What changed in this filing

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Item 1. Business

2022-03-14 compared with 2021-03-18 · 96 added, 89 removed, 569 unchanged (25% 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 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.

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, 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, and the ability of ARCA’s financial resources to support its operations through the middle of fiscal year 2023, 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.

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

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.

Our lead product candidates are rNAPc2 (AB201) as a potential treatment for COVID-19, the disease syndrome caused by the SARS-CoV-2 virus, and potentially other viral diseases 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.

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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.

initiate d a Phase 2 b clinical trial of rNAPc2 as a potential treatment for patients hospitalized with COVID-19 in the fourth quarter of 2020 and completed patient enrollment in the fourth quarter 2021 .

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 is a potent inhibitor of tissue factor, or TF, 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.

TF 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 TF 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.

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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.

A commonly used biomarker for assessing the presence of abnormal coagulation is a D-dimer test, which is elevated (greater than 0.5) in approximately 40% to 75% 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.

As a result of the observed role of coagulation disorders in COVID-19, patients who are hospitalized with the disease are commonly giving anti-coagulant therapy, in particular heparin.

We believe that there is a medical need for a COVID-19 therapy that provides anticoagulation therapy and directly inhibits the TF pathway and the inflammatory and viral dissemination processes that may be initiated by TF.

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

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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.

To our knowledge, rNAPc2 is the only New Molecular Entity, or 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.

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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.

rNAPc2 is a single-chain, 85 amino acid, recombinant protein administered subcutaneously, that has previously been evaluated under three U.S.

Food and Drug Administration, or 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.

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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 .

In July 2021, we increased the ASPEN-COVID-19 clinical trial target enrollment from 100 to 160 patients to increase the sample size for determining if there are differences in the two rNAPc2 dose regimens being investigated, to decrease variance in the standard of care heparin control arm, in recognition of the study being conducted in different geographic regions and to potentially account for evolving changes in the clinical course of COVID-19.

In October 2021, the Data and Safety Monitoring Committee, or DSMC, completed a pre-specified interim analysis and, based on the DSMC’s review of approximately 75% of the projected final efficacy and safety data, recommended completion of the clinical trial with no modifications to the clinical trial design.

We anticipate announcing topline data from this approximately 1 6 0 patient international Phase 2b clinical trial in the last week of March 202 2 .

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.

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

Secondary endpoints include time to recovery for eligibility of hospital discharge, and the clinical composite of all-cause mortality, thrombosis, need for organ support or re-hospitalization within 30 days from randomization.

We plan to meet with the FDA to review the Phase 2b clinical study data.

The clinical trial is being managed in collaboration with the Colorado Prevention Center, or CPC, the University of Colorado's Academic Research Organization.

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

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 regulation in the United States, 10 years data protection exclusivity in the European Union, or EU, and potentially patent protection in addition to this.

We have filed an international patent application for the use of rNAPc2 in COVID-19 and plan to prosecute this patent in the United States and other markets.

If this patent issues in the United States, we believe it could provide intellectual property protection into approximately 2040.

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

In July 2021, we entered into a patent assignment agreement, or the Agreement, with the University Medical Center of Johannes Gutenberg University Mainz , Germany.

Under the terms of the Agreement, we received exclusive world-wide patent rights relating to the use of rNAPc2 as a potential treatment for COVID-19, and other indications, based on the research and discoveries from Univ.-Prof.

Wolfram Ruf, the Scientific Director and Alexander von Humboldt Professor at the Center for Thrombosis and Hemostasis (CTH) of the University Medical Center Mainz, and his collaborators.

We have upfront and potential milestone obligations to the University Medical Center Mainz that could total approximately €1.6 million and royalty obligations in the low single digit range, if rNAPc2 receives regulatory approval and is commercialized.

The term of the Agreement extends to the date of expiration of the last to expire of any of the assigned patent.

Gencaro™ (bucindolol hydrochloride) for Atrial Fibrillation

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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.

Our development plan for Gencaro is based on our recently published 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.

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.

The Phase 3 pivotal clinical trial of Gencaro conducted under an SPA will include secondary endpoints that are intended to capture some

of this new information, such as a reduction in the need to deploy rhythm control interventions including electrical cardioversion, catheter ablation and use of anti-arrhythmic drugs and avoidance of 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.

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We are seeking similar patent protection in other countries .

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.

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

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%.

Beta-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;

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

these interventions also typically require 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.

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Maintenance of rhythm control after a successful AF catheter ablation;

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

Effective rate control with lower risk of treatment-limiting, adverse event producing bradycardia;

Reduction in symptoms and improvement in quality of life;

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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.

We believe our cash and cash equivalents as of December 31, 2021 will be sufficient to fund our operations through the middle of fiscal year 2023.

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

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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.

In July 2020, 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 $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.

In April 2021, we amended the new sales agreement and the amount available for the offering under our prospectus to our registration statement on Form S-3 (No.

333-254585) .

As of March 14, 2022, the amount available for the offering under the prospectus supplement is subject to the limitation of not selling a total value amount of shares exceeding more than one-third of our public float in any 12-month period, which as of March 11 , 2022 would have been approximately $ 10.5 million .

In 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 .

However, if 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.

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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.

well over 435 million cases of COVID-19 have been confirmed and over 5.9 million deaths worldwide are attributed to the virus (as of March 2022).

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

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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.

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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.

Other antiviral therapeutics, such as monoclonal antibodies, have received emergency authorization from the 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.

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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.

Multiple 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.

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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.

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

TF 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.

TF 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.

Because of its potent inhibition of TF, 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.

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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.

We believe m ore recent research su ggests 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.

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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 .

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.

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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.

D-dimer is a biomarker commonly used for assessing coagulation activation, which is elevated (greater than 0.5) in approximately 40% to 75% of hospitalized COVID-19 patients and is directly associated with adverse clinical outcomes.

Atrial Fibrillation in Heart Failure

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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.

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.

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The primary analysis compared the evidence of safety and efficacy of Gencaro versus an active comparator, TOPROL-XL.

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 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.

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

Randomized patients had an 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, 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.

The NDA submission for Gencaro is eligible for expedited review in the United States under the Fast Track development program designation 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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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 one or more diagnostic providers, by the company marketing Gencaro, or a combination of approaches.

We believe the Gencaro Test could be developed and commercialized through one or more diagnostic providers, by the company potentially 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 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.

Our lead product candidates are rNAPc2 (AB201) as a potential treatment for COVID-19, the disease syndrome caused by the SARS-CoV-2 virus, and potentially other viral diseases, 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.

We completed patient enrollment in the Phase 2b portion of the program in the fourth quarter 2021 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.

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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.

HF patients with EF between 40% and 55% in patients with 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, including expanding the patient population to selected HF patients with EF >55%.

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 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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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 .

We believe our cash and cash equivalents as of December 31, 2021 will be sufficient to fund our operations through the middle of fiscal year 2023.

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

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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.

” 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 .

In April 2021, we amended the new sales agreement and the amount available for the offering under our prospectus to our registration statement on Form S-3 (No.

As of March 14, 2022, the amount available for the offering under the prospectus supplement is subject to the limitation of not selling a total value amount of shares exceeding more than one-third of our public float in any 12-month period, which as of March 11, 2022 would have been approximately $10.5 million .

Research and Development Expenses

Our research and development expenses were $13.8 million for the year ended December 31, 2021 as compared to $5.0 million for 2020, an increase of approximately $8.8 million.

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

R&D expense in 2022 is expected to be consistent with 2021.

Licensing and Royalty Obligations

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

In July 2021, we entered into a patent assignment agreement, or the Agreement, with the University Medical Center of Johannes Gutenberg University Mainz , Germany.

Wolfram Ruf, the Scientific Director and Alexander von Humboldt Professor at the Center for Thrombosis and Hemostasis (CTH) of the University Medical Center Mainz, and his collaborators.

The term of the Agreement extends to the date of expiration of the last to expire of any of the assigned patents.

Our patent portfolios relating to Gencaro, including a patent 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.

rNAPc2 is the only novel anticoagulant 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.

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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 .

Gencaro could 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, adding 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

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

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

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.

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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During Phase 1, clinical trials are conducted with a relatively small number of subjects or patients to determine the early safety profile of a product candidate, as well as dose tolerance, absorption, and the pattern of drug distribution and drug metabolism.

Phase 2 trials are conducted with groups of patients afflicted by a specific target disease to determine preliminary efficacy, optimal dosages and dosage tolerance and to identify possible adverse effects and safety risks.

Phase 2 trials are conducted with groups of patients afflicted by a specific target disease to

determine preliminary efficacy, optimal dosages and dosage tolerance and to identify possible adverse effects and safety risks.

In Phase 3, larger-scale, multi- center trials are conducted with patients afflicted with a specific target disease over a longer term to confirm Phase 2 results and provide reliable and conclusive data supporting efficacy and safety of a drug as required by regulatory agencies for drug approval.

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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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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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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 most likely to benefit from a particular therapeutic product;

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

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

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 have filed an international patent application for the use of rNAPc2 in COVID-19 and plan to prosecute this patent in the United States and other markets.

If this patent issues in the United States, we believe it could provide intellectual property protection into approximately 2040.

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

In July 2021, we entered into a patent assignment agreement, or the Agreement, with the University Medical Center of Johannes Gutenberg University Mainz , Germany.

Wolfram Ruf , the Scientific Director and Alexander von Humboldt Professor at the Center for Thrombosis and Hemostasis (CTH) of the University Medical Center Mainz, and his collaborators.

We ha ve upfront and potential milestone obligations to the University Medical Center Mainz that could total approximately €1.6 million and royalty obligations in the low single digit range, if rNAPc2 receives regulatory approval and is commercialized.

The term of the Agreement extends to the date of expiration of the last to expire of any of the assigned patents .

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

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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 .

The average tenure of our employees is approximately seven years and approximately one-third of our employees have been employed by us for more than ten years .

Corporate Information

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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