Item 1. Business
Item 1. Business.
Overview
Revelation is a clinical-stage life science company that is focused on rebalancing inflammation to optimize health using its proprietary formulation Gemini. We have multiple ongoing programs to evaluate Gemini, including GEM-AKI as a treatment for acute kidney injury (“AKI”) and GEM-CKD as a treatment for chronic kidney disease (“CKD”). The Company was incorporated in the state of Delaware on November 20, 2019 (originally as Petra Acquisition, Inc.) and is based in San Diego, California.
Our common stock and warrants sold in our initial public offering (“Public Warrants”) are listed on The Nasdaq Stock Market, LLC (“Nasdaq”) under the ticker symbol “REVB” and “REVBW,” respectively.
Recent Developments
July 2025 and January 2026 Reverse Stock Splits
On June 23, 2025, at the annual meeting of stockholders, our stockholders granted discretionary authority to our board of directors to (i) amend our certificate of incorporation one or more times to combine outstanding shares of our common stock into a lesser number of outstanding shares, or a “reverse stock split,” at a specific ratio within a range of one-for-two to a maximum of a one-for-250 split, with the exact ratio to be determined by our board of directors in its sole discretion; and (ii) effect the reverse stock split(s), if at all, within one year of the date the proposal is approved by stockholders
Following the annual meeting of stockholders and determination by the Board of Directors on the reverse split ratio, we filed a Certificate of Amendment which effected a 1-for-3 reverse stock split of our outstanding shares of common stock effective as of July 7, 2025. Additionally, we filed a Certificate of Amendment effective which effected a 1-for-4 reverse stock split of our outstanding shares of common stock effective as of January 28, 2026, .
2025 Reverse Stock Splits
On January 17, 2025, at a special meeting of stockholders, our stockholders approved a Certificate of Amendment to our Third Amended and Restated Certificate of Incorporation to effect a reverse stock split of our outstanding shares of common stock at a specific ratio within a range of one-for-two (1-for-2) to a maximum of a one-for-fifty (1-for-50) split. Following the special meeting of stockholders and determination by the Board of Directors on the reverse split ratio, we filed a Certificate of Amendment which effected a 1-for-16 reverse stock split of our outstanding shares of common stock effective as of January 28, 2025.
2024 Reverse Stock Split
On January 17, 2024, at a special meeting of stockholders, our stockholders approved a Certificate of Amendment to our Third Amended and Restated Certificate of Incorporation to effect a reverse stock split of our outstanding shares of common stock at a specific ratio within a range of one-for-two (1-for-2) to a maximum of a one-for-fifty (1-for-50) split. On January 22, 2024, we filed the Certificate of Amendment which effected a 1-for-30 reverse stock split of our outstanding shares of common stock effective as of January 25, 2024.
Business Strategy and Pipeline
Revelation is focused on developing potentially high-value products to address significant, unmet medical needs. Revelation’s lead product candidate Gemini, is our proprietary formulation platform of phosphorylated hexaacyl disaccharide (“PHAD ® ”), an established Toll-like receptor 4 (“TLR4”) agonist that works by modulating and rebalancing a dysregulated inflammatory response.
Our lead Gemini programs have been derisked with preclinical and clinical data and are focused on disorders involving the kidneys including treatment or prevention of acute kidney injury (“AKI”) and treatment of chronic kidney disease (“CKD”). In order to leverage our renal care focus and associated infrastructure, Revelation will look to add to its pipeline with technologies that address other kidney related issues. Revelation’s pipeline is summarized in the figure below:
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In addition to kidney care, Gemini’s unique immunomodulatory properties could lead to prevention and treatment of a variety of diseases ( Figure 1 ). To realize and unlock the full potential of Gemini, Revelation may seek strategic opportunities including out-licensing and/or academic collaborations.
Figure 1. Potential Future Applications for Gemini
The Gemini Platform
Our current therapeutic programs are based on our proprietary Gemini formulation of PHAD ® , a synthetic version of monophosphoryl lipid A (“MPLA”) with a well-established biology. Chemically, PHAD is a small fragment of lipopolysaccharide (“LPS”) which is also called endotoxin. Like LPS, PHAD stimulates TLR4, but unlike LPS, PHAD stimulation leads to controlled production of multiple cytokines and chemokines ( Figure 2 ) which modulate the activity of the innate and adaptive immune response to rebalance the inflammatory response and restore equilibrium ( Figure 3 ).
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Figure 2. Interaction of PHAD with TLR4
Figure 3. Gemini can rebalance cellular equilibrium, fostering healing processes
GEM-AKI
Gemini is being evaluated as an acute (short-term) treatment for AKI. AKI is defined as a sudden and rapid loss in normal kidney function and currently the only treatment for AKI is supportive care and the use of renal replacement therapy (dialysis). AKI can be caused by many different factors including severe infection, trauma, drug toxicity, etc. Regardless of the initial insult, AKI is predominately driven by dysregulated hyperinflammation.
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We believe the immunomodulatory action of Gemini can attenuate the excess inflammation associated with AKI and restore equilibrium. Preclinical studies have demonstrated that Gemini can treat acute kidney injury driven by hyper inflammation. In addition, clinical studies have demonstrated the immunomodulatory properties of Gemini in healthy individuals, and more importantly, Gemini was shown to durably normalize excessive background cellular inflammation and restore immunocompetence in patients with CKD.
Revelation met with FDA at the end of 2025 and obtained agreement on a single Phase 2/3 adaptive design study with a primary composite endpoint of death and/or dialysis for submission of a new drug application (NDA). During 2026, the Company plans to build the necessary infrastructure to successfully run this clinical study including engagement of a scientific advisory board, engagement of a top-tier clinical research organization, and manufacture of blinded drug and placebo with the intention of starting the Phase 2/3 study as soon as feasible.
GEM-CKD
Gemini is also being evaluated as a chronic (long-term) treatment for CKD. CKD is a progressive decline in kidney function ultimately resulting in the need for dialysis and/or a transplant (if eligible). CKD can be caused my numerous conditions including diabetes, hypertension, prior episode of AKI, etc. Like AKI, progression of CKD is predominately driven by dysregulated inflammation resulting in scarring of the kidney.
We believe the immunomodulatory action of Gemini can attenuate the dysregulated inflammation associated with CKD and restore equilibrium. Preclinical studies have demonstrated that Gemini treatment can prevent scar tissue formation in hyper inflamed kidneys. In addition, clinical studies have demonstrated the immunomodulatory properties of Gemini in healthy individuals, and more importantly, Gemini was shown to durably normalize excessive background cellular inflammation and restore immunocompetence in patients with CKD.
During 2026, Revelation intends to conduct preclinical toxicology studies to support a repeat dose Phase 2 study to allow further evaluation of Gemini in this high-need patient population.
Our Strategy
Our goal is to become a leader in the treatment and prevention of kidney disease and conditions with significant unmet needs. The key components of our strategy are to:
• Conduct a phase 2/3 adaptive design study in patients with AKI and submit the data from this study in an NDA for marketing approval in the United States
• Conduct clinical studies to advance the development of Gemini for the treatment of chronic kidney disease
• Leverage our growing expertise and infrastructure in the kidney space by broadening our portfolio through identification and development of new additional technologies to treat other kidney related issues
• Strategically advance the development of Gemini for prevention and treatment of other non-kidney related conditions, through collaborations and out-licensing opportunities to maximize the potential for Gemini
Our Corporate History and Team
The Company was incorporated in the state of Delaware on November 20, 2019 (originally as Petra Acquisition, Inc.) and is based in San Diego, California. The Gemini program was initiated in 2022. We have assembled an entrepreneurial management team of biopharmaceutical experts with extensive experience in drug development, manufacturing and commercialization of pharmaceutical products. We are also supported by a group of directors, leading investors and scientific advisors whose collective experience will assist us in realizing our corporate strategy.
BACKGROUND
Acute Kidney Injury Overview
Acute Kidney Injury, or “AKI”, (also known as acute renal failure), is defined as a rapid loss of kidney function. AKI causes a build-up of waste products in blood and makes it more difficult for kidneys to maintain the correct balance of fluid in the body. AKI can also significantly impact other organs such as the brain, heart, and lungs. Severe AKI requiring dialysis significantly increases the likelihood of worse outcomes including longer time in an ICU, potential to develop chronic kidney disease, and death.
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AKI is a major cause of morbidity and mortality, affecting more than 10% of all hospitalized patients and more than 50% of patients admitted to intensive care units. Renal replacement therapy (dialysis) is still the only therapeutic option in the treatment of the consequences of severe AKI and is required in approximately 20% of all critically ill patients. AKI is associated with high mortality rates, and even among those who survive, up to 40% later develop chronic kidney disease or progress to end-stage renal disease. As such, new therapies to treat AKI are urgently needed.
AKI can develop as a result of many different causes including decreased blood flow to the kidneys, direct damage to the kidneys, or blockage of urine flow through the kidney. AKI inducing events may include shock (low blood pressure), blood or fluid loss (such as bleeding, severe diarrhea), heart attack, heart failure, and other conditions leading to decreased heart function, organ failure (e.g., heart, liver), overuse of pain medicines such as NSAIDs, severe allergic reactions, burns, injury, infection (sepsis), cancer, toxicity (e.g., chemotherapies), hereditary factors, or major surgery.
The American Hospital Association states that approximately 34 million people are admitted to US hospitals each year. It was found that 20% or approximately 6.8 million patients admitted to hospitals had AKI by the University of Florida. The CDC says Medicare in 2015 alone had an annual expenditure of over $10 billion and growing for AKI, with spending for AKI related costs of approximately $42,077 per patient. The only treatment for severe AKI is dialysis which increases the potential for worse outcomes including death, therefore Gemini could be the first available therapy for this significant unmet medical need. This data is an indication of how large the AKI market is and the potential for Gemini.
AKI is a serious and growing unmet medical need. Aside from supportive care and the use of renal replacement therapy, there are no approved therapies for treating AKI.
Chronic Kidney Disease Overview
Organ damage, due to chronic disease, is a pervasive problem in the United States and world-wide. Organ disease (due to chronic inflammation and subsequent fibrosis, for example) is progressive and ultimately results in loss of function of the organ. Examples of chronic organ and tissue disease include CKD through end-stage renal disease, liver diseases such as non-alcoholic steatohepatitis, osteoarthritis, rheumatoid arthritis, pulmonary fibrotic disease, heart disease, pancreatitis, cancer, and irritable bowel syndrome.
Kidney disease is a major public health problem, affecting ~10% of populations in industrialized countries. The damage suffered as a result of AKI, which affects 13.3 million people per year, often leads to CKD. Both AKI and CKD are increasing worldwide. Progression of chronic kidney damage often leads to end stage renal disease with the need for renal replacement therapy (dialysis or transplantation), resulting in significant morbidity and mortality for affected patients.
CKD can be initiated and propagated in several ways. One prevalent condition is the high blood sugar levels associated with Type 1 or Type 2 diabetes. High blood sugar is toxic to kidney cells creating stress which imitates the inflammatory process leading to the demise of these cells with subsequent fibrosis ultimately resulting in continuous loss of kidney function over time. High arterial blood pressure is another source of stress that initiates the inflammatory process leading to CKD. Other risk factors include heart disease, obesity family history of CKD or older age.
Other causes for CKD include: glomerulonephritis (inflammation in the glomerulus), polycystic kidney disease, autoimmune diseases (such as systemic lupus erythematosus), vesicoureteral reflux (a condition where urine flows back up to the kidneys), pyelonephritis, interstitial nephritis (inflammation of the tubules), kidney stones, obstruction in kidney or cancer can lead to kidney failure over a period of time, overuse of certain medications, drug (heroin or cocaine) abuse, chemotherapy (such as cisplatin).
Every day more than 360 people begin treatment for kidney failure (dialysis or transplant). According to the Centers for Disease Control and Prevention (the “CDC”), more than 1 in 7, that is 15%, of US adults or 37 million people are estimated to have CKD. As many as 9 to 10 adults with CKD as well as about 2 in 5 adults with severe CKD do not know they have the disease. Kidney diseases are a leading cause of death in the United States. The CDC estimates Medicare costs in excess of $87 billion and continues to promote reduced costs including better management of CKD.
Current Treatment
AKI
There are currently no therapeutics to prevent or treat AKI. Treatment for AKI requires hospitalization and intensive care support until kidney function recovers. In more serious cases, dialysis may be needed to help replace kidney function until kidneys can recover. Current treatments only address what is causing the acute kidney injury.
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CKD
In April 2021, The FDA approved the use of Farxiga (Dapagliflozin) to reduce the risk of kidney function decline, kidney failure, cardiovascular death and hospitalization for heart failure in adults who are at risk of disease progression. Farxiga was originally approved in 2014 for diabetic control in adults in addition to diet and exercise.
In addition to the approved drug, other treatments include lifestyle changes to control health and weight, medications to control associated diseases such as high blood pressure or high cholesterol and for later stages, filtering the blood with a machine known as dialysis. Avoiding conditions or exposures that can harm the kidneys like certain medications or kidney infections is also beneficial.
At this time, there are no approved therapies for CKD that target the underlying inflammation associated with the progression of this disease.
REVELATION’S PROGRAMS
Gemini Platform
The innate immune system is our first line of defense against stress such as trauma, infection and acute and chronic disorders. The innate immune system responds to stress by producing and releasing various types of cytokines. Cytokines are proteins that direct different activities in cells and can be inflammatory or protective, meaning they may be able to modulate certain established cellular activities. Toll-like receptors serve a vital role in initiating the innate immune system response by recognizing different molecular patterns associated with pathogens such as bacteria and viruses (e.g. PAMPS: pathogen associated molecular patterns) as well as tissue damage (e.g. DAMPS: damage associated molecular patterns).
Gemini is our proprietary formulation platform of PHAD ® , a synthetic version of MPLA with a well-established biology. Chemically, PHAD is a small fragment of LPS, which is also called endotoxin. Like LPS, PHAD stimulates TLR4, but unlike LPS, PHAD stimulation leads to controlled production of multiple cytokines and chemokines ( Figure 4 ) which modulate the activity of the innate and adaptive immune response to rebalance the inflammatory response and restore equilibrium ( Figure 5 ).
Revelation believes the immunomodulatory action of Gemini can be used to treat disease and conditions driven by a dysregulated inflammatory response. Numerous acute and chronic kidney conditions are driven by dysregulated inflammation.
Figure 4. Interaction of PHAD with TLR4
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Figure 5. Gemini can rebalance cellular equilibrium, fostering healing processes
Gemini-AKI and CKD Programs
AKI Overview
Gemini is being evaluated as an acute (short-term) treatment for AKI. AKI is defined as a sudden and rapid loss in normal kidney function. Currently the only treatment for AKI is supportive care and the use of renal replacement therapy (dialysis). AKI can be caused by many different factors including severe infection, trauma, drug toxicity, etc. Regardless of the initial insult, AKI is predominately driven by dysregulated hyperinflammation.
We believe the immunomodulatory action of Gemini can attenuate the excess inflammation associated with AKI and restore equilibrium. Preclinical studies have demonstrated that Gemini can treat acute kidney injury driven by hyperinflammation. In addition, clinical studies have demonstrated the immunomodulatory properties of Gemini in healthy individuals, and more importantly, Gemini was shown to durably normalize excessive background cellular inflammation and restore immunocompetence in patients with CKD.
Revelation met with FDA at the end of 2025 and obtained agreement on a single Phase 2/3 adaptive design study with a primary composite endpoint of death and/or dialysis for submission of a new drug application (NDA). During 2026, the Company plans to build the necessary infrastructure to successfully run this clinical study including engagement of a scientific advisory board, engagement of a top-tier clinical research organization specializing in renal studies, and manufacture of blinded drug and placebo with the intention of starting the Phase 2/3 study as soon as feasible.
CKD Overview
Gemini is also being evaluated as a chronic (long-term) treatment for CKD. CKD is a progressive decline in kidney function ultimately resulting in the need for dialysis and/or a transplant (if eligible). CKD can be caused my numerous conditions including diabetes, hypertension, prior episode of AKI, etc. Like AKI, progression of CKD is predominately driven by dysregulated inflammation resulting in scarring of the kidney.
We believe the immunomodulatory action of Gemini can attenuate the dysregulated inflammation associated with CKD and restore equilibrium. Preclinical studies have demonstrated that Gemini treatment can prevent scar tissue formation in hyper inflamed kidneys. In addition, clinical studies have demonstrated the immunomodulatory properties of Gemini in healthy individuals, and more importantly, Gemini was shown to durably normalize excessive background cellular inflammation and restore immunocompetence in patients with CKD.
During 2026, Revelation intends to conduct preclinical toxicology studies to support a repeat dose Phase 2 study to allow further evaluation of Gemini in this high-need patient population.
Preclinical Studies Supporting the development of Gemini for AKI and CKD
Preclinical studies have shown that Gemini can attenuate the inflammatory response resulting in reduce severity and duration of acute kidney injury as well as prevention of scarring associated with AKI and CKD.
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Unilateral Urethral Obstruction Model
Revelation tested Gemini in the Unilateral Urethral Obstruction (“UUO”) model of AKI and CKD to evaluate the potential of Gemini to prevent kidney fibrosis and correct excess inflammation. The UUO model is appropriate for studying the anti-inflammatory and anti-fibrotic effects of potential new therapies for acute and chronic kidney disease as complete ureteral obstruction of one kidney results in significant inflammation and subsequent fibrosis of the obstructed kidney over a 7-day period.
The study demonstrated a dose-dependent reduction in scar tissue formation in the Gemini treated groups ( Figure 6 ) and a dose dependent decrease in inflammation markers with a. subsequent increase in inflammation resolving and protective markers ( Figure 7 ).
Figure 6. Gemini Treatment Reduces Fibrosis in Acute and Chronic Kidney Model (UUO in Rats)
Rats (n=11-12 per treatment group) were subjected to the UUO surgical procedure. Animals were administered either vehicle (Sham, UUO, and Positive control) or Gemini (doses listed are for active ingredient) on days 1-7 post-surgery. Kidneys were harvested and analyzed at the end of the treatment period. Composite data represents the average of 3 anatomically distinct depths (10 images/depth/rat/group = ~60-65% of renal cortical area). Treatment with Gemini resulted in a significant dose-dependent reduction in fibrosis. The high dose group (0.9 mg/kg) reduced new collagen deposition (fibrosis) by 58% vs new collagen deposition observed in the no treatment UUO group (normalized to sham group, n=6).
Figure 7. Gemini Antifibrotic Effects Likely Mediated by Validated Target Cytokines
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Gemini reduced TGF-β and increased IL-10 and NGAL in a dose dependent manner. TGF-β is pro-fibrotic and is directly linked to the propagation of fibrosis. The positive control is a well-established TGF-β blocker. IL-10 is a key driver for the reduction and resolution of inflammation, and NGAL is an important defense for preventing excessive oxidative damage resulting from injury/ongoing inflammation.
Ischemia-Reperfusion Model
Gemini Pretreatment Reduces AKI in a Unilateral Ischemia/Reperfusion Model
Revelation tested Gemini pretreatment in a bilateral ischemia-reperfusion model (I/R). In this model, rats were pretreated with:
• single dose of intravenous Gemini at 1000 or 350 µg/kg or vehicle control (2.18% HP-b-CD and 5% dextrose in sterile water), at 3 or 24 and/or 48 hours prior to undergoing bilateral ischemia for 30 minutes followed by reperfusion.
• two doses of intravenous Gemini at 350 or 70 µg/kg or vehicle control (2.18% HP-b-CD and 5% dextrose in sterile water), at 24 and 48 hours prior to undergoing bilateral ischemia for 30 minutes followed by reperfusion.
In addition to clinical observations, rats were evaluated for kidney function and functional biomarkers at 24 and 72 hours post-surgery, and kidney damage at 72 hours (sacrifice) post-surgery.
The results from this study demonstrated pretreatment with Gemini at least 24 hours prior to surgery significantly improved kidney function as demonstrated by reductions in serum BUN and creatinine vs pretreatment with vehicle only ( Figures 8a and 8b ). Additional renal function findings (data not shown) included improved creatinine clearance and excretion relative to the vehicle group. In addition, Gemini pretreatment reduced cortical and medullary tubular injury ( Figure 9a and 9b ). Lastly, Gemini pretreatment showed a reduction in several markers of inflammation including CRP, IL-6, and neutrophilic inflammation ( Figures 10a - 10d ).
Figure 8a and 8b: Gemini Preserves Kidney Function (Serum Creatinine and Serum BUN) in a Rat Bilateral Ischemia/Reperfusion Model of AKI
Gemini reduced serum creatinine levels (left) and BUN levels (right) at 24 and 72 hours post IR surgery as measured by histopathology when dosed 24 and/or 48 hours prior to IR. A similar trend was observed at the 70µg/kg dose level (data not shown). n = 16-28.
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Figure 9a and 9b: Gemini Reduces Injury (Acute Cortical Tubular Necrosis and Medullary Tubular Necrosis) in a Rat Bilateral Ischemia/Reperfusion Model of AKI
Gemini reduced injury to the cortical (left) and medullary tubules (right) at 72 hours post IR surgery as measured by histopathology when dosed 24 hours prior to IR. A similar trend was observed for 70 mg/kg (data not shown). n = 8-14.
Figure 10a-10d: Gemini Significantly Reduces Inflammatory Response in a Rat Bilateral Ischemia/Reperfusion Model of AKI
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Pretreatment with Gemini (350 µg/kg) at 24 and/or 48 hours prior to IR significantly reduced multiple markers of local inflammation at 24 and/or 72 hours in urine (Figure 10a and 10b, 72-hour data not shown). Pretreatment with Gemini (350 µg/kg) significantly reduced a key marker (CRP) of systemic inflammation at 72 hours in serum (Figure 10c). Pretreatment with Gemini 24 hours prior to surgery also significantly reduced markers of cellular inflammation as observed via reduced neutrophilic inflammation at 72 hours (Figure 10d). n = 8-14.
Clinical Studies Supporting the development of Gemini for AKI and CKD
Phase 1 Clinical Study in Healthy Volunteers
Administration of Gemini to healthy volunteers induced significant, dose dependent changes in key circulatory biomarkers of activity that reflect the expected pharmacology of Gemini-specific toll-like receptor 4 (TLR4) stimulation. Intravenous Gemini induced significant increases in interleukin-10 (IL-10) (p<0.0.05, Figure 11 ), interleukin-1 Receptor Antagonist (IL-1RA) (p<0.001 at mid and high dose, Figure 12a ), neutrophil gelatinase lipocalin (NGAL) (p<0.01 at mid and high dose, Figure 12b ), c-reactive protein (CRP) (p<0.001 at mid and high dose, Figure 12c ), and IL-6 (p<0.01 at high dose, Figure 12d ). Significant, dose dependent mobilization of innate immune cell populations was observed, specifically neutrophils (p<0.001 at mid-dose and high dose) and monocytes (p<0.001 at mid and high dose). Importantly, Gemini administration did not induce significant increases in serum TNF-α (p=0.51 at the highest dose) and IL-1β (p=0.89 at the highest dose). This attenuated pro-inflammatory activity and corresponding significant upregulation of anti-inflammatory cytokines is unique to Gemini, and evidence of the reprogramming of the innate immune response for resolution of inflammation and promotion of the healing process.
Figure 11: Upregulation of IL-10 at 2 Hours Post Intravenous Administration of Gemini
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Figure 12a-12d: Peak Increase in IL-1RA, NGAL, CRP, and IL-6
Figures 12a through 12d illustrate the reprogramming of the innate immune response after Gemini administration in multiple biomarkers of TLR4 stimulation. IL-10 is a potent anti-inflammatory protein that downregulates pro-inflammatory cytokines and is an active contributor to initiating reduction of inflammation. The significant increase of anti-inflammatory IL-10 with no significant increase in pro-inflammatory IL-1b and TNF-a confirms TLR4 binding unique to Gemini, and is further evidence of the reprogramming of the innate immune response, enabling Gemini to initiate resolution of inflammation and promote the healing process. IL-1RA has anti-inflammatory properties, as it binds to the IL-1 receptor, blocking IL-1a and IL-1b, major drivers of the inflammation cascade. NGAL sequesters iron and is an important defense for preventing excessive oxidative damage resulting from injury and/or ongoing inflammation. CRP plays an important role in resolving acute inflammation through increased phagocytosis, clearing cellular debris. IL-6 at low concentrations facilitates multiple activities associated with the resolution of inflammation, including stimulation of IL-1RA and IL-10.
The pharmacologic effects observed in healthy volunteers was consistent with the pharmacologic effects observed in healthy animals ( Figure 13 ). Importantly, this consistent effect was observed in the same species used in the preclinical AKI models, (unilateral ureteral obstruction model of kidney injury and ischemia/reperfusion model of acute kidney injury) where Gemini demonstrated significant activity as a treatment for AKI.
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Figure 13: Cytokine Upregulation in Healthy Humans Agrees with Cytokine Upregulation in Healthy Animals
Figure 13 demonstrate the cytokine and cellular response in healthy volunteers is comparable to the cytokine and cellular response observed in healthy rats, the same species used for the preclinical pharmacology studies.
Phase 1b Clinical Study in patients with stage 3 and stage 4 chronic kidney disease
Stage 3 and Stage 4 CKD patient peripheral blood mononuclear cells (PBMCs) were isolated predose and at 2, 24, and 168 hours post-dose of either Gemini or placebo. PBMCs were analyzed ex vivo for background inflammation by measurement of IL-1β, TNF-α, IL-6, IL-10, and IL-1RA. Cells were also assessed for response to stimulation by lipopolysaccharide (LPS, also known as endotoxin) or high mobility group box-1 protein (HMGB-1). On average, patients enrolled in the study had at least 3 elevated cytokines at baseline with a majority (>50%) of all patients in the placebo and target groups having greater than 4 elevated cytokines, and greater than 80% of patients having least 1 elevated cytokine at predose ( Table 1a ). In particular, elevated IL-1b and IL-6 were observed in >60% of patients ( Table 1b ). In addition to having a high cytokine background, PBMCs were also not responsive to additional stimulation to either LPS ( Table 2a and 2b ) or HMGB-1 ( Table 3a and 3b ), demonstrating a form of immunoparalysis or immune cell tolerance, often observed in chronic disease.
Table 1a and 1b: Elevated Cytokines in PBMC Samples
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Table 2a and 2b: Response to LPS Stimulation in predose PBMC Samples
Table 3a and 3b: Response to HMGB-1 Stimulation in predose PBMC Samples
Treatment with Gemini significantly reduced the number of elevated cytokines vs baseline at all timepoints post-dose, demonstrating a durable response ( Figure 14a ), while placebo resulted in no significant change from baseline ( Figure 14b ).
Figure 14a and 14b: Elevated Cytokines in Target Dose Group and Placebo Group Over Time
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Figures 14a and 14b are box and whisker plots of all data in the specified group at the specified time. P-values: Target dose: 2 hr, p<0.01, 24 hr p<0.02, 168 hr p<0.03. Placebo: 2 hr, NS, 24 hr NS, 168 hr NS. NS=not significant. P-values generated using two-tailed t-test with alpha at 5%.
In addition, treatment with Gemini significantly restored normal responsiveness to LPS stimulation ( Figure 15a and 15b ) and trended to improved responsiveness to HMGB-1 at 24 hours vs baseline values, p=0.06 for Treated and p=0.45 for Placebo ( Figure 16a and 16b ) correcting the immunoparalysis observed predose, demonstrating Gemini is not simply acting as an immunosuppressive agent.
Figure 15a and 15b: Cytokines stimulated by LPS in Target Dose Group and Placebo Group Over Time
Figures 15a and 15b are box and whisker plots of all data in the specified group at the specified time. P-values: Target dose: 2 hr, NS, 24 hr p<0.02, 168 hr p<0.03. Placebo: 2 hr, NS, 24 hr NS, 168 hr NS. NS=not significant. P-values generated using two-tailed t-test with alpha at 5%.
Figure 16a and 16b: Cytokines stimulated by HMGB-1 in Target Dose Group and Placebo Group Over Time
Figures 16a and 16b are box and whisker plot of all data in the specified group at the specified time. P-values: Target dose: 2 hr, NS, 24 hr p<0.06, 168 hr NS. Placebo: 2 hr, NS, 24 hr NS, 168 hr NS. NS=not significant. P-values generated using two-tailed t-test with alpha at 5%.
Patient PBMCs with high background inflammation tended to be resistant to LPS or HMGB-1 stimulation. As such, an analysis was done on patients with high IL-1b (>12 pg/mL IL-1β) and high IL-6 at predose. In these patients, Gemini significantly reduced the background inflammation relative to placebo patient PBMCs post dose (IL-1β: p<0.01; TNF-α: p=0.05; IL-6: p<0.01; IL-10: p<0.01; IL-1RA: p<0.001) and remained significantly below their baseline value through day 7. Background inflammation was reduced to levels comparable to PBMCs isolated from healthy subjects.
In addition, Gemini significantly increased the responsiveness to LPS ( Figures 17a-17f ) and HMGB-1 stimulation ( Figures 18a-18f ) relative to placebo at all timepoints. The increased responsiveness was comparable to PBMCs isolated from healthy subjects. These results show the ability of Gemini to restore normal cell function, even as far as one week after a single dose.
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As expected, Gemini administration had no significant effect on patients with low background inflammation (e.g. it did not increase background inflammation).
Figure 17a-17f: Gemini Restored Response to LPS Stimulation in High Predose Background Patients
Figures 17A-F show the cytokine response of isolated PMBCs to stimulation with LPS which had an initial high background of IL1- b . Target dose. NS=not significant. P-values generated using two-tailed t-test with alpha at 5%.
Figure 18a-18f: Gemini Restored Response to HMGB-1 Stimulation in High Predose Background Patients
Figures 18A-F show the cytokine response of isolated PMBCs to stimulation with HMGB-1 which had an initial high background of IL1- b . Target dose. P-values generated using two-tailed t-test with alpha at 5%.
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Development Plans
AKI
Revelation met with FDA at the end of 2025 and obtained agreement on a single Phase 2/3 adaptive design study comprising approximately 300 patients with AKI and a primary composite endpoint of death and/or need for dialysis, the data from which can be used for submission of a new drug application (NDA). During 2026, the Company plans to build the necessary infrastructure to successfully run this clinical study including engagement of a scientific advisory board, engagement of a top-tier clinical research organization specializing in renal studies, and manufacture of blinded drug and placebo with the intention of starting the Phase 2/3 study as soon as feasible.
CKD
During 2026, Revelation intends to conduct preclinical toxicology studies to support a multiple-dose Phase 2 study to allow further evaluation of Gemini in this high-need patient population. Additional clinical studies will be necessary to obtain approval of Gemini in this indication
Competition
The biopharmaceutical industry is intensely competitive and subject to rapid innovation and significant technological advancements. We believe the key competitive factors that will affect the development and commercial success of our Gemini based programs and any future product candidates are efficacy, safety and tolerability profile, reliability, convenience of dosing, price, the level of generic competition, and reimbursement. Our competitors include multinational pharmaceutical companies, specialized biotechnology companies, universities, and other research institutions. A number of biotechnology and pharmaceutical companies are pursuing the development or marketing of pharmaceuticals that target the same diseases that we are targeting. Smaller or earlier-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Given the high incidence of AKI and CKD, it is likely that the number of companies seeking to develop products and therapies for the prevention or treatment of such will increase.
If Gemini-AKI is approved for treatment of acute kidney injury, we would face competition that could arise from products currently in development.
If Gemini-CKD is approved for treatment of chronic kidney disease, we would face competition from currently approved and marketed products including Farxiga®. We would also have future competition that could arise from products currently in development.
Many of our competitors have substantially greater financial, technical, human, and other resources than we do and may be better equipped to develop, manufacture, and market technologically superior products. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of competitors. In addition, many of these competitors have significantly longer operating histories and greater experience than we have in undertaking preclinical studies and human clinical studies of new pharmaceutical products and in obtaining regulatory approvals of human therapeutic products. Many of our competitors have established distribution channels for the commercialization of their products, whereas we have no such channel or capabilities. In addition, many competitors have greater name recognition and more extensive collaborative relationships. As a result, our competitors may obtain regulatory approval of their products more rapidly than we do or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our Product Candidates or any future product candidates. Our competitors may also develop and succeed in obtaining approval for drugs that are more effective, more convenient, more widely used and less costly or have a better safety profile than our products and these competitors may also be more successful than we are in manufacturing and marketing their products. If we are unable to compete effectively against these companies, then we may not be able to commercialize our Product Candidates or any future product candidates or achieve a competitive position in the market. This would adversely affect our ability to generate revenue. Our competitors also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical study sites and enrolling patients for clinical studies, as well as in acquiring technologies complementary to, or necessary for, our programs.
Manufacturing and Supply
We do not own or operate manufacturing facilities for the production of our Product Candidates or any other product candidates, nor do we have plans to develop our own manufacturing operations in the foreseeable future. We currently rely, and expect to continue to rely on, third parties for the manufacturing of our Product Candidates or any other product candidates for preclinical and clinical testing, as well as for commercial manufacturing if Gemini or any future product candidate receives marketing approval. Also, there is only one supplier for PHAD ® , Avanti Polar Lipids, Inc., with whom we do not have a long-term supply agreement. Currently, we have purchased enough active pharmaceutical ingredients for our planned clinical studies through purchase orders.
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Strategic Acquisitions and In-Licensing
We are working to deepen the pipeline of Revelation through both internal organic development of new technologies along with portfolio additions from acquisitions, strategic partnerships and in-licensing of new therapeutic product candidates. From time to time we may enter into discussions regarding potential transactions; however, our focus is on development of our existing pipeline and discussions with third parties to date have not progressed beyond the preliminary stage.
License
On September 29, 2022, we entered into an exclusive worldwide license agreement with Vanderbilt University to develop and commercialize PHAD, for treating or preventing infections. The license grants Revelation the use of issued US patent 11,389,465.
We are obligated to use commercially reasonable efforts to (i) develop, commercialize, market and sell licensed products in a manner consistent with a development plan submitted to Vanderbilt in April 2023 and (ii) achieve certain financing, development, regulatory and clinical milestone events, including, among other things, raising $5 million in financing to advance the development program, commencement of various clinical trials by target dates according to the development plan and the filing of an Investigational New Drug Application (“IND”) by the end of 2032.
Under the license agreement we are obligated to make payments to Vanderbilt based upon achievement of certain milestones including achievement of various clinical trial events, regulatory approval and sales levels. In addition, we will pay royalties on sales of products using the licensed patent.
Vanderbilt has the right to terminate the license agreement if the development milestones are not made, subject to a six-month grace period.
Sales and Marketing
We currently have no marketing, sales or distribution capabilities. In order to commercialize any products that are approved for commercial sale, we must either develop a sales and marketing infrastructure or collaborate with third parties that have sales and marketing experience.
We may elect to establish our own sales force to market and sell a product for which we obtain regulatory approval if we expect that the geographic market for a product, we develop on our own is limited or that the prescriptions for the product will be written principally by a relatively small number of physicians. If we decide to market and sell any products ourselves, we do not expect to establish direct sales capability until shortly before the products are approved for commercial sale.
We plan to seek third-party support from established pharmaceutical and biotechnology companies for those products that would benefit from the promotional support of a large sales and marketing force. In these cases, we might seek to promote our products in collaboration with marketing partners or rely on relationships with one or more companies with large established sales forces and distribution systems.
Intellectual Property
Our success depends in part on our ability to obtain and maintain proprietary protection for our Product Candidates, technology, and know-how, to operate without infringing upon the proprietary rights of others and to prevent others from infringing upon our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, pursuing and obtaining patent protection in the United States and in jurisdictions outside of the United States related to our proprietary technology, inventions, improvements, and Product Candidates that are important to the development and implementation of our business. Our patent portfolio is intended to cover our Product Candidates and components thereof, their methods of use and processes for their manufacture, our kit designs, our proprietary reagents and assays, and any other inventions that are commercially important to our business. We also rely on trade secret protection of our confidential information and know-how relating to our proprietary technology, platforms, and Product Candidates.
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As of February 23, 2026, our patent portfolio includes one patent family directed to MPLA formulations, including Gemini. This patent family includes one U.S. application, one European Patent Organization (“EPO”) application, and one Canadian application. Our portfolio additionally includes a second patent family, consisting of a U.S application and a Canadian application directed to methods of using MPLA formulations, including Gemini, as an adjuvant to traditional allergy immunotherapy, such as oral allergy immunotherapy. Our portfolio also includes a U.S. provisional patent application covering dosing regimens of MPLA formulations. Regarding our GEM-AKI and GEM-CKD programs, our portfolio also includes a patent family directed to the use of MPLA formulations for the prevention of loss of function associated with acute organ disease and chronic organ disease. This patent family includes one application in the U.S., as well as applications filed in the EPO, China, Hong Kong, Japan, South Korea, and Canada. Finally, we have licensed from Vanderbilt University a patent directed to methods of using PHAD for treating or preventing infections.
Our pending and future patent applications may not result in patents being issued which protect our technology or Product Candidates, or which effectively prevent others from commercializing competitive technologies and Product Candidates.
Generally, issued patents are granted a term of 20 years from the earliest claimed non-provisional filing date. In certain instances, patent term can be adjusted to recapture a portion of delay incurred by the U.S. Patent and Trademark Office (the “USPTO”) in examining the patent application (patent term adjustment, or “PTA”) or extended to account for term effectively lost as a result of the FDA regulatory review period (patent term extension, or “PTE”), or both. In addition, we cannot provide any assurance that any patents will be issued from our pending or future applications or that any issued patents will adequately protect our products or Product Candidates.
We believe that we have certain know-how and trade secrets relating to our technology and Product Candidates. We rely on trade secrets to protect certain aspects of our technology related to our current and future product candidates. However, trade secrets can be difficult to protect. We seek to protect our trade secrets, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, service providers, and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.
Employees
As of February 23, 2026, we had 8 full-time employees and one part-time employee, 5 of whom are engaged in research and development activities or operations and 4 of whom are engaged in general and administrative activities or operations. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be positive.
Government Regulation
The FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, recordkeeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs. We, along with our vendors, contract research organizations (“CROs”), clinical investigators and contract manufacturing organizations (“CMOs”) will be required to navigate the various preclinical, clinical, manufacturing and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval of our Product Candidates. The process of obtaining regulatory approvals of drugs and ensuring subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.
In the United States, the FDA regulates drug products under the Federal Food, Drug, and Cosmetic Act (“FD&C Act”), its implementing regulations, and other federal, state and local statutes and regulations. Drugs are also subject to other federal, state and local statutes and regulations. If we fail to comply with applicable FDA or other requirements at any time with respect to product development, clinical testing, approval or any other regulatory requirements relating to product manufacture, processing, handling, storage, quality control, safety, marketing, advertising, promotion, packaging, labeling, export, import, distribution, or sale, we may become subject to administrative or judicial sanctions or other legal consequences. These sanctions or consequences could include, among other things, the FDA’s refusal to approve pending applications, issuance of clinical holds for ongoing studies, suspension or revocation of approved applications, warning or untitled letters, product withdrawals or recalls, product seizures, relabeling or repackaging, total or partial suspensions of manufacturing or distribution, injunctions, fines, civil penalties or criminal prosecution.
Our Product Candidates must be approved for therapeutic indications by the FDA before they may be marketed in the United States. For Product Candidates regulated under the FD&C Act, FDA must approve a New Drug Application (“NDA”). The process generally involves the following:
• completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice (“GLP”) requirements;
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• completion of the manufacture, under current Good Manufacturing Practices (“cGMP”), conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing;
• submission to the FDA of an investigational new drug application, or IND, which must become effective before clinical trials may begin and must be updated annually and when certain changes are made;
• approval by an institutional review board (“IRB”), or independent ethics committee at each clinical trial site before each trial may be initiated;
• performance of adequate and well-controlled clinical trials in accordance with applicable IND regulations, good clinical practice (“GCP”), requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication;
• preparation and submission to the FDA of an NDA;
• a determination by the FDA within 60 days of its receipt of an NDA to file the application for review;
• satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;
• satisfactory completion of FDA audit of the clinical trial sites that generated the data in support of the NDA;
• payment of user fees for FDA review of the NDA; and
• FDA review and approval of the NDA, including, where applicable, consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug in the United States.
Preclinical studies and the IND process
Preclinical studies include laboratory evaluation of product chemistry and formulation, as well as in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for therapeutic use. The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed protocol for clinical studies, among other things, to the FDA as part of an IND. An IND is an exemption from the FD&C Act that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical study and is a request for FDA authorization to administer such investigational product to humans. Such authorization must be secured prior to interstate shipment and administration of any product candidate that is not the subject of an approved application. Some long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may continue after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical studies and places the study on clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical study can begin. As a result, submission of an IND may not necessarily result in the FDA allowing clinical studies to commence.
Clinical studies
Clinical studies involve the administration of the investigational new drug to human subjects — healthy volunteers or patients — under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical study. Clinical studies are conducted under written study protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A protocol for each clinical study and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical study must review and approve the plan for any clinical study before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB may also require the clinical study at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements, or may impose other conditions. For clinical studies involving an IND, an IRB must operate in compliance with FDA regulations. Additionally, some studies are overseen by an independent group of qualified experts organized by the study sponsor, known as a data safety monitoring board (“DSMB”). This group provides authorization as to whether or not a study may move forward at designated check points based on access that only the DSMB maintains to available data from the study.
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Human clinical studies are typically conducted in three sequential phases, which may overlap or be combined:
• Phase 1: The investigational drug or biological product is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, side effects associated with increasing doses, pharmacological action, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness.
• Phase 2: The investigational drug or biological product is administered to a limited patient population to identify common adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. This phase may include administration of the investigational drug to patients with concomitant disease conditions.
• Phase 3: The investigational drug or biological product is administered to an expanded patient population in adequate and well-controlled clinical studies, typically at geographically dispersed clinical study sites, to generate sufficient data to statistically confirm the efficacy and safety of the product for approval, to permit the FDA to evaluate the overall risk-benefit profile of the product and to provide adequate information for the labeling of the product. More than one adequate and well-controlled Phase 3 clinical study may be required by the FDA for approval of an NDA.
Pursuant to FDORA and subsequent FDA guidance, sponsors of certain Phase 3 clinical trials or other pivotal studies are required to submit Diversity Action Plans describing strategies to enroll representative populations, including racial and ethnic minorities and other underrepresented populations. The FDA has indicated that failure to submit or adequately implement such plans may delay review or approval. These requirements may increase development complexity and cost.
Progress reports detailing the results of clinical studies involving an IND must be submitted at least annually to the FDA and more frequently if serious adverse events occur. Phase 1, Phase 2 and Phase 3 clinical studies may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical study at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical study at its institution if the clinical study is not being conducted in accordance with the IRB’s requirements or if the drug or biologic product has been associated with unexpected serious harm to patients.
Concurrent with clinical studies, the Company usually completes additional animal studies, develop additional information about chemistry and physical characteristics of the product candidate, and finalize a process for manufacturing the drug product in commercial quantities in accordance with cGMP requirements. The manufacturing must be capable of consistently producing quality batches of the product candidate and manufacturers must develop, among other things, methods for testing the identity, strength, quality and purity of the final drug product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.
In some cases, the FDA may approve an application for a product candidate but require the sponsor to conduct additional clinical studies to further assess the product candidate’s safety and effectiveness after approval. Such post-approval studies are typically referred to as Phase 4 clinical studies. These studies are used to gain additional experience from the treatment of a larger number of patients in the intended treatment group and to further document a clinical benefit in the case of drugs approved under accelerated approval regulations.
U.S. Marketing Approval
Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s pharmacology chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. FDA approval of the NDA is required before marketing of the product may begin in the United States. Under federal law, the submission of most NDAs is subject to a substantial application user fee, and the sponsor of an approved NDA is also subject to annual product or program fees. These fees may be increased or decreased annually.
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The FDA conducts a preliminary review of all NDAs within the first 60 days after receipt before accepting them for filing based on the agency’s threshold determination that they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information, which would also be subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA has agreed to specified performance goals in the review of NDAs. Most such applications for non-priority products are reviewed within ten to twelve months after filing, and most applications for priority review products, that is, drugs and biologics that the FDA determines represent a significant improvement over existing therapy, are reviewed in six to eight months after filing. The review process may be extended by the FDA for three additional months to consider certain late-submitted information or clarification regarding information already provided in the submission. The FDA may also refer applications for novel drugs or biological products or products that present difficult questions of safety or efficacy to an 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. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. In addition, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP and integrity of the clinical data submitted.
The testing and approval process requires substantial time, effort and financial resources, and each may take many years to complete. Data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. We may encounter difficulties or unanticipated costs in our efforts to develop our Product Candidates and secure necessary governmental approvals, which could delay or preclude us from marketing our products.
After the FDA’s evaluation of the NDA and inspection of the manufacturing facilities, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the drug or biological product with specific prescribing information for specific indications. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
Even if the FDA approves a product, the agency may limit the approved indications for use for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions through a Risk Evaluation and Mitigation Strategy or other risk management mechanisms, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. After approval, some types of changes to the approved product, such as changes in indications, manufacturing changes and labeling, are subject to further testing requirements and FDA review and approval.
Other Regions
Most major markets have different levels of regulatory requirements for medical devices. Modifications to the cleared or approved products may require a new regulatory submission in all major markets. The regulatory requirements, and the review time, vary significantly from country to country. Products can also be marketed in other countries that have minimal requirements for medical devices.
Other U.S. Healthcare Laws and Compliance Requirements
In the United States, our current and future operations are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare & Medicaid Services (“CMS”), other divisions of the U.S. Department of Health and Human Services (“HHS”) (such as the Office of Inspector General, Office for Civil Rights and the Health Resources and Service Administration), the U.S. Department of Justice, and state and local governments. For example, our clinical research, sales, marketing and scientific/educational grant programs may have to comply with the anti-fraud and abuse provisions of the Social Security Act, the false claims laws, the privacy and security provisions of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and similar state laws, each as amended, as applicable.
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The federal Anti-Kickback Statute prohibits, among other things, any person or entity from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs. The term remuneration has been interpreted broadly to include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements between therapeutic product manufacturers on one hand and prescribers, purchasers, and formulary managers on the other.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution. The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Our practices may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor. The statutory exceptions and regulatory safe harbors are also subject to change.
Additionally, the intent standard under the Anti-Kickback Statute was amended by the Affordable Care Act, to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the Affordable Care Act also codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act (“FCA”).
The federal false claims and civil monetary penalty laws, including the FCA, which imposes significant penalties and can be enforced by private citizens through civil qui tam actions, prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal government, including federal healthcare programs, such as Medicare and Medicaid; knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government; or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. Although we would not submit claims directly to payors, manufacturers can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label. In addition, our future activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state, and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law. For example, pharmaceutical companies have been prosecuted under the FCA in connection with their alleged off-label promotion of drugs, purportedly concealing price concessions in the pricing information submitted to the government for government price reporting purposes, and allegedly providing free product to customers with the expectation that the customers would bill federal health care programs for the product.
HIPAA created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the control or custody of, any healthcare benefit program, including private third-party payors, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Like the Anti-Kickback Statute, the Affordable Care Act amended the intent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
Also, many states have similar, and typically more prohibitive, fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.
In addition, we may be subject to data privacy, data security and data breach notification laws, regulations, standards, and codes of conduct by both the U.S. federal government and the states. These laws, regulations, standards, and codes of conduct may govern the collection, use, disclosure and protection of health-related and other personal information. HIPAA, as amended by the HITECH, imposes requirements relating to the privacy, security and transmission of individually identifiable health information. HIPAA requires covered entities to limit the use and disclosure of protected health information to specifically authorized situations and requires covered entities to implement security measures to protect health information that they maintain in electronic form. The federal government may impose civil, criminal, and administrative fines and penalties and/or additional reporting or oversight obligations for a violation of HIPAA’s requirements. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to business associates that receive or obtain protected health information in connection with providing a service on behalf of a covered entity.
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HITECH also created four 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 HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition to HIPAA and HITECH, numerous states have enacted comprehensive consumer privacy statutes that may apply to health-related data even where HIPAA does not, imposing additional data governance, cybersecurity, and consumer rights compliance obligation, many of which differ from each other in significant ways, are often not pre-empted by federal law, and may have a more prohibitive effect than federal law, thus complicating compliance efforts.
We may develop products that, once approved, may be administered by a physician. Under currently applicable U.S. law, certain products not usually self-administered (including injectable drugs) may be eligible for coverage under Medicare through Medicare Part B. Medicare Part B is the part of Medicare that covers outpatient services and supplies, including certain pharmaceutical products, that are medically necessary to treat a beneficiary’s health condition. As a condition of receiving Medicare Part B reimbursement for a manufacturer’s eligible drugs, the manufacturer is required to participate in other government healthcare programs, including the Medicaid Drug Rebate Program and the 340B Drug Pricing Program. The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of HHS as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished to Medicaid patients. Under the 340B Drug Pricing Program, the manufacturer must extend discounts to entities that participate in the program.
In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely.
Additionally, the Physician Payment Sunshine Act (the “Sunshine Act”) within the Affordable Care Act, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members. This information is made publicly available on a CMS website, and failure to report accurately could result in penalties. In addition, many states also govern the reporting of payments or other transfers of value, many of which differ from each other in significant ways, are often not pre-empted, and may have a more prohibitive effect than the Sunshine Act, thus further complicating compliance efforts.
In order to distribute products commercially, we must comply with state laws that require the registration of manufacturers and wholesale distributors of drug and biological products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers or distributors have no place of business within the state. Some states also impose requirements on manufacturers and distributors to establish the pedigree of product in the chain of distribution.
These requirements have been further expanded under the Drug Supply Chain Security Act (DSCSA), which mandates interoperable electronic tracing at the package level and enhanced product verification, including interoperable electronic tracing at the package level, became effective in November 2023, subject to phased enforcement. Manufacturers must ensure serialization, product tracing, and verification compliance, including some states that require manufacturers and others to adopt new technology capable of tracking and tracing product as it moves through the distribution chain. Several state and local laws have been enacted requiring pharmaceutical and biotechnology companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical studies and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical and biotechnology companies for use in sales and marketing, and to prohibit certain other sales and marketing practices. In addition, all of our activities are potentially subject to federal and state consumer protection and unfair competition laws.
Ensuring business arrangements with third parties comply with applicable healthcare laws and regulations is a costly endeavor. If our operations are found to be in violation of any of the federal and state healthcare laws described above or any other current or future governmental regulations that apply to us, we may be subject to significant penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
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Coverage, Pricing and Reimbursement
Significant uncertainty exists as to the coverage and reimbursement status of any Product Candidates for which we may obtain regulatory approval. In the United States and in foreign markets, sales of any products for which we receive regulatory approval for commercial sale will depend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such products. In the United States, third-party payors include federal and state healthcare programs, private managed care providers, private health insurers and other organizations.
Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid in the United States, and commercial payors are critical to new product acceptance.
Our ability to commercialize any products successfully also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which therapeutics they will pay for and establish reimbursement levels. Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a therapeutic is:
• a covered benefit under its health plan;
• safe, effective and medically necessary;
• appropriate for the specific patient;
• cost-effective; and
• neither experimental nor investigational.
We cannot be sure that reimbursement will be available for any product that we commercialize and, if coverage and reimbursement are available, what the level of reimbursement will be. Coverage may also be more limited than the purposes for which the product is approved by the FDA or comparable foreign regulatory authorities. Reimbursement may impact the demand for, or the price of, any product for which we obtain regulatory approval.
Third-party payors are increasingly challenging the price, examining the medical necessity, and reviewing the cost-effectiveness of medical products, therapies, and services, in addition to questioning their safety and efficacy. Obtaining reimbursement for our products may be particularly difficult because of the higher prices often associated with branded drugs and drugs administered under the supervision of a physician. We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain FDA approvals. Our Product Candidates may not be considered medically necessary or cost-effective. Obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of our product on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained. A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize any product candidate that we successfully develop.
Different pricing and reimbursement schemes exist in other countries. In the European Union, governments influence the price of pharmaceutical products through their pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of those products to consumers. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical studies that compare the cost effectiveness of a particular product candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines but monitor and control company profits. The downward pressure on health care costs has become intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert a commercial pressure on pricing within a country.
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The marketability of any product candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care, the increasing influence of health maintenance organizations, and additional legislative changes in the United States has increased, and we expect will continue to increase, the pressure on healthcare pricing. The downward pressure on the rise in healthcare costs in general, particularly prescription medicines, medical devices and surgical procedures and other treatments, has become very intense. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
Healthcare Reform
In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product candidates for which marketing approval is obtained. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.
For example, Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA, has substantially changed healthcare financing and delivery by both governmental and private insurers. Among the ACA provisions of importance to the pharmaceutical and biotechnology industries, in addition to those otherwise described above, are the following:
• an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs that began in 2011;
• an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, retroactive to January 1, 2010, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively, and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price, or AMP;
• a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts, which through subsequent legislative amendments, will be increased to 70%, starting in 2019, off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;
• extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
• expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals beginning in 2014 and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability;
• expansion of the entities eligible for discounts under the 340B Drug Discount Program;
• a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
• expansion of healthcare fraud and abuse laws, including the FCA and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance;
• a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected;
• a requirement to annually report certain information regarding drug samples that manufacturers and distributors provide to physicians;
• establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending that began on January 1, 2011; and
• a licensure framework for follow on biologic products.
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Since its enactment, there have been executive, legal and Congressional challenges to certain aspects of the ACA. On June 17, 2021 the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Further, prior to the U.S. Supreme Court ruling, President Biden issued an executive order that initiated a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental authorities 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. Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or IRA, into law. The IRA extended enhanced premium tax credits for individuals purchasing health insurance coverage through ACA marketplace plans through plan year 2025. The enhanced premium tax credits expired on December 31, 2025. The expiration of these subsidies may reduce enrollment in ACA marketplace plans and decrease access to subsidized health insurance coverage. Changes in the number of insured individuals or in reimbursement structures could affect demand for pharmaceutical products reimbursed through such plans.
The IRA also eliminated the Medicare Part D coverage gap beginning in 2025, caps beneficiary out-of-pocket costs, establishes a manufacturer discount program that increases manufacturer liability in certain phases of the Part D benefit, authorizes the Secretary of HHS to negotiate maximum fair prices for certain high-expenditure single-source drugs and biologics covered under Medicare, with the first negotiated prices taking effect in 2026 for selected Medicare Part D drugs and additional products to be selected annually thereafter, and imposes inflation-based rebate obligations under Medicare Parts B and D. These provisions are being implemented through agency guidance and rulemaking and is expected to affect pricing and reimbursement dynamics for pharmaceutical products.
Further legislation or regulation could be passed that could harm our business, results of operations and financial condition. Other legislative changes have been proposed and adopted since the ACA was enacted. For example, in August 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included aggregate reductions to Medicare payments to providers, which went into effect beginning on April 1, 2013 and, due to subsequent legislative amendments, will stay in effect through 2032. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
In 2018, the Trickett Wendler, Frank Mongiello, Jordan McLinn, and Matthew Bellina Right to Try Act of 2017, or the Right to Try Act, was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase I clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a pharmaceutical manufacturer to make its product candidates available to eligible patients as a result of the Right to Try Act.
Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. For example, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions took effect progressively in fiscal year 2023, although they may be subject to legal challenges. The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented. It is currently unclear how the IRA will be implemented but it is likely to have a significant effect on the pharmaceutical industry. Further, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
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There have been a number of recent Presidential Executive Orders that have or may have an effect on the pharmaceutical and biotechnology industries. In 2025, the Trump Administration issued Executive Orders and pursued legislative initiatives that could materially affect our business operations and product development strategy. On May 12, 2025, President Trump signed an Executive Order requiring that U.S. prices for prescription drugs not exceed the lowest price ordered in other developed nations (Most-Favored-Nation or “MFN” pricing). In September 2025, President Trump announced a 100% tariff on all "branded or patented" imported drugs effective October 1, 2025, which manufacturers could avoid by building manufacturing facilities in the United States. This tariff regime significantly increases costs for manufacturers relying on foreign manufacturing, potentially making our reliance on third-party manufacturers for clinical and commercial supply more expensive if those manufacturers do not rapidly establish or expand U.S. production capabilities. Additionally, on May 5, 2025, President Trump signed an Executive Order directing the FDA to streamline and accelerate approval of domestic pharmaceutical manufacturing by eliminating unnecessary regulatory barriers and increasing fees for foreign manufacturing facilities.
On August 13, 2025, President Trump signed an Executive Order establishing a Strategic Active Pharmaceutical Ingredients Reserve, which may affect the availability and cost of critical raw materials, including the PHAD lipid our GEM Program Products require. The Trump Administration has pursued a deregulatory agenda requiring agencies to eliminate 10 existing regulations or guidance documents for every new regulation issued. This regulatory framework may slow FDA issuance of guidance and reduce the agency’s capacity for routine functions, potentially extending our IND review timelines and clinical study authorization processes. Additionally, uncertainty regarding how FDA will interpret and apply these new policies, combined with reduced agency staffing due to budget constraints, may create delays or unpredictable regulatory outcomes for our clinical programs. Enhanced FDA oversight of foreign contract manufacturing organizations and contract research organizations may increase the cost of engaging foreign CDMOs and CROs and potentially limit our access to certain foreign suppliers if they do not meet enhanced FDA requirements or choose to cease U.S. operations due to increased compliance burden.
On October 1, 2025, the Administration launched TrumpRx.gov, a government-operated direct-to-consumer platform allowing individuals to purchase select medications at discounted prices from participating manufacturers. These initiatives could fundamentally change the traditional pharmaceutical distribution model, bypass traditional pharmacy benefit managers and wholesalers, and require us to establish new compliance and operational infrastructure if we choose to participate. Alternatively, exclusion from these channels could disadvantage us competitively relative to manufacturers participating in these programs. In December 2025, Congress expanded the orphan drug exclusion to the Medicare Drug Price Negotiation Program, allowing drugs with multiple rare disease indications to maintain pricing protection if each indication is for a rare disease. This change may benefit our GEM-AKI program if it qualifies for orphan designation, though it also reflects continued Congressional interest in restricting pharmaceutical pricing through the Medicare program, creating ongoing uncertainty regarding how future policy changes may affect our products if approved. On December 1, 2025, the U.S. and United Kingdom announced an agreement to increase net prices of new prescription drugs by 25% in the U.K., reflecting efforts to ensure foreign countries contribute more fairly to pharmaceutical innovation. These bilateral price negotiations may complicate our international commercialization strategy and pricing discussions in foreign markets, requiring coordination between domestic MFN pricing requirements and foreign price negotiations.
We cannot predict whether these 2025 policy initiatives will be maintained, expanded, modified, or reversed by future administrations, Congress or the courts. The evolving regulatory landscape creates material uncertainty regarding whether and when our manufacturing costs will increase. Any of these developments could materially and adversely affect our business model, cost structure, development timeline, manufacturing strategy, regulatory approvals, commercialization approach, and financial projections. We will need to maintain flexibility in our development and commercialization strategies to adapt to these policy changes, but such adaptation may require significant operational and financial adjustment
We expect additional state, federal and foreign healthcare reform measures to be adopted in the future, any of which could limit the amounts that federal, state and foreign governments will pay for health products, which could result in reduced demand for our products, if approved or additional pricing pressure. For instance, the EU Regulation (EU) 2021/2282 on Health Technology Assessment (“HTA Regulation”), amending Directive 2011/24/EU, was adopted in December 2021 and entered into force in January 2022. The HTA Regulation became applicable in January 2025 for certain medicinal products, including certain oncology and advanced therapy medicinal products, with phased expansion to additional products thereafter. The regulation establishes a framework for joint clinical assessments at the EU level, which Member States are required to consider in their national pricing and reimbursement decisions.
The HTA Regulation is intended to enhance cooperation among EU Member States in the assessment of health technologies by providing common tools, methodologies and procedures, including joint clinical assessments, joint scientific consultations, identification of emerging health technologies, and continued voluntary cooperation in other areas. While clinical assessment activities will be coordinated at the EU level, individual Member States will remain responsible for evaluating non-clinical aspects, such as economic, social and ethical considerations, and for making final pricing and reimbursement decisions.
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Additional Regulation
In addition to the foregoing, local, state and federal laws, including such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control and hazardous substances, including, in the United States, the Occupational Safety and Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations result in contamination of the environment or expose individuals to hazardous or biohazardous substances, we could be liable for damages, environmental remediation, and/or governmental fines. We believe that we are in material compliance with applicable environmental laws and occupational health and safety laws that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations. We may incur significant costs to comply with such laws and regulations now or in the future.
Government Regulation and Product Approval
Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing, manufacture, including any manufacturing changes, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, import and export of pharmaceutical products, biological products and medical devices, such as those we are developing.
Disclosure of clinical study information
Sponsors of applicable clinical studies of FDA regulated products, including drugs, are required to register and disclose certain clinical study information. Information related to the product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical study is then made public on the ClinicalTrials.gov website as part of the registration. Sponsors are also obligated to disclose the results of their clinical studies after completion. Disclosure of the results of these studies can be delayed until the new product or new indication being studied has been approved. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.
Expedited Programs for Serious Conditions
The FDA maintains several programs intended to facilitate and expedite development and review of new drugs and biologics to address unmet medical needs in the treatment of serious or life-threatening diseases or conditions. These programs include Fast Track designation, Breakthrough Therapy designation, Priority Review and Accelerated Approval. These programs can significantly reduce the time it takes for the FDA to review a NDA, but they do not guarantee that a product will receive FDA approval. Even if a product qualifies initially, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review will not be shortened. In May 2018, the Right to Try Act also established a program to increase access to unapproved, investigational treatments for patients diagnosed with life-threatening diseases or conditions who have exhausted approved treatment options and who are unable to participate in a clinical study.
A new drug or biologic is eligible for Fast Track designation if it is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address unmet medical needs for such disease or condition. Fast Track designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing application is filed, meaning that the agency may review portions of the marketing application before the sponsor submits the complete application, as well as Priority Review, discussed below. In addition, a new drug or biologic may be eligible for Breakthrough Therapy designation if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Breakthrough Therapy designation provides all the features of Fast Track designation in addition to intensive guidance on an efficient drug development program beginning as early as Phase 1, and FDA organizational commitment to expedited development, including involvement of senior managers and experienced review staff in a cross-disciplinary review, where appropriate.
Any product submitted to the FDA for approval, including a product with Fast Track or Breakthrough Therapy designation, may also be eligible for additional FDA programs intended to expedite the review and approval process, including Priority Review designation and accelerated approval. A product is eligible for Priority Review if it has the potential to provide a significant improvement in safety or effectiveness in the treatment, diagnosis or prevention of a serious disease or condition. Under priority review, FDA will review an application in six months compared to ten months for a standard review. Products are eligible for accelerated approval if they can be shown to have an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or an effect on a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality which 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 treatment. Accelerated approval is usually contingent on a sponsor’s agreement to conduct additional post-approval studies to verify and describe the product’s clinical benefit.
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In December 2022, the Food and Drug Omnibus Reform Act (FDORA) amended the accelerated approval framework to provide the FDA with enhanced authority to require that confirmatory trials be underway prior to approval, to mandate timely completion of such trials, and to expedite withdrawal procedures if confirmatory trials fail to verify clinical benefit. These changes could increase regulatory oversight and post-approval compliance obligations for products approved under accelerated pathways. In addition, unless otherwise informed by the FDA, the FDA currently requires, as a condition for accelerated approval, that all advertising and promotional materials that are intended for dissemination or publication be submitted to FDA for review before the initial dissemination or publication.
Orphan drugs
Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs or biologics intended to treat a rare disease or condition, which is generally defined as a disease or condition that affects fewer than 200,000 individuals in the United States. Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug designation, the generic identity of the drug or biologic and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation is taken into consideration but generally does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first NDA applicant to receive FDA approval for a particular active ingredient to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product, for that indication. During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug or biologic for the same orphan indication, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity in that it is shown to be safer, more effective or makes a major contribution to patient care. This is the case despite an earlier court opinion holding that the Orphan Drug Act unambiguously required the FDA to recognize orphan exclusivity regardless of a showing of clinical superiority. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA application user fee.
Pediatric information and exclusivity
Under the Pediatric Research Equity Act of 2003, an NDA or supplement to an NDA must contain data from pediatric studies that are adequate to assess the safety and effectiveness of the drug or biological product 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. Under the Food and Drug Administration Safety and Innovation Act, the FDA has additional authority to take action against manufacturers not adhering to pediatric study requirements. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan drug designation.
Pediatric exclusivity is a type of non-patent exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or patent protection, including the non-patent and orphan exclusivity. This six-month exclusivity may be granted if an application sponsor submits pediatric data that fairly respond to a written request from the FDA for such data. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical study is deemed to fairly respond to the FDA’s request, the additional protection is granted.
The Hatch-Waxman Act
Abbreviated new drug applications
In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent that claims to cover the applicant’s product. Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential competitors in support of approval of an abbreviated new drug application (“ANDA”). Generally, an ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown through bioequivalence testing to be therapeutically equivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct or submit results of preclinical or clinical tests to prove the safety or effectiveness of their drug product. Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug.
The ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book. Specifically, the applicant must certify that:
• the required patent information has not been filed;
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• the listed patent has expired;
• the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or
• the listed patent is invalid or will not be infringed by the new product.
A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid is called a Paragraph IV certification. If the ANDA applicant does not challenge the listed patents, the ANDA will not be approved until all the listed patents claiming the referenced product have expired.
If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of a 30-month period, expiration of the patent, settlement of the lawsuit or a decision in the infringement case that the patent involved is deemed invalid or not infringed.
The ANDA also will not be approved until any applicable non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange Book for the referenced product has expired. Federal law provides a period of five years following approval of a drug containing no previously approved active ingredients during which ANDAs for generic versions of those drugs cannot be received by the FDA, except that the application may be submitted in four years if it contains a Paragraph IV certification. If there is no listed patent in the Orange Book, there may not be a Paragraph IV certification, and thus, no ANDA may be filed before the expiration of the exclusivity period. Federal law provides for a period of three years of exclusivity following approval of a listed drug that contains previously approved active ingredients but is approved in a new dosage form, route of administration or combination, or for a new use, the approval of which was required to be supported by new clinical studies conducted by or for the sponsor, during which the FDA cannot grant effective approval of an ANDA based on that listed drug.
The FDA must establish a priority review track for certain generic drugs, requiring the FDA to review a drug application within eight months for a drug that has three or fewer approved drugs listed in the Orange Book and is no longer protected by any patent or regulatory exclusivities, or is on the FDA’s drug shortage list. The FDA must also expedite review of “competitor generic therapies” or drugs with inadequate generic competition, including holding meetings with or providing advice to the drug sponsor prior to submission of the application.
Patent term extension
After NDA approval, owners of relevant drug patents may apply for up to a five year patent term extension. The allowable patent term extension is calculated as half of the drug’s testing phase, based on the time between IND application and submission of the NDA, and all of the review phase, based on the time between the NDA submission and approval up to a maximum of five years. The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence. The total patent term after the extension may not exceed 14 years.
For patents that might expire during the application phase, the patent owner may request an interim patent term extension. An interim patent term extension increases the patent term by one-year and may be renewed up to four times. For each interim patent term extension granted, the post-approval patent term extension is reduced by one-year. The director of the USPTO must determine that approval of the drug covered by the patent for which a patent term extension is being sought is likely.
Interim patent term extensions are not available for a drug for which an NDA has not been submitted.
Section 505(b)(2) new drug applications
Most drug products obtain FDA marketing approval pursuant to an NDA or an ANDA. A third alternative is a special type of NDA, commonly referred to as a Section 505(b)(2) NDA, which enables the applicant to rely, in part, on the FDA’s previous approval of a similar product, or published literature, in support of its application.
Section 505(b)(2) NDAs often provide an alternate path to FDA approval for new or improved formulations or new uses of previously approved products. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference. If the Section 505(b)(2) applicant can establish that reliance on the FDA’s previous approval is scientifically appropriate, it may eliminate the need to conduct certain preclinical or clinical studies of the new product. The FDA may also require companies to perform additional studies or measurements to support the change from the approved product. The FDA may then approve the new product for all or some of the label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant.
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To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would. As a result, approval of a Section 505(b)(2) NDA can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent infringement suit, until the earlier of a 30-month period, settlement of the lawsuit or a decision in the infringement case that the patent involved is deemed invalid or not infringed.
Post-Approval Requirements
Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing user fee requirements, under which FDA assesses an annual program fee for each product identified in an approved NDA. Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.
The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a Risk Evaluation and Mitigation Strategy program. Other potential consequences include, among other things:
• restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls;
• fines, warning letters or holds on post-approval clinical studies;
• refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals;
• product seizure or detention, or refusal of the FDA to permit the import or export of products; or
• injunctions or the imposition of civil or criminal penalties.
The FDA closely regulates the marketing, labeling, advertising and promotion of biologics, including regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.
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