Item 1. Business
ITEM 1. BUSINESS
Overview
We are a clinical-stage immuno-oncology company specializing in the development and commercialization of novel T cell-based immunotherapies and innovative peptide-based vaccines for the treatment of hematological malignancies and solid tumor indications. We developed our lead product candidates from our MultiTAA-specific T cell technology, which is based on the selective expansion of non-engineered, tumor-specific T cells that recognize tumor associated antigens, or TAAs, which are tumor targets, and then kill tumor cells expressing those targets. These T cells are designed to recognize multiple tumor targets to produce broad spectrum anti-tumor activity. We are advancing two pipelines of product candidates as part of our MultiTAA-specific T cell program: the autologous T cells for the treatment of lymphoma, multiple myeloma, or MM, and selected solid tumors and the allogeneic T cells for the treatment of acute myeloid leukemia, or AML, and acute lymphoblastic leukemia, or ALL. Because we do not genetically engineer the MultiTAA-specific T cell therapies, we believe that our product candidates are easier and less expensive to manufacture, have lower toxicities than current engineered chimeric antigen receptor, or CAR-T, and T cell receptor-based therapies and may provide patients with meaningful clinical benefit. We are also developing innovative peptide-based immunotherapeutic vaccines for the treatment of metastatic solid tumors.
We are pursuing post-transplant AML as the lead indication for our first company-sponsored MultiTAA-specific T cell program. In April 2020, the FDA granted orphan drug designation to MT-401 for the treatment of AML after receiving an allogeneic stem cell transplant. The MultiTAA-specific T cell therapy has been well tolerated in an ongoing Phase 1 clinical trial in AML and myelodysplastic syndrome, or MDS, conducted by our strategic partner Baylor College of Medicine, or BCM. As reported in a recent publication by Lulla et al., 11 of the 17 patients in the adjuvant disease setting dosed with the MultiTAA-specific T cell therapy after receiving an allogeneic hematopoietic stem cell transplant, or HSCT, never relapsed [median leukemia-free survival, or LFS, not reached at a median follow-up of 1.9 years], with 11 of 15 patients remaining alive (estimated two-year overall survival of 77%) at a median follow-up of 1.9 years post-infusion which compares favorably with HSCT outcomes for risk-matched AML/MDS patients post-HSCT [median LFS of nine to 15 months and two-year survival probability of 42%]. Additionally, eight patients were treated for active disease that was resistant to salvage therapy post-HSCT with a median of five prior lines of therapy (range: four to 10). One of the eight patients crossed over from the adjuvant group while two patients enrolled twice, but all three patients had active AML that failed another line of salvage therapy after their first MultiTAA-specific T cell infusion. Two of the eight patients achieved objective responses with one complete response and one partial response, with six patients continuing with stable disease.
We submitted an investigational new drug, or IND, application to the United States Food and Drug Administration, or the FDA, to initiate a Phase 2 clinical trial of MultiTAA-specific T cell therapy, which we refer to as MT-401 (zedenoleucel), in post-allogeneic HSCT patients with AML in both the adjuvant and active disease setting. The dose administered in this multicenter trial is the approximate flat dose equivalent of the current maximum tolerated dose from the ongoing Phase 1 trial. In the adjuvant setting, patients will be randomized to either MultiTAA-specific T cell therapy at approximately 90 days post-transplant versus standard of care observation, while the active disease patients will receive MT-401 following relapse post-transplant as part of a single-arm group. We expect to complete the safety lead-in portion of the trial in the first half of 2021. We anticipate that we will initiate the remainder of the Phase 2 trial in the third quarter of 2021 and complete enrollment of 20 patients in that phase of the trial in the fourth quarter of 2021 in order to report results from the active disease arm of the trial in the first quarter of 2022. We expect to begin manufacturing MT-401 for the Phase 2 trial at our cGMP manufacturing facility in the third quarter of 2021.
We reported interim data for an ongoing Phase 1/2 clinical trial of the MultiTAA-specific T cell therapy for the treatment of pancreatic adenocarcinoma being conducted by BCM. In this trial, we have observed a clinical benefit correlated with the post-infusion detection of tumor-reactive T cells in patient peripheral blood and within tumor biopsy samples in patients in the tumor-resection arm of the trial. These T cells exhibited activity against both targeted antigens and non-targeted TAAs, indicating induction of antigen spreading. To date, we have not observed any cytokine release syndrome or neurotoxicity in this trial.
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We are also evaluating the MultiTAA-specific T cell therapies in a Phase 2 clinical trial for the treatment of breast cancer and in Phase 1 clinical trials for the treatment of ALL, lymphoma, MM and sarcoma, all of which are being conducted by BCM. As of December 2020, the MultiTAA-specific T cell therapies have been generally well tolerated by all of the patients enrolled in clinical trials in hematological and solid tumor indications with no incidents of cytokine release syndrome or neurotoxicity, which are frequently associated with CAR-T therapies. Our ongoing clinical trials may be also affected by the COVID-19 pandemic. Based on our observations in clinical trials in AML, pancreatic cancer, lymphoma, ALL and MM, we believe that the MultiTAA-specific T cell therapies have the potential to mediate a meaningful anti-tumor effect, as well as significant in vivo expansion of T cells. We may initiate additional Phase 2 clinical trials investigating other indications in addition to our planned Phase 2 trial in post-transplant AML patients.
Pipeline
Our clinical-stage pipeline, including clinical trials being conducted by BCM and other partners, is set forth below:
Clinical Program Updates
Initiation of Phase 2 Clinical Trial of MT-401 (zedenoleucel) for the Treatment of Post-Transplant AML
In January 2021, we announced that the FDA lifted the partial clinical hold on the Phase 2 clinical trial investigating the safety and efficacy of MT-401 for the treatment of patients with AML post-transplant, permitting us to initiate the trial with the safety lead-in portion that is expected to enroll approximately six patients. Three patients will be dosed with MT-401 manufactured with the legacy reagent used in the Phase 1 trial, and three patients will be dosed with MT-401 manufactured using a new reagent from an alternative supplier. We anticipate using this supplier for clinical and commercial manufacturing of MT-401. We expect to complete the safety lead-in portion of the trial in the first half of 2021, and we continue to work to identify clinical trial sites.
In January 2021, the United States Adopted Names, orUSAN, Council and the World Health Organization International Nonproprietary Name, or WHO INN, Expert Committee adopted “zedenoleucel” as the non-proprietary name for MT-401. The USAN Council previously accepted “zelenoleucel” as the non-proprietary name for MT-401. The USAN Council forwarded the name to the WHO INN Expert Committee for additional review and clearance. The WHO INN Expert Committee revised the name to zedenoleucel to avoid a conflict with the existing INN selenomethothionine (75Se) and could evoke that the substance is selenium-labelled. The USAN Council agreed with the WHO INN Expert Committee’s revision of the name from “zelenoleucel” to “zedenoleucel.”
Our Strategy
Our goal is to be the leader in the development and commercialization of transformative immunotherapies for the treatment of hematological malignancies and solid tumors. We are developing a portfolio of highly differentiated T cell therapies utilizing the MultiTAA-specific T cell platform that we believe have the potential to significantly disrupt the current cell therapy landscape, while substantially improving survival and quality of life for patients with cancers.
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The key elements of our strategy include:
· Expedite clinical development, regulatory approval, and commercialization of our lead product candidates.
Based on the results of the Phase 1 clinical trials of the MultiTAA-specific T cell therapies conducted at BCM, we plan to advance our lead product candidates into Phase 2 clinical trials and facilitate the initiation of company-sponsored clinical trials. We are pursuing post-transplant AML as the lead indication for the MultiTAA-specific T cell program. We expect to complete the safety lead-in portion of our Phase 2 trial in post-transplant AML in the first half of 2021.
We plan to initiate in the future additional clinical trials in other tumor types based on emerging data. We expect our current Good Manufacturing Practices, or cGMP, manufacturing facility in Houston, Texas will be fully operational to support our clinical manufacturing in the first half of 2021. Until that time, we anticipate that clinical product manufacturing will be conducted at BCM’s Good Manufacturing Practices, or GMP, cell manufacturing facility.
· Continue to collaborate with our partners and increase our internal research and development activities to improve and develop adoptive cell therapy technologies.
We are party to a strategic alliance with BCM, pursuant to which we will sponsor selected research at BCM in support of our technology. In conjunction with this strategic alliance, BCM will conduct selected Phase 1 and Phase 2 clinical trials of our product candidates. If data from these early clinical trials are positive, we will consider the therapeutic and commercial potential for such therapies to be advanced as new product candidates for us.
In addition, we plan to use BCM facilities and our company laboratories to enable the process development required to support the Phase 2 clinical trials of our product candidates. We plan to invest in our own research and development and chemistry, manufacturing and controls, or CMC, capabilities to enhance our ability to conduct process development to optimize our manufacturing process, product quality and commercial scalability.
· Invest in our platform to maximize the beneficial outcomes for cancer patients.
We plan to explore new product opportunities by increasing and/or customizing the antigens we target to expand the indications in which the MultiTAA-specific T cell products will be efficacious, including solid tumors or other hematologic malignancies. Additionally, our research and development efforts may include the exploration of different doses and/or frequency of dosing and the relationship of these factors with potential therapeutic benefit.
· Leverage our relationships with our founding institutions, scientific founders and other scientific advisors.
Our world-renowned scientific founders and scientific advisors have made seminal contributions to major discoveries in the field of immuno-oncology, and have significant experience in oncology, immunology and cell therapy. We intend to significantly leverage the knowledge, experience and advice of our scientific founders and advisors, as well as the institutional expertise of BCM, the Mayo Foundation and our other major institutional partners, to advance our therapies through the clinic and into commercialization.
We are in the process of evaluating the peptide vaccine therapeutic products and programs to determine the future strategy and the proper allocation of our resources to best maximize stockholder value. In conjunction with this evaluation process we may de-emphasize or terminate certain vaccine therapeutic products or programs. Such strategic review and evaluations are a priority and an important part of our ongoing operations.
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Background and History of Cancer Immunotherapies
Despite advances in options for treatment, cancer continues to be one of the main causes of death in developed countries. Historically, cancer therapy has been constrained to surgery, radiation, and chemotherapy. More recently, advances in the understanding of the immune system’s role in cancer surveillance have led to immunotherapy becoming an important treatment approach. Cancer immunotherapy began with treatments that nonspecifically activated the immune system and had limited efficacy and/or significant toxicity. In contrast, newer immunotherapy treatments activate specific, potent immune cells, leading to improved safety and efficacy. Within the immunotherapy category, treatments have included vaccines, cytokine therapies, antibody therapies, and adoptive cell therapies.
In 1996, Dr. Dana Leach, Dr. Matthew Krummel and Dr. James Allison reported that monoclonal antibodies, or mAbs, blocking CTLA-4 could treat tumors in animal models. Subsequently, mAbs that targeted CTLA-4 and PD-1 became known as immune checkpoint inhibitors, or ICIs. Immune checkpoints are a means by which cancer cells inhibit or turn down the body’s immune response to cancer. By interfering with these cloaking mechanisms, ICIs have shown an ability to activate T cells, shrink tumors, and improve patient survival. Recent clinical data from checkpoint inhibitors such as ipilimumab, nivolumab and pembrolizumab have confirmed both the validity of this approach and the importance of T cells as promising tools for the treatment of cancer.
Despite these many advances, there persists a significant unmet need in cancer therapeutics. We believe that the use of human cells as a therapeutic modality to re-engage the immune system will be the next significant advancement in the treatment of cancer. These cellular therapies may avoid the long-term side effects associated with current treatments and have the potential to be effective regardless of the type of previous treatments patients have experienced.
T Cell Therapy Overview
The field of adoptive cell transfer is currently comprised primarily of CAR and TCR engineered T cells and has emerged from principles of basic immunology to become a paradigm-shifting clinical immunotherapy. T cell therapy has evolved as one of the most promising branches of immunotherapy. T cell immunotherapy involves the infusion of T cells into a patient. Immune cells used for immunotherapy treatments can either be collected from the patient (autologous) or harvested from a donor (allogeneic). The cells are retrieved and either genetically modified to express tumor-specific CARs or TCRs or mixed with specific antigens. The cells are then cultured to proliferate, and the proliferated cells are infused into the patient. Upon infusion, the cells can target and eliminate cancerous cells. Unlike chemotherapy, which is unable to distinguish between healthy and malignant cells, T cells produced for immunotherapy can selectively attack cancer cells that express the target antigen(s). This leads to a more effective treatment platform with fewer side effects. Some of these infused T cells may remain in the body for long periods, providing immunological memory, thus leading to longer and more durable responses.
TCRs and CARs have distinct signaling properties and antigen sensitivities. TCRs recognize peptide fragments from proteins expressed either inside the cell or on the cell surface, which are presented to T cells via major histocompatibility complex molecules. CARs are programmed to recognize a specific cell surface protein. Because CARs are specific for a single antigen, or more precisely a single epitope within the single antigen, they are very narrowly focused and have limitations. When a CAR-T cell product is applied to a specific antigen of a heterogeneous disease, CAR-T cells may leave behind tumor cells that do not express the target antigen, which can lead to tumor relapse due to immune escape.
Our approach is to avoid genetic engineering by relying upon the native T cell receptor, which has evolved over millions of years to provide T cells with an exquisite capacity to recognize and kill cancer cells. Use of the native T cell receptor is the bedrock of our versatile immunotherapy, which is intended to provide a cost-effective and non-toxic strategy to target multiple tumor antigens and lead to durable responses. The process entails expanding tumor-specific T cells from patients (autologous), or a patient’s hematopoietic stem cell donor (allogeneic). This is achieved by in vitro manipulation consisting of co-culturing a patient’s or donor’s antigen presenting cells with patient (or donor) peripheral blood mononuclear cells, or PBMCs, respectively. As a source of antigen, we use overlapping peptide libraries spanning each of several immunogenic target antigens that are typically associated with certain types of cancer. These peptides are at least 15 amino acids in length, overlapping by 11 amino acids and span the entire length of each of the target antigens. This typical footprint of peptides allows us to induce both CD4 + (helper) and CD8 + (cytotoxic) T cells. Following manufacture, these cells are frozen and stored for later infusion. Once infused, the natural characteristics of T cells take over and the T cells multiply in quantity, forming an army of T cells that kill the targeted cancer cells.
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We have observed evidence of “epitope spreading” in our clinical trials, suggesting that the MultiTAA-specific T cell therapy is inducing an enhanced response by the patient’s own T cells (specific for an expanded set of tumor-associated antigens beyond those targeted by the infused product). Correlative analyses show expansion of endogenous T cells, other than those present in the infused product, in the months following infusion. This phenomenon, also known as “antigen spreading,” is potentially important in generating a deep and durable response for a patient because it enables the killing of tumors that do not express any of the antigens initially targeted by our therapy and could be due to the lack of lymphodepletion that allows recruitment of the endogenous immune system for anti-tumor activity.
The MultiTAA-Specific T Cell Therapies
In collaboration with BCM, we are advancing two MultiTAA-specific T cell therapies through clinical development:
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Autologous MultiTAA-specific T cell therapies target the NY-ESO-1, PRAME, MAGE-A4, Survivin and SSX2 antigens. We recently reported updated clinical data from BCM’s Phase 1/2 clinical trial of the autologous MultiTAA therapy for the treatment of patients with pancreatic cancer, and we are currently evaluating these therapies for the treatment of patients with lymphoma, MM and other selected solid tumors in Phase 1 trials.
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Allogeneic MultiTAA-specific T cell therapies target the WT1, NY-ESO-1, PRAME, and Survivin antigens. The stem cell transplant donor is used as the source of the cells manufactured for our allogeneic therapies. We are pursuing post-transplant AML as the lead indication for the MultiTAA-specific T cell program using our allogeneic therapies.
While the blood source and the antigens for stimulation differ between the autologous and allogeneic therapies, the manufacturing process for each product is identical.
Cancers are heterogeneous in their expression of antigens. Tumors generally consist of individual cancer cells expressing different antigens, and each of those antigens can be present at a different level that can change over time. Therapies targeting only a single antigen are vulnerable to evolutionary escape mechanisms.
While single-antigen specific therapy can eliminate all the tumor cells expressing the targeted antigen, the residual tumor cells that do not express that antigen may survive and expand. In addition, tumor cells may also downregulate or mutate the targeted antigen, thus becoming invisible to the T cell therapy. Both phenomena create a transformed tumor that is impervious to that therapy. This process is referred to as antigen-negative tumor escape.
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Our solution to the problem of tumor heterogeneity is the development of T cell products that simultaneously attack multiple tumor-expressed antigens and thereby enable more complete initial tumor targeting, thus minimizing the subsequent opportunity for the cancer to engage escape mechanisms. Of note, data suggest that this strategy may be responsible for recruitment and activation of unique cancer-killing cells from the patient’s own immune repertoire to participate in cancer eradication, further minimizing the possibility for tumor cell escape.
We believe our proprietary MultiTAA-specific T cell platform may have meaningful advantages over current CAR and TCR-engineered cell therapy approaches. Compared to current gene-modified T cell therapies, the MultiTAA-specific T cell product candidates are characterized by the following:
· Clinical benefits observed in early-stage clinical trials in multiple cancer indications.
Based on our observations in clinical trials in AML, pancreatic cancer, lymphoma, ALL and MM, we believe that the MultiTAA-specific T cell therapies have the potential to mediate a meaningful anti-tumor effect, as well as significant in vivo expansion of T cells. For example, in BCM’s Phase 1 clinical trial in lymphoma, there were complete responses, or CRs, in six of the fifteen evaluable patients with active disease. Significantly, no patient with a CR has subsequently relapsed with disease, whereas typically 30% or more of patients with CR in reported CAR-T studies relapse within one year. In patient results to date in this trial, observed therapeutic responses appear to be highly durable, with some patients being relapse-free beyond five years.
· Non-gene modified.
Unlike CAR and TCR-based approaches, our MultiTAA-specific T cell therapy does not require genetic modification of T cells, a costly and complex process that significantly complicates the manufacturing of a patient product. We believe our MultiTAA-specific T cell therapy can be manufactured at a fraction of the cost of a gene-modified T cell product, with substantially reduced complexity of manufacturing.
· No need for lymphodepletion before infusion.
Unlike CAR-T therapies, which require lymphodepletion of a patient’s existing T cells so that they will not compete with the infused therapy, the MultiTAA-specific T cell therapies work with the natural capabilities of T cells to target cancer and do not require lymphodepletion prior to infusion.
· Low incidence rate of adverse events.
As of December 2020, the MultiTAA-specific T cell therapy has been generally well tolerated by all of the patients enrolled in clinical trials in hematological and solid tumor indications with no incidences of cytokine release syndrome or neurotoxicity. In these trials, there has been only one Grade 3 adverse reaction considered possibly related to the therapy. This appears to compare favorably with published CD19 CAR-T studies that have been associated with substantial tolerability concerns, including one Phase 1 trial in which 95% of patients had Grade 3 or higher adverse events during treatment.
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· Appears to drive endogenous immune responses.
In our clinical trials, we have observed evidence of “epitope spreading” in the treated patients, meaning that the MultiTAA-specific T cell therapy is potentially inducing an enhanced response by the patient’s own T cells (specific for an expanded set of tumor-associated antigens beyond those targeted by the infused product). Correlative analyses show expansion of endogenous T cells, other than those present in the infused product, in the months following infusion. This phenomenon, also known as “antigen spreading,” is potentially important in generating a deep and durable response for a patient, because it enables the killing of tumors that do not express any of the antigens initially targeted by our therapy and could be due to the lack of lymphodepletion that allows recruitment of the endogenous immune system for anti-tumor activity.
· Capable of addressing a broad repertoire of cancer cells.
While CAR-T and TCR therapies generally target a single epitope, our manufacturing process selects for T cells that are specific for multiple peptides derived from several targeted antigens. Deep gene sequencing of our products shows that a typical patient dose usually consists of approximately 4,000 unique T cell clonotypes, some of which target up to five different tumor-associated antigens. The five antigen targets can be recognized by a very wide range of T cells, which we believe facilitates robust killing of targeted cancer cells.
MT-401 for the Treatment of Post-Transplant AML
We have submitted an IND to the FDA to initiate a Phase 2 clinical trial in post-allogeneic HSCT patients with AML in both the adjuvant and active disease setting, which may become pivotal pending the results of the interim analysis. The dose administered in this multicenter trial is the current maximum tolerated dose from the Phase 1/2 trial. In the adjuvant setting, patients will be randomized to either MT-401 at approximately 90 days post-transplant versus standard of care observation, while the active disease patients will receive MT-401 following relapse post-transplant as part of a single-arm group.
We have initiated the Phase 2 trial, beginning with a safety lead-in portion that is expected to enroll approximately six patients. Three patients will be dosed with MT-401 manufactured using the legacy reagent used in the Phase 1 trial, and three patients will be dosed with MT-401 manufactured using a reagent from an alternative supplier. We anticipate using this supplier for clinical and commercial supply of MT-401. We expect to complete the safety lead-in portion of the trial in the first half of 2021. The safety lead-in will be followed by the 160-patient portion of the trial at approximately 20 transplant centers. Group 1 will comprise 120 adjuvant (disease-free) patients, with the primary endpoint of relapse-free survival of patients randomized to receive MT-401 versus a control group. Group 2 will comprise 40 active disease patients in a single arm, with primary endpoints of complete remission and duration of complete remission.
Clinical Development of Our MultiTAA-Specific T Cell Therapies by BCM
The following clinical trials are being conducted by BCM pursuant to our strategic alliance. If data from these early clinical trials are positive, we will consider the therapeutic and commercial potential for such therapies to be advanced as new product candidates for us. In each trial, correlative studies showed significant expansion of MultiTAA-specific T cells, as well as significant evidence of epitope spreading with expansion of endogenous T cells specific for tumor-associated antigens that were not targeted by the MultiTAA-specific T cell therapy.
Acute Myeloid Leukemia
We are pursuing post-transplant AML as the lead indication for the MultiTAA-specific T cell program. Currently, available treatments for post-transplant AML patients are limited and include donor lymphocyte infusion, which has an approximately 15% overall response rate but a 30% to 50% risk of severe and debilitating graft-versus-host disease. The five-year mortality rate for patients who receive an allogeneic HSCT exceeds 50%, and patients who relapse after a transplant have a survival expectation of approximately 4.5 months.
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BCM recently completed a Phase 1 AML/MDS clinical trial of the MultiTAA-specific T cell therapy for the treatment of patients with post-transplant AML. In this trial, we treated patients in remission and with active disease post-transplant. As reported in a recent publication by Lulla et al. and illustrated below, 11 of the 17 patients in the adjuvant disease setting dosed with the MultiTAA-specific T cell therapy after receiving an allogeneic HSCT never relapsed [median LFS not reached at a median follow-up of 1.9 years], with 11 of 15 patients remaining alive (estimated two-year overall survival of 77%) at a median follow-up of 1.9 years post-infusion which compares favorably with HSCT outcomes for risk-matched AML/MDS patients post-HSCT [median LFS of nine to 15 months and two-year survival probability of 42%].
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Additionally, eight patients were treated for active disease that was resistant to salvage therapy post-HSCT with a median of five prior lines of therapy (range: four to ten). One of the eight patients crossed over from the adjuvant group while two patients enrolled twice, but all three patients had active AML that failed another line of salvage therapy after their first MultiTAA-specific T cell infusion. As shown below, two of the eight patients achieved objective responses with one complete response and one partial response, with six patients continuing with stable disease.
In this trial, the MultiTAA-specific T cell therapy was well tolerated, with no drug-related serious adverse events and no instances of greater than Grade 2 graft-versus-host disease. The maximum grade treatment-related adverse event was seen in one patient in the adjuvant disease group who had a possibly drug-related Grade 3 elevation of liver enzymes but was treated with prednisone with complete resolution. After discontinuing treatment and receiving decitabine, the patient relapsed and later re-enrolled in the trial in the active disease group and entered CR for 13 months and survived for 2.5 years.
Pancreatic Cancer
In May 2020, we reported interim data from an ongoing Phase 1/2 clinical trial of the MultiTAA-specific T cell therapy for the treatment of pancreatic adenocarcinoma being conducted by BCM. In this trial, BCM plans to enroll approximately 45 patients with advanced or borderline resectable pancreatic adenocarcinoma in three arms: Arm A, which includes patients with unresectable/metastatic disease who are responding to standard first-line chemotherapy; Arm B, which includes patients with progressive disease or therapy intolerance; and Arm C, which includes patients with surgically resectable disease. A total of 31 patients were administered the MultiTAA-specific T cell therapy: 13 patients in Arm A, 10 patients in Arm B and eight patients in Arm C.
Overall, we have observed a clinical benefit correlated with the detection of tumor-reactive T cells in patient peripheral blood (Arms A, B and C) and within tumor biopsy samples (Arm C) post-infusion. T cells exhibited activity against both targeted antigens as well as non-targeted TAAs, including MAGE-A2B and AFP, indicating induction of antigen/epitope spreading. No cytokine release syndrome or neurotoxicity has been observed in any arm of the trial to date.
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Arm A
Arm A is designed to evaluate the safety and potential efficacy of using MultiTAA-specific T cell therapy as part of first-line treatment for patients with pancreatic cancer. These patients in the chemo-responsive arm have completed or will complete at least three months of standard-of-care chemotherapy (gemcitabine/nab-paclitaxel or FOLFIRINOX), which is the period during which a response to chemotherapy would typically occur, before receiving up to six administrations of MultiTAA-specific T cell therapy in conjunction with chemotherapy.
For 12 of the 13 patients, sufficient cells for all six planned doses were generated; two doses were available for the remaining patient.
● Out of the 13 evaluable patients (best overall response):
o 4 patients experienced objective responses after administration of MultiTAA cells;
o 1 patient experienced a radiographic complete response occurring at month 9 after starting chemotherapy;
o 3 patients experienced partial responses per RECIST occurring at 6-9 months after starting chemotherapy;
o 6 patients experienced stable disease;
o 1 patient experienced a mixed response (some lesions increased in size and others decreased for a net zero change in size of tumor lesions);
● Patients had durable cancer control with 9 of the 13 patients exceeding historical control of overall survival;
● 5 patients enrolled in the study were not administered MultiTAA-specific T cells, either because of disease progression (4 patients) which made them ineligible for treatment, or because insufficient starting material from the patient was available for manufacturing (1 patient);
● Evidence of epitope-spreading was observed in all responders, suggesting that the MultiTAA T cell therapy triggered the recruitment of a broader endogenous immune system response for improved anti-tumor activity; and
● No infusion-related reactions, cytokine release syndrome or neurotoxicity was observed.
● In patients responding to therapy, significant expansion of the infused MultiTAA-specific T cell therapy was observed, along with broad-based epitope spreading, with significant expansion of endogenous T cells specific for other tumor specific antigens.
In patients responding to therapy, significant expansion of the infused MultiTAA-specific T cell therapy was observed, along with broad-based epitope spreading, with significant expansion of endogenous T cells specific for other tumor specific antigens.
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Arm B
Arm B is designed to evaluate the use of MultiTAA-specific T cell therapy as a second-line therapy for patients who have failed first-line chemotherapy. The patients in this chemo-refractory arm are either ineligible for chemotherapy or have progressed on chemotherapy and have received or are receiving up to six doses of MultiTAA-specific T cell therapy as a monotherapy. The following graphic depicts the best clinical assessment of the 10 evaluable patients in Arm B:
Among the patients who saw clinical disease stabilization, significant expansion of the infused MultiTAA-specific T cell therapy was observed, along with broad-based epitope spreading, with significant expansion of endogenous T cells specific for other tumor-specific antigens.
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Arm C
Arm C is designed to assess T cell infiltration and expansion. These patients with borderline surgically resectable disease received or will receive a dose of MultiTAA-specific T cell therapy following chemotherapy, radiotherapy or combination and prior to surgical resection and up to five additional doses of T cells after surgery. In the patients evaluable in Arm C, MultiTAA-specific T cells were measurable in meaningful numbers as detected by correlative analysis of resected tumor, and significant expansion of the infused MultiTAA-specific T cells was observed, along with broad-based epitope spreading, with significant expansion of endogenous T cells specific for other tumor specific antigens. All eight patients in the adjuvant setting have received at least the pre-surgery dose of MultiTAA-specific T cells. Only two of the eight treated patients had all of the per-protocol MultiTAA-specific T cell infusions. One patient has not yet received any post-operative MultiTAA-specific T cells despite remaining in the trial on an observational basis. Five patients are still in the trial, while three patients had recurrence of disease. Two patients have not yet undergone surgery. As illustrated below with respect to the six patients treated in Arm C (excluding the two patients who have not yet undergone surgery), three of the patients in Arm C remain in the trial, while three patients had recurrence of disease:
Lymphoma
BCM is currently evaluating the MultiTAA-specific T cell therapy in a Phase 1 clinical trial for the treatment of patients with lymphoma. A total of 32 patients received two protocol-specified infusions of MultiTAA-specific T cells, 14 with Hodgkin lymphoma, or HL, and 18 with aggressive non-Hodgkin lymphoma, or NHL, [diffuse large B-cell lymphoma, or DLBCL, (n=12), mantle cell lymphoma, or MCL, (n=2), T-cell lymphoma (n=3) and composite lymphoma (HL and DLBCL, n=1)].
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As reported in a recent publication by Vasileiou et al., BCM had treated 15 patients with active disease, which we refer to as the active lymphoma group, all of whom had completed a follow-up period beyond three months post-infusion. These patients were heavily pre-treated and, on average, had failed a median of five prior lines of therapy (range four to eight) for the HL patients and a median of three prior lines of therapy (range three to four) for the NHL patients. As illustrated below, in the active lymphoma group, six patients entered CR and nine patients had experienced stable disease. None of the patients in CR had relapsed, and the range for the duration of CR in these patients were between two and over five years after being infused with the MultiTAA-specific T cell therapy with the exception of one CR patient who died of an unrelated pneumonia. Responses in all six patients who entered CR were associated with an expansion of infused T cells, as well as induction of antigen spreading.
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We also treated 17 patients, including one patient who was treated a second time after a relapse, in remission, which we refer to as the adjuvant lymphoma group. Like the active lymphoma group, these patients were heavily pre-treated with seven patients with HL treated with a median of 4 prior lines of therapy (range three to five) and 10 patients with NHL with a median of three prior lines of therapy (range one to five). As illustrated below, in the adjuvant lymphoma group, all 17 patients had entered CR, with 14 patients in continued complete remission, or CCR, without relapsing. The duration of response ranged from approximately nine months to over five years.
In both treatment groups, the MultiTAA-specific T cell therapy was well tolerated, with no drug-related serious adverse events, suggesting that the MultiTAA-specific T cell therapy might serve as a standard-of-care maintenance therapy for lymphoma patients in remission.
Further, data from this trial show “epitope spreading,” or expansion of patients’ endogenous T cells (specific for an expanded set of tumor-associated antigens beyond those targeted by the infused therapy) in the months following infusion. Significantly, we have observed this effect even though some patients in this trial received doses that had not yet been antigen-escalated to the full antigen dose.
Acute Lymphoblastic Leukemia
BCM is currently evaluating the MultiTAA-specific T cell therapy in a Phase 1 clinical trial for the treatment of patients with ALL. Leukemic relapse is one of the primary causes of treatment failure in HSCT recipients. Like post-transplant AML patients, post-transplant ALL patients have limited treatment options, with donor lymphocyte infusions similarly associated with the risk of life-threatening graft-versus-host disease. While CAR-T therapies have shown potent anti-leukemia activity in post-transplant ALL patients, CD19-CAR-T cell therapies target a single antigen, carrying the inherent risk of immune escape, and are most effective in malignancies of B-cell lineage. In contrast, the MultiTAA-specific T cell therapy targets multiple antigens expressed in both B- and T-cell ALL.
In this trial, as reported in February 2019 we had treated 18 patients. Of the seven evaluable patients:
● All evaluable patients were up to 28 months in CCR;
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● One patient experienced relapse displayed mixed donor/recipient chimerism after transplant, but remained in CCR for 6 months; and
● Patients who remained in CCR had been durable for between four to 28 months, with a median of 16 months.
Multiple Myeloma
BCM is currently evaluating the MultiTAA-specific T cell therapy in a Phase 1b/2a clinical trial for the treatment of patients with MM. In this trial, we are treating both active and adjuvant post-autologous stem cell transplant MM patients both within 90 days and more than 90 days post-transplant. We have not seen a meaningful difference in response rates or durability between the two arms and intend to standardize future trials based upon a protocol wherein patients will receive MultiTAA-specific T cell therapy immediately post-transplant.
As reported in a recent publication by Lulla et al., of the 12 patients that had been treated in the active MM group with a median of 3.5 prior lines:
● One patient had a CR;
● Two patients achieved partial responses; and
● Nine patients had stable disease following initial MultiTAA-specific T cell infusion.
Of the nine patients that had been treated in the adjuvant MM group, all nine patients had remained in CCR, with a median follow-up of 21 months. Only two patients had relapsed at months seven and 13 after infusion while the remaining patients remain in CCR at a median follow-up of 27.5 months.
Process Development and Manufacturing of The MultiTAA-Specific T Cell Therapies
In the manufacturing process, blood is drawn from either the individual patient (in the case of the autologous T cells) or from the allogeneic stem cell transplant donor (in the case of the allogeneic T cells). Although the T cells that are selected and expanded by our process exist in a patient’s circulating blood, these T cells are often present at very low frequencies. Researchers at BCM believe that these T cells are adversely affected by the suppressive tumor microenvironment. It is a well-accepted concept that cancers not only evade immune detection but often actively suppress the function of the human immune system. Our manufacturing and culturing process is intended to (1) identify the T cells specific for the antigens that we intend to target, (2) restore these T cells to functionality with respect to their anti-tumor capability and (3) expand the population of those T cells specific for our targets to achieve the required patient dose.
After blood is drawn, PBMCs are isolated and used to manufacture a patient-specific product. These cells are placed inside a G-Rex manufacturing device and combined with an experimentally optimized mix of GMP-grade cytokines that is used to restore and enhance the functional capability of the cultured T cells.
In addition, libraries of overlapping peptides, which we refer to as peptide pools, spanning the target antigens are combined with antigen presenting cells and added to the cell culture. Each peptide within a peptide pool represents a small segment of a target antigen, which a T cell might recognize. Each library represents the entire protein sequence of a target antigen, with each peptide overlapping significantly with the peptides adjacent to it within the antigen’s protein sequence. This overlapping structure allows us to isolate, activate and expand any T cell that is specific for any segment of the antigens that we target in the unique genetic background of every patient.
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The G-Rex is a cell culture device manufactured by Wilson Wolf used by many cell therapy developers, both in commercial and academic settings. The device allows a user to introduce cells, medium and other reagents into a cell culture chamber, which has a gas-permeable membrane at its bottom. The cells settle on this gas-permeable membrane through which oxygen and carbon dioxide are exchanged (i.e. the cells can breathe at the base of the device), while nutrients required for cell expansion are obtained from the medium above the cells. This system allows for the highly robust growth of cells in culture, by providing them with superior access to oxygen and nutrients. Cells manufactured in the device grow efficiently without need for agitation by a technician, scientist or automated system.
Inside the G-Rex, PBMCs are co-cultured with antigen-presenting cells that have been exposed to the stimulating peptide pools. This results in the selective expansion of T cells that specifically recognize the target antigens. At the end of the manufacturing process, the resulting product is a mix of helper (CD4 + ) and cytotoxic (CD8 + ) T cells that recognize the targeted antigens.
Once cell manufacturing is complete, the product is tested for identity, sterility, phenotype and functionality before it is released for infusion into a patient. Sampling of product indicates that, on average, approximately 4,000 different T cell clonotypes are present in a typical 5-antigen-specific patient product.
Upon release of the final patient product, the cells are frozen and transported to the site where the cells will be administered. The standard dose for patients with lymphoma, AML or myeloma ranges from 5 to 20 million cells per meter squared (corresponding to typical doses of 10 to 40 million cells per adult patient). These cell doses represent a significantly smaller dose of cells, when compared to CAR-T or TCR therapies. As a result, our therapy requires only a very small infusion volume that can be administered to patients within minutes at an outpatient center. Due to the low incidence of adverse events with our therapies, patients do not need to be hospitalized and monitored overnight. Instead, the patients are evaluated for any immediate infusion-related reactions and can then usually be discharged within two hours.
Our manufacturing process is illustrated below:
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Our Peptide-Based Immunotherapeutic Vaccines: TPIV200 and TPIV100/110
In addition to our MultiTAA-specific T cell therapies, we are developing peptide-based immunotherapeutic vaccines that are designed to precisely target breast and ovarian cancer cells, in contrast to standard therapies for the treatment of cancer that target both cancer cells and normal cells. Our peptide vaccines are derived from naturally processed T cell-targeted antigens. We believe that our peptide vaccines are potentially effective standalone therapies but may also enhance the efficacy of other immunotherapy approaches, including our own MultiTAA-specific T cell therapies. Our multipeptide approach is fundamentally different from traditional vaccine therapies that have generally targeted a major histocompatibility complex, or MHC, class I-restricted epitope and have historically performed poorly as stand-alone treatments. We are currently evaluating TPIV200 for the treatment of breast cancers that overexpress FRa in multiple Phase 2 clinical trials and TPIV100 for the treatment of breast cancers that overexpress HER2/neu in Phase 1b and Phase 2 clinical trials.
We are in the process of evaluating the peptide vaccine therapeutic products and programs to determine the future strategy and the proper allocation of our resources to best maximize stockholder value. In conjunction with this evaluation process we may de-emphasize or terminate certain vaccine therapeutic products or programs. Such strategic review and evaluations are a priority and an important part of our ongoing operations.
TPIV200 for the Treatment of FRa-Overexpressed Breast and Ovarian Cancers
FRa is overexpressed in over 80% of breast cancers and over 90% of ovarian cancers. The only treatment options for these cancers are surgery, radiation therapy and chemotherapy, creating a very important and urgent clinical need for a new therapeutic strategy. Time to recurrence is relatively short for ovarian cancer and survival prognosis is extremely poor after recurrence. In the United States alone, every year there are 22,350 new ovarian cancer diagnoses and 268,600 new breast cancer diagnoses, of which 10% are diagnoses of triple-negative breast cancer.
TPIV200 is composed of a mixture of five FRa-derived immunogenic peptides adjuvanted with low-dose granulocyte-macrophage colony-stimulating factor, or GM-CSF, and is designed to activate both the CD4 + and CD8 + T cell compartments in order to activate a patient’s T cells against the targets. Recent developments in immunology suggest that both CD4 + and CD8 + activation support a robust immune response.
Clinical Development
Phase 1 Clinical Trial in Advanced Breast and Ovarian Cancer
In this Phase 1 clinical trial, completed by Mayo Clinic in 2015, 21 patients with advanced breast or ovarian cancer who had undergone standard surgery and adjuvant treatment were treated with one cycle of cyclophosphamide, followed by intradermal vaccination of TPIV200 on day one of a 28-day cycle for a maximum of six vaccination cycles. In the trial, 20 of 21 patients generated T cell responses. These responses developed slowly over the course of the vaccination cycles, with a median time to maximal immunity of five months. Over 90% of patients developed robust and durable antigen-specific immune responses against FRa without regard for HLA type, which aligns with the intended mechanism of action of the vaccine, and 89% of the patients responded to multiple epitopes included in the TPIV200 vaccine, with most patients demonstrating T cell immunity to three or more epitopes. Further, all 16 patients in the observation stage generated T cell responses that lasted over six months.
TPIV200 was well-tolerated, with only one Grade 3 drug-related adverse event. In a two-year patient follow-up analysis, the 10 enrolled ovarian cancer patients had longer median progression-free survival time of 528 days than the 313 days historically reported for the standard-of-care chemotherapy treatment. All patients were alive at the final follow-up. None of the 7 breast cancer patients had experienced a recurrence.
Phase 2 Clinical Trials in Triple-Negative Breast Cancer
Triple-negative breast cancer is one of the most difficult cancers to treat and represents a clear unmet medical need. With the support of a $13.3 million grant from the Department of Defense, the Mayo Foundation is conducting a 280-patient Phase 2 clinical trial of TPIV200 in patients with triple-negative breast cancer, which began enrolling patients in late 2017 and is still recruiting patients.
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On June 21, 2016, we announced the initiation of a randomized four-arm Phase 2 trial of TPIV200 for the treatment of patients with Stage 1 to Stage 3 triple-negative breast cancer who have completed initial surgery and chemo/radiation therapy. This open-label, 80-patient clinical trial is designed to evaluate dosing regimens, pre-treatment, efficacy and immune responses. In the trial, we are evaluating a high dose and a low dose of TPIV200, each of which will be tested both with and without cyclophosphamide prior to vaccination. To date, there have been no drug-related serious adverse events reported. Based on a preliminary analysis of 34 patients enrolled in the triple negative breast cancer trial as of September 30, 2019, 31 patients showed meaningful immune response to vaccine treatment. These data are subject to final review by independent biostatistical analysis. As of December 31, 2020, 16 of the patients treated have shown disease progression following treatment with TPIV200.
Phase 2 Clinical Trial in Combination With Durvalumab for Patients with Ovarian Cancer
On April 21, 2016, we announced our participation in an ovarian cancer trial sponsored by Memorial Sloan Kettering Cancer Center, or MSKCC, in collaboration with AstraZeneca Pharmaceuticals in ovarian cancer patients who are not responsive to platinum, a commonly used chemotherapy for ovarian cancer. This open-label Phase 2 trial of TPIV200 in 40 patients is designed to evaluate the effects of combination therapy with AstraZeneca’s checkpoint inhibitor durvalumab (anti-PD-L1). Interim results from the first 27 patients were presented at the AACR-Rivkin Symposium in September 2018; safety of the combination was shown in these heavily pretreated patients and a subset of patients exhibited durable disease stabilization. Objective response rate and progression-free survival with combination treatment was not superior from the expected efficacy of durvalumab as a monotherapy. However, post-immunotherapy follow-up was suggestive of improved clinical benefit from standard therapies, as the majority of patients’ post-progression went on to receive subsequent standard therapy with durable clinical benefit, creating a rationale for exploration of these agents in combination with chemotherapy. Although we have no business relationship with AstraZeneca, we paid for half of the costs of this trial, in addition to providing TPIV200.
TPIV 100/110 for the Treatment of HER2/neu-Overexpressed Breast Cancers
HER2/neu amplification/overexpression results in an effective therapeutic target in breast and gastric cancer. Over-expressed HER2 is detected predominantly in malignancies of epithelial origin, such as breast, gastric, esophageal, colorectal, salivary gland, pancreatic, epithelial ovarian, endometrial, and bladder carcinomas, as well as gallbladder and extrahepatic cholangiocarcinomas. HER2 is over-expressed in approximately 25% of breast cancers and its expression is associated with unfavorable pathologic features and aggressive disease if not treated with targeted therapies, relative to other forms of breast cancer. While the outcome of patients with HER2 positive breast cancer has significantly improved in the past few decades with an advent of anti-HER2 therapies, a substantial number of resected patients with all types of breast cancer subsequently develop metastatic disease. The continued prevalence of these cancers represents a high unmet medical need, justifying the targeted development of immunotherapeutic strategies.
We have added a MHC class I-restricted peptide, which we licensed from the Mayo Foundation on April 16, 2012, to the four MHC class II-restricted peptides present in TPIV100, resulting in TPIV 110 after the five peptides are mixed with GM-CSF. We have amended the existing IND to incorporate the fifth peptide and will use TPIV110 in future trials with the goal of producing an even more robust vaccine activating both CD4 + (helper) and CD8 + (killer) T cells.
On June 7, 2016, we announced that we had exercised our option agreement with Mayo Foundation and signed a worldwide license agreement to TPIV100. The license gives us the right to develop and commercialize the technology in any cancer indication in which the HER2/neu antigen is overexpressed. As part of this agreement, the IND for the HER2/neu Phase 1 trial was transferred from Mayo Foundation to us for Phase 2 clinical trials of TPIV100. See “—Mayo Foundation for Medical Education and Research Relationships—Mayo HER2/neu License.”
Clinical Development
Phase 1 Clinical Trials in HER2/neu + Breast Cancer
In the Phase 1 trial of 20 patients conducted at the Mayo Clinic, TPIV100 was well tolerated. Nineteen of the twenty evaluable patients showed robust T-cell immune responses to the antigens in the vaccine. An additional secondary endpoint incorporated into this trial was a two-year follow-on recording the time to disease recurrence in the participating breast cancer patients.
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On March 14, 2017, we announced that our partners at the Mayo Clinic received a $3.8 million grant from the Department of Defense to conduct a Phase 1b trial of TPIV100 in ductal carcinoma in situ, or DCIS, an early form of breast cancer. We are working closely with the Mayo Foundation on this clinical trial by providing clinical and manufacturing expertise, as well as providing GMP vaccine formulations under contract. The trial is expected to enroll 40 – 45 women with DCIS and commenced such enrollment during the first quarter of 2019. If the trial is successful and subject to receiving marketing approval from the FDA, we believe that TPIV100 may eventually augment or even replace standard surgery and chemotherapy, and potentially could become part of a routine immunization schedule for preventing breast cancer in healthy women.
Phase 2 Clinical Trials in HER2/neu + Breast Cancer
On October 10, 2018, we announced that the Mayo Clinic had been awarded a grant of $11 million from the Department of Defense intended to cover the costs of a large randomized, double-blind Phase 2 trial of TPIV100. We are working closely with the Mayo Foundation on this clinical trial by providing clinical and manufacturing expertise, as well as providing GMP vaccine formulations under contract. In this trial, 190 patients will be randomized, in a 2:1 fashion, to receive TPIV100 plus maintenance ado-trastuzumab emtansine, or T-DM1, or maintenance T-DM1with placebo plus GM-CSF. The trial will evaluate whether the administration of vaccine during T-DM1 maintenance therapy in patients with residual disease post-neoadjuvant chemotherapy effectively blocks disease recurrence and the development of metastatic breast cancer. By prevention of recurrence and metastasis, the expectation is that mortality associated with breast cancer will be decreased.
Manufacturing
In January 2021, we announced that we had completed the construction and qualification of our cGMP manufacturing facility in Houston, Texas. Our facility will allow for production of MultiTAA-specific T cell products according to FDA guidelines and is designed to be scalable using modular processes. We have initiated the technology transfer process and expect the facility to be fully operational in the first half of 2021. Until that time, we will continue to rely on BCM to manufacture our MultiTAA-specific T cell therapies, as well as the raw materials, our active pharmaceutical ingredients, or APIs, and finished solid dose products for our peptide vaccines for clinical uses, including our Phase 2 trial in AML. We anticipate using our manufacturing facility to produce commercial supply of any approved product candidates.
Our supply chain for manufacturing raw materials, API, peptide vaccines and MultiTAA-specific T cell therapies ready for distribution and commercialization is a multi-step process. Establishing and managing the supply chain requires a significant financial commitment and the creation and maintenance of numerous third-party contractual relationships.
Third-party manufacturers supply us with raw materials for the peptide vaccines, and other third-party manufacturers convert these raw materials into API or convert the API into final dosage form. For most of our peptide vaccine candidates, once our raw materials are produced, we rely on different third parties to manufacture the API, to make finished drug product and to lyophilize, package and label the finished product. While we currently have focused on single vendors for manufacturing of peptide, formulation development, and lyophilization and vialing, we have access to numerous other vendors, if required.
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Competition
Our drug discovery, development and ultimate commercialization activities face, and will continue to face, intense competition from organizations such as pharmaceutical and biotechnology companies, as well as academic and research institutions and government agencies. We face significant competition from organizations, particularly fully integrated pharmaceutical companies that are pursuing pharmaceuticals which are competitive with our drug candidates. Our product candidates may compete with product candidates from a number of companies, which are developing various types of similar in vivo T-cell immunotherapies and therapeutic cancer vaccines to treat cancer, including: Advaxis Inc., Merck/Immune Design, Celldex, BN Immunotherapeutics, Immunocellular, SELLAS Life Sciences Group, Inc. (formerly) Galena BioPharma, NuGenerex Immuno-Oncology (formerly) Antigen Express, Transgene S.A., and Bavarian Nordic. In addition, other adoptive T-cell therapies, monoclonal antibodies and checkpoint inhibitors also provide competition in the oncology space. In these areas, competitors include Iovance, Immatics, NexImmune, Repertoire Immune Medicines, Tessa Therapeutics, Adaptimmune, Mana Therapeutics, Bluebird Bio, Cellectis, Kuur Therapeutics, Juno Therapeutics/Celgene/Bristol Myers Squibb, Kite Pharma/Gilead, Novartis, Roche Pharmaceuticals, Merck & Co, AstraZeneca plc and Medimmune, LLC. We believe that our non-engineered T cells therapy and our in vivo T-cell therapy approaches will be synergistic and may improve therapies being developed by these competitors. Many companies and institutions, either alone or together with their collaborative partners, have substantially greater financial, technical and human resources, and significantly greater experience than we do in the following:
● drug discovery;
● developing products;
● undertaking preclinical testing and clinical trials;
● obtaining FDA and other regulatory approvals of products; and
● manufacturing, marketing, distributing and selling products.
Accordingly, our competitors may succeed in obtaining patent protection, receiving FDA and other regulatory approval or commercializing products that compete with our drug candidates.
In addition, any drug candidate that we successfully develop may compete with existing therapies that have long histories of safe and effective use. Competition may also arise from:
● other drug development technologies and methods of preventing or reducing the incidence of disease;
● new small molecules; or
● other classes of therapeutic agents.
We face, and will continue to face, intense competition from other companies for collaborative arrangements with pharmaceutical and biotechnology companies, for establishing relationships with academic and research institutions and for licenses to drug candidates or proprietary technology. These competitors, either alone or with their collaborative partners, may succeed in developing products that are more effective than ours.
Our ability to compete successfully will depend, in part, on our ability to:
● develop proprietary products;
● develop and maintain products that reach the market first, are technologically superior to and/or are of lower cost than other products in the market;
● attract and retain scientific, product development and sales and marketing personnel;
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● obtain patent or other proprietary protection for our products and technologies;
● obtain required regulatory approvals; and
● manufacture, market, distribute and sell any products that we develop.
In a number of countries, including in particular, developing countries, government officials and other groups have suggested that pharmaceutical companies should make drugs available at a low cost. In some cases, governmental authorities have indicated that where pharmaceutical companies do not do so, their patents might not be enforceable to prevent generic competition. Some major pharmaceutical companies have greatly reduced prices for their drugs in certain developing countries. If certain countries do not permit enforcement of any of our patents, sales of our products in those countries, and in other countries could be reduced by generic competition or by parallel importation of our product. Alternatively, governments in those countries could require that we grant compulsory licenses to allow competitors to manufacture and sell their own versions of our products in those countries, thereby reducing our product sales, or we could respond to governmental concerns by reducing prices for our products. In all these situations, our results of operations could be adversely affected.
BCM Exclusive License Agreement
On March 16, 2018, we entered into an exclusive license agreement, or the BCM License Agreement, with BCM, under which we received a worldwide, exclusive license to BCM’s rights in and to certain intellectual property rights, including European patent EP 2470644 (estimated expiration date August 24, 2030), to develop and commercialize MultiTAA-specific T cell product candidates.
Exclusive License to BCM’s Subject Technology:
1. “Generation of CTL Lines with Specificity Against Multiple Tumor Antigens or Multiple Viruses”
2. “Pepmixes to Generate Multiviral CTLs with Broad Specificity”
3. “Immunogenic Antigen Identification from a Pathogen and Correlation to Clinical Efficacy”
4. "T cell performance assay as a prognostic factor for clinical outcome"
In partial consideration for the exclusive rights granted under the BCM License Agreement, Marker Cell Therapy, Inc., an entity that is now our wholly owned subsidiary, issued shares of its common stock to BCM valued at approximately $5.0 million at the time of issuance. Such initial equity issuance was exchanged into merger consideration of 1,490,813 shares of our common stock and warrants to acquire 540,643 shares of our common stock in connection with the merger we completed in October 2018. Additional consideration includes a royalty paid on net sales by us to BCM according to the royalty schedule in the BCM License Agreement. The royalty fee schedule is based on aggregate net sales in four different ranges: (1) less than $500 million, (2) $500 million to $1.0 billion, (3) $1.0 billion and over, and (4) $2.0 billion and over. The corresponding royalty percentages range from 0.65% to 5.0% - increasing in proportion to the aggregate net sales. The royalty fee may be reduced in the event that we must pay additional royalties with respect to third-party owned patent rights or technology necessary for the use, manufacture or sale of a licensed product. We also agreed to pay BCM up to an aggregate of $64.85 million in milestone payments upon the occurrence of nine particular milestones relating to completion of the first dosing in clinical trials for a first and second distinct product, receipt of approval from the FDA and the achievement of certain net sales goals. We are also responsible for sublicensing fees. In addition, under the BCM License Agreement, we are responsible for reimbursing BCM for patent-related expenses. BCM is responsible for filing, prosecuting and maintaining all patent applications and patents included in the licensed patent rights, and we have agreed to reimburse BCM for all such related legal costs incurred after the date of the BCM License Agreement, except such legal costs shall be reduced on a pro-rata basis on a patent or patent application basis should BCM license such patent or patent application in additional fields of use to any third party.
In addition, upon a liquidity event (as defined in the BCM License Agreement) of the Company, BCM will receive a liquidity incentive payment of 0.5% of the liquidity event proceeds (as defined in the BCM License Agreement).
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We have agreed to indemnify BCM and certain persons affiliated with BCM against claims and liabilities directly or indirectly related to or arising out of the design, process, manufacture or use by any third party of the licensed products, even though such claims and liabilities result in whole or in part from the negligence of the BCM indemnified parties or are based upon doctrines of strict liability or product liability, but not claims or liabilities arising from the gross negligence or intentional misconduct of any such BCM indemnified parties.
Unless terminated sooner, the license will expire on a licensed product-by-product basis and country-by-country basis, on the later of (1) the date of expiration of the last valid claim of patent rights to expire that covers the sale of such licensed product in such country, or (2) the first date following the tenth anniversary of the first commercial sale of first licensed product by us in such country. After such expiration, but not termination, the licenses granted to us shall survive and become a perpetual, paid-in-full license in such country with respect to such licensed product.
We have the right in our sole discretion to terminate the BCM License Agreement upon 60 days’ written notice to BCM. BCM has the right to terminate the agreement upon material default or failure of us of our overall obligation to perform any of the terms, covenants or provisions of the license agreement, including failure to make timely payment, taken as a whole, and which default or failure remains uncured thirty days after written notice from BCM of such material default or failure to correct such default or failure. Notwithstanding the foregoing, if a material default or failure is not susceptible to cure within the 30-day cure period, BCM’s right to terminate shall be suspended if, and for so long as, (1) we have provided BCM with a written plan that is reasonably calculated to effect a cure, (2) such plan is reasonably acceptable to BCM, in its sole but reasonable discretion, and (3) we commit to and do carry out such plan; provided, however, that, unless mutually agreed to by the parties in such plan, such suspension of BCM’s right to terminate shall not extend beyond 60 days after the original cure period. In addition, either party’s right to terminate the license agreement shall be tolled for so long as dispute resolution procedures are being pursued by the allegedly breaching party in good faith, and if it is finally and conclusively determined that the allegedly breaching party is in material breach, then the breaching party shall have the right to cure within 30 days after such determination. BCM also has the right to terminate the agreement if we shall (1) become involved in insolvency, dissolution, bankruptcy or receivership proceedings affecting the operation of our business, (2) make an assignment of all or substantially all of our assets for the benefit of creditors, or (3) if a receiver or trustee is appointed for us and we, after the expiration of 30 days following any of the enumerated events, are unable to secure a dismissal, stay or other suspension of such proceedings.
In the event of termination of the BCM License Agreement, but not expiration, all rights to the subject technology and patent rights thereunder shall revert to BCM, except to the extent necessary to exercise any surviving right or license thereunder. We may sell any licensed products actually in our possession at the effective date of termination, provided that we continue to pay to BCM royalties on all such sales in accordance with the license agreement, otherwise comply with the terms of the license agreement and sell all such licensed products within six months after the effective date of the termination.
In furtherance of the BCM License Agreement and as contemplated by the terms thereof, we entered into a Sponsored Research Agreement, or the SRA, with BCM, which provides for the conduct of research for us by credentialed personnel at BCM’s Center for Cell and Gene Therapy.
We have entered into additional agreements with BCM with respect to a strategic alliance to advance pre-clinical research, early-stage clinical trials, and Phase 2 clinical trials with respect to our product candidates, as well as continued access to our clinical data, and product manufacturing and support, including personnel and space at the institution for the foreseeable future.
Mayo Foundation for Medical Education and Research Relationships
We have exclusively licensed the intellectual property for our TPIV100/110 HER2/neu breast cancer vaccine and TPIV200 folate receptor alpha vaccine product candidates from the Mayo Foundation for Medical Education and Research, or the Mayo Foundation.
As part of our business strategy, we establish business relationships, including collaborative arrangements, with other companies and medical research institutions to assist in the clinical development of certain of our drugs and drug candidates and to provide support for our research programs.
Below is a brief description of our significant business relationships and collaborations and related license agreements with Mayo Foundation that expand our pipeline and provide us with certain rights to existing and potential new products and technologies.
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Following approval of the IND by the FDA in July 2011, we executed a Sponsored Research Agreement with the Mayo Foundation for the clinical trial.
Mayo Patent & Know-How License
On March 25, 2012, we entered into a Patent & Know-How License Agreement with the Mayo Foundation pursuant to which we licensed certain intellectual property rights from the Mayo Foundation for the development and commercialization of certain products, methods and processes property relating to a proprietary HER2/neu technology.
The Mayo Foundation granted us a license (with a right to sublicense) on a worldwide basis to make, sell and use products for prophylactic and therapeutic use. This license is an exclusive license for products that are based on the licensed intellectual property and non-exclusive for products that are based on Mayo Foundation know–how and materials. The intellectual property licensed includes U.S. patents 9,814,767 (estimated expiration date February 15, 2033) and 10,117,919 (estimated expiration date February 15, 2033) and European patent 2814836 (estimated expiration date February 15, 2033).
Under this agreement, and subject to certain exceptions, we are responsible for, among other things, developing the technology under the Patent Rights to bring Licensed Products (as defined in the agreement) to market and costs of filing, prosecution and maintenance of the Patent Rights. Mayo Foundation controls the prosecution and maintenance of the Patent Rights in consultation with us.
The Mayo Foundation granted this license in exchange for an upfront payment of $250,000 that we paid in three installments. In addition to the upfront payment, we are to pay an annual license maintenance fee, milestone fees, royalty fees (which will be subject to a minimum annual royalty fee once royalty fees are due), a percentage of sublicense income (if applicable), and a $2,000,000 diligence fee if we fail to initiate a Phase 2 clinical trial for a Licensed Product prior to the eighth anniversary of the agreement.
We have agreed to indemnify and hold Mayo Foundation harmless from any damages caused as a result of (1) the practice or exercise of any rights and assignments granted pursuant to the agreement by or on behalf of us, any affiliate, or any sub-licensee; (2) research, development, design, manufacture, distribution, use, sale, importation, exportation or other disposition of Licensed Products; (3) our, any affiliates, or any sub-licensee’s act or omission; and (4) third party suits for patent infringement involving a Licensed Product.
The term of this agreement runs from March 25, 2012 until the date of the last to expire of the Valid Claims (as defined in the agreement), provided that Mayo Foundation may terminate the agreement if, among other matters, (1) 45 days after providing us with notice of a material breach of this agreement, we fail to cure such breach, (2) we fail to initiate a Phase 3 clinical trial for a Licensed Product prior to the tenth anniversary of the agreement, and (3) we cease to conduct business in the normal event of operations or become insolvent or bankrupt. We may voluntarily terminate the agreement at any time upon written notice to Mayo Foundation.
Mayo HER2/neu License
On May 4, 2016, we entered into a License and Assignment Agreement with Mayo Foundation, or the Mayo Foundation HER2/neu License, pursuant to which we licensed certain intellectual property rights from the Mayo Foundation for the development and commercialization of certain products, methods and processes property relating to any cancer indication in which the HER2/neu antigen is overexpressed. The Mayo Foundation HER2/neu License resulted from our exercise of an option that was issued pursuant to a Technology Option Agreement that we entered into with the Mayo Foundation on May 25, 2010.
The Mayo Foundation granted us a license (with a right to sublicense) on a worldwide basis to make, sell and use products for therapeutic use against breast, ovarian, lung and any other cancers that overexpress HER2/neu antigens. This license is an exclusive license for products that are based on the licensed intellectual property and non-exclusive for products that are based on Mayo Foundation know–how and materials. The intellectual property licensed includes European patent 2215111 (estimated expiration date October 30, 2028).
Under the Mayo Foundation HER2/neu License, and subject to certain exceptions, we are responsible for, among other things, developing the technology under the Patent Rights to bring Licensed Products (both as defined in the Mayo Foundation HER2/neu License) to market and costs of filing, prosecution and maintenance of the Patent Rights. Mayo Foundation has sole control over the protection, defense, enforcement, maintenance abandonment and other handling of the Know-How (as defined in the Mayo Foundation HER2/neu License) and Materials (as defined in the Mayo Foundation HER2/neu License).
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The Mayo Foundation granted this license in exchange for an initial payment of $300,000. The Mayo Foundation assigned to us IND #14749, and we assumed all responsibility and liability for this investigational new drug application. In addition to the initial payment, we are to pay an annual license maintenance fee, milestone fees, royalty fees (which will be subject to a minimum annual royalty fee once royalty fees are due) and, if applicable, a percentage of sublicense income.
We have agreed to indemnify and hold Mayo Foundation harmless from any damages caused as a result of (1) the practice or exercise of any rights and assignments granted pursuant to the agreement by or on behalf of us or any sub-licensee; (2) research, development, design, manufacture, distribution, use, sale, importation, exportation or other disposition of Licensed Products; (3) our or any sub-licensee’s act or omission, including negligence or willful misconduct; and (4) third party suits for patent infringement involving a Licensed Product.
The term of this agreement runs from May 4, 2016 until the date of our last obligation to make payments under the agreement, provided that Mayo Foundation may terminate the agreement if, among other matters, (1) 30 days after providing us with notice of a material breach of this agreement, we fail to cure such breach, (2) 90 days after providing us with written notice, we fail to meet either of the following diligence events (a) initiate a Phase 2 clinical trial for a Licensed Product prior to the second anniversary of the agreement and, once initiated, keep current on all of our Phase 2 funding obligations and (b) initiate a Phase 2b or 3 clinical trial for a Licensed Product prior to the fifth anniversary of the agreement, (3) we fail to make a sale of a Licensed Product by May 4, 2026, and (4) we cease to conduct business in the normal event of operations or become insolvent or bankrupt. We may voluntarily terminate the agreement at any time upon written notice to Mayo Foundation.
Mayo Folate Receptor Alpha License
On July 21, 2015, we entered into a License and Assignment Agreement with Mayo Foundation, or the Mayo Foundation FRa License, pursuant to which we licensed certain intellectual property rights from the Mayo Foundation for the development and commercialization of certain products, methods and processes property relating to a Folate Receptor Alpha immunotherapeutic vaccine comprised of a set of unique peptide epitopes targeting breast, lung and ovarian cancer. The Mayo Foundation FRa License resulted from our exercise of an option that we acquired from Ayer Special Situations Fund I, LP, or Ayer, that was issued pursuant to a Technology Option Agreement that Ayer entered into with the Mayo Foundation on March 19, 2014.
The Mayo Foundation granted us a license (with a right to sublicense) on a worldwide basis to make, sell and use products for therapeutic use against breast, ovarian, lung and other cancers that overexpress Folate Receptor Alpha. This license is an exclusive license for products that are based on the licensed intellectual property and non-exclusive for products that are based on Mayo Foundation know–how and materials. The intellectual property that is licensed includes US patents 8,486,412 (estimated expiration date April 3, 2029), 8,858,952 (estimated expiration date March 10, 2031), 9,243,033 (July 10, 2027) and 9,915,646 (estimated expiration date June 1, 2027).
Under the Mayo Foundation FRa License, and subject to certain exceptions, we are responsible for, among other things, developing the technology under the Patent Rights to bring Licensed Products (both as defined in the Mayo Foundation FRa License) to market and costs of filing, prosecution and maintenance of the Patent Rights. Mayo Foundation has sole control over the protection, defense, enforcement, maintenance abandonment and other handling of the Know-How (as defined in the Mayo Foundation FRa License) and Materials (as defined in the Mayo Foundation FRa License).
The Mayo Foundation granted this license in exchange for an initial upfront payment of $350,000. The Mayo Foundation assigned to us IND # 14546, and we assumed all responsibility and liability for this investigational new drug application. In addition to the initial upfront payment, we are to pay additional upfront payments, an annual license maintenance fee, milestone fees, royalty fees (which will be subject to a minimum annual royalty fee once royalty fees are due), and, if applicable, a percentage of sublicense income.
We have agreed to indemnify and hold Mayo Foundation harmless from any damages caused as a result of (1) the practice or exercise of any rights and assignments granted by the Mayo Foundation FRa License by or on behalf of us or any sub-licensee; (2) research, development, design, manufacture, distribution, use, sale, importation, exportation or other disposition of Licensed Products; (3) our or any sub-licensee’s act or omission, including negligence or willful misconduct; and (4) third party suits for patent infringement involving a Licensed Product.
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The term of this agreement runs from July 21, 2015 until the date of our last obligation to make payments under this agreement, provided that the Mayo Foundation may terminate this agreement if, among other matters, (1) 30 days after providing us with notice of a material breach of this agreement, we fail to cure such breach, (2) 90 days after providing us with written notice, we fail to meet either of the following diligence events (a) initiate a Phase 2 clinical trial for a Licensed Product prior to the 2nd anniversary of the Mayo Foundation FRa License and, once initiated, keep current on all of our Phase 2 funding obligations and (b) initiate a Phase 2b or 3 clinical trial for a Licensed Product prior to the 5th anniversary of the Mayo Foundation FRa License, (3) we fail to make a sale of a Licensed Product by July 21, 2025 and (4) we cease to conduct business in the normal event of operations or become insolvent or bankrupt. We may voluntarily terminate the Mayo Foundation FRa License at any time upon written notice to Mayo Foundation.
Intellectual Property
Our commercial success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our technology, inventions, improvements, and know-how related to the business; to defend and enforce proprietary rights, including any patents that we may own in the future; to preserve the confidentiality of our trade secrets and other intellectual property; to obtain and maintain licenses to use intellectual property owned by third parties; and to operate without infringing the valid and enforceable patents and other proprietary rights of third parties. Our ability to stop third parties from making, using, selling, offering to sell, or importing our products may depend on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities — in other words, the rights obtained under exclusive license arrangements such as those pursuant to our BCM License Agreement and our Mayo Foundation licenses. With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed in the future, nor can we be sure that any of our existing patents or any patents that may be granted in the future will be commercially useful in protecting our commercial products and methods of manufacturing the same.
To achieve this objective, a strategic focus for us has been to identify and license key patents and patent applications that serve to enhance our intellectual property and technology position. Currently, all of our MultiTAA-specific T cell intellectual property rights are licensed from BCM. Our intellectual property portfolio currently includes patent applications having: (1) claims directed to methods of generating multi-antigen specific T cell products; and (2) claims directed to therapeutic uses of such multi-antigen specific T cell products. We believe our patent portfolio, together with our efforts to develop and patent next-generation technologies, provides us with a substantial intellectual property position. However, the area of patent and other intellectual property rights in biotechnology is an evolving one with many risks and uncertainties.
Patents
Patents and other proprietary rights are vital to our business operations. We protect our technology through various United States and foreign patent filings and maintain trade secrets that we own. Our policy is to seek appropriate patent protection both in the United States and abroad for our proprietary technologies and product candidates. An enforceable patent with appropriate claim coverage can provide an advantage over competitors who may seek to employ similar approaches to develop therapeutics, and so the future commercial success of products, and therefore our future success, will be in part dependent on our intellectual property strategy. We reassess the value of each patent at the time maintenance fees are due, and in cases where maintaining the patent is judged to be of no significant strategic value, we decline to pay the maintenance fee.
There can be no assurance that our patents, and any patents that may be issued or licensed to us in the future, will afford protection against competitors with similar technology. In addition, no assurances can be given that the patents issued or licensed to us will not be infringed upon or designed around by others or that others will not obtain patents that we would need to license or design around. If the courts uphold existing or future patents containing broad claims over technology used by us, the holders of such patents could require us to obtain licenses to use such technology. Patent coverage may also vary from country to country based on the scope of available patent protection. There are also opportunities to obtain an extension of patent coverage for a product in certain countries, which adds further complexity to the determination of patent life.
We currently have a number of issued and pending patents covering composition of matter of our PolyStart technology and methods of using our PolyStart technology, including: U.S. 9,364,523 (estimated expiration date March 17, 2035); U.S. 9,655,956 (estimated expiration date March 17, 2035); U.S. 9,988,643 (estimated expiration date March 27, 2035); and U.S. 10,030,252 (estimated expiration date March 17, 2035)
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The effect of the issued United States patents is that they provide us with patent protection for the claims covered by the patents. While the expiration of a product patent normally results in a loss of market exclusivity for the covered product or product candidate, commercial benefits may continue to be derived from , for example: (1) later- expiring patents on processes and intermediates related to more economical methods of manufacture of the active ingredient of such product; (2) patents relating to the use of such product; (3) patents relating to novel compositions and formulations; and (4) in the United States and certain other countries, other types of market exclusivity that may be available under relevant law. The effect of patent expiration on our product candidates also depends upon many other factors such as the nature of the market and the position of the product in it, the growth of the market, the complexities and economics of the process for manufacture of the active ingredient of the product and the requirements of new drug provisions of the Federal Food, Drug and Cosmetic Act or similar laws and regulations in other countries.
Our pending patent applications cover a range of technologies, including specific embodiments and applications for treatment of various medical indications, improved application methods and adjunctive utilization with other therapeutic modalities. The coverage claimed in a patent application can be significantly reduced before the patent is issued. Accordingly, we do not know whether any of the applications we will acquire, or license will result in the issuance of patents, or, if any patents are issued, whether they will provide significant proprietary protection or will be challenged, circumvented or invalidated. Because unissued U.S. patent applications are maintained in secrecy for a period of eighteen months and U.S. patent applications filed prior to November 29, 2000 are not disclosed until such patents are issued, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain of the priority of inventions covered by pending patent applications. Moreover, we may have to participate in opposition proceedings in a foreign patent office, or for United States patent applications filed before March 16, 2013, in interference proceedings declared by the United States Patent and Trademark Office, or the USPTO, to determine priority of invention, or in United States inter partes review or post-grant review procedures, any of which could result in substantial cost to us, even if the eventual outcome is favorable to us. There can be no assurance that the patents, if issued, would be held valid by a court of competent jurisdiction. An adverse outcome could subject us to significant liabilities to third parties, require disputed rights to be licensed from third parties or require us to cease using such technology.
We have patents and patent applications in other countries, as well as in the European Patent Office that we believe provide equivalent or comparable protection for our product candidates in jurisdictions internationally that we consider to be key markets. Because of the differences in patent laws and laws concerning proprietary rights, the extent of protection provided by U.S. patents or proprietary rights owned by us may differ from that of their foreign counterparts.
Trade Secrets
We also rely on trade secrets and know-how relating to our proprietary technology and product candidates, continuing innovation, and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of immuno-oncology. However, trade secrets can be difficult to protect. We also plan to rely on regulatory protection afforded through orphan drug designations, data exclusivity, market exclusivity and patent term extensions when available, as well as contractual agreements with our academic and commercial partners.
We require each of our employees, consultants and advisors to execute a confidentiality agreement upon the commencement of any employment, consulting or advisory relationship with us. Each agreement provides that all confidential information developed or made known to the individual during the course of the relationship will be kept confidential and not be disclosed to third parties except in specified circumstances. In the case of employees, the agreements provide that all inventions conceived by an employee shall be our exclusive property.
Trademarks
We currently have pending with the USPTO applications for registration of the trademarks POLYSTART and “Marker Therapeutics.” We currently have the trademark “TapImmune” registered with the USPTO. We also have rights to use other names essential to our business. Federally registered trademarks have a perpetual life if they are maintained and renewed on a timely basis and used properly as trademarks, subject to the rights of third parties to seek cancellation of the trademarks if they claim priority or confusion of usage. We regard our trademarks and other proprietary rights as valuable assets and believe they have significant value to us.
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We believe that our patents, the protection of discoveries in connection with our development activities, our proprietary products, technologies, processes and know-how and all our intellectual property are important to our business. There can be no assurance that any of our patents, licenses or other intellectual property rights will afford us any protection from competition.
Government Regulation
The FDA and other regulatory authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of biologics such as those we are developing. We, along with third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following:
● completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices, or GLP, regulation;
● submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made;
● approval by an independent Institutional Review Board, or IRB, or ethics committee at each clinical site before the trial is commenced;
● performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose;
● preparation of and submission to the FDA of a biologics license application, or BLA, after completion of all pivotal clinical trials;
● a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;
● satisfactory completion of an FDA Advisory Committee review, if applicable;
● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices, or GCP; and
● FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
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Preclinical and Clinical Development
Prior to beginning the first clinical trial with a product candidate, we must submit an IND to the FDA. An IND is a request for authorization from the FDA to administer an investigational new drug product to humans. The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial. In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial. Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments. Furthermore, an independent IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site and must monitor the study until completed. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy. There are also requirements governing the reporting of ongoing clinical studies and clinical study results to public registries.
For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap.
● Phase 1—The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition. These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.
● Phase 2—The investigational product is administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.
● Phase 3—The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval.
In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product. These so- called Phase 4 studies may be made a condition to approval of the BLA. Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product, or for biologics, the safety, purity and potency. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.
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BLA Submission and Review
Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications. The BLA must include all relevant data available from pertinent preclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things. The submission of a BLA requires payment of a substantial application user fee to FDA, unless a waiver or exemption applies.
Once a BLA has been submitted, the FDA’s goal is to review standard applications within ten months after it accepts the application for filing, or, if the application qualifies for priority review, six months after the FDA accepts the application for filing. In both standard and priority reviews, the review process is often significantly extended by FDA requests for additional information or clarification. The FDA reviews a BLA to determine, among other things, whether a product is safe, pure and potent and the facility in which it is manufactured, processed, packed, or held meets standards designed to assure the product’s continued safety, purity and potency. The FDA may convene an advisory committee to provide clinical insight on application review questions. Before approving a BLA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a Complete Response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A Complete Response letter will describe all of the deficiencies that the FDA has identified in the BLA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the Complete Response letter without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling. In issuing the Complete Response letter, the FDA may recommend actions that the applicant might take to place the BLA in condition for approval, including requests for additional information or clarification. The FDA may delay or refuse approval of a BLA if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.
If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy, or REMS, to ensure the benefits of the product outweigh its risks. A REMS is a safety strategy to manage a known or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications. Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace. The FDA may require one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies.
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Expedited Development and Review Programs
The FDA offers a number of expedited development and review programs for qualifying product candidates. The fast-track program is intended to expedite or facilitate the process for reviewing new products that meet certain criteria. Specifically, new products are eligible for fast-track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a fast-track product has opportunities for frequent interactions with the review team during product development and, once a BLA is submitted, the product may be eligible for priority review. A fast-track product may also be eligible for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.
A product intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its development and review. A product can receive breakthrough therapy designation if preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation includes all of the fast-track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product, including involvement of senior managers.
Any marketing application for a biologic submitted to the FDA for approval, including a product with a fast-track designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval. A product is eligible for priority review if it has the potential to provide a significant improvement in the treatment, diagnosis or prevention of a serious disease or condition compared to marketed products. For products containing new molecular entities, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (compared with ten months under standard review).
Additionally, products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.
The regenerative medicine advanced therapy, or RMAT, designation is intended to facilitate an efficient development program for, and expedite review of, any drug that meets the following criteria: (1) it qualifies as a RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions; (2) it is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and (3) preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such a disease or condition. Like breakthrough therapy designation, RMAT designation provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate and eligibility for rolling review and priority review. Products granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites, including through expansion to additional sites. Once approved, when appropriate, the FDA can permit fulfillment of post-approval requirements under accelerated approval through the submission of clinical evidence, clinical studies, patient registries, or other sources of real-world evidence such as electronic health records; through the collection of larger confirmatory datasets; or through post-approval monitoring of all patients treated with the therapy prior to approval.
Fast track designation, breakthrough therapy designation, priority review, accelerated approval, and RMAT designation do not change the standards for approval but may expedite the development or approval process.
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Orphan Drug Designation
Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic for this type of disease or condition will be recovered from sales in the United States for that drug or biologic. Orphan drug designation must be requested before submitting a BLA. After the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. The orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review or approval process.
If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusive approval (or exclusivity), which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. Orphan drug exclusivity does not prevent FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA application fee.
A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. In addition, exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
Post-Approval Requirements
Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing user fee requirements, under which FDA assesses an annual program fee for each product identified in an approved BLA. Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.
The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:
● restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls;
● fines, warning letters or holds on post-approval clinical studies;
● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals;
● product seizure or detention, or refusal of the FDA to permit the import or export of products; or
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● injunctions or the imposition of civil or criminal penalties.
The FDA closely regulates the marketing, labeling, advertising and promotion of biologics. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.
Biosimilars and Reference Product Exclusivity
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the ACA, signed into law in 2010, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009, or BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-approved reference biological product.
Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical study or studies. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. Complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval pathway that are still being worked out by the FDA.
Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.
The BPCIA is complex and continues to be interpreted and implemented by the FDA. In addition, recent government proposals have sought to reduce the 12-year reference product exclusivity period. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. As a result, the ultimate impact, implementation, and impact of the BPCIA is subject to significant uncertainty.
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Other Healthcare Laws and Compliance Requirements
Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business. Such laws include, without limitation: the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under any federal healthcare program; federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment to the federal government, including federal healthcare programs, that are false or fraudulent; HIPAA, which created additional federal criminal statutes which prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters, and which, as amended by HITECH, also imposes certain requirements on HIPAA covered entities and their business associates and covered subcontractors relating to the privacy, security and transmission of individually identifiable health information; the U.S. federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to the federal government, information related to payments or other transfers of value made to covered health care professionals and teaching hospitals, as well as ownership and investment interests held by health care professionals and their immediate family members; and U.S. state and foreign law equivalents of each of the above federal laws, which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts. In addition, certain states require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and certain states and local jurisdictions require the registration of pharmaceutical sales representatives. If their operations are found to be in violation of any of such laws or any other governmental regulations that apply, they may be subject to penalties, including, without limitation, significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.
Coverage and Reimbursement
Significant uncertainty exists as to the coverage and reimbursement status of any pharmaceutical or biological product for which we obtain regulatory approval. Sales of any product depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement for such product by third-party payors. Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. In the United States, for example, principal decisions about reimbursement for new products are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS. CMS decides whether and to what extent a new product will be covered and reimbursed under Medicare, and private third-party payors often follow CMS's decisions regarding coverage and reimbursement to a substantial degree. However, one third-party payor's determination to provide coverage for a product candidate does not assure that other payors will also provide coverage for the product candidate. Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. As a result, the coverage determination process is often time-consuming and costly. This process will require us to provide scientific and clinical support for the use of our products to each third-party payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization.
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In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products. Third-party payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical or biological products, medical devices and medical services, in addition to questioning safety and efficacy. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product. Decreases in third-party reimbursement for any product or a decision by a third-party payor not to cover a product could reduce physician usage and patient demand for the product. No regulatory authority has granted approval for a personalized cancer immunotherapy based on a vaccine approach, and there is no model for reimbursement of this type of product.
Healthcare Reform
The United States and some foreign jurisdictions are considering or have enacted a number of reform proposals to change the healthcare system. There is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by federal and state legislative initiatives, including those designed to limit the pricing, coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially under government-funded health care programs, and increased governmental control of drug pricing.
In March 2010, the ACA was signed into law, which substantially changed the way healthcare is financed by both governmental and private insurers in the United States, and significantly affected the pharmaceutical industry. The ACA contained a number of provisions of particular importance to the pharmaceutical and biotechnology industries, including, but not limited to, those governing enrollment in federal healthcare programs, a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. There remain judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future. For example, the Tax Cuts and Jobs Act was enacted, which, among other things, removed penalties for not complying with ACA’s individual mandate to carry health insurance. In addition, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer tax. On December 14, 2018, a Texas U.S. District Court Judge ruled that the ACA is unconstitutional in its entirety because the individual mandate was repealed by Congress as part of the Tax Cuts and Jobs Act. Additionally, on December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. The United States Supreme Court is currently reviewing this case, although it is unclear when a decision will be made. Although the Supreme Court has yet ruled on the constitutionality of the ACA, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through May 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including, among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. It is also unclear how the Supreme Court ruling, other such litigation, and the healthcare reform measures of the Biden administration will impact the ACA and our business.
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Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year through 2030, except for a temporary suspension from May 1, 2020 through March 31, 2021 due to the COVID-19 pandemic, unless additional Congressional action is taken, and reduced payments to several types of Medicare providers. Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives. For example, on July 24, 2020 and September 13, 2020, the Trump Administration announced several executive orders related to prescription drug pricing that seek to implement several of the administration's proposals. As a result, the FDA released a final rule on September 24, 2020, effective November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada. Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed pending review by the Biden administration until March 22, 2021. On November 20, 2020, CMS issued an interim final rule implementing President Trump's Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021. On December 28, 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule. However, it is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.
Product Liability and Insurance
We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. We have not experienced any product liability claims to date. We currently carry products and clinical trial liability insurance policies. There can be no assurance that liability claims will not exceed such insurance coverage limits, which could have a materially adverse effect on our business, financial condition or results of operations or that such insurance will continue to be available on commercially reasonable terms, if at all.
Human Resources
Employees
As of December 31, 2020, we had 44 full-time employees. There were 32 in research, development, quality, CMC and clinical and 12 were in finance, legal, human resources or administrative support. None of our employees is subject to a collective bargaining agreement. We consider our relationship with our employees to be good.
Consultants
We have consulting agreements with a number of leading academic scientists, clinicians and regulatory experts. They serve as important contacts for us throughout the broader scientific and clinical communities. They are distinguished individuals with expertise in numerous fields, including cellular biology, molecular biology, oncology, clinical, manufacturing and regulatory.
We retain each consultant according to the terms of a consulting agreement. Under such agreements, we pay them a consulting fee and reimburse them for out-of-pocket expenses incurred in performing their services for us. In addition, some consultants hold options to purchase our common stock, subject to the vesting requirements contained in separate award agreements. Our consultants may be employed by other entities and therefore may have commitments to their employer or may have other consulting or advisory agreements that may limit their availability to us.
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Human Capital Resources
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of equity-based compensation awards. We strive to create a diverse environment, and our commitment to diversity, equity and inclusion begins with our leadership team of diverse backgrounds and experiences. Approximately 80% of our executive officers are women or self-identify as a member of an underrepresented minority group.
Corporate Information
We were incorporated under the laws of the State of Nevada in 1991 under the name "TapImmune, Inc." and reincorporated in Delaware in October 2018 under the name "Marker Therapeutics, Inc." On October 17, 2018, we completed a business combination with a Delaware corporation that was then known as "Marker Therapeutics, Inc.," or Private Marker, in accordance with the terms of the Agreement and Plan of Merger and Reorganization dated as of May 15, 2018, or the Merger Agreement, by and among us, Private Marker and Timberwolf Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of TapImmune, or Merger Sub, pursuant to which, among other matters, Merger Sub merged with and into Private Marker, with Private Marker continuing as a wholly owned subsidiary of TapImmune and the surviving corporation of the merger. In connection with the merger, we changed our name from "TapImmune, Inc." to "Marker Therapeutics, Inc." and Private Marker changed its name to "Marker Cell Therapy, Inc." and became our wholly owned subsidiary. Our principal executive offices are located at 3200 Southwest Freeway, Suite 2500, Houston, Texas 77027, and our telephone number is (713) 400-6400. Our common stock is listed for trading on the Nasdaq Capital Market under the symbol "MRKR".
Available Information
Our website is located at www.markertherapeutics.com . We make available free of charge on our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as soon as reasonably practicable after we electronically file or furnish such materials to the Securities and Exchange Commission. Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.