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Item 1. Business

2022-02-28 compared with 2021-03-17 · 769 added, 1045 removed, 453 unchanged (80% of the section changed)

COMPANY OVERVIEW

We are a clinical-stage biopharmaceutical company translating genetic insights into the development of therapies for central nervous system, or CNS, disorders characterized by neuronal imbalance.

We are a clinical-stage biopharmaceutical company translating genetic insights into the development of therapies for central nervous system, or CNS, disorders characterized by neuronal excitation-inhibition imbalance.

Normal brain function requires a delicate balance of excitation and inhibition in neuronal circuits, which, when dysregulated, can lead to abnormal function and disease.

We are applying insights from genetic epilepsies to broader neurological and psychiatric disorders, using our understanding of shared biological targets and circuits in the brain.

We are applying insights from genetic epilepsies to both rare and more prevalent neurological and psychiatric disorders, using our understanding of shared biological targets and circuits in the brain.

We apply a deliberate and pragmatic precision approach, leveraging a suite of translational tools including novel transgenic and predictive translational animal models and electrophysiology markers, to enable an efficient path to proof-of-concept in patients.

Through this approach, we have established a broad portfolio, including multiple disclosed programs across CNS disorders, including depression, epilepsy, movement disorders and pain syndromes, with three clinical-stage product candidates.

We expect multiple topline clinical trial readouts from all three programs in the next year and anticipate the launch of a new clinical development program in 2021.

We intend to develop differentiated therapies that can deliver long-term benefits to human health by meaningfully impacting patients and society.

Our most advanced clinical program, PRAX-114, is an extrasynaptic GABA A receptor preferring positive allosteric modulator, or PAM, for the treatment of patients suffering from major depressive disorder, or MDD, and perimenopausal depression, or PMD.

Together, these conditions affect more than 22 million people in the United States, many of whom are not responsive to or are underserved by current treatments.

PRAX-114 is under development as a potentially differentiated treatment for a broad MDD population, as both a monotherapy and adjunctive therapy for both acute and maintenance treatment.

We believe that PRAX-114 has several advantages relative to currently available therapies and product candidates in the GABA A PAM therapeutic class, including the potential for rapid and durable antidepressant effect across MDD symptoms, a wider therapeutic window, simple nightly dosing with or without a meal via tablet formulation and indication expansion opportunities.

We have a multi-cohort, three-part Phase 2a clinical trial ongoing in Australia.

Parts A and C of the trial are treating patients with MDD while Part B has focused on patients with PMD.

For all parts of the trial, PRAX-114 was generally well-tolerated.

In Parts A and C, we observed marked improvements in depression scores in MDD patients within two weeks of treatment that were maintained throughout the treatment period.

We expect complete topline data from Part B of the trial in the second half of 2021.

In October 2020, we submitted an Investigational New Drug application, or IND, to support the initiation of a Phase 2/3 clinical trial in the United States.

At the end of the 30-day review period, the U.S.

Food and Drug Administration, or the FDA, notified us that the IND was placed on full clinical hold pending the resolution of certain non-clinical pharmacology and toxicology matters.

We subsequently interacted with the FDA to gain agreement on a path to initiate the clinical study, which included a proposal to submit available non-clinical data while other good laboratory practice, or GLP, reproductive toxicology studies were being completed.

Based on this submission, the FDA removed the clinical hold in March 2021.

We are operationally ready and intend to initiate the Phase 2/3 monotherapy MDD trial by the end of March 2021.

If positive, the Phase 2/3 trial is intended to serve as one of two registrational trials required by the FDA to support clinical efficacy for monotherapy treatment of MDD, and we expect topline data in the first half of 2022.

In addition to the Phase 2/3 monotherapy trial, we intend to initiate a Phase 2 dose range finding, or DRF, trial for adjunctive treatment of MDD in the third quarter of 2021 to provide controlled data to support advancing a Phase 3 adjunctive MDD trial and will further inform dose selection for the future Phase 3 monotherapy trial.

Our second clinical program, PRAX-944, is a potentially differentiated selective small molecule inhibitor of T-type calcium channels for the treatment of Essential Tremor, or ET.

ET is a progressive and debilitating movement disorder with action tremor that significantly disrupts activities of daily living, with an estimated prevalence of up to seven million patients in the United States with only one approved pharmacotherapy that is poorly tolerated, resulting in high discontinuation rates.

The condition can be debilitating enough that in severe cases, patients opt for invasive brain surgeries when pharmacotherapy fails.

Successful development of T-type calcium channel modulators in ET likely requires a pharmacokinetic, or PK, profile with sustained exposure throughout the day and a blunted maximum drug concentration, or Cmax.

We believe the therapeutic profile of PRAX-944 coupled with a modified release formulation allows the potential for PRAX-944 to be a differentiated therapy.

We have evaluated the safety and tolerability of PRAX-944 in over 150 healthy volunteers in five separate clinical trials.

We have studied the safety of PRAX-944 modified release formulation with titration up to 120mg/day and no maximum tolerated dose, or MTD, has been identified.

We are currently conducting a Phase 2a proof-of-concept, open-label

trial, in ET patients.

Preliminary site data from six participants in the low dose cohort showed tremor reduction, which compares favorably to the standard of care agents and historical placebo response.

Based on the observed safety profile in the healthy volunteer titration study and the safety and preliminary efficacy data in ET participants administered up to 40mg daily, we have added a second cohort to the ongoing ET Phase 2a trial where patients will be titrated to a dose of up to120mg/day of PRAX-944.

We have also included a randomized, double-blind, placebo-controlled withdrawal phase to this later cohort in the trial, where participants will either be maintained on their final open-label dose or switched to placebo.

We plan to announce topline open-label safety, tolerability and efficacy data, for the high dose cohort, in mid-year 2021.

In addition, we plan to start a Phase 1 trial to explore short titration schemes by mid-2021 and to initiate a Phase 2b randomized controlled trial in ET in late 2021.

Our most advanced rare disease product candidate and third clinical program, PRAX-562, is the first selective persistent sodium current blocker in development for the treatment of a broad range of rare, devastating CNS disorders, such as severe pediatric epilepsies and rare adult cephalgias.

To date, PRAX-562 has demonstrated pharmacological activity in preclinical in-vivo models at generally well-tolerated doses.

We initiated a Phase 1 trial of PRAX-562 in Australia to evaluate the safety, tolerability, PK and effects on an exploratory electroencephalography, or EEG, biomarker in up to 129 adult healthy volunteers.

The single ascending dose, or SAD, portion up to the maximum planned dose has been completed with no dose limiting toxicities and the study has advanced to the multiple ascending dose, or MAD, phase.

We anticipate initiating the first proof-of-concept trial in patients with rare adult cephalgias, including Short-lasting Unilateral Neuralgiform headache attacks with Conjunctival injection and Tearing, or SUNCT, Short-lasting Unilateral Neuralgiform headache with Autonomic symptoms, or SUNA, and Trigeminal Neuralgia, or TN, in the second half of 2021.

The scope of the initial study has been expanded to include TN in addition to SUNCT and SUNA.

In January 2021, the FDA granted rare pediatric disease designation for PRAX-562 for the treatment of SCN2A and SCN8A developmental epileptic encephalopathies, or SCN2A-DEE and SCN8A-DEE, respectively.

In addition to our clinical programs, our most advanced preclinical stage program is PRAX-222, an antisense oligonucleotide, or ASO, designed to decrease the expression levels of the protein encoded by the gene SCN2A in patients with gain-of-function, or GOF, mutations in epilepsy.

The FDA has granted both rare pediatric disease and orphan drug designations for PRAX-222 for the treatment of SCN2A-DEE.

We have one disclosed discovery program in development for KCNT1 related epilepsy and in March 2021 we have entered into an innovative research collaboration with The Florey Institute of Neuroscience and Mental Health to develop three additional novel ASOs for the treatment of patients with severe genetic epilepsies, including a novel approach targeting SCN2A loss-of-function, or LOF mutations.

Below is a summary of our portfolio of disclosed programs, addressing either broad psychiatric and neurologic conditions or rare diseases.

We own global commercialization rights for all of our product candidates.

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* PRAX-222 is a collaboration with Ionis Pharmaceuticals, or Ionis, and RogCon Inc.

Ionis is eligible to receive royalties as a percentage of net product sales worldwide in the low-20s.

Our company was founded by scientific innovators Kiran Reddy, M.D., David Goldstein, Ph.D.

and Steven Petrou, Ph.D., who have pioneered work to identify and characterize de novo mutations in several dozen genes believed to cause a number of forms of severe pediatric epilepsies.

These genes regulate key neuronal circuits in the brain which, when dysregulated, can result in severe seizure phenotypes as well as comorbid developmental delays, cognitive deficits, sensory-motor issues and often early death.

Further, based on our understanding of a body of preclinical and clinical evidence, we now believe that these genes also play critical roles in the predisposition to other more prevalent neurologic and psychiatric disorders, such as mood disorders, movement disorders, pain syndromes, autism, migraine and schizophrenia, making them attractive targets for therapeutic intervention for a wide range of CNS disorders.

We have attracted a talented team of scientists and researchers in genetics and biology, chemistry and translational medicine as well as business leaders with established track records of successfully executing innovative drug discovery and development programs.

Our Chief Executive Officer, Marcio Souza, previously served as Chief Operating Officer at PTC Therapeutics, Inc.

and was instrumental in the development and commercialization of multiple approved products while at NPS Pharmaceuticals, Inc., Shire Human Genetic Therapies Inc.

and Sanofi Genzyme Corporation.

Our Chief Medical Officer, Bernard Ravina, M.D., previously Chief Medical Officer at Voyager Therapeutics, Inc., is a neurologist and movement disorder specialist who brings decades of neurologic drug development experience from roles at Biogen, the University of Rochester and the NIH’s Institute of Neurological Disorders and Stroke.

Through this approach, we have established a broad CNS portfolio with multiple programs, including product candidates across psychiatric disorders, movement disorders, epilepsy and other exploratory CNS indications, with three clinical-stage product candidates.

Each of our clinical-stage product candidates is advancing in more than one indication and we anticipate expansion into additional indications.

We expect multiple topline readouts from our clinical-stage programs and anticipate the launch of a fourth clinical development program in 2022.

In addition, we have established a robust pipeline of preclinical stage programs through internal research and in-licensing.

Our broad portfolio of CNS programs is currently structured by therapeutic focus in three primary franchises – Psychiatry, Movement Disorders and Epilepsy.

In addition, we are pursuing development in other exploratory CNS indications such as rare adult cephalgias.

Within our Psychiatry franchise, our most advanced clinical candidate, PRAX-114, is being developed for the treatment of a broad range of patients suffering from major depressive disorder, or MDD and post-traumatic stress disorder, or PTSD.

We expect to report topline results from the Aria Study, a Phase 2/3, placebo-controlled study evaluating PRAX-114 for monotherapy treatment of MDD, in the second quarter of 2022.

We also expect to report topline results from the Acapella Study, a Phase 2, placebo-controlled, dose-ranging study evaluating PRAX-114 for treatment of MDD, in mid-2022.

In addition, we have initiated a Phase 2, placebo-controlled study evaluating PRAX-114 for the treatment of PTSD and expect to report topline results in the second half of 2022.

Within our Movement Disorders franchise, our second clinical candidate, PRAX-944, is being developed for the treatment of Essential Tremor, or ET, and Parkinson's Disease, or PD.

We anticipate reporting topline results from the second cohort of our ongoing Phase 2a trial evaluating PRAX-944 for the treatment of ET in the second quarter of 2022, including both open-label and placebo-controlled, randomized withdrawal period results.

We have initiated a Phase 2b, placebo-controlled, dose-range finding trial, the Essential1 Study, to evaluate the tolerability, safety and efficacy of PRAX-944 in adults with ET and we expect to report topline results in the second half of 2022.

We also expect to initiate a Phase 2, placebo-controlled, crossover study to evaluate the safety, pharmacokinetics, or PK, and efficacy of daytime dosing of PRAX-114 for the treatment of ET in the first quarter of 2022 and expect to report topline results in the second half of 2022.

We expect to initiate a Phase 2, placebo-controlled trial to evaluate the safety, PK and efficacy of PRAX-944 as a non-dopaminergic treatment for the motor symptoms of PD in the second quarter of 2022.

Within our Epilepsy franchise, we expect to initiate a Phase 2 study with our third clinical-stage candidate, PRAX-562, in patients with rare pediatric Developmental and Epileptic Encephalopathies, or DEEs, in the second quarter of 2022.

Our most advanced preclinical stage product candidate within our Epilepsy franchise, PRAX-222, is an antisense oligonucleotide, or ASO, designed to decrease the expression levels of the protein encoded by the gene SCN2A in patients with gain-of-function, or GOF, SCN2A mutations.

We expect to initiate a seamless study of PRAX-222 in the second quarter of 2022, which would be our fourth program to reach clinical stage.

We also expect to initiate a Phase 2 proof-of-concept, or POC, clinical trial evaluating PRAX-562 in patients with rare adult cephalgias in the first quarter of 2022.

In addition, our preclinical pipeline consists of PRAX-628, a product candidate nominated in the fourth quarter of 2021 for focal epilepsy, a discovery program in development for KCNT1 related epilepsy, three ASOs targeting SCN2A in patients with loss-of-function, or LOF, mutations, PCDH19 and SYNGAP1, and three additional discovery programs for undisclosed targets in psychiatry, movement disorders and epilepsy.

Each of our programs is based on four key principles that we believe will both increase the probability of success and allow us to efficiently translate insights into high-impact therapies for patients and society:

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Numerous CNS disorders are caused by an imbalance of excitation and inhibition in neuronal circuitry.

By applying insights derived from the genetics of pediatric epilepsies, we have identified biological targets that we believe are implicated in determining neuronal excitability, not only in epilepsies, but also in a variety of more prevalent CNS disorders.

For example, human genetics points to the relevance of the GABAergic system where mutations in GABA A receptors are associated with a number of rare pediatric epilepsies.

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We leverage a number of translational tools to both confirm pharmacodynamic effects of our product candidates in the brain and establish on-mechanism effects, which we believe will result in an increased probability of success in the clinic.

Our programs utilize target-specific EEG endpoints to serve as robust markers of pharmacological engagement of the drug target and novel transgenic animal models to assess the therapeutic activity of our molecules.

Our programs utilize target-specific electroencephalogram, or EEG, endpoints to serve as robust markers of pharmacological engagement of the drug target and novel transgenic animal models to assess the therapeutic activity of our molecules.

We expect these tools, along with rigorous preclinical PK and pharmacodynamic characterization of our molecules will position us to more efficiently translate preclinical findings into clinical utility.

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Our global network of contract research organizations, or CROs, and scientists affords us the flexibility to conduct research and development activities in diverse geographic locations to accelerate our development timelines and limit geographic risks.

Apply patient-centric development strategies.

Apply patient-guided development strategies.

We pursue the development of candidates that address the treatment needs of patients and the treating community, including targeting the underlying disease pathology versus just symptom management.

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Our development strategies are tailored to demonstrate these benefits.

Our goal is to translate genetic insights into high-impact therapies for millions of people suffering from CNS disorders characterized by imbalance of neuronal excitation-inhibition.

Key components of our strategy include:

• Advance PRAX-114 in MDD and PMD toward regulatory approval and commercialization.

PRAX-114 is a potentially differentiated GABA A receptor PAM currently in Phase 2a development for the treatment of MDD and PMD.

We observed marked improvements in depression scores in MDD patients within two weeks of treatment that were maintained throughout the treatment period.

We are operationally ready and intend to initiate a Phase 2/3 trial in the United States and Australia by the end of March 2021.

If positive, the Phase 2/3 trial in monotherapy MDD is intended to serve as one of two registrational trials required by the FDA to support clinical efficacy for the treatment of MDD, and we expect topline data in the first half of 2022.

In addition to the Phase 2/3 monotherapy trial, we intend to initiate a Phase 2 DRF trial for the adjunctive treatment of MDD in the third quarter of 2021 to inform dose selection for Phase 3 monotherapy and provide controlled data to support advancing a Phase 3 adjunctive MDD trial.

We are currently conducting a Phase 2a trial in Australia in PMD and expect to announce topline data in the second half of 2021.

We intend to develop PRAX-114 in the United States and in other countries as both a monotherapy and adjunctive therapy for MDD and PMD for both acute and maintenance treatment.

For a detailed description of the risks related to the development and commercialization of our product candidates, please refer to the section entitled “Risk Factors” in this Annual Report on Form 10-K.

• Advance PRAX-944 in ET toward regulatory approval and commercialization.

PRAX-944 is a potentially differentiated selective small molecule inhibitor of T-type calcium channels in development for ET.

During clinical development of PRAX-944, we have evaluated the safety and tolerability of PRAX-944 in over 150 healthy volunteers in five separate clinical trials.

We have studied the safety of the PRAX-944 modified release formulation with titration up to 120mg/day and no MTD has been identified.

We are currently conducting a Phase 2a proof-of-concept trial in Australia and New Zealand in ET patients.

Preliminary site data from six participants of the low dose cohort showed tremor reduction, which seems to compare favorably to the standard of care agents and historical placebo response.

Based on the observed safety profile and the ET participants administered up to 40mg daily, we have amended the ongoing ET trial to include a second cohort that will titrate in an open-label fashion up to 120mg daily.

We have also included a randomized, double-blind, placebo-controlled withdrawal phase to the trial, where participants will either be maintained on their final open-label dose or switched to placebo.

We plan to announce topline open-label safety, tolerability and efficacy data for the high dose cohort in mid-year 2021.

In addition, we plan to start a Phase 1 trial to explore short titration schemes in mid-year 2021 and to initiate a Phase 2b randomized control trial in ET in late 2021.

• Build a rare disease franchise.

We are advancing several programs for patients with rare diseases.

We have six rare disease programs in our pipeline, including PRAX-562, which we believe represents the first selective persistent sodium current blocker in development for the treatment of a number of rare CNS diseases with limited or no treatment options.

The current Phase 1 trial has completed the SAD portion up to maximum planned dose, with no dose limiting toxicities, and has advanced to MAD evaluation.

We anticipate the initial proof of concept trial in patients to initiate in the second half of 2021.

The clinical development plan for PRAX-562 encompasses exploring the broad potential for the mechanism of action in rare diseases through proof-of-concept trials in rare adult cephalgia patients and then expanding into a range of rare pediatric Developmental and Epileptic Encephalopathies, or DEEs.

Given the overlapping biology, phenotypic presentation and clinical execution considerations, we believe that we can translate learnings for the treatment of DEEs across our portfolio with thorough knowledge to bring additional treatments to market.

Our most advanced pre-clinical program is PRAX-222, an ASO for lowering the expression levels of the protein encoded by the gene SCN2A, in patients with GOF mutations of SCN2A epilepsy.

In January 2021, the FDA granted rare pediatric disease designation for PRAX-562 for the treatment of SCN2A-DEE and SCN8A-DEE, and both rare pediatric disease and orphan drug designations for PRAX-222 for the treatment of SCN2A-DEE.

Additionally, we have entered into an innovative research collaboration with The Florey Institute of Neuroscience and Mental Health to develop three novel ASOs for the treatment of rare epilepsy targets.

• Maximize the value of our product candidates through select indication expansion.

All of our clinical stage product candidates address targets with therapeutic potential beyond their lead indications.

As these programs advance through the clinic, we will pragmatically evaluate indication expansion and

consider subsequent clinical development that will expand the labels of our product candidates to encompass other compelling opportunities at a time when we determine to be most efficient.

• Advance our understanding of genetics and neuronal imbalance to maintain our leadership and continue to build our pipeline.

Advances in the field of genetics continue to elucidate new insights into mutations that drive neuronal imbalance.

Our team is deeply engaged in these efforts, which we believe will enable us to pursue a pipeline discovery and development strategy grounded in these learnings and coupled with our drug discovery, translational and clinical experience.

As our knowledge base continues to grow, we believe our potential to deliver additional differentiated medicines for patients will grow as well.

• Commercialize our products in the United States and globally.

To realize the full potential of our product candidates, we intend to build a sales and marketing infrastructure to reach prescribers in the United States.

In order to capitalize on market opportunities outside the United States, we may pursue collaborations with reputable pharmaceutical companies that have established presences in key geographies.

BROAD PSYCHIATRY AND NEUROLOGY PROGRAMS

We are developing PRAX-114, an extrasynaptic GABA A receptor preferring positive allosteric modulator, or PAM, for the treatment of patients suffering from MDD and PMD.

PRAX-114 is a potentially differentiated treatment for a broad MDD population, as both a monotherapy and adjunctive therapy for both acute and maintenance use.

We have a multi-cohort, three-part Phase 2a clinical trial ongoing in Australia.

We observed marked improvements in depression scores in MDD patients in Parts A and C of this trial within two weeks of treatment that were maintained throughout the treatment period.

We expect complete topline data from Part B of the trial for the treatment of patients suffering from PMD in the second half of 2021.

In October 2020, we submitted an Investigational New Drug application, or IND, to support the initiation of a Phase 2/3 clinical trial in the United States.

We are operationally ready and with the recent clearance of our IND we intend to initiate a Phase 2/3 monotherapy MDD trial in the United States and Australia by the end of March 2021.

If positive, the Phase 2/3 trial is intended to serve as one of two registrational trials required by the FDA to support clinical efficacy for the monotherapy treatment of MDD, and we expect topline data in the first half of 2022.

In addition to the Phase 2/3 monotherapy trial, we intend to initiate a Phase 2 DRF trial for the adjunctive treatment of MDD in the third quarter of 2021 to inform dose selection for a Phase 3 monotherapy trial and to provide controlled data to support advancing a Phase 3 adjunctive MDD trial.

There is significant unmet medical need in MDD and PMD with over 22 million individuals suffering from depressive symptoms in the United States.

Current pharmacological interventions suffer from multiple shortcomings including slow onset of efficacy, low remission rates and side effects that limit patient compliance.

PRAX-114 targets an increasingly well-understood neuronal circuit in the brain that we believe, when properly modulated, can result in a robust and rapid antidepressant effect with an advantageous safety and tolerability profile.

We believe that our PRAX-114 program has several advantages as compared to currently available therapies and product candidates in the GABA A PAM therapeutic class:

• Planned Path to a Potential Broad MDD Label.

Our Portfolio

Below is a summary of our portfolio.

We own global commercialization rights for all of our product candidates.

* SCN2A-LOF, SYNGAP1 and PCDH19 ASOs are being developed in collaboration with collaboration with The Florey Institute.

We are developing PRAX-114, an extrasynaptic GABA A receptor preferring positive allosteric modulator, or PAM, for the treatment of a broad range of patients suffering from MDD and PTSD.

We believe that PRAX-114 has several advantages relative to currently available therapies and product candidates in the GABAA PAM therapeutic class, including the potential for rapid and durable antidepressant effect across MDD symptoms, a wider therapeutic window, simple nightly dosing with or without a meal via a tablet formulation and the potential for a differentiated tolerability profile.

We have been diligently pursuing our strategy to advance PRAX-114 towards regulatory approval and commercialization to support a broad label in MDD that can be easily integrated into standard clinical practice.

We intend to develop PRAX-114 in the United States and in other countries as both a monotherapy and adjunctive therapy for MDD for both acute and maintenance treatment.

If positive, our planned Phase 2/3 trial is intended to serve as one of two registrational trials required by the FDA to support clinical efficacy for the monotherapy treatment of MDD.

In addition to the Phase 2/3 monotherapy trial, we intend to initiate a dose range finding trial for the adjunctive treatment of MDD by the end of mid- 2021 to inform dose selection for Phase 3 and provide controlled data to support advancing a Phase 3 adjunctive MDD trial.

• Wider Therapeutic Window.

We have determined that PRAX-114 is approximately 10-fold more selective PAM of the extrasynaptic form of GABA A receptors compared to the synaptic form.

In healthy volunteers, we have observed PRAX-114 to markedly increase quantitative electroencephalography, or qEEG, power in the alpha and beta-frequency bands—unlike GABA A receptor PAMs that only modulate synaptic GABA A receptors, such as benzodiazepines, or that are equipotent at synaptic and extrasynaptic

receptors, such as allopregnanolone, which decreases power in the alpha frequency band.

We believe these data suggest that PRAX-114 has a differentiated pharmacological profile to other GABA A PAMs at therapeutic doses due to the relatively selective activation of extrasynaptic GABA A receptors.

By preferentially modulating extrasynaptic GABAA receptors, we believe PRAX-114 is able to uniquely activate the GABAergic target and has the potential to mediate antidepressant and anxiolytic activity without the significant sedation observed with less selective neuroactive steroids.

• Simple Nightly Dosing.

We believe the ability to administer PRAX-114 and achieve targeted exposures, with or without food, is key for clinical and commercial success in MDD.

This is also critical for a patient-centric therapy because many patients with depression suffer from appetite disturbances.

We have observed fast absorption of PRAX-114 within one to three hours of dosing and a predictable PK profile across multiple trials.

Based on clinical findings to date, PRAX-114 achieves reproducible overall exposure ( i.e.

, area under the concentration curve, or AUC) across a wide range of administration conditions, demonstrating consistent exposure when administered with or without food and at different times of day, whereas other GABA A PAM neuroactive steroids may require food to achieve therapeutic levels.

While AUC is unaffected by administration conditions, nightly dosing has been demonstrated to reduce Cmax thereby enhancing the potential for improved tolerability.

• Sustained Administration .

After consultation with the FDA and other stakeholders in MDD and PMD therapy, we designed our Phase 2/3 trial of PRAX-114 to include 28-day nightly dosing to evaluate patients at 14 days to assess the rapidity and robustness of response and 28 days to measure initial of effect.

We believe that having a dosing paradigm consistent with the duration of depressive episodes and easily integrated into standard clinical practice will provide the most substantial benefit to patients in controlling their disease, further differentiating PRAX-114 from other GABA A PAMs.

• Indication Expansion.

Based on the novel pharmacology of PRAX-114 and its generally well-tolerated profile in clinical trials to date and our knowledge of disorders related to MDD that may be treatable through the GABA A PAM mechanism, we believe PRAX-114 is suitable for potential development across a wide-range of indications in psychiatry and neurology, providing for potentially sizable expansion opportunities to explore in addition to MDD.

We intend to develop PRAX-114 as both a monotherapy and adjunctive therapy for MDD, and, if approved, commercialize it in the United States and explore opportunities to expand value in other countries.

PRAX-114 is also being evaluated in a Phase 2 POC study for the treatment of PTSD.

We believe that treatment of PTSD with a GABA A PAM has the potential to both address the underlying pathophysiology of the disorder more directly than standard of care treatments and address multiple unmet medical needs in this population.

We intend to demonstrate POC for PRAX-114 for the treatment of PTSD and subsequently determine development and regulatory pathways.

We are also assessing the potential development of PRAX-114 in additional indications.

PRAX-114 is currently in the registration-enabling phase of development for treatment of patients with MDD.

We are conducting a Phase 2/3, placebo-controlled study, the Aria Study, to assess the efficacy and safety of 40mg of PRAX-114 for monotherapy treatment of MDD and expect to report topline results in the second quarter of 2022.

The Aria Study is intended to serve as one of two trials required by the U.S.

Food and Drug Administration, or the FDA, to demonstrate clinical efficacy to support registration of PRAX-114 for treatment of MDD.

We are also conducting a Phase 2, placebo-controlled, dose-ranging study evaluating PRAX-114 for treatment of MDD, the Acapella Study, and expect to report topline results in mid-2022.

The Acapella Study is intended to provide additional understanding of the dose range and to evaluate the safety and efficacy of PRAX-114 at doses of 10, 20, 40 and 60mg.

We completed a multi-cohort, three-part Phase 2a clinical trial in Australia, in which Parts A and C of the trial treated patients with MDD while Part B focused on patients with perimenopausal depression, or PMD.

For all parts of the trial, PRAX-114 was generally well-tolerated and demonstrated a rapid antidepressant effect that was maintained throughout the treatment period.

We also observed improvements in menopausal and mood symptoms in patients with PMD and are assessing further development options based on this finding.

In addition, we initiated a Phase 2, placebo-controlled study evaluating PRAX-114 for treatment of PTSD in the fourth quarter of 2021 and expect to report topline results in the second half of 2022.

Major Depressive Disorder

Major Depressive Disorder, or MDD, is a chronic psychiatric condition causing severe impairments that interfere with the ability to carry out life activities.

MDD is a chronic psychiatric condition causing severe impairments that interfere with the ability to carry out life activities.

An MDD episode is characterized by a period of at least two weeks of persistent depressed mood and/or the loss of interest or pleasure in activities, accompanied by sleep and appetite disturbance, fatigue, concentration difficulty, cognitive impairment, feelings of guilt, psychomotor retardation or agitation and suicidal ideation.

MDD is one of the most prevalent psychiatric disorders.

In the United States, approximately 19 million adults, or 7% of the adult population suffer from MDD, with episodes lasting on average six to eight months.

In the United States, approximately 19 million adults, or seven percent of the adult population suffer from an episode of MDD every year, with episodes lasting on average six to eight months.

It is estimated that MDD affects more than 300 million people worldwide.

Moreover, the prevalence of depression has increased during the COVID-19 pandemic in the US and globally.

Moreover, the prevalence of depression has increased during the COVID-19 pandemic in the United States and globally.

In the United States, depression symptoms have increased by more than 3-fold overall during the COVID-19 pandemic.

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The side effect profile of current antidepressant standard of care negatively impacts treatment outcomes, quality of life and adherence in MDD patients.

Approximately seventy percent of MDD patients fail to achieve remission with first line treatment.

Approximately 70% of MDD patients fail to achieve remission with first line treatment.

Further, those patients that are responsive typically require approximately six to eight weeks of treatment to show a clinically meaningful response.

Slow onset of action is a substantial unmet need in MDD, with some of the most commonly prescribed antidepressants showing a reduction in the Hamilton Depression Scale, or HAM-D, of approximately 6- to 8-points and a difference from placebo of approximately 1-2 points at Week 2 (Figure 1).

Moreover, approximately

40% of patients on therapy discontinue treatment due to either a loss of response or adverse side effects.

Finally, 33% of patients fail to respond after treatment with three or more different standard of care therapies.

The HAM-D is one of the most widely-used clinical rating scales for depression and includes 17 items used for scoring over a wide range of symptoms typically found with depression including mood, suicidal thoughts, insomnia, anxiety, loss of appetite and weight loss.

Patients with more severe depression have higher scores.

Moreover, approximately 40% of patients on therapy discontinued treatment due to either a loss of response or adverse side effects.

Finally, 33% of patients failed to respond after treatment with three or more different standard of care therapies.

Among the MDD patients who experience a response to treatment, the majority do not achieve remission.

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Despite the numerous and long-standing antidepressant treatment options, there continues to be an unmet need for antidepressants that provide rapid onset of effect, higher remission rates, efficacy throughout the depressive episode and an improved tolerability profile that is aligned with the clinical care and the course of MDD and its accompanying comorbid symptoms.

Reduction of HAM-D from baseline of commonly prescribed antidepressants and placebo at Week 2.

Perimenopausal depression

Perimenopause is the transition between the onset of hormonal and clinical features of menopause and the one-year period after the final menses.

Perimenopause can last up to 10 years.

Women with no lifetime history of major depression who have entered the perimenopause period are found to be twice as likely to develop significant depressive symptoms as women who have not entered the perimenopause period.

Notably, the increased risk for depression during the perimenopausal transition has been observed to decline substantially after the final menstrual period.

There are over 30 million women in the United States between the ages of 45 and 59 years who are at risk of developing perimenopause symptoms, with an estimated three million developing mood symptoms such as depression, anxiety, irritability and suicidal ideation and behavior and an estimated 20 million women developing associated vasomotor symptoms or hot flushes.

Notably, suicide rates are the highest among women 45 to 59 years of age and have increased by approximately 42% in recent decades.

Although primarily viewed as a reproductive transition, the symptoms of perimenopause are largely neuropsychiatric in nature.

Neurological symptoms that emerge during perimenopause are indicative of disruption in multiple estrogen and progesterone-regulated systems such as thermoregulation, sleep, circadian rhythms and sensory processing and affect multiple domains of cognitive function.

Perimenopausal depression also appears to impact the clinical symptomatology of menopause, with the presence of depression being associated with a greater degree of menopausal hot flushes than in women without perimenopausal depression.

There is substantial evidence that fluctuations in estrogen and progesterone, the precursor of the endogenous neuroactive steroid allopregnanolone, a GABA A receptor PAM, are in part responsible for the mood changes, hot flushes and other neurologic symptoms of perimenopause.

Similar to MDD, SSRIs and SNRIs have shown limited efficacy in treating perimenopausal depression.

There remains an unmet medical need for effective treatment of core depression symptoms and associated physical symptoms of menopause.

A GABA A receptor PAM, like PRAX-114, that potentiates the activity of endogenous neuroactive steroids on GABA A receptors, may offer broader therapeutic benefit compared to current standard of care antidepressants.

GABA A in depression

Gamma-aminobutyric acid, or GABA, is the principal neurotransmitter mediating neuronal inhibition in the brain.

Neurons that produce GABA, known as GABAergic neurons, are present throughout the brain, representing between 20 percent and 40 percent of all neurons depending on the region.

Neurons that produce GABA, known as GABAergic neurons, are present throughout the brain, representing between 20% and 40% of all neurons depending on the region.

Their primary role is to balance and fine tune excitatory neurotransmission of various neuronal circuits.

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In addition, decreased GABAergic neuron function, most notably in the prefrontal cortex, has been documented in MDD patients and in preclinical animal models of depression.

Endogenous neuroactive steroids, such as allopregnanolone and pregnanolone or synthetic derivatives thereof, such as PRAX-114, are known to potentiate the activity of GABA A receptors.

Both human and animal data reveal an important role for neuroactive steroids in these GABAergic deficits and levels of endogenous neuroactive steroids are decreased in individuals with MDD and PMD.

Of particular relevance to the PRAX-114 program is the more recently established link between GABAergic signaling, neuroactive steroid levels and stress—a well-established risk factor for MDD and other mood disorders.

Endogenous neuroactive steroids, or NAS, such as allopregnanolone and pregnanolone or synthetic derivatives thereof, such as PRAX-114, have been shown to potentiate the activity of GABA A receptors.

human and animal data reveal an important role for NAS in these GABAergic deficits and levels of endogenous NAS are decreased in individuals with MDD.

Of particular relevance to PRAX-114 is the more recently established link between GABAergic signaling, neuroactive steroid levels and stress—a well-established risk factor for MDD and other mood disorders.

In preclinical models, exposure to chronic stress leads to reduced neuroactive steroid biosynthesis and reduced GABAergic inhibition in depression-relevant brain circuits.

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We believe that enhancing modulation of GABA A receptors in patients with depression and anxiety has the potential to restore normal function in these circuits, leading to broad applications in mood and anxiety disorders.

Post-Traumatic Stress Disorder

PTSD is a chronic disorder occurring after direct or indirect exposure to psychological trauma.

PTSD is characterized by re-experiencing aspects of the original trauma, avoidance of trauma reminders, anhedonic or dysphoric mood states, and/or negative thoughts or feelings that began or worsened after the trauma and trauma-related hyperarousal and hypervigilance.

Problems with sleep onset and maintenance are common and may be associated with nightmares, safety concerns, or a generalized elevated arousal that interferes with sleep.

PTSD is frequently associated with impairment in many aspects of daily functioning, including self-care, home functioning, relationships, and social interactions.

Common occupational impacts include higher rates of sick leave, failure to return to work and reduced work performance that is correlated with PTSD symptom severity.

Failure to achieve remission of PTSD is associated with ongoing functional impairment as well as subjective distress.

Even with effective medication or psychotherapy treatment, hyperarousal symptoms such as irritability/anger, insomnia and nightmares often persist even when other symptoms have been adequately treated, with greater than half of patients reporting these residual symptoms even when they no longer meet diagnostic criteria.

Continued sleep disruption can prolong other PTSD symptoms and increase risk of conditions frequently comorbid with PTSD such as severe chronic insomnia disorder, MDD and substance use disorders.

Despite the prevalence and negative impact of PTSD, there are few available pharmacotherapies for this disorder and their efﬁcacy has substantial limitations.

Only two medications are approved by the FDA for PTSD treatment (paroxetine and sertraline), and only a few additional medications (including fluoxetine and venlafaxine) have shown at least modest efficacy in the treatment of the disorder.

The rate of response to SSRIs is at most 60%, and only 20 to 30% of those treated achieve symptomatic remission following pharmacotherapy.

Achieving maximal improvement (even to incomplete response) with available medications can take months.

In addition to the slow onset of efficacy for core PTSD symptoms, these treatments have adverse event, or AE, profiles including the potential to increase insomnia and anxiety symptoms during treatment initiation.

The slow onset of efficacy and potential for increasing insomnia and anxiety symptoms lead a substantial proportion of patients to discontinue treatment.

We believe this highlights the unmet medical need for a rapid onset treatment that can improve insomnia and anxiety symptoms both to ease subjective distress and support adherence with treatment.

GABA A in PTSD

Based on findings from third party studies, we believe there is a compelling rationale for alterations in GABAergic transmission associated with the pathophysiology of PTSD.

These findings include reduced levels of plasma and cortical GABA seen in the insula and anterior cingulate cortex of veterans exposed to trauma.

Additionally, in military service members with PTSD, lower brain levels of GABA in the parieto-occipital cortex were negatively correlated with and mediated by scores on the Insomnia Severity Index.

Using transcranial magnetic stimulation, paired-pulse short- latency intracortical inhibition (an effect believed to reflect GABA A -mediated inhibition) was decreased in patients with PTSD relative to matched healthy controls.

PTSD has also been associated with alterations in NAS that positively allosterically modulate GABA action at GABA A receptors.

These findings include reductions in allopregnanolone levels in cerebrospinal fluid that correlate negatively with PTSD and negative mood symptoms in both women and men.

PTSD in women has been associated with a deficit in neurosteroid synthesis that in turn was associated with a deficit in extinction memory that plays a role in the development and maintenance of PTSD symptoms.

Additionally, two neurosteroid GABA A receptor antagonists, dehydroepiandrosterone and dehydroepiandrosterone sulphate, have been shown to be elevated relative to controls in combat-associated PTSD, constituting an additional negative influence on GABAergic signaling.

Taken together, these findings support our hypothesis that treatment of PTSD with a NAS GABA A PAM

has the potential to address the underlying pathophysiology of the disorder more directly than standard of care treatments and address multiple unmet medical needs in this population.

GABA A receptors:

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PRAX-114 is a small molecule neuroactive steroid that acts as a positive allosteric modulator of GABA A receptors.

Positive allosteric modulators, or PAMs, are substances that bind to a receptor, such as GABA A , to enhance that receptor’s response to its endogenous ligand (or endogenous agonist).

PAMs are substances that bind to a receptor, such as GABA A , to enhance that receptor’s response to its endogenous ligand (or endogenous agonist).

GABA A PAMs bind to a distinct site from endogenous GABA, an allosteric binding site, and do not activate the receptor in the absence of the GABA.

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Molecules that act as PAMs of only the synaptic GABA A receptor, such as benzodiazepines, bind to sites situated at the interface between the alpha and gamma subunits.

Molecules that act as PAMs of both synaptic and extrasynaptic GABA A receptors, such as the neuroactive steroids allopregnanolone and PRAX-114, bind to sites situated at the interface between the alpha and beta subunits present in both types of receptors.

The figure below displays the synaptic binding site for drugs such as benzodiazepines, and the distinct extrasynaptic and synaptic binding sites for neuroactive steroids, such as allopregnanolone and PRAX-114.

Molecules that act as PAMs of both synaptic and extrasynaptic GABA A receptors, such as the NAS allopregnanolone and PRAX-114, bind to sites situated at the interface between the alpha and beta subunits present in both types of receptors.

Figure 1 below displays the synaptic binding site for drugs such as benzodiazepines, and the distinct extrasynaptic and synaptic binding sites for NAS, such as allopregnanolone and PRAX-114.

GABA A synaptic and extrasynaptic receptors differ in structure and function.

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Allopregnanolone is an endogenous neuroactive steroid and a PAM of both the extrasynaptic and synaptic GABA A receptors, which has been associated with antidepressant activity.

However, allopregnanolone also has shown significant dose-limiting sedative activity, which we believe is likely mediated at least partially by its effects on synaptic GABA A receptors.

However, allopregnanolone also has

shown significant dose-limiting sedative activity, which we believe is likely mediated at least partially by its effects on synaptic GABA A receptors.

Despite this limitation, a formulation of allopregnanolone has been approved and is marketed as Zulresso TM to treat post-partum depression.

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PRAX-114 preference for extrasynaptic GABA A receptors

To assess the relative potency in-vitro of PRAX-114-mediated GABA A receptor activation for synaptic and extrasynaptic receptors, we measured the peak current induced by a low concentration of GABA (2 µM) in the presence of increasing concentrations of PRAX-114 in Chinese Hamster Ovary, or CHO, cells expressing either extrasynaptic (α4ß3 δ ) or synaptic (α1ß2 γ 2) human GABA A receptors.

In this model, PRAX-114 potentiates the GABA-activated current of both extrasynaptic and synaptic GABA A receptors, but was approximately 6.4-fold more potent in potentiating the extrasynaptic form of the receptor than the synaptic form based on the concentration that gives half-maximal response, or EC 50 .

At a concentration that activates extrasynaptic GABA A receptors to the equivalent of full activation by the endogenous ligand GABA (~260 nM, 300% potentiation of 2µM GABA), PRAX-114 led to 10.5-fold greater potentiation of extrasynaptic GABA A receptors than synaptic GABA A receptors (29%) (Figure 3, Table 4).

At 300% extrasynaptic GABA A receptor potentiation (equivalent to ~100% activation by endogenous agonist GABA), PRAX-114 led to 10.5-fold greater potentiation of extrasynaptic GABA A receptors than synaptic GABA A receptors (29%).

In the same assay, at the same level of extrasynaptic GABA A receptor potentiation (300%), other GABA A receptor PAM neuroactive steroids in development, or on the market, demonstrated only 0.4 to 2.6 fold greater potentiation of extrasynaptic GABA A receptors, which compares unfavorably to the 10.5 fold observed for PRAX-114 (Table 4).

In preclinical studies, we assessed the relative potency in-vitro of PRAX-114-mediated GABA A receptor activation for synaptic and extrasynaptic receptors by measuring the peak current induced by a low concentration of GABA (2 µM) in the presence of increasing concentrations of PRAX-114 in Chinese Hamster Ovary, or CHO, cells expressing either extrasynaptic (α4ß3 δ ) or synaptic (α1ß2 γ 2) human GABA A receptors.

In this model, PRAX-114 potentiated the GABA-activated current of both extrasynaptic and synaptic GABA A receptors but was approximately 6.4-fold more potent in potentiating the extrasynaptic form of the receptor than the synaptic form based on the concentration that gave half-maximal response, or EC 50 .

At a concentration that activated extrasynaptic GABA A receptors to the equivalent of full activation by the endogenous ligand GABA (~260 nM, 300% potentiation of 2µM GABA), PRAX-114 led to 10.5-fold greater potentiation of extrasynaptic GABA A receptors than synaptic GABA A receptors (29%).

In the same assay, at the same level of extrasynaptic GABA A receptor potentiation (300%), other GABA A receptor PAM NAS in development, or on the market, demonstrated only 0.4 to 2.6-fold greater potentiation of extrasynaptic GABA A receptors, which compares unfavorably to the 10.5-fold observed for PRAX-114.

Based on these assay conditions, we believe that the differentiated preference at extrasynaptic GABA A receptors by PRAX-114 will allow it to achieve high levels of extrasynaptic GABAergic activation with improved tolerability.

Dosing α 4 β 3 δ % potentiation

(Equivalent of full

activation by GABA)

α 1 β 2 γ 2 % potentiation

Fold potentiation

α 4 β 3 δ / α 1 β 2 γ 2

PRAX-114 Oral 300 % 29 % 10.5

Zuranolone Oral 300 % 117 % 2.6

Ganaxolone IV, Oral 300 % 794 % 0.4

Zulresso TM (brexanolone)

IV 300 % 306 % 1.0

Comparison of the degree of in-vitro GABA A receptor potentiation achieved by PRAX-114 and other neuroactive steroid GABA A PAMs.

extrasynaptic GABA A receptors, α 1 β 2 γ 2:

synaptic GABA A receptors.

PRAX-114 for the treatment of MDD and PTSD

We believe that PRAX-114 has several potential advantages:

• Wider Therapeutic Window .

In preclinical studies, PRAX-114 showed approximately 10-fold more selectivity for PAM of the extrasynaptic form of GABA A receptors compared to the synaptic form.

In clinical studies in healthy volunteers, we have observed PRAX-114 markedly increased quantitative electroencephalography, or qEEG, power in the alpha and beta-frequency bands—unlike GABA A receptor PAMs that only modulate synaptic GABA A receptors, such as benzodiazepines, or that are equipotent at synaptic and extrasynaptic receptors, such as allopregnanolone, which has been shown to decrease power in the alpha frequency band.

We believe these data suggest that PRAX-114 has a differentiated pharmacological profile in relation to other GABA A PAMs at therapeutic doses due to the relatively selective activation of extrasynaptic GABA A receptors.

• Simple Nightly Dosing With or Without Food .

We believe the ability to administer PRAX-114 and achieve targeted exposures, with or without food, is key for clinical and commercial success in MDD.

We believe this type of dosing regimen is also critical for a patient-guided therapy because many patients with depression suffer from appetite disturbances.

We have observed fast absorption of PRAX-114 within one to three hours of dosing and predictable PK results across multiple trials.

In clinical studies completed to date, PRAX-114 achieved reproducible overall exposure ( i.e.

, area under the concentration curve, or AUC) across a wide range of administration conditions, demonstrating consistent exposure when administered with or without food and at different times of day, whereas other GABA A PAM NAS may require food to achieve therapeutic levels.

While AUC is unaffected by administration conditions, nightly dosing has been shown to reduce blunted maximum drug concentration, or Cmax, thereby enhancing the potential for improved tolerability.

• Sustained Administration .

After consultation with the FDA and other stakeholders in MDD therapy, we designed the Aria Study to include 28-day nightly dosing to evaluate patients at 14 days to assess the rapidity and robustness of response and 28 days to measure initial durability of effect.

PRAX-114 clinical development in depression

We have initiated clinical development for PRAX-114 in mood disorders.

To date, two Phase 1 clinical trials of PRAX-114 have been completed in healthy volunteers.

These studies in 82 healthy volunteers showed PRAX-114 to be generally well-tolerated, with dose-dependent pharmacodynamic activities.

In our ongoing Phase 2a clinical trial in Australia, we observed marked improvements in depression scores in MDD patients within two weeks of treatment that was maintained throughout the treatment period.

We have also conducted a pharmacokinetics bridging study in healthy volunteers that confirmed our generally well-tolerated profile and consistency in exposure across a wide range of administration conditions including fed versus fasted and morning versus evening dosing.

We are operationally ready and intend to initiate a Phase 2/3 trial in the United States and Australia by the end of March 2021.

In addition to the Phase 2/3 monotherapy trial, we intend to initiate a Phase 2 DRF trial for adjunctive treatment of MDD by mid-2021 to inform dose selection for the Phase 3 monotherapy trial and provide controlled data to support advancing a Phase 3 adjunctive MDD trial.

Phase 1 SAD and MAD trials in healthy volunteers

We conducted a Phase 1 randomized, double-blind, placebo-controlled single ascending dose, or SAD, trial of PRAX-114 in healthy volunteers to evaluate safety and tolerability of PRAX-114.

This trial enrolled 36 volunteers who were randomized into cohorts dosed with 1mg, 3mg, 10mg, 30mg or 60mg of PRAX-114 or placebo.

PRAX-114 was generally well-tolerated and no serious adverse events, or SAEs, were reported in this trial.

We subsequently conducted a Phase 1 randomized, double-blind, placebo-controlled MAD trial in healthy volunteers in Australia to evaluate the safety, tolerability and pharmacokinetics of PRAX-114 and to assess the effect of food on drug exposure.

Thirty-six volunteers were randomized to receive daily doses of 15mg, 30mg or 60mg of PRAX-114 or placebo for 14 days.

Ten additional volunteers in a food effect cohort received 30mg doses of PRAX-114 when they were in a fasted state or with a high-fat meal.

As part of our MAD trial, we measured the effect of PRAX-114 on the quantitative EEG, or qEEG, to understand the pharmacodynamic effect of PRAX-114 on GABA A receptor activation.

An EEG is a real-time non-invasive measure of electrical activity of neurons in the brain.

The frequency and amplitude of the detected electrical signals provide insights into brain function and brain state (e.g., awake, deep sleep, etc).

qEEG, also called pharmaco-EEG, is a quantitative measure of the changes in brain activity in specific EEG frequency bands in response to treatment with a brain-active compound.

Changes in power in the beta frequency band, specifically, are used as a pharmacodynamic biomarker of GABA A receptor activation in response to a brain active compound.

In both the Phase 1 SAD and MAD trials, we observed fast absorption of PRAX-114 within one to three hours of dosing and approximately dose-proportional increases in peak concentration and total drug exposure.

In the MAD trial, the half-life of the drug was between 12.2 and 14.8 hours, consistent with a once-daily dosing paradigm.

Little or no accumulation of the drug was observed in the multiple dose trial over the ranges of doses tested.

We believe that the simple nightly administration of PRAX-114 with or without food is key for clinical and commercial success in MDD, as many patients struggle with adherence to medication and forcing a dietary regimen would impose further complications in this vulnerable population.

In the food effect cohort of the MAD trial, overall drug exposure as measured by area under the concentration curve, or AUC, of PRAX-114 increased by only 1.17-fold in the fed state versus in the fasted state.

The primary effect of food was observed in the Cmax, which was 0.64-fold of that observed under fed conditions.

These findings indicate that PRAX-114 does not need to be taken with food to achieve therapeutic exposures.

According to results presented in a published patent application, zuranolone, a GABA A PAM neuroactive steroid in development for treatment of MDD, exhibited a food effect that resulted in increases in Cmax of approximately 2.88-fold and in AUC of approximately 1.58-fold in the fed versus the fasted conditions (Table 5).

We believe this food effect has led to the development of zuranolone requiring administration with a high-fat meal for the compound reliably achieve target exposures.

We believe that the absence of a requirement that PRAX-114 be taken with food creates a potential competitive advantage over drugs that may require administration with food to achieve consistent target exposures, and should allow flexibility to adjust to the comorbid changes in appetite and preferences of MDD patients.

Statistical Analysis of the Effect of High-fat Meal

for PRAX-114 suspension (30mg)

Statistical Analysis of the Effect of High-fat Meal

for Zuranolone capsules (30mg)

Parameter Fed/Fasted

Ratio 90% Confidence

Parameter Fed/Fasted

Ratio 90% Confidence

WO2019/051264 Al Patent

Food effect clinical studies of PRAX-114 and Zuranolone (WO2019/051264 A1).

Subjects were administered a high-fat meal 30 minutes prior to administration of the compound in both studies.

In the MAD trial, PRAX-114 was generally well-tolerated, with no SAEs reported.

The reported treatment-emergent adverse events, or TEAEs, were mild to moderate and were consistent with those expected for the mechanism of action.

The most common adverse event was somnolence, which is characterized by sleepiness or drowsiness, and was reported by 78% (7/9) of those subjects receiving the 60mg dose;

all events of somnolence were mild in severity.

Increases in sleepiness as measured by the Stanford Sleepiness Scale occurred between one- and three-hours post-dosing, consistent with the period of peak drug concentrations;

sleepiness ratings at the 60mg dose were similar to placebo within 4 hours post-dose.

We did not observe a maximally tolerated dose, or MTD.

In our Phase 1 multiple ascending dose trial of PRAX-114 in healthy volunteers in Australia, we also observed the following TEAEs, all of which were mild to moderate in severity:

• 60mg dose (n=9), we observed nervous system disorder TEAEs, of somnolence (77.8% of subjects), headache (33.3% of subjects), dizziness (55.6% of subjects) and hypoaesthesia, or diminished sense of touch (22.2% of subjects).

Other TEAEs observed in more than one subject were euphoric mood (22.2% of subjects), hyperhidrosis, or excessive sweating (22.2% of subjects) and muscle twitching (22.2% of subjects).

• 30mg dose (n=9), we observed nervous system disorder TEAEs of somnolence (44.4% of subjects) and headache (22.2% of subjects).

Other TEAEs observed in more than one subject were skin irritation (55.6% of subjects) and euphoric mood (22.2% of subjects).

• 15mg dose (n=9), the only TEAE observed in more than one subject was fatigue (22.2% of subjects).

• Placebo group (n=9), we observed fatigue (22.2% of subjects).

TEAEs appearing to be dose related were somnolence, dizziness, headache, euphoric mood and hypoaesthesia.

We measured changes in qEEG power in our Phase 1 MAD volunteers to assess the effect of PRAX-114 on GABA A receptors in the brain on days 1 and 14 of this trial.

PRAX-114 produced marked increases in the power of the alpha and beta-frequency bands.

Increases in the beta-frequency band are correlated with GABAergic activation, as previously shown by the marketed GABA A PAMs, allopregnanolone and lorazepam.

PRAX-114 distinctly increases the alpha-frequency band, unlike allopregnanolone and lorazepam, which have shown to decrease the power of the alpha-frequency (Figure 6).

We believe this qEEG profile of PRAX-114 is consistent with its extrasynaptic GABA A receptor preference and differentiated pharmacological profile relative to benzodiazepines and other GABAA PAMs in the class.

GABA A PAM qEEG signal of PRAX-114, allopregnanolone, and lorazepam.

(Adapted from 1.

SAGE R&D Day Presentation, 2.

Gilles et al.

Moreover, the PRAX-114 increases in alpha and beta-frequency were strongly correlated with dose and PRAX-114 levels in the blood.

In these healthy volunteers at one hour post-dose on Day 1, PRAX-114 30mg resulted in an average increase in qEEG alpha and beta power of approximately 1.5-fold and 1.6-fold compared to baseline, and 60mg resulted in an increase in this measure of 2.6-fold and 2.8-fold compared to baseline, respectively (Figure 7).

The effects on the qEEG alpha and beta power were sustained at Day 14.

These data show that PRAX-114 engaged GABA A receptors in the brain and produced consistent effects on qEEG within the first hour after dosing with similar effects on Days 1 and 14.

This finding also supports comparison and translation of the

pharmacologic activity and qEEG data from the pre-clinical studies, where a 1.6-fold increase in beta power was associated with robust activity in animal models of anxiety and depression and was used to inform dose selection in subsequent clinical trials.

PRAX-114 (30mg and 60mg) showed a robust dose-dependent qEEG signal and target activation that was sustained over 14 days of dosing.

Notably, in the MAD study, PRAX-114 showed increases in beta power up to 2.8-fold without achieving a MTD or demonstrating any SAEs, and a higher dose of 80mg dosed as a single dose in healthy participants for 14 days was also generally well-tolerated in a subsequent clinical trial in MDD, summarized below.

In a separate study, another molecule in development in the class resulted in degrees of sedation that were not tolerated at doses that resulted in increases in beta power by approximately 1.7-fold compared to baseline.

We believe this highlights the extrasynaptic GABA A receptor preference and unique pharmacological profile of PRAX-114 and its ability to achieve high levels of GABAergic activation with improved tolerability.

This improved tolerability profile of PRAX-114 offers the potential for a wider therapeutic window, increased adherence and a wider dose range for MDD patients.

We are conducting a Phase 2/3, placebo-controlled study for monotherapy treatment of MDD, the Aria Study, and expect topline results in the second quarter of 2022.

The Aria Study is intended to serve as one of two trials required by the FD, to demonstrate clinical efficacy to support registration of PRAX-114 for monotherapy treatment of MDD.

We also are conducting a Phase 2, placebo-controlled, dose-ranging study for treatment of MDD, the Acapella Study, and expect topline results in mid-2022.

The Acapella Study is intended to provide additional understanding of the dose range and to evaluate the safety and efficacy of PRAX-114 at doses of 10, 20, 40 and 60mg.

Phase 2/3 Aria Study

Patients in the Aria Study are randomized 1:1 to receive nightly bedtime doses of 40mg PRAX-114 or placebo for 28 days in a fully outpatient setting, with two-weeks of additional follow up after the end of the active treatment period.

Patients are required to be between the ages of 18 and 65, have a diagnosis of MDD with a current episode of at least 8 weeks and not more than 24 months in duration, have a HAM-D total score of 23 or higher consistent with moderate-to-severe MDD, and have had at least one prior episode of MDD.

Participants are excluded if they are currently being treated with an antidepressant, have demonstrated an inadequate response to antidepressant treatment in the current episode or have treatment resistant depression, or if they have comorbid medical or psychiatric conditions that could interfere with the scientific objectives or safety of the trial.

The primary efficacy endpoint is change in the HAM-D total score from baseline at Day 15.

A key secondary endpoint is change in the HAM-D score after 28 days of treatment to assess the durability of effect of 40mg PRAX-114, and we also plan to evaluate changes in other depression-related assessments.

We selected a dose of 40mg in tablet formulation for the Aria Study based on the safety and efficacy results we observed from the 45mg suspension formulation in the Phase 2a clinical trial of PRAX-114 described below.

We anticipate the 40mg dose in tablet formulation to yield exposures consistently or slightly higher than what we observed with the 45mg dose in suspension formulation.

Our clinical trial design and study conduct applies several best practices to support evaluation of clinical effects in MDD, including but not limited to:

• Enrollment of patients with moderate-to-severe MDD and at least one prior episode of MDD because recurrent depression has been associated with a lower placebo response rate;

• A two-level subject and data quality process that includes independent clinical interviews confirming eligibility through the SAFER process and conducting audio confirmation of HAM-D clinical assessments at key timepoints with ongoing rating assessment quality feedback;

• Using sites with a known track-record of high quality data generation and drug-placebo separation in the conduct of MDD trials;

• Integration of a placebo control reminder script at every visit and screening for potential duplicate subjects via a dedicated clinical trial registry;

• Inclusion of the AiCure smartphone-based adherence monitoring system with structured site intervention to address participant adherence issues.

Phase 2 Acapella Study

In parallel with the Aria Study, we are conducting the Acapella Study to evaluate additional PRAX-114 doses for inclusion in pivotal Phase 3 studies in patients with MDD.

Given that comparable improvement in the HAM-D was observed in all doses (45, 60 and 80mg) evaluated in the Phase 2a MDD study, this trial is designed to evaluate the efficacy of lower doses of PRAX-114 to determine the optimal dose range to include in future Phase 3 trials.

The population for this study is both treatment naïve (monotherapy) MDD participants and MDD participants who have demonstrated an insufficient response to standard of care antidepressant treatment (adjunctive).

Patients in this study will be randomized to receive 10, 20, 40, or 60mg PRAX-114 or placebo in a 1:1:1:1:1 ratio for 28 days, with 2 weeks of additional follow up after the end of the active treatment period.

This trial is expected to enroll approximately 125 patients between the ages of 18 and 65 who are experiencing a current major depressive episode of at least 12 weeks and not more than 24 months in duration, have a HAM-D total score of 20 or higher, and who have had at least one prior episode of MDD responsive to antidepressant treatment.

Adjunctive participants must be currently treated with an antidepressant at a stable dose for at least eight weeks prior to Day 1 and have demonstrated an insufficient clinical response to one or two adequate trials of antidepressant treatment in the current episode.

Exclusion criteria will be similar to the Aria Study with the exception of allowing for adjunctive patients under the criteria described above.

The primary objective is to assess the presence of a dose-response

signal for PRAX-114 in MDD using the primary efficacy endpoint of the change from baseline in HAM-D total score at Day 15.

Secondary objectives will include evaluating the efficacy for each dose of PRAX-114 in MDD and the effect of PRAX-114 on the HAM-D scores after 28 days of treatment and impact on other depression-related assessments.

This trial will employ the full set of clinical trial quality interventions summarized above for the Aria Study.

Phase 2a trial in patients with depression

Based on the observed pharmacology in the Phase 1 trials, we are currently conducting a three-part, open-label, Phase 2a trial in Australia to assess the safety and efficacy of PRAX-114 in patients with moderate to severe MDD or PMD.

We have completed Parts A and C of this Phase 2a trial and Part B is ongoing.

Prior to the initiation of the Aria Study and the Acapella Study and based on the pharmacology observed in the Phase 1 trials described below, we conducted a three-part, open-label, Phase 2a trial in Australia to assess the safety and efficacy of PRAX-114 in patients with moderate-to-severe MDD or PMD.

Part A results

Part A of the open-label trial included two weeks of treatment and was designed to evaluate the timing and magnitude of the antidepressant effects of PRAX-114 across a range of doses in patients with MDD.

Patients were required to be between the ages of 18 and 65 and to have moderate to severe MDD for at least one month as defined by the Hamilton Depression Rating Scale, or HAM-D, score of 22 or higher.

The HAM-D, one of the most widely-used clinical rating scales for depression, was the main assessment used to quantify levels of depression in these patients.

The 17 items used for scoring this scale cover a wide range of symptoms typically found with depression including mood, suicidal thoughts, insomnia, anxiety, loss of appetite and weight loss.

Patients with more severe depression have higher scores.

Patients were required to be between the ages of 18 and 65 and to have moderate-to-severe MDD for at least one month as defined by a HAM-D score of 22 or higher.

The effect of PRAX-114 was measured by the change in the HAM-D score relative to baseline.

Patients who had previously failed to respond to a standard of care antidepressant in their current episode were eligible for inclusion.

In addition to HAM-D, other scales used included the Montgomery–Åsberg Depression Rating Scale, or MADRS, the Hamilton Anxiety Rating Scale, or HAM-A, and the Symptoms of

Depression Questionnaire, or SDQ.

In addition to HAM-D, other scales used included the Montgomery–Åsberg Depression Rating Scale, or MADRS, the Hamilton Anxiety Rating Scale, or HAM-A, and the Symptoms of Depression Questionnaire, or SDQ.

MADRS is a 10 item rating scale designed to assess the severity of symptoms in a depressive illness.

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The first week of treatment was conducted in an inpatient setting to facilitate daily efficacy and safety assessments and then patients were discharged and treated as outpatients for the second week.

Patients were instructed to take PRAX-114 at 4:00 PM on Day 1 to support collection of post-dose pharmacokinetics samples and then nightly at 9:30 PM on Days 2-14.

Patients were instructed to take PRAX-114 at 4:00 PM on Day 1 to support collection of post-dose PK samples and then nightly at 9:30 PM on Days 2-14.

Patients were not required to take PRAX-114 with food.

Compliance was carefully monitored throughout the duration of the trial, including inpatient and outpatient periods, with the AiCure smartphone adherence monitoring system.

Compliance was carefully monitored throughout the duration of the trial, including inpatient and outpatient periods, with a customized version of the AiCure smartphone adherence monitoring system.

Thirty-three patients were enrolled and completed Part A before the COVID-19 pandemic began impacting clinical trial conduct globally.

At baseline, patients had a mean HAM-D total score of 25, ranging from 20 to 33, indicating moderate to severe MDD.

At baseline, patients had a mean HAM-D total score of 25, ranging from 20 to 33, consistent with moderate-to-severe MDD.

Twenty-six of the thirty-three participants had previously received an antidepressant during the current depressive episode but still had moderate-to-severe MDD.

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Across all dose levels, two-thirds of patients were responders (defined as a >=50% reduction in HAM-D) or were clinically in remission (HAM-D<=7) at the end of the 14 day treatment period.

Changes in other depression-related scales measured such as MADRS, HAM-A and SDQ were consistent with the changes in HAM-D.

Changes in MADRS, HAM-A and SDQ were consistent with the changes in HAM-D.

While the study was not powered to show differences between dose levels, there was no notable dose response observed, which is common amongst trials of antidepressants.

Reduction in HAM-D total score observed in MDD patients treated with PRAX-114.

Reduction in HAM-D total score observed in MDD patients treated with PRAX-114 in Part A.

After 14 days of treatment, patients were monitored for an additional 14 days.

During this monitoring period, the core mood symptoms measured by the HAM-D generally remained stable with a slight increase in the insomnia item scores post-treatment.

While our Phase 2a trial is not placebo controlled, prior randomized placebo-controlled MDD trials provide important context for the interpretation of the clinical response.

The marked improvements in HAM-D scores seen in MDD patients in Part A within two weeks of treatment compares favorably to published reports on changes in HAM-D scale in clinical trials of approved antidepressants such as vortioxetine and duloxetine, among others, which commonly take approximately six to eight weeks to reach a maximal efficacy and often fail to differentiate from placebo at two weeks.

Moreover, mean HAM-D changes from baseline at Day 14 for the placebo group of these randomized controlled antidepressant trials are most often between 4-8 points.

While our Phase 2a trial was not placebo controlled, prior randomized placebo-controlled MDD trials provide important context for the interpretation of the clinical response.

The marked improvements in HAM-D scores seen in MDD patients in Part A within two weeks of treatment compares favorably to published reports on changes in HAM-D scale in clinical trials of approved antidepressants such as vortioxetine and duloxetine, among others, which commonly took approximately six to eight weeks to reach a maximal efficacy and often failed to differentiate from placebo at two weeks.

Moreover, mean HAM-D changes from baseline at Day 14 for the placebo group of these randomized controlled antidepressant trials were most often between 4-8 points.

Even at the first post-dose assessment on Day 3, patients dosed with PRAX-114 had a mean decrease of over 11 points on the HAM-D scale, which compares favorably with the average changes reported in the placebo groups at Day 14 from randomized studies completed for recently approved antidepressants (Figure 3), and other common antidepressants after several weeks of dosing.

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Across studies, the sample size in the placebo group ranged from 89 to 277.

PRAX-114 was generally well-tolerated across the dose range, including at the highest 80mg dose.

This is consistent with an expected wider therapeutic window based on the preferential selectivity of PRAX-114 for extrasynaptic GABA A receptors.

TEAEs were generally mild to moderate.

Rates of somnolence, which is characterized by sleepiness or drowsiness, increased with dose, demonstrating a pharmacological effect which was somewhat mitigated by dosing at night versus the morning.

With night-time dosing, 12/33 patients (36%) noted somnolence post-dosing, which was generally time-limited, not experienced during the daytime and substantially lower than the 78% reported in the Phase 1 60mg group with morning dosing.

There were no SAEs or discontinuations and study drug cessation at the end of the treatment period was generally well-tolerated.

In this MDD part of the trial, we also observed the following TEAEs in at least 2 subjects per dose level:

• 80mg dose (n=7), headache (42.9% of subjects), somnolence (42.9% of subjects), dizziness (57.1% of subjects), feeling drunk (28.6% of subjects) and diarrhea (28.6% of subjects).

• 60mg dose (n=13), headache (46.2% of subjects), somnolence (53.8% of subjects), dizziness (30.8% of subjects), feeling drunk (23.1% of subjects) and constipation (23.1% of subjects).

• 45mg dose (n=13), headache (53.8% of subjects), somnolence (15.4% of subjects), fatigue (23.1% of subjects), vessel puncture site bruise from blood draws (15.4% of subjects), abdominal distension (15.4% of subjects) and upper respiratory tract infection (15.4% of subjects).

Across all dose levels studied, headache (48.5%), somnolence (36.4%), dizziness (24.2%), fatigue (15.2%), feeling drunk (15.2%), constipation (12.1%) and vessel site puncture bruise (12.1%) were reported in >10% of subjects.

Part B ongoing

We are currently conducting Part B of this trial in order to assess PRAX-114 in PMD patients.

We are dosing up to twelve patients with PMD with 60mg of PRAX-114 nightly at 9:30PM for 14 days on an outpatient basis.

Part B results

Part B of this trial assessed the effect of PRAX-114 on menopausal and mood symptoms in PMD patients.

Six participants with PMD received 60mg of PRAX-114 nightly at 9:30PM for 14 days on an outpatient basis.

The dose for this part of the trial was selected based on the data from Part A.

Inclusion criteria for Part B are similar to Part A and C, except that it requires participants to be females of 40 years of age or older with irregular menses and hot flushes.

Part B will help to determine if PRAX-114 has an effect on broader menopausal symptoms, like hot flushes, in addition to confirming the antidepressant effect.

We anticipate topline results in the second half of 2021.

Inclusion criteria for Part B were similar to Part A and C, except that Part B required participants to be females of 40 years of age or older with irregular menses and a minimum of four hot flushes per day averaged over the week prior to PRAX-114 dosing.

Daily treatment of PRAX-114 in Part B showed a rapid and marked decrease in menopausal symptoms throughout the 14-day treatment period.

Treatment with PRAX-114 resulted in mean decreases from baseline at Day 15 of 60% in frequency of moderate-to-severe hot flashes and 68% in the total score of the Perimenopausal Depression Questionnaire, or Meno-D, a 12-item, self-reported questionnaire assessing the presence and severity of symptoms of PMD.

At Day 28, two weeks following discontinuation of treatment, frequency of moderate-to-severe hot flashes and Meno-D total score trended toward baseline.

Daily treatment of PRAX-114 in Part B showed a rapid and marked decrease in mood symptoms throughout the 14-day treatment period.

Treatment with PRAX-114 resulted in mean decreases from baseline at Day 15 of 47% in the HAM-D total score.

Changes in MADRS, HAM-A and SDQ were consistent with the changes in HAM-D, and similar to the observations with hot flushes and the Meno-D, the HAM-D total score trended toward baseline at Day 28, two weeks following discontinuation of treatment.

Part C results

Part C of this trial has been completed.

The goal of Part C was to evaluate the safety of four-week outpatient dosing with PRAX-114, similar to the study duration of our Phase 2/3 trial, and the treatment effect profile from Day 15 to Day 28.

The goal of Part C was to evaluate the safety of four-week outpatient dosing with PRAX-114, similar to the study duration of our ongoing Aria Study, and the treatment effect from Day 15 to Day 28.

Inclusion criteria and symptom assessments were the same as Part A.

Part C, however, was conducted in Melbourne Australia from June through October 2020, a period of highly restrictive public health lockdown due to the COVID-19 pandemic with closing of non-essential businesses, limited access to healthcare facilities, nightly curfews and restriction of residents to their homes except for essential healthcare or safety reasons.

Only one person per household could travel up to 5 km to purchase essential supplies once per day.

While the conduct of Part C continued through this period, the public health intervention required an abrupt change to the use of telehealth administered clinical efficacy assessments, mailed self-report assessments, and courier delivery of study drug to participants.

These revisions in study conduct successfully supported consistent site and participant adherence to study procedures and study drug administration through completion of Part C.

The experience managing these impacts has been integrated into the design and operationalization of the planned Phase 2/3 clinical trials with PRAX-114 in MDD.

However, due to restrictions imposed by the COVID-19 pandemic, we changed to the use of telehealth administered clinical efficacy assessments, mailed self-report assessments, and courier delivery of study drug to participants, which supported consistent site and participant adherence to study procedures and study drug administration through completion of Part C.

We used our experience from Part C to inform the design and operationalization of the Aria Study.

A total of thirteen participants were enrolled and completed a nightly 9:30 PM dose of PRAX-114 at 60mg for four weeks.

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The remaining patients were not being treated with any antidepressant for the current episode before enrolling in the trial.

PRAX-114 was generally well-tolerated, without a change in safety profile, after four-weeks of 60mg once nightly 9:30 PM outpatient dosing in Part C.

We observed no new patterns of AEs in the Day 15 to Day 28 treatment period or post-discontinuation after four-week treatment compared to Part A.

In this part of the MDD trial, we observed the following TEAEs in at least 2 subjects with 60mg PRAX-114:

• Headache (46% of subjects), somnolence (31% of subjects), feeling abnormal (15% of subjects), fatigue (15% of subjects), dry mouth (15% of subjects), nasopharyngitis (15% of subjects), weight decreased (15% of subjects) and nausea (38% of subjects).

• Examination of the nausea AEs, which have been infrequent in prior studies, found patterns inconsistent with direct pharmacological effects in four out of five cases (two cases with onset immediately upon drinking PRAX-114 suspension, one case with 10 min duration in the morning for 7 days, and one case preceding an AE of nasopharyngitis).

Dosing with PRAX-114 for four weeks led to a rapid and marked improvement in the HAM-D score (Figure 10) within two weeks of treatment, with LS Mean improvement of 11 points at Day 15 remained stable through the end of the active treatment period).

Dosing with PRAX-114 for four weeks led to a rapid and marked improvement in the HAM-D score (Figure 4) within two weeks of treatment, and LS Mean improvement of 11 points at Day 15 remained stable through the end of the active treatment period.

Reduction of HAM-D total score observed in MDD patients treated with PRAX-114 in Part C.

Data from Part B to date shows a safety profile similar to Parts A and C.

The preliminary data show that dosing with PRAX-114 led to a marked improvement in the HAM-D score within two weeks of treatment.

We expect complete topline data from Part B of the trial in the second half of 2021.

Overall, dosing with PRAX-114 led to a marked reduction in HAM-D score during the treatment periods in Parts A, B and C, with symptom improvement evident upon follow-up in the MDD populations in Parts A and C and trending toward baseline in Part B.

Changes in MADRS, HAM-A and SDQ (and menopausal symptom assessments in Part B) were consistent with the changes in HAM-D.

More than 70% of participants from all parts of the study had previously received an antidepressant during the current depressive episode but still had moderate-to-severe MDD.

Preliminary data show greater than 60% of patients were responders or clinically in remission at two weeks.

All cohorts demonstrated good tolerability.

Pharmacokinetics bridging study

To date, we have conducted all studies with PRAX-114 using a liquid, suspension formulation.

For our registrational studies and subsequent potential commercial use of PRAX-114, we have developed a tablet formulation.

In a clinical PK bridging study, PRAX-114 was administered as a solid dose (i.e., tablet) formulation in single ascending doses of 40mg, 60mg and 80mg and compared to PRAX-114 suspension administered at the 60mg dose.

The PK of the tablet formulation was found to be comparable to the suspension formulation at the 60mg dose level (Figure 11).

Administration of the 60mg tablet formulation under fasted conditions resulted in a median tmax of ~1.0 hour, Cmax of ~400ng/mL, AUCinf of ~2600 hr*ng/mL and t1/2 of ~11-12 hours, similar to the 60mg oral suspension.

Exposure to PRAX-114 increased approximately proportional to dose.

PRAX-114 dose-ranging pharmacokinetic study of tablet formulation and PRAX-114 pharmacokinetic bridging study of suspension and tablet formulations.

Arithmetic means are displayed with standard deviations at each collection time point.

When PRAX-114 is administered prior to bedtime on an empty stomach or with a high-fat or high- calorie meal, the rate of absorption is reduced, resulting in a delay in tmax and reduction in Cmax, while AUC is generally unchanged as compared to fasting conditions.

Thus, PRAX-114 maintains consistent overall exposure across a wide range of administration conditions within the evaluated dose range, and the reduction in Cmax observed with evening dosing appears to be associated with an improved tolerability profile.

Daily administration of 20, 40 and 60mg in the morning under fasted conditions for 14 days resulted in increases in exposure (Cmax and AUC0-24) from Day 1 to Day 7 and was generally comparable between Day 7 and Day 14, with Cmax accumulation ratios of approximately 1.3 consistent with the half-life of PRAX-114 and anticipated achievement of steady-state within two to three days.

Overall, the PK profile of PRAX 114 has demonstrated consistent drug exposure across a wide range of administration conditions, demonstrating a consistent AUC when administered with or without food and at different times of day, and enabling once daily administration at bedtime without the need for additional patient instructions.

Planned PRAX-114 clinical trials

In October 2020, we submitted an IND to support the initiation of a Phase 2/3 clinical trial in the United States and Australia in approximately 200 moderate to severe MDD patients.

At the end of the 30-day review period, the FDA notified us that the IND was placed on full clinical hold pending the resolution of certain non-clinical pharmacology and toxicology matters.

We subsequently interacted with FDA to gain agreement on a path to initiate the clinical study, which included a proposal to submit available non-clinical data while other GLP reproductive toxicology studies were being completed.

Based on this submission the FDA removed the clinical hold in March 2021.

We are operationally ready and intend to initiate the Phase 2/3 monotherapy MDD trial by the end of March 2021.

In addition to the Phase 2/3 monotherapy trial, we intend to initiate a Phase 2 dose range finding, or DRF, trial for adjunctive treatment of MDD in the third quarter of 2021 to inform dose selection for Phase 3 and provide controlled data to support advancing a Phase 3 adjunctive MDD trial.

Patients in the Phase 2/3 trial will be randomized 1:1 to receive nightly bedtime doses of PRAX-114 or placebo for 28 days in a fully outpatient setting, with two-weeks of additional follow up after the end of the active treatment period.

Patients will be required to be between the ages of 18 and 65, have a diagnosis of MDD with a current episode of at least 8 weeks and not more than 24 months in duration, have a HAM-D total score of 23 or higher consistent with moderate to severe MDD, and have had at least one prior episode of MDD .

Participants will be excluded if they are currently being treated with an antidepressant, have demonstrated an inadequate response to antidepressant treatment in the current episode or have treatment resistant depression, or if they have comorbid medical or psychiatric conditions that could interfere with the scientific objectives or safety of the trial.

The primary efficacy endpoint will be change in the HAM-D total score from baseline at Day 15.

A key secondary endpoint will

be change in the HAM-D score after 28 days of treatment to assess the durability of effect of PRAX-114, and we will also evaluate changes in other depression-related assessments.

As previously described, the initially targeted PRAX-114 oral suspension dose of 45mg was projected to result in the targeted degree of reduction in the HAM-D in patients with MDD.

This dose demonstrated rapid and robust improvement in the HAM-D in the Phase 2a MDD trial that was equivalent to the improvement observed in the higher dose groups (60 and 80mg).

While all doses were generally well-tolerated and no participants from Part A discontinued from the study due to AEs, the 45 mg dose group demonstrated an optimal benefit/risk profile to guide dose selection for the Phase 2/3 MDD study.

These data, in combination with the β-EEG pharmacodynamic biomarker data and the results of the PRAX-114 PK bridging study led to selection of a 40mg PRAX-114 tablet dose for the Phase 2/3 trial.

Based on these data, the 40mg PRAX-114 tablet is expected to yield therapeutic exposures that result in effects consistently at or slightly higher than previously seen with the 45mg of the PRAX-114 suspension.

We believe rigor in clinical conduct is essential for a study in MDD to appropriately mitigate historical variability in placebo effect, data reliability and the impact of current social and environmental changes caused by the COVID-19 pandemic.

Our operational plan focuses on enrolling the right patients, minimizing placebo response and data variability and ensuring achievement of targeted drug exposure thorough direct verification of study drug adherence.

Steps to advance these objectives include:

• Enrollment of patients with moderate to severe MDD and at least one prior episode of MDD (recurrent depression has been associated with a lower placebo response rate).

• Using sites with a known track-record of high quality data generation and drug-placebo separation in the conduct of MDD trials.

• Integration of a placebo control reminder script at every visit and screening for potential duplicate subjects via a dedicated clinical trial registry.

• Inclusion of the AiCure smartphone-based adherence monitoring system with structured site intervention to address participant adherence issues.

In parallel with the conduct of the Phase 2/3 trial in MDD, an exploratory DRF trial is planned to evaluate additional PRAX-114 doses for inclusion in pivotal Phase 3 studies in MDD.

Given that comparable improvement in the HAM-D was observed in all doses (45, 60 & 80mg) examined in the Phase 2a MDD study, this trial will additionally explore the efficacy of lower doses of PRAX-114 to determine the optimal dose range to include in the Phase 3 development program.

The planned population for this study is MDD participants who have demonstrated an insufficient response to standard of care antidepressant treatment, based on the following rationale:

1) The preliminary efficacy of PRAX-114 was demonstrated in a MDD population with a majority of participants having demonstrated an insufficient response to standard of care antidepressant treatment, supporting the suitability of this population for efficacy signal detection;

2) to extend these preliminary efficacy findings by generating controlled data for the efficacy of PRAX-114 in the adjunctive MDD population to inform Phase 3 study design in that population;

and 3) to support concurrent conduct of the MDD development program studies while realizing data quality and operational efficiency benefits resulting from conducting the DRF study at a subset of the clinical research sites participating in the Phase 2/3 study in MDD.

Patients in this study will be randomized to receive 10, 20, 40, or 60mg adjunctive PRAX-114 or placebo in a 1:1:1:1:1 ratio for 28 days, with 2 weeks of additional follow up after the end of the active treatment period.

This trial will enroll approximately 125 patients between the ages of 18 and 65 who are experiencing a current major depressive episode of at least 12 weeks and not more than 24 months in duration, who are being treated with an antidepressant at a stable dose for at least 8 weeks prior to Day 1 and have demonstrated an insufficient clinical response to 1 to 2 adequate trials of antidepressant treatment in the current episode, and who have had at least one prior episode of MDD responsive to antidepressant treatment.

Exclusion criteria will be similar to the Phase 2/3 study, with the exception of the insufficient response exclusion.

The objective to assess the presence of a dose-response signal for adjunctive PRAX-114 in MDD will use the primary efficacy endpoint of the change from baseline in HAM-D total score at Day 15.

Secondary objectives will include evaluating the efficacy for each dose of

adjunctive PRAX-114 in MDD and the effect of adjunctive PRAX-114 on the HAM-D after 28 days of treatment and impact on other depression-related assessments.

This trial will employ the full set of clinical trial quality interventions summarized above for the Phase 2/3 study, and the topline data is planned to be delivered in parallel with the Phase 2/3 monotherapy MDD study.

Upon completion of Part B of our Phase 2a trial, we intend to have a meeting with regulators to discuss further development of PRAX-114 in PMD.

We also observed in each part of the Phase 2a trial that greater than 50% of patients were responders at two weeks.

Combined Safety Results Summary (Parts A, B and C)

In the Phase 2a study overall, PRAX-114 suspension formulation was generally well-tolerated across the dose range in 52 participants with MDD and PMD, including at the highest 80mg dose in Part A.

Treatment-emergent adverse events, or TEAEs, were generally mild to moderate (Table 5).

There were no serious adverse events, or SAEs, and study drug cessation at the end of the treatment period was generally well-tolerated.

There was one discontinuation from the study due to AEs in a Part B participant of moderate daytime sedation and mild feeling abnormal.

The most common AEs were headache, somnolence, and dizziness.

With night-time dosing, 17 out of 52 patients (33%) noted somnolence post-dosing, which was generally time-limited, not experienced during the daytime.

Preferred Term

45 mg* (N=13)

Overall (N=52)

Feeling abnormal

*Includes participants from Part A only.

In Part A, PRAX-114 was administered at daytime of Day 1, nighttime of Days 2-14.

TEAEs reported in ≥10% of participants across all parts

of the PRAX-114 Phase 2a study (Parts A, B and C).

Phase 1 trials in healthy volunteers

Phase 1 SAD clinical trial

We conducted a Phase 1 randomized, double-blind, placebo-controlled single ascending dose, or SAD, trial of PRAX-114 suspension formulation in healthy volunteers to evaluate safety and tolerability of PRAX-114.

This trial enrolled 36 volunteers who were randomized into cohorts dosed with 1mg, 3mg, 10mg, 30mg or 60mg of PRAX-114 or placebo.

In this trial, we observed fast absorption of PRAX-114 within one to three hours of dosing and approximately dose-proportional increases in peak concentration and total drug exposure.

PRAX-114 was generally well-tolerated and no SAEs were reported in this trial.

Phase 1 MAD clinical trial

We subsequently conducted a Phase 1 randomized, double-blind, placebo-controlled multiple ascending dose, or MAD, trial in healthy volunteers in Australia to evaluate the safety, tolerability and PK of PRAX-114 suspension formulation and to assess the effect of food on drug exposure.

Thirty-six volunteers were randomized to receive daily doses of 15mg, 30mg or 60mg of PRAX-114 or placebo for 14 days.

Ten additional volunteers in a food effect cohort received 30mg doses of PRAX-114 when they were in a fasted state or with a high-fat meal.

As part of this trial, we evaluated the effect of PRAX-114 on qEEG to understand the potential pharmacodynamic effect of PRAX-114 on GABA A receptor activation.

An EEG is a real-time, non-invasive measure of electrical activity of neurons in the brain.

The frequency and amplitude of the detected electrical signals provide insights into brain function and brain state ( e.g.

, awake, deep sleep, etc).

qEEG is a quantitative measure of the changes in brain activity in specific EEG frequency bands in response to treatment with a brain-active compound.

Changes in power in the beta frequency band, specifically, are used as a pharmacodynamic biomarker of GABA A receptor activation in response to a brain active compound.

In this trial, we observed fast absorption of PRAX-114 within one to three hours of dosing and approximately dose-proportional increases in peak concentration and total drug exposure.

The half-life of the drug was between 12.2 and 14.8 hours, consistent with a once-daily dosing regimen.

Little or no accumulation of the drug was observed over the ranges of doses tested.

We believe that the potentially simple nightly administration of PRAX-114 with or without food is key for clinical, and, if approved, commercial success in MDD, as many patients struggle with adherence to medication and forcing a dietary regimen would impose further complications in this vulnerable population.

In the food effect cohort of the MAD trial, overall drug exposure as measured by AUC of PRAX-114 increased by only 1.17-fold in the fed state versus in the fasted state.

The primary effect caused by food intake was observed in the Cmax, which was 0.64-fold of that observed under fed conditions.

These findings indicate that PRAX-114 may not need to be taken with food to achieve therapeutic exposures, which we believe could create a potential competitive advantage over drugs that may require administration with food to achieve consistent target exposures, and could allow flexibility to adjust to the comorbid changes in appetite and preferences of MDD patients.

We measured changes in qEEG power in our Phase 1 MAD volunteers to assess the effect of PRAX-114 on GABA A receptors in the brain on Days 1 and 14 of this trial.

PRAX-114 produced marked increases in the power of the alpha and beta-frequency bands.

Increases in the beta-frequency band are correlated with GABAergic activation, as previously shown by the marketed GABA A PAMs.

We believe the qEEG measurements observed for

PRAX-114 were consistent with its extrasynaptic GABA A receptor preference and differentiated pharmacological profile relative to benzodiazepines and other GABA A PAMs in the class.

Moreover, the increases in alpha and beta-frequency were strongly correlated with dose and PRAX-114 levels in the blood.

These increases on the qEEG alpha and beta power were sustained at Day 14.

These data show that PRAX-114 engaged GABA A receptors in the brain and produced consistent increases on qEEG within the first hour after dosing with similar increases on Days 1 and 14.

This finding was also consistent with the pharmacologic activity and qEEG data from our preclinical studies, where a 1.6-fold increase in beta power was associated with robust activity in animal models of anxiety and depression and was used to inform dose selection in subsequent clinical trials.

Notably, PRAX-114 showed increases in beta power up to 2.8-fold without achieving a MTD or demonstrating any SAEs.

PRAX-114 (30mg and 60mg) showed a robust dose-dependent qEEG signal and target activation that was sustained over 14 days of dosing.

In this trial, PRAX-114 was generally well-tolerated, with no SAEs reported.

The reported TEAEs were mild to moderate and were consistent with those expected for the potential mechanism of action.

The most common TEAE was somnolence, which is characterized by sleepiness or drowsiness, and all events of somnolence were mild in severity.

Increases in sleepiness as measured by the Stanford Sleepiness Scale occurred between one- and three-hours post-dosing, consistent with the period of peak drug concentrations;

sleepiness ratings at the 60mg dose were similar to placebo within 4 hours post-dose.

Other common TEAEs were dizziness and hypoaesthesia, or a diminished sense of touch.

TEAEs observed in more than one subject were euphoric mood, hyperhidrosis, or excessive sweating, muscle twitching, skin irritation and fatigue.

In the placebo group, we observed fatigue in 22.2% of subjects.

TEAEs appearing to be dose-related were somnolence, dizziness headache, euphoric mood and hypoaesthesia.

We did not observe a maximally tolerated dose, or MTD.

We believe the tolerability results observed of PRAX-114 suggest the potential for a wider therapeutic window, increased adherence and a wider dose range for MDD patients.

Phase 1 pharmacokinetics bridging study

In preparation for our randomized, placebo-controlled trials in MDD, we conducted a clinical PK bridging study in which PRAX-114 was administered as a solid dose ( i.e.

, tablet) formulation in single ascending doses of 40mg, 60mg and 80mg or placebo in seventeen participants and compared to PRAX-114 suspension formulation administered at the 60mg dose.

The PK of the tablet formulation was found to be comparable to the suspension formulation at the 60mg dose level.

Overall, PRAX 114 showed demonstrated consistent drug exposure across a wide range of administration conditions and demonstrated a consistent AUC when administered with or without food and at different times of day, which we believe could enable once daily administration at bedtime without the need for additional patient instructions.

PRAX-114 clinical development in PTSD

We are conducting a Phase 2, placebo-controlled study evaluating PRAX-114 for the treatment of PTSD and expect to report topline results in the second half of 2022, which will guide decision making for subsequent development of PRAX-114 in the PTSD population.

Patients in the Phase 2 trial will be randomized 1:1 to receive nightly bedtime doses of PRAX-114 or placebo for 28 days in an outpatient setting, with two-weeks of additional follow up after the end of the active treatment period.

Dose selection was based on similar considerations to those that informed dose selection for the Aria Study and the Acapella Study.

Since it is not known whether there may be dose response differences between MDD and PTSD with this drug mechanism, a flexible-dose approach in the range that showed positive results in the Phase 2a MDD study was included in the design of this study.

Participants treated with PRAX-114 will receive 40mg on Days 1 to 14;

on Day 15, those PRAX-114 participants not achieving at least a 20% reduction in PTSD symptoms, as measured by the Clinician-Administered PTSD Scale for DSM-5, or CAPS-5, total score, will receive an increase to 60mg from Days 15 to 28 unless tolerability concerns preclude a dose increase.

CAPS-5 is a 30-item structured interview that is the gold standard in PTSD assessment, with versions that can be used to make a current diagnosis of PTSD and to assess PTSD symptoms over the past week.

Patients will be required to be between the ages of 18 and 65, have a diagnosis of PTSD with a duration of at least six months, have a CAPS-5 total score of 30 or higher consistent with moderate-to-severe PTSD, and either currently not treated with psychiatric medications or taking no more than one antidepressant within the labeled prescribing dose range for a minimum of three months prior to screening, with the intent to remain on a stable dose throughout the trial.

Participants will be excluded if they have comorbid medical or psychiatric conditions that could interfere with the scientific objectives or safety of the trial.

The primary efficacy endpoint in this study is the change from baseline in the CAPS-5 total score after 28 days of treatment.

A key secondary endpoint will be change from baseline in the CAPS-5 score after 14 days of treatment to assess the rapidity of onset of the treatment effect of PRAX-114 in PTSD.

We expect to employ similar clinical trial quality interventions to those summarized above for the Aria Study and the Acapella Study.

PRAX-114 preclinical data

The goal of our preclinical program was to establish the in-vitro and in-vivo pharmacological profiles, antidepressant potential and tolerability of PRAX-114.

In addition, we evaluated translational pharmacodynamic biomarkers to inform clinical development.

Antidepressant activity

To determine the antidepressant-like activity of PRAX-114, we used the Wistar Kyoto, or WKY, rat model.

The WKY rat is an inbred rat strain that has increased sensitivity to stress and displays a depressive-like phenotype that is resistant to SSRI and SNRI treatment.

A common way to assess depressive-like symptoms in animals is a test known as the forced swim test, or FST.

The FST is based on the natural behavior of an animal when placed in a container filled with water from which it cannot escape.

The rat will first make efforts to escape by swimming or climbing, but eventually will exhibit floating behavior, which is an indication of behavioral despair and is seen as a surrogate for depression.

WKY rats display longer time inactive (floating) over a given time period than normal rats as an indication of increased behavioral despair.

We administered oral doses of PRAX-114 or a placebo to WKY rats and evaluated performance on the FST.

At all doses of PRAX-114 tested, 1mg/kg, 3mg/kg and 10mg/kg, we observed a significant reduction in immobility time compared to rats that received a placebo, which we believe reflects an anti-depressive-like reaction or activity of PRAX-114.

Importantly, and as described below, at these doses, PRAX-114 did not impair or enhance overall spontaneous activity of the rats in independent assays in the same animals, which we believe indicates that PRAX-114 was generally well-tolerated at these doses.

A common model to assess sedation in rats is the measure of spontaneous locomotor activity, or sLMA.

Dosing rats with sedatives dose-dependently reduces their spontaneous movement in this assay.

In this model, doses of PRAX-114 up to 30mg/kg had no significant impact on spontaneous locomotion, while doses as low as 1mg/kg had significant antidepressant-like effects in the WKY rat model, demonstrating a wide therapeutic window in these models with preclinical activity at doses well below sedative doses.

We believe that the therapeutic window observed in our in-vivo assays is consistent with the preference of PRAX-114 for extrasynaptic GABA A potentiation observed in-vitro .

EEG as a pharmacodynamic biomarker

In our preclinical studies of PRAX-114, we evaluated translational pharmacodynamic biomarkers to inform clinical development.

In our rat translational biomarker model, we administered PRAX-114 to wild-type rats at doses ranging from 1 to 20mg/kg to assess the impact on power in the beta frequency band.

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This EEG biomarker was used to inform dose-selection for PRAX-114 clinical studies.

In our Phase 1 MAD trial, healthy volunteers administered the 30mg dose of PRAX-114 displayed an approximately 1.6-fold increase in qEEG beta power compared to baseline.

In our preclinical studies, doses (and plasma/brain concentrations) that induced a 1.6-fold increase in the beta frequency power in rats were associated with both robust preclinical activity in animal models of depression and anxiety and good tolerability.

Specifically, the PRAX-114 dose that is estimated to induce a 1.6-fold increase in EEG beta power activity in rats was efficacious in the rat WKY model of depression and the window between that dose that increased beta power by 1.6-fold increase in EEG and the dose that caused a 50% reduction of spontaneous locomotion in the sLMA sedation assay, or ED 50 , was ~11-fold, based on brain concentrations.

In addition, at this generally well-tolerated brain concentration, PRAX-114 was efficacious in animal models of anxiety including conditional emotional response, or CER, punished drinking, or Vogel, and elevated plus maze, or EPM (Figure 12).

anxiety and good tolerability.

Specifically, the PRAX-114 dose was estimated to induce a 1.6-fold increase in EEG beta power activity in rats led to activity in the rat WKY model of depression and the window between that dose that increased beta power by 1.6-fold increase in EEG and the dose that caused a 50% reduction of spontaneous locomotion in the sLMA sedation assay, or ED 50 , was ~11-fold, based on brain concentrations.

In addition, at this brain concentration, PRAX-114 showed activity and was generally well-tolerated in animal models of anxiety including conditional emotional response, or CER, punished drinking, or Vogel, and elevated plus maze, or EPM (Figure 7).

In the figure below, the lower bound of the preclinical activity in animal models and EEG bars are determined by the brain exposure at the lowest dose at which significant activity was observed (p < 0.05).

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Summary of PRAX-114 preclinical data.

Based on our findings in preclinical models, we believe our initial results in humans are supportive of a wide therapeutic window which, in humans, begins at or below a daily dose of 30mg of PRAX-114 and extends to higher doses prior to the onset of potential dose-limiting somnolence or sedation.

Our clinical studies to-date suggest that PRAX-114 doses up to 80mg, the highest we have tested in humans, remain generally well-tolerated.

We have yet to identify the MTD.

We are developing PRAX-944, a potentially differentiated selective small molecule inhibitor of T-type calcium channels, for the treatment of ET.

We have evaluated the safety and tolerability of PRAX-944 in over 150 healthy volunteers in five separate clinical trials.

In these trials, we have studied the safety of PRAX-944 modified release formulation with titration up to 120mg/day and no MTD has been identified.

We are currently conducting a Phase 2a proof-of-concept open-label trial in ET patients.

Preliminary site data from six participants of the low dose cohort (maximum dose of 40mg daily) showed tremor reduction, which seems to compare favorably to the standard of care agents.

We plan to announce topline open-label safety, tolerability and efficacy data, including a high dose cohort, in mid-year 2021.

There is a large body of clinical, preclinical and genetic evidence that points to the involvement of T-type calcium channels in the cerebello-thalamo-cortical, or CTC, circuit, as a main driver of ET.

ET is the most common movement disorder, affecting up to seven million patients in the United States, which is seven times more individuals compared to Parkinson’s tremor.

ET is a progressive and debilitating movement disorder with action tremors that significantly disrupt daily living.

There is a high unmet need for ET patients given the limited treatment options, with only one approved pharmacotherapy that is poorly tolerated, resulting in high discontinuation rates and a small group of patients opting for invasive brain surgeries.

Successful development of T-type calcium channel modulators in ET likely requires a PK profile with a blunted Cmax and thoughtful clinical trial design and endpoint selection.

We have designed our development program to include careful selection of clinical endpoints, a modified release formulation and dose titration strategy.

We believe the profile of PRAX-944 coupled with its modified release formulation positions it for development as a differentiated therapy in ET.

Because of the gatekeeper role of T-type calcium channels in regulating neuronal firing patterns in multiple neuronal circuits, we believe PRAX-944 is suitable for potential development across a wide-range of indications in psychiatry and neurology, providing sizable expansion opportunities in addition to ET.

MOVEMENT DISORDERS

Our Movement Disorders franchise is currently focused on the two most prevalent movement disorders, ET and PD.

We are developing PRAX-944, a potentially differentiated selective small molecule inhibitor of T-type calcium channels, and PRAX-114 for the treatment of ET, with the goal of allowing patients to fit the right therapy to their needs and on an as-needed or chronic basis.

ET is the most common movement disorder, affecting up to seven million patients in the United States, and is a disease associated with debilitating action tremors triggered when a patient voluntarily attempts to move.

There is a high unmet need for patients given limited treatment options, with only one approved pharmacotherapy that offers limited efficacy and poor tolerability.

For PRAX-944, there is a large body of clinical, preclinical and genetic evidence that points to the involvement of T-type calcium channels in the cerebello-thalamo-cortical, or CTC, circuit, as a main driver of ET.

We have designed our development program to include clinical endpoints assessing how a patient feels and functions, a modified release formulation designed to provide a blunted Cmax for tolerability and sustained exposures throughout the day, and dose titration strategy to optimally reach therapeutic levels.

We believe the design of PRAX-944, coupled with its modified release formulation, positions it for development as a differentiated therapy in ET.

We intend to initiate a registrational study for PRAX-944 for the treatment of ET, pending receipt of positive topline results from the Phase 2b randomized controlled dose-range finding Essential1 Study, which are expected in the second half of 2022.

For PRAX-114, the GABA neurotransmitter system is hypothesized to play an important role in ET, and several available treatment options appear to work via GABAergic mechanisms directly or indirectly (primidone, topiramate, propranolol).

In the PRAX-114 Phase 2 placebo-controlled, crossover study for the treatment of ET, we intend to evaluate whether there is an appropriate dose of PRAX-114 for daytime administration that enables reduction in tremor without somnolence or sedation that will guide decision making for subsequent development of PRAX-114 in the ET population.

We are also developing PRAX-944 as a potential non-dopaminergic therapy for PD.

T-type calcium channels in the CTC are also implicated in the modulation of motor circuits in PD and there is preclinical evidence which suggests blocking T-type calcium channels may support improvement of motor activity in PD models.

We intend to initiate a Phase 2 POC study of PRAX-944 for the treatment of PD in the second quarter of 2022 to evaluate motor function improvement in patients and subsequently determine development and regulatory pathways.

Because of the gatekeeper role of T-type calcium channels in regulating neuronal firing patterns in multiple neuronal circuits, we believe PRAX-944 is suitable for potential development across a wide range of indications and potentially sizable expansion opportunities in addition to ET.

For the treatment of ET with PRAX-944, we have evaluated the safety and tolerability in approximately 200 healthy volunteers and patients in seven completed and two ongoing studies.

We are conducting the Essential1 Study to evaluate the tolerability, safety and efficacy of PRAX-944 in adults with ET.

We have also completed enrollment in a two-part open-label Phase 2a proof-of-concept trial in ET patients.

Data from six patients from Part A showed tremor reduction and that PRAX-944 was generally well-tolerated at one and two weeks in patients dosed up to 40 mg once daily, which compared favorably to historical placebo response.

Based on the Part A data and the observed safety results in the healthy volunteer titration study, we added a second cohort, Part B, to the Phase 2a trial in which patients are being titrated to a dose of up to 120mg/day of PRAX-944.

We have also included a randomized, double-blind, placebo-controlled withdrawal phase to Part B, during which participants will either be maintained on their final open-label dose or switched to placebo.

Preliminary open-label data as of December 10, 2021 from nine evaluable subjects in Part B showed favorable trends in tremor reduction and activities of daily living, or ADLs, in doses up to 120mg/day.

We plan to report topline results for Part B in the second quarter of 2022, including both open-label and placebo-controlled, randomized withdrawal results.

We have also studied the safety of PRAX-944 modified release formulation with titration up to 120mg/day and no MTD has been identified.

We expect to initiate a Phase 2 study evaluating daytime administration of PRAX-114 in ET patients in the first quarter of 2022.

The objective of this trial is to evaluate the safety, tolerability, PK and efficacy of PRAX-114 in the treatment of adults with ET.

The trial is comprised of two parts:

Part A and Part B.

Part A is a randomized, double-blind, placebo-controlled, three-period crossover design where all participants will receive a single dose of 10mg of PRAX-114, 20mg of PRAX-114, and matching placebo across three dosing days.

Part B is an open-label design where participants from Part A may receive either 10mg PRAX-114 for 28 days, or 10mg PRAX-114 for 14 days and then 20mg PRAX-114 for 14 days.

Topline results are expected to be reported in the second half of 2022.

The doses of 10mg and 20mg PRAX-114 were chosen based on pharmacological activity observed in clinical trials with healthy participants and clinical experience, to balance the known impact of GABAergic molecules on somnolence and sedation in older patients with ET.

Our PK-PD modeling predicts pharmacodynamic activity at concentrations resulting from daily administration of 10 and 20mg PRAX-114, hypothesized to be predictive of efficacy in ET based on preclinical harmaline-induced tremor data.

Additionally, data in healthy volunteers at 20mg during the day suggested a tolerable profile when assessed using the Stanford Sleepiness Scale, or SSS.

Thus, the selected dose levels present a favorable benefit/risk profile in ET based on the overall interpretation of the preliminary preclinical efficacy data, clinical PK and safety data (including safety AEs, SSS and EEG), qEEG biomarker data, and nonclinical safety data.

Essential Tremor

ET is the most common movement disorder, characterized by involuntary rhythmic movement in the upper limbs, with or without tremor in other body locations such as the head, vocal cords, or legs.

ET is a day-time disease associated with debilitating tremors triggered when a patient voluntarily attempts to move.

ET is characterized by involuntary rhythmic movement in the upper limbs, with or without tremor in other body locations such as the head, vocal cords, or legs.

ET is a daytime disease associated with debilitating tremors triggered when a patient voluntarily attempts to move.

These tremors significantly disrupt daily living and are progressive in nature, with increases in tremor severity and amplitude commonly observed over the course of the disease.

The upper-limb tremor can range from barely visible to greater than 20cm in amplitude.

Unlike Parkinson’s disease, which is characterized by a rest tremor, the tremor of ET occurs with movement and therefore causes direct disability, as people are unable to perform basic, every-day functions such as writing, typing, drinking or feeding themselves.

Given the debilitating physical challenges of the disease, ET has also been associated with high prevalence of comorbidities, including anxiety, depression and social phobia.

ET is a clinically well-recognized indication with defined diagnostic criteria established by The International Parkinson and Movement Disorders Society.

ET affects between one and two percent of the worldwide population and approximately five percent of adults over 60 years of age.

It is estimated that there are up to seven million individuals with ET in the United States, up to seven times more than the second most common movement disorder, Parkinson’s disease.

Despite the prevalence and significant disease burden of ET, only a fraction of patients (an estimated one million based on claims data) are managed with pharmacological therapy, though an estimated 80% of those that are treated discontinue these medications due to limitations in efficacy and tolerability.

We believe that the treated population will increase with the availability of new therapies with improved efficacy and tolerability.

Currently, there are only two drugs commonly used in ET.

Propranolol, approved by the FDA in 1967, remains the only currently approved therapy for ET in the United States.

ET is a heterogeneous disease with a range of patient characteristics including a variety of comorbidities, range of age, severity, and impact on daily living including psychosocial aspects.

Despite the prevalence and significant disease burden of ET, only approximately two million people in the United States are diagnosed with ET and only approximately one million are actively treated, based on U.S.

healthcare claims data as of 2019.

We believe that the low treatment rate is due to limitations in efficacy and tolerability of the existing treatment options, and that the treated population could increase with the availability of new therapies with improved efficacy and tolerability that allow for patients to stay on therapy longer and more patients to start therapy sooner.

There have been no approved pharmacotherapy products designed to treat ET and the two current products commonly used offer limited efficacy and poor tolerability, resulting in treatment delays and high discontinuation rates.

Propranolol, approved by the FDA in 1967, remains the only approved therapy for ET in the United States.

A non-selective beta blocker, propranolol is contraindicated for individuals with certain respiratory or cardiac issues, which are common comorbidities in the age group affected by ET.

Primidone, an anticonvulsant used off-label, requires slow titration over six to eight weeks and can cause sedation and balance issue while accelerating osteoporosis with long-term use.

Primidone, an anticonvulsant, is used off-label and can cause sedation and balance issues while accelerating osteoporosis with long-term use.

As a last line therapy, several thousand ET patients in the United States opt for invasive surgery each year.

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These procedures are generally effective, but are associated with significant side effects and risk.

Therefore, many patients who are eligible for surgical therapies do not elect to have these procedures.

A significant unmet need remains for the millions of ET patients that are not currently receiving treatment for their ET, or are underserved by existing treatment options.

We believe that the relatively concentrated ET treatment setting composed of mainly neurology and movement disorder specialists would allow for the rapid adoption of a new treatment option that offered robust response rates and an improved tolerability profile.

Therefore, many patients who are eligible for surgical therapies elect to not have these procedures.

Genetics of Essential Tremor

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Some of these epilepsy patients also suffer from comorbid movement disorders such as tremor and ataxia.

The odds of observing a T-type calcium channel mutation in the GGE population is 9 times of that of the healthy population.

The odds of observing a T-type calcium channel mutation in the GGE population is nine times of that of the healthy population.

This supports the key role of T-type calcium channels in maintaining excitation and inhibition balance.

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The importance of T-type Ca++ channels to the function of the CTC circuit is highlighted by variants in the CACNA1G gene which are associated with rare cases of pediatric cerebellar atrophy.

Additionally, mutations in the T-type calcium channel have also been reported as

causative of a form of spinocerebellar ataxia.

We believe this genetic link, along with the preclinical and clinical evidence, help confirm the role of T-type calcium channels in the pathophysiology of ET.

Additionally, mutations in the T-type calcium channel have also been reported as causative of a form of spinocerebellar ataxia.

We believe this genetic link, along with the preclinical and clinical evidence, support the role of T-type calcium channels in the pathophysiology of ET.

Role of T-type calcium channels in ET

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When only a small number of T-type calcium channels are activated, leading to small T-type calcium channel mediated membrane depolarizations, the neuron generally generates unitary action potentials, also called tonic firing.

When the activity of T-type calcium channels is increased, either due to genetic mutations or other changes in network activity that recruit more T-type calcium channels, a longer lasting depolarization is generated, resulting in high-frequency clusters of sodium channel driven action potentials, also called burst firing, as illustrated in the figure below.

T-Type calcium channels are gatekeepers of neuronal firing patterns.

Neuroimaging and neurophysiology studies in ET patients has consistently demonstrated that individual nuclei along the CTC circuit oscillate at the same frequency as the tremor and with strong coherence amongst the brain regions and movement in the affected muscles.

Further, intraoperative real-time single-unit recordings of action potentials of individual neurons in the ventral motor thalamus of severe ET patients receiving DBS implants, in periods with and without tremors, further substantiates the central role of the CTC circuit and T-type calcium channels in ET (Figure 14).

Neuroimaging and neurophysiology studies in ET patients have consistently demonstrated that individual nuclei along the CTC circuit oscillate at the same frequency as the tremor and with strong coherence among the brain regions and movement in the affected muscles.

When no tremor was observed at rest, tonic firing was recorded in neurons of the ventral motor thalamus.

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Thalamic neuron burst firing correlated with tremor activity in ET patients.

The role of the CTC circuit and T-type calcium channels has been further confirmed in animal models.

The role of the CTC circuit and T-type calcium channels has been further observed in animal models.

A known pharmacological tremor model utilizes administration of harmaline, an alkaloid toxin, to animals.

Harmaline, on administration to experimental animals such as rodents, induces an acute action tremor as well as rhythmic burst-firing activity in the CTC circuit similar to that observed in ET patients.

We believe this model carries clinically predictive value, as compounds that improve tremor in ET patients clinically (e.g., propranolol, primidone) have also been shown to reduce harmaline-induced tremor preclinically;

in contrast compounds that worsen tremor in patients (e.g., caffeine) also worsen tremor in this model.

Similar to what’s observed in ET patients, normalizing oscillatory activity in the CTC circuit, for example with DBS, reduces harmaline induced tremor in rodents.

Pharmacological inhibition or genetic knockout of T-type calcium channels lead to resistance to harmaline-induced tremor.

We believe this model carries clinically predictive value, as compounds that improve tremor in ET patients clinically ( e.g.

, propranolol, primidone) have also been shown to reduce harmaline-induced tremor preclinically;

in contrast compounds that worsen tremor in patients ( e.g.

, caffeine) also worsen tremor in this model.

Similar to observations in ET patients, normalizing oscillatory

activity in the CTC circuit, for example with DBS, reduces harmaline induced tremor in rodents.

Pharmacological inhibition or genetic knockout of T-type calcium channels led to resistance to harmaline-induced tremor.

Role of GABA A in ET

The GABA neurotransmitter system is hypothesized to play an important role in ET, and several available treatment options appear to work via GABAergic mechanisms directly or indirectly (primidone, topiramate, propranolol).

Studies in patients with ET have shown a reduction in GABA receptor binding capacity using positron imaging that also correlated with disease severity and a loss of GABAergic cerebellar Purkinje neurons in postmortem tissue that contributes to overall reduced inhibitory output from the cerebellum.

In animal models of harmaline-induced ET, the hypothesized reduction of GABAergic activity can be reversed with GABA A receptor modulation using benzodiazepines and other compounds that act at both synaptic and extrasynaptic GABA A receptors as well as NAS GABA A -PAMs that activate both synaptic and extrasynaptic GABA A receptors.

In addition, extrasynaptic GABA A receptor activation using highly selective agonists like THIP/gaboxadol, has been demonstrated to reduce tremor in the same model.

These data suggest that therapeutics that possess preferential extrasynaptic GABA A receptor activity, like NAS, may have greater efficacy in ET than molecules that primarily activate synaptic receptors ( e.g.

, benzodiazepines).

Parkinson's Disease

PD is a debilitating neurodegenerative disorder with about one million diagnosed patients in the United States and about 10 million worldwide.

Approximately 60,000 patients are diagnosed with PD each year in the United States alone.

PD is characterized by slow movement (bradykinesia), in combination with either rest tremor and/or rigidity.

Symptoms progress over time in severity and eventually affect both sides of the body, often impairing ADLs such as dressing and eating.

Non-motor symptoms, such as impaired smell, sleep disorders, gastrointestinal symptoms and psychiatric disorders like depression also play a pivotal role in the daily life of PD patients.

Degeneration of dopaminergic neurons in the mid-brain (specifically pars compacta of the substantia nigra, or SNc) results in loss of dopaminergic output.

Thus, the cornerstone of treatment for PD has been dopaminergic replacement therapy.

L-dopa, or levodopa, a formulation of replacement dopamine, is considered the standard treatment of PD.

Levodopa has been shown to be highly effective in improving symptoms of bradykinesia and rigidity, but has a variable impact on tremor.

Other common PD medications mainly reduce dopamine metabolism or are dopamine receptor agonists.

As the neuronal degeneration progresses, higher and more frequent levodopa is required due to diminishing responses to dopaminergic medication and an inability to store excess dopamine.

While chronic dopaminergic therapy is effective, it can result in distressing side effects of motor fluctuations (wearing off) and levodopa-induced dyskinesias, impulse control disorders, and psychosis.

These side effects are disabling and, at times, more severe and distressing than the PD symptoms themselves.

Patients may also opt for a more invasive procedure to deliver continuous dopamine stimulation with levodopa-carbidopa enteral suspension to continuously control motor fluctuations and dyskinesias.

Thus, symptom management using non-dopaminergic therapeutics that have a better safety and tolerability profile are needed.

Adjunctive therapies that alleviate PD symptoms could also indirectly reduce the need for dose escalations of dopaminergic therapies and thus lower the risk of side effects.

Advanced therapies, such as DBS, can be very effective for treating for tremors and motor complications by modifying basal ganglia function downstream of the nigrostriatal pathway.

Depending on the patient’s specific symptoms, DBS electrodes can be placed in either the globus pallidus interna, or gPi, nucleus ventralis intermedius, or VIM, of the thalamus, or the subthalamic nucleus, or STN, and may be affecting aberrant burst firing in these areas.

DBS is typically reserved for those patients who respond to dopaminergic therapy like levodopa but have residual symptons despite best medical management .

Further, DBS carries significant risks associated with brain surgery, including intracerebral hemorrhage, infection, hemiparesis and cognitive decline.

The prospect of neurosurgery in later years is often overwhelming or contraindicated ( e.g.

, due to presence of cognitive impairment), and many patients are not treated with DBS.

Thus, we believe there is a clinical need for a pharmacological therapy that could mimic the effects of DBS and modulate burst firing downstream of SNc.

Role of T-type calcium channels in PD

Animal models and human PD patient data from third-party studies demonstrate that degeneration of nigral dopaminergic neurons converts the subthalamic nucleus, or STN, from a tonic firing to an aberrant bursting phenotype.

This bursting activity drove symptoms of bradykinesia and rigidity in animal models and excessive

activation of T-type Ca2+ channels has been shown to underlie this phenotype.

T-type Ca2+ channels are expressed widely throughout the brain, including in the STN.

Eliminating this burst firing through blockade of T-type Ca2+ channels has been shown to improve motor function in a 6-hydroxydopamine (6-OHDA) rat model of PD.

Thus, we believe an inhibitor of T-type Ca2+ channels could offer a non-surgical and non-dopaminergic treatment option to alleviate motor symptoms in PD.

PRAX-944 in Essential Tremor

We are advancing a modified release formulation of PRAX-944, a potent and selective small molecule inhibitor of T-type calcium channels, for the treatment of ET.

We believe that our PRAX-944 program has several potential advantages in development for ET:

• Wide Therapeutic Window :

We are currently studying PRAX-944 across a wide range of doses, ranging from 5mg to 120mg.

Our goal is to find the appropriate dose(s) to meet the needs of different patients and help address a larger market by tailoring PRAX-944 to the key unmet need in ET as well as individual patient needs.

Importantly, no MTD has been identified to date.

• Simple Daytime Dosing :

We believe the ability to administer one-time daily dose is important for reducing the burden for ET patients that are treated chronically.

These patients are typically older and with multiple comorbidities where simplicity is important when adding medications.

• Modified Release Formulation :

We believe that PRAX-944 has the potential to provide a more attractive treatment option for ET patients due to its modified release, or MR, formulation, along with a wide potential therapeutic window that could allow for up-titration.

We have observed that the MR formulation, which released approximately 80% of the drug product over seven hours in vitro, reduced the maximum plasma concentration and delayed the tmax without meaningfully impacting the overall AUC.

We have also observed that this formulation resulted in improved tolerability relative to an immediate release, or IR, formulation and sustained targeted concentrations throughout the day.

PRAX-944 clinical development in ET

We have evaluated the safety and tolerability of PRAX-944 in over 150 healthy volunteers in five separate clinical trials.

In these trials, we have studied the safety of PRAX-944 modified release formulation with titration up to 120mg/day and no MTD has been identified.

We are currently conducting a Phase 2a proof-of-concept open-label trial in Australia and New Zealand in ET patients.

Preliminary site data from six patients of the low dose cohort showed tremor reduction, which seems to compare favorably to the standard of care agents.

We plan to announce topline open-label safety, tolerability and efficacy data, including a high dose cohort, in the first half of 2021.

Phase 1 trials in healthy volunteers using previous IR formulation

An immediate release, or IR, formulation of PRAX-944 was used in the initial Phase 1 trials and reached maximal plasma concentrations within one to three hours of dosing.

Adverse events like nausea were associated with the high peak levels.

This prompted the development of a modified release, or MR, formulation for PRAX-944 that extends the absorption of the drug over a longer period.

We have demonstrated that the MR formulation, which releases approximately 80% of the drug product over seven hours in vitro, reduces the maximum plasma concentration and delays the tmax without significantly impacting the overall AUC.

We have also observed that this resulted in improved tolerability relative to an immediate release, or IR, formulation and the ability to sustain targeted therapeutic concentrations.

The sustained exposure also enables once daily dosing (Figure 15).

Phase 2b Essential1 Study in patients with ET

We are conducting the Essential1 Study to evaluate the safety and efficacy of titration to PRAX-944 20mg, 60mg or 100mg with the objective of identifying the dose for a registrational study.

Participants in the Essential1 Study will be randomized to receive either 56 days of treatment with one of three PRAX-944 dose levels or placebo every morning.

Fixed titration regimens will be used.

The primary objective of this trial is to assess for the presence of a tolerability dose-response signal over 56 days of dosing in ET participants with moderate-to-severe tremor.

A secondary objective is to identify a potential dose-response profile for PRAX-944 with respect to efficacy outcomes.

This trial will also assess innovative approaches to objectively measure tremor in ET participants and will include a sub-study with a wearable device.

Together, these data, if supportive, are expected to enable dose selection for subsequent Phase 3 trials.

Topline data from this trial is expected to be reported in the second half of 2022.

Phase 2a trial in patients with ET

We are currently in the second of two cohorts of our Phase 2a POC open-label trial evaluating safety and efficacy in patients titrated up to 120mg per day.

In the first cohort, Part A, participants received 20mg daily dosing of PRAX-944 for one week followed by 40mg daily dosing for the second week, taken in the morning.

We have completed enrollment in an additional cohort, Part B, of ET patients dosing up to 120mg for up to 42 days.

We are measuring changes in tremor with different, complementary approaches including components of the Essential Tremor Rating Scale, or TETRAS, Performance Scale and accelerometry.

We are using change from baseline in the rating of upper limb, or UL, items of the TETRAS as the primary efficacy outcome in this proof-of-concept trial because all ET patients suffer from UL tremor.

As the UL items drive most of the score on the overall TETRAS and are more reliably rated than other items on the scale, we expect them to have the best signal to noise ratio.

UL items have also been the basis of the most recent regulatory approval of neurosurgical treatments for severe ET.

We have established rigorous procedures for training and for blinded scoring of efficacy, including using centralized video assessment as an exploratory endpoint, with randomization of the videos and masking to allow for rating concordance.

We have also included the overall TETRAS performance scale, or TETRAS-PS, (both site and central video rating) and Kinesia ONE accelerometer (an objective measure of tremor), clinical global impression of severity and improvement, or CGI-S and CGI-I, respectively, and the patient global impression of change, or PGI-C, as secondary endpoints to assess consistency of response across different endpoints.

In this trial, we are enrolling participants with well-established ET, as defined by the Movement Disorders Society Task Force for Tremor as an isolated tremor syndrome of bilateral UL action tremor with at least three years’ duration.

In Part A, tremor severity was evaluated before drug administration, after daily morning dosing of

PRAX-944 20mg for seven days (Day 7), following daily administration of PRAX-944 40mg for seven additional days (Day 14) and one week after administration of PRAX-944 has been stopped (Day 21).

Data available from six participants who completed Part A of the trial and received PRAX-944 doses of 20mg followed by 40mg each for seven days is shown in Figure 10 below.

Preliminary site (primary endpoint measure) and central video assessments of participants TETRAS-PS in this cohort showed generally stable tremor severity between screening and baseline visits.

The primary endpoint change suggests dose dependent tremor reduction on the TETRAS-UL, and this change was consistent with the central video assessment.

Importantly, five of the six participants remained on propranolol in this study, suggesting that PRAX-944 could also be developed as an adjunctive treatment.

Similar patterns of improvement were also observed in the full TETRAS-PS, and Kinesia ONE accelerometry scores.

The site and central ratings were strongly correlated on the TETRAS-UL and TETRAS-PS with r values of 0.8 and 0.83, respectively.

*As TETRAS PS items are rated on a logarithmic scale, the Weber-Fechner law was used to calculate the percent change in tremor amplitude according to the equation presented in Elble (2018).

Percent change from baseline in tremor amplitude as measured by site ratings of the TETRAS PS and Upper Limb subscale in Part A of the ET OL study (N=6).

In Part A, the dose levels were generally well-tolerated.

No SAEs and no severe AEs were observed.

The majority of AEs were mild, transient and resolved without intervention.

Six out of seven participants completed dosing per protocol.

One participant discontinued on Day 8 due to anxiety.

This participant was also non-compliant with the protocol, stopping propranolol on Day 3 of dosing without consulting study staff.

Due to this protocol deviation which would have impacted this participant’s TETRAS scores, this participant was included in the safety analysis but not in efficacy analysis.

No clinically significant ECG or laboratory abnormalities were reported.

We are currently conducting Part B of the Phase 2a clinical trial, titrating up to 120mg in an open-label fashion for 42 days following by a randomized, double-blind, placebo-controlled withdrawal phase, where participants will either be maintained on their final open-label dose or switched to placebo.

The goals of the randomized withdrawal are to obtain blinded evidence of any potential effect from the open-label titration and to assess for durability of any such effect.

In addition, the TETRAS activities of daily living sub-scale was added to the efficacy endpoints.

In December 2021, preliminary data from twelve participants in Part B were presented.

Figure 11 shows preliminary open-label data from nine evaluable subjects in Part B demonstrating favorable trends in tremor reduction in doses up to 120mg/day as of December 10, 2021, as measured by percent change from baseline in UL tremor amplitude measured with the TETRAS scale.

Individual participant percent change from baseline in UL tremor amplitude in Part A (left panel) and the open-label component of Part B (right panel).

Moreover, participants in Part B who had a reduction in their UL tremor as of December 10, 2021 were generally noted to have improvements on the TETRAS activities of daily living subscale (Figure 12).

Participants with more severe tremor at baseline generally showed greater improvement in both tremor and ADLs with PRAX-944 treatment, which was consistent with the floor effects seen in the TETRAS scale and challenges with visual estimation of tremor.

Individual participant percent change from baseline in UL tremor amplitude (upper panel) and activities of daily living subscale (lower panel) in the open-label component of Part B.

PRAX-944 was generally well-tolerated with no SAEs and no physical exam, laboratory, ECG or CSSRS abnormalities as of December 10, 2021.

In Part B, one participant discontinued at 20mg due to an AE, one participant withdrew after Day 21 assessment at 40mg due to an AE, and two participants at the same site discontinued at 20mg but had protocol violations related to eligibility.

Additionally, in Part B, there were four AEs leading to dose down-titration.

TEAEs leading to dose down-titration or discontinuation were mild-moderate.

Participants not tolerating dose escalation have been able return to a lower dose level and continue the study.

Phase 1 trials in healthy volunteers using MR formulation

In our Phase 1 multiple dose trial of the MR formulation of PRAX-944 in England, doses of 20mg and 40mg were generally well-tolerated over 8 days.

Adverse events were transient and occurred at a rate similar to placebo.

We observed the following TEAEs all of which were mild to moderate:

• 40mg dose (n=6):

we observed the nervous system TEAEs of somnolence (33.3%), headache (33.3%) and dizziness (33.3%).

The TEAEs also included fatigue (33.3%) and hot flash (33.3%).

We observed ECG application site rash, EEG application site skin reaction, nausea, vision blurred, thermal burn (accidental) and euphoric mood in 16.7% of subject each.

• 20mg dose (n=6):

we observed the nervous system disorder TEAEs of somnolence (16.7%) and headache (33.3%).

We also observed nausea (33.3%), fatigue (16.7%), vomiting (16.7%) and dry throat (16.7%).

• Placebo (n=4):

we observed the nervous system TEAEs of headache (25%), somnolence (25%) and dizziness (25%).

We also observed fatigue (50%) and nausea (25%).

We conducted a Phase 1 multiple dose trial of the MR formulation of PRAX-944 in England.

Doses of 20mg and 40mg were generally well-tolerated over 8 days.

AEs were transient and occurred at a rate similar to placebo.

The most common TEAEs were somnolence, headache, dizziness, fatigue, hot flashes, and nausea.

We also observed ECG application site rash, EEG application site skin reaction, blurred vision, thermal burn (accidental), euphoric mood, vomiting, and dry throat.

All TEAEs were mild to moderate.

A single dose of 60mg was not tolerated in the single dose trial due to reports of nausea in five of six subjects and vomiting in three of six subjects.

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No subjects reported nausea or vomiting after Day 1 of dosing.

While a single dose of 60mg was not well-tolerated, the average peak drug levels (138ng/mL) observed in the 40mg group after eight days of treatment were greater than those seen with the single 60mg dose (130ng/mL) on Day 1.

Improved tolerability at higher concentrations following repeated dosing suggests that titration to higher doses might be a viable strategy to further improve the tolerability profile.

Improved tolerability observed at higher concentrations following repeated dosing suggests that titration to higher doses might be a viable strategy to further improve the tolerability profile.

Sustained exposures were observed for the MR formulation of PRAX-944.

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In our preclinical studies, dosing of normal rats with PRAX-944 led to robust and dose-dependent changes in EEG activity.

Because similarly robust sigma frequency band changes after dosing with PRAX-944 are observed during NREM sleep in rats and humans, our hypothesis is that the inhibition of this EEG signal can be used as a pharmacodynamic biomarker.

Because the doses at which EEG changes observed in rats are similar to those that demonstrated activity in a preclinical model of essential tremor, or the harmaline model, we believe that this EEG biomarker can be used to estimate the dose of PRAX-944 that will produce a therapeutic effect in ET.

Because similarly robust sigma frequency band changes after dosing with PRAX-944 were observed during NREM sleep in rats and humans, our hypothesis is that the inhibition of this EEG signal can be used as a pharmacodynamic biomarker.

Because the doses at which EEG changes observed in rats were similar to those that demonstrated activity in a preclinical model of essential tremor, or the harmaline model, we believe that this EEG biomarker can be used to estimate the dose of PRAX-944 that we believe will be most likely to produce a therapeutic effect in patients with ET.

In our Phase 1 trial, 20mg and 40mg doses of PRAX-944 administered to healthy volunteers produced changes in the qEEG recordings of the sigma frequency band during NREM sleep consistent with those observed in rats (Figure 14).

This indicated that PRAX-944 reached target levels in the brain needed to inhibit T-type calcium channels.

These results suggested that PRAX-944 reached target levels in the brain needed to inhibit T-type calcium channels.

Based on the overlap of these EEG changes with drug levels showing activity in the preclinical harmaline model, we believe that 20mg and 40mg doses of PRAX-944, which were generally well-tolerated in healthy volunteers without titration, have the potential to reduce tremor in patients with ET.

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Titration trial in healthy volunteers

Considering that improved tolerability is the key unmet need in ET and that existing data suggest that titration is a viable strategy to further improve PRAX-944’s tolerability profile, we explored titration in a two-part healthy volunteer study.

In Part A, a new 5mg PRAX-944 tablet was assessed for low-dose pharmacodynamic effects at in an open-label titration paradigm from 5mg up to 20mg daily.

Considering that improved tolerability is the key unmet need in ET and that existing data suggest that titration is a viable strategy to improve PRAX-944’s tolerability, we explored titration in a two-part healthy volunteer study.

In Part A, a 5mg PRAX-944 tablet was assessed for low-dose pharmacodynamic effects in an open-label titration paradigm from 5mg up to 20mg daily.

In Part B, PRAX-944 was titrated from 20mg up to 120mg daily, to assess the safety, tolerability and pharmacodynamic activity of higher doses.

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The total dosing duration was 31 days.

Dosing has completed in this study.

The safety data demonstrated that with titration, PRAX-944 was generally well-tolerated up to 120mg daily.

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There were no treatment-related ECG or EEG abnormalities.

Safety laboratory values have generally been within normal limits and there have been no dose dependent excursion from the normal range.

Only 1 of 12 participants randomized to PRAX-944 discontinued for a treatment-related adverse event.

This participant dropped out after 1 dose (20mg) due to symptoms the participant described as similar to a prior panic attack (not reported at screening).

Vital signs, physical examination, clinical laboratory tests, and ECG parameters were all within normal limits.

Safety laboratory values were generally within normal limits and there were no dose dependent excursions from the normal range.

One of 12 participants randomized to PRAX-944 discontinued due to a TEAE.

This participant dropped out after one dose (20mg) due to symptoms the participant described as similar to a prior panic attack (not reported at screening).

Vital signs, physical examination, clinical laboratory tests, and ECG parameters were all within normal limits for this participant.

The symptoms self-resolved.

Importantly, no MTD was identified.

We believe this provides an advantage for PRAX-944, as it enables a wide dose range for optimizing efficacy and tolerability profile tailored to the key unmet need in ET as well as individual patient needs.

Preliminary analyses confirmed the pharmacodynamic changes seen in the previous Phase 1 trial described above, and we will further assess changes across the dose range up to 120mg/day.

Analyses showed pharmacodynamic changes consistent with those seen in the previous Phase 1 trial described above, and showed similar changes in sigma EEG power during NREM sleep across the dose range up to 120mg/day (Figure 16).

TEAEs Occurring in at least two participants in a dose group or overall.

Phase 2a trial in p a tients with ET

We are currently conducting a Phase 2a proof-of-concept open-label trial in up to 12 patients per cohort with ET in Australia and New Zealand.

In the first cohort, participants received 20mg daily dosing of PRAX-944 for one week followed by 40mg daily dosing for the second week, taken in the morning.

Based on the data from the titration trial in healthy volunteers, we are enrolling an additional cohort of ET patients dosing up to 120mg.

Studies in movement disorders require careful attention to methods for obtaining and scoring outcome measures.

We are measuring changes in tremor with different, complementary approaches including components of the Essential Tremor Rating Scale, or TETRAS, Performance Scale and accelerometry.

TETRAS is a widely used clinical rating scale that measures the severity of ET.

It was based on similar clinical scales which have been used to support regulatory approval of neurosurgical treatments for severe ET.

TETRAS has shown good measurement properties and dynamic range compared to other scales.

We are using change from baseline in the rating of upper limb, or UL, items of the TETRAS as the primary efficacy outcome in this proof-of-concept trial because all ET patients suffer from UL tremor.

As the UL items drive most of the score on the overall TETRAS and are more reliably rated than other items on the scale, they are therefore expected to have the best signal to noise ratio.

UL items have also been the basis of the most recent regulatory approval of neurosurgical treatments for severe ET.

We have also included the overall TETRAS performance scale, or TETRAS-PS, (both site and central video rating) and Kinesia ONE accelerometer, clinical global impression of severity and improvement, or CGI-S and CGI-I, respectively, and the patient global impression of change, or PGI-C, as secondary endpoints in the current open-label study to assess consistency of response across different endpoints.

In this trial, we are enrolling participants with well-established ET, as defined by the Movement Disorders Society, or MDS, Task Force for Tremor as an isolated tremor syndrome of bilateral UL action tremor with at least 3 years’ duration.

Patients are required to have a combined bilateral score of ≥10 on the TETRAS UL items as confirmed by site investigator and central video review.

This requirement for moderate to severe symptoms at baseline provides a clear and measurable dynamic range for detecting a treatment response.

In the first cohort, tremor severity will be evaluated before drug administration, after daily morning dosing of PRAX-944 20mg for 7 days (Day 7), following daily administration of PRAX-944 40mg for seven additional days (Day 14) and one week after administration of PRAX-944 has been stopped (Day 21).

Preliminary data are available from six participants who completed the trial and received PRAX-944 doses of 20mg followed by 40mg, each for seven days (Figure 18).

Preliminary site (primary endpoint measure) and central video assessments of participants TETRAS-PS in this cohort showed generally stable tremor severity between screening and baseline visits.

The primary endpoint change suggests dose dependent tremor reduction on the TETRAS-UL which compares favorably to the standard of care agents, and the change was consistent with the central video assessment.

Placebo effects in tremor trials are typically low.

A recent trial in ET demonstrated a 0.1% effect on the clinical rating scale in the control group.

Importantly, five of the six participants remained on propranolol in this study, suggesting that PRAX-944 could also be efficacious as an adjunctive treatment.

Similar patterns of improvement were also observed in the full TETRAS-PS, and Kinesia ONE accelerometry scores.

The site and central ratings were strongly correlated on the TETRAS-UL and TETRAS-PS with r values of 0.8 and 0.83, respectively.

*As TETRAS PS items are rated on a logarithmic scale, the Weber-Fechner law was used to calculate the percent change in tremor amplitude according to the equation presented in Elble (2018).

Change from baseline in TETRAS scores and percent change from baseline in tremor amplitude as measured by site ratings of the TETRAS PS and Upper Limb subscale in Part A of the ET OL study (N=6).

A total of 7 participants have completed Part A of this trial.

Participants were administered 20mg PRAX-944 QAM for 7 days followed by 40mg QAM for 7 days.

These dose levels have been generally well-tolerated.

No SAEs and no severe AEs have been observed.

The majority of AEs have been mild, transient and resolved without intervention.

Six out of 7 participants completed dosing per protocol.

One participant discontinued on Day 8 due to anxiety.

This participant was also non-compliant with the protocol, stopping propranolol on Day 3 of dosing without consulting study staff.

Due to this protocol deviation which would have impacted this participant’s TETRAS scores, this participant is included in safety data but not in efficacy data.

No clinically significant ECG or laboratory abnormalities have been reported.

Based on the observed safety profile in the titration healthy volunteer trial and the safety and preliminary activity observed in Part A of the ET trial, we plan to include a high dose cohort (Part B) of up to 12 participants in this on-going ET trial titrating dosing up to 120mg in an open-label fashion.

We also are including a randomized, double-blind, placebo-controlled withdrawal phase to the trial, where participants will either be maintained on their final open-label dose or switched to placebo.

The goals of the randomized withdrawal are to obtain blinded confirmation of effect from the open-label titration and to assess for durability of effect.

We plan to announce topline open-label safety, tolerability and efficacy data, including the high dose cohort, from this Phase 2a trial in mid-year 2021.

Additional studies planned for the PRAX-944 program

We plan to initiate a Phase 1 study to explore shorter titration schemes in mid-year 2021.

In addition, we plan to initiate a Phase 2b randomized, double-blind, placebo-controlled trial to evaluate the efficacy and safety of PRAX-944 in the treatment of ET patients in the fourth quarter of 2021.

Dose and concentration dependent pharmacodynamic effects on sigma band (11-15 HZ) EEG power in the PRAX-944-105 study.

Phase 1 study to explore shorter titration schemes

We completed a single-center, multi-part, Phase 1, randomized, double-blind, placebo-controlled clinical trial in which we assessed the safety, tolerability, and PK of a more rapid PRAX-944 titration scheme up to 120mg in healthy male and female participants aged 18 to 54 years (Part A) and 55 to 75 years (Part B).

We observed no new safety signals and PK results were consistent with what we previously reported.

Preclinical support for advancing PRAX-944

PRAX-944 has been shown preclinically to inhibit all three human T-type calcium channel isoforms, Ca V 3.1, Ca V 3.2 and Ca V 3.3, and has demonstrated high selectivity against L and N-type calcium channels, or Ca V 1.2 and Ca V 2.2, respectively, and other key ion channels important for normal physiology, such as the cardiac potassium channel human Ether-à-go-go-Related Gene, or hERG, and the voltage gated sodium channel Na V 1.5.

In preclinical studies, PRAX-944 inhibited all three human T-type calcium channel isoforms, Ca V 3.1, Ca V 3.2 and Ca V 3.3, and has demonstrated high selectivity against L and N-type calcium channels, or Ca V 1.2 and Ca V 2.2, respectively, and other key ion channels important for normal physiology, such as the cardiac potassium channel human Ether-à-go-go-Related Gene, or hERG, and the voltage gated sodium channel Na V 1.5.

Robust selectivity and potency have been demonstrated across both exogenously expressed recombinant channels in a human cell line and naïve channels in isolated dorsal root ganglion, or DRG, neurons from rats using electrophysiological techniques.

HEK CELLS RAT DRG NEURONS

Channel IC 50 (nM)

202 T-Type 50

240 N-Type 10,000

rCa V 1.2 (L-Type)

rCa V 2.2 (N-Type)

PRAX-944 is a potent and selective inhibitor of T-type calcium channels.

Consistent with the gatekeeper role of T-type calcium channels in neuronal firing patterns, a gain of function mutation of the T-type calcium channel Ca V 3.2 leads to pathological burst firing in thalamic neurons in a rat model known as the GAERS model.

Administration of PRAX-944 resulted in complete suppression of the pathological burst-firing in thalamic neurons derived from the GAERS model.

We validated the therapeutic potential of PRAX-944 to treat ET using the harmaline-induced tremor model in rats.

We evaluated the therapeutic potential of PRAX-944 to treat ET using the harmaline-induced tremor model in rats.

Administration of harmaline triggers ET-like tremors in experimental animals as well as pathological burst firing throughout the CTC circuit.

We observed a large and dose-dependent decrease of harmaline-induced tremor in rats treated with PRAX-944 as compared to vehicle-treated animals, when measured as % increase of tremor from pre-

harmaline baseline.

This result served to both demonstrate the potential of PRAX-944 in ET and as independent evidence of the critical role of T-type calcium channels in tremor reduction.

PRAX-944 led to a dose-dependent inhibition of tremors in the rat harmaline model.

We observed a large and dose-dependent decrease of harmaline-induced tremor in rats treated with PRAX-944 as compared to vehicle-treated animals, when measured as percent increase of tremor from pre-harmaline baseline.

We believe this result served to both support the potential of PRAX-944 in ET and provide independent evidence of the potential role of T-type calcium channels in tremor reduction.

EEG as a pharmacodynamic biomarker for dose selection

PRAX-944 robustly and dose-dependently decreased EEG power in the sigma frequency band during NREM sleep in rats.

The effect of PRAX-944 on the EEG observed in rats when dosed with PRAX-944 indicates its ability to mediate the blockade of T-type calcium channels in the thalamocortical circuit, suggesting that this effect is a pharmacodynamic biomarker for PRAX-944.

Because the doses at which the EEG changes are observed are similar to those that demonstrate tremor reduction in the harmaline model, we believe that this biomarker can be used to estimate the dose that could be effective in treating ET.

PRAX-944 decreased EEG sigma power during NREM sleep in rats.

RARE DISEASE PORTFOLIO

We are advancing several programs which we believe offer significant therapeutic benefits for rare disease populations over the current standard of care.

We believe that all of the programs in our rare disease portfolio have the potential to be differentiated molecules, have foundational underpinnings in human genetics, utilize translational biomarker tools and have the potential for early clinical signal detection.

Our most advanced rare disease candidate is PRAX-562, which is currently in a Phase 1 trial in adult healthy volunteers in Australia.

Its mechanism suggests that PRAX-562 has broad potential to treat many diseases of neuronal hyperexcitability.

We are pursuing development in a subset of rare devastating diseases, initially rare adult cephalgias and pediatric epilepsies.

The remainder of our current rare disease portfolio consists of precision medicines approaches to address genetically defined populations suffering from Developmental and Epileptic Encephalopathies, or DEEs.

DEEs are rare neurologic diseases characterized by early onset (< 2 years of age), frequent seizures, abnormal epileptiform electroencephalographic activity, developmental impairment and resistance to available antiepileptic drugs.

We believe the effect of PRAX-944 on the EEG observed in rats when dosed with PRAX-944 suggests its potential to mediate the blockade of T-type calcium channels in the thalamocortical circuit, and further suggesting that this result may provide a pharmacodynamic biomarker for PRAX-944.

Because the doses at which the EEG changes were observed were similar to those that led to tremor reduction in the harmaline model, we believe that this potential biomarker could be used to estimate a dose that could be effective in treating ET.

Epilepsy is a common neurological disorder that affects all age groups, can lead to significant disability and social impact to the patient, family and caregivers, and is characterized by brain excitation-inhibition, or E/I, imbalance.

Hyperexcitability can lead to abnormal synchronization of neurons and neuronal circuits, which is the electrical basis of a seizure.

It is estimated that over 70 million people are living with epilepsy globally and a significant number of them are refractory to current pharmacotherapy.

In the United States, the number of people living with epilepsy is estimated to be approximately three million, of which approximately 30% are characterized as refractory to treatment despite the availability of over 20 antiseizure medications.

The mechanisms of action for most of the currently available epilepsy treatments are poorly understood.

Nevertheless, fundamentals of brain electrophysiology and mechanisms dictating seizure genesis are conserved across species and, consequently, animal models of seizures and epilepsy enable a clinically predictive and therefore efficient drug development path in this therapeutic area.

Moreover, the existence of rapid POC clinical designs and established regulatory pathways for epilepsy drug approvals, together with the significant unmet need, make the epilepsy market attractive.

Recent investigations have led to the identification of over 500 genes that are causal or present risk factors for different forms of epilepsy.

We believe this understanding unlocks opportunities for disease mechanism-targeted drug discovery that can more precisely meet the needs of people with epilepsy by addressing such fundamental mechanisms.

We have utilized this approach to identify genes that are well-positioned to impact not only rare epilepsies but also the more common forms of epilepsy, as well as other CNS conditions.

Our pipeline is being developed in recognition that through better understanding of validated targets, we may be able to maximize the impact our product candidates have on people with epilepsy, mood disorders, movement disorders and potentially other excitability disorders.

Discovery and development for rare epilepsies is therefore a key driver and catalyst for optimization of our pipeline and meeting the needs of the broader CNS patient populations we seek to serve.

Underpinning this approach is continual assessment and evaluation of computational, discovery, development, formulation and delivery technologies that can further optimize the speed and quality of the delivery of our pipelines.

Whether through in-house developments or via key strategic collaborations, we will explore ways to enhance successful delivery of new products to market and do so time and time again.

A subset of epilepsy, DEEs, are rare neurologic diseases characterized by early onset (< 2 years of age), frequent seizures, abnormal epileptiform electroencephalographic activity, developmental impairment and resistance to available antiepileptic drugs.

Furthermore, DEEs are associated with a high mortality rate and comorbidities such as developmental delay in addition to behavioral disorders, movement disorders, pain and sensory dysfunction and sleep disruptions.

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An underlying pathologic feature of many DEEs is the dysregulated neuronal activity leading to hyperexcitability, seizures and associated comorbidities.

This phenomenon is observed in many pediatric DEEs with an identified genetic cause, such as SCN8A, SCN2A, KCNT1, KCNQ2, KCNQ1, STXBP1 and SYNGAP1 epilepsy, as well as epilepsies in which a genetic cause remains unclear, such as Lennox Gastaut Syndrome, or Doose Syndrome.

This phenomenon is observed in many pediatric DEEs with an identified genetic cause, such as SCN8A, SCN2A, KCNT1, KCNQ2, KCNQ1, STXBP1 and SYNGAP1, as well as epilepsies in which a genetic cause remains unclear, such as Lennox Gastaut Syndrome, or Doose Syndrome.

Up to 40% of DEEs are caused by single gene mutations, enabling precision medicine approaches.

Our lead precision medicine candidate is PRAX-222, an antisense oligonucleotide, or ASO, for lowering the expression levels of the protein encoded by the gene SCN2A, in patients with gain-of-function, or GOF, mutations in SCN2A, the underlying cause of SCN2A GOF DEE.

We have also entered into a research collaboration with The Florey Institute of Neuroscience and Mental Health to develop three novel ASO therapies for the treatment of patients with SCN2A loss-of-function mutations and two additional rare epilepsy targets.

This partnership positions us at the forefront in rare epilepsy drug development with six distinct programs for the treatment of six different rare epilepsies.

Given the overlapping biology, phenotypic presentation and clinical execution considerations, we believe that developing a portfolio of drugs to treat DEEs will create a distinct body of knowledge and operational synergies across our rare disease portfolio, positioning us as a leader in developing meaningful therapies for this group of patients with devastating unmet clinical needs.

Within our Epilepsy franchise, we expect to initiate a Phase 2 study with our third clinical-stage candidate, PRAX-562, in patients with rare pediatric DEEs in the second quarter of 2022.

Our lead product candidate to treat epilepsy is PRAX-222, an ASO designed to lower the expression levels of the protein encoded by the gene SCN2A in patients with GOF mutations in SCN2A, the underlying cause of SCN2A-GOF DEE.

PRAX-222 has completed IND-enabling toxicology studies, and we expect to initiate a seamless study in the second quarter of 2022.

In January 2022, we exercised our option to in-license PRAX-222 from Ionis Pharmaceuticals, Inc., or Ionis.

We intend to develop PRAX-628, a small molecule with unique NaV channel binding kinetics that favor inhibition of pathological neuronal activity underlying aberrant brain function, such as that seen in our initial indication of focal onset seizures.

We anticipate use in other common forms of epilepsy and CNS excitability disorders more generally.

PRAX-628 is currently in IND-enabling toxicology studies.

We have also entered into a research collaboration with The Florey Institute of Neuroscience and Mental Health to develop three novel ASO therapies for the treatment of patients with SCN2A loss-of-function, or LOF, mutations and two additional rare epilepsy targets, SYNGAP1 and PCDH19.

We believe this collaboration positions us at the forefront in rare epilepsy drug development with six distinct programs for the treatment of six different rare epilepsies.

Standard of care sodium channel blockers, such as Tegretol (carbamazepine), Lamictal (lamotrigine), Dilantin (phenytoin) and many others are an important class of medicines in neurology and psychiatry.

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However, the efficacy of sodium channel blockers is generally limited by side effects, many attributable to on-target toxicological effects.

PRAX-562 is designed as the first selective, persistent sodium current blocker that has the potential of reducing pathological neuronal hyperexcitability with an improved tolerability profile.

PRAX-562 is in development for the treatment of a broad range of rare, devastating CNS disorders, such as severe pediatric epilepsies and adult cephalgia.

We intend to pursue development in a subset of rare cephalgias, initially Short-lasting Unilateral Neuralgiform headache attacks with Conjunctival injection and Tearing, or SUNCT, Short-lasting Unilateral Neuralgiform headache with Autonomic symptoms, or SUNA, and Trigeminal Neuralgia, or TN, along with pediatric epilepsies.

In in-vitro studies, PRAX-562 selectively blocks persistent sodium current across all subtypes of sodium channels with minimal effects on the peak sodium current that is critical for the normal physiological function of these channels.

In line with this selectivity for persistent current, PRAX-562 has been shown in ex-vivo studies to reduce neuronal hyperexcitability without impairing normal neuronal function.

This is in contrast to marketed sodium channel blockers which significantly impact normal neuronal function, leading to a narrow therapeutic index.

To date, PRAX-562 has demonstrated robust pharmacological activity in a preclinical in-vivo seizure model with significantly improved tolerability compared to other sodium channel blockers, suggesting a potentially improved therapeutic index.

The characteristics of PRAX-562 are expected to make it a versatile molecule that we

believe can be broadly applied in diseases of hyperexcitability where sodium channel blockers have demonstrated efficacy but poor tolerability.

Recent preclinical studies with PRAX-562 have demonstrated a dose-dependent and complete prevention of spontaneous seizures in a mouse model of SCN2A GOF DEE and evoked seizures in a human knock-in mouse model of SCN8A DEE.

We have initiated a Phase 1 trial of PRAX-562 in Australia to evaluate the safety, tolerability, PK and effects on an exploratory EEG biomarker in up to 129 adult healthy volunteers.

This trial has successfully completed the SAD portion up to the maximum planned dose, with no dose limiting toxicities, and has advanced to MAD cohorts.

Maximum observed PRAX-562 plasma concentrations observed to date, at Cmax in the SAD study and at trough levels in the MAD study, exceed those at the effective concentration 50, or EC50, in the MES mouse model, a model with good predictive validity, without dose limiting toxicities.

We are currently at the highest preplanned dose of PRAX-562 in our MAD trial and intend to escalate further if it continues to be generally well-tolerated.

We anticipate the initial proof-of-concept trial in rare adult cephalgia patients to initiate in the second half of 2021.

The FDA has granted rare pediatric disease designation for PRAX-562 for the treatment of SCN2A and SCN8A developmental and epileptic encephalopathies, or SCN2A-DEE and SCN8A-DEE, respectively.

PRAX-562 is a preferential, persistent sodium current blocker that is designed to reduce pathological neuronal hyperexcitability and to provide an improved tolerability profile.

PRAX-562 is in development for the treatment of a broad range of rare, devastating CNS disorders, such as severe pediatric epilepsies and adult cephalgias.

We are pursuing proof of concept clinical data in a subset of rare cephalgias, initially Short-lasting Unilateral Neuralgiform headache attacks with Conjunctival injection and Tearing, or SUNCT, Short-lasting Unilateral Neuralgiform headache with Autonomic symptoms, or SUNA, and Trigeminal Neuralgia, or TN.

We completed a Phase 1 trial of PRAX-562 in Australia to evaluate the safety, tolerability, PK and effects on an exploratory EEG biomarker in up to 129 adult healthy volunteers.

We completed the dosing and safety follow-up period for the single ascending dose and multiple ascending dose cohorts up to 150mg and 120mg, respectively.

PRAX-562 was well-tolerated, with no clinically significant safety findings.

In this study, we used auditory steady state response, or ASSR, as an exploratory EEG biomarker to determine the doses required to achieve pharmacological blockade of persistent sodium current, which we believe is a potential indicator of efficacy in patients.

Dose-related changes were observed in the ASSR biomarker with a reduction of greater than 50% in Phase Locking Factor, or PLF, after 14 days of daily dosing of PRAX-562 (120mg), as compared to baseline.

These data suggest that PRAX-562 appeared to be achieving brain exposures needed to modulate cortical E/I balance.

Based on the observed signal in the ASSR biomarker in the Phase 1 trial, we have started dosing patients in the United States in a Phase 1, placebo-controlled, two-cohort study to further evaluate the observed ASSR signal

and to evaluate 28-day dosing .

We expect to report topline data in the second quarter of 2022.

The study is designed to evaluate ASSR as a potential biomarker for the PRAX-562 program to further support selection of doses to evaluate in Phase 2 studies.

The clinical development plan for PRAX-562 encompasses exploring the broad potential for the mechanism of action in rare diseases through conducting proof-of-concept clinical trials in rare adult cephalgias, then expanding its development into a range of rare pediatric DEEs.

The FDA granted both orphan drug and rare pediatric disease designations for PRAX-562 for the treatment of SCN2A and SCN8A developmental and epileptic encephalopathies, or SCN2A-DEE and SCN8A-DEE, respectively, and the EMA Committee for Orphan Medicinal Products granted orphan drug designation for PRAX-562 for the treatment of SCN2A-DEE and SCN8A-DEE.

Voltage-gated sodium channels, persistent sodium current and neuronal excitability

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There are currently more than 15 sodium channel blockers in the market commonly used to treat diseases such as epilepsy, bipolar disorder and pain.

While standard of care sodium channel blockers, such as carbamazepine, lamotrigine and phenytoin, inhibit persistent sodium current, they likely also block peak sodium current at therapeutic concentrations, which can cause significant adverse events such as ataxia, drowsiness and dizziness, and therefore have a very narrow Therapeutic Index, or TI.

While standard of care sodium channel blockers, such as carbamazepine, lamotrigine and phenytoin, inhibit persistent sodium current, they likely also block peak sodium current at therapeutic concentrations, which can cause significant AEs such as ataxia, drowsiness and dizziness, and therefore have a very narrow Therapeutic Index, or TI.

Genetics of persistent sodium current

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These channelopathies demonstrate the important role persistent sodium current plays as a modulator of cellular excitability.

Our initial indications for PRAX-562

Developmental and Epileptic Encephalopathy

Approximately 100,000 children suffer from DEEs in the United States alone, with over two hundred thousand children affected world-wide.

An underlying pathologic feature of many DEEs with both known and unknown genetic causes, is the dysregulated neuronal activity leading to hyperexcitability and subsequently to seizure.

Sodium channel blockers have been a critical component of the pharmacological management of seizure related conditions, including epilepsy, for decades.

However, current standard of care sodium channel blockers are limited by a narrow therapeutic window and inadequate efficacy.

We believe these limitations are largely due to blockage of peak sodium current and disruption of normal neuronal function at or near therapeutic doses and significant off-target activity.

Given the role of persistent current in modulating excitability, we believe that PRAX-562 has the potential to be a broadly efficacious and generally well-tolerated antiepileptic drug for the treatment of DEEs of both genetic and unknown etiology.

SUNCT, SUNA and TN are devastating headache disorders with limited treatment options.

SUNCT and SUNA are part of a specific class of cephalgias known as Short Lasting Unilateral Neuralgiform headaches.

These headaches are characterized by severe burning, stabbing and electrical unilateral head pain that is typically 9 to 10 in the Visual Analogue Scale, or VAS, for pain.

These headache attacks last between one second and ten minutes in duration and can occur up to 600 times per day.

SUNCT and SUNA headaches are rare diseases with a prevalence estimated to be 6.6 per 100,000 based on a recent Australian study.

SUNCT and SUNA are often refractory to standard migraine and headache treatments, but are highly responsive to intravenous, or IV, infusion of the sodium channel blocker lidocaine.

Response under IV lidocaine requires continuous infusion in an inpatient setting and is associated with side effects such as nausea, vomiting and cardiovascular effects, with headache attacks returning in majority of patients within days of IV lidocaine withdrawal.

Preventative treatment of SUNCT and SUNA often includes oral sodium channel blocker lamotrigine, but this is limited by partial efficacy, tolerability concerns and the requirement of several weeks of dose-titration to reach therapeutic doses.

TN, also known as tic douloureux, is characterized by intense, stabbing, electric-shock pain typically in the lower face and jaw, usually on one side of the face.

TN is thought to be caused by irritation of the trigeminal nerve.

The pain can be triggered by an action as simple as washing or touching the face smiling or talking.

These attacks can progressively worsen over time, especially if left untreated.

Epidemiologic data are variable across the world and depend on definitions used for diagnosis, with reported annual incidence ranges from 4.3 to 26.8 per 100,000.

Anticonvulsive medications that modulate voltage-gated sodium channels, such as carbamazepine, are considered first line treatment for TN.

Additional therapies used to treat TN include other medications (e.g., gabapentin, baclofen, amitriptyline, topiramate), as well as various procedures or surgical interventions (such as vascular decompression or gamma knife).

These therapies are reported to all have inconsistent results in controlling the pain, with only about 50% success over time.

The limited FDA-approved treatments specific to SUNA or TN, or complete absence of FDA-approved treatments specific to SUNCT, combined with high comorbidity and healthcare utilization, substantiates the need for an efficacious, generally well-tolerated and orally bioavailable sodium channel blocker to treat headache attacks in acute and preventative settings.

PRAX-562 preclinical data

PRAX-562 is a highly differentiated, potent and selective inhibitor of persistent sodium current designed to overcome the limitations of currently available sodium channel blockers.

PRAX-562 preclinical studies were designed to test our belief that the block of persistent sodium current is sufficient to demonstrate robust activity in animal models of hyperexcitation and that the selective block of persistent sodium current over physiological peak current leads to an improved therapeutic index.

Selective inhibition of persistent sodium channels

In preclinical studies, PRAX-562 is a highly potent inhibitor of persistent sodium current as measured in cell-based assays, in which sodium channel isoforms are heterologously expressed and channel activity is measured via patch clamp electrophysiology.

Using electrophysiological voltage protocols, the effect of compounds on a specific channel state (e.g., peak current vs persistent current) can be measured.

When compared to other approved sodium channel inhibitors for various neurological indications, PRAX-562 was hundreds of times more potent at inhibiting persistent sodium current.

PRAX-562 showed potent inhibition of persistent sodium current as measured in cell-based assays, in which sodium channel isoforms were heterologously expressed and channel activity was measured via patch clamp electrophysiology.

Using electrophysiological voltage protocols, the effect of compounds on a specific channel state ( e.g.

, peak current vs persistent current) can be measured.

When compared to other approved sodium channel inhibitors for various neurological indications, PRAX-562 showed hundreds of times greater potency in inhibiting persistent sodium current.

PRAX-562 had an IC 50 of 141 nM compared to SOC sodium channel blockers lamotrigine and carbamazepine which had an IC 50 of 78,530 nM and 77,520 nM, respectively – a potency difference of over 500-fold.

PRAX-562 also potently inhibited persistent I Na expressed by the SCN8A-DEE mutant hNa V 1.6-N1768D (IC 50 75 nM).

PRAX-562 was ~60 fold selective for inhibiting persistent current over peak current.

PRAX-562 is approximately 150-fold more potent and two to nine-fold more selective for persistent sodium current than standard sodium channel blockers.

The selective block of persistent sodium current reduces neuronal hyperexcitability without affecting the action potential, or AP, amplitude, which is required for normal neuron function.

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PRAX-562 reduced the neuronal AP firing frequency, an indicator of neuronal excitability, without a significant effect on AP amplitude, an indicator of normal neuronal function, suggesting reduction of hyperexcitability without impacting the ability of the neuron to respond to physiologic stimuli.

In comparison, carbamazepine, a SOC sodium channel blocker, at comparable concentrations (relative to the potency in cells heterologously expressing Na V 1.6), excessively decreased AP firing almost completely and reduced the amplitude of APs, indicating impairment of normal function.

comparison, carbamazepine, a SOC sodium channel blocker, at comparable concentrations (relative to the potency in cells heterologously expressing Na V 1.6), excessively decreased AP firing almost completely and reduced the amplitude of APs, indicating impairment of normal function.

PRAX-562 Representative AP Traces

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Preclinical in vivo pharmacological activity, tolerability and EEG pharmacodynamic biomarker

We investigated the preclinical activity of PRAX-562 in a maximal electroshock model of epilepsy, or MES model, that has shown good predictive validity for clinical anti-convulsant activity, and compared it to the effects of SOC sodium channel blockers carbamazepine and lamotrigine.

To determine how well PRAX-562 is tolerated, we compared its effects on spontaneous locomotor activity, or sLMA, to the effects of carbamazepine and lamotrigine.

PRAX-562 was able to block seizures completely in mice at a dose that does not impair locomotor function (10mg/kg).

In contrast, carbamazepine and lamotrigine only achieve full block of seizures in this model at doses that also show impairment of locomotion.

PRAX-562 at a dose of 2mg/kg, inhibited the epilepsy response to half of its maximum value, or ED 50 .

Inhibition of sLMA required an estimated dose of 44mg/kg to obtain 50 percent inhibition, or TD 50 .

We investigated the preclinical activity of PRAX-562 in the maximal electroshock model of epilepsy, or MES model, that has shown good predictive validity for clinical anti-convulsant activity, and compared it to the effects of SOC sodium channel blockers carbamazepine and lamotrigine.

To determine how well PRAX-562 was tolerated in this study, we compared its effects on spontaneous locomotor activity, or sLMA, to the effects of carbamazepine and lamotrigine.

PRAX-562 was able to block seizures completely in mice at a dose that did not impair locomotor function (10mg/kg).

In contrast, carbamazepine and lamotrigine only achieved full block of seizures in this model at doses that also showed impairment of locomotion.

PRAX-562 at a dose of 2mg/kg (concentration in brain of 116ng/g and plasma of 90.1ng/mL), inhibited the epilepsy response to half of its maximum value, or ED 50 .

Inhibition of sLMA required an estimated dose of 44mg/kg (concentration in brain of 1,899ng/g and plasma of 1,553ng/mL), to obtain 50 percent inhibition, or TD 50 .

Doses of PRAX-562 resulting in potent anticonvulsant activity were associated with minimal effects on general locomotor activity.

We calculated the therapeutic index, or TI, of each molecule as the preclinical tolerability/pharmacological activity ratio.

We calculated the TI of each molecule as the preclinical tolerability/pharmacological activity ratio.

This ratio is calculated by dividing the plasma and brain concentrations at the dose that reduces locomotion by 50% by the concentrations that reduce seizures by 50%.

We found that PRAX-562 had a significantly improved therapeutic index of ~16 fold (based on brain concentrations) and ~17 fold (based on plasma concentrations) compared to the currently prescribed sodium channel blockers carbamazepine and lamotrigine, which had a much lower protective index of three to six-fold.

We found that PRAX-562 had a significantly improved TI of ~16 fold (based on brain concentrations) and ~17 fold (based on plasma concentrations) compared to the currently prescribed sodium channel blockers carbamazepine and lamotrigine, which had a much lower protective index of three to six-fold.

Notably, standard sodium channel blockers, such as carbamazepine and phenytoin, show severe toxicity in humans at exposures that are only about 1.5 to 3 times the target therapeutic exposures, underscoring the need for modulators of sodium channels with an improved tolerability.

Molecule Plasma Therapeutic

Index Brain Therapeutic

PRAX-562 17.2x 16.4x

Carbamazepine 3.4 x 5.9 x

Lamotrigine 6.4 x 4.6 x

Therapeutic Index (TI) = TC 50 / EC 50

Compared to lamotrigine and carbamazepine, PRAX-562 had an increased ratio between drug levels that demonstrated preclinical pharmacological activity

versus those that caused toxicity.

The auditory steady state response, or ASSR, is a non-invasive EEG measure of excitatory/inhibitory balance in the brain.

The ASSR is a non-invasive EEG measure of E/I balance in the brain.

This response is elicited with short lasting (2sec) auditory stimuli that lead to brain activity changes that are measured as a 40Hz EEG signature and depend on network activity between excitatory and inhibitory cortical neurons.

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Consistent with this hypothesis, dosing normal mice with PRAX-562 led to a dose-dependent decrease in the ASSR amplitude (40Hz power).

This effect was maximal at doses that have robust anticonvulsant effects in the maximal electroshock model.

This decrease was greater at doses that showed robust anticonvulsant activity in the maximal electroshock model.

PRAX-562 dose-dependently reduced the 40Hz EEG power of the auditory steady state response in mice.

Together, our data suggest that the selective effects of PRAX-562 on hyperexcitable states without affecting normal neuronal function led to the robust preclinical reduction of seizures and improved tolerability seen in animal models.

Together, our data suggest that PRAX-562 selectively affected hyperexcitable states without affecting normal neuronal function, which led to the robust preclinical reduction of seizures and improved tolerability in animal models.

As shown below, exposures of PRAX-562 that led to biomarker change (ASSR amplitude reduction shown in top row) also demonstrated robust anticonvulsant activity (shown in middle row).

Moreover, PRAX-562 has a ~16.4 fold protective index based on the spontaneous locomotor activity (shown in bottom row), which is a significant improvement over reported effects of approved sodium channel blockers.

Moreover, PRAX-562 has shown a ~16.4 fold protective index based on the spontaneous locomotor activity (shown in bottom row).

In the figure below, the lower bound of the preclinical pharmacological activity range, EEG and tolerability bars is determined by the brain EC 50 (preclinical seizure and ASSR assays) or TC 50 (tolerability assay) in a given assay and the upper bound represents the mean brain concentration at the highest dose tested in a given assay.

Summary of PRAX-562 preclinical data.

We believe that the profile of PRAX-562 may translate into therapies with the potential for clinical efficacy and tolerability across several indications caused by underlying hyperexcitability where standard sodium channel blockers have shown efficacy, albeit with limited tolerability, such as rare pediatric epilepsies and cephalgia like SUNCT/SUNA and TN.

PRAX-562 clinical development in cephalgia and DEEs

We have initiated a randomized, double-blinded Phase 1 trial in Australia to evaluate the safety, tolerability and pharmacokinetics of single and multiple ascending doses of PRAX-562 in up to 129 adult healthy volunteers between the ages of 18 and 55.

In addition, we are using ASSR as an exploratory pharmacodynamic biomarker in this trial to determine the doses required to achieve pharmacological blockade of persistent sodium current, which we believe is a potential indicator of efficacy in patients.

Preliminary analysis of the completed SAD cohorts indicate that PRAX-562 is generally well-tolerated up to the maximum planned dose.

Safety data reviewed included adverse events, vital signs, ECG, C-SSRS, physical examination and safety laboratory data.

There have been no reported SAEs, severe AEs or any AEs leading to study withdrawal or discontinuation as of the safety review committee meeting convened on February 18, 2021.

The current trial has advanced to MAD evaluations and maximum observed plasma concentrations achieved in healthy normal subjects, at trough levels, exceed those at the effective concentration 50 (EC50), in the MES mouse model.

We are currently at the highest preplanned dose of PRAX-562 in our MAD trial and intend to escalate further if it continues to be generally well-tolerated.

We anticipate the initial proof-of-concept trial in SUNCT/SUNA and TN patients to initiate in the second half of 2021.

The clinical development plan for PRAX-562 encompasses exploring the broad potential for the mechanism of action in rare diseases through proof-of-concept trials in rare adult cephalgia, then expanding into a range of rare pediatric DEEs.

The FDA has granted rare pediatric disease designation for PRAX-562 for the treatment of SCN2A-DEE and SCN8A-DEE.

Along with our PRAX-562 program, we are developing a portfolio of sodium channel blockers that we plan to advance in other rare CNS disorders.

PRAX-222 is a program for developing an antisense oligonucleotide for patients with gain-of-function SCN2A epilepsy.

This program is ongoing under a three-way collaboration with Ionis Pharmaceuticals, Inc., or Ionis, and RogCon Inc., or RogCon.

Under the terms of the collaboration agreement, Ionis is responsible for preclinical and IND-enabling toxicology studies and we are responsible for clinical development and commercialization.

The FDA has granted both rare pediatric disease and orphan drug designations for PRAX-222 for the treatment of SCN2A-DEE.

We believe that the preclinical results for PRAX-562 may support clinical development across several indications caused by underlying hyperexcitability where standard sodium channel blockers have shown efficacy, albeit with limited tolerability, such as rare pediatric epilepsies and cephalgias like SUNCT/SUNA and TN.

Preclinical in vivo pharmacological evaluation in mouse models of SCN2A and SCN8A Gain-of-Function Epilepsy

PRAX-562 also blocked seizures in two independent transgenic mice strains expressing mutant Na V gene alleles which cause human seizure disorders and encode NaV channels with gain-of-function increases in persistent I Na .

Transgenic mice heterozygous for Scn8a D/+ (encoding Na V 1.6-N1768D) exhibit symptoms observed in the human disease, including spontaneous seizures, audiogenic seizures, and sudden unexpected death.

PRAX-562 resulted in dose-dependent inhibition of audiogenic seizures with an ED 50 of 3.7 mg/kg (concentration in brain of 120 ng/g and plasma of 114 ng/mL).

The Scn2a Q54 mouse line is a model of Na V 1.2 gain-of-function where an engineered mutation (GAL879-881QQQ) results in increased persistent I Na .

Similar to patients, Scn2a Q54 mice exhibit spontaneous early life seizures and premature death.

PRAX-562 resulted in dose-dependent reduction of spontaneous seizure frequency in the Scn2a Q54 mice with an ED 50 of 0.73 mg/kg (concentration in brain of 51.0 ng/g and plasma of 17.8 ng/mL).

These preclinical studies demonstrate a dose-dependent and complete prevention of seizures in two independent mouse models Na V gain-of-function DEE.

PRAX-562 protected against audiogenic seizures

in Scn8a-N1768D (D/+) GOF Mice

PRAX-562 protected against spontaneous seizures

in Scn2a Q54 GOF Mice

PRAX-222 is an ASO for patients with SCN2A GOF epilepsy.

The PRAX-222 program is ongoing under a three-way collaboration with Ionis and RogCon Inc., or RogCon.

Under the terms of the collaboration agreement, Ionis was responsible for preclinical and IND-enabling toxicology studies and we are responsible for clinical development and commercialization.

PRAX-222 has completed IND-enabling toxicology studies, and we expect to initiate a seamless study in SCN2A GOF patients in the second quarter of 2022.

In January 2022, we exercised our option to in-license PRAX-222 from Ionis.

The FDA has granted both rare pediatric disease and orphan drug designations for PRAX-222 for the treatment of SCN2A-DEE, and the EMA Committee for Orphan Medicinal Products has granted orphan drug designation for PRAX-222 for the treatment of SCN2A-DEE.

SCN2A is the gene that encodes the voltage-gated sodium channel Na V 1.2 that is primarily found in excitatory neurons throughout the brain and which plays a critical role in action potential generation and signaling between neurons.

Individuals with gain-of-function mutations in SCN2A develop early-onset epileptic encephalopathy with severe seizures that begin within the first month of life that are often refractory to standard of care antiepileptic medications.

Individuals with gain-of-function mutations in SCN2A develop early-onset epileptic encephalopathy with

severe seizures that begin within the first month of life that are often refractory to standard of care antiepileptic medications.

SCN2A GOF DEE patients also suffer from significant intellectual disability, movement disorders and in some cases early death due to sudden unexpected death in epilepsy, or SUDEP.

It is estimated that there are thousands of patients worldwide with gain-of-function changes in SCN2A leading to epileptic encephalopathy.

Candidate ASOs under the PRAX-222 program directly target the cause of disease by down-regulating Na V 1.2 expression, an effect that has demonstrated disease-modifying activity in animal models of SCN2A epileptic encephalopathy.

In transgenic mice carrying a human SCN2A GOF mutation, we observed a significant, dose-dependent reduction in seizures and increased survival of mice treated with a mouse ASO that down-regulates SCN2A.

The PRAX-222 program is designed to directly target the cause of SCN2A disease by down-regulating Na V 1.2 expression, an effect that has demonstrated disease-modifying activity in animal models of SCN2A epileptic encephalopathy.

The survival benefit from the ASO was maintained with repeat dosing.

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This observation suggests that candidate ASOs of the PRAX-222 program may have the potential to provide clinical benefits for children after disease onset.

The ASO-treated disease model animals demonstrated similar behavior and locomotor activity as wild type animals, suggesting SCN2A knockdown is generally well-tolerated and that the benefits extend beyond seizure control alone.

The ASO-treated disease model animals demonstrated similar behavior and locomotor activity as wild type animals, suggesting SCN2A knockdown was generally well-tolerated and that the potential benefits could extend beyond seizure control alone.

An SCN2A ASO increased survival in a SCN2A gain-of-function mouse model.

Our lead candidate is currently undergoing evaluation in IND-enabling toxicology studies, which are expected to be completed by the end of 2021.

KCNT1 Program

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A KCNT1 inhibitor eliminated the occurrence of seizures in a KCNT1 transgenic mouse model and suppressed interictal spikes (or abnormal electrographic discharges observed between seizures) as detected by EEG

We are continuing to optimize the chemical structures of our molecules targeting KCNT1 channels and expect to select a development candidate in 2021.

Novel Collaborations in Rare Epilepsies

We have entered into a research collaboration with The Florey Institute of Neuroscience and Mental Health to develop three novel ASOs for the treatment of SCN2A loss of function mutations and two additional rare epilepsy targets.

This partnership expands our rare epilepsy drug development efforts with six distinct programs for the treatment of six different rare epilepsies.

This demonstrates our commitment to leading sodium channel research and particularly in the Nav1.2 channel which the SCN2A gene encodes.

Development options based on ongoing preclinical work are under assessment and we expect to provide an update in the first half of 2022.

The biopharmaceutical industry is characterized by rapidly advancing technologies, strong competition and an emphasis on proprietary products.

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• T-type calcium channel inhibitor programs in development targeting ET, including that of Jazz Pharmaceuticals and Neurocrine Biosciences, as well as other programs in clinical development targeting other mechanisms of action and approved therapies, such as propranolol, and off-label therapies, such as primidone.

• Sodium channel blocker programs in development for DEEs, including those of SK-Pharma, Xenon Pharmaceuticals and Neurocrine Biosciences, as well as other programs in clinical development targeting other mechanisms of action and approved therapies including other existing ion channel blockers.

• Sodium channel blocker or similar programs in development for DEEs, including those of SK-Pharma, Xenon Pharmaceuticals, Neurocrine Biosciences and Stoke Therapeutics, as well as other programs in clinical development targeting other mechanisms of action and approved therapies including other existing ion channel blockers.

• Treatments for TN include anticonvulsive medications, such as carbamazepine as well as various procedures or surgical interventions (vascular decompression or gamma knife).

We are not aware of any

development programs targeting SUNCT and SUNA, but we may face competition from off-label therapies such as intravenous lidocaine.

We are not aware of any development programs targeting SUNCT and SUNA, but we may face competition from off-label therapies such as intravenous lidocaine.

Many of our competitors have substantially greater financial resources, expertise and capabilities in research and development, the regulatory approval process, manufacturing and marketing than we do.

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We strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to the development of our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties.

We also rely on trade secrets relating to our proprietary technology platform and on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of neuroscience that may be important for the development of our business.

We may also rely on trade secrets relating to our proprietary technology platform and on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of neuroscience that may be important for the development of our business.

We additionally may rely on regulatory protection afforded through data exclusivity, market exclusivity and patent term extensions, where available.

Our commercial success may depend in part on our ability to:

obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business;

defend and enforce our patents;

preserve the confidentiality of our trade secrets;

and operate without infringing the valid enforceable patents and proprietary rights of third parties.

Our ability to limit third parties from making, using, selling, offering to sell, or importing our products may depend on the extent to which we have rights under valid and enforceable licenses, patents, or trade secrets that cover these activities.

In some cases, enforcement of these rights may depend on third party licensors.

With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing the same.

Patent expiration dates noted in the following paragraphs refer to statutory expiration dates and do not take into account any potential patent term adjustment or extension that may be available.

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

patents may be eligible for limited patent term extension.

These patent term extensions permit a patent restoration term of up to five years as compensation for any patent term lost during product development and the FDA regulatory review process.

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

The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a New Drug Application, or NDA, plus the time between the submission date of an NDA and the approval of that application.

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

The United States Patent and Trademark Office, or the USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration

GABA A receptor positive allosteric modulators

We own eight patent families directed to GABA A receptor positive allosteric modulators.

One family discloses and claims salts and polymorphs of PRAX-114, including the lead clinical candidate citrate salt of PRAX-114.

Two patents covering the clinical candidate salt have granted in the United States (U.S.

We own twelve patent families directed to GABA A receptor positive allosteric modulators.

Several patent families disclose and claim salts and polymorphs of PRAX-114, including the current clinical candidate salt.

Two patents are granted in the United States (U.S.

10,562,930 and U.S.

10,927,141) and applications in other potentially commercially relevant jurisdictions are pending, which expire in 2039.

A second family covers various methods of use, including treatment of the current lead clinical indication, major depressive disorder, with PRAX-114.

This patent family has 2 pending applications, which expire in December 2039.

A third family is directed to methods of treating various perimenopausal symptoms with PRAX-114.

This family has one pending application and expires in 2040.

A fourth family is directed to methods of treating mood disorders (including depression) with combinations of GABA-PAMs (including PRAX-114) with NMDA antagonists, NMDA Negative Allosteric Modulators or NMDA partial agonists.

This family has one application and expires in 2040.

A fifth family covers deuterated forms of PRAX-114.

This has one pending application and expires in February 2041.

Five additional U.S.

provisional applications have been filed, two covering methods of treating adjustment disorder with PRAX-114;

two covering improved methods of treating depression with an evening dose of PRAX-114;

and one covering a potential alternative clinical candidate salt of PRAX-114.

10,927,141), and patent applications are pending in other potentially commercially relevant jurisdictions, which expire in 2039.

Other patent families are directed to alternative salt forms of PRAX-114 and deuterated forms of PRAX-114, which expire in 2041.

Other patent applications cover formulations and processes for making related to PRAX-114, which expire in 2043.

Several patent applications covers various methods of use, including treatment of major depressive disorder (the current lead clinical indication,) with PRAX-114, which expire in 2039.

Other patent applications are directed to methods of treating various perimenopausal symptoms with PRAX-114 (which expire in 2040);

methods of treating mood disorders (including depression) with combinations of GABA-PAMs (including PRAX-114) with NMDA antagonists, NMDA Negative Allosteric Modulators or NMDA partial agonists (which expire in 2040);

methods of treating adjustment disorder with PRAX-114 (which expire in 2041);

and methods of treating motor disorders (including essential tremor) and musculoskeletal conditions with PRAX-114 (which expire in 2042).

T-type Calcium channel blockers

We own five patent families directed to T-type Calcium channel blockers.

One family discloses and claims compositions of matter of certain T-type calcium channel modulators, including PRAX-944.

This patent family is issued in many major pharmaceutical markets and is pending in others, and expires in 2029.

We own six patent families directed to T-type Calcium channel blockers.

One patent family discloses and claims compositions of matter of certain T-type calcium channel modulators, including PRAX-944.

This patent family has issued in many major pharmaceutical markets and is pending in others, and expires in 2029.

A second family is directed to methods of use of certain T-type calcium channel modulators, including PRAX-944, in treating disease such as epilepsy.

This patent family is pending in the United States and expires in December 2037.

This patent family is pending in the United States and expires in 2037.

A third patent family is directed to certain pharmaceutical formulations of PRAX-944 and methods of use in treating disorders such as essential tremor.

This patent family is pending in multiple jurisdictions of potential commercial interest.

A fourth family is directed to methods of use of PRAX-944.

This family is composed of three provisional applications.

patent family is directed to certain analog compounds of PRAX-944.

This patent family is composed of three provisional applications.

This patent family is pending in multiple jurisdictions of potential commercial interest, and expires in 2029.

A fourth family is directed to titration methods of using PRAX-944, and expires in 2041 A fifth patent family is directed to certain analog compounds of PRAX-944, and expires in 2041.

The sixth patent family is directed to the adjunctive use of a beta blocker and/or certain anticonvulsants with PRAX-944 and expires in 2043.

Persistent sodium current blockers

We own sixteen patent families directed to persistent sodium current blockers including three patent families that relate to our PRAX-562 program and thirteen families related to other persistent sodium current blockers.

Additionally, we have in-licensed one patent family.

Regarding the three families directed to our PRAX-562 program, one family discloses and claims certain persistent sodium current blockers, including PRAX-562, and methods of use in treating diseases such as pediatric epilepsy.

This family is pending in multiple jurisdictions, and expires in 2039.

A second family discloses other persistent sodium current blockers and generically claims PRAX-562.

This family also claims methods of use of the claimed compounds in treating diseases such as pediatric epilepsy.

We own fifteen patent families directed to persistent sodium current blockers, including a patent family that relates to PRAX-562 and PRAX-1451, two additional patent families that relate to PRAX-562 program, and the remaining patent families related to other persistent sodium current blockers.

One patent family discloses and claims certain persistent sodium current blockers, including PRAX-562 and PRAX-1451, and methods of use in treating diseases such as epilepsy (including pediatric epilepsy), as well as migraine and pain.

In this patent family, PRAX-562 is covered by a patent that has granted in the United States (U.S.

11,014,931), and patent applications pending in other potentially commercially relevant jurisdictions, which expire in 2039.

A second family discloses other persistent sodium current blockers and generically claims PRAX-562, as well as methods of treating diseases such as pediatric epilepsy.

This patent family is pending in multiple jurisdictions, and expires in 2037.

A third family is directed to pharmaceutical formulations of PRAX-562, methods of use in treating diseases such as pediatric epilepsy, cephalgia, SUNCT and SUNA and methods of making PRAX-562.

This family is pending.

A fourth family is directed to methods of use of persistent sodium current blockers, including PRAX-562, in treating diseases such as cephalgia, SUNCT and SUNA.

This family is composed of two provisional applications.

The remaining thirteen patent families are directed to a portfolio of sodium channel blockers that we plan to advance in other neuropsychiatric disorders.

Eleven patent families disclose and claim persistent sodium current blockers of various core structures and methods of use in treating diseases such as pediatric epilepsy, which include nine families pending in the United States, expiring between 2037 and 2040, and two families pending, expiring between 2039 and 2040.

Two families are directed to methods of use of certain persistent sodium current blockers in treating diseases such as cephalgia, SUNCT and SUNA.

The two families are composed of four provisional applications.

We have exclusively in-licensed one patent family directed to additional persistent sodium current blockers.

This family is owned by Gilead.

This family has claims directed to certain persistent sodium current blockers and methods of use.

This patent family is issued in multiple jurisdictions of potential commercial interest and is pending in other jurisdictions of interest, and expires in 2030.

KCNT1 blockers

We own ten patent families directed to KCNT1 blockers including nine families related to our KCNT1 program and one family related to antisense oligonucleotides.

Nine patent families are directed to our KCNT1 program and disclose and claim small molecule KCNT1 blockers and methods of use in treating diseases such as epilepsy, including epilepsy having certain KCNT1 mutations.

Three families are pending as PCTs, and expire in 2040 or 2041.

Six families are provisional applications.

One family is directed to certain antisense oligonucleotides and methods of use in treating diseases such as epilepsy, including epilepsy having certain KCNT1 mutations.

This family is pending and expires in December 2039.

A third family

is directed to pharmaceutical formulations of PRAX-562, methods of use in treating diseases such as pediatric epilepsy, cephalgia, SUNCT and SUNA, and methods of making PRAX-562, and expires in 2040.

The remaining patent families are directed to other persistent sodium current blockers of various core structures and methods of use in treating diseases such as pediatric epilepsy, expiring between 2037 and 2040.

SCN2A downregulation

We have exclusively in-licensed two patent families directed to our SCN2A program.

These patent families are owned by RogCon.

These families disclose and claim certain antisense oligonucleotides targeting SCN2A and methods of use in treating diseases such as epilepsy, including epilepsy having certain SCN2A mutations.

One family is pending in the United States and expires in August 2039.

A second family is pending as a PCT in which the claims are directed to methods of treating an SCN1A encephalopathy.

We own one patent family directed to our PRAX-222 program and a method of treating SCN2A gain of function neurological diseases using certain antisense oligonucelotides.

This patent family is pending as a provisional application.

We have an exclusive option to in-license one patent family directed to compositions of matter of PRAX-222.

This patent family is owned by Ionis and pending as a provisional application.

We have exclusively in-licensed three patent families directed to our SCN2A program.

Two of these patent families are owned by RogCon, and disclose and claim certain antisense oligonucleotides targeting SCN2A and methods of use in treating diseases such as epilepsy, including epilepsy having certain SCN2A mutations.

One patent family is pending in the United States, and expires in 2038.

A second patent family is directed to methods of treating SCN1A encephalopathy using antisense oligonucleotides targeting SCN2A, and expires in 2039.

The other in-licensed patent family is owned by Ionis, and is directed to compositions of matter of PRAX-222.

It includes pending PCT and Taiwanese applications that expire in 2041.

We own two patent families directed to our PRAX-222 program.

The first has claims directed to a method of treating SCN2A gain of function neurological diseases using certain antisense oligonucelotides.

This patent family is pending in the United States, and expires in 2041.

The second is directed to methods of treating SCN2A-related disorders using SCN2A inhibitors and expires in 2043.

KCNT1 blockers

We own eleven patent families directed to KCNT1 blockers including ten families related to our KCNT1 program and one family related to antisense oligonucleotides.

Ten patent families disclose and claim small molecule KCNT1 blockers and methods of use in treating diseases such as epilepsy, including epilepsy having certain KCNT1 mutations, and expire between 2040 and 2042.

One patent family is directed to certain antisense oligonucleotides and methods of use in treating diseases such as epilepsy, including epilepsy having certain KCNT1 mutations, and expires in 2039.

LICENSE AGREEMENTS

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We expense these costs as incurred as research and development.

Since the acquisition date, we expensed $ 0.2 million and $ 0.1 million related to the reimbursement of RogCon’s out-of-pocket costs in the years ended December 31, 2020 and 2019, respectively.

We expensed $0.1 million and $0.2 million related to the reimbursement of RogCon’s out-of-pocket costs in the years ended December 31, 2021 and 2020, respectively.

Additionally, RogCon has agreed to certain defined exclusivity obligations.

The RogCon Agreement, unless earlier terminated, will continue until the latest of:

(i) the expiration of all patent rights within RogCon patents, (ii) we certify we have abandoned the research, development and commercialization of product with no intention to re-establish such activities and (iii) no third party is obligated to pay any amounts that comprise net sublicense revenue.

(i) the expiration of all patent rights within RogCon patents, (ii) we certify we have abandoned the research, development and commercialization of product with no intention to re-

establish such activities and (iii) no third party is obligated to pay any amounts that comprise net sublicense revenue.

Either party may terminate the RogCon Agreement for material breach or insolvency of the other party.

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In September 2019, we and Ionis entered into the Ionis Agreement to discover and develop antisense oligonucleotides to treat forms of epilepsy caused by mutations of the SCN2A gene.

Pursuant to the Ionis Agreement, we and Ionis will each conduct certain research activities and Ionis will be responsible for identifying a development candidate and conducting an IND-enabling toxicology study.

The design of the IND-enabling toxicology study will be prepared and mutually agreed to by us and Ionis.

Pursuant to the Ionis Agreement, we and Ionis each conducted certain research activities and Ionis was responsible for identifying a development candidate and conducting an IND-enabling toxicology study.

The design of the IND-enabling toxicology study was prepared and mutually agreed to by us and Ionis.

We are obligated to reimburse any out-of-pocket costs incurred by Ionis related to research activities, identification of a development candidate and conducting IND-enabling studies.

We hold an exclusive option, which we may exercise following the results of the IND-enabling toxicology study, to obtain the rights and license to further develop and commercialize a development candidate in the field of epilepsy and neurodevelopmental disorders, other than Dravet Syndrome.

Upon the exercise of such option, we will be required to pay Ionis a $2.0 million license fee.

In addition, after option exercise, Ionis is eligible to receive certain contingent payments from us relating to development and other milestones, interest payments, royalties as a percentage of net product sales worldwide in the low-20s and any potential sublicense fees calculated as a percentage of sublicense revenue using a rate in the low-to-mid double digits.

Ionis granted us an exclusive option to obtain the rights and license to further develop and commercialize a development candidate in the field of epilepsy and neurodevelopmental disorders, other than Dravet Syndrome, following the results of the IND-enabling toxicology study.

We exercised this exclusive option in January 2022 and paid a $2.0 million license fee.

Ionis is eligible to receive certain contingent payments from us relating to development and other milestones, interest payments, royalties as a percentage of net product sales worldwide in the low-20s and any potential sublicense fees calculated as a percentage of sublicense revenue using a rate in the low-to-mid double digits.

Development milestones of $5.0 million for each product developed under the agreement are due upon the completion of the first clinical trial for each product, or the Development Milestone.

Ionis will be entitled to receive an additional one-time milestone payment of $5.0 million, or the Additional Milestone, upon the earliest to occur of the

following (each, a Payment Trigger):

Ionis will be entitled to receive an additional one-time milestone payment of $5.0 million, or the Additional Milestone, upon the earliest to occur of the following (each, a Payment Trigger):

(i) the first acceptance of an NDA filing for a product by the regulatory authority in a major market, (ii) we have both (a) received, in the aggregate, $300.0 million in cash since September 11, 2019 and (b) initiated the first clinical study with respect to a product or (iii) the closing of a change of control event affecting Praxis.

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The Ionis Agreement will continue in full force and effect until the expiration of all payment obligations to Ionis, unless terminated earlier by either party.

Either party may terminate the agreement upon material breach or insolvency of the other party or if Ionis is unable to identify a development candidate.

Either party may terminate the agreement upon material breach or insolvency of the other party.

Praxis is able to terminate the Ionis Agreement for convenience with prior written notice.

Ionis may terminate if we fail to achieve certain performance milestones or Ionis’ failure to identify a development candidate.

Ionis may terminate if we fail to achieve certain performance milestones.

Upon termination by us for convenience, we will stop selling all products, subject to certain wind-down provisions and all products will revert back to Ionis.

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We currently source all of our non-clinical and clinical compound supply through third-party contract development and manufacturing organizations, or CDMOs.

For clinical supply, we use CDMOs who act in accordance with the FDA’s current Good Manufacturing Practices, cGMP, for the manufacture of drug substance and product.

For clinical supply, we rely on CDMOs to manufacture drug substance and drug product in accordance with the FDA’s current Good Manufacturing Practices, or cGMP.

We expect to rely on third parties for our manufacturing processes and the production of all clinical supply drug substance and drug product and currently expect to continue to do so for commercial supplies of our product candidates, if approved.

We use additional contract manufacturers to fill, label, package, store and distribute our investigational drug products and currently expect to continue to do so for commercial supplies of our product candidates, if approved.

It is our intent to identify and qualify additional manufacturers to provide active pharmaceutical ingredient and fill-and-finish services prior to submission of an NDA to the FDA for any product candidates that complete clinical development.

It is our intent to identify and qualify additional manufacturers to provide active pharmaceutical ingredient and fill-and-finish services prior to submission of a new drug application, or NDA, to the FDA for any product candidates that complete clinical development.

GOVERNMENT REGULATION

The FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing and distribution of prescription drugs, such as those we are developing.

These agencies regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting,

sampling and export and import of drug products and product candidates.

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

government regulation of drug products

regulation of drug products

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

The FDA also regulates biological products under the FDCA and the Public Health Service Act, or PHSA.

If we advance clinical development of a biologic candidate in the future, these development activities will be subject to additional regulatory requirements specific to biologics.

Failure to comply with the applicable U.S.

requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending NDAs withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties brought by the FDA and the Department of Justice, or DOJ, or other governmental entities.

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

• Completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;

• Submission to the FDA of an IND which must become effective before human clinical trials may begin;

• Approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated;

• Performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug product for each indication;

• Submission to the FDA of an NDA or BLA;

• completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice regulations;

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

• approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before each trial may be initiated;

• performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug product for each intended use;

• preparation and submission to the FDA of an NDA;

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

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

• Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practice, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

• Satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;

• Payment of user, product and establishment fees and securing FDA approval of the NDA, including agreement to compliance with any post-approval requirements;

• Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.

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

• satisfactory completion of potential FDA audits of clinical trial sites to assess compliance with GCPs and the integrity of the clinical data;

• FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.

Preclinical studies

Before testing any drug or biological product candidate, including our product candidates, in humans, the product candidate must undergo rigorous preclinical testing.

Before testing any product candidate in humans, the product candidate must undergo preclinical testing.

Preclinical studies generally include laboratory evaluation of product chemistry, formulation and stability, as well as animal studies to assess potential toxicity, which support subsequent clinical testing.

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

An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical

data or literature and a proposed clinical protocol, among other things, to the FDA as part of an IND.

An IND is a request for authorization from the FDA to administer an investigational product to humans and must become effective before human clinical trials may begin.

Clinical trials

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all

research subjects provide their informed consent in writing for their participation in any clinical trial.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.

A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it initiates at that institution.

Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their www.clinicaltrials.gov website.

Information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial.

Sponsors are also obligated to disclose the results of their clinical trials after completion.

Disclosure of the results of these trials can be delayed in some cases for up to two years after the date of completion of the trial.

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

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

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

Additionally, FDA will review any data from clinical trials conducted outside the United States when determining whether to allow an IND to proceed in the U.S.

Specifically, FDA’s acceptance of data from trials conducted outside of the U.S.

is subject to certain conditions, including that the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with GCPs;

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial.

In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin.

Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

Additionally, the FDA will review any data from clinical trials conducted outside the United States when determining whether to allow an IND to proceed in the United States.

Specifically, the FDA’s acceptance of data from trials conducted outside of the United States is subject to certain conditions, including that the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with GCPs;

the data must be applicable to the U.S.

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Clinical holds also may be imposed by the FDA at any time before or during studies due to safety concerns or non-compliance.

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

The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness.

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

The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur.

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

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

Clinical trials

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

A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

Furthermore, an independent IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site, and must monitor the study until completed.

Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study, and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.

There are also requirements governing the reporting of ongoing clinical studies and clinical study results to public registries.

Specifically, information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their www.clinicaltrials.gov website.

Information related to the product candidate, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial.

Sponsors are also obligated to disclose the results of their clinical trials after completion.

Disclosure of the results of these trials can be delayed in some cases for up to two years after the date of completion of the trial.

Human clinical trials are typically conducted in three phases, which may overlap or be combined.

In Phase 1, the product candidate is introduced into healthy human subjects or patients with the target disease or condition to test for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early evaluation of effectiveness.

In Phase 2, the product candidate is administered to a limited patient population with a specified disease or condition to evaluate possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for the specified disease or condition, and to determine dosage tolerance and optimal dosage.

In Phase 3, the product candidate is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product candidate for approval, to establish the overall risk-benefit profile of the product candidate, and to provide adequate information for the labeling of the product candidate.

In some cases, the FDA may require, or sponsors may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product.

These so-called Phase 4 studies, may be conducted after initial marketing approval, and may be used to gain additional experience from the treatment of patients in the intended therapeutic indication.

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

Progress reports summarizing the results of clinical trials and nonclinical studies must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and investigators if serious and unexpected suspected adverse events occur, findings from other studies of the same or similar drug or from animal or in vitro testing suggest a significant risk, or there is an increased incidence of a serious suspected adverse reaction compared to that in the protocol or investigator brochure.

Furthermore, the FDA or the sponsor may

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

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

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

These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow up.

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

Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the drug or biologic as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the drug as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product and, among other things, companies must develop methods for testing the identity, strength, quality and purity of the final product.

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Marketing application submission and FDA review and approval

Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.

In most cases, the submission of an NDA is subject to a substantial application user fee.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA, the FDA has ten months from the date of “filing” of a standard NDA for a new molecular entity in which to complete its initial review and respond to the applicant, and six months from the filing date for priority applications.

The FDA does not always meet its PDUFA goal dates, and the review process can be extended by FDA requests for additional information or clarification and a sponsor’s process to respond to such inquiries.

This FDA review typically takes twelve months from the date the NDA is submitted to FDA (for a standard review) or eight months (for a priority review) because the FDA has approximately two months, or 60 days, after submission to make a “filing” decision on whether to accept an NDA for review.

The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review and informs the sponsor by the 74th day after the FDA’s receipt of the submission whether an application is sufficiently complete to permit substantive review.

Assuming successful completion of the required clinical testing, the results of preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.

The submission of an NDA is subject to a substantial application user fee, unless a waiver or exemption applies.

The FDA may request additional information rather than accept an NDA for filing.

In this event, the application must be resubmitted with the additional information.

In this event, the application must be withdrawn and resubmitted with the additional information.

The resubmitted application is also subject to review before the FDA accepts it for filing.

Once an application is accepted for filing, the FDA has a goal of ten months from the date of “filing” to complete a standard review of an NDA for a drug that is a new molecular entity, and six months from the filing date to complete a priority review.

The FDA does not always meet its goal dates, and the review process can be extended by FDA requests for additional information or clarification and a sponsor’s process to respond to such inquiries.

This FDA review process typically takes 12 months from the date the NDA is submitted to FDA (for a standard review) or eight months (for a priority review) inclusive of the 60 days to make a “filing” decision after the application is submitted.

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

The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured.

The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facilities in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

Before approving an NDA, the FDA typically will inspect the facilities where the product is manufactured.

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

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

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

Additionally, the FDA may refer any application to an advisory committee, including applications for novel drug candidates that present difficult questions of safety or efficacy.

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The FDA also may require submission of a risk evaluation and mitigation strategy, or REMS, plan, if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the drug product.

The REMS plan could include medication guides, physician communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.

A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.

The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis.

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In addition, under the Pediatric Research Equity Act of 2003, or PREA, as amended and reauthorized, certain NDAs or supplements to an NDA must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue either an approval letter or a complete response letter, or CRL.

The sponsor or FDA may request a deferral of pediatric clinical trials for some or all of the pediatric subpopulations.

The FDA must send a non-compliance letter

to any sponsor that fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation.

After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities, sponsor , and clinical trial sites, the FDA may issue either an approval letter or a complete response letter, or CRL.

An approval letter authorizes commercial marketing of the drug with specific prescribing information and for specific indications.

A CRL generally outlines the deficiencies in the submission and contains a statement of specific conditions that must be met in order to secure final approval of the NDA;

it may require additional clinical or preclinical testing and/or other significant and time-consuming requirements related to clinical trials, preclinical studies or manufacturing in order for FDA to reconsider the application.

If a CRL is issued, the applicant may choose to either resubmit the NDA, addressing all of the

deficiencies identified in the letter, or withdraw the application.

If and when those deficiencies have been addressed to the FDA’s satisfaction, the FDA will issue an approval letter.

The FDA has committed to reviewing such resubmissions in response to an issued CRL in either two or six months depending on the type of information included.

A CRL will describe all of the deficiencies in the NDA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the CRL without first conducting required inspections and/or reviewing proposed labeling.

In issuing the CRL, the FDA may recommend actions that the applicant might take to place the NDA in condition for approval, including requests for additional information or clarification.

If a CRL is issued, the applicant may choose to either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.

If those deficiencies have been addressed to the FDA’s satisfaction, the FDA will issue an approval letter.

Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess safety, require testing and surveillance programs to monitor the product, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.

The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs.

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Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product).

A company must request orphan product designation before submitting an NDA.

A company must request orphan drug designation before submitting an NDA.

If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use.

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

If a product with orphan status receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product generally will receive orphan product exclusivity.

Orphan product exclusivity means that the FDA may not approve any other applications for the same product for the same indication for seven years, except in certain limited circumstances.

If a drug or drug product designated as an orphan product ultimately receives marketing approval for an indication broader than what was designated in its orphan product application, it may not be entitled to exclusivity.

Orphan exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same active ingredient for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand.

Further, the FDA may approve more than one product for the same orphan indication or disease as long as the products contain different active ingredients.

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

Orphan product exclusivity means that the FDA may not approve any other applications for the same product for the same disease or condition for seven years.

Orphan exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same active ingredient for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or to provide a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand.

Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA application user fee.

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

Rare pediatric disease designation and priority review vouchers

Under the FDCA, the FDA incentivizes the development of drugs products that meet the definition of a “rare pediatric disease,” defined to mean a serious or life-threatening disease in which the serious of life-threatening manifestations primarily affect individuals aged from birth to 18 years and the disease affects fewer than 200,000 individuals in the United States or affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making in the United States a drug product for such disease or condition will be received from sales in the United States of such drug product.

The sponsor of a product candidate for a rare pediatric disease may be eligible for a voucher that can be used to obtain a priority review for a subsequent human drug product application after the date of approval of the rare pediatric disease drug product, referred to as a priority review voucher, or PRV.

A sponsor may request rare pediatric disease designation from the FDA prior to the submission of its NDA.

A rare pediatric disease designation does not guarantee that a sponsor will receive a PRV upon approval of its NDA.

Moreover, a sponsor who chooses not to submit a rare pediatric disease designation request may nonetheless receive a PRV upon approval of their marketing application if they request such a voucher in their original marketing application and meet all of the eligibility criteria.

If a PRV is received, it may be sold or transferred an unlimited number of times.

Congress has extended the PRV program through September 30, 2024, with the potential for PRVs to be granted through September 30, 2026.

In 2012, Congress authorized the FDA to award priority review vouchers to sponsors of certain rare pediatric disease product applications.

This program is designed to encourage development of new drug and biological products for prevention and treatment of certain rare pediatric diseases.

Specifically, under this program, a sponsor who receives an approval for a drug or biologic for a “rare pediatric disease” may qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product.

The sponsor of a rare pediatric disease drug product receiving a priority review voucher may transfer (including by sale) the voucher to another sponsor.

The voucher may be further transferred any number of times before the voucher is used, as long as the sponsor making the transfer has not yet submitted the application.

The FDA may also revoke any priority review voucher if the rare pediatric disease drug for which the voucher was awarded is not marketed in the United States within one year following the date of approval.

For purposes of this program, a “rare pediatric disease” is a (a) serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years;

diseases or conditions within the meaning of the Orphan Drug Act.

Congress has only authorized the Rare Pediatric Disease Priority Review Voucher program until September 30, 2024.

Consequently, sponsors of marketing applications approved after that date will not receive the voucher unless Congress reauthorizes the program.

If the program is not reauthorized, if a drug candidate receives Rare Pediatric Disease Designation before October 1, 2024, the sponsor of the marketing application for such drug will only be eligible to receive a voucher if the application for the designated drug is approved by the FDA before October 1, 2026.

Fast track, breakthrough therapy and priority review designations

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These programs include fast track designation, breakthrough therapy designation and priority review designation.

To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life threatening disease or condition and demonstrates the potential to address unmet medical needs for the condition.

Fast track designation provides opportunities for more frequent interactions with the FDA review team to expedite development and review of the product.

The FDA may also review sections of the NDA for a fast track product on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees to accept sections of the application and determines that the schedule is acceptable and the sponsor pays any required user fees upon submission of the first section of the application.

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

Fast track designation may be withdrawn by the sponsor or rescinded by the FDA if the designation is no longer supported by data emerging in the clinical trial process.

In addition, with the enactment of FDASIA in 2012, Congress created a new regulatory program for product candidates designated by FDA as “breakthrough therapies” upon a request made by IND sponsors.

A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

If the FDA designates a breakthrough therapy, it may take actions appropriate to expedite the development and review of the application, which may include holding meetings with the sponsor and the review team throughout the development of the therapy;

providing timely advice to, and interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the non-clinical and clinical data necessary for approval is as efficient as practicable;

involving senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review;

assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor;

and considering alternative clinical trial designs when scientifically appropriate, which may result in smaller trials or more efficient trials that require less time to complete and may minimize the number of patients exposed to a potentially less efficacious treatment.

Breakthrough therapy designation comes with all of the benefits of fast track designation, which means that the sponsor may file sections of the NDA for review on a rolling basis if certain conditions are satisfied, including an agreement with the FDA on the proposed schedule for submission of portions of the application and the payment of applicable user fees before the FDA may initiate a review.

Finally, the FDA may designate a product for priority review if it is a drug that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether the proposed drug represents a significant improvement when compared with other available therapies.

Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation.

A priority review designation is intended to direct overall attention and resources to the evaluation of such applications and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months for an NDA for a new molecular entity from the date of filing.

If criteria are not met for priority review, the application for a new molecular entity is subject to the standard FDA review period of ten months after FDA accepts the application for filing.

Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.

To be eligible for a fast track designation, the FDA must determine that a product candidate is intended to treat a serious or life threatening disease or condition and demonstrates the potential to address unmet medical needs for the condition.

Fast track designation provides opportunities for more frequent interactions with the FDA review team to expedite development and review of the product candidate.

The FDA may also agree to review sections of the NDA for a fast track product candidate on a rolling basis before the complete application is submitted.

A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation.

A product candidate can receive breakthrough therapy designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.

The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers.

Finally, the FDA may designate an NDA for priority review if the product candidate treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether the product candidate represents a significant improvement when compared with other available therapies.

Significant improvement may be illustrated by, among other things, evidence of increased effectiveness, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation.

A priority review designation is intended to direct overall attention and resources to the evaluation of such applications and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months from the filing date for an NDA for a new molecular entity.

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

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A drug product may also be eligible for accelerated approval if it is designed to treat a serious or life-threatening disease or condition and provides a meaningful therapeutic benefit over existing treatments.

Such products can be approved on the basis of adequate and well-controlled clinical trials establishing an effect on either

a surrogate endpoint that is reasonably likely to predict clinical benefit or on an intermediate clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the disease or condition and the availability or lack of alternative treatments.

Such product candidates can be approved upon a determination that the product candidate has an effect on either a surrogate endpoint that is reasonably likely to predict clinical benefit or on an intermediate clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the disease or condition and the availability or lack of alternative treatments.

As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials to verify and describe the predicted effect on IMM or other clinical endpoint.

The FDA may withdraw approval of a drug or indication approved under accelerated approval on an expedited basis if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product or the sponsor fails to conduct such confirmatory trials in a timely manner.

Drugs granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

In addition, all promotional materials for products approved under the accelerated approval program are subject to prior review by the FDA, a requirement that could adversely impact the timing of the commercial launch of the product.

FDA may withdraw approval of a drug or indication approved under accelerated approval if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product.

marketing and data exclusivity

Market exclusivity provisions under the FDCA can delay the submission or the approval of certain follow-on drug applications.

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

In addition, all promotional materials for products approved under the accelerated approval program are subject to prior review by the FDA.

drug product marketing exclusivity

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

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

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

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

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

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

This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs or follow-on 505(b)(2) NDAs if the protected clinical data are not referenced.

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This six-month exclusivity may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA-issued “Written Request” for such a trial.

Patent term restoration

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

patents may be eligible for limited patent term extension.

These patent term extensions permit a patent restoration term of up to five years as compensation for any patent term lost during product development and the FDA regulatory review process.

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

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

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

Post-approval requirements

Following approval of a new prescription drug product, the manufacturer and the approved drug are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to monitoring and recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.

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

Drugs must be promoted by a manufacturer and any third parties acting on behalf of a manufacturer only for the approved indications and in a manner consistent with the approved label for the product.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-

label uses and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

After approval, most changes to the approved product, such as adding new indications or other labeling claims or changes to the manufacturing processes or facilities, are subject to prior FDA review and approval.

There are continuing, annual user fee requirements for any marketed products and the establishments where such products are manufactured, as well as new application fees for supplemental applications with clinical data.

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

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FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use.

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

There are continuing, annual program fee requirements for any marketed products.

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

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information;

imposition of post-market studies or clinical trials to assess new safety risks;

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

Other potential consequences include, among other things:

• Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

• Fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials;

• Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or suspension or revocation of product approvals;

• Imposition of post-marketing studies or clinical trials to assess new safety risks, or restrictions under a REMS program;

• Restrictions on the marketing, manufacturing or distribution of the product, complete withdrawal of the product from the market or product recalls;

• Fines, warning letters, untitled letters or other enforcement-related letters or clinical holds on post-approval clinical trials;

• Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;

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

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

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

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

• Injunctions or the imposition of civil or criminal penalties.

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

Drugs must be promoted by a manufacturer and any third parties acting on behalf of a manufacturer only for the approved indications and in a manner consistent with the approved label for the product.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested and approved by the FDA.

The FDA does not regulate the behavior of physicians in their choice of treatments, but it does restrict the manufacturer’s communications on the subject of off-label use of their products.

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

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states.

Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

From time to time, new legislation and regulations may be implemented that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA.

It is impossible to predict whether further legislative or regulatory changes will be enacted, or FDA regulations, guidance or interpretations changed or what the impact of such changes, if any, may be.

Other healthcare laws and regulations

Healthcare providers, physicians and third party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any drug products for which we obtain marketing approval.

Our current and future arrangements with third party payors, customers, healthcare providers, physicians and others, in connection with the clinical research, sales, marketing and promotion of products, once approved, and related activities, may expose a pharmaceutical manufacturer to broadly applicable fraud and abuse and other healthcare laws and regulations.

In particular, the research of our product candidates, as well as the promotion, sales and marketing of healthcare items and services and certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business or financial arrangements.

The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not limited to:

federal Anti-Kickback Statute, which makes it illegal for any person or entity, including a prescription drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual, or the purchase, lease, order, arrangement, or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs.

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

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

Further, courts have found that if “one purpose” of renumeration is to induce referrals, the federal Anti-Kickback Statute is violated.

Violations are subject to significant civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment and exclusion from government healthcare programs.

In addition, a claim submitted for payment to any federal healthcare program that includes items or services that were made as a result of a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act, or FCA.

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

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

federal civil and criminal false claims laws, including the FCA, which can be enforced through “qui tam” or “whistleblower” actions, and civil monetary penalty laws, which impose criminal and civil penalties against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other federal health care programs that are false, fictitious or fraudulent;

knowingly making, using, or causing to be made or used, a false record or statement material to a false, fictitious or fraudulent claim or an obligation to pay or transmit money or property to the federal government;

or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing such an obligation.

to pay money to the federal government.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation.

A claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim under the FCA.

Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.

When an entity is determined to have violated the FCA, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs;

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false fictitious or fraudulent statement or entry in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.

Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA fraud provisions without actual knowledge of the statute or specific intent to violate it;

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose requirements relating to the privacy, security and transmission of individually identifiable health information on certain covered healthcare providers, health plans and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the creation, use, receipt, maintenance or disclosure of individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information.

HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil

In addition, there may be additional federal, state and non-U.S.

laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;

federal Physician Payments Sunshine Act, created under Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, and its implementing regulations, which require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the Centers for Medicare and Medicaid Services, or CMS, an agency within the U.S.

Department of Health and Human Services, or HHS, under the Open Payments Program, information related to direct or indirect payments and other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by the physicians and their immediate family members.

Effective January 1, 2022, these reporting obligations will extend to include transfers of value made during the previous year to certain non-physician providers such as physician assistants and nurse practitioners;

federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

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state, local and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers;

state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and other relevant compliance guidance promulgated by the federal government that otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities;

state and local laws requiring the registration of pharmaceutical sales representatives;

and state and foreign laws governing the privacy and security of health information, some of which may be more stringent than those in the United States (such as the European Union, which adopted the General Data Protection Regulation, which became effective in May 2018) in certain circumstances, and may differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Additionally, on November 20, 2020, HHS finalized a regulation that, among other things, (i) removed safe harbor protection for price reductions from pharmaceutical manufacturers, and (ii) created new safe harbor for certain fixed fees.

It is not clear at this time what effect, if any, these and other changes to the Anti-Kickback Safe Harbors, in effect as of January 19, 2021, will have on our business.

Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws.

Efforts to ensure that business arrangements comply with applicable healthcare laws involve substantial costs.

It is possible that governmental and enforcement authorities will conclude that our business practices do not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations.

If any such actions are instituted against us and we are not successful in defending ourselves or asserting its rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, imprisonment, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, reporting obligations and oversight if we become subject to integrity and oversight agreements to resolve allegations of non-compliance, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and the results of operations.

In addition, commercialization of any drug product outside the United States will also likely be subject to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business with are found to be not in compliance with applicable laws, they may be subject to similar penalties.

Other data privacy and security laws

In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws and federal and state consumer protection laws, govern the collection, use, disclosure and protection of health-related and other personal information outside of HIPAA and its implementing regulations.

For example, in June 2018, the State of California enacted the California Consumer Privacy Act of 2018, or the CCPA, which came into effect on January 1, 2020 and provides new data privacy rights for consumers and new operational requirements for companies, which may increase our compliance costs and potential liability.

The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used.

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.

While there is currently an exception for protected health information that is subject to HIPAA and clinical trial regulations, as currently written, the CCPA may impact certain of our business activities.

The CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the United States, which could increase our potential liability and adversely affect our business.

In the event we decide to conduct clinical trials or continue to enroll subjects in our ongoing or future clinical trials, we may be subject to additional privacy restrictions imposed by other countries and jurisdictions.

The collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the European Economic Area, or EEA, including personal health data, is subject to the EU General Data Protection Regulation, or GDPR, which became effective in May 2018.

The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches and taking certain measures when engaging third-party processors.

The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to € 20 million or 4% of annual global revenues, whichever is greater.

The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR.

In addition, the GDPR includes restrictions on cross-border data transfers.

The GDPR may increase our responsibility and liability in relation to personal data that we process where such processing is subject to the GDPR, and we may be required to put in place additional mechanisms to ensure compliance with the GDPR, including as implemented by individual countries.

Compliance with the GDPR will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.

Further, the United Kingdom’s decision to leave the EU, often referred to as Brexit, has created uncertainty with regard to data protection regulation in the United Kingdom.

In particular, it is unclear how data transfers to and from the United Kingdom will be regulated now that the United Kingdom has left the EU.

Healthcare laws and regulations

Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states in which they conduct their business, which may constrain the financial arrangements and relationships through which these companies and their partners research, sell, market and distribute any products for which marketing approval is obtained.

Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims and transparency laws regarding drug pricing and payments and other transfer of value to physicians and other healthcare providers.

If their operations are found to be in violation of any of such laws or any other governmental regulations that apply, they may be subject to penalties, including, without limitation, civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of operations.

Current and future healthcare reform legislation

In both the United States and certain foreign jurisdictions, there have been, and likely will continue to be, a number of legislative and regulatory changes regarding the health care system directed at broadening the availability of healthcare, improving the quality of healthcare and containing or lowering the cost of healthcare.

For example, in March 2010 the ACA was enacted, which substantially changed the way health care is financed by both governmental and private insurers, and significantly impacted the U.S.

In the United States, there have been, and likely will continue to be, a number of legislative and regulatory changes regarding the healthcare system directed at broadening the availability of health care, improving the quality of health care and containing or lowering the cost of health care.

For example, in March 2010 the Affordable Care Act, or ACA, was enacted, which substantially changed the way health care is financed by both governmental and private insurers, and significantly impacted the U.S.

pharmaceutical industry.

The ACA, among other things, subjects biological products to potential competition by lower-cost biosimilars, expands the types of entities eligible for the 340B drug discount program;

The ACA, among other things, subjected biological products to potential competition by lower-cost biosimilars;

expanded the types of entities eligible for the 340B drug discount program;

introduced a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

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and created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, or BBA, effective as of January 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

Since its enactment, there remain judicial, administrative, executive and legislative challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.

Various portions of the ACA are currently undergoing legal and constitutional challenges in the United States Supreme Court;

the Trump Administration has issued various Executive Orders which eliminated cost sharing subsidies and various provisions that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices;

and Congress has introduced several pieces of legislation aimed at significantly revising or repealing the ACA.

Also, in December 2018, CMS issued a final rule permitting further collections and payments to and from certain ACA qualified health plans and health insurance issuers under the ACA risk adjustment program.

Since then, the ACA risk adjustment program payment parameters have been updated annually.

It is unclear whether the ACA will be overturned, repealed, replaced, or further amended.

Since its enactment, there have been judicial, administrative, executive and legislative challenges to certain aspects of the ACA.

On June 17, 2021 the U.S.

Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

Thus, the ACA will remain in effect in its current form.

Further, prior to the U.S.

Supreme Court ruling, President Biden issued an executive order to, among other things, instruct certain governmental agencies to review and reconsider their existing policies and rules that limit access to health care, including among others, reexamining Medicaid

demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

For example, in August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.

A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs, including aggregate reductions of Medicare payments to providers of up to 2% per fiscal year.

These reductions went into effect on April 1, 2013, and, due to subsequent legislative amendments, will remain in effect through 2030 unless additional Congressional action is taken.

However, pursuant to the Coronavirus Aid, Relief and Economic Security Act, or CARES Act and subsequent legislation, these Medicare sequester reductions under the Budget Control Act of 2011 will be suspended from May 1, 2020 through March 31, 2021 due to the COVID-19 pandemic.

Proposed legislation, if passed, would extend this suspension until the end of the COVID-19 pandemic.

For example, in August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2% per fiscal year.

These reductions went into effect on April 1, 2013, and, due to subsequent legislative amendments, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Additionally, the BBA, among other things, also amended the ACA, effective January 1, 2019, by increasing the point-of-sale discount (from 50% under the ACA to 70%) that is owed by pharmaceutical manufacturers who participate in Medicare Part D and closing the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”.

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.

For example, CMS may develop new payment and delivery models, such as bundled payment models.

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

Payment methodologies may also be subject to changes in healthcare legislation and regulatory initiatives.

For example, Centers for Medicare and Medicaid Services may develop new payment and delivery models, such as bundled payment models.

There also has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics.

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Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drugs.

For example, at the federal level, the U.S.

government’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs.

On March 10, 2020, the Trump administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses and place limits on pharmaceutical price increases.

Moreover, the U.S.

Presidential administration previously released a “Blueprint” to lower drug prices and reduce out-of-pocket costs of drugs that contained proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers.

HHS has solicited feedback on some of these measures and has implemented others under its existing authority.

For example, in May 2019, CMS issued a final rule that would allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020.

This final rule codified CMS’s policy change that was effective January 1, 2019.

In addition, there have been several changes to the 340B drug pricing program, which imposes ceilings on prices that drug manufacturers can charge for medications sold to certain health care facilities.

It is unclear how these developments could affect covered hospitals who might purchase our future products and affect the rates we may charge such facilities for our approved products in the future, if any.

Additionally, on July 24, 2020 and September 13, 2020, former President Trump signed a series of Executive Orders aimed at lowering drug prices and at implementing several of the administration's proposals.

In response, the FDA released a final rule on September 24, 2020, which went into effect on November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada, as further discussed below.

Further, on November 20 2020 CMS issued an Interim Final Rule implementing the Most Favored Nation, or MFN,

Model under which Medicare Part B reimbursement rates will be calculated for certain drugs and biologicals based on the lowest price drug manufacturers receive in Organization for Economic Cooperation and Development countries with a similar gross domestic product per capita.

The MFN Model regulations mandate participation by identified Part B providers and will apply in all U.S.

states and territories for a seven-year period beginning January 1, 2021, and ending December 31, 2027.

The Interim Final Rule has not been finalized and is subject to revision and challenge.

Additionally, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.

Although a number of these and other measures may require additional authorization to become effective, and the Biden administration may reverse or otherwise change these measures, Congress has indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.

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

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

In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

In the European Union and in other foreign jurisdictions, similar political, economic and regulatory developments may affect our ability to profitably commercialize our products.

In addition to continuing pressure on prices and cost containment measures, legislative developments at the European Union or EU member state level may result in significant additional requirements or obstacles that may increase our operating costs.

Legislative and regulatory proposals, and enactment of laws, at the foreign, federal and state levels, directed at containing or lowering the cost of healthcare, will likely continue into the future.

Rest of world regulation

For other countries outside of the European Union and the United States, such as countries in Eastern Europe, Latin America or Asia, the requirements governing product development, the conduct of clinical trials, manufacturing, distribution, marketing approval, advertising and promotion, product licensing, pricing and reimbursement vary from country to country.

Additionally, clinical trials must be conducted in accordance with GCP requirements and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Additionally, to the extent that any of our product candidates, once approved, are sold in a foreign country, we may be subject to applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals.

Additional laws and regulations governing international operations

We expect that additional federal and state healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.

Coverage, pricing and reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval.

Sales of any products for which we receive regulatory approval for commercial sale will depend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such drug products.

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

For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs.

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

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

We may need to conduct expensive pharmaco-economic studies in order to demonstrate the medical necessity and cost-effectiveness of our product candidates, if approved, in addition to the costs required to obtain the FDA approvals.

Nonetheless, our product candidates may not be considered medically necessary or cost-effective.

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

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

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

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

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

In addition, emphasis on managed care in the United States has increased and could increase the pressure on pharmaceutical pricing.

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

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

Regulation of drug products and healthcare laws and regulations outside of the United States

Our product candidates may be subject in the future to laws and regulations related to drug products and health care imposed by jurisdictions outside of the United States, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals.

Outside of the United States, the provision of health care, including the pricing of pharmaceutical products, is subject to governmental control in many countries, and efforts to control prices and costs, including legislative action, will likely continue as countries attempt to manage healthcare expenditures.

Data privacy and security laws

Numerous state, federal and foreign laws govern the collection, dissemination, use, access to, confidentiality, and security of personal information, including health-related information.

In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, including the Health Insurance Portability and Accountability Act, or HIPAA, and federal and state consumer protection laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information could apply now or in the future to our operations or the operations of our partners.

In addition, certain state and non-U.S.

laws, such as the California Consumer Privacy Act of 2018, the California Privacy Rights Act of 2020, and the General Data Protection Regulation, or GDPR, and the UK GDPR, govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.

Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to make compliance efforts more challenging, and can result in investigations, proceedings, or actions that lead to significant penalties and restrictions on data processing.

Laws and regulations governing international operations

If we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate.

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exchanges for violations of the FCPA’s accounting provisions.

Coverage, pricing and reimbursement

Significant uncertainty exists as to the coverage, pricing and reimbursement status of any products seeking regulatory approval.

Successful commercialization of new drug products depends in part on the extent to which coverage and reimbursement for those drug products will be available from government health administration authorities, private health insurers and other organizations.

The availability and extent of reimbursement depend substantially, both domestically and abroad, on the extent to which the costs of drugs products are paid for by third-party payors, such as government health care programs (e.g., Medicare, Medicaid), health maintenance organizations, managed care providers, pharmacy benefit and similar healthcare management organizations, private health coverage insurers and other third-party payors.

These third-party payors decide which medications they will pay for and will establish reimbursement levels.

In the United States, the principal decisions about reimbursement for new drug products are typically made by CMS.

CMS decides whether and to what extent a new drug product will be covered and reimbursed under Medicare, and private payors tend to follow CMS to a substantial degree.

Factors payors consider in determining reimbursement are based on whether the product is:

• a covered benefit under its health plan;

• safe, effective and medically necessary;

• appropriate for the specific patient;

• cost-effective;

• neither experimental nor investigational.

In the United States, no uniform policy of coverage and reimbursement for drug products exists among third-party payors and coverage and reimbursement levels for drug products can differ significantly from payor to payor.

The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the reimbursement rate that the payor will pay for the product.

One payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product.

Third-party payors may also limit coverage to specific products on an approved list, or formulary, which might not include all of the FDA-approved products for a particular indication.

Various federal laws may impact the extent of coverage and reimbursement status provided by government health care programs.

For instance, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the MMA, established the Medicare Part D program to provide a voluntary prescription drug benefit to Medicare beneficiaries.

Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities that provide coverage of outpatient prescription drugs.

While all Medicare drug plans must give at least a standard level of coverage set by Medicare, Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each Part D prescription drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level.

However, Part D prescription drug formularies must include drugs within each

therapeutic category and class of covered Part D drugs, though not necessarily all the drugs in each category or class.

Any formulary used by a Part D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee.

Government payment for some of the costs of prescription drugs may increase demand for drugs for which we obtain marketing approval.

Any negotiated prices for any of our products covered by a Part D prescription drug plan will likely be lower than the prices we might otherwise obtain.

Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates.

Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-governmental payors.

For a drug product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to U.S.

government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program.

The required 340B discount on a given product is calculated based on the average manufacturer price, or AMP, and Medicaid rebate amounts reported by the manufacturer.

As of 2010, the ACA expanded the types of entities eligible to receive discounted 340B pricing, although under the current state of the law these newly eligible entities (with the exception of children’s hospitals) will not be eligible to receive discounted 340B pricing on orphan drugs.

As 340B drug pricing is determined based on average manufacturer price, or AMP, and Medicaid rebate data, the revisions to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase.

The American Recovery and Reinvestment Act of 2009 provides funding for the federal government to compare the effectiveness of different treatments for the same illness.

The plan for the research was published in 2012 by HHS, the Agency for Healthcare Research and Quality and the National Institutes for Health and periodic reports on the status of the research and related expenditures are made to Congress.

Although the results of the comparative effectiveness studies are not intended to mandate coverage policies for public or private payors, it is not clear what effect, if any, the research will have on the sales of our product candidates, if any such drug or the condition that they are intended to treat are the subject of a trial.

It is also possible that comparative effectiveness research, whether conducted by government or private entities, demonstrating benefits in a competitor’s drug could adversely affect the sales of our product candidate.

If third party payors do not consider our drugs to be cost-effective compared to other available therapies, they may not cover our drugs after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our drugs on a profitable basis.

In addition to the above-mentioned laws, increasing efforts by third party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.

In order to secure coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain FDA or comparable regulatory approvals.

Additionally, we may also need to provide discounts to purchasers, private health plans or government healthcare programs.

Our product candidates, if approved, may nonetheless not be considered medically necessary or cost-effective.

If third party payors do not consider a product to be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit.

We expect to experience pricing pressures from third party payors in connection with the potential sale of any of our product candidates

Outside of the United States, the pricing of pharmaceutical products and medical devices is subject to governmental control in many countries.

For example, in the European Union, pricing and reimbursement schemes vary widely from country to country.

Some countries provide that products may be marketed only after a reimbursement price has been agreed.

Some countries may require the completion of additional studies that compare the cost effectiveness of a particular therapy to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval.

Other countries may allow companies to fix their own prices for products, but monitor and control product volumes and issue guidance to physicians to limit prescriptions.

Efforts to control prices and utilization of pharmaceutical products and medical devices will likely continue as countries attempt to manage healthcare expenditures.

Historically, products launched in the European Union do not follow price structures of the United States and generally prices tend to be significantly lower.

HUMAN CAPITAL

At Praxis, we are fiercely dedicated to our mission to translate genetic insights into the development of therapies for CNS disorders characterized by neuronal imbalance.

While we strive each day to innovate and adapt

to deliver treatments that could potentially change the course of CNS disorders, we are also committed to developing our culture and our employees through our company core values – Trust , Ownership , Curiosity and Results .

High talent density is our ultimate goal.

Our culture is how we attract talent to join Praxis, which is how we were able to grow from 29 employees in three states at the end of 2019 to 67 in 12 states as of January 31, 2021.

We Trust each other’s judgement, which is why we do not implement excessive policies, and we value transparency among team members that leads to direct, clear, and timely feedback so we can all improve together.

We strive each day to innovate and adapt to deliver treatments that could potentially change the course of CNS disorders and to do so based on a culture built to attract, develop and retain a talent-dense workforce.

We are committed to developing our culture and our employees through our company core values – Trust , Ownership , Curiosity and Results .

It is the strength of our culture and our work environment that allow us to attract top talent to Praxis, which is how we were able to grow from 62 employees in 11 states at the end of 2020 to 139 in 22 states as of February 18, 2022.

We Trust each other’s judgement, which is why we do not implement excessive policies.

We value transparency among team members that leads to direct, clear, and timely feedback so we can all improve together.

We commit to be one another’s checks and balances.

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As an example, we do not have prescriptive policies on vacation, sick or personal time – we encourage employees to take that time as they need it and simply align with their manager about their plans.

Companies have learned to adapt on the fly during a global pandemic, and Ownership is something we have been sure to emphasize during this time.

We have adapted to new working methodologies that embrace a virtual and cooperative work environment while emphasizing personal Ownership for actions and outcomes.

We want employees to own projects and stay engaged through communication, but we also make sure employees know that Praxis is not a nine-to-five culture.

We are a culture where employees have real accountability as we all work towards a greater goal.

We understand the adjustment of working from home, connecting virtually instead of in person, and, for some, serving as teacher for children in virtual school.

We also acknowledge the stresses of living through a pandemic.

Our headquarters is designated as a collaborative workspace where we gather in teams or as a company when practical and safe.

Being able to own projects, while expressing when you need a break, is something we value.

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We love to learn.

Every first Monday of the month, we commit to what we call “Curiosity Day.” We ask our employees to step away from the computer for a day to learn more about something that interests them.

Whether it is diving deeper into a rare disease we do not currently support, revisiting a historical moment in time, perfecting a new skill, or even taking a day to safely enjoy the outdoors, these opportunities have made a positive impact for our employees, and they bring the new knowledge back to deliver on our mission.

One day a month, we commit to what we call “Curiosity Day.” We ask our employees to step away from the computer, meetings and calls for a single day to focus solely on being curious – whether that means catching up on professional articles or journals, diving deeper into a rare disease we do not currently support, challenging ourselves by exploring an area outside our comfort zone, perfecting a new skill, or even taking some time to safely enjoy the outdoors.

These opportunities have a positive impact on our employees, and enables them to bring the new knowledge and learnings to the work they do and increase the ability to deliver on our mission.

As we pursue objectives to achieve the ultimate Results , we challenge ourselves daily.

Through trust, ownership and curiosity, our employees are positioned to leave lasting results that reach the communities we serve.

At the end of the day, the magic we witness when employees put their minds together is what our company is most proud of.

To hold ourselves accountable for fulfilling our core values, we have abandoned traditional performance management systems.

With our work being done by agile, self-managed teams, we have developed a unique social feedback system in which, each employee chooses approximately 10 reviewers to give feedback on the employee’s performance and Praxis values, on a regular basis.

Reviewers are instructed to be candid but with positive intent, so that the feedback receiver has the opportunity to learn valuable lessons and identify development opportunities, which are crucial for our collective and individual growth.

At the end of the day, the magic we witness when employees put their minds together is what we are most proud of as a company.

To hold ourselves accountable for fulfilling our core values, we have established a unique social feedback system process that supports our agile, self-managed teams and is conducted on a regular schedule throughout the year.

Each employee chooses approximately 10 colleagues to provide them with thoughtful and constructive feedback on performance and our Praxis values.

Feedback givers are instructed to be candid but with positive intent, so that the feedback receiver has the opportunity to learn valuable lessons and identify development opportunities, both of which are crucial for our collective and individual growth.

To promote a culture of openness and transparency, the feedback is not given anonymously and each employee sees the reviewer's ratings and comments.

We feel the breadth of feedback helps ensure employees best understand what they do well, what they have improved on, where improvement is still needed and ultimately results in a high-performance culture.

In line with our core values, we are committed to providing a competitive total rewards package.

In line with our core values, we are committed to providing a highly competitive total rewards package.

Our compensation is a mix of salary, bonus, long-term equity and health and welfare benefits.

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Our Internet address is http://praxismedicines.com.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available through the “Investors + Media” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

file such material with, or furnish it to, the SEC.

Information on our website is not part of this Annual Report on Form 10-K or any of our other securities filings unless specifically incorporated herein by reference.

In addition, our filings with the SEC may be accessed through the SEC’s Interactive Data Electronic Applications system at http://www.sec.gov.

All statements made in any of our securities filings, including all forward-looking statements or

information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

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