What changed in this filing

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Item 1. Business

2025-02-27 compared with 2024-02-29 · 197 added, 157 removed, 404 unchanged (47% of the section changed)

Lisata Therapeutics, Inc.

(together with its subsidiaries, “we,” “us,” “our,” “Lisata” and the “Company”) is a clinical-stage pharmaceutical company dedicated to the discovery, development, and commercialization of innovative therapies for the treatment of solid tumors and other major diseases.

Our lead investigational product candidate, LSTA1, is designed to activate a novel uptake pathway that allows co-administered or tethered (i.e., molecularly bound) anti-cancer drugs to target and penetrate solid tumors more effectively.

LSTA1 actuates this active transport system in a tumor-specific manner, resulting in systemically co-administered anti-cancer drugs more efficiently penetrating and accumulating in the tumor, while normal tissues are unlikely to be affected.

LSTA1 also has the potential to modify the tumor microenvironment (“TME”), thereby making tumors more susceptible to immunotherapies and inhibiting the metastasis cascade (i.e., the spread of cancer to other parts of the body).

(together with its subsidiaries, the “Company”) is a clinical-stage pharmaceutical company dedicated to the discovery, development, and commercialization of innovative therapies for the treatment of solid tumors and other major diseases.

Our investigational product, certepetide (formerly known as LSTA1 or CEND-1), is designed to activate a novel uptake pathway that allows co-administered or tethered (i.e., molecularly bound) anti-cancer drugs to target and penetrate solid tumors more effectively.

Certepetide actuates this active transport system in a tumor-specific manner, resulting in systemically co-administered anti-cancer drugs more efficiently penetrating and accumulating in the tumor, while normal tissues are expected to remain unaffected.

Certepetide has also been shown to modify the tumor microenvironment (“TME”) by reducing T-regulatory cells and augmenting cytotoxic T cells, thereby making tumors more susceptible to immunotherapies while also inhibiting the metastatic cascade (i.e., the spread of cancer to other parts of the body).

We and our collaborators have amassed significant non-clinical data demonstrating enhanced delivery of a range of existing and emerging anti-cancer therapies, including chemotherapeutics, immunotherapies, and RNA-based therapeutics.

To date, LSTA1 has also demonstrated favorable safety, tolerability and activity in completed and ongoing clinical trials designed to enhance delivery of standard-of-care chemotherapy for pancreatic cancer.

Currently, LSTA1, is the subject of Phase 2a and 2b clinical studies being conducted globally in a variety of solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC), cholangiocarcinoma, head and neck cancer, appendiceal cancer, colon cancer and glioblastoma multiforme in combination with a variety of anti-cancer regimens.

Our legacy CD34+ cell therapy technology was the subject of several clinical trials targeting an array of diseases, among them, critical limb ischemia, coronary microvascular dysfunction, and diabetic kidney disease.

Further development of such programs would require significantly larger studies and capital investment and thus, development by Lisata would only be continued if a strategic partner that can contribute the necessary capital for future development is identified.

To date, certepetide has also demonstrated favorable safety, tolerability and activity in completed and ongoing clinical trials designed to enhance delivery of standard-of-care chemotherapy for pancreatic cancer.

We are exploring certepetide as a means to enable a variety of treatment modalities to treat a range of solid tumors more effectively.

Currently, certepetide is the subject of several Phase 2 clinical studies being conducted globally in a variety of solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC), cholangiocarcinoma, appendiceal cancer, colon cancer and glioblastoma multiforme in combination with a variety of anti-cancer regimens.

Additionally, the Company is currently exploring applications of certepetide in melanoma (skin cancer) in collaboration with Valo Therapeutics of Finland as well as in endometriosis (a non-cancer disease that behaves much like a solid tumor) in collaboration with the University of Cincinnati (USA).

Our leadership team has decades of collective biopharmaceutical and pharmaceutical product development experience across a variety of therapeutic categories and at all stages of development from preclinical through to product registration and launch.

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All trademarks, service marks and traded names included herein are the property of their respective owners.

Merger with Cend Therapeutics, Inc.

and Name Change

On September 15, 2022, we, then operating as Caladrius Biosciences, Inc.

(“Caladrius"), completed our acquisition (the “Merger”) of Cend Therapeutics, Inc.

(“Cend”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated as of April 26, 2022, by and among us, Cend and CS Cedar Merger Sub, Inc.

(“Merger Sub”).

Pursuant to the terms set forth in the Merger Agreement and effective September 15, 2022 (the “Effective Time”):

(i) Merger Sub merged with and into Cend, with Cend surviving as our wholly owned subsidiary, (ii) we changed our name to Lisata Therapeutics, Inc., and (iii) we effected a 1:15 reverse stock split of our common stock (the “Reverse Stock Split”) prior to the Effective Time.

At the Effective Time, each share of Cend's common stock outstanding immediately prior to the Effective Time was converted into the right to receive shares of our common stock, based on an exchange ratio of 0.5338, after taking into account the Reverse Stock Split (the “Exchange Ratio”).

In connection with the Merger close, we issued an aggregate of 3,772,768 shares of common stock, based on the Exchange Ratio, to holders of Cend, in exchange for all of the Cend capital stock outstanding immediately prior to the closing of the Merger.

Pursuant to the Merger Agreement, we assumed all of the outstanding and unexercised options to purchase shares of Cend capital stock under the 2016 Equity Incentive Plan, and, in connection with the Merger, such options were converted into options to purchase shares of our common stock based on the Exchange Ratio.

At the closing of the Merger, we assumed Cend's stock options to purchase an aggregate of 1,227,776 shares of our common stock.

Caladrius was considered to be the accounting acquirer based on the terms of the Merger Agreement and certain factors including:

(i) Caladrius owned approximately 52% of our outstanding shares of common stock immediately following the close of the Merger;

(ii) although both entities contributed to our new management team, the Caladrius team had more individuals on the management team and holds the chief executive officer (“CEO”), chief medical officer (“CMO”) and other senior management roles;

(iii) Caladrius paid a premium to acquire Cend’s assets;

and (iv) Caladrius was significantly larger than Cend regarding total assets, operations, and research and development activities.

The Merger was accounted for as an asset acquisition as substantially all of the fair value is concentrated in in-process research and development (“IPR&D”).

Cend’s assets (except for cash and working capital) were measured and recognized as an allocation of the transaction price based on their relative fair values as of the transaction date with any value associated with IPR&D with no alternative future use being expensed as reported in the consolidated statement of operations.

The prior reported operating results prior to the closing of the Merger are those of Caladrius alone.

Reverse Stock Split

On September 14, 2022, in connection with the Merger, we implemented the Reverse Stock Split, which was approved at our annual meeting of stockholders on September 13, 2022.

The Reverse Stock Split became effective on September 14, 2022 at 5:00 pm, and our common stock began trading on The Nasdaq Capital Market on a post-split basis at the open of business on September 15, 2022.

As of September 14, 2022, every fifteen shares of our issued and outstanding common stock (and such shares held in treasury) were automatically converted into one share of common stock, without any change in the par value per share.

In addition, proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options, stock appreciation rights, convertible notes and warrants to purchase shares of common stock, the number of shares issuable upon the vesting of all restricted stock awards, and the number of shares of common stock reserved for issuance pursuant to our equity incentive compensation plans.

Any stockholder who would otherwise be entitled to a fractional share of common stock created as a result of the Reverse Stock Split received a cash payment equal to the product of such resulting fractional interest in one share of common stock multiplied by the closing trading price of the common stock on September 15, 2022.

The Reverse Stock Split was effectuated in order to increase the per share trading price of our common stock to satisfy the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market.

All share and per share amounts of common stock, options and warrants in the accompanying financial statements have been restated for all periods presented to give retroactive effect to the Reverse Stock Split.

Accordingly, the consolidated statements of equity reflect the impact of the Reverse Stock Split by reclassifying from “common stock” to “additional paid-in capital” in an amount equal to the par value of the decreased shares resulting from the Reverse Stock Split.

Development Programs

Targeted Solid Tumor Penetration via CendR Active Transport

Many solid tumor cancers, including pancreatic ductal adenocarcinoma (“PDAC”), and cholangiocarcinoma, are surrounded by dense fibrotic tissue, or stroma.

This limits the efficacy of current chemotherapies for these cancers.

Emerging immunotherapy treatments, including checkpoint inhibitors, adoptive cell therapies such as chimeric antigen receptor T cells, as well as nucleic acid-based therapies, such as short interfering RNA (“siRNA”), antisense oligonucleotides, and messenger RNAs (“mRNAs”) also face challenges in penetrating solid tumors.

Many tumors also exhibit an immunosuppressive TME, which suppresses patients’ immune systems’ ability to fight their cancer and can limit effectiveness of immunotherapies and/or contribute to metastases.

These factors negatively impact the ability of many therapeutic agents to effectively treat these cancers.

To address the tumor stroma’s role as a primary impediment to effective treatment, our approach is to activate the C-end rule (“CendR”), or CendR system, a naturally occurring active transport system.

Our lead investigational drug, LSTA1 (a specific internalizing R-G-D or iRGD peptide), activates this transport system in a tumor-specific manner (Sugahara, Science, 2010).

LSTA1 enables more selective and efficient uptake of systemically administered anti-cancer drugs resulting in more intratumoral drug accumulation.

The overall result is enhanced anticancer activity without an increase in adverse side effects.

While it is possible to couple/tether or conjugate some anticancer drugs to LSTA1, we believe that the co-administration approach is an advantage because it does not create a new chemical entity with its attendant development and regulatory hurdles, thereby providing an anticipated faster-to-clinic and faster-to-market product opportunity for a range of co-administration therapies.

LSTA1 has demonstrated favorable safety, tolerability, and activity to date in clinical trials to enhance delivery of standard-of-care chemotherapy for mPDAC.

LSTA1’s cancer-targeted delivery may enable such emerging treatment modalities to treat a range of solid tumors potentially more effectively.

LSTA1 as a treatment for solid tumor cancers in combination with other anti-cancer agents

LSTA1 is an investigational drug that actuates the CendR active transport mechanism.

LSTA1 has the potential to modify the TME, making it less immunosuppressive and thereby making the tumor more susceptible to attack by the immune system and inhibiting the metastasis cascade.

It targets tumor vasculature, endothelial cells, tumor cells and some intratumoral immunosuppressive cells by its affinity for alpha-v, beta-3 and beta-5 integrins that are upregulated on these cells.

LSTA1 is a nine amino acid cyclic internalizing RGD (“iRGD”) peptide that, once bound to these integrins, is cleaved by proteases expressed in tumors to release a peptide fragment, called a CendR peptide fragment.

The CendR peptide fragment then binds to an adjacent receptor, called neuropilin-1, also upregulated in solid tumors, to activate a novel uptake pathway that allows circulating moieties such as anticancer drugs to more selectively and effectively penetrate solid tumors.

The ability of LSTA1 and iRGD peptides to modify the TME to enhance delivery and efficacy of co-administered drugs has been demonstrated in many preclinical models in a range of solid tumors with the results from Lisata, collaborators and research groups around the world having been the subject of over 300 related scientific publications.

With regard to clinical development, LSTA1 is the subject of a completed Phase 1b clinical trial of 31 first-line mPDAC patients, of which 29 were evaluable.

Results from the trial showed that the safety profile of the LSTA1 combination regimen was similar to standard of care (“SoC”) alone with LSTA1 being well-tolerated with no-dose limiting toxicities.

An Objective Response Rate (“ORR”) of 59% was observed, compared to the 23% ORR observed in the “MPACT” clinical trial that served as the basis for approval of nab-paclitaxel for use in combination with gemcitabine for the treatment of first line, mPDAC (Von Hoff, et al.

Many solid tumor cancers, including, for example, pancreatic ductal adenocarcinoma (“PDAC”) and cholangiocarcinoma, are surrounded by dense fibrotic tissue, known as the tumor stroma.

This stroma often limits the efficacy of current chemotherapies in the treatment of these cancers by impeding the penetration of anti-cancer therapies into the tumor.

Emerging immunotherapies, including but not limited to checkpoint inhibitors and adoptive cell therapies (e.g., chimeric antigen receptor T cells (CAR-Ts)), also face challenges in effectively treating solid tumors.

Many tumors exhibit an immunosuppressive TME, which suppresses a patient's immune system and can thus limit the effectiveness of immunotherapies and/or contribute to metastases.

These factors, i.e., the combination of a dense stroma and an immunosuppressive TME, negatively impact the ability of many therapeutic agents to optimally treat these cancers.

To address the tumor stroma’s role as a key impediment to effective treatment, our approach is to activate the C-end rule (“CendR”), or CendR active transport mechanism, a naturally occurring transport system.

Our investigational drug, certepetide (a specific, proprietary internalizing R-G-D or iRGD peptide), activates this transport system in a tumor-specific manner

(Sugahara, Science, 2010).

Certepetide enables more selective and efficient uptake of systemically administered anti-cancer drugs resulting in more intratumoral drug accumulation.

The overall expected result is enhanced anticancer activity without an increase in adverse side effects.

While it is possible to couple/tether or conjugate some anticancer drugs to certepetide, we believe that our initial approach of co-administration of certepetide with anti-cancer therapies is advantageous.

Co-administration does not create a new chemical entity (“NCE”) with its attendant development and regulatory hurdles, thereby providing an anticipated faster-to-clinic and faster-to-market product opportunity for a range of combination therapies.

That said, an attractive life-cycle management strategy for certepetide would be to molecularly bind it to a variety of anti-cancer agents (as an alternative to co-administration), thereby creating new NCEs with the potential for distinct patent protection, compositionally or otherwise.

Certepetide has demonstrated favorable safety, tolerability, and activity to date in clinical trials enhancing the delivery of standard-of-care chemotherapies for mPDAC.

Certepetide’s cancer targeting characteristics may also enable emerging solid tumor treatment modalities to prove more effective.

For example, preliminary results of the combination of certepetide with immunotherapy and chemotherapy are promising.

Certepetide as a treatment for solid tumor cancers in combination with other anti-cancer agents

Certepetide is an investigational drug that actuates the CendR active transport mechanism.

Certepetide has been shown to modify the TME, making it less immunosuppressive and thereby making the tumor more susceptible to attack by the immune system while also inhibiting the metastatic cascade.

It targets tumor vasculature, endothelial cells, tumor cells and some intratumoral immunosuppressive cells by its selective affinity for alpha-v beta-3 and alpha-v beta-5 integrins that are upregulated on these cells.

Certepetide is a nine amino acid cyclic proprietary internalizing RGD (“iRGD”) peptide that, once bound to these integrins, undergoes proteolytic cleavage to release a linear peptide fragment, called a CendR peptide fragment.

After dissociation from the integrin receptor, the CendR peptide fragment then binds with high selectivity and affinity to an adjacent receptor, called neuropilin-1, also upregulated in solid tumors, to activate the novel uptake pathway that allows circulating anticancer drugs to more selectively and effectively penetrate solid tumors.

The ability of certepetide and iRGD peptides to modify the TME to enhance delivery and efficacy of co-administered drugs has been demonstrated in many preclinical models in a range of solid tumors.

Lisata, its collaborators, and research groups around the world have published more than 370 scientific papers related to the benefits of internalizing RGD peptides and the CendR pathway.

Clinically, certepetide was the subject of a completed Phase 1b/2a trial inclusive of 31 first-line mPDAC patients, of which 29 were evaluable.

Results from the trial showed that the safety profile of the certepetide combination regimen was similar to standard of care (“SoC”) chemotherapy alone with certepetide being well-tolerated with no dose limiting toxicities.

An Objective Response Rate (“ORR”) of 59% was observed, compared to the 23% ORR observed in the “MPACT” clinical trial that served as the basis for approval of the chemotherapy combination nab-paclitaxel and gemcitabine for the treatment of first line mPDAC (Von Hoff, et al.

A Disease Control Rate (“DCR”) (partial and complete responses plus stable disease) of over 79% was also observed in comparison to a DCR of 48% observed in the MPACT trial.

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These results have been published in The Lancet Gastroenterology and Hepatology (Dean, et al.

Additionally, LSTA1 is the subject of multiple ongoing and planned clinical trials being conducted globally in a variety of solid tumor types and in combination with several chemotherapy and immunotherapy anti-cancer regimens.

Certepetide was also examined in another Phase 1b/2a study in first line mPDAC patients.

Study CEND1-201 was conducted in China by our development partner, Qilu Pharmaceutical.

Two dose levels of certepetide (1.6 and 3.2 mg/kg) were combined with SoC chemotherapy (gemcitabine and nab-paclitaxel).

There were 55 patients in the study, 53 of whom were evaluable for efficacy.

Twenty-five (25) patients were treated with 1.6 mg/kg certepetide, and 28 patients with 3.2 mg/kg certepetide.

In the 1.6 mg/kg certepetide group, partial response occurred in 11/25 (44.0%) patients, and stable disease occurred in 12/25 (48%) patients.

In the 3.2 mg/kg certepetide group, partial response occurred in 11/28 (39.3%) patients, and stable disease occurred in 12/28 (42.9%) patients.

The ORR was 41.5% for all doses.

The ORR was 44.0% and 39.3% in 1.6 mg/kg group and in 3.2 mg/kg group, respectively.

The DCR was 86.8% for all doses.

The DCR in 1.6 and 3.2 mg/kg groups was 92.0% and 82.1%, respectively.

The median PFS was 5.82 months for all doses combined.

The median PFS was 7.36 months and 5.75 months in 1.6 mg/kg group and in 3.2 mg/kg group, respectively.

The median OS was 11.10 months for all doses combined.

The median OS was 10.35 months and 11.10 months in 1.6 mg/kg group and in 3.2 mg/kg group, respectively.

The adverse event profile at both dose levels was similar to that for SoC alone.

Qilu has completed Phase 2 enrollment (n=96) in first line mPDAC in combination with SoC gemcitabine and nab-paclitaxel.

Finally, certepetide is also the subject of a Phase 2 trial in first-line mPDAC patients, the ASCEND trial.

ASCEND is being conducted in collaboration with the Australasian Gastrointestinal Clinical Trials Group (AGITG) and the University of Sydney at 25 sites in Australia and New Zealand.

The Phase 2 double-blind, randomized (2:1), placebo-controlled ASCEND trial is evaluating certepetide in combination with SoC chemotherapy (gemcitabine and nab-paclitaxel) for the treatment of mPDAC.

The original ASCEND protocol included one dosing scheme for certepetide.

Following the acquisition of Cend Therapeutics

and, by extension, certepetide in September 2022, Lisata collaborated with AGITG to amend the protocol to ensure it respected international regulatory standards.

Thus, endpoints more traditionally recognized by regulators as primary in registration studies, and that would effectively guide the next stages of clinical development (e.g., overall survival), were added.

The amended protocol was designed to assess the efficacy of two different dosing regimens of certepetide in two separate cohorts:

Cohort A, with 95 patients receiving a single intravenous (IV) dose of certepetide 3.2 mg/kg or placebo in combination with SoC, and Cohort B, with 63 patients receiving two IV doses of certepetide 3.2 mg/kg or placebo administered 4 hours apart in combination with SoC.

The preliminary data from Cohort A were reported at the ASCO GI meeting on January 24, 2025, demonstrating a median overall survival (mOS) of 12.68 months for the certepetide treated group, compared to 9.72 months for the placebo treated group.

Despite a numerical trend in 6-month PFS favoring the certepetide treatment group, no significant improvement in median PFS was observed (mPFS of 5.5 months in both groups).

However, the observed mOS and objective response rate (ORR) benefit are positive with 4/65 (6.2%) complete responses in the certepetide treated group, compared to 0/28 (0%) the placebo treated group.

Adverse events from an analysis of Cohort A groups with and without certepetide suggest no increase in adverse events when certepetide is added to SOC.

Event rates were similar in the two Cohorts, confirming previous observations of certepetide’s benign safety profile.

Data from Cohort B is expected in the coming months with a final analysis of both cohorts available thereafter.

Additionally, certepetide is currently the subject of multiple ongoing and planned clinical trials being conducted globally in a variety of solid tumor types and in combination with several chemotherapy and immunotherapy anti-cancer regimens.

The following diagram summarizes these studies.

TECHNOLOGY COLLABORATION AND OUT-LICENSING OPPORTUNITIES

Pancreatic Cancer & Advanced Solid Tumors (LSTA1:

Pancreatic Cancer & Advanced Solid Tumors (certepetide:

CendR Platform ® )

Our lead investigational drug candidate from the CendR Platform ® , LSTA1, holds broader potential to be combined as a co-administration treatment with an array of anti-cancer agents to benefit solid tumor cancer patients and we seek to collaborate with chemotherapy, targeted and immuno-therapy developers.

The Company plans to enter partnerships to exploit the CendR Platform ® for applications to enhance or enable effective treatment of solid tumor cancers across a range of treatment modalities.

Our investigational drug candidate from the CendR Platform ® , certepetide, holds broader potential to be combined as a co-administration treatment with an array of anti-cancer and diagnostic agents to benefit solid tumor cancer patients and we seek to collaborate with chemotherapy, targeted and immuno-therapy developers.

The Company plans to enter partnerships to exploit the CendR Platform ® for applications to enhance or enable effective diagnosis and treatment of solid tumor cancers across a range of treatment modalities.

These include but are not limited to nucleic acid-based treatments such as antisense, siRNA, mRNA and gene editing approaches, immunotherapies such as adoptive cell immunotherapy as well as immune checkpoint inhibitors, and additional targeted therapy treatments for solid tumor cancer applications.

Intellectual Property Platform

Our developed and owned LSTA1 and CendR Platform ® patent portfolio comprises the following:

Three pending patent applications in the United States;

Our developed and owned certepetide and CendR Platform ® patent portfolio comprises the following:

Four pending patent applications in the United States;

Fourteen pending patent applications outside the United States;

Pending claims covering, inter alia, methods for reducing the volume of a tumor using LSTA1 in combination with at least one anti-cancer agent or therapy;

methods of treating pancreatic cancer using LSTA1 in combination with gemcitabine and/or nab-paclitaxel and treating tumors with iRGD and a cytokine.

Pending claims covering, inter alia, methods for reducing the volume of a tumor using certepetide in combination with at least one anti-cancer agent or therapy;

methods of treating pancreatic cancer using certepetide in combination with gemcitabine and/or nab-paclitaxel, treating tumors with iRGD and a cytokine, and methods of treating cancer in combination with chemotherapeutic and immunotherapeutic agents.

Product Opportunity for Pancreatic ductal adenocarcinoma (PDAC)

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GOVERNMENT REGULATION

The healthcare industry is one of the most highly regulated industries in the United States and abroad.

The health care industry is one of the most highly regulated industries in the United States and abroad.

Various governmental regulatory authorities, as well as private accreditation organizations, oversee and monitor the activities of individuals and businesses engaged in the development, manufacture and delivery of health care products and services.

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Premarket Review and Approval of Pharmaceutical Products in the United States

Pharmaceutical products are subject to extensive pre- and post-market regulation by the U.S.

Pharmaceutical products are subject to extensive pre-market and post-market regulation by the U.S.

Food and Drug Administration (the “FDA”) and other global agencies.

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Trials in this phase are initially conducted in a limited population of healthy volunteers to test the product candidate for safety, dose tolerance, absorption, metabolism, distribution and excretion in healthy humans or, on occasion, in patients, such as cancer patients, when the investigational drug is too toxic to be ethically given to healthy individuals.

These clinical trials are generally conducted in a limited patient population to determine the presence and approximate magnitude of therapeutic effect of the product candidate for specific targeted indications and to identify appropriate therapeutic dose and dose frequency as well as any corresponding additional possible adverse effects and

safety risks.

Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

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The FDA may grant a waiver for some or all of the requirements for a diversity action plan.

It is unknown at this time how the diversity action plan may affect Phase 3 trial planning and timing or what specific information FDA will expect in such plans, but if the FDA objects to a sponsor’s diversity action plan or otherwise requires significant changes to be made, it could delay initiation of the relevant clinical trial.

It is unknown at this time how the diversity action plan may affect Phase 3 trial planning and timing, but if the FDA objects to a sponsor’s diversity action plan or otherwise requires significant changes to be made, it could delay initiation of the relevant clinical trial.

Submission and FDA Review of an NDA

Assuming successful completion of all required testing in accordance with applicable regulatory requirements, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted as part of an NDA seeking approval to market the drug product for one or more indications.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the product candidate for its intended use(s) to the satisfaction of the FDA.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety, efficacy, and reliable manufacturing of the product candidate for its intended use(s) to the satisfaction of the FDA.

Approval of the NDA is required before marketing of the product may begin.

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To ensure cGMP and GCP compliance by its employees and third-party contractors, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production and quality control.

review, evaluation, and a recommendation as to whether the application should be approved and under what conditions.

During its review of an NDA, FDA may also refer applications for novel drug products, or drug products that present difficult questions of safety or efficacy, to an advisory committee of independent clinicians and other scientific experts for review, evaluation, and a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendation of an advisory committee but will carefully consider them.

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Drugs designated as breakthrough therapies may also be eligible for accelerated approval of their respective marketing applications.

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

FDA must take certain actions with respect

to breakthrough therapies, such as holding timely meetings with and providing advice to the product sponsor, intended to expedite the development and review of an application for approval of a breakthrough therapy.

Finally, FDA may designate a product for priority review if it is a drug that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

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Congress also recently amended the law to give FDA the option of using expedited procedures to withdraw product approval if the sponsor’s confirmatory trial fails to verify the claimed clinical benefits of the product.

Prior to the recent statutory amendments enacted by Congress, several oncology sponsors voluntarily withdrew specific indications for their drug products that were being marketed pursuant to accelerated approval, and the FDA’s Oncology Center of Excellence launched an initiative called Project Confirm, aimed at promoting transparency in the area of accelerated approvals for oncology

Prior to the recent

statutory amendments enacted by Congress, several oncology sponsors voluntarily withdrew specific indications for their drug products that were being marketed pursuant to accelerated approval, and the FDA’s Oncology Center of Excellence launched an initiative called Project Confirm, aimed at promoting transparency in the area of accelerated approvals for oncology indications.

Scrutiny of the accelerated approval pathway is likely to continue in the coming years and may lead to further legislative and/or administrative changes in the future.

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Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although the FDA has recently taken steps to limit what it considers abuse of this statutory exemption in PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.

Waiver of pediatric data requirements also does not apply to anti-cancer therapies in cases where the molecular target is found in pediatric tumors.

The FDA Reauthorization Act of 2017 introduced a provision regarding required pediatric studies.

Under this statute, for product candidates intended for the treatment of adult cancer which are directed at molecular targets that the FDA determines to be substantially relevant to the growth or progression of pediatric cancer, original application sponsors must submit, with the marketing application, reports from molecularly targeted pediatric cancer investigations designed to yield clinically meaningful pediatric study data, gathered using appropriate formulations for each applicable age group, to inform potential pediatric labeling.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals or waivers of some or all of this data, as above.

Unlike PREA, orphan products are not exempt from this requirement.

The Best Pharmaceuticals for Children Act (“BPCA”) provides approved NDA holders a six-month extension of any exclusivity that attaches to the end of all existing marketing exclusivities and listed patents for the drug.

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Congress periodically considers enacting new incentives or mandates applicable to pediatric drug development, and the regulatory requirements applicable to pediatric drug developers may change in the future.

For example, bipartisan legislation introduced in 2023 in the House of Representatives would increase funding for pediatric trials;

mandate that drugs for rare diseases be studied in children;

and grant FDA authority to assess penalties against companies that do not complete required pediatric studies.

For example, bipartisan legislation introduced in 2023 in the House of Representatives would have increased funding for pediatric trials;

mandated that drugs for rare diseases be studied in children;

and granted FDA authority to assess penalties against companies that do not complete required pediatric studies.

However, the introduced legislation failed to become law.

Under the Orphan Drug Act, the FDA may designate a candidate as an orphan drug if it is intended to treat a rare disease or condition, which is generally a disease or condition that affects either (i) fewer than 200,000 individuals in the United States or (ii) more than 200,000 individuals in the United States but there is no reasonable expectation that the cost of developing and making such a product available for this type of disease or condition will be recovered from sales in the United States from the product.

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Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

If a product with orphan status receives the first regulatory approval for the disease or condition for which it has such designation, the product generally will receive orphan drug exclusivity.

If a product with orphan status receives the first regulatory approval for the disease or condition for which it has such

designation, the product generally will receive orphan drug exclusivity.

Orphan drug exclusivity means that the FDA may not approve any other applications for the same product for the same indication for seven years, except in certain limited circumstances (such as a showing of clinical superiority to the drug with orphan exclusivity by means of greater effectiveness, greater safety, or providing a major contribution to patient care).

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Recent court cases have challenged FDA’s approach to determining the scope of orphan drug exclusivity;

however, at this time the Agency

continues to apply its long-standing interpretation of the governing regulations and has stated that it does not plan to change any orphan drug implementing regulations.

however, at this time the Agency continues to apply its long-standing interpretation of the governing regulations and has stated that it does not plan to change any orphan drug implementing regulations.

Among the other benefits of orphan drug designation, the sponsor receives a waiver of the NDA application user fee and is eligible for tax credits for certain research.

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the fee for redeeming a PRV is also adjusted each fiscal year.

For fiscal 2024 that additional user fee is over $1.3 million.

A PRV is transferrable and may be sold to other companies who wish to obtain a priority review for a future new drug or biological product marketing application.

For fiscal year 2025 that additional user fee is over $2.48 million.

A PRV is transferable and may be sold to other companies who wish to obtain a priority review for a future new drug or biological product marketing application.

In 2020, the Rare Pediatric Disease Priority Review Voucher Program was extended by Congress.

Under the current statutory sunset provisions, after September 30, 2024, FDA may only award a voucher for an approved rare pediatric disease product application if the sponsor has RPDD for the drug, and that designation was granted by September 30, 2024.

Under the current statutory sunset provisions, after December 20, 2024, FDA may only award a voucher for an approved rare pediatric disease product application if the sponsor has RPDD for the drug and that designation was granted on or before December 20, 2024.

After September 30, 2026, FDA may not award any rare pediatric disease PRVs unless the program is extended.

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We rely, and expect to continue to rely, on third parties for the production of clinical and commercial quantities of our products in accordance with cGMP regulations.

These manufacturers must comply with cGMP regulations that require, among other things, quality control and quality assurance, the maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP.

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance and ensure ongoing compliance with other statutory requirements the FD&C Act.

These manufacturers

must comply with cGMP regulations that require, among other things, quality control and quality assurance, the maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP.

Even after a new drug approval is granted, the FDA may withdraw that approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

If a previously unknown problem, including adverse events of unanticipated severity or frequency, or with manufacturing processes, is discovered or the manufacturer fails to comply with regulatory requirements, the FDA may require revisions to the approved

labeling to add new safety information;

may impose additional post-market studies or clinical trials to assess new safety risks;

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The DSCSA mandated phased-in and resource-intensive traceability and verification obligations for pharmaceutical manufacturers, wholesale distributors, and dispensers over a 10‑year period that culminated in November 2023.

FDA has announced a one-year stabilization period to November 2024, giving entities subject to the DSCSA additional time to finalize interoperable tracking systems and to ensure supply chain continuity.

After an additional one-year stabilization period to give entities subject to the DSCSA additional time to finalize interoperable tracking systems and to ensure supply chain continuity, the applicable requirements under the DSCSA became fully enforceable as of November 27, 2024.

The DSCSA also replaced certain provisions from the PDMA pertaining to wholesale distribution of prescription drugs with a more comprehensive statutory scheme, requiring uniform national standards for wholesale distribution and, for the first time, for third-party logistics providers.

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– state laws and regulations governing human subject research;

– federal and state coverage and reimbursement laws and regulations, including laws and regulations administered by the Centers for Medicare & Medicaid Services (“CMS”) and state Medicaid agencies;

– federal and state coverage and reimbursement laws and regulations, including laws and regulations administered by

the Centers for Medicare & Medicaid Services (“CMS”) and state Medicaid agencies;

– the federal Anti-Kickback Law and similar state laws and regulations;

– the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and similar state laws and regulations;

– the federal transparency requirements under the Physician Payments Sunshine Act that require manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the Department of Health and Human Services information related to payments and other transfers of value physicians, teaching hospitals, and certain advanced non-physician health care practitioners and physician ownership

and investment interests;

– Occupational Safety and Health Administration requirements;

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These third-party payors are increasingly challenging drug prices and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.

If these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our products after approval as a benefit under their plans or, even if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis.

If these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our products, if approved as a benefit under their plans or, even if they do provide coverage, the level of payment may not be sufficient to allow us to sell our products on a profitable basis.

Significant uncertainty exists as to the reimbursement status for newly approved prescription products, including coding, coverage and payment.

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Payment rates may vary according to the use of the product and the clinical setting in which it is used, may be based on payments allowed for lower cost products that are already reimbursed and may be incorporated into existing payments for other services.

Net prices for products may be reduced by mandatory discounts or rebates required by third-party payors and by any future relaxation of laws that presently restrict imports of products from countries where they may be sold at lower prices than in the United States.

Net prices for products may be reduced by mandatory discounts or rebates required by third-party payors and by any future relaxation of laws that presently restrict imports of products from

countries where they may be sold at lower prices than in the United States.

In the United States, third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but they also have their own methods and approval process apart from Medicare coverage and reimbursement determinations.

One third-party payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product.

Accordingly, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate payment will be applied consistently or granted at all.

Accordingly, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products, if approved, to each payor separately, with no assurance that coverage and adequate payment will be applied consistently or granted at all.

The process for determining whether a payor will cover and how much it will reimburse a product may be separate from the process of seeking approval of the product or for setting the price of the product.

Even if reimbursement is provided, market acceptance of our products may be adversely affected if the

amount of payment for our products proves to be unprofitable for health care providers or less profitable than alternative treatments or if administrative burdens make our products less desirable to use.

Even if reimbursement is provided, market acceptance of our products, if approved, may be adversely affected if the amount of payment for such products proves to be unprofitable for health care providers or less profitable than alternative treatments or if administrative burdens make the products less desirable to use.

Additionally, the containment of health care costs has become a priority of federal and state governments and the prices of drug products have been a focus in this effort.

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In August 2022, President Biden signed into the law the Inflation Reduction Act of 2022, or the IRA, which includes (among other things) multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.

Starting in 2023, a manufacturer of drug products covered by Medicare Parts B or D must pay a rebate to the federal government if their drug product’s price increases faster than the rate of inflation.

For example, under the IRA, a manufacturer of drug products covered by Medicare Parts B or D must pay a rebate to the federal government if their drug product’s price increases faster than the rate of inflation.

This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.

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If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.

CMS has begun to implement these new authorities and entered into the first set of agreements with pharmaceutical manufacturers to conduct price negotiations in October 2023.

CMS has begun to implement these new authorities and entered into the first set of agreements with drug and biological product manufacturers for negotiated prices of 10 products, which will become applicable for payment year 2026.

However, the IRA’s impact on the pharmaceutical industry in the United States remains uncertain, in part because multiple large pharmaceutical companies and other stakeholders (e.g., the U.S.

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Those lawsuits are currently ongoing.

We expect that federal, state and local governments in the U.S.

will continue to consider legislation directed at lowering the total cost of health care.

Individual states in the United States 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.

We expect that federal, state and local governments in the United States will continue to consider legislation directed at lowering the total cost of health care.

Individual U.S.

states 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.

In December 2020, the U.S.

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The Federal Trade Commission in mid-2022 also launched sweeping investigations into the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements.

Significant efforts to change the PBM industry as it currently exists in the U.S.

may affect the entire pharmaceutical supply chain and the business of other stakeholders, including medical product developers like us.

Significant efforts to change the PBM industry as it currently exists in the United States may affect the entire pharmaceutical supply chain and the business of other stakeholders, including medical product developers like us.

It is uncertain whether and how future legislation or regulatory changes could affect prospects for our product candidates or what actions federal, state, or commercial payors for pharmaceutical products may take in response to any such health care reform proposals or legislation.

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The length of the patent term extension is related to the length of time the drug is under regulatory review while the patent is in force.

The restoration period granted on a patent covering a new FDA-regulated medical product is typically one-half the time between the date a clinical investigation on human beings is begun and the submission date of an application for marketing approval of the product, plus the time between the submission date of an application for approval of the product and the ultimate approval date.

The restoration period granted on a patent covering a new FDA-regulated medical product is typically one-half the time between the

date a clinical investigation on human beings is begun and the submission date of an application for marketing approval of the product, plus the time between the submission date of an application for approval of the product and the ultimate approval date.

Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date.

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In addition, the CCPA creates a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches.

While there is currently an exception for protected health information that is subject to HIPAA and clinical trial regulations, as currently written, the CCPA may impact our business activities.

While there is an exception for protected health information that is subject to HIPAA and clinical trial regulations, as the law currently written, the CCPA may impact our business activities.

More recently, a new privacy law, the California Privacy Rights Act (“CPRA”) was approved by California voters.

The CPRA went into effect in January of 2023, modifying and strengthening the CCPA significantly, potentially resulting in further uncertainty, additional costs and expenses in an effort to comply and additional potential for harm and liability for failure to comply.

Among other things, the CPRA established a new regulatory authority, the California Privacy Protection Agency, which will be enacting new regulations and will have expanded enforcement authority.

Moreover, various states such as Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Montana, Oregon, Tennessee, Texas, Utah and Virginia have enacted their own privacy laws similar to the CCPA, and other states are considering proposals for such laws.

Among other things, the CPRA established a new regulatory authority, the California Privacy Protection Agency, which has the authority to promulgate new privacy regulations and enforce California privacy laws and regulations.

Moreover, multiple states have enacted their own privacy laws similar to the CCPA, and other states are considering proposals for such laws.

As more states implement their own privacy laws and regulations, and the interplay of federal and state laws becomes subject to varying interpretations by courts and government agencies, pharmaceutical companies and clinical research collaborators may become exposed to complex compliance issues and the potential for additional expenses or liability.

Environmental, Health and Safety Regulation

We are subject to numerous federal, state and local environmental, health and safety (“EHS”) laws and regulations relating to, among other matters, safe working conditions, product stewardship, environmental protection, and handling or disposition of products, including those governing the generation, storage, handling, use, transportation, release, and disposal of hazardous or potentially hazardous materials, medical waste, and infectious materials that may be handled by our research laboratories.

products, including those governing the generation, storage, handling, use, transportation, release, and disposal of hazardous or potentially hazardous materials, medical waste, and infectious materials that may be handled by our research laboratories.

Some of these laws and regulations also require us to obtain licenses or permits to conduct our research and development operations.

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EHS laws and regulations are complex, change frequently and have tended to become more stringent over time.

We cannot predict the impact on our business of new or amended laws or regulations or any changes in the way existing and future

laws and regulations are interpreted or enforced, nor can we ensure we will be able to obtain or maintain any required licenses or permits.

We cannot predict the impact on our business of new or amended laws or regulations or any changes in the way existing and future laws and regulations are interpreted or enforced, nor can we ensure we will be able to obtain or maintain any required licenses or permits.

Foreign Corrupt Practices Act

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Government Regulation Outside the U.S.

In addition to regulations in the U.S., we may be subject to a variety of regulations in foreign jurisdictions that govern, among other things, clinical trials and any commercial sales and distribution of our products, if approved, either directly or through our distribution partners.

In addition to regulations in the United States, we may be subject to a variety of regulations in foreign jurisdictions that govern, among other things, clinical trials and any commercial sales and distribution of our products, if approved, either directly or through our distribution partners.

Whether or not we obtain FDA approval for a product candidate, we must obtain the requisite approvals from regulatory authorities in foreign jurisdictions prior to the commencement of clinical trials or marketing and sale of the product in those countries.

The foreign regulatory approval process includes all of the risks associated with the FDA approval described above, and the time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.

Some foreign jurisdictions have a drug product approval process similar to that in the U.S., which requires the submission of a clinical trial application much like the IND prior to the commencement of clinical studies.

In Europe, for example, a clinical trial application, or CTA, must be submitted to each country’s national health authority and an independent ethics committee, much like the FDA and IRB, respectively.

Once the CTA is approved in accordance with a country’s requirements, clinical trial development may proceed.

To obtain regulatory approval of a therapeutic product candidate under European Union (“EU”) regulatory systems, we would be required to submit a Marketing Authorisation Application, which is similar to the NDA, except that, among other things, there are country-specific document requirements.

The foreign regulatory approval process includes risks that are the same as or similar to the ones described above relating to the FDA submission, review and approval processes, and the time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.

Some foreign jurisdictions have a drug product approval process similar to that in the United States, which requires the submission of a clinical trial application, or CTA, much like the IND prior to the commencement of clinical studies.

In Europe, for example, a CTA must be submitted in accordance with the Clinical Trials Regulation and must involve an independent ethics committee, much like the FDA and a responsible IRB, respectively.

Once the CTA is authorized, clinical trial development may proceed.

To obtain regulatory approval of a therapeutic product candidate under European Union (“EU”) regulatory systems, we would be required to submit a marketing authorisation application, which is similar to the NDA, except that there are different pathways to obtain marketing authorization, such as the centralized and decentralized procedures.

For countries outside of the EU, such as countries in Eastern Europe, Latin America or Asia, and recently the United Kingdom, the requirements governing the conduct of clinical trials, product approval, pricing and reimbursement vary from country to country.

Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

Moreover, some nations may not accept clinical studies performed for U.S.

approval to support approval in their countries or require that additional studies be performed on natives of their countries.

Moreover, even though certain clinical trials may support product approval in the United States, some nations may not consider such clinical studies adequate to support marketing authorization or may require that additional studies be performed on their citizens.

In addition, in certain foreign markets, the pricing of drug products is subject to government control and reimbursement may in some cases be unavailable or insufficient.

We face the risk that the resulting prices would be insufficient to generate an acceptable return to us or any future partner of ours.

We face the risk that the resulting prices would be insufficient to generate an acceptable return to us

or any future partner of ours.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution.

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The extent to which ongoing clinical trials will be governed by the Clinical Trials Regulation depends on when the Clinical Trials Regulation becomes applicable and on the duration of the individual clinical trial.

If a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

If a clinical trial that was initially authorized under the Clinical Trials Directive continues past January 31, 2025, the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

The new Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the European Union.

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Use of the CTIS became mandatory for new clinical trial application submissions as of February 1, 2023.

There continue to be challenges related to the implementation and use of the new CTIS by clinical researchers and trial sponsors.

To obtain marketing approval of a drug in the EU, an applicant must submit a marketing authorization application (“MAA”) either under a centralized or decentralized procedure.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU member states, Iceland, Lichtenstein and Norway.

The centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy products (such as gene-therapy, somatic cell-therapy or tissue-engineered medicines) and products with a new active substance indicated for the treatment of certain diseases.

For products with a new active substance indicated for the treatment of certain diseases and products that are highly innovative or for which a centralized process is not in the interest of patients, the centralized procedure may be optional.

The centralized procedure is optional for products that represent a significant therapeutic, scientific or technical innovation, or whose authorization would be in the interest of public health.

Under the centralized procedure the maximum timeframe for the evaluation of an MAA by the European Medicines Agency (“EMA”) is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the Committee for Medicinal Products for Human Use (“CHMP”).

Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view of therapeutic innovation.

The timeframe for the evaluation of an MAA under the accelerated assessment procedure is of 150 days, excluding stop-clocks.

The timeframe for the evaluation of an MAA under the accelerated assessment procedure is 150 days, excluding stop-clocks.

The decentralized procedure is available to applicants who wish to market a product in specific EU member states where such product has not received marketing approval in any EU member states before.

The decentralized procedure provides for an applicant to apply to one-member state to assess the application (the reference member state) and specifically list other member states in which it wishes to obtain approval (concerned member states).

Under this procedure, an applicant submits an application based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labelling and package leaflet, to the reference member state and each concerned member state.

Under this procedure, an applicant submits an application based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and each concerned member state.

The reference member state prepares a draft assessment report and drafts of the related materials within 210 days after receipt of a valid application which is then reviewed and approved commented on by the concerned member states.

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In the EU, only products for which marketing authorizations have been granted may be promoted.

A marketing authorization is valid for five years in principle and the marketing authorization may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state.

A marketing authorization is valid for five years in principle and the marketing authorization may be renewed after the initial five-year period on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state.

To this end, the marketing authorization holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid.

Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal.

Any authorization which is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid (the so-called sunset clause).

Once renewed, the

marketing authorization is valid for an unlimited period, unless the European Commission or the competent authority decides on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal.

Any marketing authorization which is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid (the so-called sunset clause).

Moreover, even if authorized to be marketed in the EU, prescription-only medicines may only be promoted to health care professionals, not the general public.

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Regulation of Pharmaceutical Products in the United Kingdom

The United Kingdom (“UK”) left the European Union on January 31, 2020 (commonly referred to as “Brexit”), with a transitional period that expired on December 31, 2020.

The United Kingdom and the EU entered into a trade agreement known as the Trade and Cooperation Agreement, which went into effect on January 1, 2021.

As a result, UK licensing decisions were transferred from the EMA to the Medicines and Healthcare Products Regulatory Agency (“MHRA”), the UK regulatory body responsible for overseeing medical products.

For a period of three years following January 1, 2021, the UK will continue to adopt decisions taken by the European Commission on the approval of new marketing authorizations.

However, companies will be required to submit an identical application to the MHRA upon the CHMP positive opinion of the application.

The MHRA will then wait for the European Commission decision on approval.

More recently, in March 2023, the UK government and the European Commission reached agreement on a regulatory framework to replace the Northern Ireland Protocol, referred to as the Windsor Framework.

The Windsor Framework is expected to apply as of January 1, 2025 and will change the existing system under the Northern Ireland Protocol, including the regulation of pharmaceutical products in the UK.

Specifically, the MHRA will be responsible for approving all medicines intended to be marketed in the UK (i.e., Great Britain and Northern Ireland), while the EMA will no longer be involved in approving medicines intended for sale in Northern Ireland.

Since the regulatory framework in the United Kingdom covering the quality, safety and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from European Union directives and regulations, the ongoing transition could materially impact the future regulatory regime as it applies to medicinal products and the approval of our product candidates in the United Kingdom.

As of January 1, 2021, European Union law no longer directly applies in the United Kingdom.

The United Kingdom has adopted existing European Union medicines regulation as standalone United Kingdom legislation with some amendments to reflect procedural and other requirements with respect to marketing authorizations and other regulatory provisions.

The Medicines and Healthcare products Regulatory Agency, or MHRA, is responsible for regulating the United Kingdom medicinal products market (Great Britain and Northern Ireland).

An MHRA authorization must be obtained for each medicine to be marketed in the regions that comprise the United Kingdom.

On January 1, 2021, all European Union marketing authorizations were converted to United Kingdom marketing authorizations subject to a manufacturer opt-out.

The United Kingdom has introduced separate, specific processes for regulatory submissions and medicinal product marketing authorization, and MHRA guidance states that the United Kingdom will have the power to take into account marketing authorizations made under the European Union decentralized and mutual recognition procedures.

On January 1, 2024, the MHRA launched the International Recognition Procedure, or IRP, which provides for an expedited authorization procedure for products that have received positive marketing authorization decisions from trusted partner agencies, such as the EMA or the FDA.

There are two available routes for assessment and recognition under the IRP:

• Recognition Route A – 60 days from validation of submission

◦ Application must be based on a Reference Regulatory, or RR, marketing authorization within the previous two years

◦ Any significant differences from the quality dossier approved by the RR marketing authorization requires assessment under Recognition Route

◦ Evidence of cGMP compliance for manufacturing sites should be provided with submission

◦ None of the Recognition Route B criteria are met

• Recognition Route B – 110 days from validation of submission with one planned clock stop (up to 60 days) at day 70 to allow applicant to respond to issues identified during review

◦ Application must be based on a RR marketing authorization within the previous 10 years

◦ Criteria requiring Recognition Route B include, among other things:

▪ The RR marketing authorization granted a conditional or exceptional circumstances marketing authorization

▪ Additional manufacturing sites included in the application were not assessed by the RR marketing authorization or a manufacturing site is not cGMP certified

▪ There are substantial changes to the manufacturing process compared to the process approved by the RR marketing authorization

▪ Certain product types (e.g., advanced therapy medicinal products, orphan medicines, over-the-counter medicines)

▪ A risk management plan was not assessed under the RR marketing authorization

▪ The RR marketing authorization required one or more post-authorization safety studies for the product

▪ A companion diagnostic is necessary for correct use of the product and the diagnostic test is not authorized in the EU or UK

United Kingdom medicines legislation is subject to future regulatory change under the Medicines and Medical Devices Act 2021.

This act sets out a framework for the adoption of medicines regulation.

Different rules apply in Northern Ireland following implementation of the Northern Ireland Protocol, under which European Union central marketing applications continue to apply there.

However, in March 2023, the United Kingdom government and the European Commission reached agreement on a regulatory framework to replace the Northern Ireland Protocol, referred to as the Windsor Framework.

The Windsor Framework is effective as of January 1, 2025 and requires changes to the system that was previously in effect under the Northern Ireland Protocol, including the regulation of pharmaceutical products in the United Kingdom.

Specifically, the MHRA will be responsible for approving all medicines intended to be marketed in the United Kingdom (including Northern Ireland), while the EMA will no longer be involved in approving medicines intended for sale in Northern Ireland.

The Trade and Cooperation Agreement, which sets forth a framework for partnership between the European Union and the United Kingdom, became effective as of January 1, 2021.

The Trade and Cooperation Agreement between the European Union and the United Kingdom contains an Annex in relation to medicinal products with the objective of facilitating availability of medicines, promotion of public health and consumer protection in respect of medicinal products.

The Annex provides for mutual recognition of cGMP inspections and certificates, meaning that manufacturing facilities do not need to undergo duplicate inspections for the two markets.

The Annex establishes a Working Group on Medicinal Products to deal with matters under the Trade and Cooperation Agreement, facilitate co-operation and for the carrying out of technical discussions.

It is expected that further bilateral discussions will continue with respect to regulatory areas not the subject of the Trade and Cooperation Agreement, including pharmacovigilance.

The Trade and Cooperation Agreement also does not include reciprocal arrangements for the recognition of batch testing certification.

However, the United Kingdom has listed approved countries, including the EEA which will enable United Kingdom importers and wholesales to recognize certain certification and regulatory standards.

The European Commission has not adopted such recognition procedures.

It is expected that the establishment of a separate United Kingdom authorization system, albeit with transitional recognition procedures in the United Kingdom, will lead to additional regulatory costs.

In addition, additional regulatory costs may be incurred with respect to the lack of mutual recognition of batch testing and related regulatory measures.

SUMMARY OF RISK FACTORS

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Additionally, we anticipate that we will need substantial additional financing to continue our operations;

if we are unable to raise additional capital, we may be forced to delay, reduce or eliminate one or more of our product development programs, and our business will consequently be harmed.

• We are substantially dependent on our lead product candidate, LSTA1.

If we are unable to advance LSTA1 or any of our other product candidates through clinical development, obtain regulatory approval and ultimately begin commercializing, or experience significant delays in doing so, our business will be materially harmed.

if we are unable to raise additional capital, we may be forced to delay, reduce or eliminate one or more of our product development programs, and our business will consequently be materially harmed.

• We are substantially dependent on our investigational product candidate, certepetide.

If we are unable to advance certepetide or any of our other product candidates through clinical development, obtain regulatory approval and ultimately begin commercializing, or experience significant delays in doing so, our business will be materially harmed.

• The commercial potential and profitability of our product candidates are unknown.

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• A Fast Track or breakthrough therapy designation by the FDA and other similar regulatory designations may not lead to a faster development, regulatory review, or approval process.

• Our clinical trials may fail to demonstrate adequately the safety and efficacy of our product candidates, which failure would prevent or delay regulatory approval and commercialization.

• Our clinical trials may fail to demonstrate adequately the safety and efficacy of our product candidates, which failure would prevent or delay acquisition of requisite capital to complete development and/or regulatory approval and commercialization.

• We presently rely on contract manufacturing organizations to produce our product candidates at development and commercial scale quantities and have not yet qualified an alternate manufacturing supply, which could negatively impact our ability to meet any future demand for the products.

• We currently rely on contract research organizations to conduct our studies.

• We currently rely heavily on contract research organizations to conduct our studies.

Their inability to recruit or operationalize our study could negatively impact our ability to meet our milestone timelines.

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• We may need to grow the size of our organization, and may experience difficulties in managing this growth.

• We are involved in a litigation matter that may consume resources and management time, and an adverse resolution could require us to pay damages or otherwise adversely impact our business, financial condition or results of operations.

• We may be subject to significant product liability claims and litigation, including potential exposure from the use of our product candidates in human subjects, and our insurance may be inadequate to cover claims that may arise.

• We may be unable to hire or retain key officers or employees needed to implement our business strategy.

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• We conduct significant operations through our Australian subsidiary.

If we lose our ability to operate in Australia, or if the subsidiary loses eligibility for certain Australian tax credits, our business and results of operations will suffer.

If we lose our ability to operate in Australia, or if the subsidiary loses eligibility for certain Australian tax credits, our business and results of operations will materially suffer.

• Our internal computer systems, or those used by our clinical investigators, clinical research organizations or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of development programs for our product candidates.

• The development and commercialization of our product candidates are subject to extensive regulation and the failure to receive regulatory approvals would likely have a material and adverse effect on our business and prospects.

• The development and commercialization of our product candidates are subject to extensive regulation and the failure to receive regulatory approvals would have a material and adverse effect on our business and prospects.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that it will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.

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Legislation and regulatory proposals intended to contain health care costs may adversely affect our business.

• Inadequate funding for the FDA, the SEC and other government agencies could prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

• Inadequate funding for the FDA, the SEC and other government agencies, and/or large staff turnovers at these agencies could hinder new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

• If we are unable to obtain or maintain our licenses, patents or other intellectual property we could lose important protections that are material to continuing our operations and our future prospects.

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• Our ability to utilize our net operating loss carryforwards and tax credit carryforwards may be subject to limitations.

• Our stock price has been, and will likely continue to be, highly volatile.

• We may fail to comply with the continued listing requirements of the Nasdaq Capital Market, such that our common stock may be delisted and our ability to access the capital markets could be negatively impacted.

• Our stock price has been, and will likely continue to be, highly volatile and accurately predicting positive or negative movement relative to our results and announcements historically has been inconsistent.

• Future fundraising and strategic transactions may cause dilution, and we currently have a significant number of securities outstanding that are exercisable for our common stock, which could result in significant additional dilution.

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Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees, advisors and consultants.

The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to increase stockholder value and our success by motivating such individuals to perform to the best of their abilities and achieve our objectives.

The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to emphasize increasing stockholder value and our success by motivating such individuals to perform to the best of their abilities and achieve our objectives.

We recognize that our industry is specialized and dynamic, and a significant aspect of our success is our continued ability to execute our human capital strategy of attracting, engaging, developing and retaining highly skilled talent.

There is fierce competition both within our industry and in the geographic locations in which we have offices for highly skilled talent, and we offer a robust set of benefits, career-enhancing learning experiences and initiatives aligned with our mission, vision, and values in order to attract qualified prospective employees and to retain and motivate our employees.

We offer competitive compensation for our employees and strongly embrace a pay for performance philosophy in setting and adjusting compensation.

There is fierce competition both within our industry and in the geographic locations in which we operate for highly skilled talent, and we offer a robust set of benefits, career-enhancing learning experiences and initiatives aligned with our mission, vision, and values in order to attract qualified prospective employees and to retain and motivate our employees.

We offer competitive compensation based on industry benchmarking provided by our independent compensation consultant to the Compensation Committee of the Board of Directors for our employees and strongly embrace a pay for performance philosophy in setting and adjusting compensation.

Our Code of Business Conduct and Ethics clearly outlines our commitment to diversity and inclusion, where all employees are welcomed in an environment designed to make them feel comfortable, respected, and accepted regardless of their age, race, national origin, gender, religion, disability or sexual orientation.

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Item 1. Business