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Item 1. Business

2025-03-10 compared with 2024-03-28 · 691 added, 482 removed, 35 unchanged (97% of the section changed)

Reneo is a pharmaceutical company historically focused on the development and commercialization of therapies for patients with rare genetic mitochondrial diseases, which are often associated with the inability of mitochondria to produce adenosine triphosphate (ATP).

Our only product candidate, mavodelpar, is a potent and selective agonist of the peroxisome proliferator-activated receptor delta (PPARδ).

Mavodelpar has been shown to increase transcription of genes involved in mitochondrial function and increase fatty acid oxidation (FAO), and may increase production of new mitochondria.

On December 14, 2023, we announced that our pivotal STRIDE study, a global, randomized, double-blind, placebo-controlled Phase 2b trial of mavodelpar in adult patients with primary mitochondria myopathy (PMM) due to mitochondrial DNA (mtDNA) defects, did not meet its primary or secondary efficacy endpoints.

As a result, we suspended the development activities for mavodelpar and implemented cash preservation activities, including a substantial workforce reduction.

We implemented a reduction in workforce in December 2023 and February 2024, and currently have eight full-time employees remaining.

In January 2024, our Board of Directors retained an independent financial advisor to initiate a formal process to evaluate potential strategic alternatives focused on maximizing stockholder value, including, but not limited to, a merger, sale, other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of our assets.

Our Board of Directors, in consultation with our independent financial and legal advisors, is evaluating a number of indications of interest we have received.

If we do not successfully consummate a strategic alternative, our Board of Directors may decide to pursue a dissolution and liquidation of our company.

We are no longer pursuing further clinical development of mavodelpar at this time.

The disclosures throughout this Annual Report include discussion regarding our historical operations along with potential risks that could arise if we or a third party pursue further research, development or clinical trials in the future.

Our evaluation of potential strategic alternatives entails numerous significant risks and uncertainties, including those set forth in Part I, Item 1A under the heading “Risk Factors” of this Annual Report.

History of Mavodelpar Clinical Trials Overview

The following table summarizes our historical clinical trials.

Phase 1 RDBPC

Obese (dyslipidemic)

Phase 1 RDBPC (leg immobilization)

Open-label Phase 1b

RDBPC Phase 2b

Open-label safety

(STRIDE AHEAD)

(mtDNA + nDNA)

randomized double-blind placebo-controlled clinical trial

* long-chain fatty acid oxidation disorder

Mavodelpar has been administered to more than 450 subjects, with treatment as long as 30 months.

Mavodelpar was generally well-tolerated in all clinical trials conducted, with the majority of adverse events reported being mild to moderate in severity.

In the entire program, there was one death that occurred during the post-study observational period in a subject who had previously been treated with mavodelpar.

Sales and Marketing

We currently do not have a commercial organization for the marketing, sales, and distribution of pharmaceutical products.

OnKure Therapeutics, Inc.

(“OnKure”, “we”, “us” or the “Company”) is a clinical-stage biopharmaceutical company focused on the discovery and development of precision medicines that target biologically validated drivers of cancers underserved by available therapies.

Using a structure- and computational chemistry-driven drug design platform, we are committed to improving clinical outcomes for patients by building a robust pipeline of small molecule drugs designed to selectively target specific mutations thought to be key drivers of cancer.

By improving selectivity for the oncogenic and mutated form of these cancer-driver proteins, we aim to discover and develop drugs with improved safety and efficacy by sparing toxicity that arises from non-selective inhibition of the non-mutated (or wild-type) version of the protein.

We work under the belief that inhibiting target proteins with specific mutations instead of wild-type variants should enable precise patient selection that will, in turn, improve the probability of clinical success.

We designed our current product candidates utilizing disciplined medicinal chemistry, x-ray crystallography and computational chemistry to inhibit specified mutated versions of phosphoinositide 3-kinase alpha (“PI3K α ”), a key mediator in cancer growth signaling.

Our lead product candidate, OKI-219, is a highly selective inhibitor of PI3K α harboring the H1047R mutation (“PI3K α H1047R ”) that has a much smaller impact on wild-type PI3K α (“PI3K α WT ”).

By minimizing the targeting of PI3Kα WT (approximately 80-fold selectivity for PI3Kα H1047R over PI3Kα WT ), we believe OKI-219 can achieve exposures required for activity in PI3Kα-mutated cancers with minimal effect on wild-type PI3Kα signaling, thus potentially limiting on-target toxicities, such as hyperglycemia, gastrointestinal ("GI") effects, fatigue, and rash.

We plan to initially focus on the development of OKI-219 in patients with advanced breast cancer of genetic subtypes that are (a) both hormone receptor positive (“HR+”) and human epidermal growth factor receptor 2 negative (“HER2-”);

and (b) human epidermal growth factor receptor 2 positive (“HER2+”).

We believe we can potentially expand the application of OKI-219 by conducting appropriate clinical trials in earlier lines of treatment within breast cancer, other subtypes of breast cancer, and potentially in other solid tumors.

OKI-219 is currently being investigated in a first-in-human Phase 1a/1b open-label trial evaluating OKI-219 as a monotherapy and in combination with fulvestrant or trastuzumab in subjects with advanced solid tumors, including breast cancer harboring a PI3K a H1047R mutation (“PIKture-01”).

In Phase 1a, subjects receive escalating oral doses of OKI-219 starting at 300 mg twice daily (commonly referred to as “BID”) continuously.

In Phase 1b we are currently assessing OKI-219 in combination with fulvestrant in patients with HR+/HER2- breast cancer, and in the future, plan to assess OKI-219 in combination with HER2+ targeted agents (e.g., trastuzumab) in patients with HER2+ breast cancer.

In December 2024, we announced the preliminary safety, tolerability, and pharmacokinetic (“PK”) data from PIKture-01 with a cut off date of October 28, 2024.

These data showed that OKI-219 was well tolerated across all dose levels with no hyperglycemia, stomatitis, or rash observed at any dose, and only grade 1 treatment-related adverse events (“TRAEs”) were reported.

No dose interruptions, delays, reductions, or discontinuations were reported for any adverse events.

OKI-219 dosed at 900 mg twice daily showed steady-state exposure levels with near-continuous coverage of the in vivo EC 80 for pAKT inhibition.

These data supported the initiation of Part 1b of PIKture-01 and we began enrolling patients in the fourth quarter of 2024 focusing initially on the evaluation of OKI-219 in combination with fulvestrant.

To date, we have completed the enrollment of patients in the Part A monotherapy arm of PIKture-01 through the 1200 mg BID cohort level with no dose limiting toxicities observed in the completed cohorts.

We are currently enrolling the last cohort with a top dose of 1500 mg BID and enrollment in Part A is almost complete.

Additionally, we have enrolled patients in the Part B fulvestrant combination arm through the 900 mg BID cohort with no dose limiting toxicities observed for all completed cohorts through 600 mg BID and enrollment in the dose escalation portion of Part B is almost complete.

We expect to report additional single-agent data and initial combination data with fulvestrant in the second half of 2025.

Pharmacokinetic and Selectivity Profile

OKI-219 has shown favorable PK data (Figure 1) in the PIKture-01 trial that support pharmacologically relevant exposures, potentially even at the lowest assessed dose levels, with a safety profile that is indicative of little or no inhibition of wild-type PI3Kα.

At steady state, the exposures of OKI-219 exceed exposures associated with

robust antitumor activity in preclinical models.

The PK data are considered preliminary with a data cut-off of October 28, 2024.

We plan to provide updated PK data in the second half of 2025.

Steady-state concentrations of OKI-219 at Day 15 across three dose levels in PIKture-01 Part A.

Data cut off October 28, 2024.

As shown in Figure 2, 13 of the 14 patients that received a ≥600 mg dose twice a day remained in the study as of the cutoff date.

In addition, two patients with HR+/HER2- breast cancer who received the 300 mg dose showed prolonged stable disease, including one patient who sustained >95% reduction in PIK3CA H1047R ctDNA and was on treatment for more than seven months.

Time on treatment data from PIKture-01 trial.

Data cut off October 28, 2024.

Preclinical Data

Results from preclinical in vivo models (Figure 3 and 4 below) of OKI-219 used in combination with standard-of-care (“SOC”) therapies for HR+ breast cancers show strong combination activity of OKI-219 in doublet combinations with SERDs and in triplet combinations with SERD + CDK4/6 inhibitors.

Additionally, OKI-219 was well tolerated at doses well above those required for tumor regressions, supporting the ability to combine OKI-219 with SOC therapies in breast cancer.

Additional preclinical combination studies are ongoing.

Preclinical comparison of tumor shrinkage for OKI-219 alone and in combination with fulvestrant or camizestrant vs.

fulvestrant or camizestrant in an ER+HER2- breast cancer model.

Preclinical comparison of tumor shrinkage for OKI-219 alone and in combination with fulvestrant plus CDK 4/6 inhibitors vs.

CDK 4/6 inhibitors alone and in combination with fulvestrant.

Genetic analysis of tumors has become standard-of-care in oncology and has enabled oncologists to characterize tumors much more precisely than simple segmentation based on the tissue of origin.

A more precise understanding of the genetic alterations driving the growth of specific tumors has also created an opportunity for the industry to develop drugs that are intended to target mutated or oncogenic forms of proteins that drive cancer growth and survival.

In a number of notable cases, this approach has profoundly changed how these tumors are treated and has significantly improved outcomes for patients with cancers that depend on these oncogenes for survival.

However, in many cases, it has been challenging to effectively target the mutated oncogenic form of a target protein.

In particular, non-selective inhibition of the wild-type protein in normal tissues often leads to toxic effects that can limit effective target inhibition of the intended oncogenic protein in cancers and, therefore, offers suboptimal clinical benefit.

One such challenging target is the oncogene PI3Kα .

PI3Kα is an attractive target for cancer drugs because it is one of the most commonly mutated oncogenes in cancers and is a key mediator of abnormal cell growth.

Furthermore, PI3Kα kinase mutations are clinically correlated with drug resistance and poor clinical outcomes.

Single amino acid mutations such as E542K, E545K, H1047R, H1047L, and H1047Y account for over 70% of PI3Kα mutations.

Notably, the PI3Kα H1047R mutation is very common in breast cancer, being identified in approximately 14% of breast cancer cases.

The PI3Kα inhibitor alpelisib has been approved to treat patients with advanced breast cancers harboring PI3Kα mutations.

Alpelisib is non-selective for the key mutations, and its inhibition of not only mutant but also wild-type PI3Kα leads to significant toxicities in patients, such as hyperglycemia, rash and diarrhea.

These toxicities can present significant challenges to optimal dosing and use in this patient population.

We are focused on addressing the shortcomings of alpelisib and other first-generation PI3Kα inhibitors (e.g., inavolisib) by developing product candidates that target these genetic alterations selectively while sparing the wild-type PI3Kα .

Our Development Pipeline

We are focused on the discovery and development of precision oncology therapies that target

biologically validated drivers of cancers underserved by available therapies.

Currently, we are focused on delivering highly selective drug candidates that preserve wild-type PI3Kα while effectively targeting the PI3Kα-mutated cancers, initially in advanced breast cancer.

Our lead product candidate, OKI-219, is advancing in a Phase 1 clinical trial.

We are also actively pursuing multiple additional discovery programs that target oncogenic mutations of PI3Kα.

We expect to announce a pan-mutant development candidate in the second quarter of 2025 targeting the most common PI3K α mutations (i.e., H1047R, E545K, and E542K).

Additionally, we are developing an allosteric inhibitor molecule designed to be highly selective by specifically targeting the PI3Kα E545K and E542K mutations ( which are also known as helical domain mutations or e-mutants) and expect to announce a development candidate in 2026 .

Our Clinical Pipeline

Our strategic objective is to conceive, develop and commercialize one or more mutation-specific PI3Kα inhibitors to address the needs of patients in breast cancer and beyond.

With three PI3K a inhibitor programs, we are committed to developing product candidates that address the needs of patients who suffer from diseases implicated by PI3K a , a key mediator in cancer growth signaling .

We rely on the experience of our team in precision kinase inhibitor drug design and development to carry out our strategy.

In doing so, we intend to:

Rapidly advance and expand the clinical development of our highly selective PI3K α H 1047R inhibitor, OKI-219 .

The Phase 1 dose-escalation and expansion cohort trial, OKI-219-101, known as PIKture-01, is currently enrolling two arms:

a) a monotherapy arm in patients with advanced solid tumors with a PI3Kα H1047R mutation and b) a combination arm evaluating OKI-219 in combination with fulvestrant, a selective estrogen receptor degrader (“SERD”), in patients with PI3Kα H1047R -mutated, HR+/HER2- advanced breast cancer.

We also plan to initiate additional trials or arms of PIKture-01 to evaluate OKI-219 in combination with trastuzumab in patients with PI3Kα H1047R -mutated, HER2+ advanced breast cancer, and certain combinations of OKI-219 with fulvestrant and CDK inhibitors in ER+ metastatic breast cancer.

Discover and develop a PI3K a inhibitor development candidate that selectively targets all the most common PI3K a mutations .

We are actively pursuing a pan-mutant molecule to target all the most common PI3Kα mutations (i.e., H1047R, E545K, and E542K) that may have the potential to treat a

broader patient population.

Our research and development team has extensive expertise in discovering early development candidates with favorable drug properties, and we plan to announce a pan-mutant development candidate in the second quarter of 2025.

Discover and develop a PI3K α inhibitor development candidate specifically targeting helical domain mutations .

We are also applying our precision drug design approach and our team’s expertise to develop kinase inhibitors for PI3Kα E542K and E545K mutations (also known as helical domain mutations or e-mutants).

These mutants are well known oncogenic drivers, and highly selective inhibitors targeting these mutations have the potential to further expand our addressable patient population.

We anticipate announcing a development candidate in 2026.

Conduct clinical and regulatory programs to support our global regulatory and commercialization strategy .

We retain worldwide rights to all our programs.

We plan to expand our clinical development and seek regulatory approval for our current and future product candidates in the United States and abroad.

Our long-term goal is to commercialize our products by establishing a commercial organization on our own and/or by leveraging the capabilities of potential commercial partners in the United States and outside the United States.

We plan to evaluate strategic opportunities that we believe can maximize the commercial potential of our product candidates with collaborators whose development and commercial capabilities could be complementary.

Genetic Tumor Profiling is Unlocking Novel Targets for Cancer Therapy

Over the past 20 years, drug developers have translated findings from tumor genetic analysis into greater insight into tumor biology, a development that has led to a major improvement in anti-cancer therapies.

Tumors are no longer simply classified based on their tissue of origin;

rather, they are segmented based on genetic alterations, which frequently predict the likely pathogenesis of a specific malignancy and/or its sensitivity to treatment with specific targeted therapies.

As a key part of this genetic analysis, mutations in critical signaling pathways have been identified, many of which are potential targets for precision medicines.

The signaling axis encompassing PI3K/AKT and mammalian target of rapamycin (“mTOR”) is believed to be a key growth driver of tumor cells and is often considered a master regulator of cancer.

PI3K activity is upregulated by upstream oncogenes and growth factor receptors, or by activating mutations of PI3K itself, and aberrant PI3K activation is a common hallmark in tumor cell growth in both hematologic malignancies and solid tumors.

PI3K activation is believed to contribute to cancer cell survival, angiogenesis, and tumor metastasis.

There are three subtypes of PI3K, known as Type I, Type II and Type III.

Type I PI3K is believed to drive the proliferation of tumor cells and has been a key target for drug development.

There are four biochemical variants, also known as isoforms or subtypes, of Type I PI3K:

PI3Kα, PI3Kß, PI3K g and PI3K d .

While they are differentiated from each other in sequence and structure, all these variants are based on the same fundamental kinase sequence, structure, and function.

PI3Kα is one of the most commonly mutated oncogenes in cancer.

PI3Kα can be activated by oncogenic point mutations in the PI3Kα gene.

The three most common mutations of PI3Kα are H1047R, E542K and E545K.

Mutation of PI3Kα H1047R in a mouse model has induced breast cancer tumorigenesis and is also associated with drug resistance to HER2-targeting agents in breast cancer.

PI3Kα is mutated in up to 36% of breast cancer cases.

Notably, the PI3Kα H1047R mutation is also found in approximately 14% of breast cancer cases, making this an attractive target for novel therapeutics in metastatic breast cancer.

In addition, targeting mutated PI3Kα is a clinically-validated approach following approvals of three drugs for patients with PI3Kα-mutated breast cancers:

1) the PI3Kα inhibitor alpelisib, marketed by Novartis as PIQRAY ® , approved in combination with fulvestrant for the treatment of HR+, HER2-, locally advanced or metastatic breast cancer with PI3Kα mutations, 2) the AKT inhibitor capivasertib, marketed by AstraZeneca as TRUQAP ® , also approved in combination with fulvestrant for the treatment of HR+, HER2-, locally advanced or metastatic breast cancer with PI3Kα mutations and 3) the PI3Kα-selective inhibitor inavolisib (Itovebi TM ) which was recently approved in combination with the SERD fulvestrant and the CDK4/6 inhibitor palbociclib (Ibrance TM ) in endocrine-resistant HR+/Her2- locally advanced or metastatic breast cancer .

Both alpelisib and inavolisib are ATP-competitive PI3Kα kinase inhibitors that do not distinguish between mutant and wild-type PI3Kα.

Likewise, capivasertib inhibits the pathway downstream of PI3Kα, and also does not differentiate between inhibition of wild-type and mutated PI3Kα signaling.

Unlike these drugs, OKI-219 is a specific and selective allosteric inhibitor of H1047R-mutated PI3Kα.

OKI-219 is designed to bind at an allosteric

site located adjacent to the H1047R mutation which is distal from the active site.

This has been shown in numerous x-ray images of OKI-219 bound to PI3Kα H1047R .

Drug-related toxicities associated with non-selective PI3Kα pathway inhibitors such as alpelisib and capivasertib are caused by inhibiting the wild-type PI3Kα enzyme in normal tissues and limit the therapeutic dosing of these agents, resulting in sub-optimal dosing and limited efficacy.

Adverse events commonly associated with PI3Kα inhibitors include hyperglycemia, rash, diarrhea, and stomatitis.

Tumor sequencing analysis has led to the identification of specific mutations in the PI3Kα genes that offer novel drug targets for precision medicine with the potential to minimize the toxicities of non-selective PI3Kα inhibitors.

We are utilizing our precision medicine small molecule drug discovery platform to identify and develop therapeutic candidates that specifically bind to and inhibit the major PI3Kα mutations.

We believe that by avoiding the targeting of wild-type PI3Kα, our product candidates have the potential to improve upon the safety, efficacy, or both, of other non-selective PI3Kα inhibitors.

Our Product Candidate

OKI-219, a Targeted Inhibitor of PI3K α H1047R

Our lead product candidate is OKI-219, an orally administered small molecule designed to selectively bind to and inhibit PI3Kα H1047R , while avoiding inhibition of wild-type PI3Kα.

As such, OKI-219 is designed to avoid the adverse effects of inhibiting wild-type PI3Kα in patients.

OKI-219 is currently being investigated in a first-in-human Phase 1a/1b trial.

This is an open-label, international trial designed to evaluate OKI-219 for safety, tolerability, pharmacokinetics, pharmacodynamics, and efficacy with planned sites in the United States, European Union, and Asia.

In December 2024, we reported preliminary safety, tolerability, and pharmacokinetic data from the PIKture-01 trial.

OKI-219 was well tolerated across all dose levels tested with no hyperglycemia, and only grade 1 treatment-related adverse events were reported.

No dose interruptions, delays, reductions, or discontinuations were reported for any adverse events.

OKI-219 dosed at 900 mg twice daily showed steady-state exposure levels with near-continuous coverage of the in vivo EC 80 for pAKT inhibition.

These data supported the initiation of Part 1b of PIKture-01 evaluating OKI-219 in combination with fulvestrant in the fourth quarter of 2024.

We expect to provide additional single agent data and initial combination data with fulvestrant in the second half of 2025.

We will require additional Phase 2 and Phase 3 clinical trials to demonstrate that OKI-219 is safe and effective before we can seek regulatory approvals for the commercial sale of OKI-219.

Commercial Opportunity in Breast Cancer

Breast cancer is the most diagnosed cancer worldwide and is the leading cause of cancer death in women.

In the United States, there were an estimated 300,590 new cases of breast cancer in 2023, resulting in 43,700 deaths.

According to the National Cancer Institute, approximately 70% of breast cancer patients are HR+/HER2-, approximately 14% are HER2+ and approximately 11% are classified as triple negative, with the remaining 6% of patients being unclassified.

PI3K a is the most commonly mutated oncogene in breast cancer.

Mutations in the PI3K pathway are associated with increased failure of clinical treatments in advanced breast cancer, such HER2 therapy, endocrine therapy, and CDK inhibitor therapy.

Notably, the activity of fulvestrant with or without CDK inhibitors in advanced or metastatic breast cancer is worse in PI3Kα H1047R mutated tumors, suggesting that adding PI3K a inhibitors to standard of care therapies in HR+ and HER2+ breast cancer may have strong clinical benefit in patients with PI3K a -mutated cancers.

The currently approved drugs, such as inavolisib and alpelisib show strong clinical benefit in combination with fulvestrant +/- CDK inhibitors in PI3K a -mutated breast cancers, however these agents are still associated with significant toxicity from targeting the WT form of the enzyme, which is thought to limit the clinical benefit and quality of life for patients.

While a number of molecules with modest selectivity for mutations versus WT PIK3CA are being developed, we believe that highly-selective inhibition of mutated PI3K a is necessary to enable optimal target coverage and clinical benefit without eroding safety and quality of life due to inducing PI3K a -related toxicity.

We believe the potential market opportunity for PI3K a inhibitors is large.

Total new HR+/HER2- advanced breast cancer patients each year with the most common PI3K a mutations (i.e., H1047, E542 and E545) is approximately 29,000 in the U.S.

and >60,000 in the U.S.+ EU5+Japan (see Figure 5).

The single most common

PI3K a mutation, PI3Kα H1047R , is found in approximately 14% of all breast cancers.

As a comparison, the HER2+ population in breast cancer also accounts for approximately 14% of all patients.

The other common PI3K a mutations (i.e.

PI3Kα E542K and PI3Kα E545K ) are less prevalent, and combined are found in approximately 10% of breast cancers.

We believe that there is a significant market opportunity for a highly-selective PI3Kα H1047R inhibitor, with the ability to target an annual population of ~17,000 patients in the United States and >35,000 patients in the United States+ EU5 countries ( UK, Spain, Italy, Germany and France ) +Japan with PI3Kα H1047R -mutated tumors across all lines of metastatic breast cancer (see Figure 5).

Based on the data from the PIKture-01 trial, as of the October 28, 2024 cutoff date, and the selectivity of OKI-219 ( approximately 80-fold selectivity for PI3Kα H1047R over PI3Kα WT ), we believe we have the opportunity with OKI-219 to optimize efficacy and safety in patients with PI3Kα H1047R -mutated tumors, thus being well positioned to be an important therapeutic in this sizeable patient population.

Annual Breast Cancer Incidence

Total New HR+/HER2- Advanced Breast Cancer Patients Each Year

Biomarker Prevalence

% Patients with Kinase domain (H1047R or Helical Domain (E542K/E545K) Mutations

Line of Therapy Progression

1L aBC Annual New Patient Starts

2L aBC Annual New Patient Starts

3L aBC Annual New Patient Starts

Estimated breast cancer incidence metrics across certain regions of the world.

OnKure third party research

Limitations of Currently Approved PI3K Inhibitors

Mutations in the PI3K/AKT/mTOR signaling axis occur frequently in many cancer types.

PI3Kα is frequently mutated and activated in cancer, and aberrant PI3Kα activation is believed to be involved in tumor growth and metastasis.

PI3Kα is composed of two components, a regulatory subunit, p85α, and catalytic subunit, p110α.

An activating gain-of-function mutation in the catalytic p110α region of PI3Kα is one of the most common drivers of mutations in solid tumors.

Due to its role in mediating signaling in multiple cell types in humans, inhibition of the normal wild-type PI3Kα enzyme is associated with a diverse range of toxicities, including hyperglycemia, rash, diarrhea, nausea, and stomatitis, which present a challenge to maintenance of patients on therapy.

Hyperglycemia is one of the readily monitorable key toxicities in both patients and animal models that limits the efficacy of currently approved PI3Kα inhibitors and is often used as a sentinel indicator of on-target activity vs wild-type PI3Kα, however other effects, such as rash and GI toxicities can also be severe and debilitating for patients.

Alpelisib (Piqray TM ) was the first PI3Kα inhibitor approved, in combination with fulvestrant for the treatment of adults with hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative, PIK3CA-mutated, advanced or metastatic breast cancer.

At the approved dose in the SOLAR-1 trial for alpelisib, toxicities expected for inhibition of wild-type PI3Kα for the treatment of adults with hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative, PIK3CA-mutated, advanced or metastatic breast cancer were common.

Other adverse events may be associated with the treatment of adults with

hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative, PI3Kα -mutated, advanced or metastatic breast cancer.

Increases in glucose were observed in 79% of patients treated with alpelisib (39% Grade 3 or 4) in this study.

Other adverse events commonly associated with PI3K inhibition were also frequently observed:

diarrhea (58%, 7% Gr3/4);

nausea (45%, 2.5% Gr3/4);

rash (52%, 20% Gr3/4);

fatigue (42%, 5% Gr3/4) and stomatitis (30%, 2.5% Gr3/4).

Capivasertib (Truqap TM ) is an AKT inhibitor developed by AstraZeneca, indicated in combination with fulvestrant for the treatment of adult patients with hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative, locally advanced or metastatic breast cancer with one or more PIK3CA/AKT1/PTEN-alterations.

Capivasertib adverse events associated with PI3K pathway inhibition have also been commonly observed, highlighting the safety challenges of broadly inhibiting this pathway.

Specifically, in the CAPItello-291 study that supported approval of capivasertib, while the rate of hyperglycemia (37% overall, 3.1% Gr3/4) was lower than observed with alpelisib, other PI3K-related AEs were more notable, including:

diarrhea (77% overall, 12% Gr3/4);

cutaneous (56%, 15% Gr3/4);

fatigue (38%, 1.9% Gr3/4);

stomatitis (25%, 1.9% Gr3/4) and nausea (35%, 1.3% Gr3/4).

Inavolisib (Itovebi TM , Genentech) is a PI3Kα-selective inhibitor that was approved in 2024, in combination with fulvestrant and palbociclib in endocrine-resistant, PIK3CA-mutated, hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative, locally advanced or metastatic breast cancer.

While the tolerability profile of inavolisib is considered to be manageable, this molecule still shows frequent adverse events associated with inhibition of the wild-type form of PI3Kα.

These include increases in fasting glucose (85% overall, 22% Gr2 and 12.6% with Gr3/4);

stomatitis (51% overall, 6% Gr3/4);

diarrhea (48% overall, 3.7% Gr3/4);

rash (26% overall, 0% Gr3/4), fatigue (38% overall, 1.9% Gr3/4) and nausea (28% overall, 0.6% Gr3/4).

While initial PI3Kα pathway inhibitors are active clinically, the frequent rate of adverse events due to inhibition of the wild-type PI3Kα pathway impact their use and are a challenge for patients, highlighting the need for more-selective inhibitors of mutated PI3Kα that can limit on-target toxicity.

By minimizing the targeting of PI3Kα WT (approximately 80-fold selectivity for PI3Kα H1047R over PI3Kα WT ), we believe OKI-219 can achieve exposures required for activity in PI3Kα-mutated cancers with minimal effect on wild-type PI3Kα signaling, thus limiting the on-target toxicities, such as hyperglycemia, GI effects, fatigue, and rash.

We believe that this is a key differentiator for OKI-219 compared to first-generation non-selective PI3Kα inhibitors.

In December 2024, we announced preliminary safety, tolerability, and PK data from PIKture-01 as of a data cut off on October 28, 2024.

OKI-219 was well tolerated across all dose levels with no hyperglycemia, stomatitis, or rash observed with other PI3Kα inhibitors.

Additionally , only grade 1 TRAEs were reported, with no dose interruptions, delays, reductions, or discontinuations reported for any adverse events.

Initial TRAEs observed across dose levels in PIKture-01 Part A.

Data cutoff October 28, 2024.

Blood-Brain Barrier Penetration

Brain metastases are estimated to occur in 98,000 to 170,000 cancer patients in the United States each year and in 10% to 26% of patients who die from their cancers.

The observed growth in the incidence of brain metastasis over the last decade is believed to be partially attributed to the challenges of chemotherapeutic agents gaining access to the brain.

While clinical outcomes for systemic malignancies have improved, the survival prognosis for brain metastasis has remained poor and for many patients remains at less than one year.

The blood-brain barrier (the “BBB”) is a semi-permeable membrane that regulates the transfer of substances from the circulatory system into the brain and provides protection for the brain from potentially harmful substances present in the rest of the body.

The BBB is composed of cells that line blood vessels, known as endothelial cells, which are joined to each other with tight junctions and are surrounded by a layer of cells known as pericytes found in the capillary basement membrane.

The tight junctions limit the entry of most molecules greater than approximately four hundred Daltons in molecular weight.

While it is protective of the brain and contributes to overall health, the BBB nonetheless presents a challenge to physicians seeking to deliver anti-cancer agents to the brain and to treat brain metastasis.

Preclinical data for OKI-219 in a rat model suggest that OKI-219 is highly brain-penetrant, reaching free drug concentrations in the brain similar to those observed in plasma, indicating potential utility in central nervous system disease.

Distribution of OKI-219 through the BBB and into the brain has also been confirmed in both dogs and monkeys.

We believe that the ability of OKI-219 to penetrate the BBB may enable it to effectively treat patients with brain metastasis in addition to those with systemic malignancies.

Current Standard-of-Care in Breast Cancer

Many cancers are treated with combinations of two or more anti-cancer drugs.

Specifically, in breast cancer, the choice of therapy is dependent on the type and stage of disease.

Breast cancers are segmented diagnostically based on growth drivers, including hormonal receptors such as estrogen and progesterone receptors and the HER2/neu receptor.

Approximately 70% of breast cancers over-express an estrogen receptor (“ER”) or progesterone receptor and are classified as HR+/HER2-.

If diagnosed with early-stage disease, patients are usually treated with endocrine therapy, such as aromatase inhibitors or tamoxifen in the adjuvant setting, or they may receive chemotherapy before hormonal inhibitors if they are diagnosed with later-stage, intermediate or high-risk disease.

For patients initially diagnosed with metastatic HR+/HER2- disease, and for those who have disease that has progressed to become metastatic HR+/HER2- disease, first-line treatment includes an aromatase inhibitor plus a CDK4/6 inhibitor, or the SERD, fulvestrant, plus a CDK4/6 inhibitor.

In the second-line setting, treatment can vary depending on identified mutations in various genes.

Patients with PI3Kα mutations are eligible to receive fulvestrant plus a PI3Kα- or AKT-targeting agent such as alpelisib or capivasertib.

For patients with ESR1 mutations, physicians may prescribe a SERD such as elacestrant, a next-generation SERD marketed by Stemline Therapeutics, a subsidiary of Menarini Group, as Orserdu ® .

For other patients, fulvestrant with or without the mTOR inhibitor everolimus would be indicated.

Approximately 14% of breast cancer patients over-express the HER2/neu receptor and are classified as HER2+.

These patients are treated with HER2-targeting agents such as trastuzumab, marketed by Roche as Herceptin ® ;

generic biosimilars to trastuzumab;

pertuzumab, marketed by Roche as Perjeta ® ;

ado-trastuzumab emtansine or T-DM1, marketed by Roche as Kadcyla ® ;

fam-trastuzumab deruxtecan-nxki or T-DXd, marketed by Daiichi Sankyo and AstraZeneca as Enhertu ® ;

and tucatinib, marketed by Pfizer as Tukysa ® .

Typically, in early-stage or metastatic disease, the standard-of-care is trastuzumab plus chemotherapy, with or without pertuzumab.

Ado-trastuzumab emtansine was the standard-of-care in second-line metastatic disease until the approval of trastuzumab deruxtecan in 2019.

Trastuzumab deruxtecan is frequently prescribed in second-line HER2+ disease, whereas ado-trastuzumab emtansine is now typically used in the third-line setting.

In patients with disease that progresses on all these therapy regimens, a triple combination of tucatinib, trastuzumab and capecitabine is often used in the fourth-line or salvage setting.

Approximately 10% of breast cancer patients do not over-express HR or HER2 receptors.

These tumors are classified as triple negative breast cancer (“TNBC”).

Patients with TNBC are treated with chemotherapy, sacituzumab govitecan, marketed by Gilead as Trodelvy ® , immunotherapy such as pembrolizumab, marketed by Merck as Keytruda ® , or atezolizumab, marketed by Genentech as Tecentriq ® .

Beyond HR and HER2 receptors, breast cancer patients are also screened for PD-L1 positivity, which encompasses approximately 40% of patients, as well as for mutations in the germline BRCA1 or BRCA2 genes.

The prevalence of a BRCA1 or BRCA2 mutation is only 3%–4% in HR+/HER2- patients but is approximately 15% in patients with TNBC.

In PD-L1 positive, triple negative breast cancer, patients are treated with atezolizumab or pembrolizumab, while two Poly ADP Polymerase inhibitors (“PARP inhibitors”) are approved for BRCA1/2 mutants:

Olaparib, marketed by AstraZeneca as Lynparza ® , and talazoparib, marketed by Pfizer as Talzenna ® .

The PI3Kα-targeting agent alpelisib and the AKT-targeting agent capivasertib are currently approved in combination with fulvestrant in advanced HR+/HER2- breast cancer, providing a proof of concept for targeting mutated PI3Kα in this disease.

These therapies have significant toxicity, however, which presents a challenge for their use.

We believe that the ability to safely combine with fulvestrant or other SERDs is a critical advantage for any new therapy targeting PI3Kα-mutated HR+ breast cancer.

OKI-219 was tested in combination with a next-generation SERD known as camizestrant in a preclinical breast cancer model utilizing the T47D cell line.

T47D is an estrogen receptor-positive luminal A subtype breast cancer cell line that harbors the PI3Kα H1047R mutation and is frequently utilized in research of hormonal signaling in breast cancer.

In mouse xenograft models implanted with T47D cells, monotherapy treatment with camizestrant at 10mg/kg QD resulted in slower tumor growth than the control but did not result in significant tumor volume reduction from baseline.

Similarly, monotherapy dosing with OKI-219 at 25mg/kg QID resulted in delay of tumor growth as well.

The combination of OKI-219 and camizestrant resulted in significant and dose-dependent tumor shrinkage, supporting the potential for combination therapy of OKI-219 and SERDs in metastatic breast cancer.

We tested the combination of OKI-219 with tucatinib, an anti-HER2 small molecule tyrosine kinase inhibitor, in the HER2+ PI3Kα H1047R HCC1954 breast cancer cell line.

This cell line is resistant to tucatinib treatment, and in mouse xenograft models implanted with HCC1954 cells this was demonstrated by the continued tumor growth with 50mg/kg BID tucatinib dosing.

OKI-219 monotherapy at 200mg/kg QD appears to limit the tumor’s ability to grow but is not effective enough by itself to drive tumor shrinkage.

The combination of tucatinib and OKI-291 resulted in tumor shrinkage, suggesting that inhibiting mutant PI3Kα in combination with targeting HER2 can overcome poor responses to HER2-targeting agents used alone.

We believe that breast cancer is an ideal tumor type for the initial development of mutant-selective PI3Kα inhibitors due to several factors:

the fact that PI3Kα inhibitors have been approved in PI3Kα-mutated HR+ metastatic breast cancer;

the high prevalence of the PI3Kα H1047R mutation in breast cancer;

the poor prognosis of patients with metastatic breast cancer who have PI3Kα mutations;

the fact that PI3Kα mutations appear to be truncal, meaning that they originate early in cancer development and, when mutated, are found in most cancer cells in a patient.

We believe that initially focusing on PI3Kα H1047R in advanced breast cancer patients may enable the eventual development of OKI-219 in earlier lines of therapy as well as in patients with tumors with different tissues of origin besides breast and expanding the patient population that may benefit from treatment with OKI-219.

Phase 1 PIKture-01 Trial

OKI-219 is currently being investigated in the PIKture-01 trial, a Phase 1a/1b trial.

This is an open-label international trial with sites in the United States, European Union, and Asia designed to evaluate the safety, tolerability, PK, PD, and preliminary antitumor activity of OKI-219 as monotherapy as well as in combination with fulvestrant or trastuzumab.

The PIKture-01 trial has three parts:

Part A is a dose-ranging basket trial of solid tumors with a target enrollment of 24 subjects testing OKI-219 as a monotherapy.

This part of the trial is enrolling patients with solid tumors with the

PI3Kα H1047R mutation for whom there is no effective available therapy.

The starting dose is 300mg BID, and this trial uses a Bayesian Optimal Interval design.

We have dosed up to 1500mg BID.

Part B is investigating OKI-219 in combination with fulvestrant in HR+/HER2- advanced breast cancer.

These patients must have locally advanced, unresectable or metastatic cancer with the PI3Kα H1047R mutation and have received at least one prior line of hormonal therapy and at least one prior line of CDK 4/6 inhibitor therapy in the advanced or metastatic setting unless contraindicated.

Part B was initiated in the fourth quarter of 2024.

Part C will investigate OKI-219 in combination with trastuzumab in HER2+ advanced breast cancer with the PI3Kα H1047R mutation.

These patients must have HER2+, locally advanced unresectable or metastatic breast cancer and also have received prior taxane, trastuzumab, pertuzumab, tucatinib or trastuzumab deruxtecan unless unavailable or contraindicated.

Part C has not been initiated.

We expect that both Part B and Part C will initially enroll patients in a single-arm dose escalation trial and then would investigate high and low doses to comply with FDA’s project OPTIMUS dose exploration requirement.

The objective of a dose-finding trial is to find the optimum dose instead of utilizing the maximum tolerated dose, which historically has been the dose chosen for pivotal trials of cancer drugs.

The primary endpoint of Part A is to assess the safety of OKI-219 and to identify the maximum tolerated dose and pharmacologically active dose(s) (“PAD”).

Secondary endpoints include additional measures of safety and tolerability designed to:

assess plasma PK of OKI-219;

assess the effect of food on the PK of OKI-219;

estimate preliminary antitumor activity;

assess the dose-response impact of circulating tumor DNA (“ctDNA”);

assess the PD activity of OKI-219 and its association with PK, safety, and efficacy.

For Parts B and C, the primary endpoints during dose-ranging are to assess the safety of OKI-219 when taken in combination with fulvestrant or trastuzumab and to identify two PAD doses that will be utilized during the dose optimization portion, for which the primary endpoint is to compare two PAD dose levels of OKI-219 plus a fixed dose of fulvestrant or trastuzumab in order to identify the recommended Phase 2 dose.

Secondary endpoints include additional measures of safety and tolerability of OKI-219 when taken in combination with fulvestrant or trastuzumab, and are designed to:

assess the plasma PK of OKI-219 when in combination with fulvestrant or trastuzumab;

assess the effect of food on the PK of OKI-219 when in combination with fulvestrant or trastuzumab;

estimate preliminary antitumor activity of OKI-219 when taken in combination with fulvestrant or trastuzumab;

assess the dose-response impact of ctDNA of OKI-219 when taken in combination with fulvestrant or trastuzumab;

assess the PD activity of OKI-219 and, finally, determine the impact of OKI-219 dosing in combination with fulvestrant or trastuzumab on blood glucose and insulin.

Additionally, exploratory endpoints for all parts include an exploration of predictive biomarkers of response to OKI-219 in blood and tumor tissue as monotherapy and while in combination with fulvestrant and trastuzumab.

For dose optimization only, we also seek to determine the impact of OKI-219 on quality of life.

During dose optimization, we anticipate that 20 participants will be randomized between two PAD levels in parts B and C.

A sample size of 20 participants in each arm will provide 79% power to detect an increase in objective response rate from 5% to 20% within each PAD arm using a one-sided exact binomial test at the 10% level of significance.

Monotherapy is not powered to assess efficacy.

PIKture-01 trial design, key eligibility criteria and key endpoints as of October 28, 2024.

OKI-219 Potential Future Trials

OKI-219 was designed to target the PI3Kα H1047R mutation to maintain or improve upon the efficacy and simultaneously to minimize the toxicities associated with first-generation PI3Kα WT inhibitors.

We anticipate that this precision targeting of the H1047R mutation and minimal inhibition of wildtype PI3Kα should enable OKI-219 to safely combine with one or two other cancer drugs and potentially result in synergistic clinical efficacy.

We plan to explore OKI-219 in combination with other drugs in multiple lines of treatment in breast cancer.

Based on initial data from these combination studies, a number of possible development strategies will be considered, including developing OKI-219 in combination with a SERD in second-line breast cancer patients;

developing OKI-219 in patients who have disease that has progressed on prior inavolisib or alpelisib treatment;

and development of OKI-219 in front-line metastatic breast cancer, in combination with CDK inhibitors, plus either an aromatase inhibitor or a SERD.

With positive data in the metastatic setting, we would consider developing OKI-219 in combination with an AI+ a CDK inhibitor in the adjuvant setting.

Pan-mutant PI3K a Precision Kinase Inhibitor Program

A key goal of cancer therapy is to improve efficacy, while maintaining a very well tolerated side effect profile, thus improving patient benefit and quality of life for patients.

Our focus is on discovering and developing highly mutant-selective PI3Kα inhibitors that can improve target coverage and efficacy in PI3Kα-mutated cancers compared to existing agents, while also improving safety by sparing inhibition of wild type PI3Kα.

OKI-219 has approximately 80-fold selectivity for PI3Kα H1047R over the wild type form of the enzyme, a profile that may optimize the potential for efficacy and safety for treatment of tumors with a PI3Kα H1047R mutation, the most common PI3Kα mutation in breast cancer.

We believe that to fully target all the most common PI3Kα mutations in SOC combinations in HR+ mBC a PI3Kα “Pan-mutant” inhibitor will need to demonstrate approximately 10-fold selectivity against each of the most common mutations (PI3Kα H1047X , PI3Kα E542K and PI3Kα E545K ).

Currently, we are aware of no compounds in clinical development that can achieve this level of selectivity across all the most common mutations, leaving an opportunity for development and approval of a pan-mutant PI3Kα inhibitor for patients regardless of their PI3Kα mutation.

We are actively developing pan-mutant candidates with activity and selectivity (>10X) across the most common PI3Kα mutations (i.e., H1047R, E545K, and E542K).

We believe a highly selective and potent pan-mutant inhibitor has the potential to achieve a maximal efficacy and safety profile in combinations in metastatic breast cancer, and may further enable sufficient activity as a single agent to target PI3Kα-mutated advanced cancer populations beyond breast cancer.

This represents a significant patient population for which there are no current targeted therapies:

Approximately 11% of all cancers harbor mutations in PI3Kα, and no PI3Kα-targeted therapies have shown sufficient efficacy to gain approval as a single-agent, potentially due to poor selectivity limiting the ability to get sufficient target inhibition without dose-limiting toxicities.

We propose that a highly selective

pan-mutant inhibitor may have the efficacy to enable use in this underserved patient population beyond breast cancer.

We expect to announce a pan-mutant development candidate in the second quarter of 2025.

Helical Domain PI3K a Precision Kinase Inhibitor Program

Additionally, we are leveraging our discovery engine to develop a highly selective allosteric inhibitor molecule specifically targeting the PI3Kα E545K and E542K mutations ( which are also known as helical domain mutations or e-mutants) and expect to announce a development candidate in 2026.

Overall, the aim of our discovery engine is to deliver highly selective drug candidates that preserve wild-type PI3Kα while effectively targeting the vast majority of PI3Kα-mutated cancers, in breast and other cancers.

The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products.

While we believe that our technology, the expertise of our team, and our development experience and scientific knowledge provide us with competitive advantages, we face increasing competition from many different sources, including pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and public and private research institutions.

Product candidates that we successfully develop and commercialize (whether alone or in partnership with others) may compete with existing therapies and new therapies that may become available in the future.

Many of our competitors, either alone or with their collaborators, have significantly greater financial resources, established presence in the market, and expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement, and marketing approved products than we do.

These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, in establishing clinical trial sites and patient registration for clinical trials, and in-licensing or acquiring technologies complementary to, or necessary for, our programs.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with larger companies.

Additional mergers and acquisitions may result in even more resources being concentrated in our competitors.

Our commercial potential could be reduced or eliminated if our competitors develop and commercialize products that are safer or more effective, have fewer or less-severe side effects, or are more convenient or less expensive than products that we may develop.

Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we can, which could result in those competitors establishing a strong market position before we are able to enter the market or could otherwise make the development or commercialization of our products more complicated.

The key competitive factors affecting the success of all of our programs are likely to be efficacy, safety and patient convenience.

There are multiple PI3Kα-pathway targeted agents either approved or under clinical development that may compete with OKI-219 and our PI3Kα-targeted portfolio.

These include the marketed medicines alpelisib (Piqray ® , a PI3Kα-selective inhibitor marketed by Novartis) and capivasertib (Truqap ® , an AKT1 inhibitor marketed by Astra Zeneca), both of which are approved for the treatment of PI3Kα-mutated breast cancer patients in combination with the SERD fulvestrant.

The PI3Kα-selective inhibitor inavolisib (Itovebi TM ) was recently approved in combination with the SERD fulvestrant and the CDK4/6 inhibitor palbociclib (Ibrance ® ) in endocrine resistant HR+/Her2- locally advanced or metastatic breast cancer.

We are also aware of several novel PI3K-targeted therapies that are in clinical development.

These include both multiple non-mutation-selective PI3K inhibitors such as gedatolisib (Celcuity Inc.), MEN1611 (Menarini), and TOS-358 (Totus Medicines), and inhibitors designed to have greater selectivity for mutated PI3Kα, including RLY-2608 (Relay Therapeutics), STX-473 (Scorpion Therapeutics) and SNV4818 (Synnovation Therapeutics).

Multiple other companies have disclosed or published research efforts in PI3K inhibitors that are at an early stage but could potentially advance to the clinic.

Finally, there are numerous other investigational therapies, spanning many modalities that are being evaluated preclinically and in clinical trials for breast cancer.

Manufacturing

We do not own or operate manufacturing facilities.

We have historically relied on contract manufacturing organizations (CMOs) to produce mavodelpar in accordance with the U.S.

Food and Drug Administration’s (FDA) current Good Manufacturing Practices (cGMP) regulations for use in our clinical trials.

We also historically obtained our supplies from these CMOs on a contract work order basis and do not have long-term supply arrangements in place.

License Agreement with vTv Therapeutics LLC

In December 2017, we entered into a License Agreement (vTv License Agreement) with vTv Therapeutics LLC (vTv Therapeutics), under which we obtained an exclusive, worldwide, sublicensable license under vTv Therapeutics intellectual property relating to vTv Therapeutics’ PPARδ agonist program, to develop, manufacture and commercialize PPARδ agonists and products containing such PPARδ agonists, including mavodelpar, or licensed products, for any therapeutic, prophylactic or diagnostic application in humans.

Since we have suspended all development activity related to mavodelpar, we are not currently performing any development efforts under this agreement.

Under the terms of the vTv License Agreement, we made an upfront payment of $3.0 million to vTv Therapeutics and issued to vTv Therapeutics shares of our common stock representing a minority interest in our outstanding equity.

Upon the achievement of certain development and regulatory milestones, we are required to pay vTv Therapeutics milestone payments totaling up to $64.5 million.

We are also required to pay vTv Therapeutics up to $30 million in total sales-based milestones upon achievement of certain sales thresholds of the licensed product.

In addition, we are obligated to make royalty payments to vTv Therapeutics at mid-single digit to low teen percentage royalty rates, based on tiers of annual net sales of licensed products, subject to certain customary reductions.

Such royalties will be payable on a licensed product-by-licensed product and country-by-country basis until the latest of (i) expiration of the last-to-expire licensed patents covering a licensed product in a country, which are expected to expire in 2034, absent any patent term adjustments or extension, (ii) expiration of regulatory exclusivity rights for a licensed product in a country, which is expected to be five years of new chemical entity exclusivity upon approval of a licensed product, such as mavodelpar, in the United States, where such exclusivity would run concurrently with seven years of orphan drug exclusivity, if we are the first to receive marketing approval of a licensed product for an orphan disease or condition for which we have received orphan designation, such as approved orphan uses of mavodelpar for the treatment of patients with PMM and LC-FAOD, in the United States, and (iii) the tenth anniversary after the first commercial sale of a licensed product in a country.

As of December 31, 2023, we have paid an aggregate of $2.0 million in development and regulatory milestone payments.

On October 30, 2023, we repurchased from vTv Therapeutics all 576,443 shares of our common stock previously issued to vTv Therapeutics under the vTv License Agreement for an aggregate purchase price of approximately $4.4 million directly in a private, non-underwritten transaction.

Under the terms of the vTv License Agreement, we have sole authority and responsibility for the worldwide development and commercialization of the licensed products, at our cost, subject to certain diligence obligations to use commercially reasonable efforts with respect to specified development and commercialization efforts, including seeking approval for and commercializing at least one product in two major markets.

In January 2024, consistent with our implementation of cash preservation activities, including suspension of development activities of our only product candidate, mavodelpar, we returned to vTv Therapeutics prosecution and maintenance

responsibility of the vTv Therapeutics intellectual property relating to vTv Therapeutics’ PPARδ agonist program, including mavodelpar.

We continue to maintain and prosecute Reneo owned intellectual property related to mavodelpar.

The vTv License Agreement, unless terminated earlier, will continue until expiration of the last to expire royalty term.

Either party may terminate the vTv License Agreement for the other party’s uncured material breach or insolvency.

We may terminate the vTv License Agreement at will upon prior written notice.

Upon expiration (but not earlier termination) of the vTv License Agreement, the licenses granted to us will survive on a royalty-free basis in perpetuity.

Upon termination of the vTv License Agreement, we are required to, upon vTv Therapeutics’ request, (i) grant to vTv Therapeutics a non-exclusive, worldwide, royalty-free, fully paid, perpetual, irrevocable, sublicensable license under our intellectual property solely for vTv Therapeutics and its sublicensees to develop, manufacture, and commercialize the licensed products for any therapeutic, prophylactic or diagnostic application in humans or (ii) if vTv Therapeutics agrees to pay us a low single digit percentage royalty on net sales of licensed products by vTv Therapeutics, then such license grant to vTv Therapeutics will be exclusive, and we will assign and transfer to vTv Therapeutics all regulatory materials and approvals related to the licensed product.

We do not own or operate, and currently have no plans to establish any manufacturing facilities.

We rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing, and expect to rely on third parties for commercial manufacturing should any of our product candidates obtain marketing approval.

We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need to invest in our own manufacturing facilities, equipment and personnel while

also enabling us to focus our expertise and resources on the discovery and development of our product candidates.

In addition, we generally expect to rely on third parties for the manufacture of any companion diagnostics we may develop.

To date, we have obtained the regulatory starting materials and cGMP-compliant active pharmaceutical ingredients from three different suppliers, but could contract with other CMOs for these materials as the raw materials we use are commonly used and are available from multiple sources.

We also currently rely on two CMOs, for the drug product for OKI-219, but may contract with other CMOs for the manufacture of drug product in the future.

We are in the process of developing our supply chain for our product candidates and intend to put in place framework agreements under which third-party CMOs will generally provide us with necessary quantities of API and drug product on a project-by-project basis based on our development requirements.

As we advance our product candidates through development, we plan to explore adding backup suppliers for the API and drug product for OKI-219 and future product candidates in order to protect against any potential supply disruptions.

Intellectual Property

The proprietary nature of, and protection for any future product candidates, and other proprietary technologies are important to our business.

We strive to protect our product candidates and other proprietary technologies, processes and know-how through a variety of methods.

In regard to our product candidates, we seek and maintain patents intended to cover our products and compositions, their methods of use for treating diseases, the processes for their manufacture, and, as our product candidates proceed through clinical studies, the innovations that arise from these efforts.

As a result, we seek to obtain domestic and foreign patent protection and endeavor to promptly file patent applications for new commercially valuable inventions to expand our intellectual property portfolio.

Our policy is to pursue, maintain and defend patent rights in strategic areas, whether developed internally or licensed from third parties, and to protect the technology, inventions and improvements that are commercially important to the development of our business.

We also rely on trade secrets and other proprietary know-how that may be important to the development of our business.

As of December 31, 2023, our patent portfolio consisted of eight issued patents in the United States and 19 issued patents in foreign countries that we have licensed from vTv Therapeutics covering composition of matter of mavodelpar, among other things, which are expected to expire in 2026, absent any patent term adjustments or extensions;

as well as four issued patents in the United States, six issued patents in foreign countries, one pending application in the United States, and one pending application in Europe, covering methods of using mavodelpar, which are expected to expire in 2034, absent any patent term adjustments or extensions.

In addition to the licensed vTv Therapeutics patents and applications relating to mavodelpar, we have filed our own patent applications.

As of December 31, 2023, we co-own one pending application in the United States and five pending applications in foreign countries, and own four pending applications in the United States, one pending international patent application, an issued patent in a foreign country, and over 25 pending applications in foreign countries, directed to various methods of use of mavodelpar, which if issued, would be expected to expire between 2040 and 2043, absent any patent term adjustments or extensions.

We also own two issued patents in the United States, two pending applications in the United States, and over 25 pending applications in foreign countries directed to methods of manufacturing, and crystalline forms (polymorphs) of mavodelpar.

The issued patents, and pending patent applications if issued, are expected to expire in 2041, absent any patent term adjustments or extensions.

Patents related to mavodelpar may be eligible for patent term extensions in certain jurisdictions, including up to five years in both the United States and the European Union (EU), upon approval of a commercial use of the corresponding product by a regulatory agency in the jurisdiction where the patent was granted.

In addition, we currently have Orphan Drug Designation for mavodelpar for the treatment of LC-FAOD and PMM in the United States and LC-FAOD with defects in long-chain 3-hydroxy acyl-CoA dehydrogenase deficiency and mitochondrial encephalomyopathy, lactic acidosis, and neurological stroke-like episodes in the EU, providing

the opportunity to receive seven years of orphan exclusivity in the United States (upon approval of NDA), and ten years of market exclusivity in the EU and Japan (upon receipt of marketing authorization).

As mavodelpar has not previously been approved in the United States for any indication, mavodelpar may be eligible for five years of new chemical entity exclusivity upon approval in the United States, where such exclusivity would run concurrently with its seven years of orphan drug exclusivity, if we obtain orphan drug exclusivity for its approved uses.

Further, as mavodelpar has not previously been approved in the EU for any indication, mavodelpar may be eligible for eight years of data exclusivity upon approval in the EU, as well as two years of market exclusivity.

In the EU, an additional one year of exclusivity may be obtained if mavodelpar is approved for a new indication that provides a significant clinical benefit.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.

We strive to protect and enhance the proprietary technologies, inventions and improvements that are commercially important to our business by, among other methods, pursuing and obtaining patent protection in the United States and in jurisdictions outside of the United States directed to these technologies, inventions, improvements and to our drug candidates.

We also rely on trade secrets, know-how, trademarks, continuing technological innovation and licensing opportunities to develop and maintain our proprietary and intellectual property position.

As of February 1, 2025, our owned and licensed patent portfolio included 150 patents and patent applications, including two licensed U.S.

issued patents and six owned U.S.

issued patents, covering various aspects of our proprietary technology, product candidates, and related inventions and improvements.

The patent portfolio also includes 36 licensed patents issued in jurisdictions outside of the United States, and 30 owned patent applications pending in jurisdictions outside of the United States that, in many cases, are counterparts to the foregoing U.S.

patents and patent applications.

Our licensed patents relate to a patent family that is no longer material to our business.

PI3K Platform

We currently own 16 patent families directed to our PI3K platform technology as summarized below.

The patent families are differentiated based on the chemical structures of the PI3K inhibitor compounds.

All of the family members are currently at the application stage and exist as one or more U.S.

provisional (“USP”) applications, a Patent Cooperation Treaty (“PCT”) application, or as U.S.

national phase applications.

Several of our current patent applications relate to and include composition of matter claims for OKI-219.

Four of the families which are at the PCT application stage also have a Taiwanese (“TW”) application.

provisional applications secure an early filing date and provide an additional twelve months of patent protection beyond the normal 20-year lifetime of any patent granted thereon.

The PCT applications are single-application placeholders for filings in a majority of the countries and geographic regions of the world.

The types of claims for each application are listed, and an expiration year for each family based on the actual or projected PCT filing dates is also provided.

15 applications/product and method of treatment claims/2043 expiration

PCT and TW applications/product and method of treatment claims/2043 expiration

PCT application/product and method of treatment claims/2043 expiration

PCT and TW applications/product and method of treatment claims/2043 expiration

PCT and TW applications/product and method of treatment claims/2044 expiration

USP application/product and method of treatment claims/2045 expiration

2 USP application/product and method of treatment claims/2045 expiration

USP application/product and method of treatment claims/2045 expiration

USP application/product and method of treatment claims/2046 expiration

We cannot guarantee that our owned pending patent applications, or any patent applications that we may in the future file or license from third parties, will result in the issuance of patents.

We also cannot predict the scope of claims that may be allowed or enforced in our patents.

In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance.

Consequently, we may not obtain or maintain adequate patent protection for any of our programs and product candidates.

The terms of individual patents depend upon the legal terms of the patents in the countries in which they are obtained.

In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application.

1 unchanged sentence

The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of the patent.

Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to an approved drug may be extended and only those claims covering the approved drug, a method of using it, or a method for manufacturing it may be extended.

Similar provisions are available in Europe and some other foreign jurisdictions to extend the term of a patent that covers an approved drug.

Similar provisions are available in Europe and other non-U.S.

jurisdictions to extend the term of a patent that covers an approved drug.

In the future, if and when our products receive FDA approval, we expect to apply for patent term extensions on patents covering those products.

We plan to seek patent term extensions from applicable authorities, including the United States Patent and Trademark Office (USPTO) in the United States, to any of our issued patents covering any future product candidates, in any jurisdiction where these patent term extensions are available.

There is no guarantee that the applicable authorities, including the USPTO in the United States, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such extensions.

For more information regarding the risks related to our intellectual property, see “Risk Factors—Risks Related to Our Intellectual Property.” We also seek to protect our intellectual property in part by entering into confidentiality agreements with companies with whom we share proprietary and confidential information in the course of business discussions, and by having confidentiality terms in our agreements with our employees, consultants, scientific advisors, clinical investigators, and other contractors and also by requiring our employees, commercial contractors, and certain consultants and investigators, to enter into invention assignment agreements that grant us ownership of any discoveries or inventions made by them while in our employ.

We also plan to seek patent term extensions on any of our issued patents in any jurisdiction where available, but there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such extensions.

In addition to patent protection, we also rely on trademark registration, trade secrets, know how, other proprietary information, and continuing technological innovation to develop and maintain our competitive position.

We seek to protect and maintain the confidentiality of proprietary information of our business that is not amenable to, or that we do not consider appropriate for, patent protection.

We take steps to protect our proprietary information, including trade secrets and unpatented know-how, by entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors.

However, we cannot provide any assurances that all such agreements have been duly executed, and any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets and unpatented know-how, and we may not be able to obtain adequate remedies for such breaches.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.

In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets.

For more information regarding the risks related to our intellectual property, see “Risk Factors—Risks Related to Our Intellectual Property.”

The biotechnology and pharmaceutical industries are characterized by rapid technological advancement, significant competition and an emphasis on intellectual property.

We are not currently pursuing further clinical development of mavodelpar.

Any product candidates that are successfully developed and commercialized by us or a third party may compete with existing therapies and new therapies that may become available in the future.

If we or a third party pursues further development of mavodelpar in the future, those product candidates would compete with product candidates from a number of companies that are currently focused on also developing selective PPARδ agonist products, including Astellas Pharma Inc.

and CymaBay Therapeutics.

In addition, many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations and well-established sales forces.

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

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

These competitors also compete with us by acquiring technologies complementary to, or necessary for, our programs.

Government Regulation and Product Approval

As a pharmaceutical company we are subject to extensive regulation.

Government authorities in the United States (at the federal, state, and local level) and in other countries extensively regulate, among other things, the research, development, testing, manufacturing, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing, and export and import of drug products such as those we are developing.

Any drug candidates that we develop must be approved by the FDA before they may be legally marketed in the United States and by the appropriate foreign regulatory agency before they may be legally marketed in foreign countries.

Generally, our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the United States, although there can be important differences.

Additionally, some significant aspects of regulation in the EU are addressed in a centralized way, but country-specific regulation remains essential in many respects.

Drug Development Process

In the United States, the FDA regulates drugs under the Federal Food, Drug and Cosmetic Act (FDCA) and implementing regulations.

Drugs are also subject to other federal, state, and local statutes and regulations.

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

We protect and maintain the confidentiality of proprietary information to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Although we take steps to protect our proprietary information and trade secrets, including through contractual means, third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology.

Therefore, we may not be able to meaningfully protect our trade secrets.

It is our policy to require our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us.

These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances.

Our agreements with employees also provide that all inventions conceived by the employee in the course of employment or from the employee’s use of our confidential information are our exclusive property.

However, such confidentiality agreements and invention assignment agreements can be breached and we may not have adequate remedies for any such breach.

The patent positions of biotechnology companies like us are generally uncertain and involve complex legal, scientific and factual questions.

Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties.

It is uncertain whether the issuance of any third-party patent would require us to

alter our development or commercial strategies, alter our products or processes, obtain licenses, or cease certain activities.

Our breach of any license agreements or our failure to obtain a license to proprietary rights required to develop or commercialize our future products may have a material adverse impact on us.

If third parties prepare and file patent applications in the United States that also claim technology to which we have rights, we may have to participate in derivation proceedings in the USPTO to determine priority of invention.

For more information, see the section entitled “ Risk Factors—Risks Related to our Intellectual Property .”

Government Regulation

Our product candidates and our operations are subject to extensive regulation by the FDA and other federal and state authorities in the United States, as well as comparable authorities in other countries.

The FDA and other federal, state, local and foreign authorities regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing, and export and import of drug and combination products.

Generally, before a new drug can be marketed, considerable data demonstrating its quality, safety, and efficacy must be obtained, organized into a format specific for each regulatory authority, submitted for review and approved by the regulatory authority.

Drug Development

In the United States, the FDA regulates drugs under the Food, Drug, and Cosmetic Act (“FDCA”) and its implementing regulations.

Drug products and substances are subject to other federal, state and local statutes and regulations.

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

Failure to comply with the applicable U.S.

requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions.

FDA sanctions could include, among other actions, refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties.

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

• completion of extensive preclinical laboratory tests, preclinical animal studies and formulation studies in accordance with applicable regulations, including the FDA’s good laboratory practice (GLP) regulations, and other applicable regulations;

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

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

• performance of adequate and well-controlled human clinical trials in accordance with applicable regulations, including the FDA’s current good clinical practices (GCP) regulations to establish the safety and efficacy of the proposed drug for its proposed indication;

• submission to the FDA of a new drug application (NDA) for a new drug;

• a determination by the FDA within 60 days of its receipt of an NDA to file the NDA for review;

• satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug is produced to assess compliance with the FDA’s current cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality, and purity;

• potential FDA audit of the preclinical and/or clinical trial sites that generated the data in support of the NDA;

• satisfactory completion of an FDA advisory committee review, if applicable;

• FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States.

Before testing any compounds with potential therapeutic value in humans, the drug candidate enters the preclinical testing stage.

Preclinical tests include laboratory evaluations of product chemistry, toxicity, and formulation, as well as animal studies, to assess the potential safety and activity of the drug candidate.

The conduct of the preclinical tests must comply with federal regulations and requirements, including GLPs.

The sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND.

An IND is a request for authorization from the FDA to administer an investigational drug product to humans.

The central focus of an IND submission is on the general investigational plan and the protocol(s) for human trials.

Some preclinical testing may continue even after the IND is submitted.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions regarding the proposed clinical trials and places the IND on clinical hold within that 30-day time period.

requirements at any time during the product development process, approval process, or post-market may subject an applicant to administrative or judicial sanctions.

These sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product recalls or market withdrawals, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, and civil or criminal penalties.

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

Our current product candidates and any future small molecule product candidates must be approved by the FDA through the new drug application (“NDA”) process before they may be legally marketed in the United States.

The process generally involves the following:

completion of extensive preclinical studies in accordance with applicable regulations, including the FDA’s good laboratory practice requirements ;

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

approval by an institutional review board (“IRB”) or ethics committee at each clinical trial site before each trial may be initiated;

performance of adequate and well controlled clinical trials in accordance with applicable Investigational New Drug Application (“IND”) regulations, good clinical practice (“GCP”) requirements and other clinical trial-related regulations to establish the safety and efficacy of an investigational product for each proposed indication;

preparation and submission to the FDA of an NDA;

a determination by the FDA within 60 days of its receipt of an NDA to file the application for review;

satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug product will be produced to assess compliance with cGMP requirements to assure that the facilities, methods, and controls are adequate to preserve the drug identity, strength, quality, and purity;

potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the NDA;

FDA review and approval of the NDA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug in the United States;

compliance with any post-approval requirements, including the potential requirement to implement a risk evaluation and mitigation strategy (“REMS”), and the potential requirement to conduct post-approval studies.

Preclinical and Clinical Studies

The preclinical and clinical testing and approval process requires substantial time, effort, and financial resources, and we cannot be certain that any approvals for any future product candidates will be granted on a timely basis or at all.

Preclinical tests generally involve laboratory evaluations of drug chemistry, formulation, and stability, as well as studies to evaluate toxicity in animals, including pharmacology, pharmacokinetics, toxicokinetic, and metabolism studies that support subsequent clinical testing in humans.

The results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature, and a proposed clinical protocol, are submitted to the FDA as part of the IND.

An IND is a request for authorization from the FDA to administer an investigational product to humans.

Long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may continue after the IND is submitted.

The central focus of an IND submission is the general investigation plan and the protocol(s) for human studies.

An IND must become effective before clinical trials may begin.

An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the trial on clinical hold.

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

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

Clinical trials involve the administration of the drug candidate to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.

As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

For each successive clinical trial conducted with the investigational drug, a separate, new protocol submission to an existing IND must be made, along with any subsequent changes to the investigational plan.

Sponsors are also subject to ongoing reporting requirements, including submission of IND safety reports for any serious adverse experiences associated with use of the investigational drug or findings from preclinical studies suggesting a significant risk for human subjects, as well as IND annual reports on the progress of the investigations conducted under the IND.

Clinical studies involve the administration of the investigational product to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety and assess efficacy.

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

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

An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.

Furthermore, each clinical trial must be reviewed and approved by an IRB for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.

The IRB also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative, and must monitor the clinical trial until completed.

There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

The drug is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution, and excretion, the side effects associated with increasing doses and if possible, to gain early evidence of effectiveness.

In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.

The drug is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases or conditions and to determine dosage tolerance, optimal dosage, and dosing schedule.

Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites.

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

Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA.

In some cases, FDA may require, or sponsors may voluntarily pursue, post-approval studies, or Phase 4 clinical trials, that are conducted after initial marketing approval.

There also are requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries, including the website maintained by the U.S.

National Institutes of Health, ClinicalTrials.gov.

A sponsor that wishes to conduct a clinical trial outside of the United States may, but need not, obtain FDA authorization to conduct the clinical trial under an IND.

If a foreign clinical trial is not conducted under an IND, the sponsor may submit data from the clinical trial to the FDA in support of an NDA.

The FDA will generally accept a well designed and well conducted foreign clinical trial not conducted under an IND if the trial was conducted in accordance with GCP requirements and the FDA is able to validate the data through an onsite inspection if deemed necessary.

Clinical trials in the United States generally are conducted in three phases, known as Phase 1, Phase 2, and Phase 3.

Although the phases are usually conducted sequentially, they may overlap or be combined.

Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate.

The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, tolerability and safety of the drug.

Phase 2 clinical trials typically involve studies in a limited population of disease-affected patients to determine possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage, and dosing schedule.

Phase 3 clinical trials generally involve a large number of patients at multiple sites and are designed to evaluate the effectiveness of the product for its intended use, its safety in use, and to establish the overall benefit/risk relationship of the product and provide an adequate basis for product approval.

These trials may include comparisons with placebo and/or other comparator treatments.

Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.

These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication.

In certain instances, such as with accelerated approval drugs, FDA may mandate the performance of Phase 4 trials.

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

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events or any finding from tests in laboratory animals that suggests a significant risk for human subjects.

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

Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the drug, findings from animal or in vitro testing that suggest a significant risk for human subjects, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

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

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

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

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

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

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

Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee.

This group provides authorization for whether or not a trial may move forward at designated check points based on access to certain data from the trial.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug as well as 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 drug candidate and, among other things, must develop methods for testing the identity, strength, quality, and purity of the final drug.

Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.

Review and Approval Processes

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product.

Data may come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and effectiveness of the investigational drug product to the satisfaction of the FDA.

The submission of an NDA is subject to the payment of substantial user fees;

a waiver of such fees may be obtained under certain limited circumstances.

The FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA for filing.

This group provides authorization for whether a trial may move forward at designated check-points based on access to certain data from the trial.

Concurrent with clinical trials, companies usually complete additional animal safety studies and also must develop additional information about the chemistry and physical characteristics of the drug as well as 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 our product candidates.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that our product candidates do not undergo unacceptable deterioration over their labeled shelf life.

Following completion of clinical trials, data are analyzed to assess whether the investigational product is safe and effective for the proposed indicated use or uses.

The results of preclinical studies and clinical trials are then submitted to the FDA as part of an NDA, along with proposed labeling, chemistry, and manufacturing information in a request for approval to market the drug for one or more specified indications.

The application must include both negative and ambiguous results of preclinical studies and clinical trials, as well as positive findings.

Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use or from a number of alternative sources, including studies initiated by investigators.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational product to the

satisfaction of the FDA.

FDA approval of an NDA must be obtained before a drug may be marketed in the United States.

Under the Prescription Drug User Fee Act, as amended (the “PDUFA”), each NDA must be accompanied by an application user fee.

The FDA adjusts the PDUFA user fees on an annual basis.

The PDUFA also imposes an annual program fee for each marketed human drug.

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

The FDA reviews all submitted NDAs before it accepts them for filing to determine if they are sufficiently complete to permit a substantive review, and the FDA may request additional information rather than accepting the NDA for filing.

In this event, the application must be resubmitted with the additional information and is subject to payment of additional user fees.

The FDA must make a decision on accepting an NDA for filing within 60 days of receipt.

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

Under the Prescription Drug User Fee Act (PDUFA) guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission.

This review typically takes 12 months from the date the NDA is submitted to FDA because the FDA has

approximately two months to make a “filing” decision after it the application is submitted The FDA does not always meet its PDUFA goal dates for standard and priority NDAs, and the review process is often significantly extended by FDA requests for additional information or clarification.

After the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product is safe and effective for its intended use and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality, and purity.

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

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

Before approving an NDA, the FDA will inspect the facilities at which the product is manufactured.

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

Under the PDUFA, the FDA has agreed to certain performance goals in the review of NDAs through a two-tiered classification system:

standard review and priority review.

According to the PDUFA performance goals, the FDA endeavors to review applications subject to standard review within ten months, whereas the FDA’s goal is to review priority review applications within six months.

The FDA does not always meet its PDUFA goal dates for standard and priority NDAs, and the review process is often extended by FDA requests for additional information or clarification.

The FDA may refer applications for novel drug products or products which present difficult questions of safety or efficacy to an advisory committee for review, evaluation, and recommendation as to whether the application should be approved and under what conditions.

Before approving an NDA, the FDA will typically conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements.

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

Additionally, before approving an NDA, the FDA may inspect one or more clinical sites to assure compliance with GCP requirements.

After the FDA evaluates the application, manufacturing process, and manufacturing facilities, it may issue an approval letter or a Complete Response Letter.

The FDA also may audit data from clinical trials to ensure compliance with GCP requirements.

The FDA also closely analyzes the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process.

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 an NDA and conducts inspections of manufacturing facilities, it will issue an Approval Letter or a Complete Response Letter.

An Approval Letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

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A Complete Response Letter usually describes all of the specific deficiencies in the NDA identified by the FDA.

The Complete Response Letter may require additional clinical data and/or (an) additional pivotal Phase 3 clinical trial(s), and/or other significant and time-consuming requirements related to clinical trials, preclinical studies, or manufacturing.

The Complete Response Letter may require additional clinical data, including the potential requirement to conduct additional pivotal Phase 3 clinical trial(s) and/or other significant and time-consuming requirements related to clinical trials, or to conduct additional preclinical studies or manufacturing changes.

If a Complete Response Letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.

Even if such data and information is submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product.

Further, the FDA may require that certain contraindications, warnings, or precautions be included in the product labeling or may condition the approval of the NDA on other changes to the proposed labeling, development of adequate controls and specifications, or a commitment to conduct one or more post-market studies or clinical trials.

For example, the FDA may require Phase 4 testing, which involves clinical trials designed to further assess a drug safety and effectiveness, and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized.

The FDA may also determine that a risk evaluation and mitigation strategy (REMS) is necessary to assure the safe use of the drug.

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

the FDA will not approve the NDA without an approved REMS, if required.

A REMS 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.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare genetic mitochondrial disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States or, if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a drug product available in the United States for this type of disease or condition will be recovered from sales of the product.

Orphan designation must be requested before submitting an NDA.

After the FDA grants orphan designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

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

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities.

The designation of such drug also entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

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

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

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

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.

Even if such data and information are submitted, the FDA may decide that the NDA does not satisfy the criteria for approval.

Data obtained from clinical trials are not always conclusive, and the FDA may interpret data differently than we interpret the same data.

Expedited Development and Review Programs

The FDA has a number of programs intended to expedite the development or review of products that meet certain criteria.

For example, new drugs 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 more frequent interactions with the review team during product development, and the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

Any product submitted to the FDA for approval, including a product with a Fast Track designation, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval.

A product is eligible for priority review if it has the potential to provide safe and effective therapy where no satisfactory alternative therapy exists or a significant improvement in the treatment, diagnosis or prevention of a disease compared to marketed products.

The FDA will attempt to direct additional resources to the evaluation of an application for a new drug designated for priority review in an effort to facilitate the review.

The FDA endeavors to review applications with priority review designations within six months of the filing date as compared to ten months for review of new molecular entity NDAs under its current PDUFA review goals.

In addition, a product may be eligible for accelerated approval.

Drug products intended to treat serious or life-threatening diseases or conditions may be eligible for 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.

The FDA has a fast-track program that is intended to expedite or facilitate the process of reviewing new drugs that meet certain criteria.

Specifically, new drugs are eligible for fast-track designation if they are intended to treat a serious or life-threatening condition and preclinical or clinical data demonstrate the potential to address unmet medical needs for the condition.

Fast-track designation applies to both the product and the specific indication for which it is being studied.

The sponsor can request that the FDA designate the product for fast-track status at any time before receiving NDA approval, but ideally no later than the pre-NDA meeting with the FDA.

Any product submitted to the FDA for marketing, including under a fast-track program, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval.

Any product is eligible for priority review if it treats a serious or life-threatening condition and, if approved, would provide a significant improvement in safety and effectiveness compared to available therapies.

A product may also be eligible for accelerated approval if it treats a serious or life-threatening condition and generally provides a meaningful advantage over available therapies.

In addition, such product must demonstrate 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 (“IMM”), which endpoint is reasonably likely to predict an effect on IMM or other clinical benefit.

As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval perform adequate and well controlled post-marketing clinical trials.

In addition, the FDA currently requires pre-approval of promotional materials as a condition for accelerated approval, which could adversely impact the timing of the commercial launch of the product.

The Food and Drug Administration Safety and Innovation Act established a category of drugs referred to as “breakthrough therapies” that may be eligible to receive breakthrough therapy designation.

A sponsor may seek FDA designation of a product candidate as a “breakthrough therapy” if the product is intended, alone or in

combination with one or more other products, to treat a serious or life-threatening disease or condition and 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.

The breakthrough therapy designation is a distinct status from both accelerated approval and priority review, which can also be granted to the same drug if relevant criteria are met.

If a product is designated as breakthrough therapy, the FDA will work to expedite the development and review of such drug.

Fast track designation, breakthrough therapy designation, priority review, and accelerated approval do not change the standards for approval, but may expedite the development or approval process.

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

The FDA may withdraw drug approval or require changes to the labeled indication of the drug if confirmatory post-market trials fail to verify clinical benefit or do not demonstrate sufficient clinical benefit to justify the risks associated with the drug.

If the FDA concludes that a drug shown to be effective can be safely used only if distribution or use is restricted, it may require such post-marketing restrictions as it deems necessary to assure safe use of the drug.

The Food and Drug Omnibus Reform Act made several changes to the FDA’s authority and its regulatory framework, including, among other changes, reforms to the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a drug on an expedited basis for non-compliance with post-approval requirements.

Additionally, a drug may be eligible for designation as a breakthrough therapy if (a) it is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening condition and (b) preliminary clinical evidence indicates that it may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints.

The benefits of breakthrough therapy designation include the same benefits as fast-track designation, plus intensive guidance from the FDA to ensure an efficient drug development program.

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

Post-Approval Requirements

Any drug products for which we receive FDA approvals are subject to continuing regulation by the FDA, including, among other things, manufacturing, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, and complying with FDA promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, restrictions on promoting drugs for uses or in patient populations that are not described in the drug’s approved labeling (known as “off-label use”), limitations on industry-sponsored scientific and educational activities, and requirements for promotional activities involving the internet.

Although physicians may prescribe legally available drugs for off-label uses, manufacturers may not market or promote such off-label uses.

In addition, quality control and manufacturing procedures must continue to conform to applicable manufacturing requirements after approval to ensure the long-term stability of the drug product.

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

cGMP regulations require among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP requirements.

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

Following approval of a new product, the product is subject to continuing regulation by the FDA, including, among other things, requirements relating to facility registration and drug listing monitoring and record-keeping adverse event and other periodic reporting, product sampling and distribution, and product promotion and advertising.

The FDA strictly regulates marketing, labeling, advertising, and promotion of products that are placed on the market.

Drugs may be promoted only for the approved indications 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, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

Although physicians may prescribe legally available drugs for off-label uses, manufacturers may not market or promote such uses.

Prescription drug promotional materials must be submitted to the FDA in conjunction with their first use or first publication.

After approval, if there are any changes to the approved product, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new NDA or NDA supplement, which may require the development of additional data or preclinical studies and clinical trials.

There also are continuing user fee requirements, under which FDA assesses an annual program fee for each product identified in an approved NDA.

In addition, quality control, drug manufacture, packaging, and labeling products must continue to conform to cGMP requirements after approval.

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

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

Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP 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 trials to assess new safety risks;

or imposition of distribution restrictions or other restrictions under a REMS program.

The discovery of violative conditions, including failure to conform to cGMP regulations, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions on a product, its manufacturer, or the NDA holder, including recalls.

The FDA may also place other conditions on approvals including the requirement for a REMS, to assure the safe use of the product.

If the FDA concludes that a REMS is needed, the NDA sponsor must submit a proposed REMS.

The FDA will not approve the product without an approved REMS, if required.

A REMS 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.

Any of these limitations on approval or marketing

could restrict the commercial promotion, distribution, prescription, or dispensing of products.

Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing.

The FDA may withdraw approval of a product if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

Corrective action could delay drug distribution and require significant time and financial expenditures.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, problems 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 the product, complete withdrawal of the product from the market or product recalls;

• fines, warning letters, or untitled letters;

• clinical holds on clinical trials;

• refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals;

• product seizure or detention, or refusal to permit the import or export of products;

• consent decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare programs;

• mandated modification of promotional materials and labeling and the issuance of corrective information;

• the issuance of safety alerts, Dear Healthcare Provider letters, press releases, and other communications containing warnings or other safety information about the product;

restrictions on the marketing or manufacturing of the product, suspension of the approval, complete withdrawal of the product from the market, or product recalls;

fines, warning letters, or holds on clinical trials;

refusal of the FDA to approve pending applications or supplements to approved applications;

suspension or revocation of product approvals;

product seizure or detention, or refusal to permit the import or export of the product;

mandated modifications of promotional materials and labeling and the issuance of corrective information;

issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product;

injunctions or the imposition of civil or criminal penalties.

The FDA also may require post-marketing testing, known as Phase 4 testing, and surveillance to monitor the effects of an approved product.

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

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

The FDA closely regulates the marketing, labeling, advertising, and promotion of drug products.

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, in their independent professional medical judgment, 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.

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.

The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion.

The FDA and other regulatory agencies have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA-approved labelling.

Marketing Exclusivity

Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain marketing applications.

The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity.

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

The FDA may also require post-approval studies and clinical trials if it finds that scientific data, including information regarding related drugs, make this appropriate.

The purpose of such studies would be to assess a known serious risk or signals of serious risk related to the drug or to identify an unexpected serious risk when available data indicate the potential for a serious risk.

The FDA may also require a labeling change if it becomes aware of new safety information that it believes should be included in the labeling of a drug.

Failure to comply with the applicable regulatory requirements at any time during the product development process, the approval process, or after approval may subject an applicant or manufacturer to, among other things, adverse publicity, warning letters, corrective advertising, and potential civil and criminal penalties.

FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical hold, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties.

Patent-Term Restoration and Marketing Exclusivity

Depending upon the timing, duration, and specifics of FDA approval of any future product candidates, some of our U.S.

patents may be eligible for limited patent term extension under the Hatch-Waxman Act.

The Hatch-Waxman Act permits restoration of the patent term of up to five years as compensation for patent term lost during product development and FDA regulatory review process.

Patent-term restoration, however, cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date.

An application for patent extension must be filed with the USPTO within 60 days of FDA approval of the drug product even if the product cannot be commercially marketed at that time.

The patent term restoration period is generally one-half the time between the effective date of an IND or the issue date of the patent, whichever is later, and the submission date of an NDA plus the time between the submission date of an NDA or the issue date of the patent, whichever is later, and the approval of the NDA

application, except that the review period is reduced by any time during which the applicant failed to exercise due diligence.

Only one patent applicable to an approved drug is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent.

The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.

In the future, we may apply for restoration of patent term for our currently owned or licensed patents to add patent life beyond our current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA.

Market exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications.

The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity.

A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.

During the exclusivity period, the FDA may not approve or even accept for review an abbreviated new drug application (ANDA) or a 505(b)(2) NDA submitted by another company for another drug based on the same active moiety, regardless of whether the drug is intended for the same indication as the original innovative drug or for another indication, where the applicant does not own or have a legal right of reference to all the data required for approval.

However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement to one of the patents listed with the FDA by the innovator NDA holder.

The FDCA also provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example new indications, dosages or strengths of an existing drug.

This three-year exclusivity covers only the modification for which the drug received approval on the basis of the new clinical investigations and does not prohibit the FDA from accepting ANDAs or 505(b)(2) NDAs for drugs referencing the approved application for review.

Five-year and three-year exclusivity will

not delay the submission or approval of a full NDA.

During the exclusivity period, the FDA may not approve an abbreviated new drug application (“ANDA”), or a 505(b)(2) NDA, submitted by another company for another version of such drug, where the applicant does not own or have a legal right of reference to all the data required for approval.

However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement.

The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, new indications, dosages or strengths of an existing drug.

This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent.

Such three-year and five-year exclusivity will not delay the submission or approval of a full NDA.

However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well controlled clinical trials necessary to demonstrate safety and effectiveness.

Orphan drug exclusivity, as described above, may offer a seven-year period of marketing exclusivity, except in certain circumstances.

Pediatric exclusivity is another type of non-patent market exclusivity in the United States.

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

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

Healthcare Laws and Compliance Requirements

Although we currently do not have any products on the market, we are and, upon approval and commercialization, we will be, subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which we conduct our business.

In the United States, such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, price reporting, and healthcare provider sunshine laws and regulations.

The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting, or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering, or arranging for the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.

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

The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, and formulary managers on the other.

There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution.

The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing, or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute.

Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances.

Our practices may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor.

Additionally, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

The federal False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to, or approval by, the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.

As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or property presented to the U.S.

Several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product.

Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, and thus non-covered, uses.

In addition, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the Affordable Care Act) codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act.

The Health Insurance Portability and Accountability Act of 1966 (HIPAA) also created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the control or custody of, any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items, or services.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have

actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

In addition, HIPAA, as amended by Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), imposes certain requirements on covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates and covered subcontractors that receive or obtain protected health information in connection with providing a service on behalf of a covered entity relating to the privacy, security and transmission of individually identifiable health information.

Additionally, the federal Physician Payments Sunshine Act and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) annually report information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, certain ownership and investment interests held by physicians and their immediate family members.

In order to distribute products commercially, we must also comply with state laws that require the registration of manufacturers and wholesale distributors of pharmaceutical products in a state, including, in certain states, manufacturers, and distributors who ship products into the state even if such manufacturers or distributors have no place of business within the state.

Some states also impose requirements on manufacturers and distributors to establish the pedigree of product in the chain of distribution, including some states that require manufacturers and others to adopt new technology capable of tracking and tracing product as it moves through the distribution chain.

Several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, track, and report gifts, compensation and other remuneration made to physicians and other healthcare providers, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.

All of our and any third party’s activities are potentially subject to federal and state consumer protection and unfair competition laws.

If our or any third party’s operations are found to be in violation of any of the federal and state healthcare laws described above or any other governmental regulations that apply, we or any third party may be subject to penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of operations.

Pharmaceutical Coverage, Pricing and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we, any third party or our collaborators obtain regulatory approval.

In the United States and markets in other countries, sales of any products for which we or our collaborators receive regulatory approval for commercial sale will depend, in part, on the extent to which third-party payors provide coverage, and establish adequate reimbursement levels for such drug products.

In the United States, third-party payors include federal and state healthcare programs, government authorities, private managed care providers, private health insurers, and other organizations.

Third-party payors are increasingly challenging the price, examining the medical necessity and reviewing the cost-effectiveness of medical drug products and medical services, in addition to questioning their safety and efficacy.

Such payors may limit coverage to specific drug products on an approved list, also known as a formulary, which might not include all of the FDA-approved drugs for a particular indication.

We, any third party, or our collaborators may need to

conduct expensive pharmaco-economic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the FDA approvals.

Nonetheless, our or any third party’s product candidates may not be considered medically necessary or cost-effective.

Moreover, the process for determining whether a third-party payor will provide coverage for a drug product may be separate from the process for setting the price of a drug product or for establishing the reimbursement rate that such a payor will pay for the drug product.

A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved.

Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product.

Adequate third-party reimbursement may not be available to maintain price levels sufficient to realize an appropriate return on our investment in product development.

If we or any third party elect to participate in certain governmental programs, we or such party may be required to participate in discount and rebate programs, which may result in prices for our future products that will likely be lower than the prices we might otherwise obtain.

For example, drug manufacturers participating under the Medicaid Drug Rebate Program must pay rebates on prescription drugs to state Medicaid programs.

Under the Veterans Health Care Act (VHCA) drug companies are required to offer certain drugs at a reduced price to a number of federal agencies, including the U.S.

Department of Veterans Affairs and Department of Defense, the Public Health Service and certain private Public Health Service designated entities in order to participate in other federal funding programs, including Medicare and Medicaid.

Recent legislative changes require that discounted prices be offered for certain U.S.

Department of Defense purchases for its TRICARE program via a rebate system.

Participation under the VHCA also requires submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the entry into government procurement contracts governed by the Federal Acquisition Regulations.

If our products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.

Different pricing and reimbursement schemes exist in other countries.

In Europe, governments influence the price of pharmaceutical products through their pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of those products to consumers.

EU member states are free to restrict the range of pharmaceutical products for which their national health insurance systems provide reimbursement, and to control the prices and reimbursement levels of pharmaceutical products for human use.

Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed.

To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular drug candidate to currently available therapies.

Other member states allow companies to fix their own prices for medicines, but monitor and control company profits.

The downward pressure on health care costs in general, particularly prescription drugs, has become very intense.

As a result, increasingly high barriers are being erected to the entry of new products.

In addition, in some countries, cross-border imports from low-priced markets exert a commercial pressure on pricing within a country.

The marketability of any product candidates for which we, any third party, or our collaborators receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement.

In addition, emphasis on managed care in the United States has increased and we expect will continue to increase the pressure on pharmaceutical pricing.

Coverage policies and third-party reimbursement rates may change at any time.

Even if favorable coverage and reimbursement status is attained for one or more products for which we, any third party, or our collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Healthcare Reform

A primary trend in the U.S.

healthcare industry and elsewhere is cost containment.

Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products and services, implementing reductions in Medicare and other healthcare funding and applying new payment methodologies.

For example, in March 2010, the Affordable Care

Act was enacted, which affected existing government healthcare programs and resulted in the development of new programs.

Since its enactment, there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act.

For example, on June 17, 2021 the U.S.

Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.

The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program.

In 2023, several legal challenges have been launched arguing that certain provisions of the IRA are unconstitutional.

It is possible that the Affordable Care Act will be subject to judicial or Congressional challenges in the future.

It is also unclear how such challenges and the healthcare reform measures of the Biden administration will impact the Affordable Care Act, IRA or our business.

Other legislative changes have also been proposed and adopted in the United States since the Affordable Care Act was enacted.

On August 2, 2011, the Budget Control Act of 2011, among other things, included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and due to subsequent legislative amendments to the statute will remain in effect until 2032, unless additional Congressional action is taken.

In addition, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.

There has also been heightened governmental scrutiny recently over the manner in which pharmaceutical companies set prices for their marketed products, which has resulted in several Congressional inquiries, Presidential executive orders, and proposed federal legislation, as well as state efforts, designed to, among other things, bring more transparency to product pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

For example, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on September 9, 2021, the U.S.

Department of Health and Human Services (HHS) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions take effect progressively starting in fiscal year 2023.

On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges.

It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.

In response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.

It is unclear whether the models will be utilized in any health reform measures in the future.

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

We anticipate that certain reform measures will result in additional downward pressure on coverage and the price that we or a third party receive for any approved product, and could seriously harm our or such third party’s

Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us or a third party from being able to generate revenue, attain profitability, or commercialize our or such third party’s products.

Data Privacy and Security

In the ordinary course of our business, we may process personal or sensitive data.

Accordingly, we are, or we or a third party may become, subject to numerous data privacy and security obligations, including federal, state, local, and foreign laws, regulations, and guidance governing data privacy and security.

Such obligations may include, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (CPRA) (collectively, the CCPA), the European Union’s General Data Protection Regulation 2016/679 (EU GDPR), and the EU GDPR as it forms part of United Kingdom (UK) law (UK GDPR).

In addition to the CCPA, several other states within the United States, such as Virginia, Colorado, Utah, and Connecticut have enacted or proposed comprehensive privacy laws and similar laws are being considered in several other states, as well as at the federal and local levels.

The CCPA and EU GDPR are examples of the increasingly stringent and evolving regulatory frameworks related to personal data processing that may increase our compliance obligations and exposure for any actual or perceived noncompliance.

For example, the CCPA imposes obligations on covered businesses to provide specific disclosures related to a business’s collection, use, and disclosure of personal data and to respond to certain requests from California residents related to their personal data.

Also, the CCPA provides for administrative fines and a private right of action for certain data breaches which may include an award of statutory damages.

Foreign data privacy and security laws (including, but not limited to, the EU GDPR and UK GDPR) impose significant and complex compliance obligations on entities that are subject to those laws.

For example, the EU GDPR applies to any company established in the European Economic Area (EEA) and to companies established outside the EEA that process personal data in connection with the offering of goods or services to data subjects in the EEA or the monitoring of the behavior of data subjects in the EEA.

These obligations may include limiting personal data processing to only what is necessary for specified, explicit, and legitimate purposes;

requiring a legal basis for personal data processing;

requiring the appointment of a data protection officer in certain circumstances;

increasing transparency obligations to data subjects;

requiring data protection impact assessments in certain circumstances;

limiting the collection and retention of personal data;

increasing rights for data subjects;

formalizing a heightened and codified standard of data subject consents;

requiring the implementation and maintenance of technical and organizational safeguards for personal data;

mandating notice of certain personal data breaches to the relevant supervisory authority(ies) and affected individuals;

and mandating the appointment of representatives in the UK and/or the EU in certain circumstances.

See the section titled “Risk Factors” for additional information about the laws and regulations to which we are or may become subject and about the risks to our business associated with such laws and regulations.

Foreign Corrupt Practices Act

Foreign Corrupt Practices Act of 1977 (FCPA) prohibits any U.S.

Regulatory Matters

Our current and future arrangements with healthcare providers, third-party payors, customers, and others may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, which may constrain the business or financial arrangements and relationships through which we research, as well as, sell, market, and distribute any products for which we obtain marketing approval.

The applicable federal, state, and foreign healthcare laws and regulations that may affect our ability to operate include, but are not limited to the following:

The Anti-Kickback Statute (“AKS”), which makes it illegal for any person, including a prescription drug or medical device manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid.

Moreover, the Patient Protection and Affordable Care Act of 2010 (“ACA”) provides that the government may assert that a claim including items or services resulting from a violation of the federal AKS constitutes a false or fraudulent claim for purposes of the federal False Claims Act (“FCA”).

The FCA, including the civil FCA that can be enforced by private citizens through civil whistleblower or qui tam actions, and civil monetary penalties prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government, and/or impose exclusions from federal health care programs and/or penalties for parties who engage in such prohibited conduct.

The Health Insurance Portability and Accountability Act (“HIPAA”) prohibits, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.

HIPAA also imposes obligations on covered entities such as health insurance plans, healthcare clearinghouses, and certain health care providers and their respective business associates and their

covered subcontractors, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information.

The federal Physician Payments Sunshine Act requires applicable manufacturers of covered 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 CMS information regarding certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others), and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.

The federal Foreign Corrupt Practice Act (“FCPA") prohibits any U.S.

individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.

The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.

Europe / Rest of World Government Regulation

In addition to regulations in the United States, we or any third party will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products.

Whether or not we, any third party, or our potential collaborators obtain FDA approval for a product, we or such third party must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries.

Certain countries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials.

Previously, in the EU, pursuant to the EU Clinical Trials Directive 2001/20/EC, a Clinical Trial Application (CTA) had to be submitted to each country’s national regulatory authority in which the clinical trial was to take place, together with an independent ethics committee, much like the FDA and IRB, respectively.

Although the Directive had sought to harmonize the EU clinical trials regulatory framework, EU Member States transposed and applied the provisions of the Directive differently, leading to significant variation in the regulatory regimes of the member states.

In 2014, a new Clinical Trials Regulation 536/2014, replacing the current Directive, was adopted.

The new Regulation is directly applicable in all EU Member States (without national implementation) and entered into application on 31 January 2022.

The new Regulation seeks to simplify and streamline the approval of clinical trials in the EU.

Pursuant to the Regulation, the sponsor shall submit a single CTA via the EMA’s Clinical Trials Information System (CTIS), which will cover all regulatory and ethics assessments from the member states concerned.

Any submissions made from January 31, 2023 onwards must be made through CTIS and all trials authorized pursuant to the Directive that are still ongoing on January 31, 2025 have their details registered on CTIS, in both cases trials registered on CTIS will have to comply with the Regulation.

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

Approval and monitoring of clinical trials in the EU is, as it was under the Directive, the responsibility of individual member states, but compared to the position prior to the applicability of the Clinical Trials Regulation there is likely to be more collaboration, information-sharing, and decision-making between member states.

The new Regulation also aims to streamline and simplify the rules on safety reporting and introduces enhanced transparency requirements, such as mandatory submission of a summary of the clinical trial results to a new EU Database.

The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.

Clinical trials of medicinal products in the EU must be conducted in accordance with EU and national regulations and the International Conference on Harmonization guidelines on GCP as well as the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

If the sponsor of the clinical trial is not established within the EU, it must appoint an EU entity to act as its legal representative.

The sponsor must take out a clinical trial insurance policy, and in most EU countries, the sponsor is liable to provide ‘no fault’ compensation to any study subject injured in the clinical trial.

Prior to commencing a clinical trial, the sponsor must obtain a CTA from the competent authority, and a positive opinion from an independent ethics committee.

The CTA must include, among other things, a copy of the trial protocol and an investigational medicinal product dossier containing information about the manufacture and quality of the medicinal product under investigation.

Any substantial changes to the trial protocol or other information submitted with the CTA must be notified to or approved by the relevant competent authorities and ethics committees.

Medicines used in clinical trials must be manufactured in accordance with GMP.

Other national and EU-wide regulatory requirements may also apply.

During the development of a medicinal product, the EMA and national regulators provide the opportunity for dialogue and guidance on the development program.

At the EMA level, this is usually done in the form of scientific advice, which is given by the Scientific Advice Working Party of the Committee for Medicinal Products for Human Use (CHMP).

A fee is incurred with each scientific advice procedure.

Advice from the EMA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical testing and clinical trials, and pharmacovigilance plans and risk-management programs.

Advice is not legally binding with regard to any future marketing authorization application (MAA) of the product concerned.

To obtain regulatory approval of an investigational drug or biological product in the EU, we or any third party must submit a MAA either under the so-called centralized or national authorization procedures.

Centralized procedure.

The centralized procedure provides for the grant of a single marketing authorization (MA), which is issued by the European Commission based on the opinion of the CHMP of the EMA and that is valid in all EU member states, as well as Iceland, Liechtenstein and Norway.

The Centralized Procedure is mandatory for certain types of products, medicines that are derived from biotechnology processes, such as genetic engineering, designated orphan medicinal products, and medicines that contain a new active substance indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases.

The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EU, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU.

Under the Centralized Procedure the maximum timeframe for the evaluation of an MAA is 210 days (excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP).

Accelerated evaluation might be granted by the CHMP in exceptional cases, when the authorization of a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation.

Under the accelerated procedure the standard 210-day review period is reduced to 150 days.

Innovative products that target an unmet medical need and are expected to be of major public health interest may be eligible for a number of expedited development and review programs, such as the PRIME scheme, which provides incentives similar to the breakthrough therapy designation in the U.S.

PRIME is a voluntary scheme aimed at enhancing the EMA’s support for the development of medicines that target unmet medical needs.

It is based on increased interaction and early dialogue with companies developing promising medicines, to optimize their product development plans and speed up their evaluation to help them reach patients earlier.

Product developers that benefit from PRIME designation can expect to be eligible for accelerated assessment but this is however not guaranteed.

The benefits of a PRIME designation include the appointment of a CHMP rapporteur before submission of a MAA, early dialogue and scientific advice at key development milestones, and the potential to qualify products for accelerated review earlier in the application process.

• National authorization procedures .

There are also two other possible routes to authorize medicinal products in several EU countries, which are available for investigational medicinal products that fall outside the scope of the centralized procedure.

• Decentralized procedure .

Using the decentralized procedure, an applicant may apply for simultaneous authorizations in more than one EU country of medicinal products that have not yet been authorized in any EU Member State and that do not fall within the mandatory scope of the centralized procedure.

• Mutual recognition procedure .

In the mutual recognition procedure, a medicine is first authorized in one EU Member State, in accordance with the national procedures of that country.

Following this, further marketing authorizations can be sought from other EU countries in a procedure whereby the countries concerned agree to recognize the validity of the original, national MA.

In the EU, upon receiving MA, new chemical entities generally receive eight years of data exclusivity and an additional two years of market exclusivity.

MAs have an initial duration of five years.

After these five years, the authorization may be renewed on the basis of a reevaluation of the risk-benefit balance.

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

If granted, data exclusivity prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic/biosimilar application.

During the additional two-year period of market exclusivity, a generic/biosimilar MA can be submitted, and the innovator’s data may be referenced, but no generic/biosimilar product can be marketed until the expiration of the market exclusivity.

However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical entity and qualify for data exclusivity.

The criteria for designating an “orphan medicinal product” in the EU are similar in principle to those in the United States.

A medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition;

(2) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits

derived from orphan status, would not generate sufficient return in the EU to justify investment;

and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to those affected by the condition.

The application for orphan drug designation must be submitted before the MAA.

Orphan medicinal products are eligible for financial incentives such as free protocol assistance, fee reductions for access to the centralized regulatory procedures and ten years of market exclusivity following drug approval, which can be extended to 12 years if trials are conducted in accordance with an agreed-upon pediatric investigational plan.

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

Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the member states.

The holder of a MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system.

Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports (PSURs).

All new MAAs must include a risk management plan (RMP) describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.

The regulatory authorities may also impose specific obligations as a condition of the MA.

Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies.

The advertising and promotion of medicinal products is also subject to laws concerning promotion of medicinal products, interactions with physicians, misleading and comparative advertising and unfair commercial practices.

All advertising and promotional activities for the product must be consistent with the approved summary of product characteristics, and therefore all off-label promotion is prohibited.

Direct-to-consumer advertising of prescription medicines is also prohibited in the EU.

Although general requirements for advertising and promotion of medicinal products are established under EU directives, the details are governed by regulations in each member state and can differ from one country to another.

The aforementioned EU rules are generally applicable in the EEA which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.

Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.

These penalties could include delays or refusal to authorize the conduct of clinical trials, or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.

Great Britain (GB) is no longer covered by the EEA’s procedures outlined above following the expiry of the Brexit transition period on January 1, 2021 (Northern Ireland will be covered by the centralized authorization procedure and can be covered under the decentralized or mutual recognition procedures).

A GB or UK MA will be required to market drugs in GB.

However, for three years from January 1, 2021, the Medicines and Healthcare Products Regulatory Agency (MHRA) may adopt decisions taken by the European Commission on the approval of new marketing authorizations through the centralized procedure, and the MHRA will have regard to marketing authorizations approved in a country in the EEA (although in both cases a MA will only be granted if any GB-specific requirements are met).

Various national procedures are now available to place a drug on the market in the UK, GB, or Northern Ireland, with the main national procedure having a maximum timeframe of 150 days (excluding time taken to provide any further information or data required).

The UK regulatory framework in relation to clinical trials is derived from existing EU legislation (as implemented into UK law, through secondary legislation), and after Brexit, new EU laws on clinical trials (including the EU Clinical Trials Regulation, EU CTR) are

not applicable in GB.

The UK may further diverge from the EU in relation to the regulation of medicinal products which could disrupt cross-border operations between the UK and EU.

Already, as a result of Brexit various benefits of membership no longer apply to the UK, for example, UK sponsored trials that span several EU countries now need to have an individual or organization in the EU to act as a legal representative, or sponsor and the UK does not have access to new EU clinical trial databases such as CTIS pursuant to the Trade and Cooperation Agreement.

Additionally, new rules apply to the import of investigational medicinal products from the EU and EEA to GB.

The data exclusivity periods in the UK are currently in line with those in the EU, but the Trade and Cooperation Agreement provides that the periods for both data and market exclusivity are to be determined by domestic law, so there could be divergence in the future.

The UK regulatory framework in relation to orphan drug designation is derived from existing EU legislation (as implemented into UK law, through secondary legislation).

The European Commission is currently evaluating new legislation in relation to orphan medicines and these laws will no longer be applicable in GB.

Since January 1, 2021, there has been no route to obtain pre-MA orphan designation in GB, however, as a result of the implementation of the Northern Ireland Protocol, EU orphan drug designation and time periods of market exclusivity still remain valid for marketing products in Northern Ireland.

Instead, the MHRA now reviews applications for GB orphan designation in parallel with the corresponding MA application.

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

For medicinal products that have received orphan status on or after January 1, 2021, a period of 10 years orphan market exclusivity is awarded from the date of MA by the MHRA.

An additional two years of exclusivity may be added where pediatric data requirements have been met.

Products with an orphan designation in the EU may be considered for a GB orphan MA.

However, where centrally authorized MAs have an existing EU orphan designation, these have been converted into GB MAs and shall continue in effect with the remaining period of orphan market exclusivity.

For other countries outside of the EU, such as countries in, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.

In all cases, again, the clinical trials are conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

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

As a result of the reduction in workforce in December 2023 and February 2024, we currently have eight full-time employees, all of whom are located in the United States.

None of our employees are subject to a collective bargaining agreement.

We consider our relationship with our employees to be good.

The FCPA also obligates companies whose securities are listed in the United States to comply with:

accounting provisions requiring them to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations;

analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers;

state laws that require biotechnology companies to comply with the biotechnology industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government;

state and local laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and require the registration of their sales representatives;

state laws that require biotechnology companies to report information on the pricing of certain drug products;

and state and foreign laws that govern the privacy and security of health information in some circumstances (such as Washington’s My Health, My Data Act, which, among other things, provides for a private right of action), many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Pricing and rebate programs must also comply with the Medicaid rebate requirements of the U.S.

Omnibus Budget Reconciliation Act of 1990 and more recent requirements in the ACA.

If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.

Manufacturing, sales, promotion, and other activities also are potentially subject to federal and state consumer protection and unfair competition laws.

In addition, the distribution of pharmaceutical and/or medical device products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage, and security requirements intended to prevent the unauthorized sale of pharmaceutical and/or medical device products.

Products must meet applicable child-resistant packaging requirements under the U.S.

Poison Prevention Packaging Act of 1970 as well as other applicable consumer safety requirements.

The failure to comply with any of these laws or regulatory requirements could subject companies to possible legal or regulatory action.

Depending on the circumstances, failure to meet applicable regulatory requirements can result in significant civil, criminal, and administrative penalties, including damages, fines, disgorgement, imprisonment, exclusion from participation in government funded healthcare programs such as Medicare and Medicaid, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings, injunctions, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product approvals, or refusal to allow a firm to enter into supply contracts, including government contracts.

Coverage and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any product candidate for which we may seek regulatory approval.

Sales in the United States will depend, in part, on the availability of sufficient coverage and adequate reimbursement from third-party payors, which include government health programs such as Medicare, Medicaid, TRICARE, and the Veterans Administration, as well as managed care

organizations and private health insurers.

Prices at which our customers may seek reimbursement for our product candidates can be subject to challenge, reduction, or denial by third-party payors.

The process for determining whether a third-party payor will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will pay for the product.

A third-party payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be available.

Additionally, in the United States there is no uniform policy among payors for coverage or reimbursement.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and approval processes.

Therefore, coverage and reimbursement for products can differ significantly from payor to payor.

If coverage and adequate reimbursement are not available, or are available only at limited levels, successful commercialization of, and/or a satisfactory financial return on, any product we develop may not be possible.

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

In order to obtain coverage and reimbursement for any product that might be approved for marketing, we may need to conduct expensive studies in order to demonstrate the medical necessity and cost-effectiveness of any products, which would be in addition to the costs expended to obtain regulatory approvals.

Third-party payors may not consider our product candidates to be medically necessary or cost-effective compared to other available therapies, or the rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development.

In most foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.

The requirements governing drug pricing and reimbursement vary widely from country to country.

For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.

There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.

Historically, products launched in the European Union do not follow price structures of the United States and generally prices tend to be significantly lower.

For more information, see the section entitled “ Risk Factors—We may face difficulties from changes to current regulations and future legislation.

Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations .”

Healthcare Reform

In the United States, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities and affect the profitable sale of product candidates.

Among policy makers and payors in the United States, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

In March 2010, the ACA was passed, which substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S.

pharmaceutical industry.

The ACA, among other things:

(1) increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations;

(2) created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics that are inhaled, infused, instilled, implanted, or injected;

(3) established an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in certain government healthcare programs;

(4) expanded the availability of lower pricing under the 340B drug pricing program by adding new entities to the program;

(5) expanded the eligibility criteria for Medicaid programs;

(6) created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research;

(7) created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (and 70% commencing January 1,

2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;

and (8) established a Center for Medicare Innovation at the CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drugs.

Since its enactment, there have been executive, judicial, and congressional challenges to certain aspects of the ACA.

For example, in June 2021 the U.S.

Supreme Court held that Texas and other challengers had no legal standing to challenge the ACA, dismissing the case on procedural grounds without specifically ruling on the constitutionality of the ACA.

Further, prior to the U.S.

Supreme Court ruling, on January 28, 2021, President Biden issued an executive order that initiated a special enrollment period in 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

This executive order also instructs certain governmental agencies to review existing policies and rules that limit access to health insurance coverage through Medicaid or the ACA, among others.

It is possible that the ACA will be subject to judicial or congressional challenges in the future.

It is unclear how any such challenges and healthcare measures promulgated by the Biden administration will impact the ACA, our business, financial condition, and results of operations.

Complying with any new legislation or reversing changes implemented under the ACA could be time-intensive and expensive, resulting in a material adverse effect on our business.

Other legislative changes have been proposed and adopted since the ACA was enacted.

These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, effective April 1, 2013, which, due to subsequent legislative amendments, will stay in effect through 2032, unless additional congressional action is taken.

In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

These laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our drugs, if approved, and accordingly, our financial operations.

Additionally, there has been heightened governmental scrutiny recently over the manner in which drug 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.

For example, the American Rescue Plan Act of 2021 eliminated the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs.

Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than they receive on the sale of products, which could have a material impact on our business.

In August 2022, Congress passed the IRA, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single-source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.

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

For 2026, the first year in which negotiated prices become effective, CMS selected 10 high-cost Medicare Part D drugs in 2023, negotiations began in 2024, and the negotiated maximum fair price for each drug has been announced.

CMS has selected 15 additional Medicare Part D drugs for negotiated maximum fair pricing in 2027.

For 2028, up to an additional 15 drugs, which may be covered under either Medicare Part B or Part D, will be selected, and for 2029 and subsequent years, up to 20 additional Part B or Part D drugs will be selected.

Various industry stakeholders, including certain pharmaceutical companies and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the IRA are unconstitutional.

The impact of these judicial challenges and other legislative, executive, and administrative actions of the government on us and the pharmaceutical industry as a whole is unclear.

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.

A number of states are considering or have

recently enacted state drug price transparency and reporting laws that could substantially increase our compliance burden and expose us to greater liability under such state laws once we begin commercialization after obtaining regulatory approval for any of our products.

Further, the FDA has authorized the state of Florida to develop an importation program to import certain prescription drugs from Canada for a limited period to help reduce drug costs, provided that Florida’s Agency for Health Care Administration meets the requirements set forth by the FDA.

Other states may follow Florida.

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

We are unable to predict the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare and containing or lowering the cost of healthcare.

If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose regulatory approval that may have been obtained and we may not achieve or sustain profitability.

Foreign Regulation

In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our product candidates to the extent we choose to develop or sell any product candidates outside of the United States.

The approval process varies from country to country and the time may be longer or shorter than that required to obtain FDA approval.

The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.

Employees and Human Capital Resources

As of March 7, 2025, we had 46 employees, 35 of whom were engaged in research and development activities.

We also engage contractors and consultants.

None of our employees are represented by a labor union or covered under a collective bargaining agreement.

We have not experienced any work stoppages due to employee disputes, and we consider our relationship with our employees to be good.

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

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

Our corporate headquarters is located in Boulder, Colorado, and consists of approximately 15,000 square feet of office and laboratory space pursuant to a lease that expires in December 2026, with the option to extend for a five-year period.

In the Merger, we assumed the lease of approximately 5,100 square feet of office space for the former Reneo headquarters in Irvine, California under a non-cancelable operating lease through November 2026.

In January 2025, we subleased this space for the remaining duration of the lease.

We lease all of our facilities and do not own any real property.

We believe that our existing facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available as and when needed.

Corporate Information

We were incorporated in Delaware in 2014.

Our principal executive offices are located at 18575 Jamboree Road, Suite 275-S, Irvine, California 92612, and our telephone number is (858) 283-0280.

Our corporate website address is www.reneopharma.com.

Information contained on or accessible through our website is not a part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive textual reference only.

Our design logo, “Reneo,” and our other registered and common law trade names, trademarks and service marks are the property of Reneo Pharmaceuticals, Inc.

We were incorporated under the laws of the State of Delaware in December 2014.

Legacy OnKure was incorporated under the laws of the State of Delaware in March 2011.

Pursuant to the Merger, we changed our name from Reneo Pharmaceuticals, Inc.

to OnKure Therapeutics, Inc.

Our principal executive offices are located at 6707 Winchester Circle, Suite 400, Boulder, CO 80301, and our telephone number is (720) 307-2892.

Our website address is www.onkure.com.

The information on, or that can be accessed through, our website is not part of this Annual Report or our other filings with the SEC.

We have included our website address in this Annual Report solely as an inactive textual reference.

We use the OnKure logo and other marks as trademarks in the United States and other countries.

This Annual Report contains references to our trademarks and service marks and to those belonging to other entities.

Solely for convenience, trademarks and trade names referred to in this Annual Report, including logos, artwork and other visual displays, may appear without a trademark symbol, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names.

We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.

Emerging Growth Company

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

We may take advantage of certain exemptions from various public company reporting requirements, including being permitted to provide only two years of audited financial statements, in addition to any required

unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure, not being required to have our internal control over financial reporting audited by our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We may take advantage of these exemptions until December 31, 2026 or until we are no longer an “emerging growth company,” whichever is earlier.

We will cease to be an emerging growth company prior to the end of such period if certain earlier events occur, including if we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the Exchange Act), our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.

This provision allows an emerging growth company to delay the adoption of accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies.

We have elected to use this extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

As a result, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We are also a “smaller reporting company” as defined in the Exchange Act.

We may continue to be a smaller reporting company even after we are no longer an emerging growth company.

We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

We will remain an emerging growth company until the earliest to occur of:

the last day of the fiscal year in which we have more than $1.235 billion in annual revenues;

the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates;

the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities;

and the last day of the fiscal year ending after the fifth anniversary of Reneo’s initial public offering (i.e., December 31, 2026).

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards.

In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of our financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

Smaller Reporting Company

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two ye ars of audited financial statements.

We may continue to be a smaller reporting company in any given year if either (i) the market value of our stock held by non-affiliates is less than $250 million as of June 30th in the most recently completed fiscal year, or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as of June 30th in the most recently completed fiscal year.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business