Item 1. Business
Item
1. Business.
On
April 16, 2021, pursuant to the previously announced Agreement and Plan of Merger and Reorganization, dated November 11, 2020 (the “Original
Merger Agreement”), as amended by Amendment No. 1 thereto, dated March 16, 2021 (the Original Merger Agreement, as amended by Amendment
No. 1, the “Merger Agreement”), by and among MyMD Pharmaceuticals, Inc., a New Jersey corporation previously known as Akers
Biosciences, Inc. (the “Company”), XYZ Merger Sub Inc., a Florida corporation and a wholly owned subsidiary of the Company
(“Merger Sub”), and MyMD Pharmaceuticals (Florida), Inc., a Florida corporation previously known as MyMD Pharmaceuticals,
Inc. (“MyMD Florida”), Merger Sub was merged with and into MyMD Florida, with MyMD Florida continuing after the merger as
the surviving entity and a wholly owned subsidiary of the Company (the “Merger”). In this Annual Report on Form 10-K, unless
the context otherwise requires, references to “we,” “us,” “our,” “our company” and “MyMD”
refer to MyMD Pharmaceuticals, Inc. and its subsidiaries. References to “Akers” refer to Akers Biosciences, Inc. prior to
the Merger. For more information on the merger or the sale of assets, see “MyMD Background and Corporate History – Merger.”
MyMD
is a clinical stage pharmaceutical company committed to extending healthy lifespan. MyMD is focused on developing and commercializing
two therapeutic platforms based on well-defined therapeutic targets, MYMD-1 and Supera-CBD:
●
MYMD-1
is a clinical stage small molecule that regulates the immunometabolic system to treat autoimmune disease, including (but not limited
to) multiple sclerosis, diabetes, rheumatoid arthritis, and inflammatory bowel disease. MYMD-1 is being developed to treat age-related
illnesses such as frailty and sarcopenia. MYMD-1 works by regulating the release of numerous pro-inflammatory cytokines, such as
TNF-α, interleukin 6 (“IL-6”) and interleukin 17 (“IL-17”)
●
Supera-CBD
is a synthetic analog of CBD being developed to treat various conditions, including, but not limited to, epilepsy, pain and anxiety/depression,
through its effects on the CB2 receptor, opioid receptors and monoamine oxidase enzyme (“MAO”) type B.
The
rights to Supera-CBD TM were previously owned by Supera and were acquired by MyMD Florida immediately prior to the closing
of the Merger.
MyMD
Background and Corporate History
MyMD
was organized under the laws of the State of Florida in November 2014 for the purpose of developing and commercializing certain technology
and patent rights relating to MYMD-1 that were developed and/or held by the company’s founder, Jonnie R. Williams, Sr. The company’s
sole initial stockholder was The Starwood Trust, a trust for which Mr. Williams is settlor/grantor. During the period from November 2014
through November 2016, MyMD was primarily focused on drug discovery and establishing its patent position through SRQ Patent Holdings,
an entity affiliated with Mr. Williams. In November 2016, SRQ Patent Holdings assigned to MyMD all of the patent rights and other intellectual
property relating to MYMD-1 pursuant to an agreement under which MyMD granted to SRQ Patent Holdings a royalty based on product sales
and other revenue arising from the assigned intellectual property (as further described below).
During
the period 2016 through October of 2020, MyMD’s principal business activities consisted of the execution and completion of in
vitro assays, in vivo pre-clinical animal studies, and genotoxicity and toxicology studies relating to MYMD-1 (as further
described below). On June 25, 2019, MyMD commenced a Phase 1 trial in healthy volunteers for pharmacokinetics and tolerability studies,
and in December of 2019 MyMD filed an IND for MYMD-1 for treatment of Hashimoto thyroiditis. The Phase 1 trial was completed on January
30, 2020, after which MyMD commenced preparation of a Phase 2 clinical trial for MYMD-1 focused on the treatment of depression and inflammation
in COVID-19 positive patients. The company has also commenced a Phase 2 clinical trial for patients with sarcopenia, with dosing begin
in the first quarter of 2022.
As
of December 31, 2022, MyMD had 500,000,000 shares of authorized Common Stock, of which approximately 39,470,009 shares were outstanding
and 14,202,928 shares were reserved for issuance of Common Stock upon the exercise of outstanding stock options, Common Stock warrants,
restricted stock units and convertible preferred stock and warrants.
Merger
On
April 16, 2021, pursuant to the Merger Agreement, by and among the Company, Merger Sub and MyMD Florida, Merger Sub was merged with
and into MyMD Florida, with MyMD Florida continuing after the merger as the surviving entity and a wholly owned subsidiary of the
Company. At the effective time of the Merger, without any action on the part of any stockholder, each issued and outstanding share
of pre-Merger MyMD Florida’s Common Stock, par value $0.001 per share (the “MyMD Florida Common Stock”), including shares underlying pre-Merger MyMD Florida’s outstanding equity awards, was converted
into the right to receive (x) 0.7718 shares (the “Exchange Ratio”) of the Company’s Common Stock, no par value per
share (the “Company Common Stock” or “Common Stock”), (y) an amount in cash, on a pro rata basis, equal to the aggregate cash proceeds
received by the Company from the exercise of any options to purchase shares of MyMD Florida Common Stock outstanding at the
effective time of the Merger assumed by the Company upon closing of the Merger prior to the second-year anniversary of the closing
of the Merger (the “Option Exercise Period”), such payment (the “Additional Consideration”), and (z)
potential milestone payments in shares of Company Common Stock up to the aggregate number of shares issued by the Company to
pre-merger MyMD Florida stockholders at the closing of the Merger payable upon the achievement of certain market capitalization
milestone events during the 36-month period immediately following the closing of the Merger. Immediately following the effective
time of the Merger, the Company effected a 1-for-2 reverse stock split of the issued and outstanding Company Common Stock (the
“Reverse Stock Split”). Upon completion of the Merger and the transactions contemplated in the Merger Agreement, (i) the
former MyMD Florida equity holders owned approximately 77.05% of the outstanding equity of the Company on a fully diluted basis,
assuming the exercise in full of the pre-funded warrants to purchase 986,486 shares of Company Common stock and including 4,188,315
shares of Company Common Stock underlying options to purchase shares of MyMD Florida Common Stock assumed by the company at closing
and after adjustments based on the Company’s net cash at closing; and (ii) former Akers Biosciences, Inc. stockholders owned
approximately 22.95% of the outstanding equity of the Company.
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The
Merger was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes. MyMD Florida
was being treated as the accounting acquirer, as its stockholders control the Company after the Merger, even though Akers Biosciences,
Inc. was the legal acquirer. As a result, the assets and liabilities and the historical operations that are reflected in our consolidated
financial statements are those of MyMD Florida as if MyMD Florida had always been the reporting company. All references to MyMD Florida
shares of common stock, warrants and options have been presented on a post-merger, post-reverse split basis.
Supera
Asset Purchase Agreement
On
November 11, 2020, in connection with entering into the Merger Agreement, MyMD Florida entered into the Supera Asset Purchase Agreement
pursuant to which MyMD Florida agreed to acquire from Supera substantially all of the assets (including all rights to Supera-CBD) and
certain obligations of Supera in consideration of the issuance to Supera of an aggregate of 13,096,640 shares of MyMD Florida Common
Stock. Supera is owned principally by The Starwood Trust and is controlled by Mr. Williams. Supera is a Florida corporation that was
incorporated in September 2018 by Mr. Williams and The Starwood Trust in order to develop and commercialize Supera-CBD. In December 2018,
Mr. Williams assigned his rights and intellectual property relating to Supera-CBD to Supera. As partial consideration for such assignment,
Supera has granted to SRQ Patent Holdings II, LLC a royalty with respect to product sales and other consideration arising from the assigned
intellectual property (as further described below).
Acquisition
and Disposition of Cystron
The
Company acquired 100% of the membership interests of Cystron pursuant to a Membership Interest Purchase Agreement, dated March 23, 2020
(as amended by Amendment No. 1 on May 14, 2020, the “MIPA”) from certain selling parties (the “Cystron Sellers”).
The acquisition of Cystron was accounted for as a purchase of an asset. Cystron is a party to a License and Development Agreement (as
amended and restated on March 19, 2020, in connection with our entry into the MIPA, the “License Agreement”) with Premas
Biotech PVT Ltd. (“Premas”) whereby Premas granted Cystron, amongst other things, an exclusive license with respect to Premas’
vaccine platform for the development of a vaccine against COVID-19 and other coronavirus infections. Cystron was incorporated on March
10, 2020. Since its formation and through the date of its acquisition by the Company, Cystron did not have any employees and its sole
asset consisted of the exclusive license from Premas.
On
March 18, 2021, the Company and the Cystron Sellers, which are also shareholders of Oravax, entered into a Termination and Release Agreement
terminating the MIPA effective upon consummation of the Contribution Agreement. In addition, the Cystron Sellers agreed to waive any
change of control payment triggered under the MIPA as a result of the Merger.
On
April 16, 2021, pursuant to the Contribution and Assignment Agreement, dated March 18, 2021 (the “Contribution Agreement”)
by and among the Company, Cystron, Oravax Medical, Inc. (“Oravax”) and, for the limited purpose set forth therein, Premas,
the parties consummated the transactions contemplated therein. Pursuant to the Contribution Agreement, among other things, the Company
caused Cystron to contribute substantially all of the assets associated with its business of developing and manufacturing Cystron’s
COVID-19 vaccine candidate to Oravax (the “Contribution Transaction”).
Oravax
is pursuing the development of the COVID-19 vaccine candidate. MyMD has evaluated several options with respect to its interest
in Oravax, including a potential distribution of Oravax shares to the MyMD shareholders. This would make Oravax a publicly held company.
MyMD’s interest in Oravax consists of 13% of Oravax’s outstanding shares of capital stock and the rights to a 2.5% royalty
on all future net sales. In addition, MyMD currently has the right to designate a member of the board of directors of Oravax, pursuant
to which Mr. Joshua Silverman, our Chairman of the Board, has been designated to serve as a director of Oravax.
Status of MyMD Florida
On April 8, 2022, the MyMD
Florida subsidiary was dissolved and merged into the New Jersey corporation MyMD Pharmaceuticals, Inc. pursuant to an Agreement and Plan
of Merger dated April 8, 2022.
Drug
Development
MyMD
is developing two platform drugs targeting numerous disease indications. Below is MyMD’s development pipeline:
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Strategy
MyMD’s
strategy is to focus on extending healthy life span through the development and commercialization of novel drug platforms based on well-defined
therapeutic targets. Below are MyMD’s key clinical strategies:
●
Complete
Phase 2 clinical trial in sarcopenia (i.e., age-related muscle loss) in the second quarter of 2023;
●
Advance
MYMD-1 into Phase 2 clinical trials for treatment of diabetes, rheumatoid arthritis, and inflammatory bowel disease;
●
Execute
on IND-enabling studies of Supera-CBD to enable submission of an IND for a Phase 1 clinical trial in healthy volunteers followed
by Phase 2 clinical trials in epilepsy, addiction and anxiety disorders;
●
Identify
and validate additional novel targets and utilize translational platforms to develop a pipeline of product candidates for aging and
other autoimmune disease;
●
Maintain
broad commercial rights to MyMD’s product candidates; and
●
Continue
to strengthen and expand MyMD’s intellectual property portfolio.
MYMD-1
Overview
MYMD-1
is a clinical stage drug that targets the immune system by inhibiting the release of pro-inflammatory cytokines, such as TNF-α.
Cytokines are a broad category of molecules involved in immune system coordination. Immunometabolic regulation is the system of regulating
the immune system and its pro-inflammatory cytokines in order to prevent and treat autoimmune diseases and age-related illnesses. By
affecting the initial triggers that drive autoimmunity, MYMD-1 targets the underlying cause of these diseases rather than just their
symptoms. Based on MYMD-1’s Phase 1 clinical trial, completed in January 2020, MyMD has commenced a Phase 2 clinical trial for
sarcopenia (age-related muscle loss) and is planning multiple Phase 2 clinical trials in autoimmune disease, including (1) multiple sclerosis,
diabetes, inflammatory bowel disease and rheumatoid arthritis; (2) inflammation related depression and anxiety; and (3) COVID-19 associated
depression. MyMD has an active IND with the Endocrinology Division at the FDA for other autoimmune diseases. Studies have been completed
on the mechanisms of action and efficacy of MYMD-1 in several pre-clinical models of autoimmune diseases (i.e., experimental autoimmune
encephalomyelitis (“EAE”) that models multiple sclerosis and autoimmune thyroiditis), and these studies have been published
in peer reviewed journals. MyMD plans to pursue these indications.
MYMD-1 :
An Immunometabolic Regulator
Inflammation,
activated through the release of TNF-α and other cytokines, is the body’s normal physiological defense against infections
and pathogens, and under normal circumstances such inflammation quickly resolves once the intruder is neutralized. However, elevated
levels of pro-inflammatory cytokines, including TNF-α, can lead to prolonged, chronic inflammation, which is closely linked to
autoimmune diseases (such as multiple sclerosis, diabetes, rheumatoid arthritis) and aging (i.e., inflamm-aging) as well as cardiovascular
disease and cancers, all of which may result in reduced health span (the period of life spent in good health).
The
goal of immunometabolic regulatory drugs such as MYMD-1 is to target immune cells that overproduce pro-inflammatory cytokines, such as
TNF-α, without preventing normal immune cell function. TNF-α is a cytokine that is released by immune cells that plays a
key role in acute and chronic inflammation, autoimmune diseases and aging. Examples of currently approved immunometabolic regulating
drugs include Dimethyl Fumarate (“DMF”) (approved for the treatment of multiple sclerosis) and Rapamycin (used in kidney
transplants and being studied in aging).
MYMD-1
is a novel immunometabolic regulator that has demonstrated in vitro and in vivo ability to regulate the release of multiple
cytokines from immune cells, including TNF-α. MYMD-1 is being developed to treat chronic inflammatory diseases, such as multiple
sclerosis, diabetes, inflammatory bowel disease, rheumatoid arthritis, and aging.
MYMD-1
Regulates Multiple Cytokines
MyMD
conducted an in vitro study to demonstrate that MYMD-1 regulates a broad range of cytokines, including TNF-α, interferon gamma
(INFγ) and interleukins, including interleukin 2 (“IL-2”) and IL-17A. By blocking these cytokines that have been shown
to play key roles in the development and maintenance of autoimmune diseases, MYMD-1 treats the causes—and not just the symptoms—of
this class of illnesses.
Figure
1. MYMD-1 modulates the release of a broad spectrum of cytokines.
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An
additional in vitro study demonstrates that MYMD-1 has broad cytokine inhibiting activity including inhibition of TNF-α,
IL-16 and IL-17. The study also suggested MYMD-1 has limited toxicity, even at high doses, and none up to 2,000 micromoles.
In
an in vivo study (NOD.H2 mouse model), MYMD-1 decreased serum levels of TNF-α and INFγ.
Figure
2. MYMD-1 decreases the serum levels TNF-α and IFN-g in NOD.H-2h4 mice. NOD.H-2h4 mice were treated with either regular water or
iodinated water (500 mg/l of sodium iodide), and each group was treated or not treated with MYMD-1 (185 mg/l). Cytokines were measured
at baseline and after 6 and 12 weeks of treatment using a multiplex magnetic bead array. (A and B) MYMD-1 significantly decreased serum
TNF-α levels in the regular water group and tended to decrease it in the iodinated water group. (C and D) MYMD-1 showed a modest
effect on serum IFN-g in the iodinated water group. Results are from three independent experiments. Statistical comparisons were made
by longitudinal data analysis with generalized estimating equations.
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MYMD-1
Targets Autoimmune Diseases
MYMD-1
is designed to regulate the immunometabolic system and intended for development as a potential treatment for certain autoimmune
diseases, including (but not limited to) multiple sclerosis, diabetes, rheumatoid arthritis, and/or inflammatory bowel disease. MYMD-1
is also being developed to treat age-related illnesses such as frailty and sarcopenia. Autoimmune diseases are a broad category of
diseases that result from an overactive immune response, where immunometabolic system dysregulation is believed to play an important
role. A healthy immune system defends the body against disease and infection. If the immune system malfunctions, it can mistakenly
attack healthy cells, tissues, and organs. In response to an often-unknown trigger, the immune system starts producing antibodies
that attack the body’s own cells instead of fighting infections.
TNF-α,
produced primarily by specific white blood cells, belongs to a category of proteins called cytokines that act as chemical messengers
throughout the body to regulate many aspects of the immune system. Other key cytokines include IL-6, IL-17A, interleukin 10 (“IL-10”)
and Interferon gamma (“INFγ”). Cytokines are essential to mounting an inflammatory response. However, chronic or excessive
production of cytokines has been implicated in a number of acute and chronic inflammatory diseases.
A
number of drugs target the immunometabolic system to treat autoimmune diseases, including DMF (approved for the treatment of multiple
sclerosis) and Rapamycin (being studied in aging, rheumatoid arthritis, and other autoimmune diseases). Additional therapies for autoimmune
diseases include anti-inflammatory drugs and immunosuppressive agents including drugs that non-selectively inhibit or block TNF-α
(generally referred to as “TNF-α blocking drugs”). Currently available TNF-α blocking drugs must be injected
or infused to work. In some instances, the efficacy of a given dosage of TNF-α blockers declines with repeated administration,
and side effects can also be a concern. These non-selective TNF-α blockers can cause serious bacterial, fungal, and viral infections.
MYMD-1 is a selective, oral TNF-α inhibitor that might provide a safer alternative to existing products on the market. The global
market for TNF-α blockers was estimated at $41.6 billion in 2020 and is projected to reach $45.5 billion by 2027.
An
in vitro study involving human blood cells analyzed the cytokine inhibitory effects of MYMD-1 together with leading approved TNF-α
blockers (monoclonal antibodies).
Figure
3. Comparison of inhibitory effect of MYMD-1 with other TNF-α blockers. MYMD-1 exhibits a dose-dependent reduction in release of
several cytokine more effectively than Humira, Enbrel and Remicade.
We
believe MYMD-1 is distinguishable from currently marketed TNF-α blockers because it selectively blocks TNF-α production
related to adaptive immunity (involved in autoimmunity) but spares the role of this cytokine in innate immunity (which plays a
primary protective role in fighting off invading organisms). Because of the crucial role that TNF-α plays in front line
protection by the innate immune system (e.g., from bacterial, fungal, and viral infections), the indiscriminate blockade of
TNF-α by TNF-α blocking agents can cause serious and even fatal infections, which is one of the primary limiting factors
in the use of this class of drugs. Based on our belief regarding the selectivity of MYMD-1 in blocking TNF-α, therefore, we
intend to explore the extent to which MYMD-1 may be a safer alternative to treat infectious, inflammatory, and autoimmune
conditions, as well as its potential to ameliorate immune mediated depression in such illnesses.
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Pre-Clinical
Study of MYMD-1 in Multiple Sclerosis Study (EAE Mouse Model)
Multiple
sclerosis is an autoimmune disease in which T cells lead an attack on oligodendrocytes and neurons. Multiple sclerosis is the leading
neurological cause of disability in adults aged 30–50, and approximately one million people in the United States are affected with
this debilitating disease. T cells are one of the major components of the adaptive immune system. Their roles include directly killing
infected host cells, activating other immune cells, producing cytokines and regulating the immune response. When naïve, undifferentiated
T cells become activated, they differentiate and acquire effector functions that can be delineated by the cytokines they secrete.
Preliminary
in vivo studies of the therapeutic efficacy of MYMD-1 in the animal model for multiple sclerosis, known as EAE, indicate that
MYMD-1 modulates autoreactive T cell activation in a dose-dependent manner, suppresses T cell activation and ameliorates the course of
EAE. Further EAE mouse studies suggest that MYMD-1 suppresses the influx of CD4+ T cells into the brain.
Figure
4. Effects of MYMD-1 on the influx of T cells into the CNS early in EAE. To assess the effects of MYMD-1 on the infiltration of T cells
into the CNS, mice were immunized and treated with either vehicle control or 25 mg/mouse/day MYMD-1. Ten to 14 days later, mice were
perfused and brains collected for analysis. Infiltration was determined by flow cytometry. Analysis of Th1 and Th17 subsets are shown;
data compiled from 2 to 3 experiments, n > 3/group per experiment). Student’s t-test was conducted for statistics.
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MYMD-1
In Vivo Study of Autoimmune Thyroiditis (NODH.2 Mouse Model)
Thyroiditis
or Hashimoto thyroiditis is an autoimmune disease characterized by lymphocytic infiltration of the thyroid gland. It has been shown that
tobacco smoking has a protective effect against Hashimoto thyroiditis as tobacco smokers have a lower prevalence of thyroid autoantibodies
than non-smokers.
MyMD
conducted an in vivo study of autoimmune thyroiditis in a spontaneous thyroiditis (NODH.2) mouse model. We believe the
results of this study show MYMD-1’s ability to suppress TNF-α production by CD-4+ T cells in a dose dependent manner. Additionally, the
study reported that MYMD-1 statistically decreases the incidence and severity (p <0.001) of thyroiditis in this mouse model.
Pre-clinical studies have demonstrated that MYMD-1 ameliorated autoimmune thyroiditis in the thyroiditis mouse model.
Figure
5. MYMD-1 decreases the incidence and severity of autoimmune thyroiditis in NOD.H-2h4 mice, as assessed by H&E histopathology. At
8 weeks old, 58 NOD.H-2h4 mice were divided into regular water and iodinated water groups. In the regular water group, 10 mice (7 M,
3 F) drank water that contained MYMD-1 (185 mg/l), and 16 mice (10 M, 6 F) drank water without it. In the iodinated water group, the
water was supplemented with 500 mg/l of sodium iodide and contained (16 mice: 10 M, 6 F) or did not contain (16 mice: 10 M, 6 F) MYMD-1
(185 mg/l). After 12 weeks of treatment, thyroids were removed and divided in half. (A and B) Thyroiditis severity and incidence assessed
by histopathology in the regular water group. (C) A representative thyroid from a mouse in the regular water group, showing a severity
score of 2. (D) A representative thyroid from a mouse in the regular water group treated with MYMD-1, showing thyroid follicle preservation
and an overall normal glandular size (severity score of 0). (E and F) Thyroiditis incidence and severity scores assessed by histopathology
in the iodinated water group. (G) A representative thyroid from a mouse in the iodine group, showing marked lymphocytic infiltration,
follicular enlargement, and architectural disruption (severity score of 4). (H) A representative thyroid from a mouse in the iodine plus
MYMD-1 group (severity score of 2). Results represent the summary of 10 independent experiments, each analyzing 4 to 6 mice, for a total
of 58 mice.
MYMD-1
Targets Inflamm-Aging and Related Disorders
Aging
is associated with a loss of tight regulation of the immune system. This leads to increased inflammatory activity in the body,
including increased circulating levels of TNF-α. Chronic inflammation is a hallmark of aging, referred to as inflamm-aging.
Inflamm-aging and chronic inflammation are closely linked to a number of disorders such as obesity, insulin resistance/type 2
diabetes, cardiovascular diseases, and cancers. TNF-α is a multifunctional pro-inflammatory
cytokine which may play a part in the pathogenesis of certain age-related disorders such as atherosclerosis. A multi-year
pre-clinical, proof of concept in vivo study in aging and longevity confirmed our belief regarding MYMD-1’s potential
therapeutic effect on inflamm-aging and other age-related disorders, which we intend to explore further in clinical trials, pending our submission,
and the corresponding acceptance, of the requisite regulatory and other relevant submissions.
Bascom
Palmer Eye Institute Collaboration
On
July 12, 2022, we announced a new collaboration with Bascom Palmer Eye Institute of Miami, Florida (“Bascom Palmer”) to collaborate
on a pre-clinical study using MYMD-1 as a potential treatment for traumatic optic neuropathy (TON). To date, our collaboration with Bascom
Palmer has included pre-clinical and clinical investigations.
Pre-Clinical
In July 2022 we entered into a Material
Transfer Agreement with Bascom Palmer. Our collaboration was announced in a press release and in an article in Ophthalmology Times .
Bascom Palmer confirmed in August 2022 that it had received a quantity of our MYMD-1 product candidate and MYMD provided a material
safety datasheet and certification of analysis. In August 2022, Bascom Palmer researchers conducted a preliminary introductory study
of TON in mice. Investigators ran a crush injury of the mice’s optic nerves with and without MYMD-1. The study drug was given
once per day via oral gavage at a dosage of 30 mg/kg of body weight. The mice were treated for five days, untreated for two
days, and then sacrificed, and their TNF-α levels were measured. Data from this study is pending. We intend to plan additional
pre-clinical studies.
Clinical
In
addition to the pre-clinical study described above, we are collaborating with Bascom Palmer to plan future a clinical study. In
August 2022, Bascom Palmer researchers executed a confidentiality and non-disclosure agreement and Bascom Palmer produced a draft
protocol synopsis entitled, Assessment of the Anti-Inflammatory Effects of MYMD-1 in Non-Infectious Anterior Uveitis: A Randomized
Controlled, Double Blind Clinical Study.
MYMD-1
Commercialization Targets
MYMD-1 is being developed to address serious and debilitating autoimmune and inflammatory diseases, including sarcopenia,
frailty resulting from aging process, and rheumatoid arthritis (RA). According to the U.S. Census Bureau, in 2020, there were approximately
54 million U.S. residents over 65 years of age, representing 16% of the U.S. population. This figure is expected to increase to nearly
22% by the year 2040. 1 The Arthritis Foundation
estimates that approximately 1.5 million people in the U.S. have RA. 2
Supera-CBD
Supera-CBD
is a synthetic small molecule that is an analog of naturally grown CBD derived from the Cannabis sativa plant. Supera-CBD is being
developed to treat conditions with which CBD is often anecdotally associated but for which no natural or synthetic CBD-containing
drugs have been approved by the FDA, such as pain, anxiety/depression and seizures from epilepsy. While naturally grown CBD is a
constituent of Cannabis sativa, Supera-CBD is a synthetic analog of CBD, thus eliminating potential complications associated with
the psychoactive effects of Tetrahydrocannabinol (“THC”), which is also a constituent of the Cannabis sativa plant.
Studies have suggested that CBD may have broad therapeutic properties, including the treatment of neuropsychiatric
disorders.
1
U.S. Department of Health and Human Services. 2020 Profile of Older Americans. May 2021 Page 3.
2
The Arthritis Foundation. Rheumatoid Arthritis: Causes, Symptoms, Treatments and More.
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Overview
General
Pharmacology and Therapeutic Profile
CBD
inhibits a number of important receptors, including the CB2 receptor and opioid receptors, and can also inhibit MAO enzymes. In the immune
system, one of the important functions of the CB2 receptor is in the regulation of cytokine release from immune cells. Antagonists targeting
the CB2 receptor have been proposed for the treatment or management of a range of painful conditions as well as for treating several
neurological diseases. The Company conducted an in vitro binding assay study to analyze the CB2 inhibition of Supera-CBD together
with that of CBD derived from naturally grown plants.
Opioid
receptors are widely expressed in the brain, spinal cord, peripheral nerves and digestive tract. MyMD conducted an in vitro binding
analysis of Supera-CBD with the three types of opioid receptors. The profile suggests that Supera-CBD could possibly play a role in
treating opioid addiction.
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MAOs
are enzymes involved in the catabolism, or digestion, of certain neurotransmitters. MyMD conducted an in vitro MAO inhibition
study. In this study, Supera-CBD and commercial CBD were analyzed against positive and negative controls. In this study, Supera-CBD far
exceeded CBD in dose-dependent inhibition of MAOs, particularly MAO-B. Drugs that inhibit MAOs have been commercially used for decades
to treat depression, and more recent studies have suggested MAO-B inhibiting drugs might have a role to play in treating cognitive decline
in aging.
Supera-CBD
Early-Stage Plans for Development and Potential Commercialization Targets
Supera-CBD
is in early-stage development for pain, anxiety, and sleep disorders. There are currently a number of over-the-counter CBD products marketed
with unapproved therapeutic claims relating to these conditions, among other conditions. While there are a substantial number of such
products on the market that have not been subject to regulatory enforcement action, the FDA has consistently reiterated, in guidance
and warning letters against a number of the companies marketing such CBD products for such uses, that CBD products may not be lawfully
marketed for therapeutic uses in the United States without first-obtaining FDA approval via the NDA process. CBD product sales in the
US reportedly reached $5.3 billion in 2021, 15% growth over 2020 sales, and are projected to reach $16 billion by 2026. 3
MyMD believes that if Supera-CBD is approved by the FDA, it may have competitive advantages over currently marketed CBD products that
have not been approved by FDA as drug products, as approved drugs must undergo rigorous premarket study and generate results sufficient
to support a finding that they are safe and effective for their intended use(s) and remain subject to ongoing FDA postmarket regulation,
which provides additional assurances relating to quality, consistency and safety.
Currently,
there is one FDA-approved drug with plant-derived CBD as an active ingredient. FDA subsequently approved three other cannabinoid-containing
drugs, two of which utilize synthetic cannabinoids analogous or similar to THC as the active ingredient and the other, a combination
of synthetic CBD and THC. Epidiolex is being commercialized by GW Pharmaceuticals, plc (“GWPH”) to treat seizures associated
with Lennox-Gastaut syndrome or Dravet syndrome in patients two years of age and older. The reported revenues from Epidiolex in fiscal
year 2019 were approximately $296 million. MYMD believes that, by utilizing synthetic, rather than naturally derived, CBD in Supera-CBD
may mitigate a number of obstacles generally associated with growing and processing an active drug ingredient produced from naturally
grown plant extracts.
On March 2, 2023, we announced that the U.S. Drug Enforcement Administration (DEA) has conducted a scientific
review and determined that it would not Supera-CBD a controlled substance or listed chemical under the Controlled Substances Act (CSA)
and its governing regulations. We believe that this decision will expedite future research involving Supera-CBD by relieving us or our
research partners from having to comply with regulations relating to controlled substances.
Sales
and Marketing
MyMD
does not currently have sales and marketing infrastructure to support the launch of its products. MyMD intends to build such
capabilities in North America prior to launch the commercial MYMD-1, if successfully developed and granted the requisite FDA
approval. Outside of North America, MyMD may rely on licensing, co-sale and co-promotion agreements with strategic partners for
commercialization of its products. If MyMD builds a commercial infrastructure to support marketing in North America, such commercial
infrastructure could be expected to include a targeted sales force supported by sales management, internal sales support, an
internal marketing group and distribution support. To develop the appropriate commercial infrastructure internally, MyMD would have
to invest financial and management resources, some of which would have to be deployed prior to any confirmation that MYMD-1 or
Supera-CBD will be approved, which cannot be guaranteed.
Competition
The
biotechnology and biopharmaceutical industries are characterized by rapid evolution of technologies, fierce competition and vigorous
defense of intellectual property. Any product candidates that MyMD successfully develops and commercializes will have to compete with
existing and future new therapies. While MyMD believes that its drug candidates, development experience and scientific knowledge may
provide it with certain competitive advantages, MyMD faces potential competition from many different sources, including major pharmaceutical,
specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and public and private research institutions.
Existing
therapies for autoimmune diseases include anti-inflammatory drugs and immunosuppressive agents, including drugs that seek to
selectively inhibit or block TNF-α (generally referred to as “TNF-α blocking drugs”). TNF-α blocking
drugs are large molecules that are generally injected or infused. In some instances, the period of efficacy of a given dosage of
TNF-α blockers can decline with repeated administration and side effects can be a concern. Leading TNF-α blocking
drugs include Etanercept (Enbrel), Infliximab (Remicade), and Adalimumab (Humira). The total TNF-α market collectively
represented approximately $41 billion in global sales in 2022. 4 All of these existing TNF-α blocking drugs require
injection, whereas MYMD-1 is being developed to be orally bioavailable. Our management believes patients and providers would view
the fact that MYMD-1 can be administered orally as a significant advantage.
Unlike
currently marketed TNF-α blockers, MYMD-1 is designed to selectively block TNF-α production related to adaptive immunity
(involved in autoimmunity) but to spare the role of this cytokine in innate immunity (which plays the primary initial role in fighting
off invading organisms). Because of the crucial role that TNF-α plays in front line protection by the innate immune system from
bacterial, fungal, and viral infections, the indiscriminate blockade of TNF-α by TNF-α blocking agents can cause serious
and even fatal infections, which is the primary limiting factor in the use of this class of drugs. MyMD thus believes that, if MYMD-1
is approved for marketing, the potential selectivity of MYMD-1 in blocking TNF-α might make it a preferrable alternative to some
existing treatments for infectious, inflammatory, and autoimmune conditions, as well as simultaneously resulting in amelioration of immune
mediated depression in such illnesses if it is also approved for such indication.
3
Benzinga: US Hemp CBD Market To Hit $5.3B In Sales In 2021.
4
https://www.thebusinessresearchcompany.com/report/tnf-alpha-inhibitor-global-market-report
13
Intellectual
Property
MyMD’s
policy is to develop and maintain MyMD’s proprietary position by, among other methods, filing or in-licensing U.S. and foreign
patents and applications related to MyMD’s drug candidates and methods of treatment that are material to the development and implementation
of MyMD’s business. MyMD also relies on trademarks, know-how, confidentiality agreements and invention assignment agreements to
develop and maintain MyMD’s proprietary position.
MyMD’s
patent portfolio includes protection for MYMD’s lead product candidates, MYMD-1 and Supera-CBD. Currently, there are multiple patent
families relating to (i) age reversal and treatments of age-related disorders including sarcopenia; (ii) reduction of TNF-α levels
and treatments of autoimmune disorders; (iii) addiction treatments; (iv) methods of increasing hair growth and (v) plant nutrition. As
of the date of this document, MyMD has 16 issued U.S. patents, four pending U.S. patent applications, 50 issued foreign patents, and
15 foreign patent applications pending in such jurisdictions as Australia, Canada, China, European Union, Israel, Japan and South Korea,
which, if issued, are expected to expire between 2036 and 2039.
The
term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries
in which MyMD files, the patent term is 20 years from the date of filing of the first non-provisional application in which priority is
claimed. In the U.S. patent term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays
by the USPTO in granting a patent or may be shortened if a patent is terminally disclaimed over an earlier-filed patent. In the U.S.,
the term of a patent that covers an FDA-approved drug may also be eligible for a patent term extension of up to five years under the
Hatch-Waxman Act, which is designed to compensate for the patent term lost during the FDA regulatory review process. The length of the
patent term extension involves a complex calculation based on the length of time it takes for regulatory review. A patent term extension
under the Hatch-Waxman Act cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval
and only one patent applicable to an approved drug may be extended. Moreover, a patent can only be extended once, and thus, if a single
patent is applicable to multiple products, it can only be extended based on one product. Similar provisions are available in Europe and
certain other foreign jurisdictions to extend the term of a patent that covers an approved drug.
MyMD’s
commercial success depends in part on its ability to obtain and maintain proprietary protection for MyMD’s product candidates,
as well as novel discoveries, core technologies, and know-how, as well as its ability to operate without infringing on the proprietary
rights of others and to prevent others from infringing its proprietary rights.
Assignment
and Royalty Agreements
MyMD
is a party to two Amended and Restated Confirmatory Patent Assignment and Royalty Agreements, both dated November 11, 2020, with SRQ
Patent Holdings and SRQ Patent Holdings II, under which MyMD (or its successor) will be obligated to pay to SRQ Patent Holdings or SRQ
Patent Holdings II (or its designees) certain royalties on product sales or other revenue received on products that incorporate or are
covered by the intellectual property that was assigned to MyMD. The royalty is equal to 8% of the net sales price on product sales and,
without duplication, 8% of milestone revenue or sublicense compensation. SRQ Patent Holdings and SRQ Patent Holdings II are affiliates
of Mr. Williams.
Government
Regulation
Government
authorities in the U.S. at the federal, state, and local level and in other countries regulate, among other things, the research,
development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising,
distribution, post-approval monitoring and reporting, marketing and export and import of drugs and biological products. Generally,
before a new drug can be marketed, considerable data demonstrating its quality, safety, and efficacy in connection with the target
indication(s) for use must be obtained, organized into a format specific for each regulatory authority, submitted for review and
approved by the regulatory authority.
FDA
Approval Process
In
the U.S., pharmaceutical products are subject to extensive regulation under the FD&C Act and the FDA’s implementing regulations
and other federal and state statutes and regulations governing, among other things, the research, development, testing, manufacture,
storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling and
import and export of pharmaceutical products. Failure to comply with applicable U.S. requirements may subject a company to a variety
enforcement actions and/or administrative or judicial sanctions, including, but not limited to clinical holds, FDA refusal to approve
NDA submissions and/or revocation or limitation of existing NDAs for approved products, warning or untitled letters, product recalls,
product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.
14
Pharmaceutical
product development for a new drug product or certain changes to an approved product in the U.S. typically requires pre-clinical
laboratory and animal tests, the submission to the FDA of an IND, which must become effective before clinical testing on human
subjects may commence, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for
each indication for which FDA approval is sought. Satisfaction of FDA pre-market approval requirements are inherently uncertain,
expensive, and it typically takes many years to generate sufficient data to apply for approval, even when such approval is not
ultimately granted, and the actual time required may vary substantially based upon the type, complexity and novelty of the product
or disease.
Pre-clinical
tests include laboratory evaluation of product chemistry, formulation and toxicity, as well as animal trials to assess the characteristics
and potential safety and efficacy of the product. The conduct of the pre-clinical tests must comply with federal regulations and requirements,
including good laboratory practices. The results of pre-clinical testing are submitted to the FDA as part of an IND along with other
information, including information about product chemistry, manufacturing and controls, and a proposed clinical trial protocol. Long-term
pre-clinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted. A 30-day
waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has neither
commented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin. Clinical trials involve
the administration of the investigational new drug to healthy volunteers or patients under the supervision of a qualified investigator.
Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with GCP, an international standard
meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors; and
(iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria
to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as
part of the IND.
The
FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time, or impose other sanctions, if it believes
that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical
trial patients. The study protocol and informed consent information for patients in clinical trials must also be submitted to an IRB
and ethics committee for approval. The IRB will also monitor the clinical trial until completed. An IRB may also require the clinical
trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements, or may impose
other conditions. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical
trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether a trial may move forward
at designated checkpoints based on access to certain data from the trial.
Clinical
trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase
1, the initial introduction of the drug into healthy human subjects or patients, the drug is tested to assess metabolism, pharmacokinetics,
pharmacological actions, side effects associated with increasing doses, and, if possible, early evidence of effectiveness. Phase 2 usually
involves trials in a limited patient population to determine the effectiveness of the drug for a particular indication, dosage tolerance
and optimum dosage, and to identify common adverse effects and safety risks. If a drug demonstrates evidence of effectiveness and an
acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtain the additional information about clinical efficacy
and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate
the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of the drug. In most cases the
FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug. A single Phase 3 trial
may be sufficient in rare instances, including (1) where the trial is a large multicenter trial demonstrating internal consistency and
a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease
with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2)
when in conjunction with other confirmatory evidence.
The
manufacturer of an investigational drug in a Phase 2 or 3 clinical trial for a serious or life-threatening disease is required to make
available, such as by posting on its website, its policy on evaluating and responding to requests for expanded access.
After
completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required before
marketing of the product may begin in the U.S. The NDA must include the results of all pre-clinical, clinical and other testing and a
compilation of data relating to the product’s pharmacology, chemistry, manufacture and controls.
15
The
cost of preparing and submitting an NDA is substantial. The submission of most NDAs is additionally subject to a substantial application
user fee, currently exceeding $3.1 million for fiscal year 2022 (for applications containing clinical data), which increased from $2.9
million for fiscal year 2021. Fee waivers or reductions are available in certain circumstances, including a waiver of the application
fee for the first application filed by a small business. Additionally, no user fees are assessed on NDAs for products designated as orphan
drugs, unless the product also includes a non-orphan indication. The applicant under an approved NDA is also subject to annual program
fees, currently exceeding $369,413 for fiscal year 2022 for each prescription product. The FDA adjusts the user fees on an annual basis,
and the fees typically increase annually.
The
FDA reviews each submitted NDA before it determines whether to file it and may request additional information. The FDA must make a decision
on whether to file an NDA within 60 days of receipt, and such decision could include a refusal to file by the FDA. Once the submission
is filed, the FDA begins an in-depth review of the NDA. The FDA has agreed to certain performance goals in the review of NDAs. Most applications
for standard review drug products are reviewed within ten to twelve months; most applications for priority review drugs are reviewed
in six to eight months. Priority review can be applied to drugs that the FDA determines may offer significant improvement in safety or
effectiveness compared to marketed products or where no adequate therapy exists. The review process for both standard and priority review
may be extended by the FDA for three additional months to consider certain late-submitted information, or information intended to clarify
information already provided in the submission. The FDA does not always meet its goal dates for standard and priority NDAs, and the review
process can be extended by FDA requests for additional information or clarification.
The
FDA may also refer applications for novel drug products, or drug products that present difficult questions of safety or efficacy, to
an outside advisory committee—typically a panel that includes clinicians and other experts—for review, evaluation and a recommendation
as to whether the application should be approved and under what conditions, if any. The FDA is not bound by the recommendation of an
advisory committee, but it generally follows such recommendations.
Before
approving an NDA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether
they comply with cGMP requirements. The FDA will not approve the product unless it determines that the manufacturing processes and facilities
are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required specifications.
The FDA also typically inspects clinical trial sites to ensure compliance with GCP requirements and the integrity of the data supporting
safety and efficacy.
After
the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter (“CRL”).
A CRL generally outlines the deficiencies in the submission, which may be minor and more technical, or major and more substantive and,
in the latter case may require substantial additional testing or data to be eligible for substantive review by FDA upon resubmission,
such as additional clinical data, additional pivotal clinical trial(s), and/or other significant and time-consuming requirements related
to clinical trials, pre-clinical studies or manufacturing. If a CRL is issued, the applicant may resubmit the NDA addressing all of the
deficiencies identified in the letter, withdraw the application, engage in formal dispute resolution or request an opportunity for a
hearing. The FDA has committed to reviewing resubmissions in two to six months depending on the type of information included. Even if
such data and information are submitted, the FDA may decide that the NDA does not satisfy the criteria for approval.
If
the deficiencies identified in the CRL are addressed to FDA’s satisfaction in a resubmission of the NDA (and FDA does not identify
any other issues that need to be corrected prior to approval or that, otherwise, cause the agency to determine that approval is not appropriate
at the given time), the FDA will issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific
prescribing information for specific indications. In addition, under the Pediatric Research Equity Act of 2003 (“PREA”),
as amended and reauthorized, certain NDAs or supplements to an NDA must contain data that are adequate to assess the safety and effectiveness
of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric
subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant
deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers
from the pediatric data requirements.
As
a condition of NDA approval, the FDA may also require a REMS, to help ensure that the benefits of the drug outweigh the potential risks
to patients. A REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use
(“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing
only under certain circumstances, special monitoring, and the use of patient registries. The requirement for a REMS can materially affect
the potential market and profitability of the drug. Moreover, product approval may require substantial post-approval testing and surveillance
to monitor the drug’s safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards
is not maintained or problems are identified following initial marketing.
Changes
to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes
or facilities, require submission and FDA approval of an NDA supplement or, in some case, a new NDA, before the change can be implemented.
An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses
the same procedures and actions in reviewing NDA supplements as it does in reviewing NDAs.
16
Further,
as a result of the COVID-19 pandemic, the extent and length of which is uncertain, MyMD will be required to develop and implement additional
clinical study policies and procedures designed to help protect study participants from the SARS-CoV-2 virus, which may include using
telemedicine visits and remote monitoring of patients and clinical sites. MyMD will also need to ensure data from its clinical studies
that may be disrupted as a result of the pandemic is collected pursuant to the study protocol and is consistent with GCPs, with any material
protocol deviation reviewed and approved by the site IRB. Patients who may miss scheduled appointments, any interruption in study drug
supply, or other consequence that may result in incomplete data being generated during a study as a result of the pandemic must be adequately
documented and justified. For example, on March 18, 2020, the FDA issued guidance on conducting clinical trials during the pandemic,
which describes a number of considerations for sponsors of clinical trials impacted by the pandemic, including the requirement to include
in the clinical study report (or as a separate document) contingency measures implemented to manage the study, and any disruption of
the study as a result of COVID-19; a list of all study participants affected by COVID-19-related study disruption by unique subject identifier
and by investigational site, and a description of how the individual’s participation was altered; and analyses and corresponding
discussions that address the impact of implemented contingency measures (e.g., participant discontinuation from investigational product
and/or study, alternative procedures used to collect critical safety and/or efficacy data) on the safety and efficacy results reported
for the study.
Disclosure
of Clinical Trial Information
Sponsors
of clinical trials of FDA regulated products, including drugs, are required to register and disclose certain clinical trial information
to the U.S. public by publishing such information on clinicaltrials.gov. Information related to the product, patient population, phase
of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration.
Sponsors are also obligated to discuss the results of their clinical trials after completion. Disclosure of the results of these trials
can be delayed in certain circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly
available information to gain knowledge regarding the progress of development programs.
Expedited
Development and Review Programs
The
FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment
of a serious or life-threatening disease or condition. These programs are fast track designation, breakthrough therapy designation, and
priority review designation. MyMD has not applied for expedited approval under any of these pathways to-date but intends to explore the
extent to which any of its current or future product candidates may be eligible for one or more such pathways. There is no guarantee
that FDA will grant any of MyMD’s products candidates the expedited designation(s) for which it is submitted, if any, or that MyMD
will secure any of the applicable benefits associated with any of any expedited designations that may be granted to its current or future
product candidates, if applicable.
Fast-Track
Designation
Fast
track designation may be granted for a product that is intended to treat a serious or life-threatening disease or condition for which
pre-clinical or clinical data demonstrate the potential to address unmet medical needs for the condition. The sponsor of an investigational
drug product may request that the FDA designate the drug candidate for a specific indication as a fast-track drug concurrent with, or
after, the submission of the IND for the drug candidate. The FDA must determine if the drug candidate qualifies for fast-track designation
within 60 days of receipt of the sponsor’s request. For fast-track products, sponsors may have greater interactions with the FDA
and the FDA may initiate review of sections of a fast-track product’s NDA before the application is complete. This rolling review
is available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a fast-track product
may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information
and the sponsor must pay applicable user fees. At the time of NDA filing, the FDA will determine whether to grant priority review designation.
Additionally, fast track designation may be withdrawn if the FDA believes that the designation is no longer supported by data emerging
in the clinical trial process.
17
Breakthrough
Therapy Designation
In
2012, Congress enacted the Food and Drug Administration Safety and Innovation Act, or FDASIA. This law established a new regulatory scheme
allowing for expedited review of products designated as “breakthrough therapies.” A product may be designated as a breakthrough
therapy if it is intended, either alone or in combination with one or more other drugs, to treat a serious or life-threatening disease
or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies
on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The FDA
may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development
process; providing timely advice to the product sponsor regarding development and approval; involving more senior staff in the review
process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the clinical trials in an
efficient manner.
Priority
Review Designation
The
FDA may designate a product for priority review if it is a drug that treats a serious condition and, if approved, would provide a significant
improvement in safety or effectiveness. The FDA determines, on a case- by-case basis, whether the proposed drug represents a significant
improvement when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness
in the treatment of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of
patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation.
A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the
FDA’s goal for taking action on a marketing application from ten months to six months.
Accelerated
Approval
Accelerated
approval may be granted for a product that is intended to treat a serious or life-threatening condition and that generally provides a
meaningful therapeutic advantage to patients over existing treatments. A product eligible for accelerated approval may be approved on
the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be
measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or
mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or
lack of alternative treatments. The accelerated approval pathway is most often used in settings in which the course of a disease is long,
and an extended period of time is required to measure the intended clinical benefit of a product, even if the effect on the surrogate
or intermediate clinical endpoint occurs rapidly. The accelerated approval pathway is contingent on a sponsor’s agreement to conduct
additional post-approval confirmatory studies to verify and describe the product’s clinical benefit. These confirmatory trials
must be completed with due diligence and, in some cases, the FDA may require that the trial be designed, initiated, and/or fully enrolled
prior to approval. Failure to conduct required post-approval studies, or to confirm a clinical benefit during post-marketing studies,
would allow the FDA to withdraw the product from the market on an expedited basis. All promotional materials for product candidates approved
under accelerated regulations are subject to prior review by the FDA.
Further,
as a result of the COVID-19 pandemic, the extent and length of which is uncertain, MyMD will be required to develop and implement additional
clinical study policies and procedures designed to help protect study participants from the SARS-CoV-2 virus, which may include using
telemedicine visits and remote monitoring of patients and clinical sites. MyMD will also need to ensure data from its clinical studies
that may be disrupted as a result of the pandemic is collected pursuant to the study protocol and is consistent with GCPs, with any material
protocol deviation reviewed and approved by the site IRB. Patients who may miss scheduled appointments, any interruption in study drug
supply, or other consequence that may result in incomplete data being generated during a study as a result of the pandemic must be adequately
documented and justified. For example, on March 18, 2020, the FDA issued guidance on conducting clinical trials during the pandemic,
which describes a number of considerations for sponsors of clinical trials impacted by the pandemic, including the requirement to include
in the clinical study report (or as a separate document) contingency measures implemented to manage the study, and any disruption of
the study as a result of COVID-19; a list of all study participants affected by COVID-19-related study disruption by unique subject identifier
and by investigational site, and a description of how the individual’s participation was altered; and analyses and corresponding
discussions that address the impact of implemented contingency measures (e.g., participant discontinuation from investigational product
and/or study, alternative procedures used to collect critical safety and/or efficacy data) on the safety and efficacy results reported
for the study.
18
Post-marketing
Requirements
Following
approval of a new product, the manufacturer and the approved product are subject to continuing regulation by the FDA. Drug manufacturers’
and/or sponsors’ post-marketing FDA obligations, include, among other things, monitoring and record-keeping activities, reporting
of adverse experiences, complying with promotion and advertising requirements, which include restrictions on promoting products for unapproved
uses or patient populations (known as “off-label use”) and limitations on industry-sponsored scientific and educational activities,
and a number of other specific requirements for prescription-drug advertising. Although physicians may prescribe legally available products
for off-label uses, manufacturers may not market or promote their approved drug products for off-label uses. Product approvals may be
withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing. Newly discovered or developed
safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications,
and may also require the implementation of other risk management measures, including a REMS, or the conduct of post-marketing studies
to assess a newly discovered safety issue.
FDA
regulations require that drug products be manufactured in registered drug-manufacturing facilities and in accordance with cGMP regulations.
MYMD currently relies on third parties to produce clinical quantities of its drug candidates under development in accordance with applicable
GCPs and GLPs, and expects to continue to rely, on third parties to produce clinical and commercial quantities of MYMD’s products
that are approved for marketing in the United States, if any, in accordance with cGMP regulations. These manufacturers must comply with
cGMP regulations that require, among other things, quality control and quality assurance, the maintenance of records and documentation
and the obligation to investigate and correct any deviations from cGMP. Accordingly, manufacturers must continue to expend time, money
and effort in the area of production and quality control to maintain cGMP compliance. The discovery of violative conditions, including
failure to conform to cGMP regulations, could result in a wide range of enforcement actions against the manufacturer, including, but
not limited to, recalls, warning letters, “dear doctor” letters, civil lawsuits, fines, and criminal prosecution. And the
discovery of previously unknown safety or efficacy problems with a product after approval may result in restrictions on, revocation of,
or the addition of conditions to the product’s approval, among other potential adverse actions.
In
addition to the requirements applicable to approved drug products, sponsors may also be subject to enforcement action in connection with
any promotion of any investigational new drug. A sponsor or investigator, or any person acting on behalf of a sponsor or investigator,
may not represent in a promotional context that an investigational new drug is safe or effective for the purposes for which it is under
investigation or otherwise promote or market the product.
Other
Regulatory Matters
Manufacturing,
sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in
the U.S. in addition to the FDA, including the CMS, other divisions of the HHS, the DOJ, the Drug Enforcement Administration, the Consumer
Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection
Agency and state and local governments and governmental agencies.
Other
Healthcare Laws
Healthcare
providers, physicians, and third-party payors will play a primary role in the recommendation and prescription of any products for which
MyMD may obtain marketing approval. MyMD’s current and future arrangements with third-party payors, healthcare providers and physicians
may expose MyMD to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial
arrangements and relationships through which MyMD markets, sells and distributes any drugs for which MYMD obtains marketing approval.
In the U.S., these laws include, without limitation, state and federal anti-kickback, false claims, physician transparency, and patient
data privacy and security laws and regulations, including but not limited to those described below. MYMD’s business operations,
including its research, marketing, and activities relating to the reporting of wholesale or estimated retail prices for MyMD’s
products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state and third-party
reimbursement for MyMD’s products, and the sale and marketing of MyMD’s product and any future product candidates, are subject
to scrutiny under these laws.
19
●
The
AKS, makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf), to knowingly
and willfully solicit, receive, offer or pay any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, that
is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug, for
which payment may be made under a federal healthcare program, such as Medicare or Medicaid. Violations of this law are punishable
by imprisonment, criminal fines, administrative civil money penalties and exclusion from participation in federal healthcare programs.
In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it.
●
The
federal civil and criminal false claims laws, including the FCA, which can be enforced through civil whistleblower or qui tam actions,
which impose penalties against individuals or entities (including manufacturers) for, among other things, knowingly presenting, or
causing to be presented false or fraudulent claims for payment by a federal healthcare program or making a false statement or record
material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government.
The government may deem manufacturers to have “caused” the submission of false or fraudulent claims by, for example,
providing inaccurate billing or coding information to customers or promoting a product off-label. Claims that include items or services
resulting from a violation of the AKS are false or fraudulent claims for purposes of the FCA.
●
The
federal anti-inducement law, which prohibits, among other things, the offering or giving of remuneration, which includes, without
limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare
or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular
supplier of items or services reimbursable by a federal or state governmental program.
●
HIPAA
imposes criminal and civil liability for knowingly and willfully executing a scheme, or attempting to execute a scheme, to defraud
any healthcare benefit program, including private payors, or falsifying, concealing or covering up a material fact or making any
materially false statements in connection with the delivery of or payment for healthcare benefits, items or services. Similar to
the AKS, a person or entity does not need to have actual knowledge of the healthcare fraud statute implemented under HIPAA or specific
intent to violate it in order to have committed a violation.
●
HIPAA,
as amended by HITECH, and their respective implementing regulations, imposes, among other things, specified requirements on covered
entities and their business associates relating to the privacy and security of individually identifiable health information including
mandatory contractual terms and required implementation of technical safeguards of such information. HITECH also created new tiers
of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave
state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA
laws and seek attorneys’ fees and costs associated with pursuing federal civil actions.
●
The
PPSA, enacted as part of the ACA, imposed new annual reporting requirements for certain manufacturers of drugs, devices, biologics,
and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, for
certain payments and “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists,
podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their
immediate family members. Effective January 1, 2022, these reporting obligations extend to include transfers of value made during
the previous year to certain non-physician providers such as physician assistants and nurse practitioners.
●
Analogous
state and foreign fraud and abuse laws and regulations, such as state anti-kickback and false claims laws, which may be broader in
scope and apply regardless of payor. These laws are enforced by various state agencies and through private actions. Some state laws
require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant
federal government compliance guidance, require drug manufacturers to report information related to payments and other transfers
of value to physicians and other healthcare providers, and restrict marketing practices or require disclosure of marketing expenditures.
In addition, certain state and local laws require the registration of pharmaceutical sales representatives.
State
and foreign laws also govern the privacy and security of health information in some circumstances. These data privacy and security laws
may differ from each other in significant ways and often are not pre-empted by HIPAA, which may complicate compliance efforts. Furthermore,
most states in the United States have enacted laws regulating the confidentiality and security of medical information and increased public
focus on privacy may result in amendments or changes to these laws in ways that may have an impact on MyMD’s business activities
related to the collection and use of health-related information.
20
The
increased attention on privacy in the United States may also impact MyMD’s business activities for the processing of personal information
not otherwise governed by HIPAA. The EU General Data Protection Regulation (“GDPR”) imposes significant privacy and cybersecurity
requirements related to the handling of all types of personal information, with heightened requirements on sensitive personal information,
such as health information. The GDPR imposes significant limitations on the use of this personal information and grants individuals in
the EU certain rights associated with the collection and use of personal information. In the U.S., California recently enacted the CCPA,
which creates new individual privacy rights for California consumers (generally defined as any resident of California, including employees
and other business relations) and places increased privacy and security obligations on entities handling personal information of consumers
or households. The CCPA also greatly extends the obligations of entities that process personal information to include information not
traditionally viewed as personal information and regulated by laws, such as Internet Protocol (IP) addresses, unique identifiers for
individuals, and information in online cookies and other online technologies. A majority of other states have already proposed laws similar
to the CCPA, each differing in scope of the personal information covered and the rights of individuals. Furthermore, the CCPA has already
been replaced with the passage of California’s Proposition 24 (the California Privacy Rights Act, “CPRA”), which adds
additional rights and obligations. While the CCPA and CPRA currently provide relatively broad exclusions for protected health information
regulated by HIPAA and clinical trials and a limited exception for consumer and business to business information, some of the proposed
laws in other states may not contain the same exceptions. Furthermore, there have been a number of competing proposals for federal laws,
some of which propose to not preempt other state laws. The uncertainty surrounding proposed new and changes to existing privacy laws
may lead to operational challenges for MYMD to comply with multiple, potentially conflicting, privacy and cybersecurity laws related
to the collection and use of personal information in each jurisdiction.
Various
state and federal laws and regulations also require entities to implement “reasonable” or “adequate” security
measures to protect personal information, but generally do not provide any specific sets of security measures that would be considered
compliant to avoid liability. Instead, different regulators have adopted inconsistent and evolving standards based on the regulator’s
view of what is appropriate given the nature and scope of the personal information and the processing performed, resulting in unclear
obligations. This may result in potential liability if a regulator finds that MYMD’s security practices do not meet or exceed the
types of security measures that the regulator believes to be adequate or reasonable under the circumstances.
The
scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform,
especially considering the lack of applicable precedent and regulations. Federal and state enforcement bodies have continued to increase
their scrutiny of interactions between healthcare companies and healthcare providers, which has led to investigations, prosecutions,
convictions and settlements in the healthcare industry. It is possible that governmental authorities will conclude that MyMD’s
business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other
healthcare laws and regulations. If MyMD’s operations are found to be in violation of any of these laws or any other related governmental
regulations that may apply to it, MyMD may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment,
disgorgement, exclusion of drugs from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional
oversight and reporting obligations if MyMD becomes subject to a corporate integrity agreement or similar settlement to resolve allegations
of non-compliance with these laws and the curtailment or restructuring of MyMD’s operations. If any of the physicians or other
healthcare providers or entities with whom MyMD expects to do business is found to be not in compliance with applicable laws, they may
be subject to similar actions, penalties and sanctions. Ensuring business arrangements comply with applicable healthcare laws, as well
as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s
attention from its business.
Current
and Future Healthcare Reform Legislation
On
March 23, 2010, President Obama signed the “Patient Protection and Affordable Care Act” (P.L. 111-148) (the “ACA”)
and on March 30, 2010, he signed the “Health Care and Education Reconciliation Act” (P.L. 111-152), collectively commonly
referred to as the “Healthcare Reform Law.” The Healthcare Reform Law included a number of new rules regarding health insurance,
the provision of healthcare, conditions to reimbursement for healthcare services provided to Medicare and Medicaid patients, and other
healthcare policy reforms. Through the law-making process, substantial changes have been and continue to be made to the current system
for paying for healthcare in the U.S., including changes made to extend medical benefits to certain Americans who lacked insurance coverage
and to contain or reduce healthcare costs (such as by reducing or conditioning reimbursement amounts for healthcare services and drugs,
and imposing additional taxes, fees, and rebate obligations on pharmaceutical and medical device companies). This legislation was one
of the most comprehensive and significant reforms ever experienced by the U.S. in the healthcare industry and has significantly changed
the way healthcare is financed by both governmental and private insurers. This legislation has impacted the scope of healthcare insurance
and incentives for consumers and insurance companies, among others. Additionally, the Healthcare Reform Law’s provisions were designed
to encourage providers to find cost savings in their clinical operations. Pharmaceuticals represent a significant portion of the cost
of providing care. This environment has caused changes in the purchasing habits of consumers and providers and resulted in specific attention
to the pricing negotiation, product selection and utilization review surrounding pharmaceuticals. This attention may result in our product
candidates, to the extent approved for commercialization in the future, being chosen less frequently or the pricing being substantially
lowered. At this stage, it is difficult to estimate the full extent of the direct or indirect impact of the Healthcare Reform Law on
us.
These
structural changes could entail further modifications to the existing system of private payors and government programs (such as Medicare,
Medicaid, and the State Children’s Health Insurance Program), creation of government-sponsored healthcare insurance sources, or
some combination of both, as well as other changes. Restructuring the coverage of medical care in the U.S. could impact the reimbursement
for prescribed drugs and pharmaceuticals, including any products hat we may commercialize or promote in the future. If reimbursement
for the products we currently commercialize or promote, any product we may commercialize or promote, or approved therapeutic candidates
is substantially reduced or otherwise adversely affected in the future, or rebate obligations associated with them are substantially
increased, it could have a material adverse effect on our reputation, business, financial condition or results of operations.
Extending
medical benefits to those who currently lack coverage will likely result in substantial costs to the U.S. federal government, which may
force significant additional changes to the healthcare system in the U.S. Much of the funding for expanded healthcare coverage may be
sought through cost savings. While some of these savings may come from realizing greater efficiencies in delivering care, improving the
effectiveness of preventive care and enhancing the overall quality of care, much of the cost savings may come from reducing the cost
of care and increased enforcement activities. Cost of care could be reduced further by decreasing the level of reimbursement for medical
services or products or by restricting coverage (and, thereby, utilization) of medical services or products. In either case, a reduction
in the utilization of, or reimbursement for any product we may commercialize or promote in the future, could have a material adverse
effect on our reputation, business, financial condition or results of operations.
21
Several
states and private entities initially mounted legal challenges to the Healthcare Reform Law, in particular, the ACA, and they continue
to litigate various aspects of the legislation. On July 26, 2012, the U.S. Supreme Court generally upheld the provisions of the ACA at
issue as constitutional. However, the U.S. Supreme Court held that the legislation improperly required the states to expand their Medicaid
programs to cover more individuals. As a result, states have a choice as to whether they will expand the number of individuals covered
by their respective state Medicaid programs. Some states have not expanded their Medicaid programs and have chosen to develop other cost-saving
and coverage measures to provide care to currently uninsured individuals. Many of these efforts to date have included the institution
of Medicaid-managed care programs. The manner in which these cost-saving and coverage measures are implemented could have a material
adverse effect on our reputation, business, financial condition or results of operations.
Further,
the healthcare regulatory environment has seen significant changes in recent years and is still in flux. Legislative initiatives to modify,
limit, replace, or repeal the ACA and judicial challenges have continued. We cannot predict the impact on our business of future legislative
and legal challenges to the ACA or other aspects of the Healthcare Reform Law or other changes to the current laws and regulations. The
financial impact of U.S. healthcare reform legislation over the next few years will depend on a number of factors, including the policies
reflected in implementing regulations and guidance and changes in sales volumes for therapeutics affected by the legislation. From time
to time, legislation is drafted, introduced and passed in the U.S. Congress that could significantly change the statutory provisions
governing coverage, reimbursement, and marketing of pharmaceutical products. In addition, third-party payor coverage and reimbursement
policies are often revised or interpreted in ways that may significantly affect our business and our products.
During
his time in office, former President Trump supported the repeal of all or portions of the ACA. President Trump also issued an executive
order in which he stated that it is his administration’s policy to seek the prompt repeal of the ACA and in which he directed executive
departments and federal agencies to waive, defer, grant exemptions from, or delay the implementation of the provisions of the ACA to
the maximum extent permitted by law. Congress has enacted legislation that repeals certain portions of the ACA, including but not limited
to the Tax Cuts and Jobs Act, passed in December 2017, which included a provision that eliminates the penalty under the ACA’s individual
mandate, effective January 1, 2019, as well as the Bipartisan Budget Act of 2018, passed in February 2018, which, among other things,
repealed the Independent Payment Advisory Board (which was established by the ACA and was intended to reduce the rate of growth in Medicare
spending).
Additionally,
in December 2018, a district court in Texas held that the individual mandate is unconstitutional and that the rest of the ACA is, therefore,
invalid. On appeal, the Fifth Circuit Court of Appeals affirmed the holding on the individual mandate but remanded the case back to the
lower court to reassess whether and how such holding affects the validity of the rest of the ACA. The Fifth Circuit’s decision
on the individual mandate was appealed to the U.S. Supreme Court. On June 17, 2021, the Supreme Court held that the plaintiffs (comprised
of the state of Texas, as well as numerous other states and certain individuals) did not have standing to challenge the constitutionality
of the ACA’s individual mandate and, accordingly, vacated the Fifth Circuit’s decision and instructed the district court
to dismiss the case. As a result, the ACA will remain in-effect in its current form for the foreseeable future; however, we cannot predict
what additional challenges may arise in the future, the outcome thereof, or the impact any such actions may have on our business.
The
Biden administration also introduced various measures in 2021 focusing on healthcare and drug pricing, in particular. For example, on
January 28, 2021, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health
insurance coverage through the ACA marketplace, which began on February 15, 2021, and remained open through August 15, 2021. The executive
order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare,
including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements and policies that
create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. On the legislative front, the
American Rescue Plan Act of 2021 was signed into law on March 11, 2021, which, in relevant part, eliminates the statutory Medicaid drug
rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source drugs and innovator multiple source
drugs, beginning January 1, 2024. And, in July 2021, the Biden administration released an executive order entitled, “Promoting
Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response, on September 9, 2021,
HHS released a “Comprehensive Plan for Addressing High Drug Prices” that outlines principles for drug pricing reform and
sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take
to advance these principles. And, in November 2021, President Biden announced the “Prescription Drug Pricing Plan” as part
of the Build Back Better Act (H.R. 5376) passed by the House of Representatives on November 19, 2021, which aims to lower prescription
drug pricing by, among other things, allowing Medicare to negotiate prices for certain high-cost prescription drugs covered under Medicare
Part D and Part B after the drugs have been on the market for a certain number of years and imposing tax penalties on drug manufacturers
that refuse to negotiate pricing with Medicare or increase drug prices “faster than inflation.” If enacted, this bill could
have a substantial impact on our business. In the coming years, additional legislative and regulatory changes could be made to governmental
health programs that could significantly impact pharmaceutical companies and the success of our product candidates. At the state level,
legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product
pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure
and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
There
is uncertainty as to what healthcare programs and regulations may be implemented or changed at the federal and/or state level in the
United States or the effect of any future legislation or regulation. Furthermore, we cannot predict what actions the Biden administration
will implement in connection with the Health Reform Law. However, it is possible that such initiatives could have an adverse effect on
our ability to obtain approval and/or successfully commercialize products in the United States in the future. For example, any changes
that reduce, or impede the ability to obtain, reimbursement for our product candidates approved for commercialization in the United States,
if any, or any other drug products we may commercialize in the future or that reduce medical procedure volumes could adversely affect
our operations and/or future business plans.
22
Packaging
and Distribution in the United States
If
MyMD’s product candidates that are approved for commercialization in the United States, if any, are made available to authorized
users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements may apply. In relevant
part, products must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act. Manufacturing,
sales, promotion and other activities also are potentially subject to federal and state consumer protection and unfair competition laws.
The
distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing,
storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.
The
failure to comply with any of these laws or regulatory requirements subjects firms to possible legal or regulatory action. Depending
on the circumstances, failure to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties,
injunctions, exclusion from federal healthcare programs, requests for recall, seizure of products, total or partial suspension of production,
denial or withdrawal of product approvals, or refusal to allow a firm to enter into supply contracts, including government contracts.
Any action against MyMD for violation of these laws, even if MyMD is successful in defending against it, could cause MyMD to incur significant
legal expenses and divert MyMD’s management’s attention from the operation of its business. Prohibitions or restrictions
on sales or withdrawal of future products marketed by MyMD could materially affect its business in an adverse way.
Changes
in regulations, statutes or the interpretation of existing regulations could impact MyMD’s business in the future by requiring,
for example: (i) changes to MyMD’s manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall
or discontinuation of MyMD’s products; or (iv) additional record-keeping requirements. If any such changes were to be imposed,
they could adversely affect the operation of MyMD’s business.
Reimbursement
Sales
of any of MyMD’s product candidates that are approved for marketing in the United States or any other products MyMD may commercialize
in the future, as applicable, will depend, in part, on the extent to which MyMD’s products, if approved, will be covered by third-party
payors, such as government health programs, commercial insurers and managed healthcare organizations, as well as the level of reimbursement
such that those third-party payors provide for MyMD’s products. Patients and providers are unlikely to use MyMD’s products
unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of MyMD’s products in which
MyMD’s products are used. In the U.S., no uniform policy of coverage and reimbursement for drugs or biological products exists,
and one payor’s determination to provide coverage and adequate reimbursement for a product does not assure that other payors will
make a similar determination. Accordingly, decisions regarding the extent of coverage and amount of reimbursement to be provided for
any of MyMD’s products candidates, if approved, will be made on a payor-by-payor basis. As a result, the coverage determination
process may be a time-consuming and costly process that will require MyMD to provide scientific and clinical support for the use of MyMD’s
products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.
The
Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with
the Secretary of the HHS as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished
to Medicaid patients. The ACA made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’
rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs and adding a new rebate calculation
for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded
products, creating a new method by which rebates owed by pharmaceutical manufacturers are calculated for drugs that are inhaled, infused,
instilled, implanted or injected, as well as potentially impacting their rebate liability by modifying the statutory definition of average
manufacturer’s price (“AMP”). The ACA also expanded the universe of Medicaid utilization subject to drug rebates by
requiring pharmaceutical manufacturers to pay rebates on Medicaid managed care utilization and by enlarging the population potentially
eligible for Medicaid drug benefits. Pricing and rebate programs must also comply with the Medicaid rebate requirements of the U.S. Omnibus
Budget Reconciliation Act of 1990.
The
Medicare Prescription Drug Improvement and Modernization Act of 2003 (“MMA”) established the Medicare Part D program to provide
a voluntary prescription drug benefit to Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug
plans offered by private entities that provide coverage of outpatient prescription drugs. Unlike Medicare Part A and B, Part D coverage
is not standardized. While all Medicare drug plans must give at least a standard level of coverage set by Medicare, Part D prescription
drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies
which drugs it will cover and at what tier or level. However, Part D prescription drug formularies must include drugs within each therapeutic
category and class of covered Part D drugs, though not necessarily all the drugs in each category or class. Any formulary used by a Part
D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee. Government payment for some of the costs
of prescription drugs may increase demand for products for which MyMD receives marketing approval. However, any negotiated prices for
MyMD’s products covered by a Part D prescription drug plan likely will be lower than the prices MyMD might otherwise obtain. Moreover,
while the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment
limitations in setting their own payment rates. Any reduction in payment that results from the MMA may result in a similar reduction
in payments from non-governmental payors.
23
For
a drug product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to U.S. government
agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program. The required 340B
discount on a given product is calculated based on the AMP, and Medicaid rebate amounts reported by the manufacturer. As of 2010, the
ACA expanded the types of entities eligible to receive discounted 340B pricing, although, under the current state of the law, with the
exception of children’s hospitals, these newly eligible entities will not be eligible to receive discounted 340B pricing on orphan
drugs. In addition, as 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions to the Medicaid rebate formula
and AMP definition described above could cause the required 340B discount to increase. The 340B program imposes ceilings on prices that
drug manufacturers can charge for medications sold to certain health care facilities. It is unclear how this decision could affect covered
hospitals who might purchase MyMD’s products in the future and affect the rates MyMD may charge such facilities for its approved
products. In addition, legislation may be introduced that, if passed, would further expand the 340B program to additional covered entities
or would require participating manufacturers to agree to provide 340B discounted pricing on drugs used in an inpatient setting.
As
noted above, the marketability of any products for which MyMD receives regulatory approval for commercial sale may suffer if the government
and other third-party payors fail to provide adequate coverage and reimbursement. An increasing emphasis on cost containment measures
in the U.S. has increased and MyMD expects it will continue to increase the pressure on pharmaceutical pricing. Coverage policies and
third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more
products for which MyMD receives regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in
the future.
These
laws, and future state and federal healthcare reform measures may be adopted in the future, any of which may result in additional reductions
in Medicare and other healthcare funding and otherwise affect the prices MyMD may obtain for any of its product candidates for which
MyMD may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
In
addition, in most foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements
governing drug pricing and reimbursement vary widely from country to country. For example, the EU provides options for its Member States
to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the
prices of medicinal products for human use. Reference pricing used by various EU Member States and parallel distribution, or arbitrage
between low-priced and high-priced Member States, can further reduce prices. A Member State may approve a specific price for the medicinal
product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product
on the market. In some countries, MyMD may be required to conduct a clinical study or other studies that compare the cost-effectiveness
of any of MyMD’s product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow
favorable reimbursement and pricing arrangements for any of MyMD’s products. Historically, products launched in the EU do not follow
price structures of the U.S. and, generally, prices tend to be significantly lower. Publication of discounts by third-party payors or
authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries.
Employees
As
of December 31, 2022, MyMD had nine full-time employees and no part-time employees. MyMD has not experienced any work stoppages. None
of MyMD’s employees are represented by a labor union or covered by collective bargaining agreements, and MyMD considers its relationship
with its employees to be good.
Management
Plans for 2023
In
November 2022, the company published data from the Phase 1 dosing study for MYMD-1 as a treatment for aging. There was a statistically
significant decrease in TNF-α levels (p-value <0.05) found in one MYMD-1 treated cohort, but no change in the levels in subjects
given placebo.
We
are focused on closing out our pivotal Phase 2 aging and sarcopenia study. Final efficacy data from the Phase 2 study is expected in
the second quarter of 2023. We anticipate that we will review the safety and efficacy of this study and present the mandatory end of
Phase 2 data to the FDA.
The
company intends to submit an IND to the FDA in the second quarter 2023 for the indication of Rheumatoid Arthritis. This will be followed
by a Phase 2 clinical trial with patients with Rheumatoid Arthritis.
In October 2020 we completed several
in vitro studies from human primary cell-based BioMap systems at Eurofins contrasting MYMD-1 with Humira, Enbrel and Remicade.
MYMD-1
Product Candidate
We
are currently completing enrollment in the fourth and final cohort of patients in the Phase 2 Aging and Sarcopenia Study (“A Double-Blind,
Placebo-controlled, Randomized Study to Investigate the Efficacy, Tolerability and Pharmacokinetics of MYMD-1 in The Treatment of Participants
Aged 65 Years or Older with Chronic Inflammation Associated with Sarcopenia/Frailty”).
24
We
completed a Phase 1 Dosing Study (“A Double-blind, Placebo-controlled, Randomized, Single Ascending and Multiple Dose Study to
Evaluate the Safety, Tolerability, and Pharmacokinetics of Oral Dose of MYMD-1 Capsules in Healthy Male and Female Adult Subjects”).
●
The
Investigational New Drug (IND) application for Aging and Sarcopenia was accepted by FDA.
●
The
IND was submitted to support a Phase 2 study focused on Aging and Sarcopenia in adults 65 years and older. The FDA reviewed the
IND with its corresponding protocol and allowed the company to proceed to a Phase 2 clinical trial on November 1, 2021.
●
We
obtained IRB approval on November 16, 2021 which permitted us to start enrollment and dosing qualified participants. To date, the trial has dosed 80% of its goal sample size of 40 subjects. The primary objects of the study are to
a) Demonstrate reduction of chronic inflammatory markers in participants treated with MYMD-1 ® versus placebo and b) To
evaluate the PK of oral doses of MYMD-1 ® capsules.
This
will be accomplished by analyzing the effect on serum levels of sTNFR1, IL-6, and TNF-α over 28 days of treatment as well as
plasma concentrations and urine and parameters of MYMD-1 ®, respectively. To qualify for the clinical trial, subjects’
biomarkers during the screening period must be within the following Criteria: IL-6 ≥ 2.5pg/mL; and/or sTNFR-1 ≥ 1500pg/mL
To
date, we have randomized and dosed 30/40 subjects across Cohorts 1 (n=10; 600mg), 2 (n=10; 750mg), 3 (n=10; 900mg) and 4 (n=pending;
1050mg).
IND
for Autoimmune Diseases
Animal
Studies
●
10-month
Dog Study – completed on December 20, 2021: A 39-Week Toxicity and Toxicokinetic Study of MYMD-1 by Oral Gavage in Beagle Dogs.
●
6-month
Rat Study – completed on December 17, 2021: A 26-Week Toxicity and Toxicokinetic Study of MYMD-1 by Oral Gavage in Rats.
●
5-Day
Mouse Study – Completed May 2020 with results pending: A Preliminary Introductory Traumatic
Optic Neuropathy (TON) in a Mouse study
●
Studies
produced guidance on dosing levels and overall safety in the human studies.
Publications
A
scientific journal article on MYMD-1 was published in The Journals of Gerontology in August 2022. This manuscript supports our continued
efforts to conduct a second Phase 2 Trial for Rheumatoid Arthritis in 2023 and additional autoimmune diseases that we may pursue.
Additionally, “MyMD-1 Improves Health Span and Prolongs Life Span in Old Mice: A Noninferiority Study to Rapamycin” by Johns
Hopkins Medical School. This journal article details a 12-month mouse trial studying aging and longevity with MYMD-1. We also completed
several in vitro studies from human primary cell-based BioMap systems at Eurofins contrasting MYMD-1 versus Rapamycin further supporting
our transition to Rheumatoid Arthritis.
In
November 2022, MyMD published “A Double-blind, Placebo-controlled, Randomized, Single Ascending, and Multiple Dose Phase 1 Study
to Evaluate the Safety, Tolerability, and Pharmacokinetics of Oral Dose Isomyosamine Capsules in Healthy Adult Subjects” Authors:
Jenna Brager, Chris Chapman, Leonard Dunn, and Adam Kaplin in Drug Research. This became available in print in February 28, 2023. This
journal article details the results from the Phase 1 clinical trial.
Later, an abstract was accepted for presentation at the British Society of Immunology, Liverpool, UK in December 2022. “Pharmacology
and clinical profile of MYMD-1 ® (isomyosamine), an oral, selective, next-generation, TNF- α inhibitor that crosses
the blood brain barrier” authored by Jenna Brager, Ronald Christopher, Adam Kaplin, and Chris Chapman.
Moving
in to the 2023, an abstract was accepted for presentation at the Society of Toxicology to be presented in March 2023, entitled, “A
Naturally Occurring Novel Therapeutic and Oral Selective Inhibitor of TNFa, MYMD-1 (Isomyosamine), Significantly Reduced the Inflammation
and Disease Severity in Murine Model of Collagen Antibody-Induced Arthritis” authored by Chris Chapman and Sonia Edaye.
All publications and abstracts support
the continued development of MYMD-1 ® across various indications.
IND
for Hashimoto’s Thyroiditis
●
On
February 18, 2022, we submitted an Annual Update to the FDA for the previously opened Hashimoto’s Thyroiditis IND.
●
In
April 2021, the FDA gave clearance for a Phase 1 dosing study in normal healthy volunteers; Institutional Review Board (IRB) approval
was obtained on April 4, 2021. The clinical trial was conducted by The Clinical Research of West Florida Phase 1 unit with a closeout
visit taking place on November 22, 2021.
●
Analyses
of laboratory parameters, vital sign, ECG, and physical findings did not reveal any clinically relevant effect of MYMD-1. In one
dose group, there was a decrease in TNF-α levels found in MYMD-1 treated subjects, but no change in the levels in subjects
given placebo. In one dose group, there was a decrease in TNF-α levels found in MYMD-1 treated subjects, but no change in the
levels in subjects given placebo.
●
The
data from the Phase 1 clinical trial was submitted to the FDA on September 14, 2021 as part of the Annual IND update for Hashimoto’s
Thyroiditis IND. The FDA responded by providing guidance on moving forward with Phase 2 clinical trials.
●
This
data was also included in a new commercial IND to the FDA on September 22, 2021.
The
company completed CYP in vitro studies which concluded that clinical drug-drug interactions are not expected with MYMD-1. CYP induction
is the most commonly studied form of induction in drug metabolism and is required by regulatory authorities.
We
had MYMD-1 synthesized in August 2021 to [14C] MYMD-1 radiolabeled product for Mass Balance, Pharmacokinetic, and Metabolism. Analysis
of the rat study results demonstrated that MYMD-1 was metabolized extensively throughout the tissues, crosses the blood brain barrier,
was cleared in the urine and feces, and there were no nitrosated metabolite biological samples detected.
Lastly,
a Metabolite Identification and Quantitation of MYMD-1 in Rat, Dog, and Human Plasma Samples: Metabolites in Safety Testing (MIST) was
completed in October 2022. MYMD-1 was extensively metabolized, and was detected at low levels (<5%) in human plasma.
25
In
November 2022, the company published data from the Phase 1 dosing study for MYMD-1 as a treatment for aging. There was a statistically
significant decrease in TNF-α levels (p-value <0.05) found in one MYMD-1 treated subjects cohort, but no change in the levels
in subjects given placebo.
We
plan to manage our pivotal Phase 2 aging and sarcopenia study. Final efficacy data from the Phase 2 study is expected in the second quarter
2023. We anticipate that we will review the safety and efficacy of this study and present the mandatory end of Phase 2 data to the FDA.
The
company intends to submit an IND to the FDA in the second quarter 2023 for the indication Rheumatoid Arthritis. MyMD Pharmaceuticals,
Inc. completed several in vitro studies from human primary cell-based BioMap systems at Eurofins contrasting MYMD-1 to Humira, Enbrel
and Remicade.
On
July 27, 2021, Eurofins showed Commonality in a Comparative Study with FDA-Approved Anti-Inflammatory and Anti-Autoimmune Drugs Used
for Arthritis, Colitis and Dermatitis. On October 26, 2021, our President and Chief Medical Officer, Chris Chapman, M.D., was named Honoree
of the year by the Arthritis Foundation.
On
August 5, 2021, our lead product candidate MYMD-1 was shown to suppress cytokines, which are the major cause of death in COVID-19 patients,
in a human cell study. The company plans to consult with the FDA on this indication for post COVID-19 immune mediated depression in the
second quarter 2024. During this time, MyMD Pharmaceuticals, Inc. also expects to seek additional FDA guidance on depression in MS patients
under an Orphan Drug Designation (ODD).
We
have an active IND to start a Phase 2 study for the indication Hashimoto’s Thyroiditis, and plan to present the FDA with a protocol
for this pilot Phase 2 study in the fourth quarter 2024.
We
intend to begin long-term reproductive toxicity studies in the fourth quarter 2022. These will include study of Fertility and Early Embryonic
Development to Implantation in Mice, and study for Effects on Embryo Fetal Development in Mice and Rabbits with a toxicokinetic evaluation.
These studies will continue to support long-term dosing in humans.
In
manufacturing, we will continue to provide GMP MYMD-1 capsules for Phase 2 clinical trials. We plan to continue analytical analysis to
provide GMP product other that capsules for long-term human trials.
We
have received domestic patent protection for MYMD-1, including its use in methods of extending lifespan and treating arthritis, autoimmune
diseases, and inflammatory and age-related disorders including sarcopenia. We will continue to prosecute patents to protect intellectual
property for MYMD-1 in the United States and abroad.
Supera-CBD
Product Candidate
Data
from Eurofins studies involving human primary cell-based BioMap system demonstrated that Supera-CBD delivers an extremely potent therapeutic
benefit of 8,000 times that of plant-derived CBD at activating CB2 receptors, permitting its delivery at a very low non-toxic dose.
On
August 10, 2021 the company was awarded U.S. Patent 11,085,047 B2, titled “Synthetic Cannabinoid Compounds for Treatment of Substance
Addiction and Other Disorders,” covering the Super-CBD product candidate and its pharmaceutical formulations. During 2021 and 2022
corresponding foreign patents were awarded in Australia, Canada, Europe, Israel, and South Korea, and patents are pending in China and
Japan.
Johns
Hopkins Medicine researchers presented Supera-CBD data at the 3 rd annual Neuroimmunology Drug Development Summit on April
26, 2021.
The
company presented data referencing Super-CBD at the 4 th Annual International Cannabinoid Summit on September 9, 2021.
On March 2,
2023, we announced that the U.S. Drug Enforcement Administration (DEA) has conducted a scientific review and determined that it would
not Supera-CBD a controlled substance or listed chemical under the Controlled Substances Act (CSA) and its governing regulations. We
believe that this decision will expedite future research involving Supera-CBD by relieving us or our research partners from having to
comply with regulations relating to controlled substances.
We
plan to continue our preclinical program starting genotoxicity studies in Europe. Those studies include:
●
Metabolic
profiling and Ames test (initiation December 21, 2021; completion January 20, 2022) and
●
Micronucleus test (initiation December 21, 2021; completion February 20,
2022).
A
study of Behavioral Biology at Johns Hopkins University Supera-CBD vs. CBD Acute Pain and Inflammation begins has been funded for
2022 and 2023.
26
The
National Institutes of Health is planning to work on a grant for Supera-CBD in Epilepsy for the third quarter 2023.
In
manufacturing, we expect to continue providing GMP Supera-CBD materials for the preclinical toxicity programs. We plan to continue analytical
analysis to provide GMP materials for long term toxicity and Human trials.
An
example of continued efforts include the JHM Research is conducting a study with MYMD-1 and L/R-Supera-CBD for Depression and
Anxiety.
●
Forced
Swim Test
●
Tail
suspension
●
Elevated
Plus Maze and Fear Conditioning
●
Dose
response study.
●
Supera-CBD
open field and Y maze study.
●
MYMD-1
LPS induced depression.
Available
information
Our
website address is www.mymd.com . We do not intend our website address to be an active link or to otherwise incorporate by reference
the contents of the website into this Annual Report on Form 10-K. The SEC maintains an Internet website ( www.sec.gov ) that contains
reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.