What changed in this filing

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Item 1. Business

2021-03-18 compared with 2020-02-18 · 364 added, 370 removed, 294 unchanged (71% of the section changed)

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Examples of these statements include, but are not limited to, statements regarding the following:

potential future development plans for Gencaro, including our ability to secure sufficient financing to support our anticipated Phase 3 clinical trial of Gencaro, the likelihood that any Phase 3 clinical trial results for Gencaro satisfy the requirements of our Special Protocol Assessment agreement, the expected features and characteristics of Gencaro, including the potential for genetic variations to predict individual patient response to Gencaro or AB171, Gencaro’s potential to treat atrial fibrillation, or AF, future treatment options for patients with AF, the potential for Gencaro to be the first genetically-targeted AF prevention treatment, statements regarding potential Phase 3 development plans for Gencaro, including the timing and results thereof, the expected features and characteristics of AB171 as a potential genetically-targeted treatment for peripheral arterial disease, or PAD, and for heart failure, or HF, the potential timeline for development of AB171, including any Investigational New Drug, or IND, application submission related thereto, and the ability of ARCA’s financial resources to support its operations through the end of the third quarter of 2020, the sufficiency of our current capital to reach certain of our corporate objectives, our ability to obtain additional funding when needed or enter into a strategic or other transaction, including our ability to raise sufficient capital to fund any Phase 3 clinical trials for Gencaro and our other operations, the extent to which our issued and pending patents may protect our products and technology, the potential of such product candidates to lead to the development of safe or effective therapies, our ability to enter into collaborations, our ability to maintain listing of our common stock on a national exchange, our future operating expenses, our future losses, our future expenditures, and the sufficiency of our cash resources to maintain operations.

potential future development plans for rNAPc2 (AB201) and Gencaro, including the potential for rNAPc2 to treat COVID-19, our ability to secure sufficient financing to support our anticipated clinical trials of rNAPc2 and Gencaro, the likelihood that any Phase 3 clinical trial results for Gencaro will satisfy the requirements of our Special Protocol Assessment agreement, the expected features and characteristics of Gencaro, including the potential for genetic variations to predict individual patient response to Gencaro or AB171, Gencaro’s potential to treat atrial fibrillation, or AF, future vaccines and treatment options for patients with COVID-19, future treatment options for patients with AF, the potential for Gencaro to be the first genetically-targeted AF prevention treatment, statements regarding potential Phase 3 development plans for Gencaro, including the timing and results thereof, the expected features and characteristics of AB171 as a potential genetically-targeted treatment for peripheral arterial disease, or PAD, and for heart failure, or HF, the potential timeline for development of AB171, including any Investigational New Drug, or IND, application submission related thereto, and the ability of ARCA’s financial resources to support its operations through the end of fiscal year 2022, the sufficiency of our current capital to reach certain of our corporate objectives, our ability to obtain additional funding when needed or enter into a strategic or other transaction, including our ability to raise sufficient capital to fund any clinical trials for rNAPc2 and Gencaro and our other operations, the extent to which our issued and pending patents may protect our products and technology, the potential of such product candidates to lead to the development of safe or effective therapies, our ability to enter into collaborations, our ability to maintain listing of our common stock on a national exchange, our future operating expenses, our future losses, our future expenditures, and the sufficiency of our cash resources to maintain operations.

Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors discussed herein and elsewhere.

These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.

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The terms “ARCA,” “the Company,” “we,” “us,” “our” and similar terms refer to ARCA biopharma, Inc.

We are a clinical-stage biopharmaceutical company applying a precision medicine approach to the development and commercialization of genetically targeted therapies for cardiovascular diseases.

Precision medicine refers to the tailoring of medical treatment to the individual characteristics of patients, using genomic and other information that extends beyond general diagnostic categorization.

We are a clinical-stage biopharmaceutical company applying a precision medicine approach to the development and commercialization of targeted therapies for cardiovascular diseases.

Precision medicine refers to the tailoring of medical treatment to the individual characteristics of patients, using genomic, non-genomic biomarker and other information that extends beyond routine diagnostic categorization.

We believe that when implemented correctly precision medicine can enhance therapeutic response, improve patient outcomes, and reduce healthcare costs.

Our lead product candidate, Gencaro™ (bucindolol hydrochloride), is a pharmacogenetically-targeted beta-adrenergic receptor antagonist with mild vasodilator properties that we are developing as a fourth-generation beta-blocker based on its pharmacogenetic targeting.

We believe the pharmacology of Gencaro is unique and has the potential for enhanced efficacy in patients with a specific genetic characteristic for the beta-1 adrenergic receptor, termed the beta-1 389 arginine homozygous genotype.

The beta-1 389 arginine homozygous genotype is present in approximately 50% of the North American and European general populations, and it can be detected by a genetic test currently performed in a centralized laboratory or in the future potentially at the point of care during a patient visit.

We are developing Gencaro to treat cardiovascular disease, focusing on atrial fibrillation, or AF, in patients with chronic heart failure, or HF.

Our lead product candidates are rNAPc2 (AB201) as a potential treatment for diseases caused by ribonucleic acid, or RNA, viruses, initially focusing on COVID-19, the disease syndrome caused by the SARS-CoV-2 virus, and Gencaro™ (bucindolol hydrochloride) for the treatment of atrial fibrillation, or AF, in patients with chronic heart failure, or HF.

rNAPc2 targets COVID-19 patients with biomarker evidence of coagulopathy, while Gencaro is being developed for patients who have a genotype that identifies a drug target associated with heightened efficacy.

rNAPc2 (AB201) for treatment of COVID-19

Recombinant Nematode Anticoagulant Protein c2, or rNAPc2 (AB201), is a protein therapeutic in clinical development as a potential treatment for patients with COVID-19.

Based on its unique mechanism of action, development history and the clinical evidence from the SARS-CoV-2 pandemic, we believe rNAPc2 has potential to be a beneficial therapy for patients with this serious viral disease.

We initiated a Phase 2 clinical trial of rNAPc2 as a potential treatment for patients hospitalized with COVID-19 in the fourth quarter of 2020 and are currently enrolling patients.

Certain patients with severe COVID-19 disease exhibit thrombotic complications and other inflammatory responses suggesting potential dysregulation of the coagulation and immune systems.

rNAPc2 is a potent inhibitor of tissue factor, a cellular receptor responsible for initiation of the primary coagulation pathway and appears to be the major activator of the coagulation cascade during viral infection.

Tissue factor is also implicated in the immune system inflammatory response to viral infections and in the process of viral dissemination during infection.

We believe that evidence from the pandemic implicates tissue factor pathways as an important part of the COVID-19 disease process, and provides a rationale to test rNAPc2 as a potential therapeutic for COVID‑19 for its anticoagulant and potential anti-inflammatory properties.

rNAPc2 was originally developed for potential use as an anticoagulant due to its inhibition of the TF-initiated coagulation process.

It was evaluated for the prevention of thrombosis in Phase 1 and Phase 2 clinical studies involving over 800 subjects and demonstrated both safety and efficacy in these studies.

rNAPc2 has also been investigated as a potential therapeutic for severe viral infections other than COVID-19.

Research has shown that viral infections can provoke dysregulated activation of the TF pathway, resulting in abnormal systemic coagulation and related inflammation, leading to potential organ failure and mortality.

For this reason, rNAPc2 was tested as a therapeutic in non-human primates, or NHPs, in studies against lethal doses of the Ebola and Marburg viruses, where it showed evidence of efficacy in the form of mortality reduction, decreases in inflammatory biomarkers and, evidence of reduced disseminated intravascular coagulation, or DIC.

DIC is a serious condition that causes abnormal blood clotting throughout the body's blood vessels.

SARS-CoV-2 is a new coronavirus identified in late 2019 that belongs to a family of enveloped RNA viruses that include Middle East Respiratory Syndrome, or MERS, and Severe Acute Respiratory Syndrome (SARS-CoV-1), both of which caused serious human infections of the respiratory system.

The disease caused by the SARS-CoV-2 virus has been designated COVID-19.

Since this outbreak was first reported in late 2019, there have been over 119 million confirmed cases of COVID-19 and over 2.6 million deaths worldwide attributed to the virus (as of March 2021).

COVID-19 is associated with a high incidence of both arterial and venous coagulation-related adverse events in large and small blood vessels.

These include, stroke, myocardial infarction, or MI, (i.e., heart attack) and pulmonary emboli;

as well as, blockage of the smaller peripheral blood vessels in the fingers/toes (COVID-digit).

This syndrome is so frequently observed in COVID-19 that it has received the name of COVID-19 Associated Coagulopathy, or CAC.

The underlying pathology of CAC is believed to result from thrombo-inflammatory processes triggered by the viral infection.

A commonly used biomarker for assessing the presence of abnormal coagulation is a D-dimer test, which is elevated (greater than 0.5) in nearly 70% of hospitalized COVID-19 patients and is associated with adverse clinical outcomes.

Some researchers believe that this and other evidence points to dysregulation of TF pathways in COVID-19 patients that result in the development of thrombotic complications.

rNAPc2 has shown potential in addressing the coagulation disorder caused by severe viral infections.

In preliminary, non-human studies in NHPs against lethal doses of the Ebola and Marburg virus, rNAPc2 lowered D-dimer levels, reduced mortality and exhibited anti-inflammatory effects.

We believe more recent research supports our belief that rNAPc2 has the ability to inhibit the activity of TF in multiple processes that contribute to severe viral disease.

Taken together, we believe this evidence suggests that rNAPc2 may have therapeutic benefits for patients with serious COVID-19 infections and the accompanying high risk of thrombosis.

To our knowledge, rNAPc2 is the only NME anticoagulant, and the only tissue factor inhibitor, currently under evaluation for COVID-19.

As a therapeutic aimed at a host response to a disease syndrome, we believe rNAPc2 potentially could be used in combination with other antiviral drugs.

We believe its potential efficacy is not linked to a specific viral genome and may not be diminished by genetic drift or the development of new strains of the SARS-CoV-2 virus.

As a therapeutic addressing a disease, we believe rNAPc2 may have broad spectrum potential against multiple pathogens that have disease elements in common with COVID‑19, such as other coronaviruses and other RNA viruses.

Therefore, we believe that rNAPc2 has therapeutic potential for future viral outbreaks beyond the current pandemic.

rNAPc2 is a single-chain, 85 amino acid, recombinant protein administered subcutaneously, that has previously been evaluated under three FDA Investigational New Drug, or IND, applications in six Phase 1 and three Phase 2 clinical studies in the United States and Europe.

These clinical trials primarily examined the safety, dosing and anticoagulation effects of rNAPc2 in patients with acute coronary syndromes, in patients undergoing knee replacement surgery and in patients undergoing percutaneous coronary interventions.

In these trials, involving more than 800 human patients with over 700 exposed to drug, rNAPc2 was generally well-tolerated with a safety profile comparable to commercially available anticoagulants.

rNAPc2 is manufactured in an engineered yeast strain by an established methodology following current Good Manufacturing Practices, or cGMP, and we believe this process can be readily scaled to commercial quantities.

FDA granted rNAPc2 Orphan Drug Designation status in 2014 for the treatment of viral hemorrhagic fever post-exposure to Ebola virus, but human clinical trials were not conducted.

In October 2020, FDA approved the IND application for rNAPc2 as a potential treatment for patients hospitalized with COVID-19 and it received a Fast-Track designation in November 2020 .

We initiat ed the Phase 2b clinical trial of rNAPc2 ( AB201 ) , ASPEN-COVID-19, in patients hospitalized with COVID-19 in the fourth quarter of 2020 .

We anticipate announcing topline data from th is approximately 100 patient Phase 2b clinical trial in the thir d quarter of 2021 .

We are evaluating rNAPc2 as a treatment for patients hospitalized with COVID-19 who are at high risk for thrombotic complications, as indicated by elevated D-dimer levels.

The Phase 2b clinical trial is designed to be a randomized comparison of two-dose regimens of rNAPc2 versus heparin prescribed per local standard of care.

The primary endpoint of the clinical trial is the change in D-dimer level from baseline to Day 8.

If Phase 2b results indicate a favorable effect on D-dimer levels and safety is confirmed, following FDA review of the data and identification of the proposed Phase 3 rNAPc2 dose, we anticipate that clinical investigative sites will begin enrolling patients in a planned Phase 3 clinical trial.

The primary endpoint of Phase 3 is planned to be clinical recovery as measured by the Adaptive COVID-19 Treatment Trial ordinal scale, with secondary endpoints that include D-dimer levels and the number of thrombotic events.

We believe the Phase 3 clinical trial will be event driven, with an estimated requirement of 450 patients.

We believe that favorable results from this Phase 2b/3 clinical trial program could support use of rNAPc2 in COVID-19 patients, given its potential efficacy both as an anticoagulant and an anti-viral agent that we believe counters the dysregulatory immune response and improves clinical recovery.

The clinical trial is being managed in collaboration with the Colorado Prevention Center, or CPC, the University of Colorado's Academic Research Organization with extensive experience in managing vascular and anticoagulation clinical trials.

We have financed the development of rNAPc2 through public equity sales.

Our rNAPc2 development plans, including the timeline, depend on our ability to enroll patients during the COVID-19 pandemic, the results of our Phase 2b clinical trial, FDA guidance, and availability of drug product, all of which are currently uncertain.

We own the clinical development program of rNAPc2, including Phase 2 clinical trials.

If rNAPc2 is successfully developed, we believe it will have intellectual property protection, including 12 years of market exclusivity as an innovative biologic product under FDA law in the United States, 10 years data protection exclusivity in the European Union, or EU, and potentially patent protection in addition to this.

We plan to pursue strategic co-development and partnering opportunities for rNAPc2 development and commercialization.

Gencaro™ (bucindolol hydrochloride) for Atrial Fibrillation

Gencaro™ (bucindolol hydrochloride) is a pharmacogenetically-targeted beta-adrenergic receptor antagonist with mild vasodilator properties that we are developing for the treatment of atrial fibrillation in patients with heart failure.

We believe the pharmacology of Gencaro is unique and its efficacy can be enhanced by prescribing it to patients with a common genotypic variant that is present in approximately 50% of the North American and European general populations.

This gene can be detected with a simple genetic test.

We are developing Gencaro to treat atrial fibrillation, or AF, in patients with chronic heart failure, or HF.

AF is the most common form of cardiac arrhythmia, a disruption of the heart’s normal rhythm or rate.

HF is a chronic condition in which the heart is unable to pump enough blood to meet the body’s needs.

AF is a disruption of

the heart’s norma l rhythm or rate, which commonly occurs in patients with HF.

In HF patients, the presence of AF leads to worsening symptoms, and increased risk of hospitalization and death.

AF and HF commonly occur together.

In HF patients, the development of AF leads to worsening symptoms, and increased risk of hospitalization and death.

Current treatment options for AF in HF patients are limited, and can be invasive, costly and dangerous.

Gencaro was previously studied in the BEST trial, a Phase 3 HF mortality trial in 2,708 patients.

The BEST trial included a DNA substudy of over 1,000 patients, which was used to evaluate the effect of genetic variations in cardiac adrenergic receptors on the response to Gencaro.

Data from this substudy showed that patients with the beta-1 389 arginine homozygous genotype had substantial improvements in mortality, hospitalization and the prevention of arrhythmias.

We believe that these genetically determined receptor variations, which are detectable using standard DNA testing technology, can serve as diagnostic markers for predicting enhanced therapeutic response to Gencaro.

Our current clinical development of Gencaro is focused on AF in HF patients who have a left ventricular ejection fraction, or LVEF, of 40% and higher and the specific genotype we believe responds best to Gencaro.

There are currently no drug therapies approved to treat AF or HF in this population, which encompasses more than half of all HF in the United States and Europe.

We believe that, if approved, there are additional indication expansion opportunities for Gencaro in other HF populations and cardiac arrhythmias, as well as the potential for new formulation developments to extend marketing exclusivity.

In May 2019, we published the results of our Phase 2B clinical trial that examined Gencaro for the prevention of AF in HF patients, in the Journal of the American College of Cardiology:

Heart Failure.

In this trial, known as GENETIC-AF, we compared Gencaro against TOPROL‑XL (metoprolol succinate), a beta-blocker that is commonly prescribed for HF patients with AF.

GENETIC-AF enrolled 267 HF patients with LVEF values ranging from 12% to 55% who had recently experienced AF and had the specific genotype we believe responds best to Gencaro.

Our analysis of the results identified what we believe is a targeted patient population for Phase 3 development;

one showing greater response to Gencaro compared to TOPROL-XL for multiple clinical assessments, including the primary endpoint of time to AF recurrence, maintenance of normal sinus rhythm, cumulative AF burden, and AF-related clinical interventions and complications.

In July 2019, we reached an agreement with the U.S.

Food and Drug Administration, or FDA, known as a Special Protocol Assessment, or SPA, for the requirements of the Gencaro Phase 3 clinical trial.

Based on the SPA agreement, our planned Phase 3 clinical trial, if successful at a statistical threshold of at least p ≤ 0.01, may support a New Drug Application, or NDA, for the marketing approval of Gencaro.

PRECISION‑AF, the clinical trial specified by the SPA, is anticipated to enroll approximately 400 HF patients with LVEF values ranging from 40% to 55% who have recently experienced AF and have the specific genotype we believe responds best to Gencaro.

The clinical trial design is similar to GENETIC-AF, including the active comparator, TOPROL‑XL, and the primary endpoint of time to AF recurrence during a 6-month follow-up period.

Secondary objectives will examine other important endpoints, such as AF burden and AF treatment-related interventions.

Subject to available financing, we plan to initiate enrollment of PRECISION-AF in the fourth quarter of 2020 and project that topline data will be available in approximately two and a half years from our initiation of patient enrollment.

If the trial meets the criteria specified in the SPA, we plan to file for approval of Gencaro with the FDA, European Medicines Agency, and other regulatory authorities.

We believe that patients with HF and AF represent a major unmet medical need, and that this need is most pronounced in patients with LVEF values of 40% and above.

This LVEF range constitutes more than half of all chronic HF in the United States and Europe, and there are currently no approved or guideline recommended therapies for these patients to treat either their AF or HF.

Our development plan for Gencaro focuses on the treatment of AF in patients with higher ejection fraction HF, those who have an ejection fraction, or EF, of 40% and higher who also have the genotype we believe is optimal for Gencaro efficacy.

This population of HF encompasses more than half of all HF patients in the United States and Europe.

There are currently few approved or effective drug therapies to treat AF or HF in this patient population.

Our development plan for Gencaro is based on our recent analysis of the Phase 2b clinical trial of Gencaro for the prevention of AF in HF patients, known as GENETIC-AF.

This analysis showed novel results for Gencaro in patients in the clinical trial with EF’s of 40% and higher.

We are planning a new design for a Phase 3 pivotal clinical trial of Gencaro based on this analysis that addresses what we believe are important clinical assessments, including the total amount of time that a patient experiences AF, known as AF burden, maintenance of normal sinus rhythm, rhythm control interventions such as electrical cardioversion, catheter ablation and use of anti-arrhythmic drugs and drug-related complications such as bradycardia.

Based on these analyses, we were issued a United States patent in February 2021 for the use of Gencaro in this patient population.

We believe this patent will substantially extend the patent protection for our planned development of Gencaro into 2039.

We are seeking similar patent protection in other countries.

We currently have an agreement with the FDA, known as a Special Protocol Assessment, or SPA, for the requirements of a Gencaro Phase 3 clinical trial, PRECISION-AF, that would support approval of Gencaro if successful.

Based on our recent analyses of the GENETIC-AF data, we may alter the design of PRECISION-AF to focus on endpoints that are not covered in the SPA agreement.

We believe that patients with HF and AF represent a major unmet medical need, and this need is most pronounced in patients with EF values of 40% and above.

This EF range constitutes more than half of all chronic HF in the United States and Europe, as well as in Japan and China, and there are currently few approved, effective or guideline-recommended therapies for these patients to treat either their AF or HF.

AF is a very common complication in these patients, with estimates of AF incidence ranging from 40% to 60%.

Beta-blockers approved for HF are commonly used off-label to treat AF and HF in these patients, but they are only moderately effective in preventing AF and none are approved for patients with LVEF ≥ 40%.

blockers approved for HF are commonly used off-label to control heart rate in these patients, but they are not considered effective in preventing AF and none are approved for patients with EF ≥ 40%.

Other anti-arrhythmic drugs approved for the treatment of AF have adverse side effects and in HF patients are either contraindicated or have label warnings for use due to an increased risk of mortality.

Interventional procedures for AF, such as catheter ablation and electrical cardioversion, are invasive, expensive, and often temporary;

typically requiring the continued use of beta blockers post-intervention to manage both AF and HF.

We believe that Gencaro, if approved, may be a safe and more effective therapy for the treatment of HF patients with AF.

these interventions also typically requir e the continued use of beta blockers and other anti-arrhythmic drugs post-intervention.

We believe that Gencaro, if approved, may be a safe and more effective therapy for the treatment of higher ejection fraction HF patients with AF.

We believe there are several potentially important attributes that would differentiate Gencaro from existing therapies, including:

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Reduction in the need for catheter ablation, electrical cardioversion, or toxic anti-arrhythmic drugs;

Maintenance of rhythm control after a successful AF catheter ablation;

Effective rate control with lower risk of treatment-limiting bradycardia;

Reduction in symptoms and improvement in quality of life;

Reduced health care burden;

Foundational beta-blocker benefits for HF and unique evidence of efficacy in HF patients with AF;

The only drug therapy approved for AF in HF patients with LVEF ≥ 40%.

We have exclusive development and commercial rights for Gencaro in all indications.

We have an international patent portfolio for Gencaro in the United States, the European Union, or EU, and other major markets, as well as new chemical entity status, which we

believe will give us a strong intellectual property position to approximately 2031 in the United States and approximately ten years from approval in the EU.

Additional issued and pending patents have the potential for longer exclusivity in these and ot her markets.

We have developed a laboratory platform to perform the genetic test that was approved by FDA for use in the Phase 2B clinical trial.

We retain all rights to this test platform which we expect to use in future clinical trials, and which we beli eve could be used for commercialization.

One of the only drug therapies approved and shown effective for AF in HF patients with EF ≥ 40%, and the only one in its drug class.

We have an international patent portfolio for Gencaro in the United States, the EU, and other major markets, as well as new chemical entity status, including a new patent that we believe will give us a strong intellectual property position to at least approximately 2039 in the United States;

we have filed applications similar to this new patent in international territories.

We have developed a laboratory platform for the diagnostic test that would be used to prescribe Gencaro;

this platform was approved by FDA for use in the Phase 2B clinical trial.

We retain all rights to this test platform;

we expect to use it in future clinical trials, and we believe it could be one of multiple diagnostic platforms used for commercialization.

To support the continued development of rNAPc2 and Gencaro, we will need additional financing to fully fund the planned clinical trials, and our general and administrative costs through the clinical trials’ projected completion and potential commercialization.

Considering the substantial time and costs associated with the development of rNAPc2 and Gencaro and the risk that we may be unable to raise a significant amount of capital on acceptable terms, we are also pursuing co-development and commercialization partnering opportunities with large pharmaceutical and/or specialty pharmaceutical companies and may pursue a strategic combination or other strategic transactions.

If we are unable to obtain sufficient financing or are unable to complete a strategic transaction, we may discontinue our development activities on rNAPc2 or Gencaro or discontinue our operations .

We believe our cash and cash equivalents as of December 31, 2020 , together with the $23.3 million of net proceeds raised through February 2021 from sales of our common stock, will be sufficient to fund our operations through the end of fiscal year 2022, including the projected costs for the rNAPc2 ( AB201) Phase 2b clinical trial.

Conducting a Phase 3 rNAPc2 clinical trial or the Phase 3 PRECISION-AF trial would likely require additional financing.

However, changing circumstances may cause us to consume capital significantly faster or slower than currently anticipated.

We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available financial resources sooner than we currently anticipate;

therefore, we may have to raise additional capital for other clinical trials of rNAPc2 .

Initiating any Phase 3 clinical trial of Gencaro is dependent on sustained improvement in the COVID-19 pandemic and will require additional financing .

In 2017, we entered into a sales agreement with a placement agent to sell, from time to time, our common stock having an aggregate offering price of up to $10.2 million, in an “at the market offering.” In 2020, we further amended the sales agreement to increase the maximum aggregate value of shares which we may issue and sell from time to time under this sales agreement to $32.4 million.

This sales agreement terminated in July 2020.

Under this sales agreement, we had sold an aggregate of 3,302,159 shares of our common stock pursuant to the terms of such sales agreement, as amended, for aggregate gross proceeds of approximately $32.3 million.

Net proceeds received in this offering were approximately $30.8 million, after deducting expenses for executing the “at the market offering” and commissions paid to the placement agent.

In July 2020, we entered into a new sales agreement with a placement agent to sell, from time to time, our common stock having an aggregate offering price of up to $54.0 million, in an “at the market offering.” As of February 2021, we had sold an aggregate of 9,928,272 shares of our common stock pursuant to the terms of such sales agreement for aggregate gross proceeds of approximately $54.0 million.

Net proceeds received in this offering were approximately $52.2 million, after deducting expenses for executing the “at the market offering” and commissions paid to the placement agent.

We have sold all shares available under the current prospectus.

I n March 2020, the World Health Organization declared the outbreak of COVID-19, a novel strain of Coronavirus, a global pandemic.

This outbreak is causing major disruptions to businesses and markets worldwide as the virus spreads.

We do not expect a material financial effect as a result of the pandemic.

However, i f the pandemic continues to be a severe worldwide crisis, it could have a material adverse effect on our business, results of operations, financial condition and cash flows .

Our mission is to become a leading biopharmaceutical company developing precision targeted cardiovascular therapies to enhance therapeutic response, improve patient outcomes, and reduce healthcare costs.

To achieve this goal, we are pursuing the following strategies:

Complete Phase 3 development and obtain regulatory approval of Gencaro for the treatment of AF in HF patients.

We intend to advance Gencaro into a Phase 3 clinical trial as a therapy for HF patients with AF, focusing on HF with LVEF ≥ 40%, a patient population for whom no approved drug therapy currently exists.

We have a SPA agreement for the Gencaro program that, if satisfied, we believe would allow for an NDA submission based on our proposed Phase 3 clinical trial (PRECISION‑AF).

To support this clinical development and our continued operations, we expect to seek additional funding through the sale of public or private equity or debt securities, the completion of a strategic transaction, or a combination thereof.

Expand Gencaro indications and product candidate franchise.

We believe the treatment of AF in HF patients is an unmet medical need with a near-term and well-defined regulatory pathway.

In addition to the indication contemplated in PRECISION‑AF, we believe Gencaro may be an effective therapy for additional HF indications.

For instance, we may seek a strategic partner to support a clinical trial of Gencaro in genotype-positive HF patients with LVEF >55%, which we believe would substantially expand the addressable patient population, if successful.

We have also identified additional indication expansion opportunities for Gencaro in other HF populations and cardiac arrhythmias, as well as the potential for new formulation developments to extend marketing exclusivity, if approved.

Increase the value of our clinical programs through strategic collaborations and potential development of internal capabilities.

We currently control all development and commercial rights for Gencaro.

We plan to seek collaborative partnerships for the further development of Gencaro in major territories.

As we progress into our Phase 3 clinical trial, we plan to further develop and implement a commercialization and marketing strategy for North America and Europe.

Advance the development of rNAPc2 .

We are developing rNAPc2 as a potential therapy for patients with COVID-19, and are currently conducting the first clinical trial of the compound in hospitalized COVID-19 patients at high risk for thrombotic complications.

If the results from this Phase 2b clinical trial are positive, we plan to use the results to increase the value of this program through further clinical development for COVID-19, seeking strategic collaborations with commercial or government partners and potential expansion into clinical trials for other disease indications.

Advance the development of Gencaro for the treatment of AF in HF patients.

We are planning a Phase 3 clinical trial for Gencaro as a therapy for AF in HF patients, focusing on patients with EF ≥ 40%, a patient population for whom few approved or effective drug therapies currently exist.

Build a cardiovascular pipeline.

Our management and employees, including our chief executive officer, are experienced in cardiovascular research, molecular genetics and clinical development of cardiovascular therapies.

We are seeking to leverage this expertise to identify, acquire and develop other cardiovascular products or candidates, particularly those with potential for pharmacogenetic based development.

Subject to availability of capital, we plan to initiate non-clinical studies to support a potential IND submission and initiation of clinical development in 2021 for AB171 as a potential genetically targeted treatment for HF and PAD.

Development of our pipeline, including AB171, is dependent on additional financing.

All of the above strategies are dependent upon our ability to obtain additional funding through the sale of public or private equity or debt securities, the completion of a strategic transaction, or a combination thereof.

If we are unable to secure additional funding or complete a strategic transaction, we may not be able to continue development of Gencaro, notwithstanding our receipt of a SPA agreement from the FDA, or to continue operations.

We are seeking to leverage this expertise to identify, acquire and develop other cardiovascular products or candidates, particularly those with potential for targeted development based on genetic or other biomarkers.

The above strategies are dependent upon our ability to obtain additional funding through the sale of public or private equity or debt securities, the completion of a strategic transaction, or a combination thereof.

If we are unable to secure additional funding or complete a strategic transaction, we may not be able to continue development of rNAPc2 or Gencaro, or to continue operations.

COVID-19 Disease and Current Medical Need

SARS-CoV-2 is a new coronavirus belonging to a family of enveloped RNA viruses that include Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS-CoV-1).

The disease caused by the SARS-CoV-2 virus has been designated COVID-19.

Like the other viruses in its family, it is capable of causing serious human infections of the respiratory system.

Since it was first identified in 2019, the SARS-CoV-2 virus has caused a pandemic of unprecedented scope in modern times;

well over 100 million cases of COVID-19 have been confirmed and over 2.6 million deaths worldwide are attributed to the virus.

There is a broad spectrum of illness caused by SARS-CoV-2 infection;

COVID-19 patients range from asymptomatic to critically-ill with acute respiratory distress syndrome requiring intensive care and mechanical ventilation.

All ages are at risk of disease, but the probability of serious complications from COVID-19 is higher in older patients, those in nursing homes and long-term care facilities, and in those with chronic medical conditions.

COVID-19 is a deadly disease in a significant fraction of patients;

in one analysis of United States confirmed COVID-19 cases, 14% were hospitalized and 5% died.

Although the long-term effects of COVID-19 are unknown, there are reports of patients with persistent symptoms or organ dysfunction, including those not within high-risk groups, and there is concern that many recovered patients may suffer long term disabilities.

COVID-19 is associated with a high incidence of thrombotic complications from arterial and venous coagulation-related adverse events in large and small blood vessels.

These include, stroke, heart attack, and pulmonary emboli, as well as blockage of the smaller peripheral blood vessels.

Some researchers believe that microthrombosis may in fact be a critical component in COVID-19-related organ dysfunction, disease progression and mortality.

The observed thrombotic syndrome in COVID-19 patients has received the name of COVID-19 Associated Coagulopathy, or CAC.

We believe the underlying pathology of CAC results from thrombo-inflammatory processes triggered by the viral infection.

While the early course of disease is thought to be driven by replication of the SARS-CoV-2 virus, later in the disease course an exaggerated immune-inflammatory response, including coagulopathy, may take over, leading to tissue damage.

The current therapies available for COVID-19 do not adequately address the serious disease and enormous health care burden that is caused by the disease.

Patients with severe disease often require prolonged hospitalization and lengthy admission in intensive care units and available therapies have not substantially altered this disease course.

Currently, the only therapeutic approved for COVID‑19 in the United States is remdesivir but its efficacy in preventing disease progression and in severe patients is uncertain and it is not recommended by certain authorities such as the World Health Organization.

Other antiviral therapeutics, such as monoclonal antibodies, have received emergency authorization from the Food and Drug Administration, or FDA;

these agents are believed to have

efficacy against virus in the earlier stages of the disease, but are thought to be less effective in more severe patients requiring hospitalization.

Because of the thrombotic complications caused by COVID-19, anticoagulation has become standard of care adjunctive therapy for patients that are hospitalized.

Treatment protocols vary by hospital and region, but guidelines published by a large number of professional societies and the NIH recommend the use of prophylactic anticoagulation for COVID-19 patients that are hospitalized.

Heparin, including low molecular weight heparin and unfractionated heparin, is the preferred agent over oral anticoagulants for hospitalized and severely ill patients.

Interim data from three international studies suggest that therapeutic dosing of heparin in hospitalized patients not yet requiring Intensive Care Unit admission may reduce the need for organ support, such as mechanical ventilation, compared to prophylactic dosing.

However, there is a lack of evidence that heparin protects COVID-19 patients from thrombotic events or does not increase the risk of bleeding.

Thrombotic complications are still common despite the current widespread use of heparin as adjunctive therapy for hospitalized COVID-19 patients.

There is uncertainty whether heparin used prophylactically prevents progression of disease.

As an anti-coagulant, heparin is not targeted specifically at the disease processes caused by the SARS-CoV-2 virus, and no evidence has emerged that it has any anti-viral or anti-inflammatory activity beyond its anticoagulation properties.

As an infused therapy, the use of heparin requires consistent contact between medical professionals and the patient, which creates additional safety concerns with a highly infectious pathogen like SARS-CoV-2.

Despite the lack of evidence and uncertainty regarding the benefits of the current anticoagulants such as heparin, we are not aware of any novel anticoagulants currently in clinical studies for COVID-19 other than rNAPc2.

In light of the importance of thrombosis in the disease course of COVID-19 and the uncertain benefits of the current anticoagulants in widespread use, we believe there is an unmet need for novel agents that have an equivalent or better safety profile than existing anti-coagulants, that are targeted to the disease processes in COVID-19 and that can provide superior benefits for seriously ill patients.

We believe there is a need for novel agents that have anti-viral and anti-inflammatory activity in addition to anticoagulant properties.

More generally, we believe there is a medical need for new COVID-19 therapeutics that can benefit seriously ill patients, that can prevent or slow progression of disease, reduce the severity of symptoms, shorten the disease course and improve prognosis.

There is a clear need for therapies that can reduce the health care burden by reducing hospital stay, the use of the intensive care units and the use of invasive treatments such a mechanical ventilation.

Four vaccines for COVID-19 have received approval or emergency authorization and have increasingly widespread acceptance.

However, we believe the experience with the pandemic shows that the high medical need for effective viral therapeutics will extend beyond the current phase of the pandemic.

Our belief is supported by the unprecedented health care and economic impact of the pandemic thus far, the uneven and incomplete rollout of vaccines and the fact that significant populations may never be vaccinated, the continued likelihood of surges of COVID-19 including from new strains of SARS-CoV-2 with uncertain susceptibility to the current vaccines, and the potential appearance of new corona viruses or other pathogens.

These factors have greatly magnified the need for more effective therapeutics, including novel anticoagulants, with properties targeted to the disease processes caused by serious viral infections.

rNAPc2 (AB201)

To our knowledge, rNAPc2 is the only novel anticoagulant and the only inhibitor of tissue factor in clinical development for COVID‑19.

Tissue factor is a cellular receptor responsible for initiation of the primary coagulation pathway and appears to be the major activator of the coagulation cascade during viral infection.

Tissue factor is also implicated in the immune system inflammatory response to viral infections and in the process of viral dissemination during infection.

We believe that evidence from the pandemic implicates tissue factor pathways as an important part of the COVID-19 disease process.

Because of its potent inhibition of tissue factor, rNAPc2 was originally developed for potential use as an anticoagulant.

It was evaluated for the prevention of thrombosis in Phase 1 and Phase 2 clinical studies involving over 800 subjects and demonstrated both safety and efficacy in these studies.

rNAPc2 has also been investigated as a potential therapeutic for severe viral infections other than COVID-19, where it showed evidence of efficacy in the form of mortality reduction, decreases in inflammatory biomarkers and evidence of anti-thrombosis efficacy in studies against lethal doses of the Ebola and Marburg viruses,

In preliminary non-human studies in NHPs against lethal doses of the Ebola and Marburg virus, rNAPc2 lowered D-dimer levels, reduced mortality and exhibited anti-inflammatory effects.

We believe more recent research suggests that rNAPc2 has the ability to inhibit the activity of TF in multiple processes that contribute to severe viral disease.

rNAPc2 potentially could be used in combination with other antiviral drugs.

Its potential efficacy is not linked to a specific viral genome and may not be diminished by genetic drift or the development of new strains of the SARS-CoV-2 virus.

Therefore, we believe that rNAPc2 has therapeutic potential for future viral outbreaks beyond the current pandemic.

rNAPc2 is a single-chain, 85 amino acid, recombinant protein administered subcutaneous ly , that has previously been evaluated under three FDA Investigational New Drug, or IND, applications in six Phase 1 and three Phase 2 clinical studie s in the United States and Europe.

Th e s e clinical trials primarily examined the safety, dosing and anticoagulation effects of rNAPc2 in patients with acute coronary syndromes, in patients undergoing knee replacement surgery and in patients undergoing percutaneous coronary interventions.

In these trials, involving more than 8 00 human patient s with over 7 00 exposed to drug, rNAPc2 was generally well-tolerated with a safety profile comparable to commercially available anticoagulants .

The ASPEN Phase 2b Clinical Trial

The ASPEN Phase 2b clinical trial is a randomized, multi-center, international clinical trial evaluating two dose regimens of rNAPc2 versus heparin prescribed per local standard of care intended to enroll approximately 100 hospitalized SARS-CoV-2 positive patients that also have elevated D-dimer levels.

The primary endpoint of the trial is safety and change in D-dimer level from baseline to Day 8 relative to standard of care heparin.

D-dimer is a biomarker commonly used for assessing coagulation activation, which is elevated (greater than 0.5) in approximately 70% of hospitalized COVID-19 patients and is directly associated with adverse clinical outcomes.

Atrial Fibrillation in Heart Failure

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According to the 2020 American Heart Association, or AHA, Heart Disease and Stroke Statistics, there were an estimated 6.2 million Americans aged 20 years or more with HF in 2016, projected to increase to between 8.3 million and 10.7 million by 2030.

The spectrum of HF includes HF in which LVEF is 50% or more and is considered preserved ejection fraction, known as HFpEF;

HF in which the LVEF is less than 40%, considered reduced ejection fraction, or HFrEF;

and HF in which the LVEF is at least 40%, but less than 50%, considered mid-range ejection fraction, known as HFmrEF.

Together, HFmrEF and HFpEF, that is HF with LVEF ≥ 40%, comprise more than half of all chronic HF in the United States and Europe.

One of the fundamental classifications of heart failure is based on the percentage of blood in the left ventricle of the heart that is ejected with each heartbeat, known as ejection fraction or EF.

The spectrum of HF includes HF in which EF is 50% or more and is considered preserved ejection fraction, known as HFpEF;

HF in which the EF is less than 40%, considered reduced ejection fraction, or HFrEF;

and HF in which the EF is at least 40%, but less than 50%, sometimes referred to as mid-range ejection fraction, known as HFmrEF.

Together, HFmrEF and HFpEF, that is HF with EF ≥ 40%, comprise more than half of all chronic HF in the United States and Europe.

In 2012, the economic cost of HF in the United States was estimated to be nearly $31 billion, of which two-thirds, or over $20 billion, was attributable to direct medical costs.

Atrial fibrillation, the most common sustained cardiac arrhythmia, is a potentially serious disorder in which the normally regular and coordinated contraction pattern of the heart’s two small upper chambers, or the atria, becomes irregular, rapid and uncoordinated.

Atrial fibrillation, the most common sustained cardiac arrhythmia, is a serious disorder in which the normally regular and coordinated contraction pattern of the heart’s two small upper chambers, or the atria, becomes irregular, rapid and uncoordinated.

AF can have significant quality of life impacts and potentially serious medical consequences, including increasing the risk of stroke and other cardiovascular problems.

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AF and HF share many of the same risk factors and commonly occur together.

It has been estimated that 30-60% of HF patients will also develop AF, with this incidence increasing in HF patients with higher LVEF;

we estimate that 40-60% of HF patients with LVEF ≥ 40% will also be diagnosed with AF.

Both AF and HF are related to dysfunction and remodeling of the myocardium, and as such share many pathophysiologic features including chamber dilatation, increased interstitial fibrosis and cardiac myocyte apoptosis.

However, longstanding AF that eventually leads to left ventricular dysfunction and HF has a different pathophysiology compared to HF with AF developing secondarily.

In longstanding AF, fibrosis and hypertrophy develop in both the atrium and ventricles, whereas in HF that precedes AF there is predominantly eccentric hypertrophy and contractile dysfunction in the ventricle and to a lesser extent in the atrium, with less fibrosis in most cases.

It has been estimated that 30-60% of HF patients will also develop AF, with this incidence increasing in HF patients with higher EF;

we estimate that 40-60% of HF patients with EF ≥ 40% will also be diagnosed with AF.

Medical Need and Current Therapy

AF is a serious cardiovascular, or CV, disease and it has even greater negative impacts in patients with HF.

An important clinical consequence of AF in HF is an increase in the risk of embolic events including stroke, and for this reason alone it is preferable for a HF patient to be in sinus rhythm, or SR.

While AF increases stroke risk above an already increased risk in HF, this risk can be mitigated by administration of oral anticoagulants.

While stroke is the most feared complication of AF, it is the increased risk of mortality and hospitalization conferred by AF in HF that is of major concern and the biggest unmet therapeutic need.

The appearance of AF in HF patients often leads to adverse clinical outcomes, including worsening of left ventricular dysfunction, increased hospitalization burden, and increased risk of death.

This increased risk of morbidity and mortality with AF appears to be true across the spectrum of HF.

In patients with established HF it is clear that the presence of AF is associated with increased risks of mortality and worsening HF.

Framingham Heart Study data indicate there is a potential interrelationship between the development of AF and HF, with each condition developing as HF progresses and often (21% of the time) both presenting contemporaneously.

In the Framingham study, when AF developed after HF there was a 1.6-fold (95% CI:

1.2, 2.1) increase in mortality after adjusting for potential modifiers, and when HF developed after AF the risk was increased 2.7-fold (95% CI:

Data from the Women's Health Study, which is based on 1,011 AF cases developed over a 15.4 year span, found that new onset AF was associated with a 2.1-fold (95% CI:

1.6, 2.8) increase in ACM and a 4.2-fold (95% CI:

2.7, 6.5) increase in CV mortality.

Moreover, in women with new onset AF, the risk of developing HF increased by 14.7-fold (95% CI:

New onset AF also worsens the prognosis in patients with established HF, a finding that was observed in the BEST trial as well as other studies.

The goals of current medical therapy for AF are to maintain sinus rhythm or to control ventricular rate in patients who cannot maintain sinus rhythm in order to minimize patient symptoms and avoid the risk of further complications and disease progression.

Addressing the rhythm and rate abnormalities of AF is believed to be particularly important in HF patients because of the relationship between the presence of AF and worsening HF.

We believe that effective medical therapy for HF patients with AF must address both disease conditions.

Patients with both HF and AF have a significantly worse prognosis, and therefore effective therapies for these patients are of paramount importance.

Unfortunately, the current treatment options for these patients have significant limitations.

The goals of current medical therapy for AF are to provide anticoagulation to reduce the risk of stroke, and also either maintain sinus rhythm (known as rhythm control), or reduce the high heart rate caused by AF (known as rate control), in both cases to minimize patient symptoms and reduce the risk of further complications and disease progression.

Unfortunately, the current treatment options for treating AF in patients with HF have significant limitations.

Beta-blockers are considered standard of care for the treatment of HF patients, including in patients with co-morbid AF.

Two drugs in the beta-blocker class are approved in the United States for the treatment of HF (metoprolol succinate and carvedilol), and two additional beta-blockers (bisoprolol and nebivolol) are approved in Europe.

These drugs have the highest level of recommendation in the United States and European Union HF guidelines.

They are also viewed as foundational therapy to treat AF in HF patients in part for their efficacy in controlling the higher heart rate that is typically found with AF, a treatment strategy known as rate control.

However, current beta blockers approved for HF are only modestly effective at maintaining normal cardiac rhythm, a treatment strategy known as rhythm control, and none are FDA approved for this indication.

Importantly, none of these drugs have been shown to be effective for treating HF in patients with LVEF ≥ 40%, so they are currently used off-label in this setting.

They are also viewed as foundational therapy to treat AF in HF patients for their ability to provide rate control.

Their safety in this patient population is well established.

However, current beta blockers approved for HF patients are only modestly effective at providing rhythm control, and none are FDA approved for this indication.

Importantly, none of these drugs have been shown to be effective for treating HF in patients with

EF ≥ 40%, so they are currently used off-label in this setting.

When used for rate control, these drugs can cause bradycardia, a condition in which the heart rate drops below a safe threshold, which often leads to dose reductions and potential loss of the drug’s treatment effect.

Furthermore, recent evidence indicates that the mortality and other HF clinical outcome benefits of these beta blockers is uncertain when sustained or permanent AF is present in HF patients.

In contrast, Gencaro reduced the composite endpoints of all-cause mortality/HF hospitalizations and CV mortality/CV hospitalization by approximately 75% (p < 0.05 for both) in HF patients with the beta-1 389 arginine homozygous genotype who were in AF at the time of enrollment in the BEST trial.

Therefore, we believe there is a significant unmet medical need for a beta-blocker with better rhythm and rate control properties to provide symptom relief and outcome benefits for these patients.

This need is particularly acute in patients with LVEF ≥ 40%, for whom there are no currently approved drug therapies.

Anti-arrhythmic drugs are a drug class that is often prescribed to control the irregular heartbeat of AF.

These drugs are frequently used in addition to beta-blockers in patients with both HF and AF to treat the arrhythmia, when a patient remains symptomatic despite beta-blocker therapy.

However, most anti-arrhythmic agents with AF indications are either contraindicated or have significant label warnings for use in HF patients due to an increased risk of serious ventricular arrhythmias and/or mortality.

In the United States, anti-arrhythmic drug therapy for AF used in addition to beta-blockers is generally confined to the Class 3 anti-arrhythmic agents, amiodarone and dofetilide.

Amiodarone is not approved for the treatment of AF but is commonly used off-label in HF patients with AF.

However, amiodarone has multiple toxicities, is pro-arrhythmic, and likely increases mortality in HF patients.

Dofetilide is pro-arrhythmic and initiation of the drug must be monitored during a multi-day hospital stay;

even so, fatal drug-induced arrhythmias may still occur.

Considering these safety concerns and practical considerations, physicians treating HF patients seek to limit the use of Class 3 anti-arrhythmic drugs.

We believe there is a medical need for new therapies that can reduce the need to resort to Class 3 antiarrhythmic drugs in HF patient with AF.

Non-pharmacologic i nterventions such as catheter ablation and electr ical cardioversion (ECV) , are also used in some patients with HF to treat AF .

Catheter ablation is invasive, expensive and generally not permanent, and is not a substitute for drug therapy for HF.

Beta-blockers are typically continued after ablation, for both HF treatment as well as rhythm control if AF returns .

ECV is expensive , much less permanent than ablation and its repeatability is limited.

P at ients will also generally remain on beta-blockers post- ECV, for both their HF and AF.

Anticoagulants are effective against the risk of stroke in AF patients and are widely prescribed, but in HF these drugs do not address the pathological effects of the irr egular and rapid heartbeat that worsen prognosis .

Furthermore, recent evidence indicates that the mortality and other clinical benefits of these beta blockers are uncertain when sustained or permanent AF is present.

Anti-arrhythmic drugs are a drug class that is often prescribed to provide rhythm control.

These drugs are frequently used in patients with both HF and AF when a rate control strategy using a beta blocker fails to control the patient’s symptoms.

However, these agents have significant safety issues, For example, in the United States, anti-arrhythmic drug therapy for AF used in addition to beta-blockers is generally confined to the drugs amiodarone and dofetilide, which have multiple safety and toxicity concerns.

Because of these concerns, physicians treating HF patients seek to limit the use of these anti-arrhythmic drugs.

Non-pharmacologic interventions such as catheter ablation and electrical cardioversion (ECV), are also used to treat AF in patients with HF.

Catheter ablation is now guideline-recommended in this patient population and its use is increasing.

However, it is not a replacement for drug therapy;

it is invasive, expensive and generally impermanent.

Drug therapy, including beta blockers, is generally continued in patients post-ablation, both for rhythm control and for HF benefit.

ECV is expensive and less permanent than ablation, but like ablation, post-ECV patients will generally remain on drug therapy to treat their AF and HF, including beta-blockers.

In light of the serious medical consequences presented by AF in the presence of HF as well as, the limitations of current therapies, we believe there is an unmet need for a drug therapy that can provide greater rhythm control compared to the current standard of care;

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can provide effective rate control with a lower risk of treatment-limiting bradycardia;

and can provide foundational beta-blocker benefits for HF with efficacy in patients with permanent AF.

This need is particularly significant for HF patients with LVEF ≥ 40%, for whom there are currently no approved or Class I guideline recommended drug therapies.

and can provide foundational beta-blocker benefits for HF.

This need is particularly significant for HF patients with EF ≥ 40%, for whom there are few approved or Class I guideline-recommended drug therapies.

Gencaro Clinical Development

The Proposed Phase 3 AF Clinical Trial (PRECISION-AF)

Our planned Phase 3 development program of Gencaro is based on the results from GENETIC-AF and a prospectively designed DNA substudy of adrenergic receptor polymorphisms in the BEST trial, a previous Phase 3 study of bucindolol in 2,708 HF patients that showed potential evidence of enhanced efficacy in treating AF and in reducing mortality and hospitalizations in HF patients with the beta-1 389 arginine homozygous genotype.

The PRECISION-AF Phase 3 clinical trial is designed as a double-blind, active-controlled, multicenter, international, adaptive study comparing Gencaro with TOPROL-XL for the prevention of recurrent AF/atrial flutter, or AF/AFL, or all-cause mortality, or ACM, in HF patients.

The study is expected to enroll approximately 400 patients at investigative sites in the United States, Europe and Australia.

Eligible patients will have LVEF ≥ 40% and ≤ 55%, a recent AF event, and the beta-1 389 arginine homozygous genotype which we believe responds best to Gencaro.

The planned trial will use a significance criterion of p < 0.01 for the primary endpoint and will include an interim analysis after a portion of total patients have been enrolled.

The interim analysis is designed to assess safety, validate initial study assumptions and maintain adequate statistical power for the primary endpoint.

Subject to securing additional financing, we plan to initiate enrollment of PRECISION-AF in the fourth quarter of 2020.

Any future development of Gencaro, including initiating any Phase 3 clinical trial, is dependent on obtaining significant additional financing.

The GENETIC-AF Phase 2B Clinical Trial

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The primary endpoint of the trial was time to first event of AF/AFL or ACM during a 24-week follow-up period after the establishment of sinus rhythm.

Randomized patients had a LVEF ≤ 55%, a history of AF in the past 6 months, and the beta-1 389 arginine homozygous genotype that we believe responds best to Gencaro.

Randomized patients had a EF ≤ 55%, a history of AF in the past 6 months, and the beta-1 389 arginine homozygous genotype that we believe responds best to Gencaro.

Laboratory Corporation of America, or LabCorp, developed the genetic test, obtained an Investigational Device Exemption, or IDE, from the FDA and provided the companion diagnostic test and services to support our GENETIC‑AF clinical trial.

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However, based on further analysis of the trial, we believe we have identified a population that shows greater response to Gencaro compared to TOPROL-XL across multiple important clinical assessments, including the primary endpoint of time to AF recurrence, maintenance of normal sinus rhythm, cumulative AF burden, and AF-related clinical interventions and complications.

We plan to study this population in our first Phase 3 clinical trial.

We believe that the inclusion of a small number of patients in the trial (13.9% of overall population) with long-standing and heavily pretreated HF and AF led to attenuation of the treatment effect estimates for the primary endpoint of GENETIC-AF.

Therefore, in accordance with procedures outlined in the statistical analysis plan, post-hoc analyses were performed that excluded 37 patients with extraordinarily long durations of HF and AF, which showed a trend for benefit in favor of Gencaro compared to TOPROL-XL (32% reduction;

The onset of AF relative to the development of HF was also identified in our post-hoc analyses to have a relationship to treatment effect.

In these analyses, there was an attenuation of the treatment effect estimates for the primary endpoint in patients who had long-standing AF prior to developing HF.

We believe this is due to differences in the underlying pathophysiology for AF patients who eventually develop HF compared to HF patients who subsequently develop AF.

Therefore, a post-hoc analysis was performed in the above patient population that excluded patients who had developed AF for more than 2 years prior to developing HF.

In this population, termed the precision therapeutic phenotype, or PTP cohort, a significant reduction in the primary endpoint was observed (46% reduction;

p = 0.011), which was retained in a subgroup of this cohort with LVEF values ≥ 40% and ≤ 55% (58% reduction;

These data were published in May of 2019 in the Journal of the American College of Cardiology:

Heart Failure (print version July 2019).

Based upon our analysis of the GENETIC-AF data, we believe further clinical development of Gencaro can be successful us ing entry criteria to identify patients with the characteristics for disease duration and onset described above and outlined in the following table:

GENETIC-AF Subgroup Analysis:

Time to First AF/AFL/ACM Event

Subpopulation

Time to AF/AFL/ACM

HF and AF for less than 12 years

AF not more than 2 years prior to HF (PTP cohort)

LVEF ≥ 40% and ≤ 55%

Stratified Cox proportional hazards model with adjustment for:

1) HF etiology, 2) LVEF, 3) rhythm at randomization,

4) device type, 5) previous Class 3 antiarrhythmic drug use (subpopulations only).

Additional analyses of patients entering efficacy follow-up demonstrate additional benefits of Gencaro compared to TOPROL-XL in preventing adverse consequences of developing AF.

Maintenance of normal sinus rhythm, as assessed by routine ECG monitoring, was increased by 15% (p = 0.022) in the overall population and by increased 28% (p < 0.001) in the PTP cohort with Gencaro compared to TOPROL-XL.

A composite endpoint that includes AF interventions (i.e., electrical cardioversion, catheter ablation, and initiation of Class III antiarrhythmics), cardiovascular adverse events, and death was reduced by 30% (p = 0.008) in the overall population and by 46% (p = 0.001) in the PTP cohort with Gencaro compared to TOPROL-XL.

A composite endpoint of AF interventions and death was reduced by 33% (p = 0.009) in the overall population and by 51% (p < 0.001) in the PTP cohort with Gencaro compared to TOPROL-XL.

Similarly, the composite endpoint of sinus bradycardia or death was reduced by 55% (p < 0.001) in the overall population and by 49% (p < 0.001) in the PTP cohort with Gencaro compared to TOPROL-XL.

Furthermore, patients who experienced sinus bradycardia in GENETIC-AF had a 4‑fold higher incidence of study drug dose reductions (P < 0.001).

Improvements in all of the above endpoints were retained in a subgroup of the PTP cohort with LVEF values ≥ 40% and ≤ 55% (see table below).

Therefore, in addition to the prevention of AF recurrence, these data suggest that HF patients with AF potentially receive downstream clinical and pharmacoeconomic benefits with Gencaro compared to non-genetically targeted beta blockers such as TOPROL-XL.

Subject to available financing, we anticipate these findings will be further examined in the anticipated Phase 3 PRECISION-AF clinical trial.

Our cumulative analyses of important AF-related clinical outcomes are summarized in the following table:

GENETIC-AF Subgroup Analysis:

Cumulative Events During Efficacy Follow-up Period

Entire Cohort

LVEF ≥ 40% and ≤ 55%

Maintenance of

Normal Sinus Rhythm

AF Interventions and CV AEs

We plan to study this population in our Phase 3 clinical trial.

These further analyses of the GENETIC-AF population (shown in the table below) demonstrated that Gencaro, as compared to metoprolol, reduced AF burden, improved maintenance of sinus rhythm and lowered the need for additional rhythm control interventions.

Entire GENETIC-AF Cohort

Time to 1 st AF/AFL/ACM

(Primary Endpoint)

Cumulative 24-week AF Burden

AF Burden at Week 24

ECGs in Normal Sinus Rhythm

AF Interventions

Sinus Bradycardia

IRR (95% CI) for all patients entering efficacy follow-up period.

Maintenance of Normal Sinus Rhythm = cumulative number of ECGs in normal sinus rhythm

AF Interventions = electrical cardioversion, ablation, or initiation of class 3 antiarrhythmic therapy after start of follow-up.

Sinus Bradycardia = sinus bradycardia on ECG as assessed by the investigator.

Deaths included as events due to competing risk.

Incidence Rate Ratio (IRR) = Incidence Rate BUC / Incidence Rate MET

A subgroup of patients underwent continuous (24/7) heart rhythm monitoring via implanted loop recorders or other implanted therapeutic devices of Medtronic, Inc., or Medtronic, a global healthcare solutions company, to evaluate daily AF burden, or AFB.

A prespecified time-to-first event analysis was conducted using a total AFB of at least 6 hours per day to define an event of AF recurrence.

For the time-to-first event of AF or ACM endpoint, a trend for benefit in favor of Gencaro over TOPROL-XL was

observed in the overall substudy cohort (69 patients ;

25% reduction;

p = 0.315 ) and in the PTP substudy cohort (49 patients ;

41% reduction ;

Cumulative AFB was also evaluated in the d evice substudy to determine the total number of days in AF during the efficacy follow-up period.

In this cumulative analysis, a significant reduction in AFB was observed for Gencaro compared to TOPROL-XL in in the overall substudy cohort (2 3 % reduction;

p < 0.001) and in the PTP substudy cohort (37% reduction;

Gencaro was generally safe and well-tolerated, with 84% of patients attaining their target dose compared to 72% of patients receiving TOPROL-XL.

The most frequently reported adverse events were similar in both groups and consistent with the known safety profile of the beta-blocker class of drugs.

Adverse events assessed as related to study drug by the investigator occurred in 23.8% of patients in the Gencaro group and in 30.1% of patients in the TOPROL-XL group.

Of note, adverse events of bradycardia were less frequently reported in the Gencaro group (3.7%) compared to patients receiving TOPROL-XL (12.0%).

During the 24-week efficacy follow-up period there were three deaths (ACM) in the TOPROL-XL group and none in the Gencaro group.

Three patients died in the long-term treatment extension period after receiving Gencaro for more than a year.

(ECVs, Ablations, & Class 3 AA Drugs)

Bradycardia prevalence

met., VR< 60 bpm)

Dose reductions

w/bradycardia vs.

Time to first AF/AFL/ACM treatment effect = hazard ratio (95% CI).

AF burden = % time in AF per day.

Cumulative AF burden treatment effect = AUC ratio (i.e., AUC BUC /AUC MET ) over 24-week follow-up period with significance assessed via null permutation.

AFB at Week 24 = Instantaneous estimates of average daily AF burden at week 24 with comparison between groups expressed as the ratio of the estimates and tested for significance using a Wald test.

Normal Sinus Rhythm = total # ECGs in sinus rhythm with ventricular rate ≥ 60 and ≤ 100 bpm during efficacy follow-up period.

AF Interventions = ECV, ablation, or guideline-recommended antiarrhythmic use during efficacy follow-up period.

Treatment effect for normal sinus rhythm, AF interventions and bradycardia = prevalence rate ratio (i.e., PRR BUC /PRR MET ) modeled to test significance using Poisson regression.

Treatment with Gencaro was associated with a 36% reduction in cumulative AF burden over 24 weeks of follow-up compared to metoprolol, leading to a 55% reduction in AF burden at the end of 24 weeks.

Consistent with the results in the device substudy, there was a 39% increase in the prevalence of ECGs demonstrating normal sinus rhythm in the overall study population.

Treatment with Gencaro also led to a 32% lower utilization of adjunctive rhythm control therapies, including electrical cardioversion, catheter ablation and antiarrhythmic drug therapy.

There was also a 61% reduction in bradycardia with Gencaro versus metoprolol.

The consequence of bradycardia is a reduction in beta-blocker dose, which 4.2-fold higher in patients exhibiting bradycardia than without bradycardia.

The BEST Phase 3 Heart Failure Trial

Gencaro was the subject of a major HF study known as the BEST trial, a double-blind, placebo-controlled, multicenter study of bucindolol on mortality and morbidity in an advanced chronic HF population with LVEF < 35%.

The primary endpoint of the BEST trial was ACM, and the pre-specified main secondary endpoint was progression of HF, defined as death from HF, cardiac transplant, HF hospitalization, or an emergency room visit for the treatment of worsening HF not requiring hospitalization.

The trial was projected to enroll 2800 patients and run four and one-half years.

The trial enrolled a total of 2,708 chronic HF patients primarily from U.S.

The trial was notable for including a major DNA bank, in which 1,040 of the BEST patients participated by providing blood for DNA analysis.

The DNA bank provided the basis for the genetic substudies that discovered Gencaro’s modulation by genetic variations of the beta-1 adrenergic receptor.

The effect of Gencaro on heart failure endpoints in an advanced HFrEF population was evaluated in the 2,708 patient, placebo controlled Phase 3 BEST clinical trial co-sponsored by the NHLBI and Department of Veterans Affairs.

In addition to the parent population, BEST included a 1,040 patient DNA substudy that evaluated the effects of adrenergic receptor, or AR, polymorphisms on Gencaro effectiveness.

The BEST trial was terminated early because, after positive mortality results from two HF trials involving other beta-blockers had been reported, a substantial number of BEST trial investigators concluded that it was unethical to continue to give placebo to BEST trial participants.

It was initially reported the trial had failed to reach its primary endpoint of ACM, showing a 10% risk reduction in mortality with a p-value of 0.10.

Our reanalysis of the BEST results in accordance with the FDA approved, pre-specified statistical analysis plans (which had not been performed by the sponsors of BEST) demonstrated a 13% risk reduction on the primary endpoint of ACM in the BEST trial with a p-value of 0.053.

The results of the genetic substudies that were conducted using the BEST DNA bank were not available until several years after the completion of the trial.

Importantly, these substudies indicated a significant enhancement of response on the major HF clinical endpoints from the BEST trial in patients with the beta-1 389 arginine homozygous genotype.

As shown in the table below, the risk reduction on HF clinical efficacy endpoints such as mortality and hospitalization ranged from 34% to 48% in this genotype.

BEST Trial Clinical Responses by Genotype Groups

ADRB1 Arg389Arg

ADRB1 389Gly carrier

All-cause mortality (ACM)

CV mortality (CVM)

CV Hospitalization

HF Hospitalization

ACM or HF Hospitalization

CVM or HF Hospitalization

AF Prevention

VT/VF Prevention

Endpoints presented as time to event analyses, with hazard ratios from a COX model and p-values generated using the log-rank statistic.

The BEST study data were further analyzed focusing on AF prevention, as well as rate control and clinical outcomes for patients with established AF.

Based on adverse events and surveillance ECGs, 7.9% of patients in the overall trial developed new onset AF, with a greater incidence observed in the placebo group (9.7%) compared to the Gencaro group (6.2%).

This corresponded to a 36% reduction in the incidence of new onset AF (based on crude event rates) for patients receiving bucindolol (p = 0.002).

In a time to event analysis,

the risk of new onset AF was reduced in the overall population by 41% (p < 0.001 ) with Gencaro compared to placebo .

However , analysis from the DNA substudy showed that the Gencaro response for AF prevention was g enotype specific, with a 74% reduction (p < 0.001) observed in patients with the beta-1 389 arginine homozygous genotype compared to no risk reduction (p = 0.969) in patients who did not have the beta-1 389 arginine homozygous genotype (i.e., beta-1 389 Gl y carriers).

Gencaro also demonstrated the potential for efficacy against the serious arrhythmias of VT/VF, which also appears to be genetically regulated.

A 58% reduction in the incidence of VT/VF (p < 0.001) was observed in the overall population of the BEST trial, with a 74% reduction (p < 0.001) observed in patients with the beta-1 389 arginine homozygous genotype and no significant risk reduction

(p = 0.085) seen in beta-1 389 arginine Gly carrier genotype.

In patients with established AF, Gencaro may also have favorable effects on ventricular response rate control and other clinical outcomes.

Of the 303 patients in the BEST trial with AF at baseline, ventricular response rate control, defined as a resting heart rate of less than or equal to 80 beats per minute without symptomatic bradycardia, was observed in 67% of those receiving Gencaro compared to 49% in the placebo group (p < 0.005).

In patients with ventricular response rate control, Gencaro produced a 39% reduction in cardiovascular mortality/cardiovascular hospitalizations (p = 0.025).

Gencaro was also associated with a 72% decrease in cardiovascular mortality/cardiovascular hospitalizations (p = 0.039) in patients with the beta-1 389 arginine homozygous genotype who were in AF at baseline (N=52).

The risk reduction on HF clinical efficacy endpoints such as mortality and hospitalization ranged from 34% to 48% in this beta-1 389 arginine homozygous genotype.

The DNA substudy revealed that Gencaro exhibited greater efficacy in patients homozygous for the beta-1 389 arginine homozygous genotype ( ADRB1 Arg389Arg), encoding for receptors that exhibit higher function and greater affinity for norepinephrine compared to the patients who did not have the beta-1 389 arginine homozygous genotype (i.e., beta-1 389 Gly carriers).

In the 47% of BEST trial patients with a ADRB1 Arg389Arg genotype Gencaro reduced (p <0.05) the primary endpoint of mortality or heart transplantation by 43%, all-cause mortality, cardiovascular mortality, heart failure hospitalizations, heart failure progression, development of atrial fibrillation, and incidence of ventricular tachycardia or ventricular fibrillation with degrees of reduction (effect sizes) ranging from 34% (heart failure progression) to 74% (atrial fibrillation).

Beta-1 389 Gly carriers had no statistically significant reduction in any endpoint.

Pharmacology and Pharmacogenetics of Gencaro

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Importantly, beta-2 receptors are also present on adrenergic nerve terminals in the heart, where they regulate the release of the neurotransmitter norepinephrine, or NE.

The blocking of these receptors prevents them from binding with other molecules, primarily NE, which activates these receptors.

The blocking of these receptors prevents them from binding with other molecules, primarily NE, which activates these receptors to release more NE.

We believe Gencaro has two unique anti-adrenergic properties not possessed by other beta-blockers currently approved for the treatment of HF:

(1) it is moderately sympatholytic, i.e., by blocking beta-2 receptors on adrenergic nerves it lowers adrenergic drive to a level that can be detected on measurements of central or systemic venous NE levels, and, (2) through “inverse agonism,” as it binds to a polymorphic "389 arginine" form of the heart cell beta-1 receptor it promotes the inactivation of the active-state of this receptor.

(1) it is moderately sympatholytic, i.e., by blocking beta-2 receptors on adrenergic nerves it lowers adrenergic drive to a level that can be detected on measurements of central or systemic venous NE levels, and, (2) through “inverse agonism,” as it binds to a polymorphic "389 arginine" form of heart cell beta-1 receptor in isolated human heart preparations it promotes the inactivation of the active-state of this receptor.

These properties, as described below, were observed to interact with receptor polymorphisms in such a way that we believe targeting a specific genotype of the beta-1 receptor gene (known as ADRB1) could improve the therapeutic response of patients.

We believe Gencaro’s efficacy is enhanced in patients with the beta-1 389 arginine homozygous genotype, which has been shown to be present in approximately 50% of the North American and European general populations.

Gencaro’s pharmacology appears to be different from other compounds in the beta-blocker class in several fundamental respects.

First, previous studies in human myocardial preparations showed Gencaro, but not other tested beta-blockers approved to treat HF, predisposes to a shift in equilibrium of beta-1 389 arginine but not 389 glycine receptors from a constitutively active to an inactive state (the property of inverse agonism).

Second, other studies, including BEST, indicated that Gencaro, but not other beta-blockers, lowers the systemic levels of the neurotransmitter NE released by cardiac and other adrenergic nerves.

The beta-1 389 arginine receptor, which is 100% of the receptor population in patients with a 389 arginine homozygous genotype, has much higher affinity for binding to NE compared to 389 glycine receptors, and published data indicate that NE lowering from Gencaro is beneficial in patients who have only beta-1 389 arginine receptors.

In contrast, patients with the lower NE affinity beta-1 389 glycine genotypes may have blunting of efficacy from greater amounts of NE lowering.

We believe that Gencaro's inverse agonist property contributes to the enhanced lowering of HF and arrhythmia event rates in patients who are beta-1 389 arginine homozygous genotype relative to individuals who are beta-1 389 Gly carriers or to the general population.

In addition, we believe the unique NE lowering properties of Gencaro have a selectively beneficial effect in patients who have only beta-1 389 arginine receptors, because of the high affinity of these receptors for NE.

As a result, the GENETIC-AF clinical trial was targeted at patients with the beta-1 389 arginine homozygous genotype, which was present in 52% of screened patients.

We believe that these properties and their pharmacogenetic implications for modulating effectiveness are unique to Gencaro, and if the drug is approved, will be described in in the prescribing information.

We believe Gencaro’s efficacy is enhanced in patients with the beta-1 389 arginine homozygous genotype ( ADRB1 Arg389Arg), which has been shown to be present in approximately 50% of the North American and European general populations.

To date no other beta-blocker has been shown to possess pharmacological sympatholysis, or beta-1 AR inverse agonism in human heart preparations.

We believe that Gencaro's sympatholytic and beta-1 AR inverse agonist properties contribute to its enhanced lowering of HF and arrhythmia event rates in patients who have an ADRB1 Arg389Arg genotype.

Gencaro Clinical and Regulatory Strategy

We intend to advance Phase 3 clinical development of Gencaro as a therapy for HF patients with AF, focusing on HF with LVEF ≥ 40%.

The regulatory strategy for Gencaro is to obtain an initial approval to treat AF in a HF population with LVEF ≥ 40% and ≤ 55% and the beta-1 389 arginine homozygous genotype;

We intend to advance Phase 3 clinical development of Gencaro as a therapy for HF patients with AF, focusing on HF with EF ≥ 40%.

The regulatory strategy for Gencaro is to obtain an initial approval to treat AF in a HF population with EF ≥ 40% and ≤ 55% and the beta-1 389 arginine homozygous genotype;

the population demonstrating the greatest efficacy in the Phase 2B GENETIC-AF clinical trial.

Indication expansion for Gencaro will focus on genotype-positive HF patients with LVEF >55%, which we believe would substantially expand the addressable patient population, if successful.

We have identified additional indication

expansion opportunities for Gencaro in other HF populations and cardiac arrhythmias, as well as the potential for new formulation development s to extend marketing exclusivity , if approved .

We are se eking the support of strategic partners to develop these opportunities.

HF with LVEF ≥ 40% constitutes more than half of all chronic HF in the United States and Europe, and there are currently no approved or guideline recommended therapies for these patients to treat either their AF or HF.

There are also no regulatory requirements to demonstrate standard HF clinical outcome benefits in this population, as beta blockers currently approved for HF have not demonstrated mortality or hospitalization benefits in HF patients with LVEF ≥ 40%.

Therefore, by focusing on HF patients with LVEF ≥ 40% we have obtained an SPA agreement with the FDA to conduct a single, 400-patient Phase 3 clinical trial that, if successful at a statistical threshold of p ≤ 0.01, may be sufficient to support an NDA for the marketing approval of Gencaro.

The clinical trial specified by the SPA agreement, called PRECISION-AF, will enroll approximately 400 HF patients with LVEF values ranging from 40% to 55% who have the beta-1 389 arginine homozygous genotype and have recently experienced AF.

HF patients with a recent history of AF are at high risk of AF recurrence.

We believe this high event rate combined with the treatment effect observed in the GENETIC‑AF clinical trial, allows for an adequate and well controlled clinical trial with a sample size of approximately 400 patients.

The clinical trial also includes an interim efficacy analysis designed to assess safety, validate initial clinical study assumptions, and maintain adequate statistical power for the primary endpoint.

Indication expansion for Gencaro will focus on genotype-positive HF patients with EF >55%, which we believe would substantially expand the addressable patient population, if successful.

We have obtained an SPA agreement with the FDA to conduct a single, 400-patient Phase 3 clinical trial that, if successful at a statistical threshold of p ≤ 0.01, may be sufficient to support an NDA for the marketing approval of Gencaro.

The clinical trial design is similar to GENETIC-AF, including the active comparator, TOPROL-XL, and the primary endpoint of time to AF or atrial flutter, or AF/AFL, recurrence or mortality during a 6-month follow-up period.

The planned clinical trial will use a standard significance criterion of p ≤ 0.05 for the primary endpoint;

however, if the primary endpoint is significant with a p‑value ≤ 0.01, then this single Phase 3 clinical trial may be sufficient for regulatory approval per the SPA agreement.

The NDA submission for Gencaro is eligible for expedited review in the United States under the Fast Track development program.

that was granted to Gencaro in 2015.

Based on the use of this same endpoint in GENETIC-AF it is anticipated that ≥90% of the primary events will be due to recurrent AF/AFL.

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however, if the primary endpoint is significant with a p‑value ≤ 0.01, then this single Phase 3 clinical trial may be sufficient for regulatory approval per the SPA agreement.

Subject to securing additional financing, we plan to initiate enrollment of PRECISION-AF in the fourth quarter of 2020 and project that topline data could be available in approximately two and a half years from initiation of patient enrollment.

If the trial meets the criteria specified in the SPA agreement, we plan to file for approval of Gencaro with the FDA, European Medicines Agency, and other regulatory authorities.

Any future development of Gencaro, including initiating any Phase 3 clinical trial, is dependent on obtaining significant additional financing, even if we enter into a strategic collaboration around the development of Gencaro.

The NDA submission for Gencaro is eligible for expedited review in the United States under the Fast Track development program.

In 2015, the FDA designated the investigation of Gencaro for the prevention of AF/AFL in a genetically targeted HF population as a Fast Track development program.

Fast Track drug development designation was included in the FDA Modernization Act of 1997, or FDAMA, as a formal process to enhance interactions with the FDA during drug development.

A drug development program with Fast Track designation is eligible for consideration of the following to expedite development and review:

1) scheduled meetings to seek FDA input into development plans;

2) priority review of the NDA;

3) the option of submitting portions of an NDA for review prior to submission of the complete application, and;

4) potential accelerated approval.

We believe that the Fast Track designation will expedite the review of the NDA we plan to file if PRECISION-AF is successful.

The Gencaro Test

If approved, we believe that Gencaro will be the first cardiovascular drug to be integrated with a companion diagnostic to predict enhanced efficacy.

We believe that our proposed drug label for Gencaro will identify the specific genotype we believe responds best to Gencaro and recommend receptor genotype testing prior to initiation of therapy.

Therefore, the commercialization of Gencaro may require that an FDA approved diagnostic test for this genotype be available.

Such a test, referred to as the Gencaro Test, could be performed by a variety of laboratory processes or platforms.

We have developed one such genetic testing platform, with the assistance of LabCorp.

On our behalf, LabCorp developed the genetic test, obtained an IDE from the FDA and provided the test and associated services to support our GENETIC-AF clinical trial.

This platform was approved for use in the Phase 2B clinical trial.

We retain all rights to it, and we believe it could be used as a commercial platform.

If approved, we believe that Gencaro will be the first cardiovascular drug to be integrated with a companion diagnostic.

This would be a test for the patient genotype approved for the drug, and could be performed by a variety of laboratory processes or platforms.

In collaboration with LabCorp, we developed one such genetic test, obtained an IDE from the FDA and used this test in our GENETIC-AF clinical trial.

We retain all rights to this particular test platform, and we believe it could be used for commercialization.

Future clinical trials of Gencaro, including PRECISION‑AF, are expected to use a similar diagnostic test to identify the patient’s receptor genotype.

We believe the Gencaro Test could be developed and commercialized through a preferred diagnostic provider, by the company marketing Gencaro, or a combination of approaches.

We also believe that point of care genetic tests, which could be performed during the patient’s visit to the physician, may be feasible as part of the commercialization strategy.

We believe the Gencaro Test could be developed and commercialized through one or more diagnostic providers, by the company marketing Gencaro, or a combination of approaches.

We also believe that point of care genetic tests, which could be performed during the patient’s visit to the physician, will be part of the commercialization strategy for Gencaro.

Development Pipeline

Our development activities are substantially focused on our lead product candidate, Gencaro, for the potential treatment of HF patients with AF.

Our lead product candidates are rNAPc2 (AB201) as a potential treatment for patients hospitalized with COVID-19, and Gencaro™ (bucindolol hydrochloride) for the treatment of atrial fibrillation in patients with chronic heart failure.

With the COVID-19 pandemic of 2020, rNAPc2 was identified as a potential treatment for diseases caused by viruses, initially focusing on patients hospitalized with COVID-19, the disease syndrome caused by the SARS-CoV-2 virus.

Because of the severity of the COVID-19 pandemic and the impact on our Gencaro program, w e transitioned our development work and capital allocation to designing a Phase 2b and potential Phase 3 clinical trial program for rNAPc2 .

We are currently enrolling patients in the Phase 2b portion of the program and, with positive results from that trial, expect it to be sequentially followed by Phase 3 using a common protocol for both trials.

Our lead cardiovascular product candidate, Gencaro, is a potential treatment for HF patients with AF.

Gencaro (bucindolol hydrochloride) is a pharmacogenetic-targeted beta-adrenergic receptor antagonist with mild vasodilator properties that is considered a fourth-generation beta-blocker based on its novel pharmacogenetic profile.

We believe the treatment of AF in HF patients with LVEF ≥ 40% is an unmet medical need with a near term and straightforward regulatory pathway.

Our plan is to obtain an initial approval for Gencaro to treat AF in a genotype specific HF population with LVEF ≥ 40% and ≤ 55% and the beta-1 389 arginine homozygous genotype;

the population demonstrating the greatest efficacy in the Phase 2B GENETIC-AF clinical trial.

Indication expansion for Gencaro will focus on genotype-positive HF patients with LVEF >55%, which we believe would substantially expand the addressable patient population, if successful.

We believe Gencaro has potential to address these additional indications, and that the clinical response of patients with these diseases may be genetically influenced, based on the same genetic markers we have identified for our proposed treatment of AF with Gencaro.

We do not expect to pursue further development of Gencaro without obtaining additional funding or entering into a strategic partnership or collaboration.

We believe the treatment of AF in HF patients with EF ≥ 40% is an unmet medical need with a near term and straightforward regulatory pathway.

Our plan is to obtain an initial approval for Gencaro to treat AF in a genotype specific HF population;

HF patients with EF ≥ 40% and the genotype we studied in the Phase 2B GENETIC-AF clinical trial.

We believe that, if approved, there are additional indication expansion opportunities for Gencaro in other AF populations.

We continue to evaluate the feasibility and potential timing for initiating PRECISION-AF relative to the COVID-19 pandemic.

We may seek additional capital or a strategic partnership for the Phase 3 clinical trial and potential commercialization of Gencaro.

AB171 is a thiol-containing derivative of isosorbide mononitrate.

Pre-clinical data indicate that AB171 may have antioxidant properties and may be favorably differentiated from other nitrates for prevention of myocardial remodeling, anti-atherosclerotic effects and the loss of effectiveness when used as a sustained therapy.

We believe the unique pharmacology of AB171, coupled with targeting to genetically identified enhanced response subpopulations, has the potential to translate to better long-term responses than currently available treatments.

We have identified what we believe to be a pharmacogenetic target for AB171 that is the basis for our patents, and which may enable genetically targeted cardiovascular development programs in two cardiovascular indications:

The European Patent Office has issued a patent to us on methods of treating cardiovascular disease and conditions with a thiol-substituted isosorbide mononitrate based on genetic targeting.

The European patent has been validated in ten countries in the EMA:

We also have related patent applications pending in the United States Patent Office and Canadian Intellectual Property Office.

We believe the unique pharmacology of AB171, coupled with targeting to genetically identified enhanced response subpopulations that we have identified, has the potential to translate to better long-term responses than currently available treatments in indications such as HF and PAD.

We also have exclusive pharmacogenetic and other patent rights to drug targets and candidates that have potential indications in cardiovascular disease, oncology and other therapeutic areas.

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Financial Resources

To support the continued development of Gencaro, including the planned PRECISION-AF clinical trial , we will need additional financing to fund the Phase 3 clinical trial and our general and administrative costs through its projected completion.

Considering the substantial time and costs associated with the development of Gencaro and the risk that we may be unable to raise a significant amount of capital on acceptable terms, we are also pursuing co-development and commercialization partnering opportunities with large pharmaceutical and/or specialty pharmaceutical companies and may pursue a strategic combination or other strategic transactions.

If we are delayed in obtaining financing or are unable to complete a strategic transaction, we may discontinue our development activities on Gencaro or discontinue our operations .

We believe our cash and cash equivalents balance as of December 31, 2019 will be sufficient to fund our operations, at our current cost structure, after giving effect to potential cost reductions, through the end of the third quarter of 2020.

However, changing circumstances may cause us to consume capital significantly faster or slower than we currently anticipate.

If we are delayed in obtaining financing or are unable to complete a strategic transaction, we may discontinue our development activities on rNAPc2 or Gencaro or discontinue our operations .

Conducting a Phase 3 rNAPc2 clinical trial or the Phase 3 PRECISION-AF trial would likely require additional financing.

However, changing circumstances may cause us to consume capital significantly faster or slower than currently anticipated.

We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available financial resources sooner than we currently anticipate;

In 2017, we entered into a sales agreement, with an agent to sell, from time to time, our common stock having an aggregate offering price of up to $10.2 million, in an “at the market offering.” In 2019, we further amended the sales agreement to increase the maximum aggregate value of shares which we may issue and sell from time to time under this sales agreement from $10.2 million to $17.5 million.

As of December 31, 2019, we sold an aggregate of 1,087,858 shares of our common stock pursuant to the terms of such sales agreement, as amended, for aggregate gross proceeds of approximately $17.4 million.

therefore, we may have to raise additional capital for other clinical trials of rNAPc2 .

Initiating any Phase 3 clinical trial of Gencaro is dependent on sustained improvement in the COVID-19 pandemic to the point of being able to recruit patients for a cardiovascular clinical trial and will require additional financing .

This sales agreement terminated in July 2020.

Under this sales agreement, we sold an aggregate of 3,302,159 shares of our common stock pursuant to the terms of such sales agreement, as amended, for aggregate gross proceeds of approximately $32.3 million.

Net proceeds received in this offering were approximately $30.8 million, after deducting expenses for executing the “at the market offering” and commissions paid to the placement agent.

On April 3, 2019, we completed a 1-for-18 reverse stock split of our common stock.

All common share and per common share amounts included herein have been adjusted retroactively to reflect the effects of this action .

” As of February 2021 , we ha d sold an aggregate of 9,928,272 shares of our common stock pursuant to the terms of such sales agreement for aggregate gross proceeds of approximately $ 54.0 million.

Net proceeds received in this offering were approximately $52.2 million, after deducting expenses for executing the “at the market offering” and commissions paid to the placement agent.

We have sold all shares available under the current prospectus .

Research and Development Expenses

Our research and development expenses were $1.8 million for the year ended December 31, 2019 as compared to $4.2 million for 2018, a decrease of approximately $2.4 million.

Subject to securing significant additional financing, we plan to initiate enrollment of the PRECISION‑AF clinical trial in the fourth quarter of 2020.

R&D expense in 2020 is expected to be higher than 2019, if we initiate our PRECISION‑AF clinical trial.

If we are unable to initiate enrollment of our PRECISION‑AF clinical trial, then R&D expense is expected to be consistent with 2019.

Our research and development expenses were $5.0 million for the year ended December 31, 2020 as compared to $1.8 million for 2019, an increase of approximately $3.2 million.

R&D expense in 2021 is expected to be higher than 2020, as we conduct the rNAPc2 (AB201) Phase 2b clinical trial.

Licensing and Royalty Obligations

We have licensed worldwide rights to all preclinical and clinical data from development of bucindolol through the BEST trial from Cardiovascular Pharmacology and Engineering Consultants, LLC, or CPEC, who has licensed rights to this data from BMS.

In addition, we have sublicensed CPEC’s rights from Bristol Meyers Squibb, or BMS.

CPEC is a licensing entity which holds the rights of the biotechnology companies that were the commercial sponsors of the BEST trial.

All of the patents that were the subject of the CPEC and BMS licenses have expired.

Based on this and the terms of these licenses and applicable law, we believe that the financial obligations stated in these agreements will reduced or eliminated, if and when they become payable under their stated terms.

If the FDA grants marketing approval for Gencaro, the license agreements state that we are required to make a milestone payment of $8.0 million within six months after FDA approval.

The license agreements also state that we are required to make milestone payments of up to $5.0 million in the aggregate upon regulatory marketing approval in Europe and Japan.

The licenses state that our royalty obligations range from 12.5% to 25% of revenue from the related product based on achievement of specified product sales levels including a 5% royalty that CPEC is obligated to pay BMS.

The agreements state that we have the right to buy down the royalties to a range of 12.5% to 17% by making a payment to CPEC within six months of regulatory approval.

In October 2017, we entered into an agreement with CPEC’s minority owner, Aeolus Pharmaceuticals, Inc., or Aeolus, pursuant to which we acquired Aeolus’ minority membership interest in CPEC.

The transaction effectively buys-out Aeolus’ royalty interest thereby reducing or eliminating the stated milestone and royalty obligations by 35% that could be payable by us, if Gencaro receives regulatory approval and is commercialized.

In the transaction, we also acquired all of CPEC’s rights to milestones and royalties for Europe and all other territories outside of the United States, Japan and Puerto Rico.

We also have licensed worldwide rights to intellectual property covering the pharmacogenetic response of Gencaro based on the cardiac receptor polymorphisms, which is owned by the University of Colorado.

We have no material future financial obligations under this license.

We also have licensed exclusive, worldwide rights to develop and commercialize diagnostics for these receptor polymorphisms, for the purpose of prescribing Gencaro.

We own the clinical development program of rNAPc2, including Phase 2 clinical trials.

Our patent portfolios relating to Gencaro, including a patent that issued in 2021, are either owned by us or are subject to licenses that impose no royalty obligations or milestone payments relating to the further development, approval and commercialization of Gencaro.

We are also a party to licenses for patents relating to Gencaro that are now expired.

We believe that there are no future milestone or royalty obligations that will be payable under these licenses.

rNAPc2 is the only novel compound that we believe is in clinical development for the treatment of COVID-19.

Other trials for this condition are evaluating various doses/regimens of approved anti-thrombotic agents, predominantly heparins.

Though heparin therapy is considered standard therapy for all hospitalized patients, and is believed to provide some benefit based on interim clinical trial data, the degree of this benefit is uncertain and many patients receiving heparin therapy develop serious COVID-19 disease and thrombotic complications.

Moreover, three major clinical trials exploring heparin therapy in these patients have stopped enrolling intensive care unit COVID patients due to lack of efficacy.

These trials, which are comparing prophylactic versus therapeutic dose heparins, are continuing in less severe patients.

The pathology of thrombosis in COVID-19 may explain the limitations of heparin treatment.

This pathology is believed to be an inflammatory thrombosis with immune endothelialitis.

Thus, we believe rNAPc2 may better address COVID-19-associated thrombosis than heparin.

Current HF treatments include three beta-blockers approved for HF in the Unites States.

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It is also now acknowledged that evidence is lacking that the approved beta-blockers provide outcome benefits for patients who develop permanent AF.

Furthermore, these drugs have not demonstrated efficacy for HF patients with LVEF ≥ 40%, which is the focus of the Gencaro development program.

Furthermore, these drugs have not demonstrated efficacy for HF patients with EF ≥ 40%, which is the focus of the Gencaro development program.

Current AF treatments include pharmaceutical, procedural or device intervention.

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Drugs that are currently approved or used for the treatment or prevention of AF in HF either have not demonstrated efficacy in these patients, or have notable risks due to adverse side effects or lack sufficient efficacy.

Therefore, in HF, and specifically in HF patients with LVEF ≥ 40%, we believe there is a substantial unmet medical need for AF therapies that are more effective and have fewer side effects than those currently available.

Therefore, in HF, and specifically in HF patients with EF ≥ 40%, we believe there is a substantial unmet medical need for AF therapies that are more effective and have fewer side effects than those currently available.

We believe that Gencaro’s treatment of AF in HF patients could provide a more effective and safer pharmacotherapy than treatments currently used in these patients.

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Most of these companies have significantly greater financial, product development, manufacturing, and commercial resources than we have.

If approved, the drugs which Gencaro would potentially compete with are used, though not approved, for treatment of AF and are largely generic in the United States.

Gencaro could be priced at a premium compared to these therapies.

In addition, our proposed prescribing information for Gencaro includes a recommendation for genetic testing, which will add additional procedures to the process of prescribing Gencaro, which, together with its premium price, could make it more difficult for us to compete against existing or future therapies.

If approved, some of the drugs which Gencaro would potentially compete with are generic in the United States and are used, though not approved or shown to be effective, for the treatment of AF or in HF patients with EF ≥ 40% .

Gencaro c ould be priced at a premium compared to some of these therapies.

In addition, Gencaro, if approved, would be prescribed in conjunction with a diagnostic test, add ing additional procedures to the process of prescribing Gencaro, which could make it more difficult for us to compete against existing or future therapies .

Manufacturing and Product Supply

rNAPc2 (AB201) is a single-chain, 85 amino acid recombinant protein that is manufactured using an engineered yeast strain.

Multiple manufacturers of both drug substance and drug product have successfully produced rNAPc2 over its clinical development history.

We outsource all manufacturing and analytical testing, and have selected third party contract manufacturing organizations, or CMOs, on the basis of their technical and regulatory expertise.

We are actively working with these CMOs to produce additional drug substance and drug product to support potential Phase 3 development.

rNAPc2 drug product is currently produced as an injectable formulation, and is stored frozen at -20°C in sterile glass vials.

The product is administered subcutaneously.

Gencaro is a small molecule drug with an established manufacturing history.

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In Europe, the Competent Authorities and Ethics Committees of the respective countries regulate these activities.

In South America, the Health Authorities and Ethics Committees of their respective countries regulate these activities.

We anticipate that all of our product candidates will require regulatory approval by governmental agencies prior to commercialization.

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Before human clinical trials can commence, an Investigational New Drug, or IND, application, submitted to FDA must become effective.

For an IND to become effective, the applicant must submit, among other things, information on design of the proposed investigation, reports necessary to assess the safety of the drug for use in clinical investigation, and information on the chemistry and manufacturing of the drug, controls available for the drug, and primary data tabulations from animal or human studies.

chemistry and manufacturing of the drug, controls available for the drug, and primary data tabulations from animal or human studies.

The clinical phase of development involves the performance of human studies, including adequate and well-controlled human clinical trials to establish the safety and efficacy of the product candidate for each proposed indication.

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NDA Submission.

In the United States, the results of preclinical and clinical testing along with chemistry, manu facturing and controls information, are submitted to the FDA in the form of an NDA.

Under the current Prescription Drug User Fee Act, or PDUFA, after submission of an NDA and payment, or waiver, of the required fee, the FDA’s goal is to review most standar d NDAs within 10 months from the time that a sponsor’s application is accepted as filed by the FDA, which can occur within a 60-day window following the initial submission of the application.

At the end of the 10 months, the FDA’s goal is to issue a “compl ete response,” or approve the NDA.

In the United States, the results of preclinical and clinical testing along with chemistry, manufacturing and controls information, are submitted to the FDA in the form of an NDA.

Under the current Prescription Drug User Fee Act, or PDUFA, after submission of an NDA and payment, or waiver, of the required fee, the FDA’s goal is to review most standard NDAs within 10 months from the time that a sponsor’s application is accepted as filed by the FDA, which can occur within a 60-day window following the initial submission of the application.

At the end of the 10 months, the FDA’s goal is to issue a “complete response,” or approve the NDA.

While FDA’s goal is to issue a complete response within 10 months, the process may take longer than 10 months, particularly if multiple review cycles are required.

Gencaro has been granted Fast Track Designation which all ows for a rolling review of a marketing application.

A rolling review allows FDA to consider reviewing portions of a n NDA before the sponsor submits the complete application.

Gencaro has been granted Fast Track Designation which allows for a rolling review of a marketing application.

A rolling review allows FDA to consider reviewing portions of an NDA before the sponsor submits the complete application.

In responding to an NDA, the FDA may grant marketing approval or deny the application if the FDA determines that the application does not satisfy the statutory and regulatory approval criteria.

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Companies are responsible for compliance with such requirements and would be responsible to ensure that all contract manufacturing organizations who perform work for them also comply with such requirements.

Similarly, if a drug manufacturer hires contract sales representatives or consultants to promote its products, such organizations or individuals must comply with all of the same requirements applicable to the drug manufacturer.

Similarly, if a drug manufacturer hires contract sales representatives or consultants to promote its products, such organizations or individuals must

comply with all of the same requirements applicable to the drug manufacturer.

The FDA regularly inspects companies to determine compliance with cGMPs and other post-market requirements.

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Approval for a generic drug is obtained by filing an abbreviated NDA, or ANDA.

Gener ic drug applications are “abbreviated” because they generally do not include clinical data to demonstrate safety and effectiveness.

Instead, an ANDA applicant must establish that its product is bioequivalent to an approved drug and that it is the same as t he approved drug with respect to active ingredient(s), route of administration, dosage form, strength and recommended conditions of use (labeling).

The FDA will approve the generic as suitable for an ANDA if it finds that the generic does not raise questio ns of safety and effectiveness as compared to the pioneer drug.

Generic drug applications are “abbreviated” because they generally do not include clinical data to demonstrate safety and effectiveness.

Instead, an ANDA applicant must establish that its product is bioequivalent to an approved drug and that it is the same as the approved drug with respect to active ingredient(s), route of administration, dosage form, strength and recommended conditions of use (labeling).

The FDA will approve the generic as suitable for an ANDA if it finds that the generic does not raise questions of safety and effectiveness as compared to the pioneer drug.

A drug is not eligible for ANDA approval if the FDA determines that it is not equivalent to the pioneer drug or if it is intended for a different use.

Any applicant who files an ANDA seeking a pproval of a generic version of an approved drug listed in FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book, must certify to the FDA that (i) no patent information on the drug has been listed in the Orange Book;

Any applicant who files an ANDA seeking approval of a generic version of an approved drug listed in FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book, must certify to the FDA that (i) no patent information on the drug has been listed in the Orange Book;

(ii) that each patent listed in the Orange Book for that approved drug has expired;

(iii) FDA should approve the product on the date on which a listed patent expires;

or (iv) that such patent is invalid, unenforceable or will not be infringed by the manufactu re, use or sale of the generic drug.

or (iv) that such patent is invalid, unenforceable or will not be infringed by the manufacture, use or sale of the generic drug.

If the ANDA applicant makes a certification pursuant to (iv) above, or a Paragraph IV certification, and the NDA holder files an infringement suit against the ANDA applicant within 45 days of receiving the Paragraph IV notification, the NDA owner is entitled to an automatic 30-month stay of FDA’s ability to approve the ANDA.

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the drug application is for the first permitted commercial marketing of the product.

We have obtained four U.S.

patents (U.S.

We believe that, if Gencaro is approved by the FDA, any one of the U.S.

patents may be eligible for PTE, which could provide approximately 5 years of additional patent life based on our current clinical trial plans.

We believe that, if Gencaro is approved by the FDA, one of several of our U.S.

patents may be eligible for PTE, which could provide approximately 5 years of additional patent life for that patent based on our current clinical trial plans.

A Supplementary Protection Certificate, or SPC, is a form of patent term extension that is available for pharmaceutical products approved for marketing in the European Union, or EU.

We obtained a patent in Europe on methods for using Gencaro that is similar to US Patent 7,678,824 (EP 1802775);

this EU patent is in force in certain countries in Europe, including the United Kingdom, France, Germany, Italy and Spain.

We obtained a patent in Europe on methods for using Gencaro that is similar to one of our US Patents and this EU patent is in force in certain countries in Europe, including the United Kingdom, France, Germany, Italy and Spain.

We believe that this patent may be eligible for an SPC, if Gencaro is approved for marketing in any European country in which the patent is in force, which could provide up to five years of additional patent life.

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Separate and apart from patent protection, the Hatch-Waxman Act entitles approved drugs to various periods of non-patent statutory protection, known as marketing exclusivity.

The Hatch-Waxman Act provides five years of “new chemical entity” marketing exclusivity to the first applicant to gain approval of an NDA for a product that contains an active moiety not found in any other approved product.

The Hatch-Waxman Act provides five years of “new chemical entity” marketing exclusivity to the first applicant to gain approval of an NDA for a product that contains an active

moiety not found in any other approved product.

This exclusivity means that another manufacturer cannot submit an ANDA or 505(b)(2) NDA until the marketing exclusivity period ends.

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The Hatch-Waxman Act also provides three years of “new use” marketing exclusivity for the approval of NDAs, and supplements, where those applications contain the results of new clinical investigations (other than bioavailability studies) essential to the FDA’s approval of the applications.

Such applications may be submitted for new indications, dosage forms, s trengths, or new conditions of use of approved products.

Such applications may be submitted for new indications, dosage forms, strengths, or new conditions of use of approved products.

So long as the studies are essential to the FDA’s approval or were conducted by or for the applicant, this three-year exclusivity prohibits the final approval of ANDAs or 505(b)(2) NDAs for products with the specific changes associated with those studies.

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An IDE supplement must be submitted to and approved by the FDA before a sponsor or investigator may make a change to the investigational plan in such a way that may affect its scientific soundness, study indication or the rights, safety or welfare of human subjects.

The trial must also comply with the FDA’s regulations, including the requirement that informed consent be obtained from each subject.

The trial must also comply with the FDA’s regulations, including the

requirement that informed consent be obtained from each subject.

Even if a trial is completed, the results of clinical testing may not adequately demonstrate the safety and efficacy of the device or may otherwise not be sufficient to obtain FDA clearance to market the product in the United States.

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FDA has described IVD companion diagnostic devices as in vitro diagnostic devices that provide information that is essential for the safe and effective use of a corresponding therapeutic product.

The use of an IVD companion diagnostic device with a particular therapeutic product is stipulated in the instructions for use in the labeling of both

the diagnostic device and the corresponding therapeutic product, as well as in the labeling of any generic equivalents of the therapeutic product.

An IVD companion diagnostic device could be used to (i) identify patients who are m ost likely to benefit from a particular therapeutic product;

The use of an IVD companion diagnostic device with a particular therapeutic product is stipulated in the instructions for use in the labeling of both the diagnostic device and the corresponding therapeutic product, as well as in the labeling of any generic equivalents of the therapeutic product.

An IVD companion diagnostic device could be used to (i) identify patients who are most likely to benefit from a particular therapeutic product;

(ii) identify patients likely to be at increased risk for serious adverse reactions as a result of treatment with a particular therapeutic product;

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Although FDA’s regulation of IVD companion diagnostic devices is evolving and implemented on a case-by-case basis, FDA’s stated policy for a novel therapeutic product is that an IVD companion diagnostic device should be developed and approved or cleared contemporaneously to support the therapeutic product’s safe and effective use.

The clinical performance and clinical significance of the IVD c ompanion diagnostic device is to be established using data from the clinical development program of the corresponding therapeutic product.

The clinical performance and clinical significance of the IVD companion diagnostic device is to be established using data from the clinical development program of the corresponding therapeutic product.

FDA recognizes, however, that there may be cases where contemporaneous development may not be possible.

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Intellectual Property

The future success of our business will partly depend on our ability to maintain market exclusivity for Gencaro, if approved, in the United States and important international markets, and for other products or product candidates that we may acquire or develop.

The future success of our business will partly depend on our ability to maintain market exclusivity for our product candidates, if approved, in the United States and important international markets, and for other products or product candidates that we may acquire or develop.

We will rely on statutory protection, patent protection, trade secrets, know-how, and in-licensing of technology rights to maintain protection for our products.

We believe that both patent protection and data exclusivity statutes will give Gencaro, if approved, market exclusivity in the United States and in major international markets.

If approved by the FDA or international regulatory agencies, Gencaro will qualify as a New Chemical Entity, or NCE, as it has never received regulatory approval in any jurisdiction.

As an NCE, Gencaro, if approved, will enjoy market exclusivity in the United States and most international markets under data exclusivity statutes.

These laws provide for an exclusivity period beginning from regulatory approval, during which any generic competitor is barred from submitting an application that relies on the data that has been submitted in connection with the approval of the NCE.

In the United States, the Hatch-Waxman Act provides for an initial period of up to five years from approval of the NCE, during which a generic application attempting to rely on the data submitted for the NCE cannot be filed with the FDA.

This period can be effectively extended to seven and one-half years

from FDA approval because a provision of the Hatch-Waxman Act provides for an automatic 30-month extension of the exclusivity period if we promptly pursue litigation against a company attempting to enter the marke t with a generic for a drug that is covered by a composition of matter or method of use patent.

Many international markets have data exclusivity statutes that are analogous to Hatch-Waxman and sometimes more protective.

The analogous statute in the European Medicines Evaluation Agency will, in general, provide Gencaro with a minimum of ten years of protection from marketing approval before such a generic application may be approved.

Protection under Hatch-Waxman and other data exclusivity statutes is sometimes considered superior to patent protection, as the generic cannot be marketed during the period of exclusivity, thus eliminating the need to initiate patent infringement litigation with its accompanying risks and costs.

In addition to protection under data exclusivity statutes, we believe that Gencaro’s patent portfolio will also provide market exclusivity, if approved.

We have been granted patents in the United States and Europe that claim the use of Gencaro in patients predicted to have a favorable response to the drug based on genetic polymorphisms in the genes encoding the beta-1 and/or alpha-2C receptors.

We believe that this patent strategy may deter generic competition because of the threat of patent litigation or may exclude generic competition from the market until the patents expire if we are successful in litigation.

Consequently, if our patent strategy is successful, we believe we may avoid generic competition with Gencaro in the United States or certain countries in Europe until at least the expiration of these patents, which would be no earlier than 2026 in the United States and into 2025 in Europe.

In addition, we believe that if Gencaro is approved, any one of our U.S.

patents may be entitled to an extension of its term and the European patent may be entitled to an extension through a supplemental protection certificate in one or more countries in Europe.

The length of any such extension may vary by country.

We cannot predict whether any such extensions will be granted, but if they are, they may provide market exclusivity for Gencaro into approximately 2031 in the United States and Europe.

In addition, we were granted a patent on the S-isomer formulation of Gencaro, which we believe could be important in Gencaro’s future development and could extend market exclusivity of the S-isomer form in the United States to approximately 2034, assuming it is the first approved formulation.

For AB171, the European Patent Office issued patent on methods of treating cardiovascular disease and conditions with a thiol-substituted isosorbide mononitrate based on genetic targeting.

The European patent, entitled “Methods and Compositions for Cardiovascular Diseases and Conditions,” provides protection for this novel approach to treating patients with cardiovascular disease and conditions.

The European patent has been validated in ten countries:

Denmark, France, Germany, Ireland, Italy, Netherlands, Spain, Sweden, Switzerland and the United Kingdom.

We have related patent applications pending at the United States Patent Office and Canadian Intellectual Property Office.

We own the clinical development program of rNAPc2, including Phase 2 clinical trials.

If rNAPc2 is successfully developed, we believe it will have intellectual property protection, including 12 years of market exclusivity as an innovative biologic product under FDA law in the United States, 10 years data protection exclusivity in the EU, and potentially patent protection in addition to this.

We plan to pursue strategic co-development and partnering opportunities for rNAPc2 development and commercialization.

We believe that Gencaro, if approved, will have market exclusivity in the United States and in major international markets.

We recently obtained a patent in the United States for the use of Gencaro for the patient population we plan to study in the Phase 3 pivotal trial.

We have filed similar patent applications in international jurisdictions.

If Gencaro is approved by the FDA or international regulatory agencies based on this planned clinical development, we believe that the commercialization of Gencaro will have patent protection extending into 2039.

We have an existing patent portfolio of United States and international patents covering the use of Gencaro for various cardiovascular indications in the genetic population we plan to study in Phase 3, that we believe will provide additional patent protection.

In addition to patent protection, Gencaro will qualify as a new chemical entity and if approved will have data protection in the United States and other jurisdictions in which it is approved.

We also have other patent rights in additional drug candidates having possible indications in cardiovascular disease, oncology, and other therapeutic areas;

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Information relating to our executive officers is included in Item 10 of Part III of this Annual Report and such information is incorporated herein by reference.

Human Capital Management

As of December 31, 2020, we had 14 employees, of which 11 are full-time.

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We believe that we maintain good relations with our employees.

Information relating to compensation of our executive officers is included in Items 10 and 11 of Part III of this Annual Report and such information is incorporated herein by reference.

The structure of our compensation programs balances incentive earnings for both short-term and long-term performance.

We are committed to providing comprehensive benefit options and offering benefits that will allow our employees and their families to live healthier and more secure lives.

Some examples are employees are eligible for health insurance, prescription drug benefits, dental insurance, vision insurance, life insurance, disability insurance, health savings accounts, flexible spending accounts, paid and unpaid leaves, a retirement plan and life and disability/accident coverage.

We also offer a variety of voluntary benefits that allow employees to select the options that meet their needs, including hospital indemnity insurance, accident insurance and critical illness insurance.

We continually monitor employee turnover rates as our success depends upon retaining our highly trained personnel.

We believe the combination of competitive compensation and career growth and development opportunities have helped increase employee tenure and reduce voluntary turnover.

The average tenure of our employees is approximately nine years and approximately half of our employees have been employed by us for more than ten years .

Corporate Information

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You may obtain a free copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports on our website at http://www.arcabiopharma.com on the earliest practicable date following the filing with the SEC or by contacting the Investor Relations Department at our corporate office by calling (720) 940-2200.

Information found on our website is not inc orporated by reference into this report.

Information found on our website is not incorporated by reference into this report.

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