tissue FXN levels from the Phase 2 trial’s 50 mg cohort as well as available data from the 25 mg dose of nomlabofusp in the OLE trial, and is contingent on FDA review as part of the partial clinical hold.

Initial data from the OLE trial is expected in the fourth quarter of 2024.

Key elements of our strategy include:

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.

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.

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 ("UK"), Australia, Canada and potentially other countries.

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 .

We intend to evaluate commercialization options in the United States, the European Union, and in other foreign jurisdictions throughout the world where Friedreich’s ataxia patients can benefit, if we are successful in obtaining regulatory approval.

• Advance nomlabofusp 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 and a Phase 2 dose exploration trial in patients with FA in the United States and have initiated an OLE study in the U.S with patients age 18 or older to be dosed 25 mg of nomlabofusp daily.

Expansion of this OLE to doses above 25 mg as well as the initiation of additional U.S.

clinical trials evaluating nomlabofusp are contingent on FDA review as part of the FDA’s partial clinical hold.

We do not know if, or when, the FDA will lift the partial clinical hold on our nomlabofusp program or if it will ever allow further clinical development of nomlabofusp beyond the current OLE study that we recently initiated.

We also are planning to include in our clinical studies, individuals between the ages of 2 and 17 and are currently in discussions with FDA as to what additional clinical trial data in adults would inform inclusion of those pediatric individuals in our studies.

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 nomlabofusp in the United States, the European Union, the United Kingdom ("UK"), Australia, Canada and potentially other countries.

• Intend to pursue the use of tissue frataxin levels as a novel surrogate endpoint to support a potential Biologics License Application (“BLA”) submission for accelerated approval .

Recently, we had discussions with the FDA regarding the potential use of tissue FXN levels as a novel surrogate endpoint.

The FDA has acknowledged that frataxin deficiency appears to be critical to the pathogenic mechanism of FA, and that there continues to be an unmet need for treatments for FA patients that address the underlying disease pathophysiology.

We intend to pursue an accelerated approval using FXN levels, supportive PD and clinical information, and safety data from the OLE study, along with additional non-clinical pharmacology information needed to support the novel surrogate endpoint approach.

We are beginning to plan for a confirmatory study and are targeting a BLA submission in the second half of 2025.

• If nomlabofusp receives regulatory approval(s), commercialize nomlabofusp in the United States, the European Union, and other relevant countries independently or with third parties.

We intend to evaluate commercialization options in the United States, the European Union, the United Kingdom and in other foreign jurisdictions throughout the world where FA patients can benefit, if we are successful in obtaining regulatory approval.

We may build our own internal sales force;

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.

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

• Expand our product candidate pipeline to treat a variety of rare diseases.

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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 and develop other therapeutics with potentially disease modifying therapeutic action.

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

We also plan to continue to build our intellectual property portfolio to expand 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.

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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.

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The members of our scientific advisory board consist of distinguished research scientists, professors and industry experts recognized as key opinion leaders in the fields of rare disease, pediatrics and mitochondrial disease.

We build these relationships to enhance our knowledge of the patient’s needs and utilize that knowledge to design development programs intended to address unmet medical needs and add value for potential patients.

Platform Technology for Treatment of Rare Genetic Diseases

There are estimated to be between 5,000 and 7,000 rare genetic diseases, which, collectively affect hundreds of millions of people worldwide.

There are estimated to be over 9,500 rare genetic diseases, which, collectively affect hundreds of millions of people worldwide.

Of the hundreds of millions of individuals suffering from these rare genetic diseases, only approximately 5% have therapeutic options available to manage their disease.

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

CTI-1601 For the Treatment of Friedreich’s ataxia

Friedreich’s ataxia

Friedreich’s ataxia is a rare genetic disease that is the most commonly inherited ataxia in humans, with approximately 20,000 individuals living with Friedreich’s ataxia globally, and of these individuals, approximately 5,000 are in the United States and the majority of the remaining individuals are in the European Union.

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

Nomlabofusp For the Treatment of Friedreich’s ataxia

Friedreich’s ataxia

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 the highest levels found in the heart, spinal cord, liver, pancreas, and skeletal muscle.

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As part of this process the mitochondrial targeting sequence is cleaved off in the mitochondria by a naturally occurring enzyme.

Friedreich’s ataxia is a progressive multi-symptom disease typically presenting in mid-childhood that affects the functioning of multiple organs and systems.

It is a debilitating neurodegenerative disease that results in poor coordination of legs and arms, progressive loss of the ability to walk, generalized weakness, loss of sensation, scoliosis, diabetes and cardiomyopathy as well as impaired vision, hearing and speech.

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

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.

Omaveloxolone, the first drug approved for the treatment of FA, was approved by the FDA and the European Commission in February 2023 and February 2024, respectively.

Nomlabofusp, an investigational 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, nomlabofusp is designed to carry 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 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:

We have completed two Phase 1 nomlabofusp clinical trials, and a Phase 2 dose exploration trial and have initiated an OLE study in the U.S with patients to be dosed 25 mg of nomlabofusp daily.

The nomlabofusp program remains under a partial clinical hold imposed by the FDA, and expansion of the OLE study above the 25 mg dose level as well as further clinical development of nomlabofusp is contingent upon FDA agreement based on its review of data from the 50 mg cohort of the Phase 2 dose exploration study and review of the available data from the OLE study at the current 25 mg dose level.

Based on the results of our non-clinical development program as well as results from our Phase 2 clinical trials, we believe that administering nomlabofusp may increase FXN levels in the mitochondria of patients with Friedreich’s ataxia and patients could potentially experience:

• improved cellular function;

a positive impact on Friedreich’s ataxia symptoms;

• a positive impact on Friedreich’s ataxia symptoms;

• a slowing of progression of the disease, potentially prolonging life.

In our Phase 1 clinical trials, CTI-1601 appeared to increase FXN levels in the peripheral tissues that were tested (buccal cells, skin biopsies and platelets).

Based on this, we believe that our technology may allow us to address other rare genetic diseases that either require the replacement of molecules that need to target specific intracellular organelles, or that share similar clinical symptoms that overlap with Friedreich’s ataxia.

Finally, the use of CTI-1601 to improve mitochondrial function in other rare diseases that demonstrate evidence of mitochondrial dysfunction is also being explored.

Development of CTI-1601

In our Phase 1 clinical trials, nomlabofusp appeared to increase FXN levels in the peripheral tissues that were tested (buccal cells, skin biopsies and platelets) and data from our Phase 2 dose exploration study demonstrated dose dependent increases in FXN levels in all evaluated tissues (skin and buccal cells) after daily dosing of 14 days followed by every other day dosing until day 28 in the 25 mg and 50 mg cohorts.

Finally, the use of nomlabofusp to improve mitochondrial function in other rare diseases that demonstrate evidence of mitochondrial dysfunction is also being explored.

Development of Nomlabofusp

Non-clinical Development

Knock-Out Mice and Other Non-clinical Studies

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.

In non-clinical studies of CTI-1601, the median survival in animals treated with vehicle of 98 days was extended to a median survival of 166 days in animals treated with CTI-1601 subcutaneously three times per week (p=0.0001).

Furthermore, 87.5% of mice treated with CTI-1601 survived beyond the mean age of death in the vehicle treated group (107.5 days) whereas only 33% of vehicle treated animals survived.

Nomlabofusp has been demonstrated to prolong the life of knock-out ("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.

In non-clinical studies of nomlabofusp, the median survival in animals treated with vehicle of 98 days was extended to a median survival of 166 days in animals treated with nomlabofusp subcutaneously three times per week (p=0.0001).

Furthermore, 87.5% of mice treated with nomlabofusp survived beyond the mean age of death in the vehicle treated group (107.5 days) whereas only 33% of vehicle treated animals survived.

Results are reflected in Figure 2.

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Another study, also performed at an independent laboratory, demonstrated the maintenance of cardiac function when the same KO mouse model was studied.

These mice were treated with CTI-1601 at doses of 10 mg/kg every other day for 6 weeks.

These mice were treated with nomlabofusp at doses of 10 mg/kg every other day for 6 weeks.

Echocardiograms were performed prior to initiating dosing and after 4 weeks of dosing.

When compared to vehicle, mice treated with CTI-1601 maintained their left ventricular volume and ejection fraction while vehicle treated mice deteriorated over the same 4-week period.

When compared to vehicle, mice treated with nomlabofusp maintained their left ventricular volume and ejection fraction while vehicle treated mice deteriorated over the same 4-week period.

See Figures 5 and 6.

Using a neurologic mouse model, treatment with CTI-1601 prevented the development of ataxia in mice whose nervous system was deficient in FXN compared to those treated with placebo.

In multiple non-clinical studies in rodents and non-human primates ("NHPs"), human FXN was found to be distributed into all tissues tested following CTI-1601 dosing.

Using a neurologic mouse model, treatment with nomlabofusp prevented the development of ataxia in mice whose nervous system was deficient in FXN compared to those treated with placebo.

In multiple non-clinical studies in rodents and non-human primates ("NHPs"), human FXN was found to be distributed into all tissues tested following nomlabofusp dosing.

See Figure 7.

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Skeletal Muscle

Tissues Examined, By Study

Study Vehicle

Human Frataxin Distribution

Brain, Heart, Liver

PHARM-1601-02

Neuro KO Mice

Brain, Dorsal Root Ganglia, Spinal Cord

PHARM-1601-03/04

Cardiac KO Mice

Mitochondria of Skeletal Muscle and Cardiomyocytes

Cynomolgus Monkey

CSF, Skin, Buccal Cells, Platelets

Since CTI-1601 is intended to increase FXN levels in patients with Friedreich’s ataxia who are deficient in FXN, it is important to be able to measure changes in human FXN in the clinic in easily accessible tissues.

To accomplish this, we have developed a proprietary assay that can measure and quantify human FXN in buccal swabs, skin biopsies and platelets.

This process is designed to allow repeated analysis of changes in human FXN in patients over time as they are dosed with CTI-1601.

The effectiveness of this assay was first demonstrated by its ability to detect the presence of human FXN in those tissues in cynomolgus monkeys.

In an exploratory study, NHPs were dosed for 14 days with 15 mg/kg twice a day of CTI-1601.

Buccal swabs skin biopsies and platelets were obtained on Day 3 prior to administration of any CTI-1601 but after two days of dosing with vehicle.

No human FXN was found.

Since these were healthy NHPs there were levels of endogenous monkey FXN present.

This is demonstrated by the yellow bars in the graph in Figure 8 below on Day 3.

After 7 and 14 days of dosing with CTI-1601 human FXN was seen in significant amounts in all tissues analyzed.

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

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

We previously conducted 28-day and 13-week GLP toxicology studies of CTI-1601 in two species, rat and NHP.

We previously conducted 28-day and 13-week GLP toxicology studies of nomlabofusp in two species, rat and NHP.

In the rat studies, some injection sites showed edema and erythema with associated histologic changes localized to the injection site.

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These clinical observations resolved with no intervention and all of the NHPs who experienced these clinical observations received all doses and completed the in-life portion of the study.

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

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

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.

On May 25, 2021, the FDA placed a clinical hold on the nomlabofusp 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.

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

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Data from the study were collected throughout the second half of 2021 and included in the complete response to the clinical hold submitted to the FDA in January 2022.

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 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.

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

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

We submitted a complete response to clinical hold incorporating additional information requested by the FDA at the meeting as well as information on the proposed study in August 2022.

In September 2022, following the Type C meeting and the submission of the Company's complete response to clinical hold, the FDA allowed the 25 mg cohort of a Phase 2, four-week, placebo-controlled, dose exploration trial of nomlabofusp in FA patients discussed above to proceed.

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

In June 2023, we met with the FDA.

Following that meeting, we submitted a complete response to the FDA’s partial clinical hold that included unblinded safety, PK and frataxin data from the Phase 2 trial’s completed 25 mg cohort.

In July 2023, following the FDA’s review of our complete response to the partial clinical hold, the FDA cleared initiation of a second cohort at 50 mg of our four-week, placebo-controlled, Phase 2 dose exploration trial and initiation of our OLE trial with daily dosing of 25 mg.

Clinical Development

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

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

Enrollment in this study was completed in 2022 and data has been used for comparison purposes in the Phase 2 clinical study described below.

See Figure 8.

FXN concentrations were measured in skin and buccal cells from 60 homozygous healthy volunteers utilizing the same sampling technique and assay as clinical trials of nomlabofusp;

FXN levels measured via detection of peptide derived from mature FXN;

FXN concentrations normalized to total cellular protein content in each sample.

Deutsch et al.

Molecular Genetics and Metabolism 101 (2010) 238–245.

Friedreich’s Ataxia Research Alliance

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 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.

Completed Phase 1 Clinical Studies in Adults with Friedreich’s Ataxia

We submitted our investigational New Drug application ("IND") application for nomlabofusp and began Phase 1 clinical trials in 2019 in patients with FA.

We completed two clinical studies of nomlabofusp 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 nomlabofusp at doses ranging from 25 mg to 100 mg administered via subcutaneous injection ("SC").

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

Administration of nomlabofusp via 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 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).

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 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.

We expect to initiate a global registration study once sufficient data is available to inform decisions regarding dosing and trial design.

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 will be subject to FDA review of our CTI-1601 Phase 2 cohort 1 data, and possibly other data.

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 Figures 9 and 10).

The study was designed in this fashion to ensure that the PK of nomlabofusp 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 profile.

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

*FXN levels measured via detection of peptide derived from mature FXN;

FXN concentrations are normalized to total cellular protein content in each sample;

Data represent median and 25th and 75th percentiles;

FXN levels from day 4, & day 13 measurements are shown for data derived from the 25 mg cohort;

FXN levels from day 7 & day 13 measurements are shown for data derived from the 50 & 100 mg cohorts.

Completed Phase 2 Dose Exploration Study

The Phase 2 randomized, double-blind, placebo controlled dose exploration study evaluated the safety, tolerability, PK and PD of two doses of nomlabofusp.

Cohort 1 evaluated 25 mg and Cohort 2 evaluated 50 mg.

Participants in either the 25 mg or 50 mg cohorts were randomized 2:1 to receive daily subcutaneous injections of either nomlabofusp or placebo for 14 days, and then every other day for an additional 14 days for a total 28-day dosing period.

In May 2023, we reported preliminary unblinded top-line data from the 25 mg cohort of the Phase 2 trial.

In June 2023, we met with the FDA.

Following that meeting, we submitted a complete response to the FDA’s partial clinical hold that included unblinded safety, PK and frataxin data from the Phase 2 trial’s completed 25 mg cohort.

In July 2023, following the FDA’s review of our complete response to the partial clinical hold, the FDA cleared initiation of the second cohort (50 mg) of our four-week, placebo-controlled, Phase 2 dose exploration trial and the initiation of our OLE trial with daily dosing of 25 mg.

In February 2024, we reported positive top-line data and successful completion of our four-week, placebo-controlled Phase 2 dose exploration study of nomlabofusp in participants with FA.

Nomlabofusp was generally well tolerated and demonstrated dose response in FXN levels in all evaluated tissues (skin and buccal cells) after daily dosing of 14 days followed by every other day dosing until day 28 in the 25 mg and 50 mg cohorts.

With regard to safety in the Phase 2 dose exploration trial, there were a total of 28 participants (19 received nomlabofusp and 9 received placebo).

There were no serious adverse events reported.

There was one allergic reaction which was considered to be a severe adverse event in the 25 mg cohort that resolved with standard treatment.

This participant withdrew from the trial.

The most common adverse events reported were mild and moderate injection site reactions which resolved without any intervention and there were no study discontinuations due to injection site reactions.

Consistent with findings in our Phase 1 study, nomlabofusp demonstrated quick absorption after subcutaneous administration and had dose proportional increases in exposure.

Participants treated with 50 mg for 14 days daily had frataxin levels in skin cells increase from less than 17% at baseline relative to healthy volunteers, to 33% to 59% of healthy volunteers after 14 days of treatment.

Patients treated with placebo showed no increase in their frataxin levels during this period.

Additionally, the majority of treated patients in both cohorts with quantifiable levels of frataxin at baseline and day 14 achieve at least a 100% increase in tissue frataxin in skin cells, and at least a 30% increase in tissue frataxin levels in buccal cells.

Figures 11 and 14 show a clear dose response and increase from baseline in skin tissue and buccal tissue frataxin levels respectively.

The graph on the left in both Figures 12 and 15 show a dose dependent increase in frataxin levels after 14 days of treatment.

With both skin and buccal cells, when dosing is switched to every other day the magnitude of the increase in frataxin levels declines.

The waterfall plots on the right in both Figures 12 and 15 depict the individual changes in frataxin levels from baseline in skin cells and buccal cells at day 14 respectively.

Each bar represents an individual patient, with placebo treated participants in grey, the 25 mg cohort in aqua, and the 50 mg cohort in blue.

The majority of patients treated with nomlabofusp had significant increases in frataxin levels while placebo patients were basically unchanged.

Importantly, there also appears to be a dose response as frataxin levels are notably increased in most of the 50 mg cohort over the 25 mg cohort.

Only participants with quantifiable levels at baseline and day 14 and day 28 are included in the tables.

*FXN levels measured via detection of peptide derived from mature FXN;

FXN concentrations are normalized to total cellular protein content in each sample.

Data represent median and 25th and 75th percentiles.

Only participants with quantifiable levels at both baseline and day 14 are included in the figures.

**Median baseline FXN levels in patients were 3.5 pg/µg for the placebo, 3.7 pg/µg for the 25 mg cohort and 2.1 pg/µg for the 50 mg cohort.

Figures 13 and 16 depict how many people had a shift in frataxin levels in skin cells and buccal cells as a percentage of average healthy volunteers after 14 days of treatment.

On the left is the 25 mg cohort and on the right is the 50 mg cohort.

On the far left of each figure are categories of the percentage of average healthy volunteers.

Figures in black to the left of the black vertical line represent patients at baseline.

Figures to the right of the black

vertical line represent day 14 frataxin levels as a percentage of average healthy volunteers.

In blue are individuals that increase by 25% to 50% and in green are individuals that exceeded 50% of average healthy volunteers.

Only participants with quantifiable levels at baseline and day 14 are included in the figures.

*% of healthy volunteer FXN level is calculated by dividing each participant's FXN level by the average FXN level (16.34 pg/µg) from the noninterventional healthy volunteer study (N=60).

Only participants with quantifiable levels at baseline and day 14 and day 28 are included in the tables.

*FXN levels measured via detection of peptide derived from mature FXN;

FXN concentrations are normalized to total cellular protein content in each sample.

Data represent median and 25th and 75th percentiles.

Only participants with quantifiable levels at both baseline and Day 14 are included in the figures.

**Median baseline FXN level in patients were 2.1 pg/µg for the placebo, 1.8 pg/µg for the 25 mg cohort and 1.6 pg/µg for the 50 mg cohort.

Only participants with quantifiable levels at baseline and day 14 are included in the figures.

*% of healthy volunteer FXN level is calculated by dividing each participant's FXN level by the average FXN level (8.24 pg/µg) from the noninterventional healthy volunteer study (N=60).

Open Label Extension

Participants who completed treatment in the Phase 2 dose exploration trial, or who previously completed a prior clinical trial of

nomlabofusp are potentially eligible to screen for the OLE.

The OLE will evaluate the safety, tolerability, PK, and measures of frataxin levels in peripheral tissues as well as other exploratory PD (lipid profiles and gene expression data) following long-term subcutaneous administration of nomlabofusp.

Further dose expansion in the OLE trial will be considered based on safety, tolerability, PK, FXN levels from the 25 mg dose of nomlabofusp in the OLE trial, as well as data from the Phase 2 trial's 50 mg cohort and is contingent on FDA review as part of the partial clinical hold.

Initial data from the OLE trial is expected in the fourth quarter of 2024.

We also are planning to include in our clinical studies, individuals between the ages of 2 and 17 and are currently in discussions with FDA as to what additional clinical data in adults would inform inclusion of those pediatric individuals in our studies.

Intellectual Property

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

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 (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.

As of February 23, 2024, our intellectual property portfolio was composed of numerous international Patent Cooperation Treaty ("PCT"), foreign, and United States non-provisional patent applications, a United States patent and United States provisional patent applications that we own or co-own, and 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 nomlabofusp 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 nomlabofusp.

The additional patent applications we own or co-own which include PCT, foreign and United States non-provisional patent applications a United States patent, and United States provisional patent applications are related to the development of nomlabofusp, including methods of use of nomlabofusp, 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 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 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 2044 or 2025, without taking potential patent term adjustment or patent term extension into consideration.

Nomlabofusp 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 nomlabofusp (composition of matter and methods of use).

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.

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.

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We also use other forms of protection besides patent protection and regulatory exclusivity, such as trademark, copyright, and trade secret protection, to enhance our intellectual property, particularly where we do not believe patent protection is appropriate or obtainable.

We aim to take advantage of all of the intellectual property rights that are available to us and believe that this comprehensive approach will provide us with proprietary exclusive positions for our product candidates, such as CTI-1601, where available.

In-License Agreements

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.

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

In partial consideration for the right and license granted under these agreements, we will pay each of WFUHS and IU a royalty of a low single digit percentage of net sales of licensed products depending on whether there is a valid patent covering such products.

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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.

We expect to compete with Biogen’s SKYCLARYS TM (omaveloxolone), which was approved for the treatment of FA in adults and adolescents aged 16 and older by the FDA and the European Commission in February 2023 and February 2024, respectively.

Other competitors currently developing therapeutics to treat FA include, but are not limited to Design Therapeutics, Lexeo Therapeutics, Neurocrine Biosciences/Voyager Therapeutics and PTC Therapeutics.

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

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Manufacturing and Supply

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

Nomlabofusp is a biologic fusion protein that is produced in E.

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 future clinical trials.

We also use third party manufacturers for the clinical packaging, storage and

distribution of nomlabofusp.

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

We continue to advance the manufacturing of nomlabofusp, 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.

The final process will need to be successfully scaled up to support commercial manufacturing.

The drug substance which is in frozen liquid form for CTI-1601 is currently manufactured for us by KBI Biopharma, Inc.

We are party to a Master Services Agreement, as amended, with KBI, pursuant to which KBI provides biological development and clinical manufacturing services with respect to CTI-1601.

The drug substance which is in frozen liquid form for nomlabofusp is currently manufactured for us by KBI Biopharma, Inc.

We are party to a Master Services Agreement, as amended, with KBI, pursuant to which KBI provides biological development and clinical manufacturing services with respect to nomlabofusp.

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

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.

We have also begun a program with a third-party manufacturer 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 and ultimately, commercial use, assuming nomlabofusp receives required regulatory approvals.

Human Capital Resources

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We value the diversity of our employees and take pride in our commitment to diversity and inclusion across all levels of our organizational structure and with respect to our board of directors.

We value diversity and inclusion across our entire workforce.

We are committed to developing strategies for building diverse teams and promoting the advancement of employees from diverse backgrounds.

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Our scientific advisors are set forth in the table below:

Rusty Clayton, DO

Consultant, Scientific Advisory Board Chair

Marni Joy Falk, MD

Executive Director, Mitochondrial Medicine Frontier Program at Children’s Hospital of Philadelphia;

Professor, Department of Human Genetics and Department of Pediatrics, University of Pennsylvania Perelman School of Medicine

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We lease office and laboratory space, which consists of approximately 8,000 square feet and 1,750 square feet located in Bala Cynwyd, PA and Philadelphia, PA, respectively.

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 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").

We are currently on a month-to-month lease on this Philadelphia lab space.

We, as well as our landlord, can terminate the lease with four months notice.

We have entered into a lease for 3,927 square feet of new laboratory space in King of Prussia, PA to replace the Philadelphia lab space, but this lease has not yet commenced with expected occupancy in the second quarter of 2024.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.

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Copies of each of our filings with the SEC on Form 10-K, Form 10-Q and Form 8-K and all amendments to those reports, can be viewed and downloaded free of charge at our website, www.larimartx.com as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC.

Our code of ethics, other corporate policies and procedures, and the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available through our website at www.larimartx.com .

at www.larimartx.com .

We intend to post information regarding any amendments to, or waivers from, our code of ethics on our website.

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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.

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• 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;

• submission to the FDA of an IND, which must become effective before human clinical trials may begin;

• approval by an institutional review board ("IRB") reviewing each clinical site before each clinical trial may be initiated;

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• 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;

• 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;

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Before testing any drug or biological product candidate in humans, the product candidate enters the non-clinical testing stage.

Non-clinical tests include laboratory evaluations of product chemistry, pharmacology, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the product candidate.

Non-clinical tests include laboratory evaluations of product chemistry, pharmacology, toxicity

and formulation, as well as animal studies to assess the potential safety and activity of the product candidate.

The conduct of the non-clinical tests must comply with federal regulations and requirements including GLPs.

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If the FDA imposes a clinical hold, trials may not recommence without FDA authorization and then only under terms authorized by the FDA.

Clinical trials may involve the administration of the drug or biological product candidate to healthy volunteers or subjects under the supervision of qualified investigators, generally physicians not employed by or under the study sponsor’s control.

Clinical trials involving some products for certain diseases, including some rare diseases may begin with testing in patients with the disease.

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Each protocol and any amendments to the protocol must be submitted to the FDA as part of the IND application.

Clinical trials must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP requirements, including the requirement that all research subjects or his or her legal representative provide informed consent.

Further, each clinical trial must be reviewed and approved by an independent IRB, at or servicing each institution at which the clinical trial will be conducted.

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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.

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

An OLE study may also be conducted.

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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.

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 cGMP requirements.

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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 files it.

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.

One of the performance goals agreed to by the FDA under the PDUFA is to review standard NDAs or BLAs in ten 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.

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The FDA may impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a risk management plan, or otherwise limit the scope of any approval.

In addition, the FDA may require post marketing clinical trials, sometimes referred to as Phase 4 clinical trials, designed to further assess a drug or biological product’s safety and effectiveness, and testing and surveillance programs to monitor the safety of approved products that have been commercialized.

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

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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.

Following approval, the manufacturing facilities are subject to periodic inspections by the FDA 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.

Prior to the institution of any manufacturing changes, a determination needs to be made whether FDA approval is required in advance.

If not done in accordance with FDA expectations, the FDA may restrict supply and may take further action.

in accordance with FDA expectations, the FDA may restrict supply and may take further action.

Annual product reports are required to be submitted annually.

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As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution.

If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot.

The FDA may also perform certain confirmatory tests on lots of some products, before releasing the lots for distribution by the manufacturer.

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

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.

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 in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.

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

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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.

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.

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.

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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.

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

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 with due diligence 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.

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.”

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.

FDORA also provides the FDA increased authority for expedited procedures to withdraw approval of a drug or biologic or indication approved under accelerated approval if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product.

FDORA also 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.

In addition, the FDA generally requires, unless otherwise informed by the agency, pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

Moreover, 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 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 shortened.

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

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.

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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.

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 must 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.

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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.

for such a study.

Biologics Price Competition and Innovation Act

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.

Under the Best Pharmaceuticals for Children Act (“BPCA”), 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 for all formulations, dosage forms, and indications of the active moiety and patent terms for drugs and six months to exclusivity periods for all formulations, dosage forms, and indications for biologic products.

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, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining.

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.

Biosimilarity is demonstrated in steps beginning with rigorous analytical studies or "fingerprinting", in vitro studies, in vivo animal studies, and generally at least one clinical study, absent a waiver from the Secretary of Health and Human Services.

Department of Health and Human Services ("HHS").

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

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Complexities associated with the larger, and often more complex, structures of biological products, as well as the process by which such products are manufactured, pose significant hurdles to implementation that are still being evaluated by the FDA.

Under the BPCIA, a reference biologic is granted 12 years of exclusivity from the time of first licensure of the reference product.

Under the BPCIA, a reference biologic is granted 12 years of exclusivity from the time of first licensure or BLA approval, of the reference product, and no application for a biosimilar can be submitted for four years from the date of licensure of the reference product.

The first biologic product submitted under the biosimilar abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against a finding of interchangeability for other biologics for the same condition of use for the lesser of (i) one year after first commercial marketing of the first interchangeable biosimilar, (ii) 18 months after the first interchangeable biosimilar is approved if there is no patent challenge, (iii) 18 months after resolution of a lawsuit over the patents of the reference biologic in favor of the first interchangeable biosimilar applicant, or (iv) 42 months after the first interchangeable biosimilar is approved if a patent lawsuit is ongoing within the 42-month period.

Regulation Outside of the United States

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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.

Under the 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).

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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 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.

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

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

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.

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.

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.

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

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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.

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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.

The medicinal product is assigned a Community registration number, which will be placed on its packaging if the marketing authorization is granted.

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

The European Commission has fifteen days to prepare a draft decision.

The medicinal product is assigned an EU registration number, which will be placed on its packaging if the MA is granted.

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

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

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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.

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 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.

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

Regulation (EC) No.

141/2000, as amended, provides that a product may be designated as an orphan medicinal product if its sponsor can establish that it is intended 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 when the application is made.

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

We have obtained orphan drug in the European Union for nomlabofusp.

Orphan designation provides opportunities for fee reductions, protocol assistance and access to the centralized procedure in the European Union.

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

In addition, if a product which has an orphan designation subsequently receives a centralized MA for the indication for which it has such designation, the product is entitled to orphan market exclusivity, which means the regulatory authorities in the European Union may not approve any other application to market a "similar medicinal product" 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.

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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.

In exceptional cases, applicants from the academic sector or SMEs (small and medium sized enterprises) may submit an eligibility request at an earlier stage of development if compelling non-clinical data in a relevant model provide early evidence of promising activity, and first in man studies indicate adequate exposure for the desired pharmacotherapeutic effects and tolerability.

In exceptional cases, applicants from the academic sector or SMEs (small and medium sized enterprises) may submit an eligibility request at an earlier stage of development if compelling non-clinical data in a relevant model provide early evidence of promising activity to establish proof of principle, and first in man studies indicate adequate exposure for the desired pharmacotherapeutic effects and tolerability.

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

• 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;

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

• Organizes a kick-off meeting with the rapporteur and experts from relevant EMA committees and working groups;

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They are required to submit relevant data and justification as the product development reaches this stage.

Medicines that are selected for the PRIME scheme are also expected to benefit from EMA’s accelerated assessment procedure at the time of application for marketing authorization.

Where, during the course of development, a medicine no longer meets the eligibility criteria, support under the PRIME scheme may be withdrawn.

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All applications for marketing authorization for new medicines have to include the results of studies as described in an agreed PIP, unless the study results are deferred, or the medicine is exempt because of a waiver.

This requirement also applies when a marketing-authorization holder wants to add a new indication, pharmaceutical form, or route of administration for a medicine that is already authorized and covered by intellectual property rights.

This requirement also applies when a marketing-authorization holder wants to add a new indication, pharmaceutical form, or route of

administration for a medicine that is already authorized and covered by intellectual property rights.

Several rewards and incentives for the development of pediatric medicines for children are available in the E.U.

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with the results of studies from a PIP included in the product information are eligible for an extension of their supplementary protection certificate by six months.

This is the case even when the studies’

results are negative.

This is the case even when the studies’ results are negative.

For orphan medicines, the incentive is an additional two years of market exclusivity.

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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.

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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.

We may also apply for access to the UK’s Innovative Licensing and Access Pathway (“ILAP”) which aims to accelerate the time to market and facilitate patient access to certain types of medicinal products in development which target a life-threatening or seriously debilitating condition, or where there is a significant patient or public health need in the UK.

To access the ILAP, an applicant applies for an Innovation Passport designation.

Once an Innovation Passport designation is granted, the MHRA and its partner agencies (including The All Wales Therapeutics and Toxicology Centre, National Institute for Health and Care Excellence and the Scottish Medicines Consortium) will work with the Innovation Passport designee to define a Target Development Profile, (“TDP”).

TDP sets out a unique product-specific roadmap towards patient access in the UK and provides access to a toolkit to support all stages of the design, development and approvals process, including continuous benefit-risk assessment, increased support for novel development approaches and enhanced patient engagement.

However, although the goal of the ILAP is to reduce the time to market and enable earlier patient access, access does not accelerate conduct of clinical trials or mean that the regulatory requirements are less stringent, nor does it ensure that a marketing authorization application will be approved or that any approval will be granted within a particular timeframe or at all.

Healthcare Laws and Regulations

Coverage and Reimbursement

Our ability to successfully commercialize our product candidates will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.

Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment.

Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels.

There is also significant uncertainty related to the insurance coverage and reimbursement of newly approved products and coverage may be more limited than the purposes for which the medicine is approved by the FDA or comparable foreign regulatory authorities.

In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S.

Department of Health and Human Services.

CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree.

Factors payors consider in determining reimbursement are based on whether the product is a covered benefit under its health plan;

safe, effective and medically necessary;

appropriate for the specific patient;

cost-effective;

and neither experimental nor investigational.

Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.

Outside of the United States, the pricing of pharmaceutical products is subject to governmental control in many countries.

For example, in the European Union, pricing and reimbursement schemes vary widely from country to country.

Some countries provide that products may be marketed only after a reimbursement price has been agreed.

Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular therapy to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval.

Other countries may allow companies to fix their own prices for products, but monitor and control product volumes and issue guidance to physicians to limit prescriptions.

We cannot be sure that reimbursement will be available for any of our product candidates that we commercialize and, if reimbursement is available, the level of reimbursement.

Other Healthcare Laws

Sales of our product candidate, if approved, or any other future product candidate will be subject to healthcare regulation and enforcement by the federal government and the states and foreign governments in which we might conduct our business.

The healthcare laws and regulations that may affect our ability to operate include the following:

the federal Anti-Kickback Statute makes it illegal for any person or entity to knowingly and willfully, directly or indirectly, solicit, receive, offer, or pay any remuneration that is in exchange for or to induce the referral of business, including the purchase, order, lease of any good, facility, item or service for which payment may be made under a federal healthcare program, such as Medicare or Medicaid.

The term “remuneration”

has been broadly interpreted to include anything of value;

• the federal Anti-Kickback Statute prohibits, among other things knowingly and willfully, directly or indirectly, soliciting, receiving, offering, or paying any remuneration that is in exchange for or to induce the referral of business, including the purchase, order, lease of any good, facility, item or service for which payment may be made under a federal healthcare program, such as Medicare or Medicaid.

The term “remuneration” has been broadly interpreted to include anything of value.

• The Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”), amended the intent element of the federal Anti-Kickback Statute so that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to commit a violation;

• 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.

The ACA amended the federal Anti-Kickback Statute such that a violation of that statute can serve as a basis for liability under the federal civil False Claims Act;

• 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 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

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 ("HITECH") and their implementing regulations, impose obligations on healthcare providers, health plans, and healthcare clearinghouses, known as covered entities as well as their business associates and their subcontractors that perform certain services involving the storage, use or disclosure of individually identifiable health information;

including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information.

HITECH increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions;

• the federal Physician Payments Sunshine Act enacted as part of the ACA, and its implementing regulations requires certain manufacturers of approved 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 collect and 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.

The reported data is made available in searchable form on a public website on an annual basis.

Failure to submit required information may result in civil monetary penalties;

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

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Many states have similar laws and regulations, such as anti-kickback and false claims laws that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs.

Additionally, we may be subject to state laws that require pharmaceutical companies to comply with the federal government’s and/or pharmaceutical industry’s voluntary compliance guidelines, state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, as well as state and foreign laws governing the privacy and security of health information, many of which differ from each other in significant ways and often are not preempted by HIPAA.

Certain states and local jurisdictions also require the registration of pharmaceutical sales representatives.

Further, certain states require the posting of information relating to clinical studies and their outcomes.

A growing number of states require the reporting of certain drug pricing information, including information pertaining to and justifying price increases and the price set for newly launched drugs, or to prohibit prescription drug price gouging.

We may also be subject to state and foreign laws governing the privacy and security of health information, many of which differ from each other in significant ways and often are not preempted by HIPAA.

In the United States, there are numerous federal and state privacy and data security laws and regulations governing the collection, use, disclosure and protection of personal information, including federal and state health information privacy laws, federal and state security breach notification laws, and federal and state consumer protection laws.

Each of these laws is subject to varying interpretations and new laws continue to be proposed.

At the state level, numerous states have or are in the process of enacting or considering comprehensive

state-level data privacy and security laws, rules and regulations while other states have focused on more narrow aspects of privacy.

In the state of Washington, for example, the My Health My Data Act will require regulated entities to obtain consent to collect health information, grant consumers certain rights, including to request deletion of their information, and provide for robust enforcement mechanisms, including enforcement by the Washington state attorney-general and a private right of action for consumer claims.

Other states have also enacted, proposed, or are considering proposing, data privacy laws, which could further complicate compliance efforts, increase our potential liability and adversely affect our business.

Additionally, to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws.

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The United States government, state legislatures and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs.

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

Third-party payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical or biological products, medical devices, and medical services, in addition to questioning safety and efficacy.

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

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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.

Therefore, although private payors have their own methods and approval process apart from Medicare determinations, 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, 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 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 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.

Among other things, the Affordable Care Act expanded manufacturers’ 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, several healthcare reform proposals recently culminated in the enactment of the Inflation Reduction Act (“IRA”) in August 2022, which, among other things, allows HHS to directly negotiate the selling price of a statutorily specified number of drugs and biologics each year that CMS reimburses under Medicare Part B and Part D.

Only high-expenditure single-source biologics that have been approved for at least 11 years (7 years for drugs) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.

Negotiations for Medicare Part D products take place in 2024 with the negotiated price taking effect in 2026, and negotiations for Medicare Part B products will begin in 2026 with the negotiated price taking effect in 2028.

In August 2023, HHS announced the ten Medicare Part D drugs and biologics that it selected for negotiations.

HHS will announce the negotiated maximum fair prices by September 1, 2024, and this price cap, which cannot exceed a statutory ceiling price, will go into effect on January 1, 2026.

A drug or biological product that has an orphan drug designation for only one rare disease or condition will be excluded from the IRA’s price negotiation requirements, but will lose that exclusion if it receives designations for more than one rare disease or condition, or if is approved for an indication that is not within that single designated rare disease or condition, unless such additional designation or such disqualifying approvals are withdrawn by the time CMS evaluates the drug for selection for negotiation.

The IRA also imposes rebates on Medicare Part B and Part D drugs whose prices have increased at a rate greater than the rate of inflation.

The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

Manufacturers that fail to comply with the IRA may be subject to various penalties, including significant civil monetary penalties.

These provisions have been and may continue to be subject to legal challenges.

For example, the provisions related to the negotiation of selling prices of high-expenditure single-source drugs and biologics have been challenged in multiple lawsuits brought by pharmaceutical manufacturers.

Thus, while it is unclear how the IRA will be implemented, it will likely have a significant impact on the biopharmaceutical industry and the pricing of prescription drug products.

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.

For example, the FDA released a final rule in

September 2020 providing guidance for states to build and submit plans for importing drugs from Canada, and FDA authorized the first such plan in Florida in January 2024.

In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

We expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.

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What changed 10-K

Item 1. Business