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 (HT-001); (ii) a treatment for mast-cell derived cancers
and anaphylaxis (HT-KIT); (iii) a treatment for traumatic brain injury and ischemic stroke (HT-TBI); and (iv) a treatment and/or prevention
for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ). We also have assets being developed for (i) atopic dermatitis (also
known as eczema) (BioLexa); (ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment
for acne as well as inflammatory bowel diseases (HT-003). In addition, we are continuing to evaluate a novel peptide that may be used
to slow the transmission of SARS-CoV-2 (HT-002). We are also developing a diagnostic device via a mobile device. Furthermore, we have
interests in certain other assets being developed by third parties including a treatment for patients with lupus that is being developed
by Zylö Therapeutics, Inc. and potential product candidates being developed pursuant to our agreement with Voltron Therapeutics,
Inc. for the prevention of COVID-19.
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 seek approval for 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 November 2022, we submitted
an IND to the FDA with respect to HT-001 as a concomitant therapy with EGFR inhibitors, for a Phase 2a clinical trial in humans. 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 CLEER-001 Phase 2a clinical
trial in the United States. We received FDA approval to proceed with our clinical study on December 28, 2022.
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.
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HT-KIT
We have obtained from North Carolina State University
(“NC State”) 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 November 15, 2021, we entered into a sponsored
research agreement with NC State to focus on characterizing the HT-KIT dose and dosing frequency for treatment of aggressive mastocytosis
and mast cell neoplasms using humanized tumor mouse models.
In December 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 such ODD. 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
In February 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, and in February 2022, we filed a Patent Cooperation
Treaty patent application, receiving confirmation of such filing on April 4, 2022 .
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
Washington University in St. Louis 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 after positive initial preclinical
results, a chronic dosing study in mice was initiated. We expect preclinical results from the chronic dosing study in 2023.
HT-TBI
In October 2022, 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 traumatic brain injury and ischemic stroke. We intend to develop HT-ALZ for use in patients following the Section 505(b)(2) regulatory
pathway of the FDA rules pursuant to which 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.
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HT-TBI injection is being
developed as a ready-to-inject autoinjector for intramuscular injection to be used in both traumatic brain injuries and ischemic stroke.
The same dose and formulation can be used across both TBI and stroke indications in age two years through adult. Our focus of development
is for point-of-care use in ambulatory and emergency room settings. HT-TBI’s active ingredient targets substance P/NK-1 pathway,
identified as a leading cause of post-brain injury inflammation and edema. Preclinical data has shown an NK-1 Antagonist significantly
reduces brain edema and blood brain barrier disruption post-TBI and post-stroke.
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. We intend to develop the BioLexa Platform for use in patients following the Section 505(b)(2) regulatory pathway of the
FDA rules. Proceeding under this regulatory pathway, we will be able to rely upon publicly available data with respect to gentamicin and
the zinc chelator in our NDA submission to the FDA for marketing approval.
In December 2020, we received approval from the Belberry Human Research
Ethics Committee in Australia to conduct our Phase 1b clinical trial of BioLexa, and we have engaged Novotech (Australia) Pty Limited
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 1b of the trial was initiated
in 2021 and final dosing of patients concluded in September 2022. At this time, we do not anticipate conducting any further trials/studies
in Australia.
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.
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.
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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.
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.
Preclinical proof-of-concept studies were conducted in 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 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.
In December 2019, we entered a sponsored research
agreement with NC State for proof of principle in targeting allergic inflammation in the airways. 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 initiated in 2022 and was completed in 2023.
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.
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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 were 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.
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. (“Voltron”) 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.
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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.
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,
one European application 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.
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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.
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.
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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.
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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.
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 had
authorized COVID-19 diagnostic tests under its Emergency Use Authorization (“EUA”) authority; however, on January 31, 2023, President Biden issued a Statement
of Administration Policy indicating that the administration intends for the COVID-19 national emergency and public health emergency to
end on May 11, 2023. When the public health emergency ends, the FDA will continue to have the authority to issue EUAs until that authority
is formally terminated by the Secretary of HHS through a separate process. 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.
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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.
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.
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●
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.
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.
Employees
As of March 17, 2023, we employed a total of 2
full-time employees, 3 employee consultants, 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 and History
We
were incorporated as a Nevada corporation on May 16, 2017. On October 20, 2022, we filed a Certificate
of Change with the Nevada Secretary of State to effectuate a 1-for-25 reverse stock split of our issued and outstanding and authorized
shares of common stock. The reverse stock split became effective on October 26, 2022. All share data, per share data and related
information contained in this Annual Report on Form 10-K has been retrospectively adjusted to reflect the effect of the reverse stock
split. On November 2, 2022, we filed a
Certificate of Designation of the Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State
of the State of Nevada to create a new class of Series B Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”),
designating 2,000,000 shares of our authorized preferred stock as Series B Preferred Stock. On
November 2, 2022, we also entered into a Subscription and Investment Representation Agreement
with an investor pursuant to which we issued and sold 2,000,000 shares of our newly designated Series B Preferred Stock to such investor
for an aggregate purchase price of $1,000. The Series B Preferred Stock were not entitled to receive dividends or any other distributions.
The Series B Preferred Stock were entitled to ten votes per share and voted together with the issued and outstanding shares of our common
stock as a single class exclusively with respect to the Authorized Stock Increase (as defined in the Certificate of Designation). The
Series B Preferred Stock had no rights as to any distribution or assets of our Company upon a liquidation, bankruptcy, reorganization,
merger, acquisition, sale, dissolution or winding up of our Company. The 2,000,000 outstanding shares of Series B Preferred Stock were
redeemed for an aggregate price of $10 on December 13, 2022 in connection with the filing of the Amendment (as defined herein) with the
Secretary of State of the State of Nevada. Pursuant to the Certificate of Designation, the shares of Series B Preferred Stock redeemed
by us were automatically retired and restored to the status of an authorized but unissued share of preferred stock.
On December
13, 2022, we filed a Certificate of Amendment (the “Amendment”) to our Articles of Incorporation, as amended, to increase
our authorized shares of common stock from 3,000,000 shares to 50,000,000 shares.
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.
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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.