What changed in this filing

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Item 1. Business

2021-03-31 compared with 2020-03-13 · 333 added, 213 removed, 850 unchanged (39% of the section changed)

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Pieris Pharmaceuticals, Inc.

is the sole stockholder of Pieris GmbH.recent

is the sole stockholder of Pieris GmbH.

Pieris Pharmaceuticals, Inc.’s corporate headquarters are located at 255 State Street, 9th Floor, Boston, Massachusetts 02109.

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We are a clinical-stage biotechnology company that discovers and develops Anticalin-based drugs to target validated disease pathways in unique and transformative ways.

Our clinical pipeline includes an inhaled IL-4Rα antagonist Anticalin protein to treat uncontrolled asthma and an immuno-oncology (IO) bispecific targeting HER2 and 4-1BB.

Our clinical pipeline includes an inhaled IL-4Rα antagonist Anticalin protein to treat uncontrolled asthma and an immuno-oncology, or IO, bispecific targeting HER2 and 4-1BB.

Proprietary to us, Anticalin proteins are a novel class of therapeutics validated in the clinic and through partnerships with leading pharmaceutical companies.

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We believe that our ownership or exclusive license of intellectual property related to the Anticalin platform provides us with a strong intellectual property position, particularly in cases where we are seeking to address targets and diseases in a novel way and for which there is existing antibody intellectual property.

We also believe that the drug-like properties of the Anticalin drug class have been demonstrated in various clinical trials with different Anticalin-based drug candidates, including PRS-060/AZD1402, PRS-343, PRS-080 and others.

Our core Anticalin technology and platform were developed in Germany, and we have collaborations with major multi-national pharmaceutical companies.

• We entered into a license and collaboration agreement, or the Servier Collaboration Agreement, with Les Laboratoires Servier and Institut de Recherches Internationales Servier, or Servier, in January 2017 in IO.

In May 2017, we entered into an alliance with AstraZeneca AB, or AstraZeneca, to treat respiratory diseases, and in February 2018, we entered into a license and collaboration agreement, or the Seattle Genetics Collaboration Agreement, with Seattle Genetics Inc., or Seattle Genetics, in IO.

• In May 2017, we entered into an alliance with AstraZeneca AB, or AstraZeneca, to treat respiratory diseases.

On March 29, 2021, we and AstraZeneca entered into the first amendment to the Non-exclusive Anticalin Platform License Agreement dated May 2, 2017 and the second amendment to the License and Collaboration Agreement dated

Under the amendments, the parties agreed to restructure certain commercial economics for the AZD1402/PRS-060 program by adjusting various milestones and royalty provisions, while fundamentally maintaining the overall value split between AstraZeneca and the Company.

In connection with the amendments, we achieved a $13.0 million milestone in connection with the initiation of the phase 2a study for this program and we and AstraZeneca entered into a Subscription Agreement pursuant to which we have agreed to issue to AstraZeneca, 3,584,230 shares of our common stock for a total purchase price of $10.0 million in a private placement transaction.

• In February 2018, we entered into a license and collaboration agreement, or the Seagen Collaboration Agreement, with Seagen Inc.

(formerly Seattle Genetics, Inc.), or Seagen, in IO.

On March 25, 2021 we announced an amendment to the Seagen Collaboration Agreement whereby our option to co-develop and co-commercialize the second of three programs in the collaboration was converted to a co-promotion option in the United States, with Seagen solely responsible for the development and overall commercialization of that program.

Under the co-promotion option, we will be entitled to increased royalties from that program in the event that we choose to exercise the option.

In addition, we entered into a clinical trial and supply agreement with Seagen to evaluate the safety and efficacy of combining our cinrebafusp alfa with Seagen’s TUKYSA ® (tucatinib), a small-molecule tyrosine kinase HER2 inhibitor, for the treatment of gastric cancer patients expressing lower HER2 levels (IHC2+/ISH- & IHC1+) as part of an upcoming phase 2 study.

Finally, as part of this transaction, we entered into a subscription agreement pursuant to which we agreed to issue to Seagen 3,706,174 shares of our common stock for a total purchase price of $13.0 million in a private placement transaction.

In connection with our efforts to develop multispecific Anticalin-based proteins designed to engage immunomodulatory targets, we have gained non-exclusive access to antibody building blocks that can be utilized to develop multispecific antibody-Anticalin fusion proteins.

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Further, we believe an inhaled drug may be better tolerated than systemically-administered antibodies.

We completed a phase 1 single-ascending dose, or SAD, study of PRS-060/AZD1402 and reported in November 2018 that PRS-060/AZD1402 was safe and well-tolerated by healthy volunteers participating in the trial.

In October 2019 we reported data from the ongoing multiple ascending dose, or MAD, phase 1 study in mild asthmatics.

PRS-060/AZD1402 was safe and well-tolerated by participants in the trial and provided for a robust reduction in fractional exhaled nitric oxide, or FeNO, versus placebo.

FeNO is a clinically-validated marker of airway inflammation.

Importantly, we were able to show that PRS-060/AZD1402 can inhibit FeNO levels at doses that do not inhibit systemic target engagement, which indicates a localized drug action in the lungs.

We anticipate the initiation of a phase 2a study, led by our partner AstraZeneca, for PRS-060/AZD1402 in the second half of 2020.

We are the sponsors of the phase 1 SAD/MAD studies for PRS-060/AZD1402, after which AstraZeneca will be responsible for further clinical development of PRS-060/AZD1402.

PRS-060/AZD1402 was tested in a nebulized formulation in 54 healthy volunteers at nominal dose levels ranging from 0.25 mg to 400 mg in a phase 1 SAD study.

Data from that study were presented at the American Thoracic Society International Conference in May 2019 showing that PRS-060/AZD1402 was well tolerated when given as a single inhaled or intravenous doses to healthy volunteers and there was systemic target engagement (as measured by pSTAT6 inhibition).

We presented interim data from the then ongoing PRS-060/AZD1402 phase 1 MAD study at the European Respiratory Society International Congress in October 2019 and reported that PRS-060/AZD1402 was safe and well-tolerated at all doses, led to a statistically significant reduction in fractional exhaled nitric oxide, or FeNO, a validated biomarker for eosinophilic airway inflammation, and showed dose-dependent systemic target engagement in patients with mild asthma and elevated levels of FeNO (≥ 35ppb).

Following the addition of 4 new cohorts, the phase 1 MAD study has now concluded, and additional data generated are currently planned to be publicly disclosed in 2021.

In addition to Ukrainian regulatory approval, AstraZeneca has also recently received ethics approval and regulatory acknowledgement for the phase 2a study of PRS-060/AZD1402in Australia.

In this global, two-part phase 2a study, PRS-060 will be evaluated at up to three dose levels in an inhaled dry powder formulation versus placebo.

The first part of the study will evaluate the compound in approximately 45 moderate asthmatics controlled on standard-of-care asthma therapy over four weeks to establish the safety and pharmacokinetics of the dry powder formulation.

The second part of the study will assess its efficacy, safety, and pharmacokinetics in up to three arms plus a placebo arm in up to 360 moderate uncontrolled asthmatics with a blood eosinophil count of ≥ 150 cells/μL and FeNO ≥ 25 ppb.

Patients will be dosed and monitored over four weeks, with FEV1 improvement compared to placebo as the primary endpoint.

We have been the sponsors of the phase 1 SAD/MAD studies for PRS-060/AZD1402, after which AstraZeneca has taken responsibility for further clinical development of PRS-060/AZD1402.

We have the right to opt-into co-development of PRS-060/AZD1402 with AstraZeneca after completion of the phase 2a study.

We also have a separate option to co-commercialize PRS-060/AZD1402 with AstraZeneca in the United States.

Beyond PRS-060/AZD1402, our alliance with AstraZeneca includes the development of four inhaled Anticalin-based drug candidates for the treatment of respiratory diseases and three of these programs have been initiated as part of the collaboration:

two new programs were initiated in 2018, one program was initiated in 2019.

AstraZeneca will have the option to initiate the fourth discovery program in the collaboration this year.

As part of the Company’s commitment to building a novel respiratory pipeline, in the fourth quarter of 2019, Pieris entered into research collaboration with the laboratories of University of Pittsburgh Professors Sally Wenzel, MD, and Anuradha Ray, PhD, focused on comprehensive immune phenotyping of severe asthmatic patients.

Key objectives of the collaboration include patient stratification strategies for more streamlined development of therapeutic interventions as well as identifying and validating novel asthma targets..

Beyond PRS-060/AZD1402, our alliance with AstraZeneca includes the development of four inhaled Anticalin-based drug candidates for the treatment of respiratory diseases which have been initiated as part of the collaboration:

two programs were

initiated in 2018, one program was initiated in 2019 and one was initiated in 2020.

The Company also continues to advance several proprietary discovery-stage respiratory programs.

Pieris expects to share data and rationale for advancement of one of its proprietary programs at a medical meeting in the second half of 2020.

The lead IO Anticalin-based drug candidate in our pipeline, PRS-343, is designed to target the immune receptor 4-1BB and the tumor target HER2.

PRS-343 is a genetic fusion of a variant of a HER2-targeting antibody with an Anticalin protein specific for 4-1BB.

Pieris expects to share data and rationale for advancement of one of its proprietary programs in 2021.

The lead IO Anticalin-based drug candidate in our pipeline, cinrebafusp alfa, is designed to target the immune receptor 4-1BB and the tumor target HER2.

Cinrebafusp alfa is a genetic fusion of a variant of a HER2-targeting antibody with an Anticalin protein specific for 4-1BB.

The proposed mode of action of this 4-1BB/HER2 bispecific is to promote 4-1BB clustering by bridging 4-1BB-positive T cells with HER2-positive tumor cells, thereby providing a potent co-stimulatory signal to tumor antigen-specific T cells.

PRS-343 is intended to localize 4-1BB activation in the tumor, and to thereby both increase efficacy and reduce systemic toxicity compared to 4-1BB-targeting antibodies.

Patient dosing in a multicenter, open-label, phase 1 dose escalation study commenced in September 2017.

The study is designed to determine the safety, tolerability, and potential anti-cancer activity of PRS-343 in patients with advanced or metastatic HER2-positive solid tumors for which standard treatment options are not available, are no longer effective, or are not tolerated, or in patients that have refused standard therapy.

Cinrebafusp alfa is intended to localize 4-1BB activation in the tumor, and to thereby both increase efficacy and reduce systemic toxicity compared to 4-1BB-targeting antibodies.

We will present an updated dataset for cinrebafusp alfa in an oral presentation at the American Association for Cancer Research, or AACR, Annual Meeting 2021 on April 10, 2021.

The presentation will include additional clinical benefit and safety data from cohort 13b (18 mg/kg, administered Q2W), as well as biomarker data across all active dose cohorts.

The Company is preparing for the phase 2 study of cinrebafusp alfa, expected to begin in the summer of 2021.

The phase 2 study will evaluate cinrebafusp alfa in combination with ramucirumab and paclitaxel in high HER2-expressing gastric cancer and in combination with tucatinib in low HER2-expressing gastric cancer.

Collaboration partners Lilly and Seagen will supply ramucirumab and tucatinib, respectively, for these study arms.

The phase 1 study, a multicenter, open-label, dose escalation study, was designed to determine the safety, tolerability, and potential anti-cancer activity of cinrebafusp alfa in patients with advanced or metastatic HER2-positive solid tumors for which standard treatment options are not available, are no longer effective, or are not tolerated, or in patients that have refused standard therapy.

Elevated HER2 expression is associated with multiple cancers, including gastroesophageal, bladder, breast and a range of other tumor types.

We presented interim data from the study in a late-breaking presentation at the Society for Immunotherapy of Cancer (SITC) annual meeting on November 9, 2019.

At SITC, we reported that PRS-343 was well tolerated and had a favorable safety profile at all doses and schedules tested, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T-cell numbers in the tumor microenvironment in patients, indicative of 4-1BB agonism on T-cells.

We continue to enroll patients in that study at higher dose cohorts and different dose regimens.

We also reported initial data from a phase 1 escalation study of PRS-343 in combination with atezolizumab at our R&D day on November 19, 2019.

We reported that PRS-343 in combination with atezolizumab was well tolerated and had a favorable safety profile at all doses tested, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T-cell numbers in the tumor microenvironment in patients demonstrating a clinical benefit, indicative of 4-1BB agonism on T-cells and a mode of action distinct from atezolizumab alone.

We plan to present detailed data from both studies at a medical meeting in the second half of this year.

We presented interim data from the phase 1 study at the Society for Immunotherapy of Cancer, or SITC, annual meeting in November 2019.

At SITC, we reported that cinrebafusp alfa was well-tolerated and had a favorable safety profile at all doses and schedules tested, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T cell numbers in the tumor microenvironment in patients, indicative of 4-1BB agonism on T cells.

We continued to enroll patients in that study at higher dose cohorts and different dose regimens.

We also reported initial data from a phase 1 escalation study of cinrebafusp alfa in combination with atezolizumab at our R&D day on November 19, 2019.

We reported that cinrebafusp alfa in combination with atezolizumab was well-tolerated and had a favorable safety profile at all doses tested, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T cell numbers in the tumor microenvironment in patients demonstrating a clinical benefit, indicative of 4-1BB agonism on T cells and a mode of action distinct from atezolizumab alone.

We presented additional interim data from the phase 1 monotherapy study and atezolizumab combination study of cinrebafusp alfa at the European Society for Medical Oncology, or ESMO, Virtual Congress in September 2020.

Data showed that cinrebafusp alfa had an acceptable safety profile at all doses and schedules tested in each clinical study, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T cell numbers in the tumor microenvironment in patients, indicative of 4-1BB agonism on T cells.

Additionally, a significant expansion of CD8+ T cells in the tumor microenvironment of responders and a substantial increase of peripheral soluble 4-1BB were observed in the active dose cohorts, suggesting 4-1BB-mediated target engagement.

In the monotherapy study, out of 33 response-evaluable patients at the time of the data cutoff, one patient with stage 4 rectal adenocarcinoma achieved a confirmed complete response at the 18 mg/kg Q2W dose (cohort 13b), three patients achieved a partial response at the 8 mg/kg Q2W dose (cohort 11b), and stable disease was observed in 13 patients as best response.

In the atezolizumab combination trial, four patients achieved a confirmed partial response at active dose levels.

In July 2020, we announced that our phase 1 studies of cinrebafusp alfa were placed on partial clinical hold by the FDA, or the Agency, while we conducted an additional in-use stability and compatibility study requested by the FDA.

Treatment of currently-enrolled patients continued, although no new patients were enrolled pending resolution of the partial hold.

The Company has completed the in-use studies it deems necessary in connection with the partial clinical hold of the cinrebafusp alfa phase 1 studies.

As part of the now-completed studies that supported a robust process for administration of cinrebafusp alfa in the clinical setting, we have optimized the level of an existing excipient to enhance the stability of cinrebafusp alfa under prescribed as well as stressed conditions that could occur in preparation of the drug candidate for patient administration in the real-world clinical setting.

In November 2020, we provided these results to the FDA in the form of a Type A briefing package and received feedback in December that the FDA agrees with the adequacy of the stability data supporting the use of the existing excipient as a co-diluent for cinrebafusp alfa and the clinical proposal to initiate continued development of cinrebafusp alfa.

The FDA lifted the partial clinical hold in January 2021.

We plan to advance cinrebafusp alfa into a phase 2 study for the treatment of HER2+ gastric cancer in combination with ramucirumab and paclitaxel in 2021.

In January 2017, we initiated a strategic collaboration with Servier to discover and develop multiple Anticalin-based bispecific therapeutics in IO.

The lead program in the alliance is PRS-344 (also known as S095012), a PD-L1/4-1BB antibody-Anticalin bispecific, for which we plan to file an investigational new drug application, or IND, in the first half of 2020.

Preclinical data for the PRS-344 program were presented at the SITC 2018 Annual Meeting.

The lead program in the alliance is PRS-344, also known as S095012, a PD-L1/4-1BB antibody-Anticalin bispecific and preclinical data for the PRS-344 program were presented at the SITC 2018 Annual Meeting.

We achieved two preclinical milestones under the program, one in December 2018 and another in February 2019.

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commercialization of PRS-344 during the first quarter of 2019.

In February 2018, we initiated a strategic collaboration with Seattle Genetics to discover and develop up to three Anticalin-based tumor-targeted bispecific therapeutics in IO.

As part of the alliance, we have generated and characterized the first tumor-targeting bispecific for further evaluation and development by Seattle Genetics.

We anticipate filing an IND/CTA application for PRS-344 in 2021 and are currently completing CMC activities associated with the scale-up manufacture of the drug product.

We hold exclusive commercialization rights for PRS-344 in the United States and will receive royalties on ex-U.S.

sales from Servier for this program.

The second active program in this alliance is PRS-352, a preclinical-stage program addressing undisclosed targets for immuno-oncology.

We successfully completed non-GLP preclinical work in 2020 and PRS-352 is currently under further development at Servier.

In February 2018, we initiated a strategic collaboration with Seagen to discover and develop up to three Anticalin-based tumor-targeted bispecific therapeutics in IO.

As part of the alliance, we have achieved a key preclinical milestone for one of the programs in the Seagen collaboration, a bispecific tumor-targeted costimulatory agonist, triggering a $5 million milestone.

We have handed the program over to Seagen, which is responsible for further advancement and funding of the asset.

The program is one of up to three potential programs in the Seagen alliance, and we believe the achieved milestone further validates our approach and leadership in immuno-oncology bispecifics, complementing the encouraging clinical data seen with cinrebafusp alfa.

We continue to explore opportunities to develop additional differentiated Anticalin-based multispecific therapeutics in IO.

We are performing proof of concept and proof of mechanism studies on additional fully proprietary programs to support drug candidate nomination.

Additionally, we have several academic collaborations that support our research and development objectives, including collaborations to assist in target and biomarker identification and translational research related to our drug candidates in IO and respiratory diseases.

Our goal is to become a fully-integrated biotechnology company by discovering and developing Anticalin-based therapeutics to target validated disease pathways in unique and transformative ways and to later commercialize our therapeutic products.

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Key elements of our strategy include:

Supporting AstraZeneca in the initiation of PRS-060/AZD1402 phase 2 studies.

We have reported promising data from our phase 1 SAD study and ongoing MAD study of PRS-060/AZD1402, are completing the ongoing MAD study, and are working with AstraZeneca for drug supply and other preparations for the phase 2a study of PRS-060/AZD1402.

We anticipate that AstraZeneca will initiate the study in the second half of this year.

Completing PRS-343 through phase 1 dose escalation study and initiating the next phase of development studies in gastric cancer.

We presented interim data from the study at a late-breaking presentation at the SITC annual meeting on November 9, 2019.

We reported that PRS-343 was well tolerated and had a favorable safety profile at all doses and schedules tested, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T-cell numbers in the tumor microenvironment of responders, indicative of 4-1BB agonism on T-cells.

Pieris continues to enroll patients in that study at higher dose cohorts and modified dosing schedules and plans to initiate a further trial of the drug candidate in gastric cancer.

We also plan to conclude and report complete data from the dose escalation study of PRS-343 in combination with atezolizumab in 2020.

• Supporting AstraZeneca in the execution of the PRS-060/AZD1402 phase 2 studies.

We have reported promising data from our phase 1 SAD and MAD studies of PRS-060/AZD1402 and have been working with AstraZeneca for drug supply and other preparations for the phase 2a study of PRS-060/AZD1402.

In addition to Ukrainian regulatory approval, AstraZeneca has also recently received ethics approval and regulatory acknowledgement for the phase 2a study of PRS-060/AZD1402 in Australia.

We achieved a $13.0 million milestone in connection with the initiation of patient enrollment in the phase 2a study of PRS-060/AZD1402 in the first quarter of 2021.

• Advancing cinrebafusp alfa into a phase 2 study to evaluate the drug candidate in combination with ramucirumab and paclitaxel in high HER2-expressing gastric cancer and in combination with tucatinib in low HER2-expressing gastric cancer.

We presented additional detailed data from the phase 1 monotherapy study and atezolizumab combination study of cinrebafusp alfa in an oral presentation session at the ESMO Virtual Congress in September 2020.

We reported that cinrebafusp alfa was well tolerated and had a favorable safety profile at all doses and schedules tested, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T cell numbers in the tumor microenvironment of responders, indicative of 4-1BB agonism on T cells.

In July 2020, we announced that our phase 1 studies of cinrebafusp alfa have been placed on partial clinical hold by the FDA while we conduct an additional in-use stability and compatibility study requested by the FDA.

Pieris has completed the studies requested by the Agency and submitted a Complete Response Letter and an amendment of the Ph1 monotherapy protocol to assess the safety and pharmacokinetics of cinrebafusp alfa in combination with the increased concentration of the excipient in December 2020.

In January 2021, FDA lifted the partial clinical hold of the phase 1 studies of cinrebafusp alfa.

We will present an updated dataset for cinrebafusp alfa in an oral presentation at the AACR Annual Meeting 2021 on April 10, 2021.

The presentation will include additional clinical benefit and safety data from cohort 13b (18 mg/kg, administered Q2W), as well as biomarker data across all active dose cohorts.

Additionally, we plan to advance cinrebafusp alfa into a phase 2 study for the treatment of low-HER2 and high-HER2 expressing gastric cancer in the summer of 2021.

• Advancing PRS-344 to initiation of a phase 1 study.

PRS-344 is currently undergoing IND-enabling activities and we intend to file an IND for the program in the first half of 2020.

PRS-344 is currently completing CMC activities associated with the scale-up manuf acture of the drug product, and we intend to file an IND for the program in 2021.

In addition, we and Servier will present preclinical data for PRS-344 as part of a poster session at the AACR Annual Meeting in 2021.

The presentation will showcase synergistic data, including in vitro data evaluating potential effects of combining 4-1BB with PD-L1 and the effects of PRS-344 on CD8+ T cells, as well as dose-dependent anti-tumor response in in vivo preclinical models.

PRS-344 is expected to enter phase 1 studies this year.

• Continuing to build our platform by entering into new partnerships and license and collaborative arrangements and advancing our currently partnered programs.

We have entered into partnership and collaborative arrangements with pharmaceutical companies in a diverse range of therapeutic areas and geographies.

We have active strategic partnerships with the global pharmaceutical companies Servier, AstraZeneca and Seattle Genetics.

We have active strategic partnerships with the global pharmaceutical companies Servier, AstraZeneca and Seagen.

Together with our partners, we intend to advance multiple drug candidates through preclinical studies and to select further drug candidates for clinical development in the future.

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• Pursuing other platform development activities.

We continue to make investments in our Anticalin platform, including in display and other technologies used to discover and optimize Anticalin proteins against targets of interest to increase the speed, throughput and quality of the selection process.

We continue to make investments in our Anticalin platform, including in display and other technologies used to discover and optimize Anticalin proteins against targets of interest to increase speed, throughput and quality of the selection process.

In addition, we continue to make investments in our platform for the characterization and manufacture of Anticalin proteins to develop drug candidates with excellent drug-like properties that can be efficiently produced.

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Lipocalins naturally bind to, store and transport a wide spectrum of molecules.

The defining attributes of the 12-member human lipocalin class and, by extension, Anticalin proteins, engineered from the lipocalin class of proteins, are a rigidly conserved beta-barrel backbone with four flexible loops, which, together, form a cup-like binding pocket.

The graphic below shows both tear lipocalin (left) and neutrophil gelatinase-associated lipocalin (NGAL, right).

We currently develop our Anticalin proteins from either tear lipocalin, found primarily in human tear fluid as well as the lung epithelium, or NGAL, a protein involved in the innate immune system, by making discrete mutations in the genetic code of the ligand binding regions.

The defining attributes of the human lipocalin class and, by extension, Anticalin proteins, engineered from the lipocalin class of proteins, are a rigidly conserved beta-barrel backbone with four flexible loops, which, together, form a cup-like binding pocket.

The graphic below shows the tear lipocalin (left) and neutrophil gelatinase-associated lipocalin, or NGAL (right).

These mutations have the potential to lead to highly specific, high-affinity binding proteins for both small and large molecular targets.

Mutations are introduced at pre-defined positions, creating exponentially diverse pools of Anticalin proteins, the most potent and well behaved of which are selected and optimized in a customized manner through in vitro selection using techniques such as phage display, a successful technique in antibody-based drug discovery.

The ability to generate highly-diverse and high-quality Anticalin libraries and to select for the best binders among the large pool of Anticalin proteins by phage display technology gives us the opportunity to select specific and high affinity Anticalin proteins for a wide variety of targets.

Mutations are introduced at pre-defined positions, creating exponentially diverse pools of Anticalin proteins, the most potent and well behaved of which are selected and optimized in a customized manner through in vitro selection using techniques such as phage and yeast display, successful techniques in antibody-based drug discovery.

The ability to generate highly-diverse and high-quality Anticalin libraries and to select for the best binders among the large pool of Anticalin proteins by display technologies gives us the opportunity to select specific and high affinity Anticalin proteins for a wide variety of targets.

The flexibility inherent in the Anticalin proteins’ cup-like structure allows us to choose both small-molecule targets that can be bound more inside the ‘cup’ as well as larger protein targets that can be bound more by the flexible loop region outside of the ‘cup’.

Our phase 1 studies for PRS-060/AZD1402, our prior phase 1 and 2 studies of PRS-080, our prior phase 1 study of PRS-050, as well as the phase 1 study of a PCSK9-specific Anticalin protein, indicate that these proteins may be non-immunogenic and thereby have the potential to exhibit a favorable safety profile.

Our phase 1 studies for PRS-060/AZD1402, our prior phase 1 and 2 studies of PRS-080, our prior phase 1 study of PRS-050, as well as the phase 1 study of a PCSK9-specific Anticalin protein, indicate that these proteins appear to have low immunogenic potential and thereby have the potential to exhibit a favorable safety profile.

The below graphic illustrates Anticalin proteins binding to a small molecule (left), a small protein target (hepcidin, center) and a large protein target (CTLA4, right):

To obtain a specific Anticalin protein, we take advantage of the breadth of our proprietary Anticalin libraries, generated through our protein engineering expertise.

We have created, and will continue to create, proprietary Anticalin libraries by rationally diversifying the lipocalin regions, thereby generating Anticalin libraries suitable for identifying binders to different types of targets.

We have created, and will continue to create, proprietary Anticalin libraries by rationally diversifying the certain lipocalin regions, thereby generating Anticalin libraries suitable for identifying binders to different types of targets.

By utilizing bacterial or mammalian expression platforms from the earliest stages of drug discovery through Current Good Manufacturing Practice, or cGMP, manufacturing, we have created a seamless platform that improves the quality, yield and cost-effectiveness of our drug candidates comprising a single Anticalin protein.

Some anticalin-based bi- and multi- specific drug candidates, such as PRS-343 and PRS-344, are expressed in standard mammal expression systems.

Some Anticalin-based bi- and multi- specific drug candidates, such as cinrebafusp alfa and PRS-344, are expressed in standard mammal expression systems.

In this way, Anticalin protein manufacturing is not limited to bacterial systems, with the underlying expression system being driven on a program-by-program basis.

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Such cross-linking often leads to undesirable activation of the cells bearing those receptors.

Single-action (monovalent) Anticalin proteins have only a single binding site and by that do not induce cross-linking.

Single-action, or monovalent, Anticalin proteins have only a single binding site and by that do not induce cross-linking.

Further, when it is called for by the biology we are addressing, we can create multispecific Anticalin proteins that can simultaneously bind (i) two or more different targets or (ii) different epitopes on the same target by genetically linking Anticalin proteins with distinct specificities or by genetic fusion of an Anticalin protein with an antibody.

We believe this multispecificity offers advantages in biological settings where binding to multiple targets can enhance the ability of a drug to achieve its desired effects, such as killing cancer cells.

We believe this multispecificity offers advantages in biological settings where binding to multiple

targets can enhance the ability of a drug to achieve its desired effects, such as killing cancer cells.

Novel Anticalin proteins genetically fused to each other or to existing antibodies for simultaneous target engagement are expressed as a fusion protein without generally compromising on manufacturability.

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PRS-060/AZD1402 is derived from human tear lipocalin, has a 20 pM affinity for human IL-4Rα and has a favorable stability profile.

Following the results reported in the "Clinical data" section below, and presented at the American Thoracic Society International Conference in May 2019 and European Respiratory Society International Congress in October 2019, AstraZeneca and Pieris are preparing to move into a phase 2a study in moderate-to-severe asthmatics in the second half of this year.

Following the results reported in the “Clinical data” section below, and presented at the American Thoracic Society International Conference in May 2019 and European Respiratory Society International Congress in October 2019, AstraZeneca made preparations for a global phase 2a study of PRS-060/AZD1402.

We anticipate the first patient will be dosed in the second quarter of 2021.

We believe that PRS-060/AZD1402 represents a first-in-class inhaled biologic targeting IL-4Rα for the treatment of asthma.

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There are several biologics approved for moderate-to-severe uncontrolled asthma in the United States and Europe.

Omalizumab is an anti-IgE monoclonal antibody marketed by Roche/Genentech for moderate-to-severe persistent allergic asthma and chronic idiopathic urticaria;

in 2018, Roche/Genentech reported total global sales for omalizumab in the amount of CHF 1,912 million ($1,905 million).

Omalizumab is an anti-IgE monoclonal antibody marketed by Roche/Genentech and Novartis for moderate-to-severe persistent allergic asthma and chronic idiopathic urticaria;

in 2019, Roche/Genentech and Novartis reported total global sales for omalizumab in the amount of $3,407 million.

Mepolizumab is an anti-IL5 monoclonal antibody marketed by GlaxoSmithKline, or GSK, for severe eosinophilic asthma;

in 2018, GSK reported global sales for mepolizumab in the amount of £563 million ($727 million).

in 2019, GSK reported global sales for mepolizumab in the amount of $1,041 million.

Benralizumab is an anti-IL5 receptor monoclonal antibody marketed by AstraZeneca for severe eosinophilic asthma;

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Furthermore, general asthma symptoms are also typically unaffected by omalizumab.

Finally, in 2007, the U.S.

Food and Drug Administration, or FDA, issued a black box warning for omalizumab due to reported cases of anaphylaxis, a potentially life-threatening allergic reaction suffered by some patients who had taken the drug.

Beyond omalizumab, there are four approved biologics for the treatment of asthma.

Finally, in 2007, the FDA issued a black box warning for omalizumab due to reported cases of anaphylaxis, a potentially life-threatening allergic reaction suffered by some patients who had taken the drug.

Beyond omalizumab, there are four approved biologics, or antibodies, for the treatment of asthma.

Three target the IL-5 pathway and one targets IL-4Rα.

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Since dosing by inhalation is a common route of administration in asthma patients, it could represent a more convenient dosage regimen for patients than dosing of antibodies by injection.

PRS-060/AZD1402 was safe and well-tolerated in a SAD phase 1 study, and the drug candidate is currently being evaluated in a MAD phase 1 study with interim data suggesting that PRS-060/AZD1402 was safe and well tolerated at all doses, led to a statistically significant reduction in FeNO and showed dose-dependent systemic target engagement in patients with mild asthma and elevated levels of FeNO.

PRS-060/AZD1402 was safe and well tolerated in a SAD phase 1 study, and the drug candidate has been evaluated in a MAD phase 1 study with interim data suggesting that PRS-060/AZD1402 was safe and well tolerated at all doses, led to a statistically significant reduction in FeNO and showed dose-dependent systemic target engagement in patients with mild asthma and elevated levels of FeNO.

Preclinical data

In in vitro assays, PRS-060/AZD1402 specifically bound to immobilized targets such as human IL-4Rα in a concentration-dependent manner.

We tested the binding of PRS-060/AZD1402 to various targets in an enzyme-linked immunosorbent assay, or ELISA, a standard in vitro assay platform.

We tested the binding of PRS-060/AZD1402 to various targets in an enzyme-linked immunosorbent assay,

or ELISA, a standard in vitro assay platform.

In these tests, PRS-060/AZD1402 bound to IL-4Rα with subnanomolar affinity and it did not bind to three other human cell-surface interleukin receptors (IL-6R, IL-18Rα, IL-23Rα).

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Minimal systemic exposure and target engagement were observed at the 2 mg dose, suggesting that local target engagement by the drug may be sufficient to reduce airway inflammation, as evidenced by FeNO reduction at that 2 mg dose level.

Following these reported results, AstraZeneca and Pieris are preparing to initiate a phase 2a study in moderate-to-severe asthmatics in the second half of this year.

In order to further investigate the safety and efficacy profile of PRS-060/AZD1402, the phase 1 MAD study recruited 4 additional cohorts in 2020.

The MAD study is now complete, and outcomes are planned to be publicly disclosed in 2021 following completion of the clinical study report.

AstraZeneca has received regulatory approval from Australia and Ukraine for a global phase 2a study of PRS-060/AZD1402.

Patient screening has begun following a COVID-19-related inventory challenge that we believe has now been resolved.

Dosing of the first patient with PRS-060/AZD1402 is expected in the second quarter of 2021.

The two-part phase 2a study is evaluating PRS-060/AZD1402, which is being conducted with a dry powder formulation, at up to three dose levels versus placebo.

The first part of the study will evaluate PRS-060/AZD1402 in moderate asthmatics controlled on standard-of-care asthma therapy over four weeks to establish the safety and pharmacokinetics of the dry powder formulation.

The second part of the study will evaluate efficacy, safety, and pharmacokinetics of PRS-060/AZD1402 in moderate asthmatics uncontrolled on standard-of-care asthma therapy over four weeks with FEV1 improvement as the primary endpoint.

Proprietary Respiratory Platform

We continue to advance several proprietary discovery-stage respiratory programs.

We expect to share data and rationale for advancement of one of our proprietary respiratory programs at a medical meeting in the second half of this year.

We expect to share data and rationale for advancement of one of our proprietary respiratory programs at a medical meeting in 2021.

AstraZeneca Respiratory Collaboration Beyond PRS-060/AZD1402

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We retain co-development and co-commercialization rights to two out of those four programs.

We have initiated discovery work on the three additional development candidates under the collaboration.

The targets and disease areas of those three programs are undisclosed.

AstraZeneca will have the option to initiate the fourth discovery program in the collaboration this year.

PRS-343 Targeting 4-1BB (CD-137) in Oncology

PRS-343 is a bispecific protein targeting the immune receptor 4-1BB and the tumor target HER2.

We have initiated discovery work on all four of the additional development candidates under the collaboration.

The targets and disease areas of those four programs are undisclosed.

Cinrebafusp alfa Targeting 4-1BB (CD-137) in Oncology

Cinrebafusp alfa is a bispecific protein targeting the immune receptor 4-1BB and the tumor target HER2.

It is generated by genetic fusion of an Anticalin protein specific for 4-1BB to each heavy chain of a variant of a HER2-targeting antibody.

The mode of action of this 4-1BB/HER2 bispecific is to promote 4-1BB clustering by bridging 4-1BB-positive T-cells with HER2-positive tumor cells, and to thereby provide a potent co-stimulatory signal to tumor antigen-specific T-cells.

PRS-343 is intended to localize 4-1BB activation in the tumor, and to thereby both increase efficacy and reduce systemic toxicity compared to 4-1BB-targeting antibodies being developed by third parties in clinical trials.

We initiated a phase 1 dose-escalation study of PRS-343 in HER2 positive patients in September 2017 and a phase 1 dose-escalation study of PRS-343 in combination with atezolizumab in HER2 positive patients in August 2018.

We presented interim data from the study at the SITC annual meeting on November 9, 2019.

We continue to enroll patients in that study at higher dose cohorts and modified dosing schedules and plan to initiate a further trial of the drug candidate in gastric cancer this year based on continued encouraging results from the trial.

We also plan to conclude and report complete data from the dose escalation study of PRS-343 in combination with atezolizumab this year.

mode of action of this 4-1BB/HER2 bispecific is to promote 4-1BB clustering by bridging 4-1BB-positive T cells with HER2-positive tumor cells, and to thereby provide a potent co-stimulatory signal to tumor antigen-specific T cells.

Cinrebafusp alfa is intended to localize 4-1BB activation in the tumor, and to thereby both increase efficacy and reduce systemic toxicity compared to 4-1BB-targeting antibodies being developed by third parties in clinical trials.

We initiated a phase 1 dose-escalation study of cinrebafusp alfa in HER2 positive patients in September 2017 and a phase 1 dose-escalation study of cinrebafusp alfa in combination with atezolizumab in HER2 positive patients in August 2018.

Biology of the co-stimulatory immune receptor 4-1BB

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The induced 4-1BB clustering leads to activation of the receptor and downstream signaling.

In a T-cell pre-stimulated by the T-cell receptor, or TCR, binding to a cognate major

histocompatibility complex, or MHC, target, co-stimulation via 4-1BB leads to further enhanced activation, survival and proliferation, as well as the production of pro-inflammatory cytokines and an improved capacity to kill.

In a T cell pre-stimulated by the T cell receptor, or TCR, binding to a cognate major histocompatibility complex, or MHC, target, co-stimulation via 4-1BB leads to further enhanced activation, survival and proliferation, as well as the production of pro-inflammatory cytokines and an improved capacity to kill.

Validation of 4-1BB as a therapeutic target in cancer

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We therefore hypothesized that to obtain an ideal 4-1BB-targeting agent, a bispecific molecule should be designed that targets 4-1BB on one end and a differentially expressed tumor target on the other end.

A visualization of the general concept is provided in Figure 1, below.

A visualization of the general concept is

provided in Figure 1, below.

HER2/4-1BB bispecific is envisioned to promote 4-1BB clustering by bridging T cells with HER2-positive tumor cells, and to thereby provide a potent co-stimulatory signal to tumor antigen-specific T cells, further enhancing its TCR-mediated activity and leading to tumor destruction.

Concept of co-stimulatory T-cell engagement.

Figure 1 Concept of co-stimulatory T cell engagement.

(A) The elements of the system are a target-positive tumor cell, a T cell with a TCR that is specific for an HLA/peptide combination on the tumor, and a co-stimulatory bispecific.

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(C) Toxic side effects are expected to be manageable, as target-negative cells do not lead to co-stimulation of T cells due to a lack of target-mediated receptor clustering, and healthy tissue is spared by tumor-costimulated T cells due to the absence of a primary, TCR-mediated signal.

Design and Generation of HER2/4-1BB bispecific PRS-343.

To obtain a molecule that would work by the mode of action of co-stimulatory T-cell engagement, we generated the HER2/4-1BB bispecific PRS-343.

Design and Generation of HER2/4-1BB bispecific cinrebafusp alfa.

To obtain a molecule that would work by the mode of action of co-stimulatory T cell engagement, we generated the HER2/4-1BB bispecific cinrebafusp alfa.

The molecule consists of two different building blocks binding to the two targets HER2 and 4-1BB.

To generate the 4-1BB-specific building block of PRS-343, we utilized Anticalin technology.

To generate the 4-1BB-specific building block of cinrebafusp alfa, we utilized Anticalin technology.

A 4-1BB-binding Anticalin protein was generated based on a re-design of the natural binding pocket of NGAL using mutant Anticalin libraries and a selection and screening process.

The resulting 4-1BB targeting Anticalin protein binds human 4-1BB with an affinity of 2 nM as determined by surface plasmon resonance, or SPR, and is capable of co-stimulating human T cells when immobilized on a plastic dish together with an anti-CD3 antibody.

To generate the bivalent HER2/4-1BB bispecific PRS-343, we constructed a genetic fusion of a 4-1BB-specific Anticalin protein to the C-terminus of each heavy chain of a HER2-binding antibody, connected by a flexible, non-immunogenic linker.

We utilized a sandwich ELISA experiment to investigate whether PRS-343 can bind both targets at the same time, which is a necessary prerequisite for the envisioned mode of action of PRS-343.

To generate the bivalent HER2/4-1BB bispecific cinrebafusp alfa, we constructed a genetic fusion of a 4-1BB-specific Anticalin protein to the C-terminus of each heavy chain of a HER2-binding antibody, connected by a flexible, non-immunogenic linker.

We utilized a sandwich ELISA experiment to investigate whether cinrebafusp alfa can bind both targets at the same time, which is a necessary prerequisite for the envisioned mode of action of cinrebafusp alfa.

The figure below shows that a sigmoid binding curve results from this titration, proving that both targets can indeed be engaged at the same time, fulfilling the key requirement for simultaneous co-stimulatory engagement of T cells by HER2-positive target cells.

PRS-343 simultaneous binding to targets HER2 and 4-1BB.

Recombinant Her2 was coated on a microtiter plate, followed by titration of PRS-343.

Figure 2 Cinrebafusp alfa simultaneous binding to targets HER2 and 4-1BB.

Recombinant HER2 was coated on a microtiter plate, followed by titration of cinrebafusp alfa.

Subsequently, a constant concentration of biotinylated human 4-1BB was added, which was detected via a peroxidase-conjugated avidin variant.

Mode of action – co-stimulatory T cell activation

We developed a novel T-cell activation assay format to investigate whether PRS-343 is capable of co-stimulating T-cells that have received a basic stimulus via the TCR.

We developed a novel T cell activation assay format to investigate whether cinrebafusp alfa is capable of co-stimulating T cells that have received a basic stimulus via the TCR.

The assay, visualized in Figure 3 below, is based upon providing the TCR stimulus via an anti-CD3 antibody coated onto the plastic culture dish, while 4-1BB co-stimulation is achieved by tumor-target dependent clustering of 4-1BB on purified T cells.

Visualization of co-stimulatory T-cell activation assay.

Figure 3 Visualization of co-stimulatory T cell activation assay.

HER2-positive tumor cells are grown overnight on cell culture plates that have been precoated with low amounts of an anti-CD3 antibody to provide a limited primary activation of T cells via the T cell receptor.

T-cells are added to the wells together with the titrated 4-1BB/HER2 bispecific PRS-343, leading to clustering of the co-stimulatory 4-1BB receptor, which in turn results in T-cell co-stimulation.

T cells are added to the wells together with the titrated 4-1BB/HER2 bispecific cinrebafusp alfa, leading to clustering of the co-stimulatory 4-1BB receptor, which in turn results in T cell co-stimulation.

T cell co-stimulation is detected by increased supernatant IL-2 and IFN-γ levels in the culture supernatants after continued culture.

There is a clear induction of IL-2 (Figure 4A) and IFN-γ (Figure 4C) with increasing concentrations of PRS-343.

There is a clear induction of IL-2 (Figure 4A) and IFN-γ (Figure 4C) with increasing concentrations of cinrebafusp alfa.

The fitted EC50 of this effect is similar for both proinflammatory cytokines, with 0.7 nM for IL-2 induction and 0.3 nM for IFN- α induction, respectively.

That T cell co-stimulation is indeed, due to the bispecific engagement of T cells and SKBR3 cells, shown by two observations:

firstly, the monospecific HER2-targeting antibody does not lead to enhanced T-cell activation (average shown as dotted line in Figure A and Figure C), and secondly, disrupting the bispecific interaction with an excess of HER2-targeting antibody abolishes the effect of IL-2 and INF-γ induction almost completely, except at the highest concentrations of PRS-343 employed (Figure 4B and Figure 4D).

Experimental result of co-stimulatory T-cell activation assay.

firstly, the monospecific HER2-targeting antibody does not lead to enhanced T cell activation (average shown as dotted line in Figure A and Figure C), and secondly, disrupting the bispecific interaction with an excess of HER2-targeting antibody abolishes the effect of IL-2 and INF-γ induction almost completely, except at the highest concentrations of cinrebafusp alfa employed (Figure 4B and Figure 4D).

Figure 4 Experimental result of co-stimulatory T cell activation assay.

HER2-positive tumor cells were grown overnight on 96-well plates that had been precoated with 0.25 µg/mL anti-CD3 antibody for 1 hour at 37°C.

The next day, T-cells purified from healthy donor peripheral blood mononuclear cells, or PBMC, were added to the wells together with the titrated 4-1BB/HER2 bispecific PRS-343 (filled circle) or trastuzumab as a control (dotted line).

The next day, T cells purified from healthy donor peripheral blood mononuclear cells, or PBMC, were added to the wells together with the titrated 4-1BB/HER2 bispecific cinrebafusp alfa (filled circle) or trastuzumab as a control (dotted line).

After three days in culture, IL-2 and IFN-γ, levels in the culture supernatants were measured by an electrochemoluminescence immunoassay.

In parallel, the experiment was performed in the presence of an excess of trastuzumab (340 nM) to inhibit the binding of PRS-343 to the tumor cells, and IL-2 (C) and IFN-γ (D) levels were measured.

In parallel, the experiment was performed in the presence of an excess of trastuzumab (340 nM) to inhibit the binding of cinrebafusp alfa to the tumor cells, and IL-2 (C) and IFN-γ (D) levels were measured.

Proof of concept data utilizing a humanized SK-OV-3 mouse model demonstrated dose-dependent tumor growth inhibition compared to treatment with the isotype control (Figure 5).

It is anticipated that the tumor growth inhibition, or TGI, in this model is predominantly caused by the anti-HER2 activity.

The anti-tumor response observed with PRS-343 was accompanied by a significantly higher tumor infiltration with human lymphocytes (hCD45+).

The anti-tumor response observed with cinrebafusp alfa was accompanied by a significantly higher tumor infiltration with human lymphocytes (hCD45+).

Interestingly, the anti-4-1BB benchmark neither displayed tumor growth inhibition nor enhanced lymphocyte infiltration into tumors compared to isotype.

The tras-IgG4 control was also devoid of lymphocyte infiltration into the tumor but displayed a tumor growth inhibition comparable to PRS-343.

Taken together, these data show that PRS-343 provided dual activity by both increasing the frequency of TILs by bispecific targeting of CD137 and HER2 as well as mediating direct tumor growth inhibition by the direct, monospecific targeting of HER2.

PRS-343 activity in mice engrafted with HER2-positive SK-OV-3 cell line and human PBMC.

The tras-IgG4 control was also devoid of lymphocyte infiltration into the tumor but displayed a tumor growth inhibition comparable to cinrebafusp alfa.

Taken together, these data show that cinrebafusp alfa provided dual activity by both increasing the frequency of TILs by bispecific targeting of CD137 and HER2 as well as mediating direct tumor growth inhibition by the direct, monospecific targeting of HER2.

Figure 5 Cinrebafusp alfa activity in mice engrafted with HER2-positive SK-OV-3 cell line and human PBMC.

(A) Median of tumor growth.

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Clinical data

We presented interim data from our phase 1 escalation study of PRS-343 at the SITC annual meeting on November 9, 2019.

We disclosed that PRS-343 was well tolerated and had a favorable safety profile at all doses and schedules tested, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T-cell numbers in the tumor microenvironment of responders, indicative of 4-1BB agonism on T-cells.

We continue to enroll patients in that study at higher dose cohorts and modified dosing schedules and plan to initiate a further trial of the drug candidate in gastric cancer this year.

We also plan to conclude and report complete data from the dose escalation study of PRS-343 in combination with atezolizumab in 2020.

We presented interim data from the phase 1 study of cinrebafusp alfa in a late-breaking presentation at the SITC annual meeting in November 2019.

At SITC, we reported that cinrebafusp alfa was well tolerated and had a favorable safety profile at all doses and schedules tested, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T cell numbers in the tumor microenvironment in patients, indicative of 4-1BB agonism on T cells.

We continue to enroll patients in that study at higher dose cohorts and different dose regimens.

We also reported initial data from a phase 1 escalation study of cinrebafusp alfa in combination with atezolizumab at our R&D day on November 19, 2019.

We reported that cinrebafusp alfa in combination with atezolizumab was well tolerated and had a favorable safety profile at all doses tested, demonstrated anti-tumor activity in a heavily pre-treated patient population across multiple tumor types and showed a potent increase in CD8+ T cell numbers in the tumor microenvironment in patients demonstrating a clinical benefit, indicative of 4-1BB agonism on T cells and a mode of action distinct from atezolizumab alone.

We presented additional interim data from the phase 1 monotherapy study and atezolizumab combination study of cinrebafusp alfa in an oral presentation session at the ESMO Virtual Congress in September 2020.

As of the July 2020 cutoff date, 74 patients had been enrolled in the monotherapy study, including 21 additional patients enrolled in the active dose cohorts (≥2.5 mg/kg) since the data were presented at the SITC 2019 Annual Meeting, and 41 patients had been enrolled in the atezolizumab combination therapy study.

In the monotherapy study, out of 33 response-evaluable patients at the time of the data cutoff of July 27, 2020, according to RECIST 1.1, one patient with stage 4 rectal adenocarcinoma achieved a confirmed complete response at the 18 mg/kg Q2W dose (cohort 13b), three patients achieved a partial response at the 8 mg/kg Q2W dose (cohort 11b), and stable disease was observed in 13 patients as best response out of 33 evaluable patients across the predicted active dose ranges (cohorts 9-13b), translating to an overall response rate, or ORR, of 12% and a disease control rate, or DCR, of 52%.

Cinrebafusp alfa also showed an acceptable safety profile at all doses and schedules tested in each clinical study.

In the atezolizumab combination trial, seven dose cohorts have been evaluated at a Q3W dosing schedule ranging from 0.05 mg/kg to 8 mg/kg in combination with a fixed 1200 mg dose of atezolizumab.

In that trial, under RECIST 1.1, four patients achieved a confirmed partial response at active dose levels.

We plan to advance cinrebafusp alfa into a phase 2 study for the treatment of HER2+ gastric cancer in combination with ramucirumab and paclitaxel in 2021.

PRS-344 consists of a PD-L1-targeting antibody and 4-1BB-targeting Anticalin proteins genetically fused to each arm of the C-terminal heavy chain of the antibody.

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PRS-344 is intended to localize 4-1BB activation in the tumor in a PD-L1 dependent manner.

PD-L1 is a transmembrane protein belonging to the B7 family and is expressed on a variety of cells including T-cells, B cells, epithelial and vascular endothelial cells.

a transmembrane protein belonging to the B7 family and is expressed on a variety of cells including T cells, B cells, epithelial cells and vascular endothelial cells.

Most importantly, PD-L1 is found at high levels on tumor cells of several cancer types including but not limited to melanoma, lung, bladder, colon and breast cancer.

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Preclinical data shows that the synergistic effect observed by targeting PD-L1 and 4-1BB simultaneously is stronger with PRS-344 than with the combination of anti-PD-L1 and anti-4-1BB antibodies.

The combination of anti-PD-L1 benchmark and anti-4-1BB benchmark demonstrates the strong synergistic effect of T-cell co-stimulation and checkpoint blockade in T-cell activation.

Figure 1 The combination of anti-PD-L1 benchmark and anti-4-1BB benchmark demonstrates the strong synergistic effect of T cell co-stimulation and checkpoint blockade in T cell activation.

With PRS-344, this synergistic effect is massively increased.

Together with our partner Servier, we plan to file an IND for the program in the first half of 2020.

Together with our partner Servier, we are completing CMC activities associated with the scale-up manufacture of the drug-product, while preparing for an IND/CTA submission in 2021.

This first-in-human study will consist of evaluating the safety and tolerability profile of PRS-344 and determining its maximum tolerated dose, or MTD, and/or the recommended phase 2 dose, or RP2D, in patients with solid tumors.

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Any initial signs of anti-tumoral activity will be correlated to safety and PK and further explored in expansion cohorts.

IO Market with respect to PRS-343 and PRS-344

IO Market with respect to cinrebafusp alfa and PRS-344

In 2020, there were approximately 1.807 million estimated new cancer cases in the United States (NCI Surveillance, Epidemiology, and End Results Program) and approximately 19.3 million cancer cases worldwide (IARC GLOBOCAN 2020).

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Global sales in 2018 for these seven checkpoint inhibitors exceeded $16 billion.

In addition, other than the six anti-PD-1 or PD-L1 monoclonal antibodies approved in the Unites States, four other anti-PD-1 monoclonal antibodies had been approved in China by the end of 2019.

In addition, other than the six anti-PD-1 or PD-L1 monoclonal antibodies approved in the United States, four other anti-PD-1 monoclonal antibodies had been approved in China by the end of 2019 and additional anti-PD-1 or PD-L1 monoclonal antibodies have filed for approval in both the United States and China.

The majority of the global sales of checkpoint inhibitors comes from two anti-PD-1 monoclonal antibodies:

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Current antibody-based therapies targeting tumor cell destruction or immune activation are hampered by, among other factors, low response rates and the induction of immune-related adverse events.

Our IO pipeline beyond PRS-343 and PRS-344 is designed to target checkpoint proteins or, like PRS-343, co-stimulatory proteins.

These programs consist of a variety of multifunctional biotherapeutics that can encompass a fusion of antibodies with Anticalin proteins or two or more Anticalin proteins to each other.

Our IO pipeline beyond cinrebafusp alfa and PRS-344 is designed to target checkpoint proteins or, like cinrebafusp alfa, co-stimulatory proteins.

These programs consist of a variety

of multifunctional biotherapeutics that can encompass a fusion of antibodies with Anticalin proteins or two or more Anticalin proteins to each other.

These combined molecules have the potential to build upon current therapies by modifying or regulating one or more immune functions on a single fusion protein, thereby having the potential to elevate immune responses within a tumor microenvironment.

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Servier Collaboration Beyond PRS-344

As further described below, our Servier Collaboration Agreement includes three active programs beyond PRS-344.

We retain co-development and co-commercialization rights to two programs, including PRS-344.

These additional programs have been defined, and may combine antibodies with one or more Anticalin proteins based on our proprietary platform to generate innovative immuno-oncology bispecific drug candidates.

In September 2019, Servier decided to discontinue co-development of PRS-332, but we retain full rights to advance the development and commercialization of the drug candidate on a world-wide basis.

Servier's decision to discontinue PRS-332 does not impact the rest of the Servier Collaboration Agreement.

In addition, effective in January of this year, Servier and Pieris agreed to extend the research term of the three programs in development beyond PRS-344 for one year.

In February 2020, we and Servier agreed to extend the research term of the three programs in development beyond PRS-344 for one year.

This research extension includes reimbursement for Pieris’ internal efforts and an extension of the research license.

Seattle Genetics Collaboration

In addition, our collaboration with Seattle Genetics to discover and develop Anticalin-based tumor-targeted bispecific therapeutics in IO includes up to three programs.

As part of the expiration of the initial research term, the option to expand the collaboration beyond the initial five committed programs also expired.

In March 2020, Servier notified us of its decision to discontinue co-development of two earlier preclinical stage programs for strategic reasons based upon an extensive portfolio review.

The discontinuation of these two programs decreased the potential milestone payments we could receive in the future.

In February 2021, the research term was extended again for another 12 months.

Given the discontinuation of the two preclinical stage programs in March 2020, and as further described below, our Servier Collaboration Agreement includes one additional program beyond PRS-344, PRS-352.

We retain co-development and co-commercialization rights to only PRS-344.

PRS-352 is a preclinical-stage program within the Servier alliance addressing undisclosed targets in IO.

We have successfully completed non-GLP preclinical work in 2020 and PRS-352 is currently under further development at Servier.

Seagen Collaboration

In addition, our collaboration with Seagen to discover and develop Anticalin-based tumor-targeted bispecific therapeutics in IO includes up to three programs.

We retain a co-development and co-commercialization option for one of these three programs.

We achieved a key development milestone for one of the programs in the Seagen collaboration in 2020, a bispecific tumor-targeted costimulatory agonist, triggering a $5 million payment.

We have handed the program over to Seagen, which is responsible for further advancement and funding of the asset.

In March 2021, Seagen made a $13.0 million equity investment in Pieris as part of an ongoing collaboration between the companies.

Additionally, the companies have entered into a clinical trial and supply agreement to evaluate the safety and efficacy of combining Pieris' cinrebafusp alfa with Seagen's tucatinib, a small-molecule tyrosine kinase HER2 inhibitor, for the treatment of gastric cancer patients expressing lower HER2 levels (IHC2+/ISH- & IHC1+) as part of the upcoming phase 2 study to be conducted by Pieris.

The companies have also amended their existing immuno-oncology collaboration whereby Pieris' option to co-develop and co-commercialize the second of three programs in the collaboration has been converted to a co-promotion option in the United States.

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

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Our competitors may develop or market products or other novel technologies that are more effective, safer, more convenient or less costly than any that may be commercialized by us or may obtain regulatory approval for their products more rapidly than we may obtain approval for ours.

The acquisition or licensing of pharmaceutical products is also very competitive, and a number of more established companies, some of which have acknowledged strategies to license or acquire products and many of which are bigger, have more institutional experience, and greater cash flows than us, may have competitive advantages over us, as may other emerging companies taking similar or different approaches to product licenses and/or acquisitions.

The acquisition or licensing of pharmaceutical products is also very competitive, and a number of more established companies, some of which have acknowledged strategies to license or acquire products and many of which are bigger, have more institutional experience and have greater cash flows than us, may have competitive advantages over us, as may other emerging companies taking similar or different approaches to product licenses and/or acquisitions.

In addition, a number of established research-based pharmaceutical and biotechnology companies may acquire products in late stages of development to augment their internal product lines, which may provide those companies with an even greater competitive advantage.

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Additionally, there are multiple drug candidates in preclinical or clinical trials targeting other co-stimulatory receptors, either in a tumor dependent or monospecific manner, including OX40, CD40, GITR, CD27 and ICOS.

The first checkpoint inhibitor, ipilimumab, targeting CTLA-4 was approved for the treatment of melanoma patients in 2011 and is being marketed by Bristol-Myers Squibb.

The first checkpoint inhibitor targeting CTLA-4, ipilimumab, was approved for the treatment of melanoma patients in 2011 and is being marketed by Bristol-Myers Squibb.

Nivolumab from Bristol-Myers Squibb was approved for the treatment of melanoma in 2014 as the first PD-1 inhibitor.

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In addition to nivolumab and pembrolizumab, there are multiple approved checkpoint inhibitors targeting the PD-1/PD-L1 pathway, for example, those from Roche, AstraZeneca, Pfizer and Merck KGaA.

There are also drug candidates in preclinical or clinical testing for other checkpoint targets such as LAG3, TIM3 and B7-H3.

Companies developing either dual-checkpoint inhibitors or combinations of two or more monospecific checkpoint inhibitors includes Xencor, F-Star, Bristol-Myers Squibb, Merus, GSK, Novartis, Merck & Co.

among others.

Additionally, a number of other companies, such as Amgen, Affimed, Macrogenics, F-star, Molecular Partners, Xencor, Immunocore and Zymeworks, also pursue other multispecific approaches in oncology, in which such therapies are in clinical or preclinical development.

PRS-343 is bispecific Anticalin-antibody fusion protein targeting 4-1BB and HER2.

PRS-343 has a bifunctional proposed mode of action.

Cinrebafusp alfa

Cinrebafusp alfa is bispecific Anticalin-antibody fusion protein targeting 4-1BB and HER2.

Cinrebafusp alfa has a bifunctional proposed mode of action.

It is designed to both promote 4-1BB clustering by bridging 4-1BB-positive T cells with HER2-positive tumor cells, and to thereby provide a co-stimulatory signal to tumor antigen-specific T cells and inhibit HER2 signaling.

Other drug candidates targeting the co-stimulatory receptor 4-1BB include urelumab, which is being developed by Bristol-Myers Squibb, and utomilumab, which is being developed by Pfizer, both of which are currently in clinical development (Trialtrove, January 18, 2020).

Other drug candidates targeting the co-stimulatory receptor 4-1BB include urelumab, which was being developed by Bristol-Myers Squibb, and utomilumab, which is being developed by Pfizer, and is currently in clinical development (Trialtrove, December 10, 2020), among others.

In the HER2-positive space, several companies are active with approved clinical and preclinical drugs candidates.

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The two other drugs are pertuzumab and ado-trastuzumab emtansine which both are marketed for breast cancer patients.

In addition to PRS-343, there are also other HER2 targeting drug candidates in clinical development designed to induce an immune response by bridging HER2-positive tumor cell with immune cells, for example, GBR 1302, a bispecific antibody targeting HER2 and CD3, from Glenmark (Pharmaprojects, December 6, 2018).

Further trials with PRS-343 are being planned in gastric cancer this year.

In addition to cinrebafusp alfa, there are also other HER2 targeting drug candidates in clinical development designed to induce an immune response by bridging HER2-positive tumor cell with immune cells, for example, GBR 1302, a bispecific antibody targeting HER2 and CD3, from Glenmark, or NJH-395, an immune stimulating antibody conjugate targeting HER2 and TLR7/8, from Novartis (Pharmaprojects, December 10, 2020).

Further trials with cinrebafusp alfa are being planned in gastric cancer this year.

Trastuzumab in combination with cisplatin and 5-FU, or capecitabine, is currently standard of care for 1 st line HER2+ metastatic gastric, or GEJ adenocarcinoma.

Other drug candidates or novel combinations being developed in HER2+ cancer include pembrolizumab in combination with trastuzumab and chemotherapy (Merck & Co, KEYNOTE-811), trastuzumab deruxtecan (Daiichi Sankyo/AstraZeneca, DESTINY-Gastric01), margetuximab in combination with a checkpoint inhibitor, with or without chemotherapy (MacroGenics, MAHOGANY) and ZW25 (Zymeworks) among others.

Other drug candidates or novel combinations being developed in HER2+ cancer include pembrolizumab in combination with trastuzumab and chemotherapy (Merck & Co, KEYNOTE-811), trastuzumab deruxtecan (Daiichi Sankyo/AstraZeneca, DESTINY-Gastric01, -Gastric02 and -Gastric03), margetuximab in combination with a checkpoint inhibitor, with or without chemotherapy (MacroGenics, MAHOGANY) and ZW25 (Zymeworks), among others.

There are also other non-HER2 targeted drug candidates or combinations being developed more broadly, which may or may not overlap with drug candidates being developed in a HER2+ patient population.

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Alligator Bioscience, together with Aptevo Therapeutics, have disclosed a 4-1BB-based bispecific drug candidate targeting 5T4.

However, the 4-1BB-based bispecific drug candidates targeting FAP or 5T4 do not constitute direct competition to PRS-343 since they are targeting a different tumor target and will, thus, likely be developed in different indications or patient populations.

However, depending on the tumor target, it may not constitute direct competition to cinrebafusp alfa if there is no overlap in expression with HER2.

PRS-344 is bispecific Anticalin-antibody fusion protein targeting 4-1BB and PD-L1.

PRS-344 is, similar to PRS-343, designed to promote 4-1BB clustering by bridging 4-1BB-positive T-cells with, in the case of PRS-344, PD-L1-positive tumor cells, and to thereby provide a co-stimulatory signal to tumor antigen-specific T-cells.

Similar to cinrebafusp alfa, PRS-344 is designed to promote 4-1BB clustering by bridging 4-1BB-positive T cells with, in the case of PRS-344, PD-L1-positive tumor cells, and to thereby provide a co-stimulatory signal to tumor antigen-specific T cells.

Furthermore, the direct PD-L1- targeting activity of PRS-344 may provide an additional therapeutic benefit by checkpoint blockade.

Multiple companies have publicly disclosed competing 4-1BB and PD-L1 bispecific programs, including, for example, Genmab in collaboration with BioNTech (GEN1046), Incyte in collaboration with Merus(MCLA-145), Inhibrx in collaboration with Elpiscience (INBRX-105), F-Star (FS-222), MacroGenics, and Numab in collaboration with CStone.

GEN1046, MCLA-145 and INBRX-105 are currently in phase 1 clinical development.

Multiple companies have publicly disclosed competing 4-1BB and PD-L1 bispecific programs, including, for example, Genmab in collaboration with BioNTech (GEN1046), Incyte in collaboration with Merus (MCLA-145), Inhibrx in collaboration with Elpiscience (INBRX-105), F-star (FS-222), MacroGenics and Numab in collaboration with CStone (NM21-1480).

GEN1046, MCLA-145, INBRX-105, NM21-1480 and FS-222 are currently in clinical development.

Manufacturing

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We currently rely and expect to continue to rely on third-party contract manufacturer organizations, or CMOs, for the manufacture of our drug candidates for larger scale preclinical and clinical testing, as well as for commercial quantities of any drug candidates that are approved.

We currently rely on multiple CMOs for all of our clinical supplies, including drug substances and finished drug products, and label and packaging for our preclinical research and clinical trials, including the phase 1 study for PRS-060/AZD1402, the phase 1 studies for PRS-343 and the planned phase 1 study for PRS-344.

We believe that we will be able to contract with other CMOs to obtain drug substances if our existing sources of drug substances were no longer available or sufficient, but there is no assurance that the drug substances would be available from

other CMOs on acceptable terms, on the timeframe that our business would require, or at all.

We currently rely on multiple CMOs for all of our clinical supplies, including drug substances and finished drug products, and label and packaging for our preclinical research and clinical trials, including the phase 1 and 2 studies for PRS-060/AZD1402, the phase 1 and planned phase 2 studies for cinrebafusp alfa and the planned phase 1 study for PRS-344.

We do not have supply commitments or other arrangements in place with our existing CMOs.

We also do not currently have arrangements in place for redundant supply of bulk drug substance.

We have also experienced reduced capacity offered by CMOs due to the COVID-19 pandemic.

We do not have any current contractual relationships for the manufacture of commercial supplies of any of our drug candidates if they are approved, and we intend to enter into agreements with a CMO and one or more back-up manufacturers for the commercial production of our product candidates as they near potential approval.

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We currently employ internal resources to manage our CMOs.

We believe that PRS-060/AZD1402, PRS-343 and PRS-344 and our other Anticalin-branded drug candidates can be manufactured in reliable and reproducible biologic processes from readily available starting materials.

We believe that PRS-060/AZD1402, cinrebafusp alfa and PRS-344 and our other Anticalin-branded drug candidates can be manufactured in reliable and reproducible biologic processes from readily available starting materials.

PRS-060/AZD1402 is produced using a bacterial expression system similar to those that have been used in the past for the production of other proteins and which systems are widely used in the industry.

PRS-343 and PRS-344 are produced using mammalian expression systems similar to those systems that are widely used in the industry for the production of antibodies.

Cinrebafusp alfa and PRS-344 are produced using mammalian expression systems similar to those systems that are widely used in the industry for the production of antibodies.

We believe that the manufacturing process is amenable to scale-up and will not require unusual or expensive equipment.

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Intellectual Property and Exclusivity

Our commercial success depends in part on our ability to obtain and maintain exclusivity of our proprietary Anticalin technologies through intellectual property protection for our drug candidates, libraries of different protein scaffolds and consensus sequences, and the fundamental Anticalin platform technology, including novel therapeutic and diagnostic discoveries, as well as other proprietary know-how and trade secrets, and to operate without infringing on the intellectual property rights of others.

We seek to protect our exclusive position of Anticalin technologies by, among other means, prosecuting our own international, U.S., and foreign patent applications related to our proprietary technology, inventions, and improvements that are important to the development and implementation of our business.

Our commercial success depends in part on our ability to obtain and maintain exclusivity of our proprietary Anticalin technologies through intellectual property protection for our drug candidates, libraries of different protein scaffolds and consensus sequences, the fundamental Anticalin platform technology, including novel therapeutic and diagnostic discoveries, as

well as other proprietary know-how and trade secrets, and to operate without infringing on the intellectual property rights of others.

We seek to protect our exclusive position of Anticalin technologies by, among other means, prosecuting our own international, U.S.

and foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development and implementation of our business.

We have established intellectual property protection in relation to our Anticalin technologies in key global markets, including in North America, Europe and Asia.

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If we obtain marketing approval for our drug candidates in the United States or certain jurisdictions outside of the United States, we may be eligible for regulatory protection, such as 12 years of data exclusivity for new biological entities in the United States and as mentioned below, up to five years of patent term extension potentially available in the United States, eight to 11 years of data and marketing exclusivity potentially available for new drugs in the European Union, up to five years of patent extension in Europe (supplemental protection certificate) and eight years of data exclusivity potentially available in Japan.

There can be no assurance that we will qualify for any such regulatory exclusivity, or

that any such exclusivity will prevent competitors from seeking approval solely on the basis of their own studies.

There can be no assurance that we will qualify for any such regulatory exclusivity or that any such exclusivity will prevent competitors from seeking approval solely on the basis of their own studies.

See “Government Regulation.”

We hold issued patents and pending patent applications in the United States and other foreign jurisdictions, which patents are related to libraries of different scaffolds and consensus sequences such as human apolipoprotein D, human NGAL and human tear lipocalin, and are expected to expire between 2020 and 2030, subject to any patent term adjustments and terminal disclaimers in the United States.

We also own a number of patents and patent applications at various stages of prosecution directed towards compositions of mater and in some cases, formulations or methods of use, of our preclinical and clinical drug candidates.

We also own a number of patents and patent applications at various stages of prosecution directed towards compositions of matter and in some cases, formulations or methods of use, of our preclinical and clinical drug candidates.

Where possible, we will pursue patent term adjustments in the United States and any applicable foreign jurisdictions.

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We hold a number of issued patents and pending patent applications in the United States and foreign jurisdictions directed to newly-discovered or improved scaffold libraries of lipocalin muteins, compounds derived therefrom (i.e., specific drug candidates) or the uses of such compounds to treat, prevent and mitigate certain diseases and conditions whose pathological development involve the targets of interest as well as to diagnose, prognose and select treatments for the diseases and conditions.

We would expect that these patents and any patents that may issue from pending applications would likely expire between 2029 and 2040 without taking into account possible patent term adjustments or other extensions, however, any and all of these pending patent applications may not result in issued patents, and not all issued patents may be maintained in force for their entire term.

However, any and all of these pending patent applications may not result in issued patents, and not all issued patents may be maintained in force for their entire term.

We are actively pursuing intellectual property protection for our IO drug candidates in key global markets that, if granted, could expire as late as 2040 or later depending on the date of the filing of such patent applications.

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Since 2007, we have entered into several strategic partnerships and other license or option agreements to complement our drug discovery and development.

Specifically, we have entered into strategic partnerships with Servier, AstraZeneca and Seattle Genetics, or collectively, the Strategic Partnerships, and other non-strategic license agreements or collectively, the License Agreements.

Specifically, we have entered into strategic partnerships with Servier, AstraZeneca and Seagen, or collectively, the Strategic Partnerships, and other non-strategic license agreements or collectively, the License Agreements.

Under the Strategic Partnerships and License Agreements, we have developed and conducted or will develop and conduct selection and screening of drug candidates, as well as in vitro potency and efficacy testing, using our Anticalin-brand drug discovery platform, our Anticalin libraries and other proprietary methods to generate, identify and characterize drug candidates against certain biological targets associated with several diseases.

The Strategic Partnerships have provided us with approximately $122.1 million in cash from upfront and milestone payments to date.

The Strategic Partnerships have provided us with approximately $127.1 million in cash from upfront and milestone payments through December 31, 2020.

With respect to discontinued agreements, we have no ongoing performance obligations and do not expect to receive any significant additional consideration pursuant to those agreements.

Under our ongoing Strategic Partnerships and License Agreements, our partners are obligated to use commercially reasonable efforts to develop and commercialize drug candidates identified in the course of the collaboration.

We are entitled to receive from our partners’ research, development and regulatory milestone payments and, in some cases, including in the Servier, AstraZeneca and Seattle Genetics collaborations, royalties on net sales for products developed and commercialized under these collaborations.

We are entitled to receive from our partners’ research, development and regulatory milestone payments and, in some cases, including in the Servier, AstraZeneca and Seagen collaborations, royalties on net sales for products developed and commercialized under these collaborations.

With respect to our Strategic Partnerships, we have commercial rights, including the option to co-develop or co-commercialize one or more therapeutic programs with the applicable partners.

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Under the AstraZeneca Agreements the parties will advance several novel inhaled Anticalin proteins.

On March 29, 2021, we entered into the first amendment to the Non-exclusive Anticalin Platform License Agreement dated May 2, 2017 and the second amendment to the License and Collaboration Agreement dated May 2, 2017.

In connection with the amendments, we entered into a Subscription Agreement pursuant to which we have agreed to issue to AstraZeneca, 3,584,230 shares of our common stock for a total purchase price of $10.0 million in a private placement transaction.

Under the AstraZeneca Agreements, we received an upfront, non-refundable payment of $45.0 million.

In addition, we initiated a phase 1 study for the PRS-060, or the AstraZeneca Lead Product, or AZD1402, in December 2017 for which we received a $12.5 million milestone payment.

In addition, we initiated a phase 1 study for PRS-060/AZD1402, or the AstraZeneca Lead Product, in December 2017 for which we received a $12.5 million milestone payment.

In March 2021, we achieved a $13.0 million milestone in connection with the initiation of the phase 2a study for this program.

We are also eligible to receive research, development, commercial and sales milestone payments and royalty payments.

The total potential milestones are categorized as follows:

research, development, and commercial milestones up to $1.1 billion;

and sales milestones up to $1.0 billion.

We may receive tiered royalties on sales of potential products commercialized by AstraZeneca and for co-developed products, gross margin share of worldwide sales, depending on our level of committed investment.

The total potential milestones, as of December 31, 2020, are categorized as follows:

research, development and commercial milestones up to $1.1 billion and sales milestones up to $1.0 billion.

We may receive tiered royalties on sales of potential products commercialized by AstraZeneca and for co-developed products and gross margin share of worldwide sales, depending on our level of committed investment.

The term of each of the AstraZeneca Agreements ends upon the expiration of all of AstraZeneca’s payment obligations under such AstraZeneca Agreement.

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On January 4, 2017, we entered into the Servier Collaboration Agreement and a non-exclusive Anticalin platform license agreement with Servier, or the Servier Platform License, collectively referred to as the Servier Agreements.

Pursuant to the terms of the Servier Agreements, we, along with Servier, will initially pursue five bispecific therapeutic programs.

These programs, which have been defined, may combine antibodies from the Servier portfolio with one or more Anticalin proteins based on our proprietary platform to generate innovative IO bispecific drug candidates.

The collaboration may be expanded by up to three additional therapeutic programs.

We also have the option to co-develop and retain commercial rights in the United States for up to four programs, including any potential expansion, while Servier will be responsible for development and commercialization of the other programs worldwide.

Pursuant to the terms of the Servier Agreements, we, along with Servier, initially pursued five bispecific therapeutic programs.

In September 2019, Servier notified the Company of its decision to discontinue co-development of PRS-332, a PD-1-LAG-3 bispecific that served as the initial development program under the Pieris-Servier alliance, for strategic reasons.

After having conducted an extensive portfolio review, Servier decided in March 2020 to focus on continued and accelerated development of the two most advanced programs, PRS-344 and PRS-352, and to discontinue development of two earlier-stage programs in the collaboration.

Under the Servier Agreements, we received an upfront payment of €30.0 million (approximately $32.0 million) and have achieved two preclinical milestones related to PRS-344.

We may also receive additional development-dependent and commercial milestone payments for each program.

The total development, regulatory and sales-based milestone payments to us

could exceed €1.7 billion during the life of the collaboration and are dependent on the final number of projects pursued and the number of co-development options exercised by us.

The total development, regulatory and sales-based milestone payments to us, as of December 31, 2020, could exceed €381.0 million during the life of the collaboration and are dependent on the final number of projects pursued and the number of co-development options exercised by us.

We will share preclinical and clinical development costs for each co-developed program with Servier.

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The Servier Platform License will terminate upon termination of the Servier Collaboration Agreement, on a product-by-product and/or country-by-country basis.

Our collaboration with Seattle Genetics

On February 8, 2018, we entered into the Seattle Genetics Collaboration Agreement and a non-exclusive Anticalin platform technology license agreement with Seattle Genetics, or the Seattle Genetics Platform License, collectively referred to as the Seattle Genetics Agreements, pursuant to which the parties will develop multiple targeted bispecific IO treatments for solid tumors and blood cancers.

Under the terms of the Seattle Genetics Agreements, Seattle Genetics paid us a $30 million upfront fee, will pay tiered royalties on net sales up to the low double-digits, and will pay us up to $1.2 billion in total success-based payments across three product candidates.

The companies will pursue multiple antibody-Anticalin fusion proteins during a research phase, and Seattle Genetics has the option to select up to three therapeutic programs for further development.

Prior to the initiation of a pivotal trial, we may opt into global co-development and U.S.

commercialization of the second program and share in global costs and profits on a 50/50 basis.

Seattle Genetics will solely develop, fund and commercialize up to two other programs.

Seattle Genetics may also decide to select additional candidates from the initial research phase for further development in return for the payment to us of additional fees, milestone payments, and royalties.

The term of each of the Seattle Genetics Agreements ends upon the expiration of all of Seattle Genetics’ payment obligations under such Seattle Genetics Agreement.

The Seattle Genetics Collaboration Agreement may be terminated by Seattle Genetics on a product-by-product basis for convenience beginning 12 months after its effective date upon 90 days’ notice or, for any program where a pivotal study has been initiated, upon 180 days’ notice.

Any program may be terminated at Seattle Genetics’ option.

If any program is terminated by Seattle Genetics after a pre-defined pre-clinical stage, we will have full rights to continue such program.

If any program is terminated by Seattle Genetics prior to such pre-defined pre-clinical stage, we will have the right to continue to develop such program but will be obligated to offer a co-development option to Seattle Genetics for such program.

The Seattle Genetics Collaboration Agreement may also be terminated by Seattle Genetics or us for an uncured material breach by the other party upon 90 days’ notice, subject to extension for an additional 90 days if the material breach relates to diligence obligations and subject, in all cases, to dispute resolution procedures.

The Seattle Genetics Collaboration Agreement may also be terminated due to the other party’s insolvency and may in certain instances, including for reasons of safety, be terminated on a product-by-product basis.

Each party may also terminate the Seattle Genetics Agreements if the other party challenges the validity of any patents licensed under the Seattle Genetics Agreements, subject to certain exceptions.

The Seattle Genetics Platform License will terminate upon termination of the Seattle Genetics Collaboration Agreement, whether in its entirety or on a product-by-product basis.

Our collaboration with Seagen

On February 8, 2018, we entered into the Seagen Collaboration Agreement and a non-exclusive Anticalin platform technology license agreement with Seagen, or the Seagen Platform License, collectively referred to as the Seagen Agreements, pursuant to which the parties will develop multiple targeted bispecific IO treatments for solid tumors and blood cancers.

Under the terms of the Seagen Agreements, Seagen paid us a $30 million upfront fee and will pay tiered royalties on net sales up to the low double-digits.

Additionally, Seagen will pay us up to $1.2 billion in total success-based payments, as of December 31, 2020, across three product candidates.

The companies will pursue multiple antibody-Anticalin fusion proteins during a research phase, and Seagen has the option to select up to three therapeutic programs for further development.

We will be entitled to increased royalties in the event that we choose to exercise the co-promotion option for that program.

As a result of this amendment, Seagen will solely develop, fund and commercialize all three programs.

Seagen may also decide to select additional candidates from the initial research phase for further development in return for the payment to us of additional fees, milestone payments and royalties.

The term of each of the Seagen Agreements ends upon the expiration of all of Seagen’s payment obligations under such Seagen Agreement.

The Seagen Collaboration Agreement may be terminated by Seagen on a product-by-product basis for convenience beginning 12 months after its effective date upon 90 days’ notice or, for any program where a pivotal study has been initiated, upon 180 days’ notice.

Any program may be terminated at Seagen’s option.

If any program is terminated by Seagen after a pre-defined pre-clinical stage, we will have full rights to continue such program.

If any program is terminated by Seagen prior to such pre-defined pre-clinical stage, we will have the right to continue to develop such program but will be obligated to offer a co-development option to Seagen for such program.

The Seagen Collaboration Agreement may also be terminated by Seagen or us for an uncured material breach by the other party upon 90 days’ notice, subject to extension for an additional 90 days if the material breach relates to diligence obligations and subject, in all cases, to dispute resolution procedures.

The Seagen Collaboration Agreement may also be terminated due to the other party’s insolvency and may in certain instances, including for reasons of safety, be terminated on a product-by-product basis.

Each party may also terminate the Seagen Agreements if the other party challenges the validity of any patents licensed under the Seagen Agreements, subject to certain exceptions.

The Seagen Platform License will terminate upon termination of the Seagen Collaboration Agreement, whether in its entirety or on a product-by-product basis.

In June 2020, we and Seagen entered into amendments to the Seagen Agreements, or together, the Amendment.

The Amendment extended the deadline for Seagen to nominate a second and third antibody target and triggered a $5.0 million milestone payment due from Seagen as Seagen made a go decision on the first antibody target.

In addition to the March 2021 second amendment to the Seagen Collaboration Agreement, we entered into a clinical trial and supply agreement with Seagen to evaluate the safety and efficacy of combining our cinrebafusp alfa with Seagen’s TUKYSA ® (tucatinib), a small-molecule tyrosine kinase HER2 inhibitor, for the treatment of gastric cancer patients expressing lower HER2 levels (IHC2+/ISH- & IHC1+) as part of an upcoming phase 2 study.

Our License Agreements are older than our Strategic Partnerships and relate to non-strategic therapeutic areas, or do not provide us with co-development and co-commercialization rights.

A brief summary of certain terms of selected License Agreements are provided below.

Our collaboration with Lilly

On August 10, 2020, we entered into a Clinical Trial Collaboration and Supply Agreement, or the Lilly Agreement, with Eli Lilly and Company, or Lilly, pursuant to which we and Lilly will collaborate on a phase 2 clinical study, or the Study, to determine the safety and efficacy of our cinrebafusp alfa in combination with the standard of care regimen for the second-line treatment of advanced or metastatic gastric cancer, ramucirumab (CYRAMZA®) and paclitaxel for the second-line treatment of HER2+ gastric cancer.

Under the terms of the non-exclusive Lilly Agreement, we will sponsor the Study and Lilly will supply us with ramucirumab as well as provide input on certain clinical and regulatory aspects of the Study in exchange for jointly owning clinical data and inventions relating to the combination regimen that may arise from the Study.

Any material changes to the protocol for the Study, and any changes relating to ramucirumab, will require Lilly’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed.

The Lilly Agreement will expire upon completion of the parties’ contractual obligations.

The Lilly Agreement may also be terminated (a) by either party for an uncured material breach by the other party upon 60 days’ notice, subject to a reasonable extension if such material breach requires more than 60 days to cure;

(b) by either party in the event that the Study

unreasonably affects patient safety, provided that the terminating party promptly notifies the other party and the other party is given the opportunity to propose modifications to the Study to address the safety issues;

(c) by either party, following 15 days’ written notice, if regulatory action is taken preventing the terminating party from providing its compound or if the terminating party decides to discontinue development of its compound;

(d) by either party, immediately upon written notice to the other party for breach by the other party of its material obligations under certain sections of the Lilly Agreement, or breach of certain of the other party’s representations and warranties;

and (e) by Lilly in the event of certain safety concerns related to the use of ramucirumab in the Study.

Our ASKA Option Agreement

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The term of the ASKA Option Agreement ended as of the date of ASKA’s notification of its decision not to exercise its option rights.

In view of the Company’s strategic focus on IO

and respiratory diseases, including the continued development of PRS-343, PRS-344, and PRS-060/AZD1402, the Company does not intend to continue the development of PRS-080.

Our collaboration with Roche

In December 2015, we entered into a research collaboration and license agreement, or the Roche Agreement, with F.

Hoffmann- La Roche Ltd.

and Hoffmann- La Roche Inc., or Roche, for the research, development, and commercialization of Anticalin-based drug candidates against a predefined, undisclosed target in cancer immune therapy selected by Roche.

Roche notified us of the termination of the Roche Agreement, effective August 21, 2018.

As a result, any Anticalin proteins generated prior to termination are wholly owned by us following termination of the Roche Agreement.

Prior to the termination of the Roche Agreement, our platform technology successfully produced a number of discovery hits specific for the target from our Anticalin libraries.

Our drug supply agreement with Roche for access to atezolizumab, an approved PD-L1 inhibitor, for a combination study of PRS-343 and atezolizumab in HER2-positive cancer patients is not impacted by the termination of the Roche Agreement.

In view of the Company’s strategic focus on IO and respiratory diseases, including the continued development of cinrebafusp alfa, PRS-344 and PRS-060/AZD1402, the Company does not intend to continue the development of PRS-080.

In-License Agreements

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The parties’ discussions relate to revised commercial terms and to re-initiating additional collaborations between faculty at TUM and Pieris.

While an amended and restated license agreement

has not yet been completed, we intend to enter into such an amendment.

While an amended and restated license agreement has not yet been completed, we intend to enter into such an amendment.

These discussions may also lead to an increase in our collaborative research activities with TUM .

We recorded the probable expected impact of the amendment in research and development expense in 2018, which was an increase in our financial obligations associated with the TUM License of approximately $2.3 million for amounts that would be due in 2019 for 2018 and 2017 sub-licensing activities.

This liability was paid in full during the year ended December 31, 2019 .

Enumeral License Agreements

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Failure to comply with the applicable U.S.

requirements may subject an applicant to administrative or judicial sanctions, such as FDA refusal to approve pending new drug applications, or NDAs, or biologics license applications, or BLAs, or the agency's issuance of warning letters, or the imposition of fines, civil penalties, product recalls, product seizures, total or partial suspension of

production or distribution, injunctions and/or criminal prosecution brought by the FDA and the U.S.

requirements may subject an applicant to administrative or judicial sanctions, such as FDA refusal to approve pending new drug applications, or NDAs, or biologics license applications, or BLAs, or the agency’s issuance of warning letters, or the imposition of fines, civil penalties, product recalls, product seizures, total or partial suspension of production or distribution, injunctions and/or criminal prosecution brought by the FDA and the U.S.

Department of Justice or other governmental entities.

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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.

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.

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The BPCIA amended the PHSA to create an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.

A federal district court ruling in Texas in 2018 struck down the Affordable Care Act in its entirety based on constitutionality last year, and in December 2019 the Fifth Circuit Court of Appeals upheld lower court’s finding that the individual mandate in the law is unconstitutional.

A federal district court ruling in Texas in 2018 struck down the Affordable Care Act in its entirety based on constitutionality, and in December 2019 the Fifth Circuit Court of Appeals upheld the lower court’s finding that the individual mandate in the law is unconstitutional.

However, the Fifth Circuit also reversed and remanded the case to the district court to determine if other reforms enacted as part of the Affordable Care Act but not specifically related to the individual mandate or health insurance, including the BPCIA, could be severed from the rest of the Affordable Care Act so as not to be declared invalid.

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(2) animal studies (including toxicity);

and (3) one or more clinical studies to demonstrate safety, purity and potency in one or more appropriate conditions of use for which the reference

product is approved.

and (3) one or more

clinical studies to demonstrate safety, purity and potency in one or more appropriate conditions of use for which the reference product is approved.

In addition, the applicant must show that the biosimilar and reference products have the same mechanism of action for the conditions of use on the label, route of administration, dosage and strength, and the production facility must meet standards designed to assure product safety, purity and potency.

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The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.

Regulatory approval in one country or

jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

Regulatory approval in one country or jurisdiction

does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

European Union drug development, review and approval

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Under Article 3 of Regulation (EC) 141/2000, a medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition;

(2) either (a) such condition

affects no more than five in 10,000 persons in the European Union when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the European Union to justify investment;

(2) either (a) such condition affects no more than five in 10,000 persons in the European Union when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the European Union to justify investment;

and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the European Union, or if such a method exists, the product will be of significant benefit to those affected by the condition, as defined in Regulation (EC) 847/2000.

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The EMA grants access to the Priority Medicines, or PRIME, program to investigational medicines for which it determines there to be preliminary data available showing the potential to address an unmet medical need and bring a major therapeutic advantage to patients.

As part of the program, EMA provides early and enhanced dialogue and support to optimize the development of eligible medicines and speed up their evaluation, aiming to bring promising treatments to patients sooner.

As part of the program, the EMA provides early and enhanced dialogue and support to optimize the development of eligible medicines and speed up their evaluation, aiming to bring promising treatments to patients sooner.

Periods of authorization and renewals

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These third-party payors are increasingly challenging the price and examining the cost-effectiveness of medical products and services.

In addition, significant uncertainty exists as to the reimbursement status of newly approved healthcare products.

addition, significant uncertainty exists as to the reimbursement status of newly approved healthcare products.

The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved.

Third-party payors may limit coverage to

specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication.

Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication.

We may need to conduct expensive pharmacoeconomic studies to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain FDA or other comparable regulatory approvals.

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• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

the federal transparency requirements under the Physician Payments Sunshine Act require manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the Department of Health and Human Services information related to payments and other transfers of value to physicians, teaching hospitals, and certain advanced non-physician health care practitioners and physician ownership and investment interests;

• the federal transparency requirements under the Physician Payments Sunshine Act require manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the Department of Health and Human Services information related to payments and other transfers of value to

physicians, teaching hospitals, and certain advanced non-physician health care practitioners and physician ownership and investment interests;

Foreign Corrupt Practices Act, or FCPA, and other anti-corruption laws and regulations pertaining to our financial relationships and interactions with foreign government officials, which prohibit U.S.

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In addition, in August 2017, the FDA Reauthorization Act was signed into law, which reauthorized the FDA’s user fee programs and included additional drug and device provisions that build on the Cures Act.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.

If we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.

As previously mentioned, a primary trend in the U.S.

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For example, the Tax Cuts and Jobs Acts was enacted in 2017, which, among other things, removed penalties for not complying with the individual mandate to carry health insurance.

As noted above, a 2018 federal district court ruling struck down the Affordable Care Act in its entirety although the Fifth Circuit Court of Appeals recently limited it to the individual mandate and remanded the case to the district court to determine if other reforms not specifically related to the individual mandate or health insurance could be severed from the rest of the Affordable Care Act.

As noted above, a 2018 federal district court ruling struck down the Affordable Care Act in its entirety, although in 2019, the Fifth Circuit Court of Appeals limited this ruling to the individual mandate and remanded the case to the district court to determine if other reforms not specifically related to the individual mandate or health insurance could be severed from the rest of the Affordable Care Act.

It is unclear how this decision, subsequent appeals including potentially to the U.S.

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There has been heightened governmental scrutiny in recent years over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical and biologic products.

Notably, on December 20, 2019, President Trump signed the Further Consolidated Appropriations Act for 2020 into law (P.L.

116-94) that includes a piece of bipartisan legislation called the

Creating and Restoring Equal Access to Equivalent Samples Act of 2019 or the “CREATES Act.” The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers have improperly restricted the distribution of their products, including by invoking the existence of a REMS for certain products, to deny generic and biosimilar product developers access to samples of brand products.

Notably, on December 20, 2019, former President Trump signed the

Further Consolidated Appropriations Act for 2020 into law (P.L.

116-94) that includes a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act of 2019 or the “CREATES Act.” The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers have improperly restricted the distribution of their products, including by invoking the existence of a REMS for certain products, to deny generic and biosimilar product developers access to samples of brand products.

Because generic and biosimilar product developers need samples to conduct certain comparative testing required by the FDA, some have attributed the inability to timely obtain samples as a cause of delay in the entry of generic and biosimilar products.

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Corporate Information

On December 17, 2014, Pieris Pharmaceuticals, Inc., or Pieris, Pieris GmbH and the former stockholders of Pieris GmbH entered into an acquisition agreement, or the Acquisition Agreement.

On December 17, 2014, Pieris, Pieris GmbH and the former stockholders of Pieris GmbH entered into an acquisition agreement, or the Acquisition Agreement.

Pursuant to the Acquisition Agreement, the stockholders of Pieris GmbH contributed all their equity interests in Pieris GmbH to Pieris in exchange for shares of Pieris common stock, which resulted in Pieris GmbH becoming a wholly-owned subsidiary of Pieris, which we refer to as the Acquisition.

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We will remain a smaller reporting company until we have a public float of $250 million or more as of the last business day of our most recently completed second fiscal quarter, and we could retain our smaller reporting company status indefinitely depending on the size of our public float.

As of December 31, 2019 , we had 114 full-time employees and 13 permanent part-time employees.

None of our employees are represented by a labor union or covered by a collective bargaining agreement.

We consider our relationship with our employees to be good.

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We anticipate hiring additional employees for research and development, clinical and regulatory affairs, and general and administrative activities over the next few years.

We also utilize the services of consultants, clinical research organizations, and other third parties on a regular basis.

Headcount Data

As of December 31, 2020, we had 111 full-time employees and 12 permanent part-time employees.

None of our employees are represented by a labor union or covered by a collective bargaining agreement.

Our corporate headquarters is located in Boston, MA and our R&D facility is located in Hallbergmoos, Germany.

As such, 18, or 14.6%, of our employees were located in the United States and 105, or 85.4%, of our employees were located in Germany.

We also utilize the services of consultants, clinical research organizations and other third parties on a regular basis from locations across the world.

Corporate Values and Ethics

We strongly believe that our success depends on all of our employees identifying with our company’s purpose and understanding how their work contributes to the Company’s overall strategy.

To this end, we engaged in an inclusive all-company process to develop our company purpose, vision, mission and values.

“Improving Lives” has been defined as the purpose of Pieris

Our corporate culture and values, along with our employees are the most valuable assets of the Company.

These values, which are the foundation of our Company culture, are:

• Excellence,

• Responsibility,

• Innovation, and

• Spirit of Collaboration.

These values form part of our goal setting and review process to ensure accountability to these values at all levels.

Annual anonymous engagement surveys ensure that we can assess our company culture against expectations and intentions.

In order to further ensure we live our values and our culture stays unique and strong, our Board of Directors and executive management team put significant focus on our human capital resources.

We utilize a variety of channels to facilitate open and direct communication, including:

(i) monthly all-hands staff meetings, (ii) regular open learning forums to promote peer learning or town hall meetings with executives;

(iii) regular ongoing update communications;

and (iv) employee surveys beyond the annual engagement survey referenced above on an as-needed basis.

Employee Compensation and Benefits

Our compensation programs are designed to align the compensation of our employees with the Company’s performance and to provide the proper incentives to attract, retain and motivate employees to achieve superior results.

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

Specifically:

• We provide employee base salaries that are competitive and consistent with employee positions, skill levels, experience, knowledge and geographic location.

• To foster a stronger sense of ownership and align the interests of employees with those of our shareholders, we offer both a stock option program and employee stock purchase program to eligible employees under our broad-based equity incentive plans.

• We engage nationally and internationally recognized outside compensation and benefits consulting firms to independently evaluate the effectiveness of our executive compensation and benefit programs and to provide benchmarking against our peers within the industry.

• Annual increases and incentive compensation are based on merit, which is communicated to employees at the time of hiring and documented through our talent management process as part of our annual review procedures and upon internal transfer and/or promotion.

• All employees are eligible for health insurance, paid and unpaid leaves, retirement benefits and life and disability/accident coverage.

We also offer a variety of voluntary benefits that allow employees to select the options that meet their needs, including flexible time-off, flexible working arrangements, paid parental leave, health programs and onsite food and drink.

We aim to provide location-specific attractive benefits packages in all of our locations.

shared compensation and benefits philosophy and have implemented size and phase-appropriate solutions for each country.

Diversity and Inclusion

Ingrained in our culture is the philosophy that each individual offers diverse perspectives, backgrounds and experiences that create great outcomes when we are united as a team.

We respect our people and embrace our differences.

We welcome everyone and value the ideas generated by our collective uniqueness.

We aspire that all of our teammates reach their full potential and we encourage them to be confident in their differences.

As of December 31, 2020, approximately 62% of our global workforce was female and 47% of our employees in managerial or supervisory roles were female.

Employee Development and Training

We invest significant resources in developing and retaining the talent needed to achieve our business goals.

To support our employees in reaching their full potential, we offer internal and promote external learning and development opportunities.

Education assistance is offered to financially support employees who seek to expand their knowledge and skill base.

Response to COVID-19

Beginning in March 2020, we have supported our employees and government efforts to curb the COVID-19 pandemic through a multifaceted communication, infrastructure and behavior modification and enforcement effort, with the main objective to keep our laboratories in operation while protecting our employees’ health and safety:

• Establishing clear and regular COVID-19 policies, safety protocols and weekly updates to all employees;

• Increasing physical distancing in workspaces for employees working onsite by scheduling adjustments and adding work from home flexibility;

• Adjusting attendance policies to encourage those who are sick to stay home;

• Increasing cleaning protocols across all locations;

• Providing additional personal protective equipment and cleaning supplies;

• Implementing site-specific protocols to address actual and suspected COVID-19 cases and potential exposure;

• Prohibiting all domestic and international non-essential travel for all employees; and

• Requiring masks to be worn in all locations.

Additionally, we have provided our employees with a stipend to ensure a safe and efficient workspace at home.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business