Item 1. Business
ITEM
1. BUSINESS
Overview
We
are a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. We are focused
on developing (i) a topical formulation for treating side effects from drugs used for the treatment of cancer; (ii) a treatment for mast-cell
derived cancers and anaphylaxis; and (iii) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases. We
also have preclinical assets being developed for (i) atopic dermatitis (also known as eczema); (ii) a treatment for asthma and allergies
using inhalational administration; (iii) a treatment for lung diseases resulting from bacterial infections; and (iv) a treatment for
inflammatory bowel diseases. We are also developing a diagnostic device via a mobile device.
Primary
Development:
HT-001
On
February 1, 2020, we entered into a patent license agreement with The George Washington University (“GW”) pursuant to which
GW granted us a license to certain patent rights to, among other things, make, use, offer and sell certain licensed products throughout
the world with respect to HT-001 which we intend to potentially use for treating dermatological side effects from epidermal growth factor
receptor (“EGFR”) inhibitors, and potentially other drugs used for the treatment of cancer. HT-001 is a topical formulation
under development for the treatment of patients with rash and skin disorders associated with initial and repeat courses of tyrosine kinase
EGFR inhibitor therapy. EGFR inhibitors are used for the treatment of cancers with EGFR up-regulation (such as non-small cell lung cancer,
pancreatic cancer, breast cancer and colon cancer); however, EGFR inhibitors are often associated with dose-limiting skin toxicities
that can result in the interruption or reduction of treatment. HT-001 is targeted to treat these EGFR-induced skin disorders to allow
patients to achieve the best potential outcomes of EGFR therapy. HT-001 has achieved positive results in its initial pre-clinical studies
conducted at GW. In December 2020, we submitted a pre-IND meeting request to the FDA with respect to HT-001 as a concomitant therapy
with EGFR inhibitors. In preparation for such pre-IND meeting, we prepared and submitted to the FDA our IND-opening clinical trial plan
in January 2021, which includes two phase 2 trials conducted in patients. Based on the FDA’s feedback, we intend to advance our
IND-enabling activities for HT-001 as planned. We have engaged Worldwide Clinical Trials (“Worldwide”) as our clinical research
organization to provide clinical management, data management, biostatistical, medical monitoring, pharmacovigilance, and other related
services to support the CLEER1 Phase 2a clinical trial in the United States.
We
believe that the key elements for our market success with respect to HT-001 include:
● To
our knowledge, there are currently no drugs approved for the treatment of skin toxicities associated with EFGR inhibitor therapy and
49-100% of patients develop skin toxicities during EGFR inhibitory therapy;
● The
main active ingredient of HT-001 is already approved in oral and IV dosage forms which supports pursuit of the 505(b)(2) regulatory pathway
to reduce development time and cost;
● To
our knowledge, there are no current topical formulations available using HT-001’s active ingredient so we believe that there is
no direct market competition; and
● We
have the potential to pursue other indications such as chronic pruritus, atopic dermatitis and other skin toxicities that develop from
anti-cancer therapies using the HT-001 formulation.
1
HT-KIT
We
have obtained from North Carolina State University an exclusive, worldwide, royalty bearing license to certain intellectual property
to, among other things, discover, develop, make, have made, use and sell certain licensed products and sell, use and practice certain
licensed services with respect to cancer and anaphylaxis; this is being developed as HT-KIT. The HT-KIT drug is designed to more specifically
target the receptor tyrosine kinase KIT in mast cells, which is required for the proliferation, survival and differentiation of bone
marrow-derived hematopoietic stem cells. Mutations in the KIT pathway have been associated with several human cancers, such as gastrointestinal
stromal tumors and mast cell-derived cancers (mast cell leukemia and mast cell sarcoma). Based on the initial proof-of-concept success,
we intend to initially target mast cell neoplasms for development of HT-KIT, which is a rare, aggressive cancer with poor prognosis.
The
same target, KIT, also plays a key role in mast cell-mediated anaphylaxis, a serious allergic reaction that is rapid in onset and may
cause death. Anaphylaxis typically occurs after exposure to an external allergen that results in an immediate and severe immune response.
We also intend to pursue the anaphylaxis indication for HT-KIT in parallel to cancer treatment.
On
December 21, 2021, we submitted an Orphan Drug Designation (“ODD”) request to the U.S. Food and Drug Administration (“FDA”)
for HT-KIT for the treatment of mastocytosis, and on March 10, 2022, we received ODD for HT-KIT for the treatment of mastocytosis. Drugs
intended to treat orphan diseases (rare diseases that affect less than 200,000 people in the U.S.) are eligible to apply for ODD, which
provides benefits such as 7 year marketing exclusivity and tax incentives to the sponsor during development and after approval.
HT-ALZ
On
February 23, 2021, we filed a provisional patent application with the United States Patent and Trademark Office for the use of the active
ingredient of HT-001 to treat and prevent Alzheimer’s disease and other neuroinflammatory diseases.
We
intend to develop HT-ALZ for use in patients following the Section 505(b)(2) regulatory pathway of the FDA rules. Section 505(b)(2) of
the Federal Food, Drug, and Cosmetic Act (“FDCA”) was enacted to enable sponsors to seek New Drug Application (“NDA”)
approval for novel repurposed drugs without the need for such sponsors to undertake time consuming and expensive pre-clinical safety
studies and Phase 1 safety studies. Proceeding under this regulatory pathway, we will be able to rely upon publicly available data
with respect to our active ingredient in our NDA submission to the FDA for marketing approval.
On
June 7, 2021, we entered into a sponsored research agreement with The Washington University to investigate the effects of HT-ALZ on behavioral
and pathological markers of Alzheimer’s disease and to determine if HT-ALZ can improve learning and memory in an animal model of
Alzheimer’s disease. Our study will also determine if behavior is improved utilizing HT-ALZ in blocking NK-1Rs. The study commenced
in August 2021 and we expect preclinical results in 2022.
The
BioLexa Platform
We
have obtained an exclusive license from the University of Cincinnati to make, use, have made, import, offer for sale, and sell products
based upon or involving the use of (i) topical compositions comprising a zinc chelator and gentamicin and (ii) zinc chelators to inhibit
biofilm formation (the “BioLexa Platform” or “BioLexa”). The license enables us to develop the platform for any
indications in humans.
The BioLexa Platform
is a proprietary, patented, drug compound platform for the treatment of eczema. It combines an FDA approved zinc chelator with one or
more approved antibiotics in a topical dosage form to address unchecked eczema flare-ups by preventing the formation of infectious biofilms
and the resulting clogging of sweat ducts.
2
The
technology is based on scientific research into the mechanism of Staphylococcus biofilm formation conducted by Andrew B. Herr, PhD at
the University of Cincinnati. Dr. Herr conducted multiple in-vitro experiments, or experiments conducted in a controlled environment
outside of a living organism, demonstrating that chelation of zinc can prevent Staphylococcus bacteria from forming complex
colonies called a biofilm. Biofilms are used by bacteria as a defense mechanism against the host immune response and antibiotics. Prevention
of the biofilm formation leaves the bacteria in their planktonic, or single cell state and susceptible to host immune defenses and antibiotic
therapy. Dr. Herr’s in-vitro work demonstrating that zinc is an enabler for staph -biofilm formation led to the design
and implementation of a series of in-vivo experiments, or experiments conducted using living organisms. These experiments were conducted
at the University of Miami using a minipig wound infection model and intended to demonstrate that the combination of zinc removal, or
chelation, and broad spectrum antibiotic therapy was more effective than either approach on its own. These positive results supported
development of the BioLexa Platform for multiple indications with staph -biofilms as the causative agent.
We
intend to develop the BioLexa Platform for use in patients following the Section 505(b)(2) regulatory pathway of the FDA rules. Section
505(b)(2) of the Federal Food, Drug and Cosmetic Act (“FDCA”) was enacted to enable sponsors to seek New Drug Application
(“NDA”) approval for novel repurposed drugs without the need for such sponsors to undertake time consuming and expensive
pre-clinical safety studies and Phase 1 safety studies. Proceeding under this regulatory pathway, we will be able to rely upon publicly
available data with respect to gentamicin and zinc chelator in our NDA submission to the FDA for marketing approval.
In
September 2018, we attended the first of a series of meetings with the FDA to review the requirements for submission and activation of
an investigational new drug application (“IND”) with respect to the BioLexa Platform for use in eczema. We prepared and presented
to the FDA our proposed first in human clinical trial plan for the treatment of eczema in patients over the age of one year old, and
the FDA provided us with general guidance with respect to specific animal studies, dosing schedules and suggested human safety studies
before we commence clinical trials in pediatric or adult patients. The FDA requested that safety and efficacy of BioLexa be established
in adults prior to investigating pediatric and adolescent patients. Therefore, we planned to conduct our first clinical trial for BioLexa
in Australia in order to enroll both adult and adolescents to support future clinical development.
On
December 9, 2020, we received approval from the Belberry Human Research Ethics Committee (“HREC”) in Australia to conduct
our clinical trial of BioLexa, and we have engaged Novotech (Australia) Pty Limited (“Novotech”) as our local clinical research
organization in Australia to provide clinical management, data management, biostatistical, medical monitoring, pharmacovigilance, and
other related services to support the first in human clinical trial of BioLexa. Phase 1 of the trial was initiated in 2021 and is expected
to conclude in 2022.
We
believe that the key elements for our market success with respect to BioLexa include:
●
the
proprietary formulation of two FDA-approved drugs to treat bacterial proliferation which may reduce development time and costs
by giving us the ability to rely on safety and efficacy data from the two approved drugs;
●
our
proprietary formulation is not a topical corticosteroid, and provides a novel mechanism of action and potentially a preferred safety
profile as a market differentiator; and
●
the
literature set forth below reaffirms the critical role that S. aureus plays in the development of atopic dermatitis flare-ups
within the international medical community, supporting the targeted mechanism of action of BioLexa.
Shi
et al, “MRSA Colonization is Associated with Decreased Skin Commensal Bacteria in Atopic Dermatitis,” Invest Dermatol.
2018.
Blicharz,
et al, “Staphylococcus aureus: an underestimated factor in the pathogenesis of atopic dermatitis?,” Adv Dermatol Allergol
2019.
3
Preclinical
Development
HT-003
On
July 30, 2020 (the “Isoprene Effective Date”), we entered into a Sublicense Agreement (the “Isoprene Sublicense Agreement”)
with Isoprene Pharmaceuticals, Inc. (“Isoprene”) pursuant to the commercial evaluation sublicense and option agreement dated
March 8, 2019 by and among us, the University of Maryland, Baltimore and Isoprene. Pursuant to the Isoprene Sublicense Agreement, Isoprene
granted us an exclusive sublicense to certain intellectual property (i) to make, have made, use, sell, offer to sell and import certain
licensed products, (ii) in connection therewith, to use certain inventions and licensed materials and (iii) to practice certain patent
rights for the treatment of dermatological conditions or diseases, referred to as HT-003. The retinoic acid metabolism blocking agents
(“RAMBAs”) have the potential to be developed as a platform for multiple inflammatory-based indications. Accordingly, we
entered into a Sublicense Agreement with Isoprene on July 2, 2021 pursuant to the option agreement dated December 22, 2020 to expand
the therapeutic indication of the sublicensed RAMBAs from Isoprene to include inflammatory bowel diseases, including Crohn’s disease
and ulcerative colitis.
Retinoids,
which include Vitamin A (retinol) and its analogues (both synthetic and metabolites), play a critical role in cell signaling and biological
processes, including regulation of immune cells and inflammation, signaling pathways that control normal skin maintenance, embryonic
development and cell growth/differentiation/repair. Deficiencies in retinoids and their active metabolites have been implicated in a
wide variety of diseases. In the skin, retinol deficiency leads to hyperkeratosis and keratinizing metaplasia that is observed in skin
disorders like psoriasis and acne. Vitamin A and retinoic acid also play a crucial role in regulating cell proliferation, differentiation,
and apoptosis and therefore, altered metabolism of retinoids has been suspected as playing a potential role in tumorigenesis. Accordingly,
retinoids have been approved in the U.S. for treatment of acne and psoriasis as well as other therapeutic indications such as acute promyelocytic
leukemia and cutaneous T-cell lymphoma; however, the therapeutic use of exogenous retinoids has been limited due to negative effects
associated with high systemic concentrations. A new therapeutic approach to increase intracellular retinoic acid (the active metabolite
of retinol) potentially without causing negative side effects of exogenous retinoic acid is to use inhibitors of RAMBAs, which prolong
the presence of retinoic acid. HT-003 is a novel RAMBA under investigation for topical treatment in acne and psoriasis applications.
In
December 2019, we entered into a research collaboration agreement with Weill Cornell Medicine for the completion of pre-clinical studies
investigating the mechanism of action of HT-003 that was renewed in January 2021 as a result of positive preclinical results. Dr. Jonathan
Zippin, M.D., Ph.D., FAAD, Associate Professor of Dermatology at Weill Cornell Medicine and our Senior Scientific Advisor, is the principal
investigator for such pre-clinical studies.
Preclinical
proof-of-concept studies began in the first quarter of 2021 for the investigation of RAMBAs for treatment of inflammatory bowel diseases,
including Crohn’s disease and ulcerative colitis.
HT-004
On
November 20, 2019, we entered into a license agreement with North Carolina State University (“NC State”) pursuant to which
NC State granted us an exclusive license to, among other things, develop, make, use, offer and sell certain licensed products throughout
the world with respect to HT-004 for treating allergic diseases. HT-004 is a potential disease-modifying agent that uses exon-skipping
oligonucleotide-targeted methods to reduce mast cell responses to immunoglobulin E (IgE)-directed antigens, which is one of the key mechanisms
in the pathophysiology of asthma, atopic dermatitis and other allergic diseases. HT-004 is currently under investigation for the treatment
of asthma and allergies using inhalational administration.
Preclinical
proof-of-concept data was generated in October 2020 supporting efficacy of HT-004 after inhalational delivery in a mouse model. Critical
proof-of-concept studies in a humanized mouse model are planned to be conducted in 2022. These studies are being conducted by our Scientific
Advisory Board member, Dr. Glenn Cruse, at NC State.
We
believe that the key elements for our market success with respect to HT-004 include:
● To
our knowledge, there are currently no disease-modifying agents for asthma or allergy diseases;
● The
active pharmaceutical ingredient in HT-004 is a novel molecular class that we believe would prevent generic competition after commercialization;
● HT-004
is being developed for inhalational administration by either inhaler or nebulizer for easy access at home by patients; and
● HT-004
is applicable for both adult and pediatric patient populations with asthma and/or allergies.
4
HT-006
On
December 22, 2020, we entered into a non-exclusive commercial evaluation license agreement with the U.S. Army Medical Research and Development
Command (“USAMRDC”), as amended, pursuant to which USAMRDC granted us a non-exclusive commercial evaluation license to HT-006
for the treatment of lung diseases resulting from bacterial infections. We will initially target treatment of serious bacterial infections
of the lung, such as hospital-acquired pneumonia (“HAP”) and ventilator-associated pneumonia (“VAP”). Given the
indication, we intend to develop HT-006 for inhalational administration.
Both
HAP and VAP are considered life-threatening diseases for which current treatment options are limited or not effective against multi-drug
resistance bacteria. As such, we intend to pursue streamlined development opportunities under the FDA’s program for “antibacterial
therapies for patients with an unmet medical need for the treatment of serious bacterial diseases.” This streamlined program allows
for the use of nonclinical animal studies to reduce clinical studies required for approval.
HT-002
On
May 18, 2020, we entered into an Exclusive License Agreement with the Virginia Commonwealth University Intellectual Property Foundation
(“VCU”) pursuant to which VCU granted us an exclusive, royalty bearing license to HT-002, a novel peptide developed
by researchers at VCU that may be used to slow the transmission of SARS-CoV-2 (the “VCU Peptide”) and a non-exclusive
royalty bearing, worldwide license with respect to certain licensed technical information patents to make, have made, use, offer to sell,
sell and import certain licensed products and perform certain licensed services. On June 29, 2020, we entered into a Sponsored Project
Agreement (“VCU SPA”) with VCU for the development of a potential COVID-19 treatment using the VCU Peptide. The VCU SPA was
amended on April 28, 2021 to extend the period of research and to add additional scope of investigation to include the variants of SARS-CoV-2.
Proof-of-Concept
preclinical studies are expected to be completed in 2022.
Direct
Detect Breath Diagnostic Device
On
August 7, 2020, we entered into a Patent License Agreement (“GW Patent License Agreement”) with GW pursuant to which GW granted
us an exclusive, worldwide, royalty bearing license to certain intellectual property that can be used to develop a device designed to
detect the presence of viruses. Specifically, the GW Patent License Agreement permits us to make, have made, use, import, offer for sale
and sell certain licensed products in the field of virus sensing and detection. We have engaged a company to develop a platform prototype
and, once developed, we will select target analytes for further development.
5
Product
Development Pipeline
The
following table summarizes our product development pipeline.
Other
Interests
We have interests in certain other assets being
developed by third parties. Specifically, in December 2021, we entered into a license agreement
with Zylö Therapeutics, Inc. (“Zylö”) with respect to the development of HT-005 .
We had previously entered into a sublicense agreement with Zylö pursuant to which we had advanced the development of HT-005
for patients with lupus. (See Note 6 to the consolidated financial statements for a discussion of our agreement with Zylö).
In addition, in March 2020, we entered into a Royalty and Development Agreement (the “Voltron Agreement”) with Voltron
Therapeutics, Inc. with respect to the development of potential product candidates for the prevention of COVID-19. (See Note 6 to the
consolidated financial statements for a discussion of our agreement with Voltron).
Competition
The
biopharmaceutical industry utilizes rapidly advancing technologies and is characterized by intense competition. There is also a strong
emphasis on intellectual property and proprietary products. In the segment of the biopharmaceutical industry, competition from different
sources including major biopharmaceutical companies, academic institutions, government agencies, and public and private research institutions
will continue. Many of our competitors have significantly greater financial resources and expertise in product candidate development
and may have progressed further toward approval and marketing. In addition, smaller or early-stage companies may also prove to be significant
competitors, particularly through collaborative arrangements with large and established companies.
Manufacturing
and Supply
We
do not have any manufacturing capability and therefore we currently rely on and intend to continue to rely on contract manufacturing
organizations to produce our product candidates in accordance with regulatory requirements.
Commercialization
Our
success depends not only on the successful development and approval of our products candidates but also on the commercialization of our
potential products. If and when our product candidates receive regulatory approval, we intend to engage third-parties such as pharmaceutical
and biotechnology companies for the commercialization of our products.
Intellectual
Property Portfolio
Our
goal is to obtain, maintain and enforce patent protection for our products, formulations, processes, methods and other proprietary technologies,
preserve our trade secrets, and operate without infringing on the proprietary rights of other parties, both in the U.S. and in other
countries. Our policy is to actively seek the broadest intellectual property protection possible for our products, proprietary information
and proprietary technology through a combination of contractual arrangements and patents, both in the U.S. and elsewhere in the world.
In addition, we intend to actively pursue product life-cycle management initiatives to extend our market exclusivity.
6
We
intend to cement our market exclusivity in conjunction with our formulation-development partners through additional patents based on
the pharmaceutical and clinical characteristics of our product candidates in the proprietary formulation and through the introduction
of line extensions such as combination drugs and new formulations.
In
addition to any granted patents, our products may be eligible for market exclusivity to run concurrently with the term of the patent
for three and a half years in the U.S. pursuant to the Hatch-Waxman Act and pediatric exclusivity guideline and up to ten years of market
exclusivity in the E.U. which includes eight years of data exclusivity and two years of market exclusivity from the date we file an NDA
or the European equivalent referred to as Marketing Authorization Application.
We currently have
licenses to six U.S. patents and one pending U.S. patent application, and we have licenses to three patents issued in Europe and
Australia and five pending patent applications in foreign jurisdictions including Europe, Brazil, Canada and Hong Kong. Hoth also
holds two pending U.S. patent applications and one pending PCT patent application.
In
addition to patents, we rely on trade secrets and know-how and continuing technological innovation to develop and maintain our competitive
position. However, trade secrets and know-how can be difficult to protect. We take measures to protect and maintain the confidentiality
of proprietary information in order to protect aspects of the business that are not amenable to, or that we do not consider appropriate
for, patent protection. We require employees, consultants, outside scientific partners, sponsored researchers and other advisors to execute
confidentiality agreements with us on or prior to the commencement of employment or consulting relationships with us.
Government
Regulations
Governmental
authorities in the U.S. and other countries extensively regulate the research, development, testing, manufacture, labeling, promotion,
advertising, distribution and marketing of pharmaceutical products, including biological products, and medical devices, such as those
being developed by us. In the U.S., the FDA regulates such products under the FDCA and the Public Health Services Act and implements
related regulations. Failure to comply with applicable FDA requirements, both before and after approval, may subject us to administrative
and judicial sanctions, such as a delay in approving or refusal by the FDA to approve pending applications, warning letters, product
recalls, product seizures, total or partial suspension of production or distribution, injunctions and/or criminal prosecution.
U.S.
Food and Drug Administration Regulations
United
States Drug Development
In
the United States, the FDA regulates drugs (including biological products, such as vaccines), medical devices and combinations of drugs
and devices, or combination products, under the FDCA and its implementing regulations. These products are also subject to other federal,
state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate
federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure
to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval,
may subject an applicant to administrative or judicial sanctions. These sanctions could include, among other actions, the FDA’s
refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, requests for voluntary
product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions,
fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial enforcement
action could have a material adverse effect on us.
7
The
process required by the FDA before a drug may be marketed in the United States generally involves the following:
● completion
of extensive pre-clinical laboratory tests, animal studies and formulation studies in accordance with applicable regulations, including
the FDA’s Good Laboratory Practice regulations;
● submission
to the FDA of an IND, which must become effective before human clinical trials may begin;
●
performance of adequate and well-controlled human clinical trials in accordance with an applicable IND and other clinical study related regulations, referred to as good clinical practice (“GCP”), to establish the safety and efficacy of the proposed drug for its proposed indication;
● submission
to the FDA of an NDA or biologics license application (“BLA”);
● satisfactory
completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product, or components thereof,
are produced to assess compliance with the FDA’s current good manufacturing practice (“cGMP”) requirements;
● potential
FDA audit of the clinical trial sites that generated the data in support of the NDA or BLA; and
● FDA
review and approval of the NDA or BLA prior to any commercial marketing or sale.
Human
clinical trials are typically conducted in three sequential phases that may overlap or be combined:
● Phase
1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance,
absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some products
for severe or life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human
testing may be conducted in patients.
● Phase
2. Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate
the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule.
● Phase
3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically
dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit relationship of the product
and provide an adequate basis for product labeling.
Post-approval
trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These studies are used to
gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate
the performance of Phase 4 trials. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified
period, if at all. The FDA or the clinical trial sponsor may suspend or terminate a clinical trial at any time on various grounds, including
a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an Institutional Review
Board (“IRB”), which oversees the conduct of clinical trials, can suspend or terminate approval of a clinical trial at its
institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product has been associated
with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts
organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for
whether a trial may move forward at designated check points based on access to certain data from the study. The clinical trial sponsor
may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.
8
FDA
Review Process
The
results of product development, pre-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical
tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of an NDA for a new drug,
or BLA for a biological product, requesting approval to market the product. The submission of an NDA or BLA is subject to the payment
of a substantial user fee, and the sponsor of an approved NDA or BLA is also subject to an annual program user fee; although a waiver
of such fee may be obtained under certain limited circumstances.
The
FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA
for filing. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA’s
goal to complete its substantive review of a standard NDA and respond to the applicant is ten months from the receipt of the NDA. The
FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional
information or clarification and may go through multiple review cycles.
The
review and evaluation of an NDA or BLA by the FDA is extensive and time consuming and may take longer than originally planned to complete,
and we may not receive a timely approval, if at all.
Before
approving an NDA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether
they comply with cGMPs. The FDA will not approve the product 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 may also audit data from clinical trials to ensure compliance with GCP requirements.
There
is no assurance that the FDA will ultimately approve a product for marketing in the United States, and we may encounter significant difficulties
or costs during the review process. If a product receives marketing approval, the approval may be significantly limited to specific diseases
and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the
FDA may require that certain contraindications, warnings or precautions be included in the product labeling or may condition the approval
of the NDA or BLA on other changes to the proposed labeling, development of adequate controls and specifications, or a commitment to
conduct post-market testing or clinical trials and surveillance to monitor the effects of approved products. For example, the FDA may
require Phase 4 clinical trials to further assess drug safety and effectiveness and may require testing and surveillance programs to
monitor the safety of approved products that have been commercialized. The FDA may also place other conditions on approvals, including
the requirement for a risk evaluation and mitigation strategy (“REMS”), to assure the safe use of the drug.
Section
505(b)(2) Regulatory Approval Pathway
Section
505(b)(2) of the FDCA provides an alternate regulatory pathway for approval of a new drug by allowing the FDA to rely on data not developed
by the applicant. Specifically, Section 505(b)(2) permits the submission of an NDA where one or more of the investigations relied upon
by the applicant for approval was not conducted by or for the applicant and for which the applicant has not obtained a right of reference.
The applicant may rely upon published literature and/or the FDA’s findings of safety and effectiveness for an approved drug already
on the market. Approval or submission of a 505(b)(2) application, like those for abbreviated new drugs (“ANDAs”), may be
delayed because of patent and/or exclusivity rights that apply to the previously approved drug.
A
505(b)(2) application may be submitted for a new chemical entity (“NCE”) when some part of the data necessary for approval
is derived from studies not conducted by or for the applicant and when the applicant has not obtained a right of reference.
Section
505(b)(2) applications also may be entitled to marketing exclusivity if supported by appropriate data and information. Three-year new
data exclusivity may be granted to the 505(b)(2) application if one or more clinical investigations conducted in support of the application,
other than bioavailability/bioequivalence studies, were essential to the approval and conducted or sponsored by the applicant. Five years
of marketing exclusivity may be granted if the application is for an NCE, and pediatric exclusivity is likewise available.
9
Orange
Book Listing and Paragraph IV Certification
For
NDA submissions, including those under Section 505(b)(2), applicants are required to list with the FDA certain patents with claims that
cover the applicant’s product. Upon approval, each of the patents listed in the application is published in Approved Drug Products
with Therapeutic Equivalence Evaluations , commonly referred to as the Orange Book. Any applicant who subsequently files an ANDA or
505(b)(2) NDA that references a drug listed in the Orange Book must certify to the FDA that (1) no patent information on the drug product
that is the subject of the application has been submitted to the FDA; (2) such patent has expired; (3) the date on which such patent
expires; or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the
application is submitted. This last certification is known as a Paragraph IV Certification.
If
an applicant has provided a Paragraph IV Certification to the FDA, the applicant must also send notice of the Paragraph IV Certification
to the holder of the NDA for the approved drug and the patent owner once the application has been accepted for filing by the FDA. The
NDA holder or patent owner may then initiate a patent infringement lawsuit in response to notice of the Paragraph IV Certification. The
filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV Certification prevents the FDA from approving
the ANDA or 505(b)(2) application until the earlier of 30 months from the date of the lawsuit, the applicant’s successful defense
of the suit, or expiration of the patent.
United
States Medical Device Regulation
Medical
devices, including diagnostic test devices, also are subject to extensive and rigorous regulation by the FDA under the FDCA, as well
as other federal and state regulatory bodies in the United States, and laws and regulations of foreign authorities in other countries.
FDA requirements specific to medical devices are wide ranging and govern, among other things, the design, development and manufacturing,
human clinical trials, preclearance or approval, advertising and promotion, and product import and export. Unless an exemption applies,
medical devices distributed in the United States must receive either premarket clearance under Section 510(k) of the FDCA or premarket
approval of a premarket application (“PMA”). During the COVID-19 public health emergency, the FDA has authorized COVID-19
diagnostic tests under its Emergency Use Authorization authority. Medical devices are classified into one of three classes—Class I,
Class II, or Class III—depending on the degree or risk associated with each medical device and the extent of control
needed to ensure safety and effectiveness. Medical devices deemed to pose relatively low risk are placed in either Class I or II.
Class II devices generally require the manufacturer to submit a premarket notification under Section 510(k) of the FDCA requesting
permission for commercial distribution. Devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting
or implantable devices are placed in Class III requiring PMA approval.
Reimbursement
Potential
sales of any of our product candidates, if approved, will depend, at least in part, on the extent to which such products will be covered
by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations. These third-party
payors are increasingly limiting coverage and/or reducing reimbursements for medical products and services. A third-party payor’s
decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s
determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product.
In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including
price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment
measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our future
revenues and results of operations. Decreases in third-party reimbursement or a decision by a third-party payor to not cover a product
candidate, if approved, or any future approved products could reduce physician usage of our products, and have a material adverse effect
on our sales, results of operations and financial condition.
In
the United States, the Medicare Part D program provides a voluntary outpatient drug benefit to Medicare beneficiaries for certain products.
We do not know whether our product candidates, if approved, will be eligible for coverage under Medicare Part D, but individual Medicare
Part D plans offer coverage subject to various factors such as those described above. Furthermore, private payors often follow Medicare
coverage policies and payment limitations in setting their own coverage policies.
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Orphan
Drug Designation
Under
the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which
is a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United
States for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic
for this type of disease or condition will be recovered from sales in the United States for that drug or biologic. Orphan drug designation
must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the generic identity of the therapeutic
agent and its potential orphan use are disclosed publicly by the FDA. The orphan drug designation does not convey any advantage in, or
shorten the duration of, the regulatory review or approval process.
If
a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation,
the product is entitled to orphan drug exclusive approval (or exclusivity), which means that the FDA may not approve any other applications,
including a full NDA or BLA, to market the same drug for the same indication for seven years, except in limited circumstances, such as
a showing of clinical superiority to the product with orphan drug exclusivity. 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 application user fee.
A
designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which
it received orphan designation. In addition, exclusive marketing rights in the United States may be lost if the FDA later determines
that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product
to meet the needs of patients with the rare disease or condition.
Healthcare
Laws and Regulations
Sales
of our product candidates, if approved, or any other future product candidate will be subject to healthcare regulation and enforcement
by the federal government and the states and foreign governments in which we might conduct our business. The healthcare laws and regulations
that may affect our ability to operate include the following:
●
The
federal Anti-Kickback Statute makes it illegal for any person or entity to knowingly and willfully, directly or indirectly, solicit,
receive, offer, or pay any remuneration that is in exchange for or to induce the referral of business, including the purchase, order,
lease of any good, facility, item or service for which payment may be made under a federal healthcare program, such as Medicare or
Medicaid. The term “remuneration” has been broadly interpreted to include anything of value.
●
Federal
false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other things, any person or
entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare
and Medicaid, claims for items or services, including drugs, that are false or fraudulent.
●
Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”) created additional federal criminal statutes that prohibit
among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program,
including private third-party payors or making any false, fictitious or fraudulent statement in connection with the delivery of or
payment for healthcare benefits, items or services.
●
HIPAA,
as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their implementing regulations,
impose obligations on certain types of individuals and entities regarding the electronic exchange of information in common healthcare
transactions, as well as standards relating to the privacy and security of individually identifiable health information.
●
The
federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which
payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report
annually to the Centers for Medicare & Medicaid Services information related to payments or other transfers of value made
to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family
members.
11
Also,
many states have similar laws and regulations, such as anti-kickback and false claims laws that may be broader in scope and may apply
regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. Additionally, we may be subject
to state laws that require pharmaceutical companies to comply with the federal government’s and/or pharmaceutical industry’s
voluntary compliance guidelines, state laws that require drug manufacturers to report information related to payments and other transfers
of value to physicians and other healthcare providers or marketing expenditures, as well as state and foreign laws governing the privacy
and security of health information, many of which differ from each other in significant ways and often are not preempted by HIPAA.
Additionally,
to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws.
Australia
Our first clinical trial for BioLexa will be conducted
in Australia. The TGA and the National Health and Medical Research Council set the GCP requirements
for clinical research in Australia, and compliance with these codes is mandatory. Australia has also adopted international codes,
such as those promulgate by the International Council for Harmonization of Technical Requirements for Registration of Pharmaceuticals
for Human Use (“ICH”). The ICH guidelines must be followed across all areas of clinical research, including those related
to pharmaceutical quality, nonclinical and clinical data requirements and trial designs. The basic requirements for preclinical data to
support a first-in-human trial under ICH guidelines are applicable in Australia. Requirements related to adverse event reporting in Australia
are similar to those required in other major jurisdictions.
Clinical
trials conducted using “unapproved therapeutic goods” in Australia, being those which have not yet been evaluated by the
TGA for quality, safety and efficacy must occur pursuant to either the Clinical Trial Notification Scheme (“CTN Scheme”)
or the Clinical Trial Exemption Scheme (“CTX Scheme”). In each case, the trial is supervised by a HREC, an independent
review committee set up under guidelines of the Australian National Health and Medical Research Council that ensures the protection of
rights, safety and well-being of human subjects involved in a clinical trial. A HREC does this by reviewing, approving and providing
continuing examination of trial protocols and amendments, and of the methods and material to be used in obtaining and documenting informed
consent of the trial subjects. A HREC reviews the scientific validity of the trial design, the balance of risk versus harm of the therapeutic
good, the ethical acceptability of the trial process, and approves the trial protocol. The HREC is also responsible for monitoring the
conduct of the trial.
The
CTN Scheme broadly involves:
● completion
of preclinical laboratory and animal testing;
● submission
to a HREC, of all material relating to the proposed clinical trial, including the trial protocol;
● the
institution or organization at which the trial will be conducted, referred to as the “Approving Authority”, giving final approval
for the conduct of the trial at the site, having regard to the advice from the HREC; and
● the
investigator submitting a ‘Notification of Intent to Conduct a Clinical Trial’ form (“CTN Form”) to the TGA. The CTN form
must be signed by the sponsor, the principal investigator, the chairman of the HREC and a person responsible from the Approving Authority.
The TGA does not review any data relating to the clinical trial however CTN trials cannot commence until the trial has been notified
to the TGA.
Under
the CTX Scheme:
● a
sponsor submits an application to conduct a clinical trial to the TGA for evaluation and comment; and
● a
sponsor must forward any comments made by the TGA Delegate to the HREC(s) at the sites where the trial will be conducted.
A
sponsor cannot commence a trial under the CTX Scheme until written advice has been received from the TGA regarding the application and
approval for the conduct of the trial has been obtained from an ethics committee and the institution at which the trial will be conducted.
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The Therapeutic
Goods Act 1989 (the Act) requires that medical products, including pharmaceuticals, imported into, supplied in, or exported from
Australia be included in the Australian Register of Therapeutic Goods (“ARTG”). In order to obtain registration of the
product on the ARTG:
● Sponsors
must provide a product application containing adequate nonclinical data as well as data from adequate and well-controlled clinical trials
that demonstrate the safety and efficacy of the therapeutic product;
● Sponsors
also must provide information demonstrating that the manufacture and quality of the therapeutic product complies with the principles
of cGMP;
● TGA
then evaluates the application data, taking into account recommendations from an advisory committee, such as the Advisory Committee on
Medicines, which makes recommendations to the TGA as to whether or not to grant approval to include the therapeutic product in the ARTG;
and
● TGA
must decide to include the therapeutic product on the ARTG.
Employees
As
of March 28, 2022, we employed a total of 4 full-time employees, 1 employee consultant, and 1 part-time employee. We are not a party
to any collective bargaining agreements. We believe that we maintain good relations with our employees.
Our
Corporate Information
We
were incorporated as a Nevada corporation on May 16, 2017. Our principal executive offices are located at 1 Rockefeller Plaza, Suite
1039, New York, New York 10020 and our telephone number is (646) 756-2997.
Available
Information
Our
website address is www.hoththerapeutics.com. The contents of, or information accessible through, our website are not part of this
Annual Report on Form 10-K, and our website address is included in this document as an inactive textual reference only. We make our filings
with the U.S. Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, available free of charge on our website as soon as reasonably
practicable after we file such reports with, or furnish such reports to, the SEC. The public may read and copy the materials we file
with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on
the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an internet site that
contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov.
The information contained in the SEC’s website is not intended to be a part of this filing.