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Item 1. Business

2022-03-10 compared with 2021-03-12 · 446 added, 366 removed, 301 unchanged (73% of the section changed)

We are a clinical-stage biopharmaceutical company leveraging our ImmTOR ™ immune tolerance platform with the goals of amplifying the efficacy of biologics, including enabling the re-dosing of life-saving gene therapies, and restoring self-tolerance in autoimmune diseases.

Our ImmTOR platform encapsulates rapamycin, also known as sirolimus, an immunomodulator, in biodegradable nanoparticles and is designed to induce antigen-specific immune tolerance.

The ImmTOR platform has the potential to mitigate the formation of anti-drug antibodies, or ADAs, against biologic drugs and restore self-tolerance to auto-antigens in autoimmune diseases.

We are a clinical-stage biopharmaceutical company.

Our ImmTOR® platform encapsulates rapamycin, also known as sirolimus, an FDA approved immunomodulator, in biodegradable nanoparticles ImmTOR is designed to induce antigen-specific immune tolerance.

By combining ImmTOR with antigens of interest, our precision immune tolerance platform has the potential to restore self-tolerance to auto-antigens in autoimmune diseases, amplify the efficacy of biologics (including gene therapies) and mitigate the formation of anti-drug antibodies, or ADAs, against biologic drugs.

ADAs can start developing in the body with the first dose of a biologic therapy and can render subsequent doses ineffective or unsafe, potentially depriving patients of life-saving therapeutic options and limiting the likelihood of success for many otherwise promising novel biologic drugs and technologies.

Additionally, we believe, based on preclinical data, that ImmTOR combined with adeno-associated virus, or AAV, gene therapy has the potential to increase transgene expression and to prevent undesired immune responses to the AAV capsid and the transgene product that can occur with the first dose of gene therapy.

We believe ImmTOR has the potential to enhance the efficacy without compromising the safety of biologic therapies, improve product candidates under development, and enable novel therapeutic modalities.

We have developed a portfolio of proprietary and collaboration-driven applications of ImmTOR, and we plan to continue to develop proprietary compounds and pursue collaboration-driven development in certain disease areas, which could include strategic collaborations, out-licensing, and in-licensing transactions.

We continually seek to enhance ImmTOR.

In recent preclinical studies we have conducted, we have observed that ImmTOR may have synergistic activity with interleukin-2, or IL-2, molecules that have been engineered to be selective for regulatory T cells, or Tregs.

Treg-selective IL-2 mutant molecules, or IL-2 muteins, have been shown to transiently expand all pre-existing Tregs in preclinical studies conducted by others.

We have observed in preclinical studies that the combination of ImmTOR, a Treg-selective IL-2 mutein and an antigen elicited an approximately three-fold increase in antigen-specific Tregs beyond ImmTOR alone with evidence of enhanced durability of immune tolerance and the potential for ImmTOR dose sparing.

This combination of ImmTOR with a Treg selective IL-2 molecule represents an evolution of the ImmTOR platform, which we call ImmTOR-IL ™ .

We believe this combination has the potential to be a best-in-class therapy in diseases where expansion of total Tregs may prove beneficial.

We believe ImmTOR and ImmTOR-IL have the potential to enhance both the efficacy and safety of biologic therapies (including gene therapies), improve product candidates under development, and enable novel therapeutic modalities in autoimmune disease.

In clinical trials, ImmTOR has been observed to inhibit the formation of neutralizing antibodies to adeno-associated virus (AAV) capsids, potentially enabling re-dosing of gene therapies.

Additionally, based on preclinical data in AAV gene therapies, we believe that ImmTOR has the potential to improve efficacy and safety by increasing transgene expression, reducing hepatic inflammation and inhibiting undesired immune responses to both the AAV capsid and the transgene product that can occur with the first dose of gene therapy.

In biologic therapies, clinical activity of ImmTOR in humans has been observed with pegadricase, a highly immunogenic pegylated uricase enzyme being developed for the treatment of patients with chronic refractory gout to conventional therapy.

The combination of ImmTOR and pegadricase is currently being evaluated in a Phase 3 clinical trial that we are conducting on behalf of our partner Swedish Orphan Biovitrum AB, or Sobi.

We intend to pursue development of therapies for autoimmune diseases where expansion of either all Tregs or antigen-specific Tregs has been shown to, or we believe is, likely to have a beneficial effect.

We believe that ImmTOR and ImmTOR-IL have the potential to unlock antigen-specific therapies for autoimmune diseases and that ImmTOR-IL can further improve the efficacy and safety profile of biologic therapies beyond ImmTOR alone.

We have developed a portfolio of wholly owned and partnered candidates across gene therapies, biologic therapies and tolerogenic therapies for autoimmune diseases that leverage our ImmTOR platform.

We plan to continue to develop proprietary compounds and pursue collaboration-driven development in certain disease areas, which could include strategic collaborations, out-licensing, and in-licensing transactions.

Our ImmTOR Platform

ImmTOR consists of our biodegradable nanoparticles encapsulating the immunomodulator rapamycin.

Rapamycin is the active ingredient of Rapamune, an immunosuppressant which has extensive prior use in humans and is currently FDA-approved as a prophylaxis of organ rejection in kidney transplant patients aged 13 or older.

Poly(D,L-lactide), or PLA is part of the broader poly(lactic-co-glycolic acid), or PLGA, family of biodegradable polymers that have more than 30 years of commercial use and are formulation components in a number of approved products.

ImmTOR consists of biodegradable nanoparticles encapsulating the immunomodulator rapamycin.

Rapamycin is the active ingredient of Rapamune, an immunosuppressant that has been used extensively in humans and is currently FDA-approved as a prophylaxis of organ rejection in kidney transplant patients aged 13 or older.

The rapamycin component of ImmTOR is embedded in a matrix of synthetic polymers called poly(D,L-lactide), or PLA, and poly(D,L-lactide)-block-poly(ethylene-glycol), or PLA-PEG.

PLA is part of the broader poly(lactic-co-glycolic acid), or PLGA, family of biodegradable polymers that have more than 30 years of commercial use and are formulation components in a number of approved products.

Polyethylene glycol, or PEG, has been widely studied in clinical trials and is also a formulation component in many approved biologic products.

Our nanoparticles are designed to remain intact after injection into the body and accumulate predominantly in lymph nodes, the spleen, and the liver, where the immune response is coordinated.

Our nanoparticles are designed to remain intact after injection into the body and accumulate predominantly in lymph nodes, the spleen, and the liver, where immune responses are coordinated.

The nanoparticles are designed to be processed by specialized immune cells, such as dendritic cells and other antigen-presenting cells, that initiate and regulate immune responses.

ImmTOR is intended to induce a tolerogenic phenotype in these antigen-presenting cells, which then process and present co-administered antigen in a manner that results in the induction of antigen-specific regulatory T cells.

To mitigate the formation of ADAs and induce immune tolerance in the body, we administer our ImmTOR with an antigen, such as a therapeutic enzyme, a viral vector in the case of our gene therapy program, or an auto-antigen, which is depicted in the figure below.

Co-administration of ImmTOR with an auto-antigen, viral vector, or therapeutic enzyme.

In the case of a biologic drug, ImmTOR is designed to be administered in conjunction with such biologic drug to mitigate the formation of ADAs without requiring the alteration of the drug or its dose regimen.

As a result, we believe ImmTOR may provide us with significant opportunities in the areas of immune tolerance and ADA prevention because ImmTOR is designed

so that it can be co-administered at the beginning of therapy with many different biologic drugs, including enzymes and viral vectors.

Importantly, we believe each pairing of ImmTOR with a biologic drug also offers us the opportunity to pursue a distinct proprietary product candidate, which we believe has the potential to be separately patented, approved and marketed.

ImmTOR is intended to induce a tolerogenic phenotype in these antigen-presenting cells, which then process and present co-administered antigens in a manner that results in the induction of antigen-specific regulatory T cells.

To mitigate unwanted immune responses by inducing precision immune tolerance in the body, we administer our ImmTOR with the desired antigen, such as an auto-antigen in the case of an autoimmune disease, a viral vector in the case of our gene therapy program, or a therapeutic enzyme, as depicted in the figure below.

In the case of a biologic drug, ImmTOR is designed to be administered in conjunction with such biologic drugs to mitigate the formation of ADAs without requiring the alteration of the drug or its dose regimen.

As a result, we believe ImmTOR may provide us with significant opportunities to co-administer ImmTOR with a variety of biologic drugs, including therapeutic enzymes and gene therapies.

We believe each pairing of ImmTOR with a biologic drug also offers us the opportunity to pursue distinct proprietary product candidates, which we believe have the potential to be separately patented, approved and marketed.

ImmTOR is manufactured in facilities subject to current good manufacturing practice, or cGMP, requirements using well-defined commercial operations, which, we believe, further enhances the scalability of our tolerance programs.

During preclinical studies, we observed that delivering an antigen together with ImmTOR provided the appropriate signals in vivo to induce regulatory T cells, which, in turn, inhibited effector immune responses, such as the formation of ADAs.

In our preclinical studies, we observed that ImmTOR labeled with a fluorescent dye selectively accumulated in lymphoid organs where it was processed by antigen-presenting cells.

The figure below depicts a model of how ImmTOR would be taken up by a dendritic cell in the spleen.

We believe that both the biologic drug and ImmTOR are taken up and processed by dendritic cells and other antigen presenting cells in a manner that may induce regulatory T cells, which can potentially block the activation of helper T cells, mitigating the formation of ADAs.

ImmTOR and Antigen/Biologic Drug Presentation and Related Immune Tolerance Induction

ImmTOR leverages nanoparticle technology to target rapamycin, an approved immunomodulatory drug, to antigen presenting cells to generate antigen-specific immune tolerance when combined with the antigen of interest.

We believe our ImmTOR platform has a broad range of potential applications.

• Enzyme therapies .

Enzyme therapies are a frequently used class of biologic drugs to treat rare diseases.

Through our analysis of biologic drugs, including our preclinical studies, we have observed that enzymes are especially prone to undesired immune responses.

Our product candidate, SEL-212, which is currently in Phase 3 clinical development includes pegadricase, a pegylated uricase enzyme, which is an example of a highly immunogenic enzyme for which we are applying ImmTOR with the intention of improving the enzyme’s efficacy and safety.

We are also combining ImmTOR with an IgA protease for the treatment of IgA nephropathy.

We intend to seek, if appropriate, licenses to other enzymes that we would evaluate in combination with ImmTOR.

In preclinical studies, we observed that delivering an antigen together with ImmTOR provided the appropriate signals in vivo to induce regulatory T cells, which, in turn, inhibited effector immune responses, such as the formation of ADAs.

In additional preclinical studies, we observed that ImmTOR labeled with a fluorescent dye selectively accumulated in the spleen and the liver following intravenous dosing, where it was processed by antigen-presenting cells, such as dendritic cells.

The figure below depicts a model of how we believe ImmTOR would be taken up by a dendritic cell in the spleen.

We believe that both the biologic drug and ImmTOR are taken up and processed by dendritic cells and other antigen presenting cells in a manner that may result in the activation of antigen-specific regulatory T cells, which can potentially block the activation of helper T cells, thus mitigating the formation of ADAs.

We look for ways to enhance our ImmTOR platform.

Recent preclinical data generated by our scientific teams suggest that ImmTOR may have profound synergistic activity with engineered IL-2 molecules that are selective for Tregs.

The IL-2 pathway influences critical aspects of both immune stimulation and immune regulation.

Tregs express a high affinity form of the IL-2 receptor.

Low doses of IL-2 have been shown by others to selectively activate Tregs resulting in expansion of pre-existing Tregs.

Clinical trials of low dose IL-2 have generated evidence of efficacy in autoimmune diseases, such as systemic lupus erythematosus.

Other investigators have shown that IL-2 can be engineered to selectively bind to the high affinity IL-2 receptor and expand pre-existing Tregs.

In our preclinical studies, we observed that ImmTOR combined with a Treg-selective IL-2 mutant protein, or IL-2 mutein, exhibited substantial synergistic activity in increasing the percentage and durability of total Treg expansion in the spleen.

We believe that this combination has the potential to be a best-in-class therapy in diseases where expansion of total Treg may prove beneficial.

The tables below show the synergistic expansion of total Treg we observed with treatment with ImmTOR and a Treg-selective IL-2 mutein.

In the study, seven C57BL/6 mice per group were untreated, treated with ImmTOR alone, treated with IL-2 mutein alone or treated with a combination of ImmTOR and IL-2 mutein.

Expansion of CD4+, CD25+ and FoxP3+ T regulatory cells in the spleen was assessed at four, seven and 14 days after treatment.

We believe that the power of ImmTOR is the ability to induce antigen-specific Treg to co-administered antigens.

The ability to induce antigen-specific Treg may be beneficial in autoimmune diseases where the auto-antigens are well characterized.

We believe the combination of a Treg-selective IL-2 with ImmTOR and an antigen has the potential to induce and/or expand antigen specific Treg.

The image below illustrates the possibility that the combination of a Treg-selective IL-2 with ImmTOR plus an antigen could give rise to the induction and/or expansion of an antigen-specific Treg.

In a preclinical study, we evaluated the potential of a Treg-selective IL-2 to further expand antigen-specific Treg when combined with ImmTOR and an antigen.

In this preclinical study, transgenic T cells expressing a T cell receptor specific for the antigen ovalbumin were adoptively transferred into wildtype mice.

The next day, the mice were treated, left untreated or treated with ovalbumin or various combinations of ovalbumin with ImmTOR and/or IL-2 mutein.

When total Treg were evaluated, we observed no increase an expansion of total Treg by IL-2 mutein + ovalbumin with a further increase in animals treated with ovalbumin + IL-2 mutein + ImmTOR.

As we had expected, ImmTOR + ovalbumin alone did not increase total Treg.

However, when ovalbumin-specific Treg were evaluated, we observed a significant increase in antigen-specific Treg in animals treated with the combination of ovalbumin + ImmTOR + IL-2 mutein.

Animals treated with only ImmTOR + ovalbumin also were observed to have an increase in ovalbumin-specific Tregs but at levels that were approximately three-fold lower than those in the former group.

The following graphs show expansion of antigen-specific Treg in mice treated with ImmTOR plus IL-2 mutein plus ovalbumin antigen.

Immune homeostasis is a dynamic process balancing immune stimulatory and immune tolerizing signals.

This balance is thought to be mediated in part by the ratio of antigen-specific Treg to antigen-specific effector T cells.

The expansion of antigen-specific Tregs has the potential to better withstand potent immune stimulatory signals and provide better durability of immune tolerance.

In a preclinical study, we evaluated the ability of ImmTOR and IL-2 mutein to mitigate the immunogenicity to a co-administered AAV vector.

Mice were injected with a dose of 2.7E12 vg/kg AAV8 on Day 0 and 5.0E12 vg/kg on Day 56 with or without IL-2 mutein and/or ImmTOR on the same days.

Mice treated with AAV alone showed a robust antibody response to the AAV capsid, as we had expected.

Co-treatment with IL-2 mutein on Days 0 and 56 showed a modest attenuation of the antibody response.

Co-treatment with ImmTOR on Days 0 and 56 showed a dose-responsive effect on the antibody response, with a therapeutic dose of 200 µg ImmTOR providing inhibition of antibodies against AAV through at least Day 75, or 19 days after the second dose.

At Day 91, some animals showed breakthrough of the antibody response.

ImmTOR doses of 50 and 100 µg alone were sub-optimal.

However, when ImmTOR was combined with IL-2 mutein, we observed inhibition of antibody formation through Day 117, 61 days after the second dose and the last time point measured.

Importantly full inhibition of anti-AAV immunoglobulin G, or IgG, antibodies was observed even when IL-2 mutein was combined with 50 and 100 µg doses of ImmTOR.

We believe these results suggest that the addition of a Treg-selective IL-2 to ImmTOR has the potential to increase the durability of tolerance allow for dose-sparing of ImmTOR and thus, potentially enabling chronic dosing of ImmTOR-IL in the treatment of autoimmune disease.

The following graphs illustrate the combination of ImmTOR and IL-2 mutein mitigated the formation of anti-AAV antibodies.

Product Candidates

Our ImmTOR platform has a broad range of potential applications.

Our product development strategy is built on the following three distinct pillars.

Biologic therapies .

Biologic therapies are a class of biologic drugs frequently used to treat rare diseases.

Through our analysis of biologic drugs, including in our preclinical studies, we have observed that enzymes foreign to the human body, such as enzymes derived from microbes or replacement enzymes in the case of patients that are deficient in the specific enzyme, are especially prone to causing undesired immune responses.

Our partnered product candidate, SEL-212, which is currently in Phase 3 clinical development, consists of ImmTOR co-administered with pegadricase, a pegylated uricase enzyme of fungal origin.

This is an example of an immunogenic enzyme that we are combining with ImmTOR with the intention of improving the enzyme’s efficacy and safety.

We believe that ImmTOR has the potential to enable and expand the use of enzymes derived from microbial sources, such as bacterial immunoglobulin A, or IgA, protease for the treatment of IgA nephropathy and bacterial IgG protease, or Xork, for the treatment of IgG-mediated autoimmune disease flares.

Additionally, we believe advances in protein engineering may lead to innovative therapeutic enzymes with improved pharmaceutical properties or entirely novel specificity and/or activity, but which may be recognized as foreign by the immune system.

We are partnering with Ginkgo Bioworks, or Ginkgo, to design novel enzymes and proteins with transformative therapeutic potential which can be paired with ImmTOR to advance treatments for orphan and rare diseases.

We intend to seek, if appropriate, licenses to other enzymes to evaluate in combination with ImmTOR.

Gene therapies .

We believe gene therapies have the potential to address key unmet medical needs for many rare genetic diseases, but undesired immune responses to the viral vectors used for gene replacement, augmentation and editing may be restricting their broader use.

AAV immunogenicity and AAV toxicity represent two major challenges for the gene therapy field;

in many cases these two issues are inextricably linked.

Immunogenicity of AAV vectors is thought to cause or exacerbate many of the adverse events associated with AAV gene therapy.

Induction of acute inflammation and capsid-specific CD8 T cells by AAV gene therapy is thought to contribute to observations of hepatotoxicity, which has been associated with loss of transgene expression.

The formation of neutralizing antibodies against AAV after initial treatment with AAV mediated gene therapies effectively prevents the possibility of re-dosing in patients who may benefit from additional doses due to either the failure to achieve therapeutic benefit or loss of transgene expression over time.

We have observed that ImmTOR, when used in combination with AAV gene therapy vectors, inhibited the immune response to the viral vector and enabled successful re-dosing in both mice and non-human primates.

Currently, the ability to re-administer systemic AAV gene therapy is limited by the development of neutralizing antibodies.

The ability to safely re-dose AAV may help achieve therapeutic benefit in patients who are under-dosed;

it may also help restore transgene expression in patients, particularly pediatric patients, who may lose expression over time as they grow.

In a study conducted in non-human primates, or NHP, we observed that co-administration of AAV vector and ImmTOR resulted in higher and more durable transgene expression after the first dose of gene therapy as well as robust inhibition of anti-AAV8 immunoglobulin G, or IgG and neutralizing antibodies.

We believe the observation that co-administration of AAV vector and ImmTOR can lead to higher transgene expression illustrates the potential for dosing lower levels of AAV gene therapies when combined with ImmTOR.

Integrating ImmTOR into a gene therapy protocol has the potential to provide a first dose benefit by enhancing liver-directed transgene expression and durability, as well as the potential to enable re-dosing to restore or augment transgene expression.

We have observed in preclinical studies that ImmTOR may also have hepatoprotective effects in mouse models of inflammation.

As hepatotoxicity is associated with higher vector doses, one potential strategy that we are pursuing is to use ImmTOR to enable multiple lower doses of AAV vectors to mitigate toxicity risks associated with high vector

We are concurrently working with our partner Ginkgo to develop a proprietary AAV capsid with improved transduction for liver-directed gene therapy.

The below illustration depicts the potential benefits of ImmTOR in systemic AAV gene therapy.

We recently completed a human proof-of-concept trial (SEL-399) in healthy volunteers who were treated with an empty AAV8 capsid (EMC-101), which is an AAV capsid containing no transgene, alone or in combination with ImmTOR.

This clinical trial was conducted in Belgium in partnership with Asklepios BioPharmaceutical, Inc., or AskBio (a Bayer AG subsidiary).

The goal of the SEL-399 clinical trial was to evaluate the appropriate dose of ImmTOR in humans to mitigate the formation of antibodies to AAV capsids used in gene therapies.

Top-line results indicated that AAV8 empty capsids elicited peak median anti-AA8 neutralizing antibody, or NAb, titers of 1:6875.

Median day 30 NAb titers were reduced to titers of 1:25 and 1:5 in the 0.15 mg/kg and 0.3 mg/kg ImmTOR cohorts, respectively, representing a 50-fold and 250-fold difference, respectively, compared to the median of control subjects dosed with AAV8 empty capsid alone, as depicted in the figure below.

Further, we observed that at Day 30, six of six, or 100%, of subjects that received 0.3 mg/kg exhibited NAb titers of 1:25 or less, and four of six, or 67%, of those subjects at this dose exhibited NAb titers of 1:5 or less.

We observed at Day 30 that six of nine, or 67%, of subjects that received 0.15 mg/kg of ImmTOR exhibited NAb titers of 1:25 or less, and two of nine, or 22%, of subjects at this dose had a titer of 1:5 or less.

At Day 90, two of six subjects in the 0.3 mg/kg cohort were observed to have sustained control of neutralizing antibodies with titers of 1:25 or less.

Consistent with preclinical data, we observed that the single dose ImmTOR cohorts showed delayed formation of neutralizing antibodies which eventually reached similar median levels of neutralizing antibodies to the control group by Day 90.

Similar data were observed in NHP receiving a single dose of ImmTOR with an AAV gene therapy vector in a preclinical study.

Importantly, we observed that two additional doses of ImmTOR, or a total of three monthly doses, provided durable inhibition of neutralizing antibodies in NHP.

Although we could not evaluate three-monthly doses of ImmTOR in healthy volunteers, we intend to employ a three-monthly dose regimen in clinical trials performed in patients.

ImmTOR showed safety results consistent with prior human studies and was generally well tolerated.

No serious adverse events were reported.

The most common treatment-related adverse events included mild-to-moderate stomatitis and rash.

We believe this promising trial in healthy volunteers provides support for the potential use of ImmTOR for the inhibition of neutralizing antibodies to AAV8 in gene therapy clinical trials.

The following graphs depict the effect of ImmTOR on the formation of neutralizing antibodies to AAV8 capsid in humans and NHP.

Finally, pre-existing neutralizing antibodies, which develop as a result of prior infection with wildtype AAV, are a major exclusion factor in clinical trials causing many potential patients to be ineligible for gene therapy.

We have licensed a bacterial IgG protease, or Xork, from Genovis AB (publ.), or Genovis.

IgG proteases have been shown by others to transiently cleave IgG and enable dosing of AAV vectors in the presence of pre-existing antibodies in NHP.

However, IgG proteases, being of bacterial origin, are themselves immunogenic.

The most commonly studied IgG protease, called IdeS or imlifidase, is derived from Streptococcus pyogenes, a common human pathogen.

Most healthy individuals have been exposed to S.

pyogenes and have pre-existing antibodies against IdeS.

We believe that Xork is a differentiated product candidate, as it is derived from a Streptoccocal species that does not infect humans and so the enzyme shows very low cross reactivity to naturally existing antibodies in most human serum.

We plan to develop Xork with the intention of enabling access to AAV gene therapy for those patients who are currently excluded due to pre-existing anti-AAV antibodies.

Through our analysis of genetic diseases, we have identified applications and patient segments that we believe would benefit from our ImmTOR platform.

We intend to develop ImmTOR-enabled non-immunogenic gene therapy candidates which are designed to be utilized with AAV, vectors (e.g., AAV8, AAV5).

We believe our product candidates have the potential to increase transgene expression and to prevent undesired immune responses to the vector and transgene product that can occur with the first dose of gene therapy by

using our ImmTOR platform.

Our initial area of focus is on genetic metabolic diseases but may also include lysosomal storage diseases and genetic muscular diseases.

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We have engaged third parties with experience in gene therapy and rare diseases to support the development of our proprietary products.

We also have licensed our ImmTOR platform to Asklepios BioPharmaceutical, Inc., or AskBio, Sarepta Therapeutics, Inc., or Sarepta, and Spark Therapeutics, Inc., or Spark, for certain pre-specified targets.

• Restoring self-tolerance to auto-antigens:

We believe that ImmTOR has the potential to restore self-tolerance to autoimmune diseases.

We also have licensed our ImmTOR platform to AskBio, Sarepta Therapeutics, Inc., or Sarepta, and Takeda Pharmaceuticals USA, Inc., or Takeda, for certain pre-specified targets.

Tolerogenic Therapies for Autoimmune Disease :

Autoimmune diseases are caused by a breakdown in natural tolerance to our own self-antigens.

With over 24 million Americans afflicted with autoimmune diseases, there is a large unmet medical need.

As the ImmTOR platform is designed to induce or expand antigen specific T regulatory cells, we believe the ImmTOR platform has the potential to treat autoimmune diseases by restoring self-tolerance to auto-antigens.

Recent preclinical data generated by our scientific team suggest that ImmTOR may have profound synergistic activity with engineered IL-2 molecules that are selective for Tregs.

The IL-2 pathway influences critical aspects of both immune stimulation and immune regulation.

Tregs express a high affinity form of the IL-2 receptor.

Low doses of IL-2 have been shown by others to selectively activate Tregs resulting in expansion of pre-existing Tregs.

Clinical trials of

low dose IL-2 have shown evidence of efficacy in small clinical trials of autoimmune diseases, such as systemic lupus erythematosus.

Other investigators have shown that IL-2 can be engineered to selectively bind the high affinity IL-2 receptor and expand pre-existing Tregs.

We believe that this combination has the potential to be a best-in-class therapy in diseases where expansion of total Treg may prove beneficial.

Furthermore, in our preclinical studies, when we combined ImmTOR-IL with an antigen, we measured an approximately three-fold increase in antigen-specific T regulatory cells vs ImmTOR alone.

Our first program in autoimmune diseases is in primary biliary cholangitis, or PBC.

PBC has a significant unmet medical need and a well-defined target antigen, known as PDC-E2.

• Other products and product candidates affected by undesired immune responses.

We have generated preclinical data which we believe suggests a broad potential benefit of ImmTOR for immune tolerance.

For many biologic drugs, undesired immune responses limit efficacy and cause safety concerns.

We intend to strategically out-license ImmTOR for use with other products that are outside our focus to larger biopharmaceutical companies.

We believe our ImmTOR platform may also be of interest to biopharmaceutical companies with novel biologic development concepts or product candidates in clinical development that have demonstrated initial efficacy but are experiencing issues with safety or sustained efficacy due to inhibitory ADAs.

PBC has a significant unmet medical need and a well-defined target antigen.

Our Product Candidates

Below is a summary of our ongoing discovery, research, and development programs:

Program Phase of Development Next Steps Commercial Rights

Amplifying the Efficacy of Biologic Therapies (Enzyme Therapies)

SEL-212 (Chronic Refractory Gout) Phase 3 clinical trials (DISSOLVE I / DISSOLVE II) Complete enrollment 2H 2021;

top-line data 2H 2022 Sobi

IgA Nephropathy Preclinical IND filing 4Q 2021 Selecta

Amplifying the Efficacy of Biologic Therapies (Gene Therapies)

Methylmalonic Acidemia (MMA) Preclinical Commence phase 1/2 2Q 2021;

preliminary data 4Q 2021 Selecta and AskBio

Ornithine Transcarbamylase (OTC) Deficiency IND-enabling Clinical program expected to commence in 2022 Selecta

(Empty AAV Capsid+ImmTOR) Phase 1

Data expected in 4Q 2021 Selecta and AskBio

Pompe Disease Preclinical Plans to be announced by our collaborator AskBio

Duchenne Muscular Dystrophy (DMD) Preclinical Plans to be announced by our collaborator Sarepta

Limb-girdle Muscular Dystrophy Preclinical Plans to be announced by our collaborator Sarepta

Restoring Self-Tolerance in Autoimmune Diseases

Primary Biliary Cholangitis Preclinical IND filing expected in 2022 Selecta

Amplifying the Efficacy of Biologics:

Enzyme Therapy – Chronic Refractory Gout

SEL-212 is designed to be a monthly treatment for chronic refractory gout, a debilitating rare disease with an unmet medical need.

SEL-212 consists of a combination of our ImmTOR platform co-administered with pegadricase.

Pegadricase is an investigational recombinant pegylated uricase (urate oxidase), an enzyme not naturally found in humans, and is therefore highly immunogenic.

This enzyme is designed to treat patients with symptomatic gout, refractory to standard uric acid lowering treatment, by breaking down the excess uric acid to the more soluble allantoin.

In preclinical studies, we observed that ImmTOR, when co-administered with pegadricase, induced antigen-specific immune tolerance to pegadricase and substantially reduced the formation of associated ADAs.

Based on our clinical data, we believe that SEL-212 has the potential to control serum uric acid, or SUA levels and mitigate the formation of ADAs in response to the therapeutic enzyme.

Additionally, we believe that SEL-212 serves as proof of concept for the ImmTOR platform in ameliorating the unwanted immune response to an immunogenic biologic.

SEL-212 is in two pivotal Phase 3 studies versus placebo, which we refer to as DISSOLVE I and DISSOLVE II, and with topline data expected in the second half of 2022.

SEL-212 has been licensed (except as to Greater China) to Swedish Orphan Biovitrum AB, or Sobi, pursuant to our license and development agreement dated June 11, 2020 with Sobi, or the Sobi License.

Program Phase of Development Anticipated Next Steps Commercial Rights

Biologic Therapies

(Chronic Refractory Gout) Phase 3 clinical trials

(DISSOLVE I / DISSOLVE II) Top-line data Q4 2022

IgA nephropathy Preclinical IND enabling studies, 2022 Selecta

Gene Therapies

Methylmalonic acidemia (MMA) IND filed / Phase 1 IND approval and study commencement, 2022 Selecta

Ornithine Transcarbamylase (OTC) Deficiency IND-enabling Currently paused Selecta

IgG protease (Xork) Preclinical IND enabling studies, 2022 Selecta

Pompe disease Preclinical Plans to be announced

by our collaborator AskBio

Duchenne muscular dystrophy (DMD) Preclinical Plans to be announced

by our collaborator Sarepta

Limb-girdle muscular dystrophy (LGMD) Preclinical Plans to be announced

by our collaborator Sarepta

Two indications for lysosomal storage disorders Preclinical Plans to be announced

by our collaborator Takeda

Tolerogenic Therapies for Autoimmune Disease

Proprietary IL-2

receptor agonist Preclinical Selecta

Primary biliary cholangitis (PBC) Preclinical Selecta

Biologic Therapies – Chronic Refractory Gout

SEL-212 consists of ImmTOR co-administered with pegadricase.

Our pegadricase consists of a yeast-derived uricase modified with PEG.

Uricase is an enzyme endogenous to all mammals, except for humans and certain primates, which converts uric acid to the more soluble metabolite, allantoin.

There is a natural limit to the amount of uric acid that can be excreted by the kidneys, which decreases with age and can be reduced by some medications.

By converting uric acid to allantoin, uricase provides an additional way for the body to reduce uric acid.

Pegadricase is designed for the treatment of patients with chronic gout, refractory to standard uric acid lowering treatment, by breaking down the excess serum uric acid, or sUA, to the more soluble allantoin.

However, the immune response to

pegadricase limits administration to a single dose which is effective for less than one month.

The addition of ImmTOR to pegadricase (SEL-212) allows multiple monthly doses to be administered, thus reducing uric acid for a prolonged time.

In preclinical studies and in our Phase 1b and Phase 2 clinical trials, we observed that ImmTOR, when co-administered with pegadricase, SEL-212 substantially reduced the formation of associated ADAs.

We believe that SEL-212 serves as proof of concept for the ImmTOR platform in ameliorating the unwanted immune response to an immunogenic biologic.

SEL-212 is in two pivotal Phase 3 studies versus placebo, which we refer to as DISSOLVE I and DISSOLVE II, with top-line data expected in the fourth quarter of 2022.

SEL-212 has been licensed (except as to Greater China) to Sobi, pursuant to our license and development agreement dated June 11, 2020, with Sobi, or the Sobi License.

Enrollment into the DISSOLVE II trial is ongoing and the study is being conducted in the United States and four countries across eastern Europe.

As a result of the ongoing and rapidly evolving geopolitical situation in Ukraine and Russia, we have proactively undertaken mitigation steps to prioritize the safety of our patients and investigators, as well as address any potential disruptions.

While we have temporarily closed screening and randomization at sites in both Russia and Ukraine, we have added 11 sites in the United States to further enrollment in DISSOLVE II.

Out of these additional enrollment sites, nine have been activated and two are pending initiation, with activation expected imminently.

Subject to ongoing geopolitical developments, we believe we remain on track to report data in the fourth quarter of 2022, and we will continue to work closely with our partner Sobi, clinical trial providers and regulatory authorities to evaluate any potential delays or adjustments to the timeline of the trial as a result of the circumstances.

The market for gout therapy

Gout, a painful and potentially disabling form of arthritis resulting from excess accumulation of uric acid and deposition of uric acid crystals in joints and soft tissues, including those of the kidney and heart, causing harmful inflammation, is caused by an overproduction of uric acid and/or an inability of the kidneys to excrete adequate amounts of uric acid from the body.

Gout is a painful and potentially disabling form of arthritis associated with elevation of sUA levels caused by an overproduction of uric acid and/or an inability of the kidneys to excrete adequate amounts of uric acid from the body.

High concentrations of sUA lead to formation of uric acid crystals in joints and tissues, causing pain, inflammation and joint damage, and increase the risk for other conditions, including cardiovascular, cardiometabolic, joint and kidney disease.

Patients who are unable to reduce their SUA levels below 6.0 mg/dL with oral drugs are diagnosed with refractory gout.

Patients who are unable to reduce their sUA levels below 6.0 mg/dL with oral drugs are defined as having refractory gout.

Chronic refractory gout constitutes a subset of gout patients exhibiting chronic high sUA levels and painful and damaging uric acid deposits.

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We believe SEL-212 may potentially address several key unmet needs in the treatment of chronic refractory gout:

the durable control of SUA levels, the elimination of painful and damaging uric acid deposits, reduction in incidence and severity of flares, based on our preclinical studies, clinical studies, and market research.

the durable control of sUA levels, the elimination of painful and damaging uric acid deposits, reduction in incidence and severity of flares, based on our preclinical studies, clinical trials, and market research.

SEL-212 is designed to address these unmet medical needs while improving the dosing regimen to a once-monthly treatment.

We announced the top-line data of our Phase 2 head-to-head clinical trial, which we refer to as the COMPARE trial, against pegloticase, which is marketed as KRYSTEXXA®, in September 2020.

SEL-212 showed a numerically higher response rate to pegloticase on the primary endpoint during months 3 and 6 combined, but did not meet the primary endpoint of statistical superiority.

SEL-212 did demonstrate a statistically significant higher response rate of SEL-212 during the third month of treatment, as well as a statistically significant greater overall reduction in mean SUA levels in SEL-212 versus pegloticase.

SEL-212 demonstrated a numerically higher response rate of SEL-212 during the sixth month of treatment.

In patients with tophi at baseline, SEL-212 demonstrated substantially higher responder rates for SEL-212 compared to pegloticase on the primary endpoint, and a statistically significant reduction in mean SUA when compared to pegloticase.

Approximately 41% of patients in the Phase 2 COMPARE trial had visible tophi at baseline.

SEL-212 showed favorable safety results and was well-tolerated;

there were no deaths during the study.

There were no notable differences in serious Treatment Emergent Adverse Events, or TEAEs, treatment-related serious TEAEs, or infusion reactions between the two groups.

A full analysis of safety signals, including gout flare incidence and severity, requires evaluation of the full data set and will be reported together with the full efficacy analysis in a manuscript in a medical journal.

We and Sobi commenced the Phase 3 DISSOLVE clinical program of SEL-212 in September 2020.

The Phase 3 clinical program consists of two double blinded, placebo-controlled trials of SEL-212, DISSOLVE I and DISSOLVE II.

Each trial is expected to enroll 105 patients, with 35 patients receiving 0.1 mg/kg of ImmTOR and 0.2 mg/kg of pegadricase, 35 patients receiving 0.15 mg/kg of ImmTOR and 0.2 mg/kg of pegadricase, and 35 patients receiving placebo.

DISSOLVE I and DISSOLVE II both have a 6-month primary endpoint with a 6-month safety extension for DISSOLVE I.

Topline data from the Phase 3 DISSOLVE clinical program is expected in the second half of 2022.

The Phase 3 DISSOLVE clinical program is being conducted by Selecta and funded by Sobi.

SEL-212 Components

SEL-212 consists of ImmTOR co-administered with pegadricase.

Our ImmTOR consists of nanoparticles composed of poly(D,L-lactide), or PLA, and poly(D,L-lactide)-block-poly(ethylene-glycol), or PLA-PEG, encapsulating rapamycin.

Our pegadricase consists of a uricase modified with poly(ethylene-glycol), or PEG.

Pegadricase is a pegylated version of the therapeutic enzyme uricase, which we have licensed from Shenyang Sunshine Pharmaceutical Co., Ltd., or 3SBio, exclusively for all markets, except Japan and Greater China, and exclusively for Japan only in combination with our ImmTOR platform.

Uricase is an enzyme endogenous to all mammals, except for humans and certain primates, which converts uric acid to the more soluble metabolite, allantoin.

There is a natural limit to the amount of uric acid

that can be excreted by the kidneys, which decreases with age and can be reduced by some medications.

By converting uric acid to allantoin, uricase provides an additional way for the body to reduce uric acid.

In our Phase 1/2 program, out of 19 patients dosed with the pegadricase alone, three patients were responders at week 4.

SEL-212 Clinical Development

Phase 1a and Phase 1b clinical trials

We conducted Phase 1a and Phase 1b clinical trials for SEL-212 at multiple sites in the United States.

The Phase 1a trial consisted of a single ascending-dose trial of pegadricase alone in 22 patients with elevated SUA levels greater than 6.0 mg/dL.

At the outset of the trial, each of five cohorts received a single intravenous infusion of pegadricase at ascending dose levels.

We monitored the patients during a 30-day period post-infusion.

We commenced enrollment of the clinical trial in the second quarter of 2015 and completed the treatment portion of the trial in November 2015.

We observed that pegadricase showed no serious adverse events, or SAEs, and was well tolerated at the five dose levels tested.

Additionally, we observed that pegadricase rapidly reduced and sustained average SUA levels below 6.0 mg/dL for each cohort for 14 to 30 days, depending on the dose level.

We conducted Phase 1a, Phase 1b, and Phase 2 clinical trials for SEL-212 at multiple sites in the United States.

These trials were designed to demonstrate the induction of an immune response to pegadricase and the ability of ImmTOR to mitigate that immune response to both single and multiple doses.

The table below summarizes the trial designs and objectives of these clinical trials.

Design Objective

SEL-212/101 • Subjects with hyperuricemia

• Single dose of pegadricase

• Evaluate safety and tolerability

• Define dose of pegadricase that would support monthly dosing

• Demonstrate formation of ADAs

SEL-212/101 • Subjects with hyperuricemia

• Single dose of SEL-212

• Evaluate safety and tolerability

• Proof-of-biological activity:

• Mitigation of ADAs after single dose

• Select dose to take forward into Phase 2

SEL-212/201 • Subjects with symptomatic gout and hyperuricemia

• Repeated monthly dosing of SEL ‑212

• Evaluate safety and tolerability

• Clinical proof-of-concept:

• Demonstrate sustained reduction of SUA with repeat dosing

• Select dose to take into Phase 3

In the Phase 1a trial, we observed that a single dose of pegadricase rapidly reduced SUA levels below 6.0 mg/dL for each dose level, although SUA levels returned close to baseline by day 30.

Consistent with our preclinical studies in animals, pegadricase induced uricase-specific ADAs in all patients with varying levels in this Phase 1a trial.

The Phase 1b clinical trial enrolled 63 patients with SUA levels greater than 6.0 mg/dL.

One group of five patients received a single 0.4 mg/kg dose of pegadricase alone.

Four groups of patients, each containing two placebo-control patients and five test article patients, received a placebo or a single intravenous infusion of ImmTOR alone at the following ascending dose levels:

0.03 mg/kg, 0.1 mg/kg, 0.3 mg/kg and 0.5 mg/kg.

Four groups of patients received a single intravenous infusion of ImmTOR at ascending dose levels of 0.03 mg/kg (5 patients), 0.1 mg/kg (10 patients), 0.15 mg/kg (5 patients) or 0.3 mg/kg (5 patients) with a fixed dose of pegadricase of 0.4 mg/kg, which we collectively call the SEL-212 cohorts.

All patients were followed for at least 30 days after their initial dose.

At the completion of our Phase 1b program for SEL-212 we had dosed a total of 64 patients in the trial with either SEL-212 (ImmTOR and pegadricase), ImmTOR alone, pegadricase alone or placebo.

The median serum acid level of patients enrolled was 7.3 mg/dL, with a mean of 7.4 mg/dL at baseline.

Patients presented with an average of 5.3 co-morbidities, such as hypertension and diabetes.

We have generally observed that SEL‑212 and its components, ImmTOR and pegadricase, have been well tolerated in this patient population.

There were a total of six SAEs in the Phase 1b trial.

Of the six SAEs, three were determined to not to be related to study drug by investigators.

The following table depicts the observations from the single ascending dose trial of pegadricase in patients with hyperuricemia.

In this trial, patients with SUA > 6 mg/dL at screening were assigned to one of five cohorts receiving a single IV infusion of pegadricase (0.1, 0.2, 0.4, 0.8 or 1.2 mg/kg).

Each cohort consisted of five patients, except for cohort 5 (1.2 mg/kg) which enrolled two patients.

In the Phase 1b clinical trial, we observed the potential for increasing doses of ImmTOR to mitigate the formation of pegadricase ADAs and sustain the anti-uricase enzyme activity through 30 days.

The cohort of subjects who received a single 0.4 mg/kg dose of pegadricase alone showed development of uricase ADAs, a short pegadricase half-life, and poor control of SUA at 30 days.

Three cohorts who received 0.4 mg/kg of pegadricase plus ascending doses of ImmTOR (0.1, 0.15 and 0.3 mg/kg) showed a dose related reduction in uricase ADAs, an increase in pegadricase half-life, and substantial reduction in SUA.

This graphs below depict the observed correlation of SUA with anti-uricase IgG and serum pegadricase activity.

In these graphs, anti-uricase IgG titers, serum pegadricase activity, and SUA are plotted against time for individual patients in cohorts A, G, H, and I.

Each line represents an individual patient.

The Phase 2 trial included patients with symptomatic gout and elevated SUA levels in an open-label, multiple ascending-dose clinical trial of SEL-212 to demonstrate sustained reduction of SUA and identify the best dose for Phase 3.

Five monthly doses of SEL-212 reduced SUA to less than 6.0 mg/dL in 21 of 32 patients, or 66%.

In distinct contrast, pegadricase alone reduced SUA to less than 6.0 mg/dL in only three of 19 patients one month after a single injection (data from pegadricase alone cohorts from the SEL-037/101, SEL-212/101, and SEL-212/201 trials).

We believe these results support our view that the addition of ImmTOR to pegadricase is able dramatically enhance the efficacy of pegadricase in the long-term reduction of SUA in gout patients.

The chart below depicts SUA after five monthly doses of SEL-212.

We have observed that SEL‑212 and its components, ImmTOR and pegadricase, were generally well-tolerated in the Phase 1a, 1b, and 2 clinical trials.

In the Phase 1a trial we observed no serious adverse events, or SAEs, and that pegadricase was well tolerated at the five dose levels tested.

Of the six SAEs in the Phase 1b trial, three were determined to not to be related to study drug by investigators.

Of the remaining three SAEs that were determined to possibly or likely be related to study drug, two were cases of stomatitis that occurred at the highest dose of ImmTOR tested (0.5 mg/kg), leading us to define 0.3 mg/kg as the maximum tolerated dose of ImmTOR in this patient population.

The remaining SAE was a case of drug hypersensitivity that occurred at a dose of 0.1 mg/kg of ImmTOR in combination with 0.4 mg/kg of pegadricase.

In all cases, the patient fully recovered from the SAE without residual effects.

Phase 2 dose-finding clinical trial

We enrolled patients with symptomatic gout and elevated SUA levels in an open-label, multiple ascending-dose Phase 2 clinical trial of SEL-212 at 15 active U.S.

clinical sites.

The primary and secondary endpoints for this trial included safety, tolerability, pharmacokinetics, and reduction of SUA and ADA levels, in addition to data regarding flares and other patient-related observations.

The following are the results from the 152 patients dosed in the Phase 2 trial with the primary clinical endpoint of SUA levels below 6 mg/dL:

• Control and 0.05 mg/kg ImmTOR Dose Cohorts (cohorts receiving five monthly doses of pegadricase alone or three monthly doses of 0.2 mg/kg or 0.4 mg/kg of pegadricase + 0.05 mg/kg of ImmTOR followed by two monthly doses of pegadricase alone):

Dosing of patients in the control cohorts receiving pegadricase alone was stopped early due to a loss of clinical activity caused by the immunogenicity of the enzyme.

Clinical activity was lost by week 12 in the majority of patients receiving pegadricase in combination with the 0.05 mg/kg dose of ImmTOR.

• 0.08 and 0.1 mg/kg ImmTOR Dose Cohorts (cohorts receiving three monthly doses of 0.2 mg/kg or 0.4 mg/kg of pegadricase + 0.08 or 0.10 mg/kg of ImmTOR followed by two monthly doses of pegadricase alone):

A majority of patients in these cohorts maintained clinical activity while receiving the combination therapy through week 12.

These results were consistent with the level of clinical activity observed through day 30 at a similar SEL-212 dose level in our Phase 1b trial.

At the 0.1 mg/kg dose level, half of the patients that maintained clinical activity through week 12 also maintained clinical activity through week 20.

• 0.125 and 0.15 mg/kg ImmTOR Dose Cohorts (cohorts receiving three monthly doses of pegadricase +0.125 or 0.15 mg/kg of ImmTOR followed by two monthly doses of pegadricase alone):

A majority of patients in these cohorts maintained clinical activity while receiving the combination therapy through week 12.

These results were consistent

with the level of clinical activity observed through day 30 at a similar SEL-212 dose level in our Phase 1b trial.

Approximately 81% of evaluable patients (N=27) receiving up to 0.15 mg/kg ImmTOR in combination with 0.2 or 0.4 mg/kg of pegadricase followed by 2 monthly doses of pegadricase alone had SUA control below 6 mg/dL at week 12.

• 0.10 and 0.15 mg/kg ImmTOR 5 Combination Dose Cohorts (cohorts receiving five monthly doses of pegadricase +0.10 or 0.15 mg/kg of ImmTOR ):

Five monthly doses of SEL-212 resulted in sustained SUA control and was well tolerated over the entire treatment period.

100% of the patients that had SUA levels below 6 mg/dL at 12 weeks maintained control through 20 weeks.

Approximately 66% of evaluable patients (21/32) completed week 20 with SUA levels below 6 mg/dL.

SEL-212 was generally well-tolerated at clinically active doses following repeated administrations in the trial.

Twenty patients reported a total of 23 SAEs in the Phase 2 clinical trial.

Nine SAEs were reported in the five dose combination cohorts, seven of which were reported to be not related or unlikely related to study drug, and two of which were infusion reactions.

All SAEs were successfully treated without further issues.

Phase 2 head-to-head clinical trial (COMPARE)

In March 2019, we initiated a non-registrational Phase 2 head-to-head clinical trial of SEL-212 (COMPARE), in which SEL-212 was compared against the current FDA-approved therapy for chronic refractory gout, pegloticase, in multiple clinical sites in the United States.

The two-armed, open label trial enrolled 170 patients with 87 patients receiving pegloticase (as set forth in the prescribing information) and the other 83 patients receiving six monthly doses of SEL-212 (0.15 mg/kg of ImmTOR and 0.2 mg/kg of pegadricase).

On September 30, 2020, we announced the topline results from the COMPARE trial.

SEL-212 showed a numerically higher response rate to pegloticase on the primary endpoint during months 3 and 6 combined, but did not meet the primary endpoint of statistical superiority.

SEL-212 demonstrated a numerically higher response rate of SEL-212 during the sixth month of treatment.

Approximately 41% of patients in the Phase 2 COMPARE trial had visible tophi at baseline, which is lower than expected for the general refractory gout population.

In the Phase 2 trial, 20 subjects reported a total of 23 SAEs, nine in the five dose combination cohorts, seven of which were reported to be not related or unlikely related to study drug, and two of which were infusion reactions.

All SAEs were successfully treated without residual effects.

Phase 2 head-to-head clinical trial

In March 2019, we initiated a non-registrational Phase 2 head-to-head clinical trial of SEL-212, which we refer to as COMPARE, in which SEL-212 was compared against the current FDA-approved therapy for chronic refractory gout, pegloticase, in multiple clinical sites in the United States.

In September 2020, we announced top-line results from the COMPARE trial.

We observed a numerically higher response rate to pegloticase on the primary endpoint during months three and six combined but did not meet the primary endpoint of statistical superiority.

SEL-212 did generate a statistically significant higher response rate of SEL-212 during the third month of treatment, as well as a statistically significant greater overall reduction in mean SUA levels in SEL-212 versus pegloticase in months three and six combined.

We observed a numerically higher response rate of SEL-212 during the sixth month of treatment.

In patients with tophi at baseline, we observed substantially higher responder rates for SEL-212 compared to pegloticase on the primary endpoint, and a statistically significant reduction in mean SUA levels when compared to pegloticase.

Approximately 41% of patients in the Phase 2 COMPARE trial had visible tophi at baseline, which is lower than we expected for the general refractory gout population.

However, in these most severe patients with tophi, SEL-212 was superior to

pegloticase with a 58% responder rate for SEL-212 versus a 39 % responder rate for pegloticase.

Response rates observed in patients with tophi at baseline are depicted below.

SEL-212 showed a favorable safety profile and was well-tolerated.

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We refer to these trials as DISSOLVE I and DISSOLVE II.

Each trial is expected to enroll up to 120 patients, with up to 40 patients receiving 0.1 mg/kg of ImmTOR and 0.2 mg/kg of pegadricase, up to 40 patients receiving 0.15 mg/kg of ImmTOR and 0.2 mg/kg of pegadricase, and up to 40 patients receiving placebo.

An additional 15 patients were added to the study sample size to account for potential treatment discontinuations that may occur due to the ongoing COVID-19 pandemic as a result of the emergence of COVID-19 variants which were not accounted for in the sample size calculations.

We commenced enrollment of DISSOLVE I in September 2020 and DISSOLVE II in December 2020.

DISSOLVE I is enrolling patients in the United States only and will have a 6-month primary endpoint followed by a 6-month safety extension.

DISSOLVE II will have a 6-month primary endpoint with no extension.

The primary endpoint of the DISSOLVE program is the maintenance of SUA levels below 6 mg/dL at 6 months.

Topline data from the Phase 3 DISSOLVE clinical program is expected in the second half of 2022.

Amplifying the Efficacy of Biologics:

Enzyme Therapy – IgA Nephropathy

The second indication in our enzyme therapy program is IgA nephropathy, an autoimmune kidney disease that occurs when immune complexes of a subclass of antibodies called immunoglobulin A1 (IgA1) accumulates in the kidneys.

On October 8, 2020, we entered into an Option and License Agreement, or the IGAN Agreement, with IGAN Biosciences, Inc., or IGAN.

Pursuant to the IGAN Agreement, IGAN has granted us an exclusive license to research, evaluate, and conduct pre-clinical development activities on IGAN’s proprietary IgA proteases.

Previous studies in animal models conducted at independent laboratories demonstrated that IgA protease removed injurious IgA immune complexes from kidneys and reduced inflammation, fibrosis, and hematuria.

These results suggest that it is an excellent candidate to potentially decrease the rate of disease progression and possibly even reverse the disease.

The barrier to IgA protease commercialization is the bacterial origin of the protease, which makes it immunogenic.

Our ImmTOR platform has shown in clinical studies the ability to mitigate the formation of ADAs to immunogenic enzymes, which has been demonstrated with our Phase 3 lead product candidate, SEL-212.

We intend to combine IgA protease with our ImmTOR platform to develop a novel combination product candidate for the treatment of IgA nephropathy and IgA-mediated diseases.

We will have an option term of 24 months, during which we can

elect to obtain an exclusive license to further develop and commercialize the product candidate to treat all IgA-mediated diseases, including IgA nephropathy, Linear IgA bullous dermatitis, IgA pemphigus, and Henoch-Schonlein purpura (also known as IgA vasculitis).

We plan to file an Investigational New Drug, or IND, application, for this program by the fourth quarter of 2021.

Amplifying the Efficacy of Biologics:

Gene Therapies

When used in combination with AAV gene therapy vectors, ImmTOR has been observed to inhibit the immune response to the vector and enable successful redosing in mice and nonhuman primates.

Currently, the ability to re-administer systemic AAV gene therapy is limited by the development of neutralizing antibodies.

The ability to safely re-dose AAV may help achieve therapeutic benefit in patients who are under-dosed;

it may also help restore transgene expression in patients, particularly pediatric patients, who may lose expression over time as they grow.

In addition, a study conducted in nonhuman primates showed that co-administration of AAV vector and ImmTOR in non-human primates, or NHPs, enabled higher and more durable transgene expression after the first dose of gene therapy as well as robust inhibition of anti-AAV8 immunoglobulin G, or IgG and neutralizing antibodies.

The observation that co-administration of AAV vector and ImmTOR leads to higher transgene expression demonstrates the potential for dosing lower levels of AAV gene therapies when combined with ImmTOR.

Thus integrating ImmTOR into a gene therapy protocol has the potential to provide a first dose benefit by enhancing liver-directed transgene expression and durability, as well as the potential for enabling re-dosing.

Our lead gene therapy program is in collaboration with AskBio in methylmalonic acidemia, or MMA, an inherited disorder in which the body is unable to process certain proteins and fats (lipids) properly.

We and AskBio plan to file an IND for this product candidate, MMA-101, in MMA and commence a Phase 1 clinical trial in the first half of 2021 under this collaboration.

We expect to report initial data from this trial by the end of 2021.

In October and November 2020, we and AskBio received rare pediatric disease designation and orphan drug designation, respectively, from the FDA for MMA-101, for the treatment of MMA due to methylmalonyl-CoA mutase, or MMUT gene mutations.

In December 2021, we announced the completion of enrollment of the DISSOLVE I trial.

DISSOLVE I has a six-month primary endpoint followed by a six-month safety extension.

DISSOLVE II will have a six-month primary endpoint with no extension.

The primary endpoint of the DISSOLVE program is the maintenance of sUA levels below 6 mg/dL at six months.

We currently expect that topline data from the Phase 3 DISSOLVE clinical program is expected in the fourth quarter of 2022.

Enrollment into the DISSOLVE II trial is ongoing and the study is being conducted in the United States and four countries across eastern Europe.

While we have temporarily closed screening and randomization at sites in both Russia and Ukraine, we have added 11 sites in the United States to further enrollment in DISSOLVE II.

Out of these additional enrollment sites, nine have been activated and two are pending initiation, with activation expected imminently.

Subject to ongoing geopolitical developments, we currently believe we remain on track to report data in the fourth quarter of 2022, and we will continue to work closely with our partner Sobi, clinical trial providers and regulatory authorities to evaluate any potential delays or adjustments to the timeline of the trial as a result of the circumstances.

Biologic Therapies – IgA Nephropathy

The second indication in our biologic therapies program is IgA nephropathy, an autoimmune kidney disease that occurs when immune complexes of a subclass of antibodies called immunoglobulin A1, or IgA1, accumulates in the kidneys.

Previous studies in animal models conducted at independent laboratories demonstrated that bacterial IgA protease has the potential to remove injurious IgA immune complexes from kidneys and reduce inflammation, fibrosis, and hematuria.

We believe these results suggest that IgA protease can potentially decrease the rate of disease progression and possibly even reverse the disease.

The barrier to IgA protease commercialization has been the bacterial origin of the protease, which makes it highly immunogenic.

In clinical trials, we have observed ImmTOR mitigating the formation of ADAs to immunogenic enzymes.

We intend to combine an IgA protease with our ImmTOR platform to develop a novel combination product candidate for the treatment of IgA nephropathy and IgA-mediated diseases.

In October 2020, we entered into an Option and License Agreement, or the IGAN Agreement, with IGAN Biosciences, Inc., or IGAN.

Pursuant to the IGAN Agreement, IGAN granted us an exclusive license to research, evaluate, and conduct pre-clinical development activities on IGAN’s proprietary IgA proteases.

We have an option term of 24 months, during which we can elect to obtain an exclusive license to further develop and commercialize the product candidate to treat all IgA-mediated diseases, including IgA nephropathy, Linear IgA bullous dermatitis, IgA pemphigus, and Henoch-Schonlein purpura (also known as IgA vasculitis).

In October of 2021 we entered into a Collaboration and License Agreement, or the First Ginkgo Agreement, with Ginkgo.

Pursuant to the First Ginkgo Agreement, Ginkgo will leverage their high throughput enzyme discovery, design and screening capabilities to identify and further optimize a proprietary, next generation IgA protease.

We have an exclusive license to further develop and commercialize the discovered IgA proteases to treat all IgA-mediated diseases, including IgA nephropathy, Linear IgA bullous dermatitis, IgA pemphigus, and Henoch-Schonlein purpura.

These collaborations build on extensive preclinical as well as strong clinical data from our Phase 2 COMPARE trial for the treatment of chronic refractory gout that we believe further supports ImmTOR’s potential for sustained therapeutic benefit when combined with immunogenic enzymatic therapies.

We are continuing to perform pre-clinical IND enabling studies.

Gene Therapies – Methylmalonic Acidemia

Our lead therapeutic gene therapy program, SEL-302, is intended to use ImmTOR to enhance the treatment of methylmalonic acidemia, or MMA, an inherited disorder in which the body is unable to process certain proteins and fats (lipids) properly.

This program was previously being conducted under our collaboration with AskBio.

In October and November 2020, we received rare pediatric disease designation and orphan drug designation, respectively, from the FDA for MMA-101, for the treatment of MMA due to methylmalonyl-CoA mutase, or MMUT gene mutations.

See “⸺Licenses and Collaborations⸺AskBio” for more information.

Our proprietary gene therapy product candidate, SEL-313, is being developed to treat ornithine transcarbamylase, or OTC deficiency, and is currently in preclinical development.

In April 2021, we were notified by AskBio that it intended to opt-out of development of the MMA indication.

The feasibility study and license agreement with AskBio, or AskBio Collaboration Agreement, otherwise remains in effect.

Manufacturing of a new lot has been completed and is currently undergoing final release testing.

We filed an IND to conduct a Phase 1/2 clinical trial of SEL-302 in pediatric patients with methylmalonic acidemia in the third quarter of 2021.

On November 23, 2021, this trial was placed on clinical hold by the FDA, with questions specifically relating to chemistry, manufacturing and controls, or CMC, of the AAV vector.

On February 9, 2022, we submitted a written response to the FDA to answer its questions.

On March 9, 2022, we received a letter from the FDA indicating the clinical hold was removed and the trial may proceed.

Gene Therapies – OTC Deficiency

Our second proprietary gene therapy product candidate, SEL-313, is being developed to treat ornithine transcarbamylase, or OTC deficiency, and is currently in preclinical development.

OTC deficiency is a rare genetic disorder that causes ammonia to accumulate in the blood due to mutations in the OTC gene, which is critical for proper function of the urea cycle.

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Less severe forms of the disorder are characterized by delirium, erratic behavior, aversion to high protein foods, vomiting and seizures.

The SEL-399 program combines an empty AAV capsid (EMC-101), which is an AAV capsid containing no transgene, with ImmTOR and is being conducted in partnership with AskBio.

Building on the preclinical data we have generated showing ImmTOR’s effect on mitigating or reducing the formation of neutralizing antibodies to AAV gene therapies, we have commenced a clinical trial of SEL-399 in healthy adult volunteers in Belgium.

The goal of the SEL-399 clinical trial is to demonstrate the appropriate dose of ImmTOR in humans to mitigate the formation of antibodies to AAV capsids used in gene therapies.

An initial control cohort of healthy volunteers received a single dose of EMC-101 in December 2020 and dose escalating cohorts of EMC-101 plus ImmTOR were initiated in February 2021.

Topline results from the clinical trial are expected in the fourth quarter of 2021.

We have several additional programs in development with our collaborators.

Restoring Self-tolerance in Autoimmune Diseases

The development of this program is currently paused.

Gene Therapies – Xork

We have exclusively licensed Xork, an IgG-specific protease from Genovis, an enzyme technology company.

We plan to develop Xork, either alone or in combination with our ImmTOR platform, with the goal of enabling the dosing of transformative gene therapies in patients with pre-existing AAV immunity due to natural exposures to AAV viruses.

Currently, significant proportions of the potential patient populations for many gene therapy trials are ineligible for treatment by AAV mediated gene therapies due to pre-existing antibodies which limits transduction efficiency of the therapy and could trigger potentially dangerous immune responses.

Because of this, the commercial potential of many gene therapies may be significantly limited due to the ineligibility of large segments of the target patient population.

This is particularly important for gene therapies given the low incidence and small prevalent populations of rare monogenic diseases which many gene therapies target.

Patients that are ineligible for gene therapy due to pre-existing immunity may have few or no alternative therapies available to them.

Xork, as a pre-treatment in advance of an AAV gene therapy, can potentially open a treatment window by cleaving the IgG antibodies and transiently reducing their concentration.

IgG proteases are bacterial proteins, which are themselves immunogenic.

We believe that Xork is differentiated from other IgG proteases since it is not derived from a human pathogen and thus, exhibits low cross-reactivity with human sera.

Additionally, to further reduce any potential immunogenicity of the Xork enzyme, we plan to explore the combination of Xork and ImmTOR.

The following images depict how Xork cleaves human IgG specifically and efficiently, but shows low cross reactivity to human sera compared to IdeS, an IgG protease derived from the common human pathogen Streptococcus pyogenes.

We believe that the combination of Xork and ImmTOR has the potential to address two of the major challenges to AAV gene therapy, pre-existing immunity that limits eligibility and de novo immunogenicity that can adversely affect safety and durability and which prevents the ability to re-dose AAV.

We plan to explore the application of Xork in combination with our wholly owned gene therapies, as well as explore partnering opportunities for the enzyme with other gene therapy companies.

Tolerogenic Therapies for Autoimmune Disease – ImmTOR & ImmTOR-IL

We intend to apply our ImmTOR platform to treat autoimmune diseases.

In preclinical studies, we have observed ImmTOR’s ability to induce antigen-specific T regulatory cells.

We believe that ImmTOR, in combination with an autoantigen of interest, could create self-tolerance to auto-antigens and thus be a novel approach to the treatment of autoimmune diseases.

Additionally, in preclinical studies we have observed ImmTOR, in combination with IL-2 muteins, expanding T-regulatory cells beyond IL-2 alone and we intend to pursue a combination of ImmTOR and IL-2 (ImmTOR-IL) in diseases where general T cell expansion has shown a therapeutic benefit.

Additionally, in our preclinical data we have observed a three-fold increase in antigen specific regulatory T cells when ImmTOR and IL-2 is combined with an antigen of interest.

We intend to pursue and develop treatments for autoimmune diseases with well-defined antigens using either ImmTOR or ImmTOR-IL.

Cyrus Biotechnology, Inc., a collaboration partner, is engineering a proprietary IL-2 protein to combine with the ImmTOR platform to potentially mitigate unwanted immune responses by reducing the inherent immunogenicity of the protein while also promoting immune tolerance.

The IL-2 pathway influences critical aspects of both immune stimulation and immune regulation, through the development and expansion of Treg cells.

These Treg cells are a specialized subpopulation of T cells involved in suppressing certain immune responses and maintaining the body’s self-tolerance.

In preclinical studies investigating the effects of ImmTOR in combination with a Treg-selective IL-2 mutant protein, or IL-2 mutein, we have observed a substantial synergistic activity in increasing the percentage and durability of Treg expansion in the spleen.

Our lead autoimmune diseases indication is PBC, a T cell driven autoimmune disease that causes progressive destruction of the bile ducts.

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Licenses and Collaborations

Swedish Orphan Biovitrum

In June 2020, we announced that we had entered into the Sobi License, pursuant to which we agreed to grant Sobi an exclusive, worldwide (except as to Greater China) license to develop, manufacture and commercialize SEL-212, which is currently in development for the treatment of chronic refractory gout.

In September 2020, pursuant to the Sobi License, Sobi paid us a one-time, up-front payment of $75 million.

Sobi has also agreed to make milestone payments totaling up to $630 million to us upon the achievement of various development and regulatory milestones and sales thresholds for annual net sales of SEL-212, and tiered royalty payments ranging from the low double digits on the lowest sales tier to the high teens on the highest sales tier.

Additionally, Sobi purchased an aggregate of 5,416,390 shares of our common stock at $4.6156 for aggregate gross proceeds of $25 million, which we refer to as the Sobi Private Placement.

The closing of the Sobi Private Placement occurred on July 31, 2020.

Under the Sobi License, we will have operational oversight of the Phase 3 DISSOLVE clinical program of SEL-212 (DISSOLVE I and DISSOLVE II) that commenced in September 2020, at Sobi’s expense.

We intend to both partner and strategically out-license ImmTOR, ImmTOR-IL and Xork for use with other products that are outside our focus to larger biopharmaceutical companies.

Additionally, we may strategically in-license products to combine with ImmTOR and develop novel therapeutic products independently.

Our key partnerships are listed below.

Ginkgo Bioworks Holdings, Inc.

On October 25, 2021, we entered into the First Ginkgo Agreement with Ginkgo.

Under the First Ginkgo Agreement, Ginkgo will design next generation IgA proteases with potentially transformative therapeutic potential.

In return, Ginkgo is eligible to earn both upfront research and development fees and milestone payments, including certain milestone payments in the form of our common stock, clinical and commercial milestone payments of up to $85 million in cash, as well as downstream value in the form of royalties on sales.

On January 3, 2022, we entered into a Collaboration and License Agreement, or the Second Ginkgo Agreement, with Ginkgo.

Under the Second Ginkgo Agreement, we will engage with Ginkgo to design novel AAV capsids with potentially improved transduction, enhanced tissue tropism and reduced immunogenicity.

In return, Ginkgo is eligible to earn both upfront research and development fees and milestone payments, including certain milestone payments in the form of our common stock, clinical and commercial milestone payments of up to $207 million in cash for each of a specified number of products which have the potential to total, in the aggregate, up to $1.1 billion.

Ginkgo is also entitled to potential further downstream value in the form of royalties on sales.

On October 21, 2021, we entered into a strategic licensing agreement with Genovis, or the Genovis Agreement.

Under the Genovis Agreement, we paid to Genovis an upfront payment in exchange for an exclusive license to Genovis’ Xork enzyme technology for all therapeutic uses in humans, excluding research, preclinical, diagnostic, and other potential non-therapeutic applications of the enzyme.

Genovis is eligible to earn development and sales-based milestones, as well as tiered royalties on worldwide sales in the low double digits.

Cyrus Biotechnology, Inc.

On September 7, 2021, we entered into a Collaboration and License Agreement with Cyrus, or the Cyrus Agreement, pursuant to which Cyrus agreed to grant us an exclusive, worldwide license to certain intellectual property in order to form a protein engineering collaboration combining the ImmTOR platform with Cyrus’ engineered protein therapeutics.

We expect that novel engineered protein therapeutic candidates from the partnership will be used to expand our proprietary pipeline and further bolster the ImmTOR platform.

In return for the licensed intellectual property, we made an upfront payment and will pay certain discovery, development, and sales-based milestones which could potentially total up to approximately $1.5 billion across multiple programs.

IGAN Biosciences

In October 2020, we entered into the IGAN Agreement.

Pursuant to the IGAN Agreement, IGAN granted us an exclusive license to research, evaluate, and conduct pre-clinical development activities on IGAN’s proprietary IgA proteases.

We have an option term of 24 months, or the Option Term, during which we can elect to obtain an exclusive license to further develop and commercialize the product to treat all IgA-mediated diseases, including IgA nephropathy, Linear IgA bullous dermatitis, IgA pemphigus, and Henoch-Schonlein purpura (also known as IgA vasculitis).

Upon execution of the IGAN Agreement, we paid IGAN a one-time up-front payment of $500,000 and we would owe additional payments to IGAN if we were to opt-in to an exclusive license agreement, as well as upon the achievement of certain development and sales milestones.

Pursuant to the IGAN Agreement, IGAN granted us an exclusive license to research, evaluate, and conduct preclinical development activities on IGAN’s proprietary IgA proteases.

Upon execution of the IGAN Agreement, we paid IGAN a one-time upfront payment of $0.5 million and we would owe additional payments to IGAN if we were to opt-in to an exclusive license agreement, as well as upon the achievement of certain development and sales milestones.

During the Option Term, we may terminate the IGAN Agreement immediately for any reason upon written notice to IGAN.

If we opt-in to an exclusive license agreement, we may terminate the IGAN Agreement upon 120 days’ written notice.

Takeda Pharmaceuticals USA, Inc.

On October 1, 2021, we entered into a strategic licensing agreement with Takeda, or the Takeda Agreement.

Under the Takeda Agreement, we granted Takeda an exclusive license to our ImmTOR technology initially for two specified disease indications within the field of lysosomal storage disorders.

Under the terms of the Takeda Agreement, we received an upfront payment and are entitled to receive up to $1.124 billion in future additional payments over the course of the partnership that are contingent on the achievement of development or commercial milestones or Takeda’s election to continue its activities at specified development stages.

We are also eligible for tiered royalties on future commercial sales of any licensed products.

Swedish Orphan Biovitrum

In September 2020, pursuant to the Sobi License, Sobi paid us a one-time, upfront payment of $75 million.

Sobi has also agreed to make milestone payments totaling up to $630

million to us upon the achievement of various development and regulatory milestones and sales thresholds for annual net sales of SEL-212, and tiered royalty payments ranging from the low double digits on the lowest sales tier to the high teens on the highest sales tier.

Additionally, Sobi purchased an aggregate of 5,416,390 shares of our common stock at a purchase price of $4.6156 per share for aggregate gross proceeds of $25 million, which we refer to as the Sobi Private Placement.

The closing of the Sobi Private Placement occurred on July 31, 2020.

Under the Sobi License, we will have operational oversight of the Phase 3 DISSOLVE clinical program of SEL-212 (DISSOLVE I and DISSOLVE II) that commenced in September 2020, at Sobi’s expense.

Sarepta Therapeutics

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Sarepta will have an option term of 24 months during which it can opt-in to obtain an exclusive license to further develop and commercialize the Sarepta Product to treat at least one Sarepta Indication, with a potential to extend the option term if Sarepta pays an additional fee to us.

Sarepta made an up-front payment to us upon signing of the agreement, and we are eligible to receive additional payments under the option term.

If Sarepta opts-in to an exclusive license agreement, we could receive option exercise payments per indication, we would be entitled to significant development and commercial milestone payments and tiered royalties ranging from the mid-to-high single digits based on net sales.

Sarepta made an upfront payment to us upon signing of the agreement, and we are eligible to receive additional payments under the option term.

If Sarepta opts-in to an exclusive license agreement, we could receive option exercise payments per indication and we would be entitled to significant development and commercial milestone payments and tiered royalties ranging from the mid-to-high single digits based on net sales.

In June 2021, we received a payment of $3.0 million for the achievement of certain pre-clinical milestones.

Feasibility Study and License Agreement

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We previously conducted preclinical studies for this product candidate and will leverage that previous work within the collaboration.

We expect to commence a Phase 1 clinical trial in MMA-101 in the first half of 2021, with initial proof of concept data expected by the end of 2021.

The initial proof-of-concept data will potentially validate the use of our ImmTOR platform to mitigate the formation of neutralizing anti-AAV capsid antibodies, which currently precludes re-dosing.

If the proof-of-concept studies are successful, we will proceed with a collaboration to pursue the development and commercialization of AAV gene therapy product candidates utilizing ImmTOR for the treatment of certain agreed serious rare and orphan genetic diseases.

Additionally, the SEL-399 program in collaboration with AskBio, combines an empty AAV capsid (EMC-101), which is an AAV capsid containing no transgene, with ImmTOR.

We commenced the trial in healthy adult volunteers in December 2020, with the goal to demonstrate the appropriate dose of ImmTOR in humans to mitigate the formation of antibodies to AAV capsids used in gene therapies.

Topline results are expected in the fourth quarter of 2021.

We and AskBio will share responsibility for the research, development and commercialization of products developed under this collaboration.

The parties will also share research, development and commercialization costs equally for all collaboration products, but with a right of either party to opt out of certain products, and thereby no longer be required to share costs for such products.

Each party will receive a percentage of net profits for each product sold under the collaboration equal to the percentage of shared costs borne by such party in the development of such product.

Pursuant to the AskBio Collaboration Agreement, AskBio is responsible for manufacturing the AAV capsids and AAV vectors and we are responsible for manufacturing ImmTOR.

In April 2021, we were notified by AskBio that it intended to opt-out of development of the MMA indication.

The feasibility study and license agreement with AskBio, or AskBio Collaboration Agreement, otherwise remains in effect.

We filed an IND to conduct a Phase 1/2 clinical trial of our SEL-302 product candidate in pediatric patients with methylmalonic acidemia in the third quarter of 2021.

On November 23, 2021, this trial was placed on clinical hold by the FDA, with questions specifically relating to CMC of the AAV vector.

On February 9, 2022, we submitted a written response to the FDA to answer its questions.

On March 9, 2022, we received a letter from the FDA indicating the clinical hold was removed and the trial may proceed.

ImmTOR manufacturing, controlled by us, continues to proceed in accordance with our expectations and we have not observed any impact to any of our ImmTOR programs.

License Agreement for Pompe Disease

In December 2019, we entered into the AskBio License Agreement which provides AskBio with exclusive worldwide rights to our ImmTOR platform to research, develop and commercialize certain AAV-gene therapy products targeting the GAA gene, or derivatives thereof, to treat Pompe Disease.

Pursuant to the AskBio License Agreement, AskBio paid us upfront fees of

an aggregate of $7.0 million.

Pursuant to the AskBio License Agreement, AskBio paid us upfront fees of an aggregate of $7.0 million.

Also pursuant to the AskBio License Agreement, AskBio agreed to make additional payments to us based on the achievement of certain development and commercial milestones of up to an aggregate of $237.0 million.

AskBio will also be obligated to make tiered royalty payments, at percentages in the mid-to-high single digits, to us based on achievement of certain sales milestones.

AskBio will also be obligated to make tiered royalty payments to us at percentages in the mid-to-high single digits based on achievement of certain sales milestones.

We will supply AskBio with our ImmTOR platform and AskBio will be responsible for all preclinical, clinical and commercial manufacture and supply of products licensed under the AskBio License Agreement (other than ImmTOR) and carry out all other activities related to the research, development, and commercialization of such products at its sole expense, including all regulatory activities related thereto.

The AskBio License Agreement contains other customary terms and conditions, including representations and warranties, covenants, termination, and indemnification obligations in favor of each party.

Spark Therapeutics

In 2016, we entered into a license and option agreement with Spark, or the Spark License Agreement, which provides Spark with exclusive worldwide rights to our ImmTOR platform to research, develop and commercialize gene therapies for Factor VIII, an essential blood clotting protein relevant to the treatment of hemophilia A.

Pursuant to the Spark License Agreement, Spark paid us an upfront payment of $15.0 million.

We will be eligible to receive up to an aggregate of $430.0 million in milestone payments, with up to $65.0 million being based on Spark’s achievement of specified development and regulatory milestones and up to $365.0 million for commercial milestones, as well as tiered royalties on global net sales at percentages ranging from mid-single to low-double digits.

Each party is responsible for its own costs and expenses incurred in connection with its respective activities under the Spark License, except that Spark has agreed to reimburse us for the full-time equivalent and out-of-pocket costs incurred in performing certain tasks or assistance specifically requested by Spark.

We retain the responsibility to manufacture Spark’s preclinical, clinical and commercial requirements for the ImmTOR platform, subject to the terms of the Spark License Agreement.

The Spark License Agreement will continue on a country-by-country and product-by-product basis until the expiration of Spark’s royalty payment obligations with respect to such product in such country unless earlier terminated by the parties.

The Spark License Agreement may be terminated by Spark for convenience upon ninety days’ notice.

Either party may terminate the Spark License Agreement on a target-by-target basis for the material breach of the other party with respect to such target.

In connection with the Spark License Agreement, we also entered into a stock purchase agreement with Spark, pursuant to which Spark purchased in the aggregate $15.0 million of shares of our common stock.

Massachusetts Institute of Technology

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We amended the MIT License in January 2010, August 2013, November 2016, December 2019 and June 2020.

Under the MIT License, we acquired an exclusive worldwide license, with the right to grant sublicenses, to develop, make, sell, use and import certain licensed products that are therapeutic or prophylactic vaccines and use certain licensed processes in the exercise of rights to the licensed products, the manufacture, sale and practice of which are covered by patent rights owned or controlled by MIT, including patents jointly owned with Brigham and Women’s Hospital, or Brigham, the President and Fellows of Harvard College, the Immune Disease Institute and the Children’s Medical Center Corporation.

Under the MIT License, we acquired an exclusive worldwide license, with the right to grant

sublicenses, to develop, make, sell, use and import certain licensed products that are therapeutic or prophylactic vaccines and use certain licensed processes in the exercise of rights to the licensed products, the manufacture, sale and practice of which are covered by patent rights owned or controlled by MIT, including patents jointly owned with Brigham and Women’s Hospital, or Brigham, the President and Fellows of Harvard College, the Immune Disease Institute and the Children’s Medical Center Corporation.

Our exclusivity is subject to certain retained rights of these institutions and other third parties.

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We manufacture ImmTOR using a scalable, self-assembly nanoemulsion process with well-defined, pharmaceutical unit operations.

This proprietary, highly specialized and precisely controlled manufacturing process enables us to reproducibly manufacture ImmTOR across many production scales, from milligram-scale at the laboratory bench to hundreds of grams to multi-kilogram scale for commercial production.

multi-kilogram scale for commercial production.

We have also developed and executed the required detailed analytic characterization of our products.

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Through a licensing arrangement, we own exclusive worldwide rights to pegadricase outside of China, with co-ownership of rights in Japan and with 3SBio owning all rights in China.

Under this arrangement, 3SBio has agreed to supply us with pegadricase.

We also have a second supplier for pegadricase in the United States.

Under this arrangement, 3SBio has agreed to supply pegadricase for the SEL-212 program.

There is also a second supplier for pegadricase in the United States.

Our AAV vector product candidates are produced using the established triple transfection production process at CMOs.

We work closely with our CMOs who have platform AAV production processes that we are able to leverage for our specific AAV product candidates.

Intellectual Property

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We have also conducted extensive research in-house to further research this area, leading to key discoveries regarding and uses for our ImmTOR technology.

We have aggressively sought to extend and protect the proprietary intellectual property underlying the composition and use of ImmTOR for antigen-specific immunotolerance.

We endeavor to protect our nanoparticle technology, which we consider fundamental to our business, by seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties, relating to our program, product candidates, their methods of use and the processes for their manufacture.

Our practice is to strive to protect our intellectual property by, among other methods, pursuing and obtaining patent protection in the United States and in jurisdictions

outside of the United States related to our proprietary technology, inventions, improvements, programs and product candidates that are commercially important to the operation and growth of our business.

We also rely on trade secrets and know-how relating to our proprietary technology, programs and product candidates, continuing innovation and in-licensing opportunities to maintain, advance and fortify our proprietary position in our nanoparticle-based immunotherapy program and product candidates.

Our commercial success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our program technology, inventions and improvements;

We have aggressively sought to extend and protect the proprietary intellectual property underlying the composition and use of ImmTOR, such as for antigen-specific immunotolerance.

We endeavor to protect our nanoparticle technology, which we consider fundamental to our business, by seeking, maintaining and defending patent and other intellectual property rights, whether developed internally or licensed from third parties, relating to our program, product candidates, their methods of use and the processes for their manufacture.

Our practice is to strive to protect our intellectual property by, among other methods, pursuing and obtaining patent protection in the United States and in jurisdictions outside of the United States related to our proprietary technology, inventions, improvements, programs and product candidates that are commercially important to the operation and growth of our business.

We also rely on trade secrets and know-how relating to our proprietary technology, programs and product candidates, and continue innovating and seeking in-licensing opportunities to maintain, advance and fortify our proprietary position in our nanoparticle-based immunotherapy program and product candidates as well as to develop new programs and other product candidates.

Our commercial success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our technology programs, inventions and improvements;

to preserve the confidentiality of our trade secrets;

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and to operate without infringing the patents and proprietary rights of third parties.

We have developed and in-licensed numerous patents and patent applications and possess substantial know-how and trade secrets relating to our nanoparticle-based immunotherapy technology, program and product candidates.

We have developed and in-licensed numerous patents and patent applications and possess substantial know-how and trade secrets relating to our technology programs and product candidates.

Our patent portfolio contains a number of issued patents in the United States and certain foreign jurisdictions.

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• development and commercialization of SEL-212, including both composition of matter and method of treatment claims (there are multiple patent families with claims that cover the SEL-212 product, one of which is a licensed, issued U.S.

patent that expires in August 2021).

patent that expired in August 2021).

In addition, we have exclusively or non-exclusively licensed intellectual property, including U.S.

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and foreign jurisdictions.

The licensed patents and patent applications cover various aspects of the technology being developed by us, including claims directed to compositions of matter and methods of use, and have been filed in various countries worldwide including in North America, Europe and Asia, with material expiration dates varying from 2021 to, if claims are issued, 2029.

In addition to filing and prosecuting patent applications in the United States, we often file analogous patent applications in the European Union and in additional foreign countries where we believe such filing is likely to be beneficial, including but not limited to, Australia, Brazil, China, Europe, South Korea, Mexico, India, Israel and/or Japan.

In addition to filing and prosecuting patent applications in the United States, we often file analogous patent applications in the European Union and in additional foreign countries where we believe such filing is likely to be beneficial, including but not limited to, Australia, Brazil, Canada, China, Europe, India, Israel, Japan, Mexico and/or South Korea.

Each patent’s term depends upon the laws of the countries in which they are obtained.

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Our competitors may have significantly greater financial resources, established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than we do.

These competitors also compete with us in recruiting and retaining qualified scientific, sales, marketing and management personnel, establishing clinical trial sites and patient registration for clinical trials,

as well as in acquiring technologies complementary to, or necessary for, our programs.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of any other tolerance or immune stimulation product candidates that we develop, if approved, are likely to be their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.

The key competitive factors affecting the success of any other tolerance or immune modulation product candidates that we develop, if approved, are likely to be their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop.

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In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic or biosimilar products.

SEL-212 may compete with others in the gout market, including KRYSTEXXA, which contains a pegylated uricase similar to the pegadricase component of SEL-212 and is indicated for the treatment of refractory gout.

Horizon Pharma plc, whose affiliates own KRYSTEXXA, may find other approaches to eliminate undesired immunogenicity to KRYSTEXXA.

SEL-212 may compete with others in the gout market, including pegloticase, which contains a pegylated uricase similar to the pegadricase component of SEL-212 and is indicated for the treatment of refractory gout.

Horizon Pharma plc, whose affiliates own pegloticase, may find other approaches to eliminate undesired immunogenicity to pegloticase.

Long-term treatment with global immunosuppressive products may increase the susceptibility to contract infections, tumors and may lead to organ failure.

Large companies with active research to prevent the formation of ADAs and treat allergies or autoimmune diseases include Sanofi S.A., Pfizer Inc., and Merck & Co., Inc.

Small, early-stage biopharmaceutical companies active in the research for new technologies to induce antigen-specific immune tolerance include Anokion SA, Apitope International NV, Caladrius Biosciences, Cour Pharmaceutical Development Company, Inc., Dendright International, Inc., Parvus Therapeutics, REGiMMUNE Corporation, Rubius Therapeutics, Inc., Tolerion, Inc., Topas Therapeutics GmbH, SQZ Biotechnologies and Txcell SA.

Biopharmaceutical companies active in the research for ornithine transcarbamylase include Ultragenyx, Poseida, TranslateBio, Arcturus, and Kaleido.

Large companies with active research to prevent the formation of ADAs and treat allergies or autoimmune diseases include Eli Lilly, Roche Holding AG, Sanofi S.A., Pfizer Inc., and Merck & Co., Inc.

Small, early-stage biopharmaceutical companies active in the research for new technologies to induce antigen-specific immune tolerance include Anokion SA, Apitope International NV, Cour Pharmaceutical Development Company, Inc., Cue Biopharma, Dendright International, Inc., Parvus Therapeutics, REGiMMUNE Corporation, Rubius Therapeutics, Inc., Tolerion, Inc., Topas Therapeutics GmbH, SQZ Biotechnologies and Txcell SA.

Biopharmaceutical companies active in the research for MMA include LogicBio, Poseida, and Moderna.

Biopharmaceutical companies active in the research for IgA nephropathy include Calliditas, Omeros, Travere, EMD Serono, Novartis, Ionis, Visterra, Reata, and Alnylam.

Biopharmaceutical companies active in the research for PBC include Intercept Pharmaceuticals, Genfit, GenKyoTex, GSK, Eli Lily, and CymaBay.

Biopharmaceutical companies active in the research for Ornithine transcarbamylase include Ultragenyx, Poseida, TranslateBio, Arcturus, and Kaleido.

Biopharmaceutical companies active in the research for IgA nephropathy include Omeros, Travere, EMD Serono, Novartis, Ionis, Visterra, Reata, and Alnylam.

Biopharmaceutical companies active in the PBC research include Intercept Pharmaceuticals, Genfit, GenKyoTex, GSK, Eli Lilly, and CymaBay.

Biopharmaceutical companies active in the IL-2 research include Roche Holding AG, Amgen, Bristol Myers Squibb, Eli Lilly, and Moderna.

Government Regulation

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The process required by the FDA before a biologic, including a gene therapy, may be marketed in the United States is summarized below.

Before testing any biological product candidate in humans, the product candidate enters the preclinical testing stage.

Preclinical tests, also referred to as nonclinical studies, include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the product candidate.

Biological product candidates are preclinically tested before any testing is done in humans.

These tests, or non-clinical studies, include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the product candidate.

The conduct of the preclinical tests must comply with federal regulations and requirements including GLPs.

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The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the clinical study on a clinical hold within that 30-day time period.

In such a case, the IND

sponsor and the FDA must resolve any outstanding concerns before the clinical study can begin.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical study can begin.

The FDA may also impose clinical holds on a biological product candidate at any time before or during clinical trials due to safety concerns or non-compliance.

If the FDA imposes a clinical hold, trials may not recommence without FDA authorization and then only under terms authorized by the FDA.

In addition to the submission of an IND to the FDA, supervision of certain human gene transfer trials may also require evaluation and assessment by an institutional biosafety committee, or IBC, a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical study, dosing procedures, patient selection and exclusion criteria, and the parameters to be used to monitor patient safety, including stopping rules that assure a clinical study will be stopped if certain adverse events should occur.

In addition to these requirements, biological product candidates may also require evaluation and assessment by an institutional biosafety committee, or IBC, that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution.

Each protocol and any amendments to the protocol must be submitted to the FDA as part of the IND.

Clinical trials must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP requirements, including the requirement that all research patients provide informed consent.

Clinical trials must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP requirements, including the requirement that all research subjects provide informed consent.

Further, each clinical study must be reviewed and approved by an independent institutional review board, or IRB, at or servicing each institution at which the clinical study will be conducted.

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Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up.

The FDA or the sponsor or its data safety monitoring board may suspend a clinical study at any time on various grounds, including a finding that the research patients or patients are being exposed to an unacceptable health risk.

The FDA or the sponsor or its data safety monitoring board may suspend a clinical study at any time on various grounds.

Similarly, an IRB can suspend or terminate approval of a clinical study at its institution if the clinical study is not being conducted in accordance with the IRB’s requirements or if the biological product candidate has been associated with unexpected serious harm to patients.

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In addition, under the Pediatric Research Equity Act, or PREA, a BLA or supplement to a BLA must contain data to assess the safety and effectiveness of the biological product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The Food and Drug Administration Safety and Innovation Act, or FDASIA, requires that a sponsor who is planning to submit a marketing application for a drug or biological product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan, or PSP, within sixty days after a Type C meeting or as may be agreed between the sponsor and FDA.

The Food and Drug Administration Safety and Innovation Act, or FDASIA, requires that sponsors planning to submit a BLA for a biological product that in certain circumstances n submit an initial Pediatric Study Plan, or PSP, within sixty days after a Type C meeting or as may be agreed between the sponsor and FDA.

Unless otherwise required by regulation, PREA does not apply to any biological product for an indication for which orphan designation has been granted.

Under the Prescription Drug User Fee Act, or PDUFA, as amended, each BLA must be accompanied by a user fee.

The FDA adjusts the PDUFA user fees on an annual basis.

Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business.

Additionally, no user fees are assessed on BLAs for products designated as orphan drugs, unless the product also includes a non-orphan indication.

Within 60 days following submission of the application, the FDA reviews a BLA submitted to determine if it is substantially complete before the agency accepts it for filing.

The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information.

In this event, the BLA must be resubmitted with the additional information.

Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the BLA to determine, among other things, whether the proposed product is safe, pure and potent for its intended use and whether the product is being manufactured in accordance with cGMP requirements to assure and preserve the product’s identity, safety, strength, quality, potency and purity.

The FDA may refer applications for novel biological products or biological products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and

under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Under the Prescription Drug Fee User Act, or PDUFA, as amended, each BLA must be accompanied by a user fee.

Fee waiver or reductions are available under certain circumstances, including for the first application filed by a small business.

In addition, no user fees are assessed on BLAs on products designated as orphan drugs unless the product also includes a non-orphan indication.

Within 60 days following submission of the application, the FDA reviews a BLA for completeness.

The FDA may refuse to file any BLA that it deems incomplete or otherwise not reviewable and may request additional information.

Once the submission is accepted for filing, the FDA substantively reviews the BLA to determine, among other things, whether the proposed product is safe, pure and potent, and manufactured in accordance with cGMP requirements.

During the biological product approval process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy, or REMS, is necessary to assure the safe use of the biological product candidate.

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the FDA will not approve the BLA without a REMS, if required.

Before approving a BLA, the FDA will inspect the facilities at which the product is manufactured to determine that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required specifications.

Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the BLA does not satisfy its regulatory criteria for approval and deny approval.

Before approving a BLA, the FDA will inspect the facilities in which the product is manufactured to determine whether the manufacturing processes and facilities are in compliance with GMPs.

The FDA may also audit the clinical investigation sites to determine that they have complied with good clinical practices.

Notwithstanding the submission of relevant data and information, the FDA may ultimately deny approval.

Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than the applicant interprets the same data.

If the FDA decides not to approve the BLA in its present form, the FDA will issue a complete response letter that usually describes all of the specific deficiencies in the BLA identified by the FDA.

Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval.

If a complete response letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application.

One of the performance goals agreed to by the FDA under the PDUFA is to review 90% of standard BLAs in 10 months from the filing date and 90% of priority BLAs in six months from the filing date, whereupon a review decision is to be made.

If the FDA denies approval of a BLA in its then-current form, the FDA will issue a complete response letter detailing deficiencies in the application.

If a response letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application.

One of the performance goals agreed to by the FDA under PDUFA is to review 90% of standard BLAs in 10 months from the filing date and 90% of priority BLAs in six months from the filing date, whereupon a review decision is to be made.

The FDA does not always meet its PDUFA goal dates for standard and priority BLAs.

Orphan Designation

The FDA may grant orphan designation to drugs or biologics intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and marketing the product for this type of disease or condition will be recovered from sales in the United States.

Orphan designation must be requested before submitting a BLA.

After the FDA grants orphan designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

Prior to the submission of a BLA, the FDA may grant orphan designation to drugs or biologics intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and marketing the product for this type of disease or condition will be recovered from sales in the United States After the FDA grants orphan designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

Orphan designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

In the United States, orphan designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

In addition, if a product receives the first FDA approval for the indication for which it has orphan designation, the product is entitled to orphan exclusivity, which means the FDA may not approve any other application to market the same product for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority over the product with orphan exclusivity or where the manufacturer with orphan exclusivity is unable to assure sufficient quantities of the approved orphan designated product.

Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity.

Competitors, however, may

receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity.

Orphan product exclusivity also could block the approval of one of our products for seven years if a competitor obtains approval of the same biological product as defined by the FDA or if our product candidate is determined to be contained within the competitor’s product for the same indication or disease.

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The sponsor of a new biologic may request that the FDA designate the biologic as a Fast Track product at any time during the clinical development of the product.

The FDA may consider for review sections of the marketing application for a Fast Track product on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees to accept sections of the application and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.

Any product submitted to the FDA for marketing, including under a Fast Track program, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval.

Any product is

eligible for priority review if it treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness compared to marketed products.

Any product is eligible for priority review if it treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness compared to marketed products.

Additionally, a product may be eligible for accelerated approval.

Biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may be eligible for accelerated approval, which means that they may be approved on the basis of adequate and well-controlled clinical studies establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of approval, the FDA may require that a sponsor of a biological product subject to accelerated approval perform adequate and well-controlled post-marketing clinical studies.

Biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may be eligible for accelerated approval, which means that they may be approved on the basis of studies establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of approval, the FDA may require that a sponsor of a biological product subject to accelerated approval perform adequate and well-controlled post-marketing clinical studies to confirm such benefit.

In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

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Discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions.

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 or manufacturer to administrative or judicial civil or criminal sanctions and adverse publicity.

FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical hold, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties.

Failure to comply may subject an applicant or manufacturer to administrative or judicial civil or criminal sanctions and adverse publicity.

Biosimilars and Exclusivity

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Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency, can be shown through analytical studies, animal studies and a clinical study or studies.

Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

However, complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval pathway that are still being worked out by the FDA.

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During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.

The BPCIA also created certain exclusivity periods for

certain biosimilars approved as interchangeable products.

At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

A biological product can also obtain pediatric market exclusivity in the United States.

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• The Community MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or EMA, and which is valid throughout the entire territory of the EEA.

The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, advanced therapy medicinal products (such as gene therapy, somatic cell therapy and tissue engineered products), and medicinal products that contain a new active substance indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases.

The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU.

Under the Centralized Procedure the maximum timeframe for the evaluation of a marketing authorization application is 210 days (excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP).

Accelerated evaluation might be granted by the CHMP in exceptional cases, when the authorization of a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation.

Accelerated evaluation might be granted by the CHMP in exceptional cases.

Under the accelerated procedure the standard 210 days review period is reduced to 150 days.

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The European Union also provides opportunities for market exclusivity.

For example, in the European Union, upon receiving marketing authorization, new chemical entities generally receive eight years of data exclusivity and an additional two years of market exclusivity.

If granted, data exclusivity prevents regulatory authorities in the European Union from referencing the innovator’s data to assess a generic or biosimilar application.

During the additional two-year period of market exclusivity, a generic marketing authorization can be submitted, and the innovator’s data may be referenced, but no generic or biosimilar product can be marketed until the expiration of the market exclusivity.

Upon receiving marketing authorization, new chemical entities generally receive eight years of data exclusivity, which prevents regulatory authorities in the European Union from referencing the innovator’s data to assess a generic or biosimilar application, and an additional two years of market exclusivity, during which no generic or biosimilar product can be marketed.

However, there is no guarantee that a product will be considered by the European Union’s regulatory authorities to be a new chemical entity, and products may not qualify for data exclusivity.

Products receiving orphan designation in the European Union can receive ten years of market exclusivity, during which time no marketing authorization application shall be accepted, and no marketing authorization shall be granted for a similar medicinal product for the same indication.

An orphan product can also obtain an additional two years of market exclusivity in the European Union for pediatric studies.

An orphan product can also obtain an additional two years of market exclusivity in the European Union for pediatric

No extension to any supplementary protection certificate can be granted on the basis of pediatric studies for orphan indications.

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

(2) either (a) such

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

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

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

Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon grant of a marketing authorization, entitled to ten years of market exclusivity for the approved therapeutic indication.

The application for orphan drug designation must be submitted before the application for marketing authorization.

The applicant will receive a fee reduction for the marketing authorization application if the orphan drug designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted.

Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

The 10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.

Additionally, marketing authorization may be granted to a similar product for the same indication at any time if the:

• second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior;

• applicant consents to a second orphan medicinal product application;

• applicant cannot supply enough orphan medicinal product.

Orphan medicinal products are eligible for certain financial and exclusivity incentives.

For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical studies, product licensing, pricing and reimbursement vary from country to country.

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These provisions require, among other things, that the prior authorization of an Ethics Committee and the competent Member State authority is obtained before commencing the clinical trial.

In 2014, the EU passed the Clinical Trials Regulation (Regulation 536/2014), which will replace the current Clinical Trials Directive.

To ensure that the rules for clinical trials are identical throughout the European Union, the EU Clinical Trials Regulation was passed as a regulation that is directly applicable in all EU member states.

All clinical trials performed in the European Union are required to be conducted in accordance with the Clinical Trials Directive until the Clinical Trials Regulation becomes applicable.

According to the current plans of the EMA, the Clinical Trials Regulation is expected to become applicable in 2020.

In 2014, the EU passed the Clinical Trials Regulation (Regulation 536/2014), which will replace the current Clinical Trials Directive, to ensure that the rules for clinical trials are identical throughout the European Union.

We are also subject to data privacy and security laws in the jurisdictions outside of the U.S.

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Member States may introduce further conditions, including limitations which could limit our ability to collect, use and share personal data (including health and medical information), or could cause our compliance costs to increase, ultimately having an adverse impact on our business.

The GDPR imposes onerous accountability obligations requiring data controllers and processors to maintain a record of their data processing and implement policies as part of its mandated privacy governance framework.

It also requires data controllers to be transparent and disclose to data subjects (in a concise, intelligible and easily accessible form) how their personal information is to be used, imposes limitations on retention of personal data;

defines for the first time pseudonymized (i.e., key-coded) data;

introduces mandatory data breach notification requirements;

and sets higher standards for data controllers to demonstrate that they have obtained valid consent for certain data processing activities.

The GDPR imposes accountability and transparency obligations regarding personal data.

We are also subject to E.U.

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jurisdictions where we are established or otherwise subject to the GDPR.

Fines for certain breaches of the GDPR are significant:

up to the greater of EUR 20 million or 4% of total global annual turnover.

In addition to the foregoing, a breach of the GDPR could result in regulatory investigations, reputational damage, orders to cease/ change our use of data, enforcement notices, as well potential civil claims including class action type litigation where individuals suffer harm.

A breach of the GDPR could result in significant fines, regulatory investigations, reputational damage, orders to cease/ change our use of data, enforcement notices, as well potential civil claims including class action type litigation where individuals suffer harm.

Moreover, the United Kingdom leaving the E.U.

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Other Healthcare Laws

The federal Anti-Kickback Statute prohibits, among other things, any person or entity from knowingly and willfully offering, paying, soliciting, receiving or providing any remuneration, directly or indirectly, overtly or covertly, to induce or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs.

The federal Anti-Kickback Statute prohibits, among other things, any person or entity from knowingly (regardless of knowledge of this specific statute) and willfully offering, paying, soliciting, receiving or providing any remuneration, directly or indirectly, overtly or covertly, to induce or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs.

The term “remuneration” has been broadly interpreted to include anything of value.

The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other.

In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

The majority of states also have anti-kickback laws, which establish similar prohibitions and in some cases may apply to items or services reimbursed by any third-party payor, including commercial insurers.

The majority of states also similar have anti-kickback laws, which in some cases are more restrictive.

The federal false claims and civil monetary penalties laws, including the civil False Claims Act, prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false, fictitious or fraudulent claim for payment to, or approval by, the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government, or from knowingly making a false statement to avoid, decrease or conceal an obligation.

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Violation of the federal Anti-Kickback Statute may also constitute a false or fraudulent claim for purposes of the federal civil False Claims Act.

Actions under the civil False Claims Act may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government.

Violations of the civil False Claims Act can result in very significant monetary penalties and treble damages.

In addition, the civil monetary penalties statute imposes penalties against any person who is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

Actions under the civil False Claims Act may be brought by the Department of Justice or as a qui tam action by a private individual in the name of the government.

Violations of the civil False Claims Act can result in very significant monetary penalties and treble damages, and may be accompanied by additional civil monetary penalties against

Many states also have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

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Among other things, HITECH made HIPAA’s security standards directly applicable to, as well as imposed certain other privacy obligations on, “business associates,” defined as independent contractors or agents of covered entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions.

HITECH also increased the civil and criminal penalties that may be imposed and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions.

Even when HIPAA does not apply, according to the Federal Trade Commission or the FTC, failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, or the FTCA, 15 U.S.C § 45(a).

The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

Individually identifiable health information is considered sensitive data that merits stronger safeguards.

The FTC’s guidance for appropriately securing consumers’ personal information is similar to what is required by the HIPAA Security Rule.

Coverage and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any pharmaceutical or biological products for which we obtain regulatory approval.

In the United States and markets in other countries, patients who are prescribed

treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs.

Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products.

Moreover, for drugs and biologics administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such products.

In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs.

Sales of any products for which we receive regulatory approval for commercial sale will therefore depend, in part, on the availability of coverage and adequate reimbursement from third-party payors.

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Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

Additionally, coverage and reimbursement for products can differ significantly from payor to payor.

One third-party payor’s decision to cover a particular medical product or service does not ensure that other payors will also provide coverage for the medical product or service, or will provide coverage at an adequate reimbursement rate.

Healthcare Reform

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Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products.

For example, the ACA, among other things, increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program;

introduced a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

extended the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care plans;

subjected drug manufacturers to new annual fees based on pharmaceutical companies’ share of sales to federal healthcare programs;

and created a new Patient Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA.

By way of example, the Tax Cuts and Jobs Acts of 2017, or the TCJA, was enacted, which, among other things, removes penalties for not complying with the individual mandate to carry health insurance.

Further, in 2018, a U.S.

District Court Judge in the Northern District of Texas, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the TCJA, the remaining provisions of the ACA are invalid as well.

In December 2019, the U.S.

Court of Appeals for the Fifth Circuit ruled that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well.

It is unclear how these decisions, subsequent appeals, if any, and other efforts to challenge, repeal or replace the ACA will impact the law.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

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On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals and imaging centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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

to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies.

Human Capital Resources

As of December 31, 2020, we had 43 full-time employees and one part-time employee, 30 of whom are primarily engaged in research and development activities and five of whom are officers of Selecta Biosciences, Inc.

As of December 31, 2020, we also had one full-time consultant.

Twenty-three of our employees have either one or both of an M.S.

We consider the intellectual capital of our employees to be an essential driver of our business and key to future prospects.

To attract and retain a high-quality, experienced workforce, we offer a competitive mix of compensation and insurance benefits for our employees, as well as participation in our equity programs.

Employees working 30 hours or more a week are eligible to participate in our medical, prescription, dental, vision, Flexible Spending Account and life insurance and disability plans.

assist employees with costs associated with rising healthcare costs, we pay 100% of an employee’s deductible and co-insurance payments.

We also offer employees an annual bonus plan and a 401(k)-retirement plan with a company match.

All employees are awarded new hire equity and annual equity as well as the opportunity to participate in our Employee Stock Purchase Plan.

At Selecta Biosciences, we consider human capital to be an essential driver of our business and successful strategy creation and execution.

Our people, driven by our Collaborative, Pioneering, and Patient Focused culture, propel our business forward, strengthening us for long-term success.

As of December 31, 2021, we had 58 employees, 44 of whom are primarily engaged in research and development activities and 14 in corporate functions.

66% of our employees have at least one of a Masters, PhD, or MD degree.

Our 2021 annualized voluntary turnover rate was 12.87%.

None of our employees are represented by a labor union and we consider our employee relations to be good.

In response to the COVID-19 pandemic, we implemented changes in our business in March 2020 in an effort to protect our employees, and to support appropriate health and safety protocols.

In particular, we closed our principal executive office with our administrative employees continuing their work remotely and limited the number of staff in any given research and development laboratory.

All employees reside and work in the United States and are not represented by a labor union.

We consider our employee relations to be strong and in good standing.

Our goal is to continually engage our talented and diverse workforce to drive value creation both for our business and ultimately our patient populations.

We believe in a proactive approach to talent management focusing on retention of key talent, critical role successor identification, and impactful employment development.

Additional priority areas intended to drive engagement include successful recruitment of diverse talent, continual promotion of professional development at all levels, introduction, and evolution of business-friendly HR solutions, coupled with an intentional culture dialog aimed to drive a high engagement, high performance, patient centric culture.

To further drive attraction and retention of our high-quality, experienced, and diverse workforce, we invest in the physical, emotional, and financial well-being of our employees.

These investments include a competitive mix of compensation and generous insurance benefits.

To assist employees with the rising cost of healthcare, we pay 100% of an employee’s deductible and co-insurance payments.

All employees are eligible to participate in our equity compensation programs.

All employees are awarded new hire equity and annual equity as well as the opportunity to participate in our Employee Stock Purchase Plan.

Employees are also eligible to receive an annual cash bonus and to participate in a 401(k)-retirement plan with an industry competitive company match.

In response to the COVID-19 pandemic, we initially implemented changes to our business practices in March 2020, taking precautions to protect the health and safety of our employees by instituting robust hygiene practices, installing temporary safety structures, increasing our cleaning protocols, implementing weekly COVID-19 testing, and limiting regular access to our facilities.

As the health environment continues to evolve, we remain committed to actively monitor and evolve our protocols to align with the Center for Disease Control’s best practices, including tracking vaccination and booster status and providing regular communication related to community resources.

Additionally, we introduced wellness initiatives as well as a flexible work environment policy and enhanced remote technology solutions, providing remote work opportunities for all employees both now, and well into the future.

Available Information

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We make available on our website at www.selectabio.com, free of charge, copies of these reports as soon as reasonably practicable after filing or furnishing these reports with the SEC.

The hyperlink to our website is included as an inactive textual reference only, and the information on our website is not incorporated by reference in this Annual Report on Form 10-K or in any other filings we make with the SEC.

RISK FACTORS SUMMARY

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You should carefully read and consider the matters discussed in this Annual Report under the heading “Risk Factors,” which include the following risks:

• We are a development-stage company and have incurred significant losses since our inception.

• We are a clinical-stage company and have incurred significant losses since our inception.

We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.

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• Clinical drug development involves a lengthy and expensive process, with an uncertain outcome.

• The outbreak of COVID-19 may continue to adversely impact our business, including sourcing raw materials and supplies to produce our product candidates, our preclinical studies and clinical trials.

• The COVID-19 pandemic may continue to adversely impact our business, including sourcing raw materials and supplies to produce our product candidates, our preclinical studies and clinical trials.

• Geopolitical events, instability and wars can adversely affect both our clinical operations and supply chains that we rely on to advance our drug candidates.

• We rely on 3SBio in China as our primary supplier of pegadricase and on other third parties for the manufacture of our product candidates for preclinical and clinical testing, and expect to continue to do so for the foreseeable future.

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• If we or our licensors are unable to adequately protect our proprietary technology, or obtain and maintain issued patents that are sufficient to protect our product candidates, others could compete against us more directly, which would negatively impact our business.

• We may suffer from effects of macroeconomic instability and inflation.

• We would be reliant on Sobi to execute the marketing and sale of SEL-212, if SEL-212 were approved.

• We may not have the funds necessary to fulfill our obligation to repurchase certain warrants.

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

What changed 10-K

Item 1. Business