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Item 1. Business

2020-10-13 compared with 2019-09-10 · 125 added, 99 removed, 28 unchanged (89% of the section changed)

2 unchanged sentences

Company ”, “

us ”) is a clinical stage biotechnology company

developing transformative therapies targeting rare and metabolic diseases.

The table below presents a summary of our

key programs and the expected timeline for development.

Congenital Hyperinsulinism (“CHI”) is a rare genetic

disorder that affects 1 in 50,000 to 1 in 30,000 newborns.

In areas of high consanguinity, the incidence may increase to 1 in 2,500

CHI can be caused by one of more than ten known genetic mutations.

These mutations may occur within the beta cells of the pancreas and lead to excessive insulin secretion.

The most common mutations

occur at the ABCC8 and KCNJ11 genes that encode the SUR-1 and Kir6.2 subunits of the KATP channel.

Ordinarily, beta cells in the pancreas secrete just enough insulin

to keep blood sugar in the normal range.

With CHI, the secretion of insulin is not properly regulated.

The beta cells secrete too

much insulin.

This results in excessively low blood sugar or severe hypoglycemia.

CHI is the most common cause of persistent hypoglycemia in infants

and children.

Persistent hypoglycemia increases risks of long-term neurologic complications.

Episodes are characterized by lethargy,

irritability, and / or difficulty feeding.

Repeated episodes of hypoglycemia increase the risk of serious complications such as

breathing difficulties, developmental delays, intellectual disability, vision loss, brain damage, seizures, coma, and possibly

We believe that existing management options are suboptimal.

To start, no medical therapy has been developed and approved for CHI.

To avoid hypoglycemia, many children require frequent glucose

monitoring and feeding, including intravenous or intestinal administration of sugar solutions, particularly overnight.

Due to genetics

or other factors, medical therapies currently used in practice do not adequately treat a significant number of children and / or

have side effects not well tolerated.

Surgical removal of all or part of the pancreas may be an option but is invasive and often

diabetes-inducing.

All in all, current treatment regimens are often ineffective, burdensome, and/or have a substantially negative

effect on the quality of life for these children and their families.

We believe that RZ358 is a first-in-class, fully human, monoclonal

antibody that has been specifically designed to treat all forms of CHI, as well as potentially other indications.

The unique, reversible

mechanism of action of RZ358 binds with high affinity to the insulin receptor at an allosteric site with no IGF-1 interaction.

In the setting of elevated insulin, RZ358 dims the insulin signal, while still allowing insulin to bind and signal.

downstream from the beta-cells, where genetic mutations leading to hyperinsulinism occur.

RZ358 was designed as a universal treatment

for all forms of CHI.

To date, RZ358 has been studied in Phase 1 and Phase 2 clinical

studies that have included children as well as adults.

Rezolute is currently launching a Phase 2b study in CHI and

we anticipate dosing the first patient in 2019.

RZ358 has designated orphan status in the US and EU.

Diabetic Macular Edema (“DME”) is one of the main

causes of vision loss in working-age adults globally.

With the growth of diabetes, prevalence in the US is estimated to increase

beyond the current estimate of 750,000 individuals.

DME is a metabolic disease that results from an increase in

retinal vascular permeability (“RVP”) in the setting of diabetic retinopathy (abnormal retinal blood vessel growth

caused by poorly controlled blood sugar levels).

Vascular leakage from retinal blood vessels leads to swelling of the retina, including

the macula, an area of the retina that is very important for vision.

The kinin system and the production of bradykinin have been

implicated in the vascular leakage associated with DME.

While the market is very large, current treatment approaches

They involve injections into the eye by retinal specialists on a monthly or bimonthly basis.

In addition to a segment

of the DME population that does not respond to these treatments, the extent of therapeutic benefit directly correlates with adherence

to this route of administration.

As the regimen is a significant burden for both patients and their healthcare providers, high

rates of non-adherence and ultimately, suboptimal therapeutic outcomes exist.

RZ402 is a potential new therapy for DME.

RZ402 has been shown

to normalize RVP in clinically-relevant animal models of macular edema as effectively as the current injectable treatments with

exposure-response studies supporting once daily dosing.

Rezolute plans to file an IND for RZ402 in mid-2020.

Exogenous basal insulin is a multi-billion dollar market dominated

by therapies where the standard of care is daily injections.

AB101 is an extended release microsphere formulation of PEGylated

human recombinant insulin.

It is being developed as a once-weekly subcutaneous injection, for use alone and in combination with

bolus prandial insulin or oral glucose lowering therapies, to improve glycemic control in patients with Type 1 and Type 2

Diabetes Mellitus.

We believe AB101 has the potential to provide a near peak-less, slow and uniform release of basal insulin.

Rezolute is currently conducting a Phase 1 study in Type 1 Diabetes

Mellitus and anticipates top line results later this year.

Following analyses of these date, we will evaluate out-licensing potential.

us ”) is advancing targeted therapies for metabolic

diseases with serious unmet needs.

On October 9, 2020, we completed

a private placement of equity securities that resulted in net proceeds to the Company of approximately $37.6 million.

October 7, 2020, our Board of Directors approved a one share for 50 shares reverse stock split of our $0.001 par

value Common Stock (the “Reverse Stock Split”).

The Reverse Stock Split was previously approved by stockholders

at our annual meeting on October 23, 2019 and was effective at 5:00 Eastern time on October 9, 2020.

first day of trading after the Reverse Stock Split was on October 13, 2020.

In connection with the Reverse Stock Split,

proportionate adjustments were made to increase the per share exercise prices and decrease the number of shares of Common

Stock issuable upon exercise of stock options and warrants whereby approximately the same aggregate price is required to be

paid for such securities upon exercise as had been payable immediately preceding the Reverse Stock Split.

In addition, any

fractional shares that would otherwise be issued as a result of the Reverse Stock Split were rounded up to the nearest whole

All references in this Annual Report to the number of shares of Common Stock and the related per share amounts have

been retroactively adjusted to give effect to the Reverse Stock Split.

Also during September 2020, we made

adjustments to the composition of our Board of Directors, which included appointing Philippe Fauchet as an independent director.

Our Board now consists of a majority of independent directors.

As of the date of this Annual Report, we

continue to work diligently toward our goal of having our shares of Common Stock listed on the Nasdaq Capital Market.

completion of the private placement and execution of the Reverse Stock Split, and board composition adjustments discussed above,

we believe that we currently meet all of Nasdaq’s initial listing standards.

We are currently engaged in active discussions

with the staff of Nasdaq with the objective to promptly complete the uplisting.

However, no assurance can be provided that we will

be successful in this regard.

Summary of Clinical Assets

Our lead clinical asset, RZ358, is an antibody

therapy in Phase 2b development as a potential treatment for congenital hyperinsulinism (“CHI”), an ultra-rare pediatric

genetic disorder.

In February 2020, we announced the

initiation of the RZ358-606 Phase 2b study (“RIZE”) globally at multiple study centers.

Prior to COVID-19, we had planned

to complete the RIZE study by the middle of calendar year 2021.

March 2020, we paused the RIZE study as a result of the COVID-19 pandemic.

As the COVID-19 pandemic abates in different

regions, we are resuming clinical activities including trial site initiations.

We believe that patient enrollment will recommence

by the end of October 2020.

Further, if we can begin enrolling patients on this timeframe, we believe we will be able to complete

the RIZE study in the second half of calendar year 2021.

addition, in the first half of calendar year 2020, we had positive interactions with the U.S.

Food and Drug Administration (“FDA”).

In June 2020, we announced that FDA granted us Rare Pediatric Disease (“RPD”) designation for RZ358, which qualifies

us to receive a priority review voucher upon marketing approval of the drug in CHI.

Such a voucher could be redeemed to receive

a priority review of a subsequent marketing application for any drug candidate in any disease indication.

Further, we submitted

the RIZE protocol to FDA which allows us to expand the study to clinical sites in the United States.

We believe that patient enrollment

may commence in the United States in the first quarter of calendar year 2021.

Our next program, RZ402, is an investigational

new drug (“IND”) application-ready oral therapy, targeting diabetic macular edema (“DME”).

Prior to COVID-19

we were planning to file the IND with the FDA in the third quarter of calendar year 2020, followed by the initiation and completion

of a Phase 1 study this calendar year.

However, as a result of the present uncertainties associated with COVID-19 pandemic, we

have deferred filing the IND.

We anticipate initiating the clinical trial for RZ402 prior to the end of the first quarter of calendar

CHI is an ultra-rare pediatric genetic

disorder characterized by excessive production of insulin by the pancreas.

CHI is caused by mutations in about a dozen known genes

associated with pancreatic beta cells and their secretion of insulin.

If untreated, it can lead to dangerously low blood sugar

Rezolute’s lead candidate, RZ358, is an antibody in Phase 2b development that is designed to prevent severe, persistent

low blood sugar in patients with CHI.

RZ358 is an intravenously administered

human monoclonal antibody that binds to a unique site on the insulin receptor found across effector cells throughout the body in

the liver, fat, and muscle.

This action allows RZ358 to counteract the effects of elevated insulin in the body.

Its unique allosteric

mechanism of action is reversible, depends on both insulin levels and blood sugar levels in a dose-dependent manner, and enables

patients to achieve normal levels of insulin and glucose.

Therefore, we believe that RZ358 is ideally suited as a potential therapy

for conditions characterized by excessive insulin production and it is being developed to treat hyperinsulinemia and prevent low

blood sugar for diseases such as CHI.

As RZ358 acts downstream from the beta cells, across effector cells in the liver, fat, and

muscle, it may be universally effective at treating CHI caused by any of the underlying genetic defects.

The RIZE study is a multi-center, open-label,

repeat-dose Phase 2b study of RZ358 in four sequential dosing cohorts of patients with CHI who are at least two years old and have

residual low blood sugar (<70 mg/dL) that is inadequately controlled on existing therapies.

In addition to safety and pharmacokinetic

evaluations, continuous glucose monitoring (“CGM”) and self-monitored blood glucose will be utilized to evaluate several

glycemic efficacy endpoints.

The primary endpoint is the time within a glucose target range of 70-180 mg/dL by CGM during weeks

4 and 8 of treatment compared to baseline.

DME is a severe complication of diabetes

marked by progressive vision loss and blindness.

Consistently high blood sugar levels can cause diabetic retinopathy, a complication

characterized by damage to the blood vessels in the eye and fluid leakage into the light-sensitive tissue known as the retina.

The accumulation of fluid may lead to DME, or swelling of the macula, the part of the retina responsible for sharp, straight-ahead

Currently available treatments for DME involve frequent burdensome injections into the eye or invasive laser surgery.

Rezolute is developing RZ402, a small molecule

plasma kallikrein inhibitor (“PKI”) for use in DME.

As a once-daily oral investigational therapy, RZ402 is designed

to improve compliance and treatment outcomes for patients with DME.

Elevated plasma levels of the enzyme kallikrein have been associated

with increased inflammation, vessel leakage and excess blood vessel growth in the eyes of patients with DME.

Genetic and pharmacologic

knockout of plasma kallikrein have been shown to protect against vascular endothelial growth factor (“VEGF”) induced

retinal blood vessel leakage in murine models without damaging long-term effects.

is a bioavailable small molecule inhibitor of plasma kallikrein that has shown the potential to prevent the onset of and reverse

vascular leakage in a dose-dependent manner in multiple rodent models of whole body and retinal vascular leakage.

Target plasma

concentrations were exceeded for 24 hours following oral dosing of RZ402 in monkeys and dogs, supporting the potential for once

daily dosing in humans.

Rezolute has completed a pre-IND meeting with the FDA and the IND-enabling toxicology studies in preparation

for filing an IND.

We face competition from pharmaceutical

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There are a handful of companies developing

therapies for CHI that could pose as potential competitors to RZ358.

Zealand Pharma, Xeris Pharma, and Hanmi are three such companies.

therapies for CHI that are potential competitors to RZ358.

Zealand Pharma is one such company.

There are a handful of companies developing

therapies for diabetic macular edema that could pose as potential competitors to the plasma kallikrein inhibitor therapy, including.

KalVista Pharmaceuticals, Verseon, and Thrombogenics.

If successfully commercialized, AB101 would

compete directly against Sanofi’s Lantus and Toujeo, Novo Nordisk’s Levemir and Tresiba, Eli Lilly’s Basaglar

as well as any other branded or biosimilar basal insulin therapies that may obtain regulatory approval in advance of AB101.

Nordisk’s Insulin 287 may be one such therapy.

oral therapies for diabetic macular edema that are potential competitors to the plasma kallikrein inhibitor therapy, KalVista Pharmaceuticals being one such company.

Government Regulation

Regulation by governmental authorities

in the US and other countries is a significant factor in the development, manufacture and marketing of pharmaceutical products.

and other countries is a significant factor in the development, manufacture and marketing of pharmaceutical products.

All of our potential products will require regulatory approval by governmental agencies prior to commercialization.

13 unchanged sentences

and $19.1 million in research and development expenses for the fiscal years ended June 30, 2020 and 2019, respectively.

discussion of our research and development activities, please refer to the discussion of our Pipeline above.

further discussion of activities related to our RZ358 and RZ402 product candidates, please refer to the discussion above.

discussion of our research and development expenses, please refer to the discussion under the caption Results of Operations

under Item 7 of this Annual Report.

As of June 30, 2020, we had 23 full-time

employees as well as one contract employee, all of whom have experience with pharmaceutical, biotechnology or medical product companies.

None of our employees or contractors are covered by collective bargaining agreements.

employees, all of whom have experience with pharmaceutical, biotechnology or medical product companies.

None of our employees or

contractors are covered by collective bargaining agreements.

Corporate Information

We were incorporated in Delaware in 2010.

We maintain executive offices located at 201 Redwood Shores Parkway, Suite 315, Redwood City, CA 94065 and our phone number is

(650) 206-4507.

were incorporated in Delaware in 2010.

We maintain executive offices located at 201 Redwood Shores Parkway, Suite 315, Redwood

City, CA 94065 and our phone number is (650) 206-4507.

Our website is located at www.rezolutebio.com .

The information contained in, or that can be accessed

through, our website is not part of, and is not incorporated into this document.

The information

contained in, or that can be accessed through, our website is not part of, and is not incorporated into this document.

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