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Item 1. Business

2024-03-11 compared with 2023-03-30 · 328 added, 444 removed, 308 unchanged (71% of the section changed)

Mustang Bio, Inc.

(“Mustang,” “we,” “us” or the “Company”) is a clinical-stage biopharmaceutical company focused on translating today’s medical breakthroughs in cell and gene therapies into potential cures for hematologic cancers, solid tumors and rare genetic diseases.

(“Mustang,” “we,” “us,” “our” or the “Company”) is a clinical-stage biopharmaceutical company focused on translating today’s medical breakthroughs in cell and gene therapies into potential cures for hematologic cancers, solid tumors and rare genetic diseases.

We aim to acquire rights to these technologies by licensing or otherwise acquiring an ownership interest in the technologies, funding their research and development and eventually either out-licensing or bringing the technologies to market.

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For each therapy we have partnered with world class research institutions.

For our CAR T therapies we have partnered with the City of Hope National Medical Center (“COH”), Fred Hutchinson Cancer Center (“Fred Hutch”), Nationwide Children’s Hospital (“Nationwide”) and the Mayo Foundation for Medical Education and Research (“Mayo Clinic”).

For our gene therapies,

we have partnered with St.

For our CAR T therapies we have partnered with the City of Hope National Medical Center (“COH” or “City of Hope”), Fred Hutchinson Cancer Center (“Fred Hutch”), Nationwide Children’s Hospital (“Nationwide”) and the Mayo Foundation for Medical Education and Research (“Mayo Clinic”).

For our gene therapies, we have partnered with St.

Jude Children’s Research Hospital (“St.

Jude”) in the development of a first-in-class ex vivo lentiviral treatment of X-linked severe combined immunodeficiency (“XSCID”) and with Leiden University Medical Centre (“LUMC”) for RAG1 severe combined immunodeficiency (“RAG1-SCID”).

Jude”) and with Leiden University Medical Centre (“LUMC”) in the development of first-in-class ex vivo lentiviral (“LV”) treatments for X-linked severe combined immunodeficiency (“XSCID”) and RAG1 severe combined immunodeficiency (“RAG1-SCID”), respectively.

CAR T Therapies

Our pipeline of CAR T therapies is being developed under exclusive licenses from several world class research institutions.

Our strategy is to license these technologies, support preclinical and clinical research activities by our partners and transfer the underlying technology to our cell processing facility located in Worcester, Massachusetts, in order to conduct our own clinical trials.

We are developing CAR T therapies for hematologic malignancies in partnership with COH targeting CD123 (MB-102) and CS1 (MB-104) and with Fred Hutch targeting CD20 (MB-106).

Phase 1 clinical trials sponsored by COH for MB-102 and MB-104 and by Fred Hutch for MB-106 are underway.

In July 2019 the FDA approved our IND application to initiate a multi-center Phase 1/2 clinical trial of MB-102, and our clinical trial began enrollment in 2020 for the treatment of patients with blastic plasmacytoid dendritic cell neoplasm (“BPDCN”).

In May 2021, the FDA approved our IND application to initiate a multi-center Phase 1/2 clinical trial of MB-106, and our clinical trial began enrollment in 2022 for treatment of patients with non-Hodgkin lymphoma (“NHL”) and chronic lymphocytic leukemia (“CLL”).

We plan to file an IND for a multicenter Phase 1/2 trial for MB-104 for the treatment of patients with multiple myeloma once COH has established a safe and effective dose.

We are also developing CAR T therapies for solid tumors in partnership with COH targeting IL13Rα2 (MB-101), HER2 (MB-103) and PSCA (MB-105).

In addition, we have partnered with Nationwide for the C134 oncolytic virus (MB-108) in order to enhance the activity of MB-101 for the treatment of patients with glioblastoma (“GBM”).

Phase 1 clinical trials sponsored by COH for MB-101, MB-103 and MB-105 are underway.

A Phase 1 clinical trial sponsored by the University of Alabama at Birmingham (“UAB”) for MB-108 began during the third quarter of 2019, and we plan to file an IND for the combination of MB-101 and MB-108 – which is referred to as MB-109 – for the treatment of patients with relapsed or refractory GBM and anaplastic astrocytoma in 2023.

In the third quarter of 2019, we announced that COH had started enrolling patients on a Phase 1 clinical trial of MB-101 in combination with nivolumab (trade name:

Opdivo ® ) and ipilimumab (trade name:

Yervoy ® ) in patients with recurrent malignant glioma (ClinicalTrials.gov Identifier:

NCT04003649).

In the fourth quarter of 2020 we announced that COH had initiated a Phase 1, two-arm clinical trial of MB-101 in patients with leptomeningeal brain tumors (e.g., glioblastoma, ependymoma or medulloblastoma;

ClinicalTrials.gov Identifier:

Our strategy is to license these technologies, support preclinical and clinical research activities by our partners and transfer the underlying technology to our or our contract manufacturer’s cell processing facility in order to conduct our own clinical trials.

We are developing CAR T therapy for hematologic malignancies in partnership with Fred Hutch targeting CD20 (MB-106).

In May 2021, we announced that the U.S.

Food and Drug Administration (“FDA”) accepted our Investigational New Drug (“IND”) Application for MB-106.

As of December 2023, approximately 40 patients have been treated in an ongoing phase 1 clinical trial sponsored by Fred Hutch (ClinicalTrials.gov Identifier:

NCT03277729), and approximately 20 patients have been treated in an ongoing phase 1 clinical trial sponsored by us (ClinicalTrials.gov Identifier:

NCT05360238).

Finally, the Company is collaborating with the Mayo Clinic to develop a novel technology that may be able to transform the administration of CAR T therapies and potentially be used as an off-the-shelf therapy.

Mustang plans to file an IND application for a multicenter Phase 1 clinical trial once a lead construct has been identified.

In 2023, we received Safety Review Committee approval to continue dose escalation in all three active arms of the ongoing Mustang-sponsored phase 1 trial.

We presented the latest results, demonstrating a favorable safety profile, complete response rate, and durability, from the ongoing Mustang-sponsored phase 1 trial at the 2023 American Society of Hematology (“ASH”) Annual Meeting.

As of December 31, 2023, the MB-106 Mustang-sponsored phase 1 trial is pending one patient to complete the final dose level required to advance to phase 2 pivotal studies for treatment of patients with relapsed or refractory indolent B-cell non-Hodgkin lymphoma.

We are also developing CAR T therapy for solid tumors in partnership with COH targeting IL13Rα2 (MB-101).

In addition, we have partnered with Nationwide for a herpes simplex virus type 1 (“HSV-1”) oncolytic virus (MB-108) in order to enhance the activity of MB-101 for the treatment of patients with high-grade malignant brain tumors.

The Phase 1 clinical trial sponsored by COH for MB-101 (ClinicalTrials.gov Identifier:

NCT02208362) has completed the treatment phase and patients continue to be assessed for long-term safety.

A Phase 1 clinical trial sponsored by the University of Alabama at Birmingham (“UAB”) for MB-108 (ClinicalTrials.gov Identifier:

NCT03657576) began during the third quarter of 2019.

In October 2023, we announced that the FDA accepted our IND application for the combination of MB-101 and MB-108 – which is referred to as MB-109 – for the treatment of patients with IL13Rα2+ relapsed or refractory glioblastoma (“GBM”) and high-grade astrocytoma.

Finally, we are collaborating with the Mayo Clinic to develop a novel technology that may be able to transform the administration of CAR T therapies and potentially be used as an off-the-shelf therapy.

We are evaluating plans to file an IND application for a multicenter Phase 1 clinical trial once a lead construct has been identified, subject to allocation of resources.

On May 18, 2023, we announced a series of changes resulting from a review of our portfolio of product candidates to determine the future strategy of our programs and the proper allocation of our resources.

Following this review, we determined to discontinue development of our MB-102 (CD123), MB-103 (HER2), MB-104 (CS1) and MB-105 (PSCA) programs (such programs, the “Discontinued Programs”), all of which were CAR T therapies being developed in partnership with City of Hope.

Gene Therapies

In partnership with St.

Jude, our XSCID gene therapy programs (MB-107 and MB-207) are being conducted under an exclusive license to develop a potentially curative treatment for XSCID, a rare genetic immune system condition in which affected patients do not live beyond infancy without treatment.

This first-in-class ex vivo lentiviral gene therapy has been evaluated in two Phase 1/2 clinical trials involving two different autologous cell products:

an ongoing multicenter trial of the MB-107 product in newly diagnosed infants sponsored by St.

Jude and a single-center trial of the MB-207 product in previously transplanted patients sponsored by the National Institutes of Health (“NIH”).

In 2022, the NIH study was suspended as a result of the study stopping rules.

In January 2021 we received a safe to proceed “approval” from the U.S.

Food and Drug Administration (“FDA”) for our MB-107 Investigational New Drug (“IND”) application allowing us to initiate a pivotal non-randomized multicenter Phase 2 clinical trial of MB-107 in newly diagnosed infants with XSCID who are under the age of two.

In January 2022, the FDA issued a clinical hold, pending additional Chemistry, Manufacturing and Controls (“CMC”) data, on our IND application to conduct a pivotal non-randomized multicenter Phase 2 clinical trial of MB-207 in previously transplanted XSCID patients.

To date, we have not received approval for the sale of our product candidates in any market and, therefore, have not generated any product sales from our product candidates.

Jude, our XSCID gene therapy programs (MB-117 and MB-217) are being developed under an exclusive license to develop a potentially curative treatment for XSCID, a rare genetic immune system condition in which affected patients do not live beyond infancy without treatment.

For these programs, the same lentiviral vector (LVV) will be used to transduce patients’ hematopoietic stem cells ex vivo.

However, since the respective cell processing is different for each cell product, the FDA considers them different products, and we have therefore assigned a different designation to each:

MB-117 designates the cell product for newborn patients, and MB-217 designates the cell product for previously transplanted patients.

The LVV used for MB-117 and MB-217 has been modified from a predecessor LVV in order to address concerns regarding detection of an increased percentage of clones in patients’ myeloid lineage following treatment with the predecessor products (designated MB-107 and MB-207, respectively) engineered using the predecessor LVV.

Although a safety signal has not been observed in over 40 patients treated with the two predecessor products, nevertheless, out of an abundance of caution, we and our academic partners decided to replace the predecessor LVV with the modified LVV.

We anticipate that the NIH and St.

Jude will initiate phase 1 trials in newborn and previously transplanted patients, respectively, in 2024 using the modified LVV to produce MB-117 and MB-217, respectively.

The predecessor LVV has been utilized in two Phase 1/2 clinical trials involving two different autologous cell products produced via transduction of patients’ hematopoietic stem cells.

As noted above, these cell products were designated MB-107 and MB-207, and the respective Phase 1/2 clinical trials were:

a multicenter trial of the MB-107 product in newly diagnosed infants sponsored by St.

Jude (ClinicalTrials.gov Identifier:

NCT01512888) and a single-center trial of the MB-207 product in previously transplanted patients sponsored by the National Institutes of Health (“NIH”) (ClinicalTrials.gov Identifier:

NCT01306019).

In January 2021, we received a safe to proceed “approval” from the FDA for our MB-107 IND application allowing us to initiate a pivotal non-randomized multicenter Phase 2 clinical trial of MB-107 in newly diagnosed infants with XSCID who are under the age of two.

In January 2022, the FDA issued a clinical hold, pending additional Chemistry, Manufacturing and Controls (“CMC”) data, on our IND application to allow for the initiation of a pivotal non-randomized multicenter Phase 2 clinical trial of MB-207 in previously transplanted XSCID patients.

In 2022, the NIH study was suspended as a result of the study stopping rules triggered by the increased percentage of clones noted above.

Jude elected to voluntarily place their study on hold in April 2023, and we elected to voluntarily discontinue development of MB-107 and MB-207 in favor of MB-117 and MB-217 prior to treating any patients with either predecessor product.

Jude and NIH intend to initiate their respective studies of MB-117 and MB-217 in 2024 following availability of the modified LVV.

MB-110, a first-in-class ex vivo treatment for RAG1 SCID, is currently being evaluated at LUMC in a Phase 1/2 multicenter clinical trial in Europe.

In 2022 the first patient was treated without any complications, after which the patient developed a functioning immune system which responded well to the standard vaccinations for newborns.

In 2024, we expect that additional centers will be added and that additional patients will be enrolled.

To date, we have not received approval for the sale of any of our product candidates in any market and, therefore, have not generated any product sales from our product candidates.

In addition, we have incurred substantial operating losses since our inception, and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable.

As of December 31, 2023, we have an accumulated deficit of $381.0 million.

We are a majority-controlled subsidiary of Fortress.

We are a majority-controlled subsidiary of Fortress Biotech, Inc.

(“Fortress”).

CORPORATE INFORMATION

Mustang Bio, Inc.

was incorporated in Delaware on March 13, 2015.

We were incorporated in Delaware on March 13, 2015.

Our executive offices are located at 377 Plantation Street, Worcester, Massachusetts 01605.

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Our website address is www.mustangbio.com.

The information set forth on our website is not a part of this report.

The information set forth on our website is not a part of this Form 10-K.

We will make available free of charge through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC.

We are not including the information on our website as a part of, nor incorporating it by reference into, this report.

We are not including the information on our website as a part of, nor incorporating it by reference into, this Form 10-K.

The SEC maintains a website that contains annual, quarterly, and current reports, proxy and information statements, and other information that issuers (including us) file electronically with the SEC.

The SEC’s website address is https://www.sec.gov/.

PRODUCTS UNDER DEVELOPMENT

CAR T Therapies for Hematologic Malignancies

MB-102 (CD123 CAR T Cell Program for BPDCN, AML and High-Risk MDS)

CD123 is a subunit of the heterodimeric interleukin-3-receptor (“IL-3R”) which is widely expressed on human hematologic malignancies including blastic plasmacytoid dendritic cell neoplasm (“BPDCN”) and acute myeloid leukemia (“AML”).

In addition, CD123 can be found on the surface of B cell acute lymphoblastic leukemia (“B-ALL”), hairy cell leukemia, myelodysplastic syndrome (“MDS”), chronic myeloid leukemia (“CML”) and Hodgkin lymphoma.

Of these malignancies, we are currently investigating CD123 as a target for adoptive cellular immunotherapy in BPDCN, since high CD123 expression is associated with enhanced cell proliferation, increased resistance of these cells to apoptosis, and poor clinical prognosis.

Depending on the early results in this patient population, we may broaden the inclusion criteria to include AML and high-risk MDS (“HR-MDS”).

CD123 is overexpressed in the vast majority of cases of AML and HR-MDS and in essentially all cases of BPDCN.

AML is a cancer of the myeloid line of blood cells characterized by rapid growth of abnormal white blood cells that accumulate in the bone marrow.

AML is the most common form of acute leukemia.

Although AML is a relatively rare disease, there are approximately 20,000 new cases per year in the U.S.

and 10,000 deaths per year, accounting for approximately 1.8% of cancer deaths in the U.S.

The Surveillance, Epidemiology, and End Results (“SEER”) Program of the National Cancer Institute].

AML standard of care involves chemotherapy to induce remission followed by additional chemotherapy or a hematopoietic stem cell transplant.

Allogeneic stem cell transplantation (“allo-SCT”) is the preferred treatment for AML following a second remission.

It can lead to a 5-year disease-free survival in 26% of patients.

Unfortunately, however, currently only about half of relapsed patients are able to achieve a second remission with traditional chemotherapy agents.

Patients who do not achieve a second remission are much less likely to benefit from transplantation and face a dismal outcome.

MDS is a heterogeneous group of malignant hematopoietic stem cell disorders characterized by dysplastic and ineffective blood cell production and a variable risk of transformation to acute leukemia.

Patients with MDS have varying reductions in the production of red blood cells, platelets, and mature granulocytes that may also exhibit functional defects;

these abnormalities often result in anemia, bleeding, and increased risk of infection.

The precise incidence of de novo MDS is not known;

conservative estimates from cancer databases suggest that there are approximately 10,000 cases diagnosed annually in the U.S.

The actual incidence of MDS is likely higher than that predicted by cancer databases, since the nonspecific symptoms may evade detection in early stages of the disease and suspected cases may not undergo definitive testing (i.e., bone marrow biopsy) due to comorbidities.

Investigations that have analyzed reimbursement claims have estimated the incidence in the U.S.

to be 30,000 to 40,000 new cases per year.

MDS occurs most commonly in older adults, with a median age at diagnosis in most series of ≥65 years and a male predominance.

MDS and AML lie along a disease continuum, with distinction between the two largely made based upon the percentage of myeloblasts, which are immature cells with large nuclei, nucleoli, and a scant rim of dark blue cytoplasm, suggesting an underlying malignant hematologic disorder.

In the current World Health Organization (“WHO”) classification system, blast forms must account for less than 20% of the total cells of the bone marrow aspirate and peripheral blood to meet the criteria for MDS.

MDS prognosis is often assessed using the revised International Prognostic Scoring System (“IPSS-R”), which takes into account cytogenetics, percentage of bone marrow blasts, and the degree of anemia, thrombocytopenia, and neutropenia.

This System categorizes patients into very low, low, intermediate, high, and very high risk MDS.

High risk and very high risk MDS are characterized by more

unfavorable cytogenetics, bone marrow blast percentages greater than 5% but under the 20% threshold for AML, and worse cytopenias (anemia, thrombocytopenia, and neutropenia) – all of which cumulatively generate an IPSS-R score of >4.5 to 6 for high risk MDS and >6 for very high risk MDS.

Furthermore, they are generally progressive in nature and can easily progress to AML.

Treatment is stratified according to medical fitness in a manner similar to that for older patients with AML.

Patients who are medically fit or of intermediate fitness are generally evaluated soon after diagnosis to determine their suitability for allo-SCT.

For patients who are not candidates for intensive treatment, care is focused on relieving symptoms and improving the quality of life and might involve lower intensity treatment, for example, with azacitidine, decitabine, or targeted therapy.

Patients with recurrent or refractory higher risk MDS may be encouraged to participate in clinical trials.

Outside of a clinical trial, the management of patients with recurrent or refractory MDS is largely dependent on the patient’s prior therapy.

BPDCN is categorized by the WHO under AML.

Most often, BPDCN presents with features of both lymphoma and leukemia.

There is little data about BPDCN and the only approved drug for this disease is tagraxofusp-erzs, which is indicated for the treatment of adult and pediatric patients with both treatment-naïve and previously-treated BPDCN.

The average age at diagnosis is 60 to 70 years.

BPDCN is very often misdiagnosed and under-reported.

The skin is the most frequently involved site of disease (80 percent of cases).

However, BPDCN usually progresses with bone marrow involvement and a decrease in red blood cell, white blood cell and platelet counts.

The lymph nodes and spleen may also be involved.

Common misdiagnoses for BPCDN include non-Hodgkin lymphoma (“NHL”), AML, leukemia cutis [a nonspecific term used for cutaneous (skin) manifestation of any type of leukemia], melanoma (a type of skin cancer), and lupus erythematosus (chronic inflammatory disease that occurs when the body’s immune system attacks its own tissues and organs).

There are no data or randomized clinical trials that can define the best first treatment for patients with BPDCN.

In addition to the emerging use of tagraxofusp-erzs, which was approved by the FDA in December 2018, treatment sometimes includes therapies that are used for AML, ALL, or lymphoma.

The time for which a patient responds to these treatments is usually short.

After a relapse, second remissions with conventional chemotherapy are difficult to achieve.

allo-SCT, especially if offered in first remission, may result in longer remissions.

The current recommendation is for BPDCN patients to be evaluated for an allo-SCT as soon as possible and to begin searching for a donor.

The use of CAR T immunotherapy in relapsed BPDCN, AML, and HR-MDS patients may offer the potential to achieve a complete or longer lasting remission.

COH investigators have developed CD123-targeted CAR T cells designed to be activated, to proliferate, and to kill CD123-expressing tumor cells [Mardiros A et al .

2013;122(18):3138-3148].

The therapy is designed to recognize and eliminate malignant cells, leading to remission in patients with relapsed or refractory BPDCN, AML, and HR-MDS, and could serve as a bridge to potentially curative allogeneic stem cell transplant.

The manufacturing process genetically modifies T cells isolated from peripheral blood mononuclear cells in order to express a CD123-specific, hinge-optimized, CD28 co-stimulatory domain-expressing CAR.

In October 2020, we announced the dosing of the first patient in a multicenter Phase 1/2 clinical trial of MB-102 in patients with relapsed or refractory BPDCN ( Clinicaltrials.gov Identifier:

NCT04109482).

This is also the first clinical trial under a Mustang IND in which a patient was dosed with cells processed in our manufacturing facility.

In December 2022, we announced that the safety review team (“SRT”), after thoroughly reviewing the safety data from Dose Level 1 (100 x 10 6 CAR T cells), unanimously recommended dose escalation to Dose Level 2 (300 x 10 6 CAR T cells).

We anticipate initiation of Dose Level 2 cohort in 2023.

MB-104 (CS1 CAR T for Multiple Myeloma and Light Chain Amyloidosis)

CS1 (also known as CD319, CRACC and SLAMF7) was identified as a natural killer (“NK”) cell receptor regulating immune functions.

It is also expressed on B cells, T cells, dendritic cells, NK-T cells, and monocytes.

CS1 is overexpressed in multiple myeloma (“MM”) and light chain amyloidosis (“AL”), which makes it a good target for immunotherapy.

A humanized anti-CS1 antibody, elotuzumab (Empliciti™), has shown promising results in clinical studies and was initially approved by the FDA in 2015 in combination with lenalidomide and dexamethasone for the treatment of patients with multiple myeloma who have received one to three prior therapies .

Despite great advances in treatment, MM remains an incurable malignancy of plasma cells.

AL is a protein deposition disorder that is a result of a plasma cell dysplasia, similar to MM.

Immunotherapy is an attractive approach for AL because of the low burden of disease.

Our academic partners at COH have developed a novel second generation CS1-specific CAR T cell therapy.

In preclinical studies, they have demonstrated efficacy of these CAR T cells, both in vitro and in vivo , within the context of clinically relevant models of MM and AL.

COH is evaluating the safety of this CS1-specific CAR T cell therapy in a Phase 1 trial that commenced in the first half of 2019 (ClinicalTrials.gov Identifier:

NCT03710421).

Once COH has established a safe and effective dose for MB-104 in this trial, we expect to file an IND for a multicenter Phase 1/2 trial for the treatment of patients with MM.

THERAPEUTIC PIPELINE

Therapies for Oncology and Hematologic Malignancies

MB-106 (CD20 CAR T for B cell non-Hodgkin lymphoma (NHL) and chronic lymphocytic leukemia (CLL))

CD20 is a promising target for immunotherapy of B-cell malignancies.

We believe CD20 is a promising target for immunotherapy of B-cell malignancies.

CD20 is a B-cell lineage-specific phosphoprotein that is expressed in high, homogeneous density on the surface of more than 95% of B-cell NHL and CLL.

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More than 80,000 new cases of NHL are diagnosed each year in the United States, and over 20,000 patients die of this group of diseases annually.

Most forms of NHL including follicular lymphoma, mantle cell lymphoma, marginal zone lymphoma, lymphoplasmacytic lymphoma, and small lymphocytic lymphoma (“SLL”), which account collectively for ~45% of all cases of NHL, are incurable with available therapies, except for allo-SCT.

Most forms of NHL, including follicular lymphoma, mantle cell lymphoma, marginal zone lymphoma, lymphoplasmacytic lymphoma, and small lymphocytic lymphoma (“SLL”), which account collectively for approximately 45% of all cases of NHL, are incurable with available therapies, except for allogenic stem cell transplant (“allo-SCT”).

However, many NHL patients are not suitable candidates for allo-SCT, and this treatment is also limited by significant rates of morbidity and mortality due to graft-versus-host disease.

Aggressive B-cell lymphomas such as diffuse large B-cell lymphoma account for an additional 30-35% of NHL.

Aggressive B-cell lymphomas such as diffuse large B-cell lymphoma, the most common subtype of lymphoma, account for an additional 30-35% of NHL.

The majority of patients with aggressive B-NHL are successfully treated with combination chemotherapy, but a significant proportion relapse or have refractory disease, and the outcome of these patients is poor.

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CLL is the most common leukemia in adults in Western countries, accounting for approximately 25 to 35 percent of all leukemias in the United States.

It is estimated that 18,740 new cases of CLL will be diagnosed in the United States in 2023.

CLL is considered to be mainly a disease of older adults, with a median age at diagnosis of approximately 70 years;

however, it is not unusual to make this diagnosis in younger individuals (e.g., from 30 to 39 years of age).

An estimated 20,700 new cases of CLL will be diagnosed in the United States in 2024.

CLL is considered to be mainly a disease afflicting older adults, with a median age at diagnosis of approximately 70 years;

however, it is not unusual to make this diagnosis in younger individuals (e.g., from approximately 30 to 39 years of age).

The incidence increases rapidly with increasing age.

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The study is also assessing CAR T cell persistence and the potential immunogenicity of the cells.

Finally, the study was designed so that Mustang together with Fred Hutch could determine a recommended Phase 2 dose.

Fred Hutch intends to enroll approximately 50 subjects in the study, which is being led by Principal Investigator Mazyar Shadman, M.D., M.P.H., Assistant Member of Fred Hutch’s Clinical Research Division.

The Fred Hutch IND was amended in 2019 to incorporate an optimized manufacturing process that had been developed in collaboration with Mustang.

In May 2021, we announced that the FDA had approved our IND application allowing for initiation of a multi-center Phase 1/2 clinical study of MB-106 in patients with relapsed or refractory B cell NHL or CLL (Clinicaltrials.gov Identifier:

Finally, this study was designed so that, together with Fred Hutch, we could determine a recommended Phase 2 dose.

Fred Hutch intends to enroll approximately 50 subjects in this study, which is being led by the Principal Investigator Mazyar Shadman, M.D., M.P.H., Associate Professor of Fred Hutch’s Clinical Research Division.

The Fred Hutch IND was amended in 2019 to incorporate an optimized manufacturing process that had been developed in collaboration with us.

In May 2021, we announced that the FDA issued a safe to proceed letter for our IND application allowing for initiation of a multi-center Phase 1/2 clinical study of MB-106 in patients with relapsed or refractory B cell NHL or CLL (Clinicaltrials.gov Identifier:

NCT05360238).

In August 2022, the first patient was treated in our study.

In November 2021, Mustang was awarded a grant of approximately $2.0 million from NCI of the National Institutes of Health.

This two-year award will partially fund the Mustang-sponsored multicenter trial to assess the safety, tolerability and efficacy of MB-106.

CAR T Therapies for Solid Tumors

MB-103 (HER2 CAR T for GBM & Metastatic Breast Cancer to Brain)

HER2/neu (“HER2”) is a growth-promoting protein on the outside of all breast cells.

Breast cancer cells with higher-than-normal levels of HER2 are called HER2-positive (“HER2+”).

These cancers tend to grow and spread faster than other breast cancers.

Breast cancer is the most commonly diagnosed cancer in women, with over 42,000 women in the United States expected to die from advanced metastatic disease in 2023.

Approximately 20% to 25% of breast cancers overexpress HER2, which is an established therapeutic target of both monoclonal antibodies (mAbs) and receptor tyrosine kinase inhibitors.

With the advent of effective mAbs directed against HER2, the median overall survival of patients with metastatic HER2+ breast cancer has improved.

However, management of metastatic disease in the brain and/or CNS – observed in up to 50% of HER2+ breast cancer patients – continues to be a clinical challenge in large part due to the inability of mAbs to sufficiently cross the blood-brain barrier.

Although small-molecule inhibitors of HER2 exist and have been clinically approved, their single-agent efficacy in the context of metastatic disease to the brain has been limited.

While HER2-targeted therapy in combination with conventional agents has shown some promise for the treatment of patients with metastatic breast cancer, control of brain metastases remains a significant unmet clinical need, as most patients survive less than two years following CNS involvement.

Recent advances in cellular immunotherapy approaches have underscored the potential for potent antitumor immune responses and clinical benefit against solid cancers, and these approaches may be effective in the treatment of HER2+ cancers – in particular breast cancer – that have metastasized to the brain.

Likewise, HER2 has been suggested as a suitable target for GBM, wherein elevated HER2 protein levels have been correlated with impaired survival.

CAR T cell immunotherapy is being actively investigated for the treatment of solid tumors, including HER2+ cancers.

Our academic partners at COH have developed a second-generation HER2-specific CAR T cell therapy for the treatment of brain and/or leptomeningeal metastases from HER2+ cancers, as well as for the treatment of refractory/relapsed HER2+ GBM.

COH’s preclinical data demonstrate effective targeting of breast cancer brain metastases with intraventricular delivery of CAR T cells expressing HER2-CARs that contain the 4-1BB costimulatory domain.

COH is evaluating the safety of this HER2-specific CAR T cell therapy in two ongoing Phase 1 clinical trials that commenced in the fourth quarter of 2018 (ClinicalTrials.gov Identifier:

NCT03389230 for HER2+ GBM;

ClinicalTrials.gov Identifier:

NCT03696030 for HER2+ brain metastases).

MB-105 (PSCA CAR T for Prostate & Pancreatic Cancers)

PSCA is a glycosylphosphatidylinositol-anchored cell membrane glycoprotein.

In addition to being highly expressed in the prostate it is also expressed in the bladder, placenta, colon, kidney, and stomach.

This gene is upregulated in a large proportion of prostate cancers and is also detected in cancers of the bladder and pancreas.

The gene includes a polymorphism that results in an upstream start codon in some individuals;

this polymorphism is thought to be associated with a risk for certain gastric and bladder cancers.

Prostate cancer may be amenable to T cell-based immunotherapy since several tumor antigens, including prostate stem-cell antigen (“PSCA”), are widely overexpressed in metastatic disease.

Our academic partners at COH have developed a second-generation PSCA-specific CAR T cell therapy that has demonstrated robust in vitro and in vivo anti-tumor activity in patient-derived, clinically relevant, bone-metastatic prostate cancer xenograft models.

COH is evaluating the safety of this PSCA-specific CAR T cell therapy in an ongoing Phase 1 trial treating patients with PSCA+ metastatic castration-resistant prostate cancer (ClinicalTrials.gov Identifier:

NCT03873805).

In October 2020,we announced initial data from this Phase 1 clinical trial in patients with PSCA-positive castration-resistance prostate cancer (“CRPC”).

In the presentation at the 2020 Annual Prostate Cancer Foundation Scientific Retreat, the COH principal investigator reported results from a highly refractory patient treated with MB-105 who experienced a 94 percent reduction in prostate-specific antigen (“PSA”), a nearly complete reduction of measurable soft tissue metastasis by computerized tomography, and improvement in bone metastases by magnetic resonance imaging.

Combination MB-101 (IL13Rα2 CAR T Cell Program for Glioblastoma) and MB-108 (HSV-1 oncolytic virus C134) as a Potential Treatment for IL13Rα2+ Relapsed or Refractory Glioblastoma (GBM) and Anaplastic Astrocytoma (AA).

This two-year award partially funded the Mustang-sponsored multicenter trial to assess the safety, tolerability and efficacy of MB-106.

In August 2023, we fully utilized the grant.

In June 2022, MB-106 received Orphan Drug Designation for the treatment of Waldenstrom macroglobulinemia (“WM”).

In December 2023, Mustang presented preliminary clinical data for the indolent lymphoma patients treated in the ongoing Phase 1/2 clinical study at the American Society of Hematology (ASH) annual meeting.

All 9 patients responded clinically to treatment;

the observed overall response rate was 100%.

All 5 follicular lymphoma patients achieved a complete response.

Among the WN patients 1 patient attained a very good partial response, and 2 patients attained a partial response.

The single patient with a hairy cell leukemia variant experienced stable disease.

The safety profile demonstrated that MB-106 was well tolerated with no occurrences of cytokine release syndrome (“CRS”) above grade 1, and no immune effector cell-associated neurotoxicity syndrome (“ICANS”) of any grade was reported.

Cell expansion and persistence were also demonstrated.

In the first quarter of 2024, the Company expects to receive FDA feedback in an End-of-Phase 1 Meeting on its strategy to conduct a non-randomized registrational multicenter trial in relapsed or refractory WM.

In the second half of 2024, the Company expects to treat the first patient in that trial, which could enable top-line results in the second half of 2026.

In order to facilitate interactions with the FDA throughout this process, we anticipate requesting Regenerative Medicine Advanced Therapy (‘RMAT’) designation for indolent lymphoma – which includes WM – from the FDA in the first half of 2024.

We are currently evaluating the extent to which we can continue the development of MB-106 in other NHL subtypes, subject to allocation of resources.

Combination MB-101(IL13Rα2 CAR T Cell Program for Glioblastoma) and MB-108 (HSV-1 oncolytic virus C134) as a Potential Treatment for IL13Rα2+ Relapsed or Refractory Glioblastoma (GBM) and High-Grade Astrocytoma.

An attractive novel approach to control glioblastoma is adoptive cellular immunotherapy utilizing CAR T cells.

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Christine Brown from City of Hope presented these preclinical studies at the American Association for Cancer Research 2022 Annual Meeting.

It was observed that co-treatment with C134 OV and IL13Rα2-directed CAR-T cells gave no adverse reaction and, more notably, that pre-treatment with C134 re-shaped the tumor microenvironment by increasing immune cell infiltrates and enhanced the efficacy of sub-therapeutic doses of CAR-T cell therapy delivered either intraventricularly or intratumorally.

These preclinical studies aimed to provide a deeper understanding of this combination approach to support the potential benefit of a combination study that will evaluate C134 OV (MB-108) and IL13Rα2-directed CAR-T cells (MB-101).

We received Pre-IND Written Responses from the FDA in May 2022, and we expect to file an IND for the combination trial of C134 oncolytic virus (MB-108) and IL13Rα2-directed CAR- T cells (MB-101) in 2023.

In the planned Phase 1 clinical study, we intend to evaluate the combination of CAR-T cells (MB-101) and the C134 oncolytic virus (MB-108) in patients with IL13Rα2+ high-grade gliomas.

The proposed design of this study will investigate increasing doses of intratumorally administered MB-108 followed by dual intratumoral (ICT) and intraventricular (ICV) administration of MB-101.

It was observed that co-treatment with HSV-1 OV and IL13Rα2-directed CAR-T cells resulted in no additional adverse events beyond those seen with the individual therapies, and, more notably, that pre-treatment with HSV-1 OV re-shaped the tumor microenvironment by increasing immune cell infiltrates and enhanced the efficacy of sub-therapeutic doses of IL13Rα2-directed CAR-T cell therapy delivered either intraventricularly or intratumorally.

These preclinical studies aimed to provide a deeper understanding of this combination approach to support the potential benefit of a combination study that will evaluate HSV-1 OV (MB-108) and IL13Rα2-directed CAR-T cells (MB-101).

In October 2023, we received a safe-to-proceed “approval” from the FDA for our MB-109 IND application allowing us to initiate a Phase 1, open-label, non-randomized, multicenter study of MB-109 in patients with IL13Rα2+ recurrent GBM and high-grade astrocytoma.

In this Phase 1 clinical study, we intend to evaluate the combination of CAR-T cells (MB-101) and the herpes simplex virus type 1 oncolytic virus (MB-108) in patients with IL13Rα2+ high-grade gliomas.

The design of this study involves first a lead in cohort, wherein patients are treated with MB-101 alone without prior MB-108 administration.

After successful confirmation of the safety profile of MB-101 alone, the study will then investigate increasing doses of intratumorally administered MB-108 followed by dual intratumoral (ICT) and intraventricular (ICV) administration of MB-101.

We are currently evaluating the extent to which we can initiate this study, subject to allocation of resources.

MB-101 (IL13Rα2 CAR T Cell Program for Glioblastoma)

GBM is the most common brain and central nervous system (“CNS”) cancer, accounting for 49.1% of malignant primary brain and CNS tumors, 54% of all gliomas, and 16% of all primary brain and CNS tumors.

More than 13,000 new glioblastoma cases were predicted in the U.S.

GBM is the most common brain and central nervous system (“CNS”) cancer, accounting for approximately 49.1% of malignant primary brain and CNS tumors, approximately 54% of all gliomas, and approximately 16% of all primary brain and CNS tumors.

More than 14,490 new GBM cases were predicted to be diagnosed in the U.S.

Malignant brain tumors are the second leading cause of cancer-related deaths in adolescents and young adults aged 15-39 and the most common cancer occurring among 15-19-year-olds in the U.S.

While GBM is a rare disease 2-3 cases per 100,000 persons per year in the U.S.

and European Union (“EU”)], it is quite lethal, with five-year survival rates historically under 10%.

Standard of care therapy consists of maximal surgical resection, radiation, and chemotherapy with temozolomide, which, while rarely curative, is shown to extend median overall survival from 4.5 to 15 months.

and European Union (“EU”), it is quite lethal, with five-year survival rate historically under 10%, which has been virtually unchanged for decades.

Standard of care therapy consists of maximal surgical resection,

radiation, and chemotherapy with temozolomide, which, while rarely curative, is shown to extend median overall survival from 4.5 to 15 months.

GBM remains difficult to treat due to the inherent resistance of the tumor to conventional therapies.

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Based on experiments with CAR-Ts in mouse xenograft models of GBM, these CAR-modified T CM and T N/MEM cells have been shown to be more potent and persistent than earlier generations of CAR-T cells.

Our academic partners at COH have completed a Phase 1 study to assess the feasibility and safety of using T CM or T N/MEM enriched IL13Rα2-specific CAR-engineered T cells for clinical study participants with recurrent/refractory malignant glioma (ClinicalTrials.gov Identifier:

Our academic partners at COH have recently completed the treatment phase of their Phase 1 study, which was designed to assess the feasibility and safety of using T CM or T N/MEM enriched IL13Rα2-specific CAR-engineered T cells for clinical study participants with IL13Rα2 recurrent/refractory malignant glioma (ClinicalTrials.gov Identifier:

NCT02208362).

As of May 2022 COH had enrolled and treated 65 patients.

Preliminary data for patients enrolled in Arm 2 of the protocol (the “Intracavitary Arm”) were presented at the annual meeting of the American Association for Cancer Research in April 2018.

The data indicated that the CAR-T cells were well tolerated, and no dose-limiting toxicities had been observed.

In this study, COH enrolled and treated 65 patients, with 58 patients receiving 3 cycles of CAR T cells per the study protocol.

In March 2024, results from this study were published in Nature Medicine .

Preliminary data indicated that the CAR-T cells were well tolerated, and no dose-limiting toxicities were observed in any of the study arms nor where there any occurrences of CRS or treatment-related deaths.

Of the 58 patients evaluable for disease response, 50% achieved stable disease (SD) or better;

22%, including 8 patients with grade 4 gliomas, achieved SD or better for at least 90 days.

Two patients achieved partial response, and one patient achieved complete response on the study.

In 2016 COH reported that a patient had achieved a complete response to treatment based on the imaging and clinical features set forth by the Response Assessment in Neuro-Oncology Criteria (“RANO”).

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however, the patient’s disease eventually recurred at four new locations that were distinct and non-adjacent to the original tumors, and biopsy of one of these lesions showed decreased expression of IL13Rα2.

enrollment in this Phase 1 study completed, COH has established the recommended Phase 2 dose, schedule and route of administration, as well as the optimal T cell selection.

Results from this COH study have laid the foundation for 3 new MB-101 studies:

Results from this COH study have laid the foundation for three new MB-101 studies:

MB-101 with or without nivolumab and ipilimumab in treating patients with recurrent or refractory glioblastoma (currently enrolling patients;

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NCT04661384) sponsored by COH;

MB101 in combination with the C134 oncolytic virus (MB108) in treating patients with recurrent or refractory glioblastoma or anaplastic astrocytoma (IND filing expected in 2023).

This combination therapy, to be administered in a phase 1 two-center trial under Mustang IND, will be referred to as MB-109.

Technology to Convert GBM from an Immunologically Cold Tumor to an Immunologically Hot Tumor

MB101 in combination with the herpes simplex virus type 1 oncolytic virus (MB108) in treating patients with recurrent or refractory glioblastoma or high-grade astrocytoma, as described above.

This combination therapy, to be administered in a phase 1 two-center trial under our IND, will be referred to as MB-109.

MB-108 (HSV-1 oncolytic virus C134)

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In addition to this direct oncolytic activity, the virus promotes an immune response against surviving tumor cells, which increases the antitumor effect of the therapy.

The virus expresses a gene from another virus from the same overall virus family, human cytomegalovirus, which allows it to replicate better in the tumor cells than its first-generation predecessors.

The virus expresses a gene from another virus from the same overall virus family, human cytomegalovirus, which allows it to replicate better

in the tumor cells than its first-generation predecessors.

However, the virus has also been genetically engineered to minimize the production of any toxic effects for the patient receiving the therapy.

To improve this virus over its first-generation predecessors, modifications have focused on improving viral replication and spread within the tumor bed and on enhancing bystander damage to uninfected tumor cells.

These effects cumulatively should result in converting an immunologically cold tumor to an immunologically hot tumor, which Mustang anticipates will increase the efficacy of its IL13Rα2-directed CAR T for the treatment of GBM and anaplastic astrocytoma.

UAB is the clinical trial site for the Phase 1 trial of MB-108, and the site has initiated a Phase 1 trial that began enrolling patients in 2019 (ClinicalTrials.gov Identifier:

These effects cumulatively should result in converting an immunologically cold tumor to an immunologically hot tumor, which we anticipate will increase the efficacy of our IL13Rα2-directed CAR T for the treatment of GBM and high-grade astrocytoma.

The O’Neal Comprehensive Cancer Center at the UAB is the single clinical trial site for the Phase 1 trial of MB-108, and this site has initiated a Phase 1 trial that began enrolling patients in 2019 (ClinicalTrials.gov Identifier:

NCT03657576).

The primary objective of this study is to determine the safety and tolerability of stereotactic intracerebral injections of escalating doses of MB-108 and to determine the maximally tolerated dose (“MTD”) of the oncolytic virus.

The primary objective of this study is to determine the safety and tolerability of a single dose of MB-108 administered via a stereotactic intracerebral injection and to determine the maximally tolerated dose (“MTD”) of the oncolytic virus.

Secondary objectives are to obtain preliminary information about the potential benefit of MB-108 in the treatment of patients with recurrent malignant gliomas, including relevant data on markers of efficacy, including time to tumor progression and patient survival.

This trial has been on clinical hold since September 2022 due to toxicity, and UAB expects FDA clearance in 2023 in order to resume enrolling patients at a lower dose level.

As of April 2023, 9 patients had been enrolled in this study.

In Vivo CAR T Platform Technology

Mustang is collaborating with the Mayo Clinic to develop a novel technology that may be able to transform the administration of CAR T therapies and potentially be used as an off-the-shelf therapy.

We are collaborating with the Mayo Clinic to develop a novel technology that may be able to transform the administration of CAR T therapies and potentially be used as an off-the-shelf therapy.

The technology, developed by Larry R.

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In turn, the viral construct infects the activated T cells and effectively forms CAR T cells in vivo in the patient.

Successful implementation may lead to an off-the-shelf product with no need to isolate and expand patient T cells ex vivo .

Successful implementation may lead to an off-the-shelf product with no need to isolate and expand patient T cells ex vivo in a cell processing facility.

Preclinical proof-of-concept has been established, and the ongoing development of this technology will take place at Mayo Clinic.

Mustang plans to file an IND application for a multicenter Phase 1 clinical trial once a lead construct has been identified.

We are evaluating plans to file an IND application for a multicenter Phase 1 clinical trial once a lead construct has been identified, subject to allocation of resources.

Gene Therapies for Rare Genetic Disorders

MB-107 and MB-207 (Ex vivo Lentiviral Therapy for X-linked Severe Combined Immunodeficiency (XSCID))

MB-117 and MB-217 (designation of MB-107 and MB-207, respectively, following replacement of the predecessor LVV with a modified LVV) (Ex vivo Lentiviral Therapy for X-linked Severe Combined Immunodeficiency (XSCID))

XSCID is a rare genetic immune system condition that occurs almost exclusively in males, in which affected patients do not live beyond infancy without treatment.

Mustang Bio’s first-in-class ex vivo lentiviral gene therapy for XSCID has been administered as two distinct cellular products using the same lentiviral vector in two phase 1/2 clinical trials:

(1) an ongoing multicenter trial of MB-107 in newly diagnosed patients being led by St.

Mustang Bio’s first-in-class ex vivo lentiviral gene therapy for XSCID has been administered as two distinct cellular products using the same predecessor lentiviral vector in two phase 1/2 clinical trials:

(1) a multicenter trial of MB-107 in newly diagnosed patients being led by St.

Jude and including also UCSF Benioff Children’s Hospital San Francisco (“UCSF”) and Seattle Children’s Hospital (“Seattle Children’s”) (ClinicalTrials.gov Identifier:

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NCT01306019).

MB-207 (previously transplanted patients):

The last peer-reviewed presentation by the NIH Principal Investigator, Dr.

Harry Malech, occurred at the 61st Annual Meeting of the American Society of Hematology (“ASH”) in December 2019, at which time 24 patients had been treated in total.

Eleven patients under the age of two years had been treated at St.

Jude and UCSF and thirteen patients 3 to 34 years of age had been treated at the NIH .

The existing data from these 24 patients were encouraging.

In the initial stage of accrual to the Phase 1/2 NIH trial, eight patients (referred to as Cohort A) were followed for 3 to 7 years.

Among Cohort A, seven patients aged 3 to 23 years increased host T cells chimerism from 0-2% to 28-93% and had normal T cell proliferation response.

These seven patients also normalized their IgM levels, and four of these patients were able to discontinue immunoglobulin replacement therapy.

In addition, gradual clinical benefit was observed in the clearance of chronic norovirus and associated abdominal complaints, malabsorption, and growth retardation, with six of seven affected patients being cured of their disease.

Five of six patients resolved their protein-losing enteropathy.

While the Cohort A results were impressive, the relatively inefficient transduction of hematopoietic stem/progenitor cells (“HSPCs”) required large quantities of vector.

This resulted in relatively low vector copy number in myeloid cells in some patients, with delayed immune cell recovery and persistent clinical disease, especially in the last patient treated (patient 8).

To address this, NIH developed a refined enhanced transduction (“ET”) procedure and incorporated two transduction enhancers:

LentiBOOST™ 1mg/mL and dimethyl prostaglandin 2 (dmPGE2;

1µM) into the manufacturing process from MB-207.

In addition to the Cohort A results, the NIH presentation at the 2019 ASH Annual Meeting included data from six ET patients (referred to as Cohort B) treated from February to June 2019, including re-treatment of patient 8.

Prior to undergoing gene therapy, the patients, who were aged 12 to 36 years, had significant problems with donor T cell infiltration of liver, bone marrow and kidneys and had nearly absent B and NK cells.

The ET procedure achieved much greater transduction efficiencies than were observed in Cohort A, with greater than 10-fold less vector, and resulted in faster immune reconstitution and more significant clinical benefit by 3 months.

As noted by the investigators, longer follow-up will be required to know if the increased vector marking using the ET regimen will prove to be stable and safe long term.

In all NIH patients, the low-dose, nonmyeloablative busulfan pretreatment conditioning was well tolerated, and of a low enough intensity to avoid the need for transfusions of red blood cells or platelets.

No evidence of malignant transformation was observed.

In a press release dated February 2, 2021, we further disclosed that, of the 6 Cohort A patients who were alive at the time of the 2019 NIH data readout and who did not undergo repeat therapy, 3 patients were able to discontinue chronic intravenous immunoglobulin (IVIG) and experienced sustained restoration of humoral responses to immunization.

The remaining 3 patients had reduced IVIG requirements.

All chronic norovirus infections were resolved, and the quality of life of all patients had improved significantly.

The original 6 patients in Cohort B also continued to do well, with the longest follow-up being 22 months.

Two additional patients were successfully treated with transduction enhancers, for a total of 8 patients in Cohort B.

As was the case in Cohort A, no serious adverse events related to treatment were reported other than hematologic related to low-dose busulfan conditioning, and there was no evidence of malignant transformation.

As a result of the study stopping rules, the NIH study was suspended in 2022 due to the presence of clonal expansion in the myeloid lineage in 10% of the treated patients, although to date there have been no observations of insertional mutagenesis or malignancies.

All patients continue to be followed and remain clinically stable with no significant hematological anomalies.

Upon review of these data, the FDA agree that the risk-benefit ration of both MB-107 and MB-207 remains favorable to support moving forward with the Mustang-sponsored multicenter clinical trials once Mustang has appropriately addressed other items flagged by the Agency.

The IND for MB-207 was submitted to the FDA in December 2021.

In January 2022, the FDA issued a clinical hold, pending additional CMC data.

In order to lift this clinical hold and receive an FDA safe-to-procced for the IND, we believe the most critical activities will be

to (1) perform process validation manufacturing runs using healthy donor material and (2) ensure qualification of all assays related to the product release.

Following completion of these activities and the earliest release of the clinical hold by FDA, we expect to enroll the first patient in a pivotal multicenter Phase 2 clinical trial in 2023.

MB-207 received Orphan Drug Designation from the FDA in September 2020.

The FDA also granted Rare Pediatric Disease Designation for MB-207 in August 2020.

If Mustang’s BLA for MB-207 is approved, the Company may be eligible to receive a priority review voucher for this product as well, which can also be redeemed to obtain priority review for any subsequent marketing application and may be sold or transferred.

The European Medicines Agency (“EMA”) granted Advanced Therapy Medicinal Product (“ATMP”) classification to MB-207 in April 2020 and Orphan Drug designation in April 2021.

MB-107 (newly diagnosed patients):

Interim Phase 1/2 data on treatment of newly diagnosed infants under the age of two with the same LV vector used in MB-107 were updated at an oral presentation at the American Society of Gene & Cell Therapy (“ASGCT”) 25 th Annual Meeting held from May 16-19, 2022.

The data included 23 infants with XSCID treated with the LV vector at a median age of 3 months (range:

2 months to 14 months) with a median follow-up of 2.4 years (range:

1.4 months to 5.4 years), making it the largest known cohort of infants treated with LV gene therapy with the longest follow-up.

Transduced autologous bone marrow CD34+ cells were generated for all patients with a median vector copy number (VCN) of 0.81/cell (range:

0.16-1.81), and a median CD34+ cell dose of 9.61x10 6 /kg (range 4.40-18.95).

Prior to the infusion of cells, patients received busulfan targeted to a cumulative area-under-the-curve (cAUC) of 22 mg*hr/L.

Severe adverse events occurred in three patients (two patients with pancytopenia and hemolytic anemia, and one patient with delayed neutrophil engraftment), and all resolved.

Seventeen of 18 patients with a follow-up of > 6 months achieved robust immune reconstitution [median CD3+ 2,545/µL, CD4+ 1,568/µL, CD4+/CCR7+/CD45R0- 1,416/µL].

In these 17 patients, T cells matured appropriately as assessed by normal T cell receptor excision circles (TRECs) and TCRvβ repertoire diversity and were functional as judged by phytohemagglutinin activation (“PHA”).

All patients were alive with stable vector marking in all cell lineages.

In addition, 15 patients had discontinued intravenous immunoglobulin, and 12 patients had been successfully immunized.

No evidence of clonal expansion or malignant transformation was observed.

The MB-107 timeline has been extended due to unanticipated issues related to the materials used in manufacturing.

These issues were communicated to the FDA and the Company received a written response on August 26, 2022.

The FDA response provided additional direction enabling us to effectively continue to work with our outside suppliers.

We are working towards enrolling the first patient in a pivotal multicenter Phase 2 clinical trial under our IND in 2023.

MB-107 received Orphan Drug Designation in August 2020 and Rare Pediatric Disease and Regenerative Medicine Advanced Therapy (“RMAT”) designations in August 2019.

Finally, the FDA designated MB-107 a Rare Pediatric Disease in August 2020.

The FDA grants Rare Pediatric Disease Designation for serious and life-threatening diseases that primarily affect children ages 18 years or younger and affect fewer than 200,000 people in the United States.

If Mustang’s BLA for MB-107 is approved, the Company may be eligible to receive a priority review voucher, which can be redeemed to obtain priority review for any subsequent marketing application and may be sold or transferred.

This program is intended to encourage development of new drugs and biologics for the prevention and treatment of rare pediatric diseases.

The EMA, granted Priority Medicines (“PRIME”) designation to MB-107 in July 2021, and ATMP classification to MB-107 in April 2020 and Orphan Drug designation in November 2020.

In 2022, the NIH study was suspended as a result of the study stopping rules triggered by the increased percentage of clones in patients’ myeloid lineage, as noted above.

All patients treated in the St.

Jude and NIH clinical trials continue to be followed and remain clinically stable with no significant hematological anomalies, including no observations of insertional mutagenesis and/or malignancies.

Jude and NIH intent to initiate their respective studies of MB-117 and MB-217 in 2024 following availability of the modified LVV.

As part of addressing concerns relating to clonal expansion, the joint team existing of St.

Jude, UCSF, Seattle Children’s and the NIH decided to suspend use of the primary lentiviral vector.

Going forward, this predecessor LV vector will be replaced by a modified LV vector which will be used to produce the MB-117 and MB-217 cell products.

St Jude has informed us that it intends to initiate a new Phase 1 trial in newly diagnosed infants using MB-117, and the NIH has informed us that it intends to initiate a new Phase 1 trial in previously transplanted patients using MB-217, each in 2024.

MB-110 (Ex vivo Lentiviral Therapy for RAG1 Severe Combined Immunodeficiency (SCID))

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MB-110, which includes low-dose conditioning prior to reinfusion of the patients’ own gene-modified blood stem cells, is currently being evaluated in a Phase 1/2 multicenter clinical trial in Europe.

The ongoing clinical trial has enrolled its first patient, and additional clinical

sites are expected to be added in the near future.

The ongoing clinical trial has enrolled its first patient, and additional clinical sites are expected to be added in the near future.

The RAG1-SCID program has been granted Orphan Drug Designation by the European Medicines Agency.

Mustang also established an ongoing partnership with Frank J.

We also established an ongoing partnership with Frank J.

Staal, Ph.D., professor of Molecular Stem Cell Biology and molecular immunologist at LUMC, whose laboratory developed the MB-110 therapy.

Staal will continue the development of additional LV gene therapies in his lab, to which Mustang Bio has rights under the agreement.

Staal will continue the development of additional LV gene therapies in his lab, to which we have certain rights under the agreement.

INTELLECTUAL PROPERTY AND PATENTS

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We will be able to protect our proprietary technologies from unauthorized use by third parties only to the extent that our proprietary rights are covered by valid and enforceable patents, supported by regulatory exclusivity or are effectively maintained as trade secrets.

We have a few patents and patent applications related to our compounds and other technology, but we cannot guarantee the scope of protection of the issued patents, or that such patents will survive a validity or enforceability challenge, or that any of the pending patent applications will issue as patents.

We own or exclusively license a few patents and patent applications related to our compounds and other technologies, but we cannot guarantee the scope of protection of the issued patents, or that such patents will survive a validity or enforceability challenge, or that any of the pending patent applications will issue as patents.

Generally, patent applications in the U.S.

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In March 2015, we licensed intellectual property related to CAR T technology from COH.

The portfolio of rights licensed from COH now includes patents and application directed to CARs targeting IL13Rα2, CD123, CS1, HER2, and PSCA, as well as rights related to modified CAR hinge regions and methods of preparing CAR T cells in particular subpopulations of cell and administering CAR T cells.

The intellectual property licensed thereunder relating to IL13Rα2-targeting CARs includes granted patents in the U.S., Australia, China, Europe,

Russia, Japan, Hong Kong, Israel, and Mexico, and this patent family further includes pending applications in the U.S., Australia, Brazil, Canada, China, Europe, South Korea, Russia, Japan, Israel, Mexico, and New Zealand.

In May 2023, we announced a series of changes resulting from a review of our portfolio of product candidates to determine the future strategy of our programs and the proper allocation of our resources.

Following this review, we determined to discontinue development of our MB-102 (CD123), MB-103 (HER2), MB-104 (CS1) and MB-105 (PSCA) programs and terminated the associated license agreements.

The portfolio of rights licensed from COH now includes patents and applications directed to CARs targeting IL13Rα2, as well as rights related to modified CAR hinge regions, methods of preparing CAR T cells in particular subpopulations of cells and methods of administering CAR T cells.

The intellectual property licensed thereunder relating to IL13Rα2-targeting CARs includes granted patents in the U.S., Australia, China, Europe, Russia, Japan, Hong Kong, Israel, and Mexico, and this patent family further includes pending applications in the U.S., Australia, Brazil, Canada, China, Europe, South Korea, Russia, Japan, Israel, Mexico, and New Zealand.

Any patents issuing from the IL13Rα2-targeting CAR will expire no sooner than 2035.

The licensed intellectual property relating to relating to CD123-targeting CARs includes issues patents in the U.S., China, Europe, Hong Kong, Israel, Japan, South Korea, and Mexico, and this patent family further includes pending applications in the U.S., Australia, Brazil, China, Europe, Hong Kong, Israel, Japan, South Korea, Mexico, and New Zealand.

Any patents issuing from the CD123-targeting CAR will expire no sooner than 2033.

The licensed intellectual property relating to relating to CS1-targeting CARs includes issues patents in the U.S., Australia, Israel, and Russia, as well as pending applications in the U.S., Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, South Korea, Mexico, Japan, Russia, and New Zealand.

Any patents issuing from the CS1-targeting CAR will expire no sooner than 2035, and some patents relating to particular methods involving CS1-targeting CARs will expire no sooner than 2038.

The licensed intellectual property relating to relating to HER2-targeting CARs includes issues patents in Japan and Russia, as well as pending applications in the U.S., Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, Japan, South Korea, Russia, Mexico, and New Zealand.

Any patents issuing from the HER2-targeting CAR will expire no sooner than 2036.

The licensed intellectual property relating to relating to PSCA-targeting CARs includes issues patents in Europe and Hong Kong, as well as pending applications in the U.S., Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, Japan, South Korea, Russia, and New Zealand.

The licensed intellectual property relating to relating modified CAR hinge regions includes issues patents in China, Europe, and Japan, as well as pending applications in the U.S., Australia, China, and Europe.

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In March 2017, we licensed intellectual property related to antibodies and binding agents that specifically bind to PSCA from the University of California Los Angeles (“UCLA”).

The intellectual property includes multiple granted patents and pending applications from around the world including the U.S., Europe, Japan, China, and Canada.

The granted patents and patents maturing from the pending applications will expire no sooner than March 2027.

In August 2023, we terminated the license agreement with UCLA.

In August 2018, we licensed from St.

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In August 2019, we licensed from CSL Behring (Calimmune) the Cytegrity TM stable producer cell line developed and used by St.

The Cytegrity TM stable producer cell line will be used to produce the viral vector for MB-107.

The Cytegrity TM stable producer cell line was developed in order to be used to produce the viral vector for MB-107 and MB-207.

However, the decision to modify the LVV used to transduce the hematopoietic stem cells of XSCID patients and thereby replace MB-107 and MB-207 with MB-117 and MB-217, respectively, rendered the stable producer cell no longer useful.

Therefore, on August 14, 2023, we notified Calimmune that we were terminating the Calimmune license, which took effect 60 days following notification.

In September 2020, we entered into an exclusive, worldwide licensing agreement with SIRION Biotech for the rights to SIRION’s LentiBOOST TM technology for the development of MB-207.

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In December 2021 this licensing agreement was amended to include CD20-directed CAR Ts in addition to lentiviral stem cell gene therapy for the treatment of XSCID.

We eventually expect to use this technology for the development of MB-217.

In November 2021, we entered into an exclusive, worldwide licensing agreement with Leiden University Medical Centre for a first-in-class ex vivo lentiviral gene therapy for the treatment of RAG1 severe combined immunodeficiency (“RAG1-SCID”).

In August 2021, we entered into an exclusive license agreement with Mayo Clinic for a novel technology that may be able to transform the administration of CAR T therapies and potentially allow such therapies to be used as an off-the-shelf therapy.

In addition to the technology the Company has in-licensed, Mustang has also developed its own proprietary intellectual property, both alone and in conjunction with COH.

In particular, Mustang filed a U.S.

provisional application directed to optimized methods for manufacturing cell-based therapeutics, and Mustang and COH, as co-applicants, filed a U.S.

In addition to the technology we have in-licensed, we also developed our own proprietary intellectual property, both alone and in conjunction with COH.

In particular, we filed a U.S.

provisional application directed to optimized methods for manufacturing cell-based therapeutics, and we and COH, as co-applicants, filed a U.S.

provisional application directed to methods of treating hematological cancers.

In addition to the technology the company has in-licensed, Mustang has also developed its own proprietary intellectual property, both alone and in conjunction with COH.

In particular, Mustang owns pending applications in the U.S.

and Europe directed to methods for manufacturing cell-based therapeutics, and pending applications in the U.S., Taiwan, and PCT relating to anti-idiotype antibodies.

Mustang and COH also own as co-applicants pending application in the U.S., Taiwan, and PCT directed to methods of treating hematological cancers with a combination therapy.

In addition to the technology we have in-licensed, we have also developed our own proprietary intellectual property, both alone and in conjunction with COH.

In particular, we own pending applications in the U.S.

and Europe directed to methods for manufacturing cell-based therapeutics, and pending PCT applications, and applications in the U.S.

and Taiwan, relating to anti-idiotype antibodies.

We and COH also own, as co-applicants, pending PCT applications, and applications in the U.S.

and Taiwan, directed to methods of treating hematological cancers with a combination therapy.

Other Intellectual Property Rights

We depend upon trademarks, trade secrets, knowhow and continuing technological advances to develop and maintain our competitive position.

We depend upon trademarks, trade secrets, know-how and continuing technological advances to develop and maintain our competitive position.

To maintain the confidentiality of trade secrets and proprietary information, we require our employees, scientific advisors, consultants and collaborators, upon commencement of a relationship with us, to execute confidentiality agreements and, in the case of parties other than our research and development collaborators, to agree to assign their inventions to us.

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XSCID License

On August 2, 2018, the Company entered into an exclusive worldwide license agreement with St.

On August 2, 2018, we entered into an exclusive worldwide license agreement with St.

Jude for the development of a first-in-class ex vivo lentiviral gene therapy for the treatment of XSCID.

The Company paid $1.0 million in consideration for the exclusive license in addition to an annual maintenance fee of $0.1 million (beginning in 2019).

We paid $1.0 million in consideration for the exclusive license in addition to an annual maintenance fee of $0.1 million (beginning in 2019).

Jude is eligible to receive payments totaling $13.5 million upon the achievement of five development and commercialization milestones.

Royalty payments in the mid-single digits are due on net sales of licensed products.

Royalty payments in the mid-single digits are due on net sales of licensed products (e.g.

MB-117 and MB-217).

XSCID Non-interventional Services Agreement

In December 2019, the Company entered into a Non-Interventional Services Agreement with Children's CGMP, LLC ("Children’s"), an affiliate of St.

Jude Children's Research Hospital, pursuant to which Children’s provides lentiviral vector for non-clinical XSCID research purposes, as well as related advisory services.

Pursuant to the agreement, we agreed to fund approximately $0.8 million upon execution of the agreement.

In December 2019, we entered into a Non-Interventional Services Agreement with Children's CGMP, LLC (“Children’s”), an affiliate of St.

Jude Children's Research Hospital, pursuant to which Children’s provides lentiviral vector for non-clinical XSCID research purposes, as well as related advisory services, and we agreed to fund approximately $0.8 million upon execution.

XSCID Data Transfer Agreement

In June 2020, the Company entered into a Data Transfer Agreement for the XSCID program (the “XSCID DTA”).

In June 2020, we entered into a Data Transfer Agreement for the XSCID program (the “XSCID DTA”).

Pursuant to the terms of the XSCID DTA, we made an upfront payment of approximately $1.1 million and will reimburse St.

Jude for additional costs in connection with the on-going investigator-initiated study.

In February 2017, the Company and COH amended and restated their license agreement, dated March 17, 2015 (the “Original Agreement”), by entering into three separate amended and restated exclusive license agreements, one relating to the CD123-directed CAR T program, one relating to the IL13Rα2-directed CAR T program, and one relating to the Spacer technology (described below).

The total potential consideration payable to COH by the Company, in equity or cash, did not in the aggregate change materially from the Original Agreement.

As of December 31, 2022, COH owns 845,385 shares of Class A common stock representing approximately 0.8% of ownership, and has the right to appoint a director to the Board of Directors (the “Board”).

The Company considers COH to be a related party, due to the foregoing rights and ownership, as well as the high proportion of the Company’s assets that are licensed from COH.

In addition, the Company entered into a sponsored research agreement with COH under which the Company has funded continued research in the amount of $2.0 million per year, payable in four equal installments, which ended in the first quarter of 2020.

The research covered under this arrangement is for the IL13Rα2-directed CAR T program, the CD123-directed CAR T program, and the Spacer technology.

CD123 License

In February 2017, the Company entered into an Amended and Restated Exclusive License Agreement with COH to acquire intellectual property rights pertaining to patent rights related to the CD123-directed CAR T program (the “CD123 License”).

Pursuant to the CD123 License, the Company and COH acknowledged that an upfront fee had already been paid under the Original Agreement.

In addition, COH is eligible to receive an annual maintenance fee of $25,000 and milestone payments totaling up to approximately $14.5 million, upon and subject to the achievement of certain milestones.

Royalty payments in the mid-single digits are due on net sales of licensed products.

The Company is obligated to pay COH a percentage of certain revenues received in connection with a sublicense ranging from the mid-teens to mid-thirties, depending on the timing of the sublicense in the development of any product.

In addition, equity grants made under the Original Agreement were acknowledged, and the anti-dilution provisions of the Original Agreement were carried forward.

CD123 CRA (AML and BPDCN)

In February 2017, the Company entered into a Clinical Research Support Agreement for CD123-directed CAR T program (the “CD123 CRA”).

Pursuant to the terms of the CD123 CRA, the Company made an upfront payment of approximately $19,000 and will contribute an additional $97,000 per patient in connection with the on-going investigator-initiated study.

Further, the Company agreed to fund approximately $76,000 annually pertaining to the clinical development of the CD123-directed CAR T therapy.

City of Hope National Medical Center

In February 2017, we and COH amended and restated our license agreement, dated March 17, 2015 (the “Original COH Agreement”), by entering into three separate amended and restated exclusive license agreements, one relating to the CD123-directed CAR T program, one relating to the IL13Rα2-directed CAR T program, and one relating to the Spacer technology (described below).

As of December 31, 2023, COH owns 845,385 shares of our Class A common stock, which are convertible into 56,359 shares of Common Stock, and has the right to appoint a member to our Board of Directors (the “Board”).

In addition, we entered into a sponsored research agreement with COH under which we have funded continued research in the amount of $2.0 million per year, payable in four equal installments, which ended in the first quarter of 2020.

The research covered under this arrangement was for the IL13Rα2-directed CAR T program, the CD123-directed CAR T program, and the Spacer technology.

Following this review, we determined to discontinue development of the Discontinued Programs, which included a portion of our portfolio of CAR T therapies being developed by us in partnership with the City of Hope.

IL13Rα2 License

In February 2017, the Company entered into an Amended and Restated Exclusive License Agreement with COH to acquire intellectual property rights pertaining to patent rights related to the IL13Rα2-directed CAR T program (the “IL13Rα2 License”).

Pursuant to the IL13Rα2 License, the Company and COH acknowledged that an upfront fee had already been paid under the Original Agreement.

Royalty payments in the mid-single digits are due on net sales of licensed products.

In addition, equity grants made under the Original Agreement were acknowledged, and the anti-dilution provisions of the Original Agreement were carried forward.

In February 2017, we entered into an Amended and Restated Exclusive License Agreement with COH to acquire intellectual property rights pertaining to patent rights related to the IL13Rα2-directed CAR T program (the “IL13Rα2 License”).

Pursuant to the IL13Rα2 License, we and COH acknowledged that an upfront fee had already been paid under the Original COH Agreement.

In addition, COH is eligible to receive an annual maintenance fee, milestone payments totaling up to approximately $14.5 million, and royalties on net sales of licensed products in the mid-single digits.

We are obligated to pay COH a percentage of certain revenues received in connection with a sublicense ranging from the mid-teens to mid-thirties, depending on the timing of the sublicense in the development of any product.

IL13Rα2 CRA (Glioblastoma)

In February 2017, the Company entered into a Clinical Research Support Agreement for the IL13Rα2-directed CAR T program (the “IL13Rα2 GBM CRA”).

Pursuant to the terms of the IL13Rα2 CRA, the Company made an upfront payment of approximately $9,000 and will contribute an additional $140,000 per patient in connection with the on-going investigator-initiated study.

Further, the Company agreed to fund approximately $66,000 annually pertaining to the clinical development of the IL13Rα2-directed CAR T therapy.

In February 2017, we entered into a Clinical Research Support Agreement for the IL13Rα2-directed CAR T program (the “IL13Rα2 GBM CRA”).

Pursuant to the terms of the IL13Rα2 CRA, we made an upfront payment of approximately $9,000 and will contribute an additional $140,000 per patient in connection with the on-going investigator-initiated study.

Further, we agreed to fund approximately $66,000 annually pertaining to the clinical development of the IL13Rα2-directed CAR T therapy (also known as MB-101).

IL13Rα2 CRA (Leptomeningeal Glioblastoma)

In October 2020, the Company entered into a Clinical Research Support Agreement for the IL13Rα2-directed CAR T program for adult patients with leptomeningeal glioblastoma, ependymoma or medulloblastoma (the “IL13Rα2 Leptomeningeal CRA”).

Pursuant to the terms of the IL13Rα2 Leptomeningeal CRA, the Company made an upfront payment of approximately $29,000 and will contribute an additional

$150,000 per patient in connection with the on-going investigator-initiated study.

Further, the Company agreed to fund approximately $200,000 annually pertaining to the clinical development of the IL13Rα2-directed CAR T therapy.

In October 2020, we entered into a Clinical Research Support Agreement for the IL13Rα2-directed CAR T program for adult patients with leptomeningeal glioblastoma, ependymoma or medulloblastoma (the “IL13Rα2 Leptomeningeal CRA”).

Pursuant to the terms of the IL13Rα2 Leptomeningeal CRA, we made an upfront payment of approximately $29,000 and will contribute an additional $150,000 per patient in connection with the on-going investigator-initiated study.

Further, we agreed to fund approximately $200,000 annually pertaining to the clinical development of the IL13Rα2-directed CAR T therapy.

Sponsored Research Agreement - IL13Rα2 and C134 Combination

In October 2020, the Company entered into a Sponsored Research Agreement (“SRA”) with COH to conduct combination studies of a potential IL13Rα2 CAR and C134 oncolytic virus therapy.

Pursuant to the SRA, the Company funded research in the amount of $0.3 million for the program.

In November 2022, the SRA was amended to include additional funding of $0.6 million.

In October 2020, we entered into a Sponsored Research Agreement (“SRA”) with COH to conduct combination studies of a potential IL13Rα2 CAR and C134 oncolytic virus therapy (also known as MB-108).

In November 2022, the SRA was amended to include additional funding.

Pursuant to the amended SRA, we funded research in total of $0.9 million for the program.

Spacer License

Pursuant to the Spacer License, the Company and COH acknowledged that an upfront fee had already been paid under the Original Agreement.

In addition, COH will receive an annual maintenance fee of $10,000.

No royalties are due if the Spacer technology is used in conjunction with a CD123 CAR or an IL13Rα2 CAR, and royalty payments in the low single digits are due on net sales of licensed products if the Spacer technology is used in conjunction with other intellectual property.

The Company is obligated to pay COH a percentage of certain revenues received in connection with a sublicense in the mid-thirties, but no such payments are due in connection with sublicenses that are granted in conjunction with the sublicense of other CARs that are licensed from COH to the Company.

In addition, equity grants made under the Original Agreement were acknowledged, and the anti-dilution provisions of the Original Agreement were carried forward.

In February 2017, we entered into an Amended and Restated Exclusive License Agreement with COH to acquire intellectual property rights pertaining to patent rights related to Spacer (the “Spacer License”).

Pursuant to the Spacer License, COH will receive an annual maintenance fee of $10,000.

No royalties are due if the Spacer technology is used in conjunction with an IL13Rα2 CAR, and royalty payments in the low single digits are due on net sales of licensed products if the Spacer technology is used in conjunction with other intellectual property.

We are obligated to pay COH a percentage of certain revenues received in connection with a sublicense in the mid-thirties.

IV/ICV License

In February 2017, the Company entered into an exclusive license agreement (the “IV/ICV License”) with COH to acquire intellectual property rights in patent applications related to the intraventricular and intracerebroventricular methods of delivering T cells that express CARs.

Pursuant to the IV/ICV License, in March 2017, the Company paid COH an upfront fee of $0.1 million.

In February 2017, we entered into an exclusive license agreement (the “IV/ICV License”) with COH to acquire intellectual property rights in patent applications related to the intraventricular and intracerebroventricular methods of delivering T cells that express CARs.

Pursuant to the IV/ICV License, in March 2017, we paid COH an upfront fee of $0.1 million.

COH is eligible to receive a milestone payment totaling approximately $0.1 million, upon and subject to the achievement of a milestone, and an annual maintenance fee.

Royalty payments in the low single digits are due on net sales of licensed products.

HER2 Technology License

On May 31, 2017, the Company entered into an exclusive license agreement (the “HER2 Agreement”) with COH for the use of HER2 CAR T technology (“HER2 Technology”), which is currently being applied in the treatment of glioblastoma multiforme and in the treatment of HER2+ cancers – in particular breast cancer – that have metastasized to the brain.

Pursuant to the HER2 Agreement, the Company paid an upfront fee of $0.6 million and owes an annual maintenance fee of $50,000 (which began in 2019).

In addition, COH is eligible to receive milestone payments totaling up to $14.9 million, upon and subject to the achievement of certain milestones.

Royalty payments in the mid-single digits are due on net sales of licensed products.

HER2 CRA (HER2+ glioblastoma and HER2+ brain metastases)

In September 2020, the Company entered into a Clinical Research Support Agreement for the HER2-directed CAR T program (the “HER2 CRA”).

Pursuant to the terms of the HER2 CRA, the Company made an upfront payment of approximately $29,000 and will contribute an additional $150,000 per patient in connection with the on-going investigator-initiated study.

Further, the Company agreed to fund approximately $200,000 annually pertaining to the clinical development of the HER2-directed CAR T therapy.

CS1 Technology License

On May 31, 2017, the Company entered into an exclusive license agreement (the “CS1 Agreement”) with COH for the use of CS1-specific CAR T technology (“CS1 Technology”), which is currently being applied in the treatment of multiple myeloma.

Pursuant to the CS1 Agreement, the Company paid an upfront fee of $0.6 million and owes an annual maintenance fee of $50,000 (which began in 2019).

In addition, COH is eligible to receive milestone payments totaling up to $14.9 million, upon and subject to the achievement of certain milestones.

Royalty payments in the mid-single digits are due on net sales of licensed products.

The Company is obligated to pay COH

a percentage of certain revenues received in connection with a sublicense ranging from the mid-teens to mid-thirties, depending on the timing of the sublicense in the development of any product.

CS1 CRA (multiple myeloma)

In June 2020, the Company entered into a Clinical Research Support Agreement for the CS1-directed CAR T program (the “CS1 CRA”).

Pursuant to the terms of the CS1 CRA, the Company made an upfront payment of approximately $32,000 and will contribute an additional $130,000 per patient in connection with the on-going investigator-initiated study.

Further, the Company agreed to fund approximately $200,000 annually pertaining to the clinical development of the CS1-directed CAR T therapy.

PSCA Technology License

On May 31, 2017, the Company entered into an exclusive license agreement (the “PSCA Agreement”) with COH for the use of PSCA CAR T technology (“PSCA Technology”), which is currently being applied in the treatment of PSCA+ metastatic castration-resistant prostate cancer.

Pursuant to the PSCA Agreement, the Company paid an upfront fee of $0.3 million and owes an annual maintenance fee of $50,000 (which began in 2019).

In addition, COH is eligible to receive milestone payments totaling up to $14.9 million, upon and subject to the achievement of certain milestones.

Royalty payments in the mid-single digits are due on net sales of licensed products.

In October 2020, the Company entered into a Clinical Research Support Agreement for the PSCA-directed CAR T program (the “PSCA CRA”).

Pursuant to the terms of the PSCA CRA, the Company made an upfront payment of $33,000 and will contribute an additional $125,000 per patient in connection with the on-going investigator-initiated study.

Further, the Company agreed to fund approximately $200,000 annually pertaining to the clinical development of the PSCA-directed CAR T therapy.

We are obligated to pay COH a percentage of certain revenues received in connection with a sublicense in the mid-thirties.

Manufacturing License

On January 3, 2018, the Company entered into a non-exclusive license agreement with COH to acquire patent and licensed know-how rights related to developing, manufacturing, and commercializing licensed products.

The Company paid $75,000 in consideration for the licenses to the patent rights and the licensed know-how in addition to an annual maintenance fee.

On January 3, 2018, we entered into a non-exclusive license agreement with COH to acquire patent and licensed know-how rights related to developing, manufacturing, and commercializing licensed products.

We paid $75,000 in consideration for the licenses to the patent rights and the licensed know-how in addition to an annual maintenance fee.

Royalty payments in the low-single digits are due on net sales of licensed products.

Sponsored Research Agreement - Manufacturing

On January 3, 2018, the Company entered into an SRA with COH to optimize and develop CAR T cell processing procedures.

Pursuant to the SRA, the Company funded continued research in the amount of $0.9 million for the program, with an initial term of two (2) years.

The SRA expired in January 2020.

University of California License

On March 17, 2017, the Company entered into an exclusive license agreement with the Regents of UCLA (the “UCLA License”) to acquire intellectual property rights in patent applications related to the engineered anti-prostate stem cell antigen antibodies for cancer targeting and detection.

Pursuant to the UCLA License, the Company paid UCLA the upfront fee of $0.2 million and owes an annual maintenance fee of $15,000 for the first two years, $25,000 for years three and four, and $50,000 per year thereafter.

In addition, UCLA is eligible to receive milestone payments totaling up to $14.3 million, upon and subject to the achievement of certain milestones.

Royalty payments in the mid-single digits are due on net sales of licensed products.

On March 17, 2017, we entered into an exclusive license agreement with the Regents of UCLA (the “UCLA License”) to acquire intellectual property rights in patent applications related to the engineered anti-prostate stem cell antigen antibodies for cancer targeting and detection.

Pursuant to the UCLA License, we paid UCLA an upfront fee of $0.2 million and owed annual maintenance fees.

In addition, UCLA was eligible to receive milestone payments totaling up to $14.3 million, and royalty payments in the mid-single digits are due on net sales of licensed products.

On July 10, 2023, we notified UCLA that we were terminating the UCLA license, which took effect on August 9, 2023.

Fred Hutchinson Cancer Center

CD20 Technology License

Effective July 3, 2017, Mustang entered into an exclusive, worldwide licensing agreement with Fred Hutch for the use of a CAR T therapy related to autologous T cells engineered to express a CD20-specific CAR (the “CD20 Technology License”).

Pursuant to the CD20 Technology License, the Company paid Fred Hutch an upfront fee of $0.3 million and owes an annual maintenance fee of $50,000 on each

anniversary of the license until the achievement by the Company of regulatory approval of a licensed product using the CD20 Technology.

Additional payments are due for the achievement of eleven development milestones totaling $39.1 million.

Effective July 3, 2017, we entered into an exclusive, worldwide licensing agreement with Fred Hutch for the use of a CAR T therapy related to autologous T cells engineered to express a CD20-specific CAR (the “CD20 Technology License”).

Pursuant to the CD20 Technology License, we paid Fred Hutch an upfront fee of $0.3 million and owes an annual maintenance fee of $50,000 on each anniversary of the license until our achievement of regulatory approval of a licensed product using the CD20 Technology.

Additional payments are due for the achievement of development milestones totaling $39.1 million.

Royalty payments in the mid-single digits are due on net sales of licensed products.

CD20 CTA (NHL and CLL)

Also, on July 3, 2017, in conjunction with the CD20 Technology License from Fred Hutch, Mustang entered into an investigator-initiated clinical trial agreement (the “CD20 CTA”) to provide partial funding for a Phase 1/2 clinical trial at Fred Hutch evaluating the safety and efficacy of the CD20 Technology in patients with relapsed or refractory B-cell non-Hodgkin lymphomas (“NHLs”).

In connection with the CD20 CTA, the Company agreed to fund up to $5.3 million of costs associated with the clinical trial, which commenced during the fourth quarter of 2017.

In November 2020, the CD20 CTA was amended to include additional funding of approximately $1.8 million for the treatment of five patients with chronic lymphocytic leukemia (“CLL”) and other research costs.

In January 2022, the CTA was amended to increase funding by approximately $2.2 million for the treatment of additional patients.

Sponsored Research Agreement

In connection with the RAG1-SCID license, the Company entered into an SRA with LUMC under which the Company will fund research in the amount of 2.3 million euros over a period of five years.

The research performed pursuant to this agreement will support the technology the Company has licensed from LUMC.

In connection with the RAG1-SCID license, we entered into an SRA with LUMC under which we fund research supporting the program in the amount of 2.3 million euros over a period of five years.

Competition in the pharmaceutical and biotechnology industries is intense.

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The field of CAR T therapy is extremely active.

Companies and partnerships currently engaged in clinical trials with CAR T modalities include Bristol Myers Squibb, Novartis Pharmaceuticals/University of Pennsylvania, 2seventy bio, Allogene Therapeutics, Cellectis, Gilead Sciences, Bellicum Pharmaceuticals, MD Anderson/Ziopharm Oncology, Atara Biotherapeutics, Celyad, Autolus Therapeutics, Precigen Inc., Precision BioSciences, Adicet Bio, Cargo Therapeutics, and ImmPACT Bio.

Companies and partnerships currently engaged in clinical trials with CAR T modalities include Bristol Myers Squibb, Novartis, AstraZeneca, Janssen Pharmaceutical Company, Gilead Sciences, Galapagos NV, Autolus Therapeutics, 2seventy bio, Kyverna Therapeutics, CARGO Therapeutics, ImmPACT Bio, and Cabaletta Bio.

The gene therapy field is characterized by rapidly changing technologies, significant competition and a strong emphasis on intellectual property.

We are aware of companies currently engaged in developing gene therapies in various indications, including Abeona Therapeutics, Adverum Biotechnologies, Astellas, AVROBIO, Axovant Sciences, Biogen, bluebird bio, BioMarin Pharmaceutical, Homology Medicines, Krystal Biotech, MeiraGTx, Novartis Pharmaceuticals, Orchard Therapeutics, Passage Bio, Prevail Therapeutics, REGENXBIO, Rocket Pharmaceuticals, Roche, Sangamo Therapeutics, Sarepta Therapeutics, Solid Biosciences, Ultragenyx Pharmaceuticals, uniQure and Voyager Therapeutics, as well as several companies addressing other methods for delivering or modifying genes and regulating gene expression.

As of December 31, 2022, we had 113 full and part-time employees.

None of our employees are represented by a labor union or covered under a collective bargaining agreement and we consider our employee relations to be good.

Employees of Fortress also make valuable financial, legal, scientific and other strategic contributions to Mustang on a regular basis.

We are aware of companies currently engaged in developing gene therapies in various indications, including Abeona Therapeutics, Adverum Biotechnologies, Astellas, AVROBIO, Sio Gene, Biogen, bluebird bio, BioMarin Pharmaceutical, Krystal Biotech, MeiraGTx, Novartis Pharmaceuticals, Orchard Therapeutics, Passage Bio, Prevail Therapeutics, REGENXBIO, Rocket Pharmaceuticals, Roche, Sangamo Therapeutics, Sarepta Therapeutics, Solid Biosciences, Ultragenyx Pharmaceuticals, uniQure and Voyager Therapeutics, as well as several companies addressing other methods for delivering or modifying genes and regulating gene expression.

As of December 31, 2023, we had 80 full-time employees.

None of our employees is represented by a labor union or covered under a collective bargaining agreement, and we consider our employee relations to be good.

Employees of Fortress also make valuable financial, legal, scientific and other strategic contributions to our Company on a regular basis.

SUPPLY AND MANUFACTURING

As an early stage development company, we rely on our research partners to manufacture or have manufactured all lentiviral vectors used in the clinical development programs currently in progress at COH, Fred Hutch, St.

As an early-stage development company, we rely on our research partners to manufacture or have manufactured all LV vectors used in the clinical development programs currently in progress at COH, Fred Hutch, St.

Jude, the NIH, and LUMC under the IND applications filed by these institutions.

In addition we rely on the NIH to produce oncolytic virus for UAB, the clinical trial site for the Phase 1 trial of Nationwide’s C134 oncolytic virus (MB-108).

We will continue to rely on our research partners to manufacture lentiviral vectors and oncolytic virus for Mustang-IND trials until such time as material is available from our contract manufacturing organizations.

In addition, we rely on the NIH to produce oncolytic virus for UAB, the clinical trial site for the Phase 1 trial of Nationwide’s herpes simplex virus type 1 oncolytic virus (MB-108).

We will continue to rely on our research partners to manufacture lentiviral vectors and oncolytic virus for our IND trials until such time as material is available from our contract manufacturing organizations.

Pursuant to the March 2015 Licensing Agreement with COH, we have the right to make and have made the cellular products, and we have negotiated Investigator-Initiated Clinical Research Support Agreements with COH and Fred Hutch which specify the cell processing costs and numbers of patients which will be supplied under filed protocols.

Our research partners have extensive experience manufacturing clinical materials for development studies, but we are currently dependent on both their capacity limitations and continued operating success to manufacture viral vector and to process cells for all CAR T clinical trials for which these partners hold the INDs, as well as to have manufactured oncolytic virus for the MB-108 investigator-IND clinical trial being conducted at UAB.

Our research partners have extensive experience manufacturing clinical materials for development studies, but we are currently dependent on both their capacity limitations and continued operating success to manufacture LV vector and to process cells for all CAR T clinical trials for which these partners hold the INDs, as well as to have manufactured oncolytic virus for the MB-108 investigator-IND clinical trial being conducted at UAB.

We have limited experience in processing cells for clinical or commercial purposes.

In 2018, we opened our own cell processing facility in Worcester, Massachusetts, in order to manufacture and supply cellular product candidates for all clinical trials that will be conducted under IND applications to be filed by us.

In August 2019, the FDA approved our IND application to initiate a multi-center Phase 1/2 clinical trial of MB-102 (CD123 CAR T) and in January 2021, the FDA approved our IND application to initiate a multi-center Phase 2 clinical trial of MB-107 (XSCID).

In May 2021, the FDA approved our IND application to initiate a multi-center Phase 1/2 clinical trial of MB-106 (CD-

In May 2023, we entered into an Asset Purchase Agreement with uBriGene (Boston) Biosciences, Inc., pursuant to which we agreed to sell our leasehold interests in our cell processing facility and associated assets relating to the manufacturing and production of cell and gene therapies.

On July 28, 2023, we completed the sale of all of our assets relating to our operations primarily relating to the manufacturing and production of cell and gene therapies.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments.”

In May 2021, the FDA accepted our IND to initiate a multi-center Phase 1/2 clinical trial of MB-106 (CD20) under our IND.

In October 2023, the FDA accepted our IND application to initiate a Phase 1 clinical trial of MB-109.

As with any supply program, obtaining raw materials of the correct quality cannot be guaranteed, and we cannot ensure that we will be successful in this endeavor.

We expect to rely on contract manufacturing relationships for lentiviral vectors and for the MB-108 oncolytic virus, as well as for any non-CAR T products that we may in-license or acquire in the future for co-administration with our CAR T products.

We expect to rely on contract manufacturing relationships for LV vectors and for the MB-108 oncolytic virus, as well as for any non-CAR T products that we may in-license or acquire in the future for co-administration with our CAR T products.

However, there can be no assurance that we will be able to successfully contract with such manufacturers on terms acceptable to us, or at all.

Contract manufacturers for these current and potential future non-CAR T products would be subject to ongoing periodic and unannounced inspections by the FDA, the U.S.

Drug Enforcement Administration (“DEA”) and corresponding state agencies to ensure strict compliance with the Current Good Manufacturing Practice regulations (“cGMP”) and other state and federal regulations.

Contract manufacturers for these current and potential future non-CAR T products would be subject to ongoing periodic and unannounced inspections by the FDA, and corresponding state agencies, to ensure strict compliance with the Current Good Manufacturing Practice regulations (“cGMP”) and other state and federal regulations.

Our contractors, if any, in Europe would face similar challenges from the numerous EU and member state regulatory agencies and authorized bodies.

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GOVERNMENT AND INDUSTRY REGULATIONS

Numerous governmental authorities, principally the FDA and corresponding state and foreign regulatory agencies, impose substantial regulations upon the clinical development, manufacture and marketing of our product candidates, as well as our ongoing research and development activities.

Numerous governmental authorities, principally the FDA and corresponding state and foreign regulatory agencies, impose substantial regulations upon the clinical development, manufacture and, if approved, marketing of our product candidates, as well as our ongoing research and development activities.

None of our product candidates has been approved for sale in any market.

Before marketing in the U.S., any drug that we develop must undergo rigorous pre-clinical testing and clinical trials and an extensive regulatory approval process implemented by the FDA under the FDCA.

Before marketing in the U.S.,

any drug that we develop must undergo rigorous pre-clinical testing and clinical trials and an extensive regulatory approval process implemented by the FDA under the FDCA.

The FDA regulates, among other things, the pre-clinical and clinical testing, safety, efficacy, approval, manufacturing, record keeping, adverse event reporting, packaging, labeling, storage, advertising, promotion, export, and the sale and distribution of biopharmaceutical products.

Drug Development

The regulatory review and approval process is lengthy, expensive and uncertain.

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Our submission of an IND may not result in FDA authorization to commence a clinical trial.

The FDA may permit expedited development, evaluation, and marketing of new therapies intended to treat persons with serious or life-threatening conditions for which there is an unmet medical need under its fast track drug development program.

A sponsor can apply for fast track designation initially at the time of submission of an IND, or at any time prior to receiving a marketing approval of the new drug application (“NDA”) or biologics license application (“BLA”).

To receive fast track designation, an applicant must demonstrate:

● that the therapy is intended to treat a serious or life-threatening condition;

● that the therapy is intended to treat a serious aspect of the condition;

● that the therapy has the potential to address unmet medical needs, and this potential is being evaluated in the planned drug development program.

The FDA must respond to a request for fast track designation within 60 calendar days of receipt of the request.

Over the course of development, a product in a fast track development program must continue to meet the criteria for fast track designation.

Sponsors of products in fast track drug development programs must be in regular contact with the reviewing division of the FDA to ensure that the evidence necessary to support marketing approval will be developed and presented in a format conducive to an efficient review.

Sponsors of products in fast track drug development programs ordinarily are eligible for priority review of a completed application in six months or less and also may be permitted to submit portions of an NDA or BLA to the FDA for review on a rolling basis before the complete application is submitted.

In accordance with the FDCA, sponsors of drugs for serious or life-threatening diseases that fill an unmet medical need may seek approval under the FDA’s accelerated approval regulations.

Under this authority, the FDA may grant marketing approval for a new drug product on the basis of adequate and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely, based on epidemiologic, therapeutic, pathophysiologic, or other evidence, to predict clinical benefit or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity.

Approval will be subject to the requirement that the applicant study the drug further to verify and describe its clinical benefit where there is uncertainty as to the relation of the surrogate endpoint to clinical benefit or uncertainty as to the relation of the observed clinical benefit to ultimate outcome.

Post-marketing studies are usually underway at the time an applicant files the NDA or BLA.

When required to be conducted, such post-marketing studies must also be adequate and well-controlled.

The applicant must carry out any such post-marketing studies with due diligence.

Many companies who have been granted the right to utilize an accelerated approval approach have failed to obtain approval.

Moreover, negative or inconclusive results from the clinical trials we hope to conduct or adverse medical events could cause us to have to repeat or terminate the clinical trials.

Accordingly, we may not be able to complete the clinical trials within an acceptable time frame, if at all, and, therefore, could not submit the NDA or BLA to the FDA or foreign regulatory authorities for marketing approval.

Clinical testing must meet requirements for institutional review board oversight, informed consent and good clinical practices, and must be conducted pursuant to an IND, unless exempted

For purposes of NDA or BLA approval, clinical trials are typically conducted in the following sequential phases:

FDA Expedited Review and Approval Programs

FDA has various programs, including fast track designation, regenerative medicine advanced therapy (RMAT) designation, breakthrough therapy designation (BTD), accelerated approval, and priority review that are intended to expedite the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address existing unmet medical needs.

The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review procedures.

To be eligible for fast track designation, the FDA must determine, based on the request of a sponsor, that a drug is intended to treat a serious or life-threatening disease or condition and based on preclinical or preliminary clinical data that demonstrates the potential to address an unmet medical need in the intended patient population.

The FDA will determine that a product will fulfill an unmet medical need if it will provide a therapy where either none exists or provide a therapy that may be potentially superior to an existing therapy based on efficacy or safety factors.

A drug is eligible for RMAT designation if it is a regenerative medicine therapy which is defined as either a cell therapy, therapeutic tissue engineered product, human cell and tissue product, or a combination therapy using any such therapies or products , it is intended to treat, modify, reverse, or cure a serious condition;

and preliminary clinical evidence indicates that the regenerative medicine therapy has the potential to address the unmet medical needs for such conditions.

Advantages of RMAT designation include all the benefits of the fast track designation, including early interactions with FDA.

The FDA must respond to a request for RMAT designation within 60 calendar days of receipt of the request.

As with other expedited development programs, if RMAT designation has been granted but, later in development, the product no longer meets the qualifying criteria, then CBER may rescind the RMAT designation.

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

The FDA may give a priority review designation within 60 days of submission of a BLA or NDA to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists.

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

Products that are eligible for fast track, RMAT or breakthrough therapy designation may be eligible to receive a priority review if the criteria for priority review are met at the time of the BLA or NDA submission.

In addition, studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval.

Approval is determined on the basis of adequate and well-controlled clinical trials that establishing that the drug 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 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 under the Food and Drug Omnibus Reform Act of 2022 (FDORA), the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.

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

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.

Even if a product candidate qualifies for one or more of these programs, the FDA may later decide that the product candidate 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.

Clinical Trials

To support a new drug application (“NDA”) or biologics license application (“BLA”) approval, clinical trials are typically conducted in the following sequential phases:

The drug is administered to a small group of humans, either healthy volunteers or patients, for the first time to test for safety, dosage tolerance, absorption, metabolism, excretion and clinical pharmacology.

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● ineffectiveness of the product candidates.

In addition, the FDA, equivalent foreign regulatory authority, or a data safety monitoring committee for a clinical trial may place a clinical trial on hold or terminate it if it concludes that subjects are being exposed to an unacceptable health risk, or for futility.

In addition, the FDA, or equivalent foreign regulatory authority, or a data safety monitoring committee for a clinical trial may place a clinical trial on hold or terminate it if it concludes that subjects are being exposed to an unacceptable health risk, or for futility.

Any drug is likely to produce some toxicity or undesirable side effects in animals and in humans when administered at sufficiently high doses and/or for a sufficiently long period of time.

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Once approved, the SPA may only be changed through a written agreement between the sponsor and the FDA, or in rare cases if the FDA becomes aware of a substantial scientific issue essential to product safety or efficacy the SPA can be rescinded.

The FDA has established the Office of Tissues and Advanced Therapies, formerly called the Office of Therapeutic Proteins, which is a super office within the Center for Biologics Evaluation and Research, or CBER, to consolidate the review of cell and gene therapies and related products.

and has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER in its review, if requested by FDA.

The FDA is not bound by the recommendations of an Advisory Committee, but it considers them carefully when making decisions.

There are a number of additional requirements that apply exclusively to clinical trials involving this class of products.

The FDA has issued various guidance documents regarding gene therapies, which outline additional factors that the FDA will consider at each of the above stages of development.

These guidelines relate to, among other things:

preclinical evaluation of gene therapies, design of clinical studies, and the chemistry, manufacturing and control information that should be included in an initial IND application and throughout clinical development to support a NDA or BLA application.

Measures to observe for delayed adverse effects in subjects who have been exposed to investigational gene therapies are required.

Per the guidelines, FDA requires that sponsors observe subjects for potential gene therapy-related delayed adverse events which can be, dependent upon various factors, up to a period of 15 years post treatment.

FDA Review and Approval

Before receiving FDA approval to market a product, we must demonstrate that the product is safe and effective for its intended use by submitting to the FDA an NDA or BLA containing the preclinical and clinical data that have been accumulated, together with chemistry and manufacturing and controls specifications and information, and proposed labeling, among other things.

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Although uncommon, the FDA may request a Risk Evaluation and Mitigation Strategy, or REMS, as part of an NDA or BLA approval for products with serious safety concerns to help ensure that the benefits of the product outweigh the risks.

The REMS plan contains post-marketing obligations of the sponsor to train prescribing physicians, monitor off-label drug use, and perhaps the conduct of Phase 4 follow-up studies and registries to ensure the continued safe use of the drug.

The REMS plan may contain post-marketing obligations of the sponsor to train prescribing physicians, monitor off-label drug use, and perhaps the conduct of Phase 4 follow-up studies and/or patient registries to ensure the continued safe use of the drug.

As part of the approval process, the FDA must inspect and approve each manufacturing facility.

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In addition, federal, state and foreign laws and regulations regarding the manufacture and sale of new drugs are subject to future changes.

Post-Marketing Requirements

Following approval, we and the new product are subject to continuing regulation by the FDA, which include monitoring and recordkeeping activities, reporting of adverse experiences and complying with promotion and advertising requirements, which include prohibitions on the promotion of the drugs for unapproved, or “off-label” uses.

Although physicians may prescribe legally available drugs for off-label treatments, manufacturers may not promote such non-FDA approved uses.

Prescription drug promotional materials must be submitted to the FDA in conjunction with their first use and an on-going basis.

Further, if there are any modifications to the drug, including changes to indications, labeling, or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a supplemental NDA/BLA or new NDA/BLA, which may require the applicant to develop additional data or conduct additional preclinical studies or clinical trials.

The FDA regulations require that products be manufactured in specific approved facilities and in accordance with current Good Manufacturing Practices (“CGMPs”).

These regulations 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 CGMPs.

Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies, and are subject to periodic, inspections by the FDA and certain state agencies for compliance with CGMPs and other laws.

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

The discovery of violative conditions, including failure to conform to CGMPs, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions on a product, manufacturer or holder of an approved NDA/BLA, including voluntary recalls and product seizures.

Discovery of previously unknown problems with a product or the failure to comply with applicable FDA requirements can have negative consequences, including adverse publicity, judicial or administrative enforcement, untitled or warning letters from the FDA, mandated corrections to advertising or communications to doctors and civil or criminal penalties, among others.

Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications, and also may require the implementation of other risk management measures.

New government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our product candidates under development.

Pediatric Information

Under the Pediatric Research Equity Act (“PREA”), an NDA or BLA or supplement to an NDA or BLA may need to 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 in which the product is safe and effective.

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

Non-oncology drugs are exempt from PREA if they were granted an orphan drug designation.

The Food and Drug Administration Safety and Innovation Act (“FDASIA”), requires that a sponsor who is planning to submit an NDA or BLA , or a supplement to an approved NDA or BLA, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan (“iPSP”), 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 trial.

In the event a Phase 3 study is not planned the iPSP must be submitted no later than 210 calendar days before the planed NDA of BLA submission, Oncology products intended to treat adult cancers is also required to submit an iPSP including those products which were granted an orphan drug designation.

The initial PSP must include an outline of the pediatric trial(s) 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 information and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric trials.

The FDA and the sponsor must reach an agreement on the PSP, but the 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 other clinical development programs.

A sponsor should not submit an NDA or BLA until the FDA confirms agreement on the iPSP.

In the EU, a pediatric investigation plan (PIP) is a development plan aimed at ensuring that the necessary data are obtained through studies in children, to support the authorization of a medicine for children.

All applications for marketing authorization for new medicines have to include the results of studies as described in an agreed upon PIP, unless there is a deferral or waiver.

Orphan Drug Designation and Exclusivity

The FDA may grant orphan drug designation (“ODD”) to drugs intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the U.S., or if it affects more than 200,000 individuals in the U.S., there is no reasonable expectation that the cost of developing and marketing the drug for this type of disease or condition will be recovered from sales in the U.S.

In the EU, the European Commission, after receiving the opinion of the EMA’s Committee for Orphan Medicinal Products (“COMP”), grants orphan medicinal product designation in respect of products that are intended for the diagnosis, prevention or treatment of a life threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the EU.

In addition, designation may be granted for products intended for the diagnosis, prevention or treatment of a life threatening, seriously debilitating or serious and chronic condition when, without incentives, it is unlikely that sales of the drug in the EU would be sufficient to justify the necessary investment in developing the drug or biological product.

In each case, there must be no satisfactory method of diagnosis, prevention or treatment of the applicable condition authorized for marketing in the EU, or, if such a method exists, the sponsor must establish that its product would be of significant benefit to those affected by the condition.

In the U.S., orphan drug status, which is granted following the approval of the NDA or BLA, entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

In addition, if a product receives the first FDA approval for the indication for which it has orphan designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority over the product with orphan exclusivity.

In the EU, orphan medicinal product designation also entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity is granted following drug or biological product approval.

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

Orphan drug designation must be requested before submitting an application (NDA/BLA) for marketing approval.

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

Other Healthcare Laws and Compliance Requirements

In the U.S., our activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration), other divisions of the United States Department of Health and Human Services (e.g., the Office of Inspector General), the United States Department of Justice and individual United States Attorney offices within the Department of Justice, and state and local governments.

Manufacturing, sales, promotion and other activities following product candidate approval are also subject to regulation by numerous regulatory authorities in addition to the FDA, including the Centers for Medicare & Medicaid Services, other divisions of the Department of Health and Human Services, the U.S.

Department of Justice, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments.

We will also be subject to various federal and state laws targeting fraud and abuse in the healthcare industry.

These laws may impact, among other things, our proposed sales, marketing and educational programs.

In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business.

The laws that may affect our ability to operate include:

The federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either (1) the referral of an individual to a person for furnishing any item or service for which payment is available under a federal health care program, or (2) the purchase, lease, order or recommendation thereof of any good, facility, service or item for which payment is available under a federal health care program;

The False Claims Act and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment from the federal government or making or using, or causing to be made or used, a false record or statement material to a false or fraudulent claim;

The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program, obtaining money or property of the health care benefit program through false representations or knowingly and willingly falsifying, concealing or covering up a material fact, making false statements or using or making any false or fraudulent document in connection with the delivery of, or payment for, health care benefits or services;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;

The provision under the Affordable Care Act (“ACA”) commonly referred to as the Sunshine Act, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies to track and annually report to CMS payments and other transfers of value provided to physicians and teaching hospitals and certain ownership and investment interests held by physicians or their immediate family members in applicable manufacturers and group purchasing organizations;

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

The Foreign Corrupt Practices Act (“FCPA”) generally prohibits offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a non-U.S.

government official in order to influence official action, or otherwise obtain or retain business.

The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls.

Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities;

therefore, our dealings with these prescribers and purchasers are subject to regulation under the FCPA;

State law equivalents of each of the above federal laws, such as the Anti-Kickback Statute and False Claims Act, and state laws concerning security and privacy of health care information, which may differ in substance and application from state-to-state thereby complicating compliance efforts.

Pharmaceutical Coverage, Pricing and Reimbursement

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Third-party payors are increasingly examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy, and, accordingly, significant uncertainty exists as to the reimbursement status of newly approved therapeutics.

Adequate third-party reimbursement may not be available for our products to

enable us to realize an appropriate return on our investment in research and product development.

Adequate third-party reimbursement may not be available for any product for which we obtain regulatory approval to enable us to realize an appropriate return on our investment in research and product development.

We are unable to predict the future course of federal or state health care legislation and regulations, including regulations that will be issued to implement provisions of the health care reform legislation enacted in 2010, known as the Affordable Care Act.

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What changed 10-K

Item 1. Business