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Item 1. Business

2023-03-16 compared with 2022-03-31 · 578 added, 477 removed, 649 unchanged (62% of the section changed)

We are a late-stage clinical biopharmaceutical company focused on developing novel cancer immunotherapeutics for a broad range of cancer indications.

Our product candidates currently include galinpepimut-S, or GPS, and nelipepimut-S, or NPS.

We are a late-stage clinical biopharmaceutical company focused on the development of novel therapeutics for a broad range of cancer indications.

Our product candidates currently include galinpepimut-S, or GPS, a peptide immunotherapy directed against the Wilms tumor 1, or WT1, antigen, and GFH009, a highly selective small molecule cyclin-dependent kinase 9, or CDK9, inhibitor.

Galinpepimut-S

Our lead product candidate, GPS, is a cancer immunotherapeutic agent licensed from Memorial Sloan Kettering Cancer Center, or MSK, that targets the Wilms tumor 1, or WT1, protein, which is present in 20 or more cancer types.

Our lead product candidate, GPS, is a cancer immunotherapeutic agent licensed from Memorial Sloan Kettering Cancer Center, or MSK, that targets the WT1 protein, which is present in 20 or more cancer types.

Based on its mechanism of action as a directly immunizing agent, GPS has potential as a monotherapy or in combination with other immunotherapeutic agents to address a broad spectrum of hematologic, or blood, cancers, and solid tumor indications.

In January 2020, we commenced in the United States a Phase 3 clinical trial, the REGAL study, for GPS monotherapy in patients with acute myeloid leukemia, or AML, in the maintenance setting after achievement of second complete remission, or CR2, following successful completion of second-line antileukemic therapy.

In January 2020, we commenced in the United States an open label randomized Phase 3 clinical trial, the REGAL study, for GPS monotherapy in patients with acute myeloid leukemia, or AML, in the maintenance setting after achievement of second complete remission, or CR2, following successful completion of second-line antileukemic therapy.

Patients are randomized to receive either GPS or best available treatment, or BAT.

We expect this study will be used as the basis for submission of a Biologics License Application, or BLA, subject to a statistically significant and clinically meaningful data outcome and agreement with the U.S.

Food & Drug Administration, or the FDA.

We plan to enroll approximately 116 patients at up to approximately 85 clinical sites in the United States, Europe and Asia with a planned interim safety and futility analysis after 80 events (deaths).

Under our current planning assumptions, which take into account our best estimates of potential delays due to COVID-19, we believe that we will complete enrollment for the REGAL study in late 2022 or early in the first quarter of 2023.

Based upon these current assumptions with respect to completion of enrollment and the estimated survival times for both the treated and control groups in the study, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 80 events (deaths) per the protocol will occur by the end of the first half of 2023, provided that our statistical assumptions and assumptions regarding the impact of COVID-19 on the operations of our clinical sites as well as the duration of the pandemic remain unchanged.

Because this analysis is event driven, it may occur at a different time than currently expected.

In December 2020, we entered into an exclusive license agreement with 3D Medicines Inc., a China-based biopharmaceutical company developing next-generation immuno-oncology drugs, for the development and commercialization of GPS, as well as the Company’s next generation heptavalent immunotherapeutic GPS+, which is at preclinical stage, across all therapeutic and diagnostic uses in the Greater China territory (mainland China, Hong Kong, Macau and Taiwan).

We have retained sole rights to GPS and GPS+ outside of the Greater China area.

In January 2022, we announced that an IND application filed by 3D Medicines to initiate the first clinical trial in China for 3D189, also known as GPS, has been accepted by China’s National Medical Products Administration (“NMPA”).

The IND is for a small Phase I clinical trial investigating safety.

On March 30, 2022, the IND was approved by the NMPA triggering a $1.0 million milestone payment to the Company which is expected to be received in the second quarter of 2022.

In December 2018, pursuant to a Clinical Trial Collaboration and Supply Agreement, we initiated a Phase 1/2 multi-arm "basket" type clinical study of GPS in combination with Merck & Co., Inc.’s anti-PD-1 therapy, Keytruda® (pembrolizumab).

Food and Drug Administration, or the FDA.

The primary endpoint of the REGAL study is overall survival.

We plan to enroll approximately 125 to 140 patients at approximately 95 clinical sites in North America, Europe and Asia with a planned interim safety, efficacy and futility analysis after 60 events (deaths).

Under our current assumptions with respect to completion of enrollment and the estimated survival times for both the treated and control groups in the study, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 60 events (deaths) per the protocol will occur by the end of 2023 or early 2024 and the final analysis after 80 events will occur by the end of 2024.

Because these analyses are event driven, they may occur at a different time than currently expected.

In December 2020, we entered into an exclusive license agreement with 3D Medicines Inc., or 3D Medicines, a China-based biopharmaceutical company developing next-generation immuno-oncology drugs, for the development and commercialization of GPS, as well as the Company’s next generation heptavalent immunotherapeutic GPS+, which is at preclinical stage, across all therapeutic and diagnostic uses in mainland China, Hong Kong, Macau and Taiwan, which we refer to as Greater China.

We have retained sole rights to GPS and GPS+ outside of Greater China.

In November 2022, we announced that we have agreed with 3D Medicines for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20 patients from mainland China.

Such participation by 3D Medicines will trigger two development milestone payments totaling $13.0 million, which we expect to receive in the first half of 2023.

If the REGAL study meets its primary endpoint for efficacy and the Chinese regulatory authorities determine that the REGAL data is sufficient for approval in China, GPS could potentially reach the market in Greater China much earlier than we and 3D Medicines had anticipated when we entered into the license agreement in December 2020.

As of March 15, 2023, we have received an aggregate of $10.5 million in upfront and milestone payments under our license agreement with 3D Medicines and a total of $191.5 million in potential future development, regulatory and sales milestones, not including future royalties, remains under the license agreement, which milestones are variable in nature and not under our control.

In 2020, we, together with Merck, determined to focus on ovarian cancer (second or third line).

We reported updated clinical and initial immune response data from this study in June 2021.

In February 2022 we reported that we had completed enrollment of 17 evaluable patients in this study.

Data from 15 of the 17 evaluable patients is expected to be examined by mid-2022, with final data analysis for all evaluable patients expected by the end of 2022.

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In November 2022, we reported topline clinical and initial immune response data from this study, which showed that treatment with the combination of GPS and pembrolizumab compared favorably to treatment with anti-PD-1 therapy alone in a similar patient population.

We plan to present final data from this study at a medical conference in the first half of 2023.

In February 2020, a Phase I open-label investigator-sponsored clinical trial of GPS, in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo ® ), in patients with malignant pleural mesothelioma, or MPM, who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy was commenced at MSK.

In June 2021, we announced updated data from this study.

Completion of enrollment of a target total of 10 evaluable patients is expected during the second half of 2022.

We expect to report additional clinical and immune response data in the first half of 2022.

Enrollment of a target total of 10 evaluable patients was completed at the end of 2022.

We expect to report topline data from this study in the first half of 2023.

GPS was granted Orphan Drug Product Designations from the FDA, as well as Orphan Medicinal Product Designations from the European Medicines Agency, or EMA, for GPS in AML, MPM, and multiple myeloma, or MM, as well as Fast Track Designation for AML, MPM, and MM from the FDA.

Nelipepimut-S

NPS is a cancer immunotherapy targeting the human epidermal growth factor receptor 2, or HER2, expressing cancers.

Data presented in 2018 from a Phase 2b clinical trial of the combination of trastuzumab (Herceptin ® ) plus NPS in HER2 low expressing (1+ or 2+ per immunohistochemistry, or IHC) breast cancer patients in the adjuvant setting to prevent recurrences showed a clinically and statistically significant improvement in the disease-free survival, or DFS, rate for the cohort of patients with triple negative breast cancer, or TNBC, at 24 months for patients treated with NPS plus trastuzumab of 92.6% compared to 70.2% for those treated with trastuzumab alone.

Since 2018, largely based on this data, we have been seeking out-licensing opportunities to fund and conduct the future clinical development of NPS in TNBC in order to maximize the potential of the program as we do not plan to conduct and fund a Phase 3 program for NPS on our own.

After extensive effort, we have concluded that continued efforts to outlicense NPS for further development for breast cancer are unlikely to result in a licensing transaction commensurate with the value of the asset which we believe is due to the changing market for breast cancer therapies, the scope, cost and timeline for a Phase 3 trial which would satisfy regulatory requirements for the TNBC indication and the failure, in 2016, of the Phase 3 clinical trial of monotherapy NPS in breast cancer.

As we continue our out-licensing strategy, we are now focusing on the potential for NPS in other cancer indications.

On March 31, 2022, we entered into an exclusive license agreement, or the GFH009 Agreement, with GenFleet that grants rights to us for the development and commercialization of GFH009, a highly selective small molecule CDK9 inhibitor, across all therapeutic and diagnostic uses worldwide, except for Greater China.

CDK9 activity has been shown to correlate negatively with overall survival in a number of cancer types, including hematologic cancers, such as AML and lymphomas, as well as solid cancers, such as osteosarcoma, pediatric soft tissue sarcomas, melanoma, endometrial, lung, prostate, breast and ovarian.

As demonstrated in preclinical and clinical data, to date, GFH009’s high selectivity has the potential to reduce toxicity as compared to older CDK9 inhibitors and other next-generation CDK9 inhibitors currently in clinical development and to potentially be more efficacious.

GFH009 is currently in a Phase 1 dose-escalating clinical trial in the United States and China.

We are evaluating both twice-a-week and once-a-week dosing regimens, and the indications are relapsed/refractory AML, chronic lymphocytic leukemia, or CLL, small lymphocytic leukemia, or SLL, and lymphoma.

The primary goal of the trial is to establish the recommended Phase 2 dose and to assess safety.

We expect enrollment in this study to be completed in the first quarter of 2023 and we expect to determine the recommended Phase 2 dose and report analyzed data from the study early in the second quarter of 2023.

Following completion of the Phase 1 clinical trial and determination of the recommended Phase 2 dose, we intend to commence a Phase 2a clinical trial of GFH009 in combination with venetoclax and azacitidine in AML patients who failed or did not respond to treatment with venetoclax and azacitidine.

The primary endpoint of the Phase 2a clinical trial, which we expect to initiate during the second quarter of 2023, will likely be complete remission (CR) rate and secondary endpoints will likely include progression free survival, or PFS, OS and proportion of patients proceeding to transplant.

We are also planning to potentially commence a Phase 2 clinical trial of GFH009 in certain solid tumors and/or lymphoma in the third quarter of 2023 and are exploring various options with respect to clinical development for GFH009 in several pediatric indications.

The chart below summarizes the current status of our clinical development pipeline:

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Merger of SELLAS Life Sciences Group Ltd.

and Galena Biopharma, Inc.

On December 29, 2017, we completed the business combination with the privately held Bermuda exempted company, Sellas Life Sciences Group Ltd., or Private SELLAS, in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of August 7, 2017 and amended November 5, 2017, or the Merger Agreement, among SELLAS Life Sciences Group, Inc., Sellas Intermediate Holdings I, Inc., Sellas Intermediate Holdings II, Inc., Galena Bermuda Merger Sub, Ltd., and Private SELLAS.

We refer to this business combination throughout this annual report on Form 10-K as the Merger.

As a result of the Merger, our business is now substantially comprised of the business of Private SELLAS, and our financial statements became those of Private SELLAS.

Upon completion of the Merger, we changed our name from “Galena Biopharma, Inc.” to “SELLAS Life Sciences Group, Inc.,” our common stock began trading on The Nasdaq Capital Market, or Nasdaq, under a new ticker symbol “SLS” on January 2, 2018.

As used in this annual report on Form 10-K, the words “we,” “us,” “our,” the “Company,” and “SELLAS” refer to SELLAS Life Sciences Group, Inc.

and its consolidated subsidiaries following completion of the Merger.

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The Cancer Immunotherapy Industry

Current treatments for cancer include surgery, radiation therapy, chemotherapy, hormone therapy, targeted therapy and immunotherapy.

Cancer immunotherapy is an approach to cancer treatment that harnesses the body’s natural immune system response to fight and/or prevent tumor growth while keeping normal cells unaffected or delivering certain immune system components in order to inhibit the spread of cancer.

In recent years, cancer immunotherapy drugs have emerged as a new mode of cancer treatment, alongside more established options such as surgery, chemotherapy, targeted therapy and radiation therapy.

Either as monotherapy or in combination therapies, immunotherapies may produce long-term remissions or even operational “cures” for cancers that have often been fatal until recently.

Cancer immunotherapy is an important and rapidly emerging field, which has led to exciting new clinical research studies and garnered the attention of investors, biotechnology and pharmaceutical companies, regulatory agencies, payors and hospital systems, cancer patients and their families and the general public at large.

According to a January 2021 report by Kelly Scientific Publications, cancer immunotherapy drugs have captured nearly 50% of the overall oncology drugs market, generating approximately $75 billion in 2019 and are forecasted to surpass $143 billion in 2025.

A July 2021 Allied Market Research has estimated that the global cancer immunotherapy market could reach $309.6 billion by 2030, growing at a compound annual growth rate, or CAGR, of 14.1%.

The global immunotherapy market is currently comprised of bi-specific monoclonal antibodies and immune response co-stimulators, checkpoint inhibitors, and other immunotherapies including chimeric antigen receptor (CAR) T-cell therapies, other cell-based modalities and novel therapies.

It is predicted that the checkpoint inhibitor market share will decrease slightly by 2023, from approximately 30% in 2019 to approximately 27% value, as novel therapies, including peptide cancer active immunizers (vaccines) such as our product candidates, GPS and NPS, and cell-based therapies, advance into regulatory approvals and use in the cancer market.

With respect to the market for AML, a June 2021 report from Delvelnsight estimates a global market size of $5.09 billion by the end of 2030, with a CAGR of 21.85% from 2018 to 2030.

The total number of newly diagnosed patients with AML per year in the United States is approximately 20,050 (2022 epidemiological data:

American Cancer Society).

It is estimated that the number of adult patients of any age with AML in the United States per year who successfully enter into CR2, the indication of our REGAL study, is approximately 2,000 patients and approximately 4,700 patients outside of the United States in the rest of the world, or ROW, while the number of patients who achieve first complete remission, or CR1, is estimated to be approximately 16,400 patients in the United States and approximately 38,100 patients ROW.

The number of patients potentially eligible for GPS maintenance therapy after achievement of CR2 status is approximately 1,200 patients in the United States and approximately 2,800 patients ROW.

Our overall goal is to develop multiple oncology product candidates in order to achieve marketing authorization in the United States and the rest of the world.

We are particularly focused on developing better treatments for AML, the lead indication for both GPS and GFH009, which will allow us to leverage our clinical development expertise in hematology/oncology and to build a single streamlined commercial infrastructure sufficient for both of our current product candidates.

Products/Pipeline

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A 2009 pilot project regarding the prioritization of cancer antigens (substances that evoke an immune response) conducted by the National Cancer Institute, or NCI, a division of the National Institutes of Health, or NIH, ranked the WT1 protein as a top priority for immunotherapy.

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WT1 is a protein that resides in the cell’s nucleus and participates in the process of cancer formation and progression.

As such, it is classified as an “oncogene.” WT1 plays a key role in the development of the kidneys in fetal life, but then almost disappears from normal organs and tissues.

As such, WT1 is classified as an “oncogene.” WT1 plays a key role in the development of the kidneys in fetal life, but then almost disappears from normal organs and tissues.

In a wide variety of cancers (20 or more cancer types), WT1 becomes detectable again in at least 50% of tumor pathology specimens in the cells of these cancers.

WT1 appears in large amounts ( i.e.

, becomes “overexpressed”) in numerous hematological malignancies, including AML, MM and chronic myeloid leukemia, as well as in many solid malignancies such as MPM, gastrointestinal cancers (such as colorectal cancer), glioblastoma multiforme, TNBC, ovarian cancer and small cell lung cancer, or SCLC.

, becomes “overexpressed”) in numerous hematological malignancies, including AML, MM and chronic myeloid leukemia, as well as in many solid malignancies such as MPM, gastrointestinal cancers (such as colorectal cancer), glioblastoma multiforme, triple negative breast cancer, or TNBC, ovarian cancer and small cell lung cancer, or SCLC.

Mechanism of Action in Immune System

GPS is a multi-peptide product that has been modified to enhance the degree and duration of the immune response against the WT1 protein.

The modification is based on the fact that two of the four peptides in the peptide mixture comprising GPS are deliberately mutated in a single amino acid residue.

The modification is based on the fact that two of the four peptides in the peptide mixture

comprising GPS are deliberately mutated in a single amino acid residue.

These mutated peptides are recognized by the immune system as non-self-entities and are therefore less likely to induce immune tolerance.

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T cells can be classified into two major subsets, CD4 cells and CD8 cells.

CD8 cells are characterized by a CD8 protein on their cell surface that allow them to recognize, bind and kill cells infected by cancer cells.

CD8 cells, known as killer T cells, are characterized by the expression of the CD8 protein on their cell surface that allow them to recognize, bind and kill cells infected by cancer cells.

CD4 cells, known as helper T cells, are critical to providing the signals necessary for sustained CD8 cell responses and are also capable of exerting direct anti-tumor activity.

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, natural killer cells) that are not as widely understood.

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The following diagram illustrate GPS’ mechanism of action:

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This process activates the CD4 and CD8 cells and sensitizes them to the key 25 epitopes of WT1, thus initiating the process of short- and long-term T-cell-mediated immunity against WT1.

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The following table summarizes the key features of GPS:

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candidate patient population GPS has activity across multiple HLA types that could allow treatment of a vast majority of global patient populations harboring WT1-positive malignancies.

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Potential Key Differentiators

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allogeneic, “off-the-shelf,” vialed subcutaneously administered drug that is not patient-specific;

• positive Phase 2 clinical data on effectiveness (based on overall survival, or OS, in AML and progression-free survival, or PFS, in MM) with good tolerability and a favorable safety profile.

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• positive Phase 2 clinical data on effectiveness (based on overall survival, or OS, in AML and PFS in MM) with good tolerability and a favorable safety profile.

Development Program for GPS

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GPS Monotherapy

• Registrational Phase 3 REGAL open-label randomized clinical trial in AML patients who have achieved hematologic complete remission, with or without thrombocytopenia (CR2/CR2p), after second-line antileukemic therapy and who are deemed ineligible for, or unable to undergo, allogeneic stem-cell transplantation

• Registrational Phase 3 REGAL open-label randomized clinical trial in AML patients who have achieved hematologic complete remission, with or without thrombocytopenia (CR2/CRp2), after second-line antileukemic therapy and who are deemed ineligible for, or unable to undergo, allogeneic stem-cell transplantation

• Phase 1 clinical trial of 3D189 (GPS) in China (our licensee, 3D Medicines is the sponsor)

IND has been filed

• Phase 1 clinical trial in patients with hematologic and thoracic malignancies with no demonstrable residual/recurrent disease after debulking therapy

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subsidiary (known as MSD outside the United States and Canada), or Merck

Enrollment complete;

data expected in 1H 2022

final data to be reported in 1H2023

• Phase I open-label investigator-sponsored clinical trial of GPS, in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo), in patients with MPM who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy

• Phase 1/pilot open-label, non-randomized clinical trial of GPS in combination with nivolumab in patients with WT1-expressing (WT1+) recurrent ovarian, fallopian tube or primary peritoneal cancer who were in second or greater clinical remission (after their successful first or subsequent “salvage” therapy)

Enrollment completed;

topline data expected 1H2023

• Phase 1/pilot open-label, non-randomized clinical trial of GPS in combination with nivolumab in patients with WT1-expressing, or WT1+, recurrent ovarian, fallopian tube or primary peritoneal cancer who were in second or greater clinical remission (after their successful first or subsequent “salvage” therapy)

final data reported

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GPS Monotherapy for Acute Myeloid Leukemia (AML)

Current AML Treatment Therapies

AML is an aggressive and potentially lethal blood cancer characterized by the rapid growth of abnormal white blood cells that build up in the bone marrow and interfere with the production of normal blood cells.

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AML most commonly affects adults, and its incidence increases with age.

A June 2021 report from Delvelnsight estimates a global market size for AML of $5.09 billion by the end of 2030, with a compound annual growth rate, or CAGR, of 21.85% from 2018 to 2030.

The total number of newly diagnosed patients with AML per year in the United States is approximately 20,050 (2022 epidemiological data:

American Cancer Society).

According to PharmaIntelligence (Informa, April 2022) as AML patients progress through their individual journeys and experience disease progression, the number of patients that ultimately receive a second-line treatment of any kind in the U.S.

is roughly 36% (about 7,500 patients) of the stated incident population.

The corresponding numbers of second-line treated patients in the key markets of the European Union (Germany, France, Italy and Spain) is approximately 6,520 and of Japan is approximately 3,482.

According to CD DiNardo (N Engl J Med 2018;

378:2386-2398) and D Verma (Leuk Lymphoma 2010 May;51(5):778-82), about 50% of patients in second-line achieve Complete Remission or CR2 (our Phase 3 REGAL patient population).

These figures would substantiate a total of approximately 8,725 clinically appropriate patients for GPS in the referenced key markets.

Until recently, the overall treatment landscape for AML had remained static for decades, as numerous targeted and antiproliferative agents were unsuccessful in providing meaningful long-term clinical benefits, including increments in survival.

In recent years, additional drugs have been approved and current standard treatments include chemotherapy (including the fixed molar ratio combination chemotherapy Vyxeos), hypomethylating agents, or HMAs, drugs that target mutations of the isocitrate dehydrogenase type-1 and -2 and the FMS-like tyrosine-protein kinase, FLT3, in patients whose disease harbors these genetic aberrations, the B-cell lymphoma 2 inhibitor venetoclax (in combination with chemotherapy or HMAs), the CD33-targeting antibody-drug conjugate gemtuzumab ozogamicin, and the sonic hedgehog signaling inhibitor glasdegib.

Select patients could also undergo an allogeneic hematopoietic, or blood-forming, stem cell transplant, or allo-HSCT.

One of the fundamental goals of therapy for AML, both in the upfront and salvage settings, is for the patient to achieve a state of complete remission.

Complete remission is defined per consensus criteria by the European Leukemia Net, or ELN, whereby the hematologic and clinical features of the disease are no longer detected.

In the first line setting, AML patients who achieve a status of first complete remission, or CR1, have two options for a meaningful long-term benefit:

allo-HSCT and maintenance therapy with the oral form of the HMA azacitidine, which the FDA approved for use in the second half of 2020.

In the second line setting, i.e., in AML patients who have relapsed and are receiving salvage antileukemic therapy, we are not aware of any therapies, other than allo-HSCT, that have shown through rigorous blinded, randomized, controlled clinical trials to offer a meaningful long-term benefit (either relapse-free or overall survival) when used as maintenance after patients achieve a status of CR2.

Once the disease relapses after second-line therapy, patients have limited options which currently include off-label administration of HMAs, venetoclax in combination with either HMAs or low-dose cytarabine or investigational agents in the context of a Phase 1/2 clinical trial.

AML as lead indication for GPS Program

We chose AML, for which we have been granted Fast Track and Orphan Drug designations by the FDA, as our lead indication for GPS for the reasons outlined below:

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• the high degree of unmet medical need in recurrent/relapsed AML and the absence of an effective maintenance therapy over the decades after salvage re-induction until and immediately after achievement of CR2 status, especially considering that most patients in this clinical scenario are older than 60 years of age;

• the almost universal expression of WT1 in leukemic blasts, which are AML’s replicating malignant cells, as well as leukemic stem cells, or LSCs, cells that are or become extremely resistant to standard chemotherapy or targeted agent approaches and which can be realistically eradicated only with immunotherapy methods (including allo-HSCT).

chemotherapy or targeted agent approaches and which can be realistically eradicated only with immunotherapy methods (including allo-HSCT).

LSCs have been shown to be susceptible to targeting by cytotoxic T cells (CD8 and CD4 cells) stimulated against leukemia-associated antigens and we believe this will be the case for GPS;

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• the advent of modern immunotherapeutics in cancer and the promise of an innovative, off-the-shelf potentially effective, low adverse event burden immunotherapy to prevent or delay relapse in patients once they achieve complete remission status in AML, a disease that has historically been associated with dearth of deep and sustained responses to checkpoint inhibitors;

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• evidence from our completed Phase 1 and Phase 2 clinical trials that administration of GPS can lead to extended relapse free survival and overall survival especially in patients who demonstrated clear WT1 specific CD4 and/or CD8 immune response to GPS administration.

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No third-line therapies have shown demonstrable clinical impact to date in AML patients after their second relapse and eventually AML patients in second relapse generally succumb to AML or complications associated therewith.

Current AML Treatment Therapies

In recent years, additional drugs have been approved and current standard treatments include chemotherapy (including the fixed-combination of chemotherapy Vyxeos), hypomethylating agents, or HMAs, drugs that target mutations of the isocitrate dehydrogenase, type-1 and -2 proteins and the FMS-like tyrosine-protein kinase, FLT3, proteins in patients whose disease harbors these genetic aberrations, the B-cell lymphoma 2 inhibitor venetoclax (typically in combination with chemotherapy or HMAs), the CD33-targeting antibody-drug conjugate gemtuxumab osogamicin, and the sonic hedgehog signaling inhibitor glasdegib.

Select patients could also undergo an allogeneic hematopoietic, or blood-forming, stem cell transplant, or allo-HSCT.

The potential effect of newer agents on overall survival has not yet been confirmed in large controlled clinical trials.

One of the fundamental goals of therapy for AML, both in the upfront and salvage settings, is for the patient to achieve a state of complete remission.

Complete remission is defined per consensus criteria by the European Leukemia Net, whereby the hematologic and clinical features of the disease are no longer detected.

In the first line setting, once AML patients achieve a status of first complete remission (CR1) they have two options for a meaningful long-term benefit:

allo-HSCT and maintenance therapy with the oral form of the HMA azacytidine, which was recently approved for use by the FDA.

Our Clinical Data in AML CR1 and CR2 Patients

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Of the eight patients tested for immunologic response, seven, or 87.5%, demonstrated a WT1-specific immune response.

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In a subsequent Phase 2 clinical trial in AML, a total of 22 adult patients of all ages with de novo AML were treated with upfront standard chemotherapy and were able to achieve CR1.

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GPS was then administered within three months from the completion of the consolidation chemotherapy regimen in up to 12 total doses:

six initial doses (priming immunization) followed by six additional “booster” immunizations over a total period of up to 15 months to qualifying patients ( i.e.

, patients who were clinically stable and did not show disease recurrence after the first six injections).

This Phase 2 clinical trial met its primary endpoint of an actual OS rate of at least 34%, measured three years into the clinical trial ( i.e.

, percentage of patients alive after three years of follow-up).

six initial doses (priming immunization) followed by six additional “booster” immunizations over a total period of up to 15 months to qualifying patients (i.e., patients who were clinically stable and did not show disease recurrence after the first six injections).

This Phase 2 clinical trial met its primary endpoint of an actual OS rate of at least 34%, measured three years into the clinical trial (i.e., percentage of patients alive after three years of follow-up).

An actual OS rate of 47.4% was demonstrated at three years post-GPS treatment, exceeding historical published data of OS of 20% to 25% by 2.4- to 1.9-fold (or 240% to 190%), respectively.

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GPS was well-tolerated in this clinical trial.

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Phase 3 REGAL Clinical Trial

Building on the Phase 2 study in AML CR2 patients, which showed a median OS of 21.0 months, at a median follow-up of 30.8 months, in patients receiving GPS compared to 5.4 months in contemporaneously treated patients with best standard therapy, in January 2020, we commenced a Phase 3 pivotal registration-enabling study for GPS in AML patients in CR2, including those in complete remission with incomplete platelet recovery.

This study, which we refer to as the REGAL study, is a 1:1 randomized, open-label study comparing GPS in the maintenance setting to investigators’ choice of best available treatment, or BAT, in adult AML patients (age >18 years) who have achieved their second hematologic (morphological) complete remission, with or without thrombocytopenia, after second-line antileukemic therapy and who are deemed ineligible for, or unable to undergo, allo-HSCT.

The primary endpoint is OS and secondary endpoints include leukemia-free survival rates of achievement of MRD negativity, and antigen-specific T-cell immune response dynamics over time.

This study, which we refer to as the REGAL study, is a 1:1 randomized, open-label study comparing GPS in the maintenance setting to investigators’ choice of best available treatment, or BAT, in adult AML patients (age >18 years) who have achieved their second or later hematologic (morphological) complete remission, with or without thrombocytopenia, after second-line antileukemic therapy and who are deemed ineligible for, or unable to undergo, allo-HSCT.

The primary endpoint is OS and secondary endpoints include leukemia-free survival, or LFS, landmark OS and LFS rates, and achievement of MRD negativity.

Exploratory endpoints include antigen-specific T-cell immune response dynamics over time.

We expect this study will be used as the basis for a BLA submission, subject to a statistically significant and clinically meaningful data outcome and agreement with the FDA.

The REGAL study is expected to enroll approximately 116 patients at up to approximately 85 clinical sites in the United States, Europe and Asia.

The COVID-19 pandemic has impacted the timeline for the REGAL study over the past two years.

Since we commenced the study in 2020, we have been initiating sites in the United States, Europe and, beginning in 2022, Asia.

However, since the onset of the COVID-19 pandemic, we have observed that, at certain times and in certain instances, clinical site initiations, patient screening and patient enrollment have been delayed.

These delays are likely due to many reasons, which have been changing and evolving as the COVID-19 pandemic itself has evolved, including the prioritization of hospital resources towards the care of patients with COVID-19, delays in reviews and approvals by independent institutional review boards, or IRBs, and/or ethics committees at clinical sites, the challenges for clinicians and patients to comply with clinical trial protocols due to quarantines impeding patient movement or interrupting operations at sites, restrictions on travel and, most recently, inadequate staffing at clinical sites, supply chain-related delays, and materials shortages.

Throughout the United States, Europe and Asia, newly initiated sites have taken longer than expected to become fully operational and begin enrolling patients.

We have taken several steps to mitigate these actual and potential delays, including increasing the number of clinical sites from 50 to up to approximately 85, increasing the number of additional countries, both in Europe and Asia, in which sites were or will be initiated, allocating additional resources, including additional CROs and internal personnel, to the REGAL study, and making certain changes to the protocol for the study.

We are continuing to monitor each clinical site through our CROs as well as conducting direct outreach to investigators and study staff through site visits, investigator meetings and other modes of communication.

The protocol specifies that the study will have a planned interim safety and futility analysis after 80 events (deaths).

In addition, the charter for the Independent Data Monitoring Committee, or IDMC, for the REGAL study provides that the IDMC will conduct safety and efficacy analyses at earlier points in the clinical trial.

Based upon these current assumptions with respect to completion of enrollment and the estimated survival times for both the treated and control groups, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 80 events per the protocol will occur by the end of the first half of 2023, provided that our assumptions regarding the impact of COVID-19 on the operations of our clinical sites as well as the duration of the pandemic remain unchanged.

Because this analysis is event driven, it may become available at different times than currently expected.

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The REGAL study is expected to enroll approximately 125 to 140 patients at approximately 95 clinical sites in North America, Europe and Asia.

We have received approvals from the regulatory authorities in the United States, Canada, France, Germany, Greece, Poland, Hungary, Spain, Italy, Serbia, India and Taiwan to commence enrollment in our Phase 3 REGAL study at clinical sites in those countries.

The protocol specifies that the study will have a planned interim safety, efficacy and futility analysis after 60 events (deaths).

In addition, the charter for the Independent Data Monitoring Committee, or IDMC, for the REGAL study provides that the IDMC may conduct risk-benefit assessments at earlier points in the clinical trial.

In December 2022, the IDMC performed its initial prespecified risk-benefit assessment of unblinded data from the study and recommended that the trial continue without modifications.

Based upon our current assumptions with respect to completion of enrollment and the estimated survival times for both the treated and control groups, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 60 events per the protocol will occur by the end of 2023 or early 2024 and that the final analysis after 80 events will occur by the end of 2024.

Because these analyses are event driven, they may become available at different times than currently expected.

We have agreed with our partner in China, 3D Medicines, for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20 patients from mainland China.

Such participation by 3D Medicines is possible due to the increase in the target patient enrollment in the study and will trigger two development milestone payments totaling $13.0 million, which we expect to receive in the first half of 2023.

The key features and schema of this study are shown in the following graphic:

Expanded Access Program

At the request of several investigators, we are planning to institute an Expanded Access Program that would allow qualified physicians who desire to treat with AML patients who do not meet currently required study entry criteria for the ongoing REGAL trial with GPS.

This access will be provided on a case by case basis to patients in the U.S.

and, potentially, Germany.

Patients treated under the Expanded Access Program will not be considered participants in the REGAL study.

We expect the program to commence in the second quarter of 2022.

It is expected that the physician selected patients will be patients in CR1 who underwent a bone marrow transplant while being positive for the minimal residual disease (MRD+).

The most common cause of early mortality in AML patients in CR1 is relapse.

There is a high relapse rate among transplanted AML patients who enter a transplant in CR1, especially among those who are MRD+.

Approximately 30% of those patients relapse within 6 months post-transplant, and approximately 35% within 8 months post-transplant, eventually reaching approximately 50% of patients by year 2 post-transplant.

At this time, there is no standard of care for maintenance after the transplant.

Most antileukemic agents have a severe myelosuppressive effect and, as such, would be counter-productive in the post-transplant setting as they could delay engraftment resulting in both increased toxicity and lower efficacy (due to limiting graft versus leukemia effect).

Attempts at maintenance with less myelosuppressive agents have a questionable track record.

HMAs, the most studied class of drugs in this setting, have failed to show any benefit in a controlled clinical trial, while increasing toxicity.

Molecularly targeted therapies (FLT3-ITD, IDH1m and IDH2m) appear to have more potential in the transplant setting but require the presence of targetable mutations.

Therefore, a non-myelosuppressive immunotherapy that does not depend on targetable mutations may be an important advancement in an area of high unmet medical need.

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In our Phase 2 study of GPS in AML CR1 patients, GPS has shown activity (as assessed by median leukemia free survival and median overall survival since the time of initial diagnosis versus historical controls) in these patients after standard induction chemotherapy, as well as one to four post-CR1 cycles of administration of further ‘consolidation’ chemotherapeutic regimen, after the completion of which they received GPS as ‘maintenance’.

We believe that there is theoretical rationale for cytocidal activity by CTLs after GPS therapy against leukemic stem cells as well, which are especially resistant to either chemotherapy or HMAs.

Phase 1 clinical trial of 3D189 in China

In January 2022, an IND application to initiate the first clinical trial in China for 3D189 (GPS) was accepted by China’s National Medical Products Administration, or NMPA.

The IND, for a small Phase I clinical trial investigating safety, was submitted by our partner in China, 3D Medicines Inc., or 3D Medicines.

3D Medicines expects to initiate this Phase 1 clinical trial by mid-2022 and will be responsible for all expenses related to executing the trial in China.

On March 30, 2022, the IND was approved by the NMPA triggering a $1.0 million milestone payment to the Company which is expected to be received in the second quarter of 2022.

The current clinical development plan provides for initiation of a Phase II clinical trial following receipt of satisfactory safety data from the Phase I study;

the initiation of the Phase II study will also trigger a milestone payment to us which we expect to receive by the end of 2022.

Potential for GPS Monotherapy in Post-Transplant Patients

In June 2021, a peer-reviewed article was published in the journal, Bone Marrow Transplantation , which included a comprehensive retrospective analysis of survival outcomes in 4,280 AML patients treated in more than 450 blood and marrow transplant centers worldwide between 2007 and 2015.

The analysis demonstrates the high unmet medical need to extend survival in AML patients.

The published analysis shows that even among patients eligible to receive a bone marrow transplant, considered to be the only potential curative therapy in AML, less than half of the patients are alive five years after initial diagnosis.

The analysis highlights the importance of the presence of MRD, with patients who harbored MRD at the time of transplant having only 34%-37% probability of surviving five years.

In our completed Phase 2 study of AML CR1 patients, OS for patients treated with GPS was 48.5 months from the time of enrollment in the study (67.6 months from initial AML diagnosis).

The retrospective analysis of the pooled outcomes for AML patients who underwent a transplant in the article published in Bone Marrow Transplantation indicates that the median OS from the time of transplant is approximately 26 months.

We believe that there is strong scientific rationale for consideration of a study in the post-transplantation setting and we are exploring the feasibility of such a clinical trial.

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In January 2022, 3D Medicines submitted an IND application to initiate the first clinical trial in China for 3D189, also known as GPS.

The IND for the Phase 1 clinical trial, which is investigating safety, was accepted by China’s National Medical Products Administration NMPA and the trial commenced in mid-2022.

3D Medicines is responsible for all expenses related to executing the trial in China.

In the second quarter of 2022, we received a $1.0 million milestone payment which was triggered by the NMPA’s approval of the IND.

Expanded Access Program

At the request of several investigators, in 2022 we instituted an Expanded Access Program that allows qualified physicians to treat patients who do not meet currently required study entry criteria for the ongoing REGAL trial with GPS.

This access is provided on a case-by-case basis to patients in the United States and Germany.

Patients treated under the Expanded Access Program are not considered participants in the REGAL study.

GPS Combination Therapy with Checkpoint Inhibitors

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In December 2018, we, in collaboration with Merck, initiated a Phase 1/2 open-label, non-comparative, multicenter, multi-arm clinical trial of GPS in combination with pembrolizumab in patients with WT1-positive advanced cancers, including both hematologic malignancies and solid tumors.

The purpose of the study is to determine if the administration of GPS in combination with pembrolizumab has the potential to demonstrate clinical activity in the presence of macroscopic disease, where monotherapy with either agent would have a more limited effect.

The negative influence of TME factors on the immune response is predicted to be mitigated by PD1 inhibition (by pembrolizumab), thus allowing the patients’ own immune cells to invade and destroy cancerous growth deposits specifically sensitized against WT1 (by concomitantly-administered GPS).

The endpoints of the study include safety, immunobiological response, overall response rate (as measured by “response evaluation criteria in solid tumors”, or RECIST), progression free survival and overall survival and other analyses of interest.

We, together with Merck, have determined to focus on 2nd or 3rd line WT1(+) relapsed or refractory ovarian metastatic cancer as the primary indication for the study.

We, together with Merck, determined to focus on 2nd or 3rd line WT1+ relapsed or refractory ovarian metastatic cancer as the primary indication for the study.

Ovarian cancer represents an intriguing opportunity to study both the clinical and immunologic effects of GPS in this solid tumor.

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• a predictive assumption of very low to negligible degree of clinical toxicity with a WT1-targeted immunotherapy such as GPS due to the fact that WT1 in normal, non-cancerous tissues is both expressed at extremely low levels and limited in number of organs and tissues, but also due to the fact that WT1 fragments, or peptide epitopes, in normal cells are presented to host APCs in a different manner than are WT1 fragments produced in cancer cells.

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Epithelial cancer of the ovary, or ovarian cancer, is a relatively common gynecologic cancer that develops insidiously, and hence is associated with vague or no symptoms that would urge patients to seek medical attention.

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Effective strategies, such as introduction of novel immunotherapies, to prolong remission or to prevent relapse are required, as subsequent remissions are of progressively shorter duration until chemotherapy resistance broadly develops, leading to eventual disease-related demise.

The purpose of the study was to determine if the administration of GPS in combination with pembrolizumab has the potential to demonstrate clinical activity in the presence of macroscopic disease, where monotherapy with either agent would have a more limited effect.

This study was the first clinical trial of GPS in a patient population harboring overt bulky disease.

The negative influence of TME factors on the immune response is predicted to be mitigated by PD1 inhibition (by pembrolizumab), thus allowing the patient's own immune cells to invade and destroy cancerous

growth deposits specifically sensitized against WT1 (by concomitantly-administered GPS).

The endpoints of the study were safety, immunobiological response, overall response rate (as measured by “response evaluation criteria in solid tumors”, or RECIST), progression free survival and overall survival and other analyses of interest.

GPS has been designed as maintenance therapy in order to provide an overall survival benefit after patients reach MRD status or complete remission.

The final topline data from this study demonstrated that the combination of GPS and pembrolizumab could halt or slow down the progression in highly active disease refractory to other therapies.

In December 2020, we announced that the first set of evaluable patients (n=8) in the study, diagnosed with metastatic ovarian cancer, demonstrated a disease control rate, or DCR, which is the sum of overall response rate and rate of stable disease, of 87.5% with a median follow-up of 9.4 weeks.

At the first assessment time-point of 6 weeks post-therapy initiation, 100% of the patients were free of disease progression.

Using a validated immunohistochemistry (IHC) assay during the screening period, the rate of WT1 positivity in this ovarian cancer patient population was approximately 70%.

Using a validated immunohistochemistry, or IHC, assay during the screening period, the rate of WT1 positivity in this ovarian cancer patient population was approximately 70%.

Six of the eight evaluable patients are continuing to receive GPS plus pembrolizumab.

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There was also evidence of polyfunctional T-cell activation (increases in secretion of >2 cytokines) in two out of three patients (66 percent).

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On February 1, 2022, we announced the completion of enrollment in the study.

The total expected enrolled and evaluable number of patients is 17.

Data from 15 patients is expected to be examined by mid-2022, with final data analysis for all evaluable patients expected by the end of 2022.

We and Merck will jointly perform applicable analyses of the study, including survival, immune-biological and any other analyses of interest, to assess the safety and efficacy profile of the combination of GPS and pembrolizumab in this metastatic ovarian cancer indication.

On November 10, 2022, we reported the following confirmatory topline data from 17 evaluable patients in the study.

We plan to report final data from this study at a medical conference in the first half of 2023.

• Median OS was 18.4 months compared to 13.8 months with pembrolizumab alone in a in a checkpoint inhibitor single agent study in a similar patient population treated with checkpoint inhibitor alone.

• Median progression-free survival, or PFS, was 12 weeks compared to 8 weeks in a checkpoint inhibitor single agent study in a similar patient population treated with checkpoint inhibitor alone.

• The overall response rate of the trial was 6.3 percent with a DCR of 50.1 percent at a median follow-up of 14.4 months.

In a checkpoint inhibitor single agent study in a similar platinum-resistant ovarian cancer patient population treated with a checkpoint inhibitor alone, the observed DCR was 37.2 percent, consistent with a DCR rate increase of approximately 45 percent in the GPS combination with pembrolizumab over that seen for checkpoint inhibitors alone.

• Survival and disease control benefits were observed in patients harboring tumors with any level of detectable PD-L1 expression, i.e., those with Combined Positive Score, or CPS, of 1 or higher.

The DCR is 63.6% in patients with a CPS of 1 or higher.

Patients with a CP S score of less than 1 showed a median OS of 3.2 months vs.

patients with a CPS greater than or equal to 1 who had a median OS of 18.4 months and, as it relates to time to progression, patients with a CPS score of less than 1 had a median PFS of 1.9 months and patients with a CPS score of greater than or equal than 1 showed a median PFS of 3.8 months.

• In 16 evaluable patients in whom serial peripheral blood samples were available, a correlation was observed between PFS and OS and WT1-specific immune response after GPS vaccination across more than 1 channel with intracellular cytokine flow-cytometry assays in peripheral blood lymphocytes assaying reactivity against the four pooled WT1 antigens comprising GPS.

The data were consistent with those seen in previous studies of GPS.

• The safety profile of GPS in combination with pembrolizumab was similar to pembrolizumab alone, with only the addition of low-grade rapidly resolving local reactions at the GPS injection site, consistent with observations from other GPS clinical studies.

GPS Combination Therapy with Nivolumab for MPM

A single-center, open-label, single-arm, non-randomized investigator-sponsored Phase 1 trial of concomitant administration of GPS in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo) was initiated in February 2020 at MSK in patients with MPM who have previously received treatment with pemetrexed-based chemotherapy and have measurable disease on imaging, either due to residual disease after prior treatment or recurrent disease.

We are providing GPS and BMS is providing nivolumab for this study.

We are providing GPS and Bristol-Myers Squibb is providing nivolumab for this study.

The principal investigator for the study is Dr.

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Completed Clinical Trials in Other Indications.

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The key features and schema of the study are shown in the Figure below:

In December 2020, we announced that the first set of evaluable patients (n=3) had a median PFS of at least 10 weeks since therapy initiation.

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All patients had the epithelioid variant of MPM, a tumor which is universally expressing WT1.

GPS was found to be appropriately immunogenic, leading to the emergence of antigen (WT1)-specific CD4+ T-memory cell responses at three months post-therapy initiation.

GPS was found to be appropriately immunogenic, leading to the emergence of antigen (WT1)-specific CD4+ T-memory cell responses at

three months post-therapy initiation.

In June 2021, we reported updated clinical data for four evaluable patients, all of whom had the MPM epithelioid and/or sarcomatoid variant and all of whom had received and progressed with, or are refractory to, frontline pemetrexed-based chemotherapy.

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The safety profile of the GPS-nivolumab combination was similar to that seen with nivolumab alone, with the addition of only low-grade, temporary local reactions at the GPS injection site, consistent with previously performed clinical studies with GPS.

Additional MPM patients are currently being enrolled;

completion of study enrollment (target total n = 10) is expected during the second half of 2022.

We expect to report additional clinical and immune response data in the first half of 2022, including, potentially, an assessment of CD8+ and CD4+ T-cell responses to the WT1 peptide pool in the GPS mixture, as well as epitope spreading (ES) by testing for antibody presence (IgG’s) directed specifically against the full-length WT1 protein (intra-antigenic ES) and IgG’s presence against other key oncofetal antigens expressed in MPM (inter-antigenic epitope spreading).

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Study enrollment (target total n=10) was completed at the end of 2022.

We expect to report final topline data for this study in the first half of 2023.

GPS Monotherapy:

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Symptoms may include shortness of breath, a swollen abdomen, chest wall pain, cough, feeling tired, and weight loss.

MPM is generally resistant to radiation and chemotherapy, and long-term survival is rare, even in cases where aggressive upfront debulking multimodality therapy ( i.e.

, extirpative surgery, chemotherapy and in some cases radiotherapy, often described as “trimodality therapy” when used to treat MPM) are used.

MPM is generally resistant to radiation and chemotherapy, and long-term survival is rare, even in cases where aggressive upfront debulking multimodality therapy (i.e., extirpative surgery, chemotherapy and in some cases radiotherapy, often described as “trimodality therapy” when used to treat MPM) are used.

A randomized, double-blind, placebo-controlled Phase 2 clinical trial in MPM patients enrolled a total of 41 patients at MSK and MDACC.

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MM causes a host of organ problems and symptoms, including fatigue, bone pain, fractures, circulatory problems (in small vessels of the brain, eye retina, heart, bowel, etc.) and kidney failure.

Treatment for MM includes chemotherapy, glucocorticoids, drugs that modulate the immune system (immunomodulatory drugs, or IMiDs), proteasome inhibitors, histone deaceylase inhibitors, targeted monoclonal antibodies, radiation and autologous stem cell transplants, or ASCTs.

Treatment for MM includes chemotherapy, glucocorticoids, drugs that modulate the immune system (immunomodulatory drugs, or IMiDs), proteasome inhibitors, histone deacetylase inhibitors, targeted monoclonal antibodies, radiation and autologous stem cell transplants, or ASCTs.

The prognosis in MM is highly variable and depends on numerous risk factors, some related to the biology of the disease, others to the host ( e.g.

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Similarly, patients who are ineligible for ASCT and are managed only with chemotherapy and long-term IMiD maintenance (with up to nine cycles of lenalidomide) who also achieve less than complete remission and remain MRD-positive demonstrate a three-year OS rate of only about 55%;

these landmark three-year OS rates decrease by approximately 40 to 50% in patients who also have high-risk cytogenetics at baseline.

these landmark

three-year OS rates decrease by approximately 40 to 50% in patients who also have high-risk cytogenetics at baseline.

Despite significant therapeutic advances in the management of MM, the prognosis of patients with high-risk cytogenetics at the time of diagnosis remains quite poor, even when they successfully complete an ASCT, particularly if such patients continue to have evidence of MRD.

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The data indicate promising clinical activity among MM patients with high-risk cytogenetics at initial diagnosis who also remain MRD(+) after successful frontline therapy (induction regimen followed by ASCT).

This subgroup of MM patients, when serially assessed per IMWG criteria, typically relapse/progress within 12 to 14 months after ASCT, even when they receive maintenance therapy with IMiDs such as

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thalidomide or proteasome inhibitors such as bortezomib - 18 of the 19 patients received lenalidomide maintenance starting after the first three GPS administrations following ASCT;

This subgroup of MM patients, when serially assessed per IMWG criteria, typically relapse/progress within 12 to 14 months after ASCT, even when they receive maintenance therapy with IMiDs such as thalidomide or proteasome inhibitors such as bortezomib - 18 of the 19 patients received lenalidomide maintenance starting after the first three GPS administrations following ASCT;

the remaining single patient received bortezomib under the same schedule.

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We believe that these results offer mechanistic underpinnings for immune activation against WT1 in patients with aggressive, high-risk MM, and support the potential antimyeloma activity of GPS.

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GPS Combination Therapy:

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GPS was studied in combination with nivolumab in an open-label, non-randomized Phase 1/pilot clinical trial, which was independently sponsored by MSK.

The aim of the study was to evaluate the safety and efficacy of this combination in patients with WT1-expressing (WT1+) recurrent ovarian, fallopian tube or primary peritoneal cancer who were in second or greater clinical remission (after their successful first or subsequent “salvage” therapy).

The aim of the study was to evaluate the safety and efficacy of this combination in patients with WT1+ recurrent ovarian, fallopian tube or primary peritoneal cancer who were in second or greater clinical remission (after their successful first or subsequent “salvage” therapy).

Eligible patients were devoid of macroscopic residual or recurrent disease, i.e., were free of locally or distantly metastatic deposits detectable by imaging modalities (CT, MRI and/or PET scan).

This Phase 1/pilot clinical trial enrolled 11 patients with recurrent ovarian cancer who were in second or greater clinical remission at MSK, of whom 10 were evaluable.

Patients enrolled in the clinical trial received the combination therapy during the clinical trial’s 14-week treatment period.

Patients enrolled in the clinical trial received the combination therapy during a 14-week treatment period.

Individuals who had not progressed by the end of this period also received a maintenance course of GPS.

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The most common adverse events were Grade 1 or 2, including fatigue and injection site reactions.

Dose limiting toxicity was observed in one patient, following the second dose of the combination.

Dose limiting toxicity was observed in one patient, following the

second dose of the combination.

No additional adverse event burden was observed for the combination as compared to nivolumab monotherapy.

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No new serious adverse events were noted during the longer follow-up period.

GPS Regulatory and Manufacturing

We have received approvals from the regulatory authorities in the United States, France, Germany, Greece, Poland, Hungary and Taiwan to commence enrollment in our Phase 3 REGAL study in those countries.

We expect to obtain regulatory approvals from additional countries in the first half of 2022.

In August 2021, we manufactured the second of three registration batches of GPS which will be required for a BLA for GPS assuming positive data from the REGAL study.

This additional batch will be used in our GPS clinical programs and for clinical supply to 3D Medicines under the license agreement for development and, potentially, commercialization in Greater China.

During the first half of 2021, the drug product manufacturing process for GPS was successfully transferred to a new CMO, Lyophilization Services of New England, Inc., or LSNE.

LSNE manufactured a new regulatory standard drug product batch which entailed further process improvements which were agreed upon by the FDA.

The new manufacturing batch met all the release criteria and, to date, has shown favorable stability data on already known long-term conditions (-20°C) as well as newly accelerated conditions (5°C and 25°C).

Both long-term and accelerated stability data are monitored to confirm that all drug product parameters are within the acceptance criteria and this optimized batch, based on the data to date, may ultimately allow for GPS to be stored in 5°C to 25°C conditions versus -20°C.

This favorable outcome would be more optimal for supply chain and logistical reasons.

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Commercial Strategy for GPS

We have retained sole rights to GPS and GPS+ outside of the Greater China area.

See “Strategic Collaborations and License Agreements.”

Nelipepimut-S

Our other cancer immunotherapy product, NPS, targets HER2 expressing cancers.

The historical development program for NPS has primarily targeted patients in the adjuvant, or after-surgery, setting who have relatively healthy immune systems but may still have residual disease.

NPS is the immunodominant nonapeptide derived from the extracellular domain of the HER2 protein, a well-established and validated target for therapeutic intervention in breast and gastric carcinomas.

The NPS vaccine is combined with GM-CSF (Sargramostim) for injection in between the layers of the skin epidermis, i.e., intradermal administration.

Data has shown that an increased presence of circulating tumor cells, or CTCs, may predict reduced DFS, and OS, suggesting a presence of isolated micrometastases, not detectable clinically, but, over time, can lead to recurrence of cancer, most often in distant sites.

After binding to the specific HLA molecules on antigen presenting cells, the NPS sequence stimulates specific CTLs, causing significant clonal expansion.

These activated CTLs recognize, neutralize and destroy, through cell lysis, HER2 expressing cancer cells, including occult cancer cells and micrometastatic foci.

This immune response can also generate CTLs to other immunogenic peptides through inter- and intra-antigenic epitope spreading.

We have previously reported data for NPS in two different types of breast cancer:

• In 2018 and 2019, we announced positive data for a subset of patients with TNBC from the prospective, randomized, single-blinded, controlled Phase 2b IST clinical trial of trastuzumab +/- NPS in HER2 1+/2+ breast cancer patients in the adjuvant setting to prevent recurrences showing a clinically and statistically significant improvement in the DFS rate for the TNBC cohort at 24 months of 92.6% for patients treated with NPS plus trastuzumab compared to 70.2% for those treated with trastuzumab alone.

In early 2020, based upon FDA feedback and on the totality of clinical, safety and translational NPS data to date, we finalized the design and plan for a Phase 3 registration-enabling study of NPS in combination with trastuzumab for the treatment of patients with TNBC in the adjuvant setting after standard treatment.

• In March 2020, we reported preliminary antigen-specific immune response data from a Phase 2 IST of NPS in combination with GM-CSF which evaluated women diagnosed with, ductal carcinoma in situ of the breast, or DCIS, who are HLA-A2+ or A3+ positive, who express HER2 at IHC 1+, 2+, or 3+ levels, and who are pre- or post-menopausal.

The trial had an immunological (rather than clinical) endpoint evaluating NPS peptide-specific CTL (CTL;

CD8+ T-cell) response in vaccinated patients.

The relative frequency of NPS-specific CD8 CTLs as a percentage (NPS-CTL%) was twice as large in the NPS-treated patients.

The mean difference in NPS-CTL% increase between the active and control groups was +0.10% vs +0.05%.

The relative magnitude of change in NPS-CTL% mean values in NPS-treated patients over time was an 11-fold increase, from 0.01% at baseline to 0.11% after surgery, indicating a continued antigen-specific T-cell response post-NPS vaccination.

The overall adverse event profile was consistent with previous safety data.

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Since 2018, we have conducted an extensive global out-licensing effort for NPS to find an interested party to fund and conduct the future clinical development of NPS in order to maximize the potential of the program, with a focus on further development of NPS for breast cancer, specifically TNBC.

We do not currently plan to conduct and fund a Phase 3 program for NPS for the TNBC indication on our own.

As part of our out-licensing efforts, we engaged numerous outside advisors who assisted us in specifically targeting over 100 pharmaceutical and biotechnology companies in the United States, Europe and Asia with research and development programs in breast cancer as well as those companies developing biosimilars of trastuzumab and companies developing immunotherapies.

During this period through the end of 2021, we met with several companies who engaged in varying degrees of due diligence and negotiation, but we were ultimately unable to agree upon terms favorable to the Company which we believed were commensurate with the value of NPS.

We believe that the reason for our inability to agree upon terms which we believe are commensurate with the value of the asset was due to the changing market for breast cancer therapies, the scope, cost and timeline for a Phase 3 trial which would satisfy regulatory requirements for the TNBC indication and the failure, in 2016, of the Phase 3 clinical trial of monotherapy NPS in breast cancer.

At this point in time, we have concluded that continued efforts to outlicense NPS for further development for breast cancer are unlikely to result in a licensing transaction.

As we continue our out-licensing strategy, we are now focusing on the potential for NPS in other cancer indications.

GFH009 is a next generation highly selective CDK9 inhibitor which we in-licensed from GenFleet in March 2022.

We have worldwide development and commercialization rights, except for Greater China.

See Strategic Collaborations and License Agreements - Exclusive License Agreement with GenFleet Therapeutics (Shanghai), Inc.

CDK9 activity has been shown to correlate negatively with overall survival in several cancer types, including hematologic cancers, such as AML and lymphomas, as well as solid cancers, such as osteosarcoma, pediatric soft tissue sarcomas, melanoma, endometrial, lung, prostate, breast and ovarian cancer.

Mechanism of Action

CDK9 is a major cancer target.

CDK9, together with cyclin T1, forms positive transcription elongation factor b, or P-TEFb, which plays an important role in allowing long RNA strands to be quickly transcribed.

P-TEFb is crucial for the synthesis of some of the key proteins necessary for survival of cancer cells, including short-lived proteins such as MCL-1, which is a key anti-apoptotic (preventing programmed cell death) protein, and oncogenes such as c-MYC.

These proteins must be constantly replenished for cancer cells to survive.

Inhibition of CDK9 can decrease the levels of MCL-1 and c-MYC which can result in apoptosis and cell cycle arrest.

Cyclin-dependent kinases, or CDKs, play a role not only in cancer cells but also healthy cells.

Drug candidates that broadly target CDKs, i.e., those with lower specificity, can have issues with toxicity because healthy cells as well as cancer cells are targeted.

The first generation of CDK9 inhibitors worked across many CDK targets in addition to CDK9.

These first-generation drug candidates showed some clinical activity but had significant toxicity due to low specificity.

Next generation CDK9 inhibitors, including GFH009, have potential for higher specificity for CDK9 and lack of binding to other CDKs, potentially resulting in less toxicity and more consistent clinical activity.

Key Attributes

Higher selectivity :

In preclinical studies, GFH009 has demonstrated higher selectivity for CDK9 than other members of the human kinome when compared to other non-oral CDK9 inhibitors currently in active clinical development in the United States for hematological cancers, including AZD-4573 being developed by AstraZeneca and BAY-1251152 (now VIP152) being developed by Vincerx Pharma.

GFH009 has been shown to block activity of fewer kinases, other than CDK9, than these competing development candidates, as.

The human kinome is a set of all 538 kinases, which are enzymes that play essential functions by catalyzing protein phosphorylation.

Higher anti-cancer activity:

The preclinical data below is a comparison of GFH009 and an exact molecular copy of VIP152 (shown in the graphs as GFC002).

The top table shows the maximal inhibitory concentration, which is the amount of drug that is needed to inhibit survival of cancer cells, across different cell lines of cancer in vitro.

Across multiple cancer cell line histologies, a smaller concentration of GFH009 is needed to achieve the same inhibitory effect as compared to the exact molecular copy of VIP152.

In a mouse AML xenograft model, the lowest tumor growth and the highest AML cell killing was achieved by GHF009.

In this mouse model, there was significantly more toxicity, including weight loss, observed with VIP152 treated mice.

GFH009 IC50 (72h)

VIP152 IC50 (72h)

42.3 ~68.6 nM

Pharmacokinetic, or PK, Data:

Initial PK data observed from the ongoing Phase 1 trial are shown below.

PK data show the relationship between the dosing regimen and the body’s exposure to a drug as indicated by the concentration time curve.

An important component of the mechanism of CDK9 inhibition in cancer is to achieve very high concentration immediately which then shuts down the cancer cell and leads to apoptosis, while quickly ramping down so that there is not apoptosis of neutrophils.

The PK curves observed at the 2.5 mg and 4.5 mg dose levels of the Phase 1 study are very similar:

there is quick ramp up to 500–600 ng/mL which drops to half of that within an hour, and another half in the next hour, resulting in enough time for fast metabolizing cancer cells to enter apoptosis but not enough time for neutrophils to become apoptotic.

In contrast, for VIP152, elimination half-life was reported as three to nine hours.

We believe that this difference in PK may account for the differences in safety outcomes between VIP152 and GFH009.

Pharmacodynamic, or PD, Data:

The graphs below show certain correlative pharmacodynamic data from the ongoing Phase 1 study.

At higher dose levels, a pattern of drug induced decreases in two biomarkers commonly used for assessing pharmacodynamics of CDK9 inhibitors, MCL1 and MYC, is seen.

These data are important in that we believe they demonstrate that GFH009 is translating CDK9 inhibition into a meaningful suppression of cancer associated proteins.

MCL1 is a key antiapoptotic protein which is difficult to inhibit directly.

It is postulated that CDK9 inhibitors can indirectly inhibit MCL1.

We believe that these PD data demonstrate that GFH009 does inhibit MCL1.

Efficacy in venetoclax resistant disease:

Venetoclax, in combination with hypomethylating agents, is a key component of treatment for AML across all patient categories, especially older patients, who are the vast majority of AML patients.

We believe that GFH009 has potential as a treatment option for AML patients who are resistant or refractory to venetoclax.

To our knowledge, as of March 31, 2023, GFH009 is the only CDK9 inhibitor for which a complete response as monotherapy in r/r AML has been reported.

See Phase 2 Clinical Trial.

We have also observed in the Phase 1 study two additional r/r AML patients with greater than or equal to 50% decrease in bone marrow leukemic blasts.

Each of these three patients had prior treatment with venetoclax.

Phase 1 Clinical Trial

GFH009 is currently in a Phase 1 dose-escalating clinical trial in the United States and China.

We expect to complete enrollment of this study in the first quarter of 2023.

In the study, we are evaluating both twice-a-week and once-a-week dosing, and the indications are relapsed/refractory, or r/r, AML, chronic lymphocytic leukemia, or CLL, small lymphocytic leukemia, or SLL, and lymphoma.

The primary goal of the trial is to establish the recommended Phase 2 dose and to assess safety.

We expect to report analyzed data from this study and the recommended Phase 2 dose early in the second quarter of 2023.

We announced in December 2022 data to date from this study.

As of December 2022, a total of 57 patients were enrolled in the study, including 31 with r/r lymphoma and 26 with r/r AML.

All enrolled patients were heavily pretreated with up to six lines of previous therapy.

The dose escalating trial was originally planned at fixed per patient doses ranging from 2.5 mg to 30 mg, administered as 30-minute infusions twice a week.

The initial design was based on expected toxicities observed in previously published trials with other CDK9 inhibitors, which were primarily severe neutropenias.

However, the lack of observed severe toxicities, even at the highest dose level of 30 mg, provided the opportunity to both further escalate the dose levels, and to explore a more patient friendly once a week dosing regimen without sacrificing efficacy.

New dosing regimens added to the trial were 40 mg administered twice per week and 30 mg, 45 mg and 60 mg administered once a week.

At December 2022, apparent efficacy was noted without significant toxicities at multiple dose levels ranging from 9 mg to 30 mg, suggesting a broad therapeutic window, which is a key trait for high combination potential.

Stable disease (SD) was maintained in certain patients for more than 8 months and one patient on treatment in December 2022 had maintained SD for more than a year, which suggests a favorable safety profile with potential for prolonged treatment.

Selective Preliminary GFH009 Monotherapy Efficacy Data in r/r AML Group at December 2022:

• One patient had a confirmed CR and was MRD negative after failing azacitidine–venetoclax treatment

• One patient continued on treatment for three months

• Two patients had blast count decreases of ≥50% in bone marrow (both r/r on azacitidine- venetoclax treatment)

Selective Preliminary GFH009 Monotherapy Efficacy Data in r/r Lymphoma Group at December 2022:

• Two patients had partial response (PR)

• Four patients achieved SD with one maintaining SD for over a year while still continuing GFH009 monotherapy

The PK profile of GFH009 showed dose proportional concentrations with a biphasic profile of rapid initial tissue distribution followed by slower elimination from tissues.

There were no apparent time-dependent changes in volume of distribution or clearance.

Initial PD studies have shown clear reductions in two known biomarkers of CDK9 activity, MCL‐1 and MYC.

In the data reported in December 2022, biomarker response was observed in 97.6% of analyzed patients (41 of 42 patients) with a decrease for either MCL-1 or MYC expression and 95.2% (40 of 42 patients) had a decrease in both biomarkers.

Phase 2 Development Program

In the second quarter of 2023, following the determination of the recommended Phase 2 dose, we intend to commence a Phase 2a clinical trial of GFH009 in combination with venetoclax and azacitidine in AML patients who failed or did not respond to treatment with venetoclax and azacitidine.

The primary endpoint of the Phase 2a clinical trial will likely be complete remission, or CR, rate and secondary endpoints will likely include progression free survival, OS and proportion of patients proceeding to transplant.

We expect to receive preliminary data from the Phase 2a study by the end of 2023.

See Current AML Treatment Therapies for more information on the AML treatment landscape.

We are also planning to potentially commence a Phase 2 clinical trial of GFH009 in certain solid tumors and/or lymphoma in the third quarter of 2023.

Preclinical Studies

In August 2022, we announced results from preclinical in vitro studies for GFH009 in AML cell lines.

The in vitro studies were conducted at an independent third-party contract research organization, and utilized the following cell lines based on their unique characteristics in combination with GFH009’s mechanism of action:

RH30, a pediatric soft tissue sarcoma cell line that is a model for studying high-risk pediatric rhabdomyosarcoma, NCI-H209, a small cell lung cancer cell line characterized by the loss of function of two major tumor suppressor genes, RB1 and TP53, and which also expresses MCL-1, a major target of CDK9 inhibition, SKOV-3, an ovarian cancer cell line containing the wild type BRCA1 gene and highly expresses CDK9, and OCI-AML-2, an AML cell line that develops resistance to venetoclax.

The data showed that GFH009 demonstrated significant anti-tumor effects in all four selected cell lines.

In three out of the four cell lines, GFH009 inhibited cancer cell growth by 90 to 100 percent.

In August, we announced results from a new preclinical in vitro study for GFH009 in neuroendocrine prostate cancer, or NEPC.

The data shows that GFH009 demonstrated significant anti-tumor effects in the selected cell line at nanomolar concentrations and, in certain samples, complete growth inhibition with no viable cancer cells.

Additionally, in December 2022, we announced results from a preclinical in vivo study for GFH009 that demonstrated robust inhibition of tumor growth in a mouse xenograft model of SCLC.

GFH009 was tested against NCI-H209 SCLC xenografts in athymic nude mice in four treatment groups of eight mice each (n=32) consisting of GFH009 alone, olaparib (a PARP inhibitor) alone, a combined regimen of GFH009 and olaparib, and a vehicle control.

Treatments were initiated after tumor xenograft volumes exceeded 120 mm3 in each animal group and mice were subsequently sacrificed after mean tumor volume exceeded 1,500 mm3 in the control group.

GFH009 treated mice exhibited a 40.4% decrease in mean tumor growth compared to the control group in this very aggressive cancer model which had a tenfold increase in average tumor volume over 20 days.

Strongest effects were observed with GFH009 in combination with olaparib, with mean tumor growth decreased by 72.3%.

Treatment with olaparib alone resulted in a 30.2% mean decrease in tumor growth.

No significant toxicity or safety concerns were observed in any of the treatment groups.

PIVOT Program

In December 2022, we announced that GFH009 will be evaluated in pediatric solid tumors and leukemia models through the NCI Pediatric Preclinical in Vivo Testing, or PIVOT, program.

GFH009 testing through the program involves a two-phase research plan for PK and efficacy in pediatric tumors.

In the first phase, PIVOT principal investigators will conduct PK experiments to confirm the appropriate dose and route administration for GFH009.

In the second phase, monotherapy in vivo efficacy testing for GFH009 will be performed by PIVOT investigators.

Studies will be supported through cooperative agreement grants from the NCI to the seven PIVOT research programs performing the testing and a centralized coordinating center.

The PIVOT program is a comprehensive program to systematically evaluate novel agents against genomically characterized pediatric solid tumor and leukemia models at eight participating research institutions.

By supporting a more reliable agent prioritization process, the PIVOT program contributes to the goal of accelerating discovery of more effective treatments for children with cancer.

Each PIVOT principal investigator has expertise in preclinical testing of childhood cancer in vivo models.

These models utilize patient derived xenografts, many of which are refractory to current standard of care treatments, from high-risk childhood cancers and have undergone comprehensive genomic characterization to demonstrate close resemblance to genetic alterations seen in the respective human cancers.

Research strategies are based on a substantial body of data showing that preclinical testing in the appropriate pediatric cancer models, combined with expertise on relative drug exposures tolerated in mice and humans, provides powerful insights into likely clinical utility of investigational agents.

PIVOT Program participating institutions and relevant pediatric cancer models are as follows:

• Jackson Laboratory which serves as PIVOT Coordinating Center

Jude Children’s Research Hospital for soft tissue sarcomas including rhabdomyosarcoma

• MD Anderson Cancer Center for osteosarcoma

• University of Texas Health Science Center San Antonio for Ewing sarcoma rhabdomyosarcoma, kidney, and liver cancers

• Memorial Sloan Kettering Cancer Center for pediatric sarcomas and other solid tumors

• Children's Hospital of Chicago for orthotopic CNS tumors

• Children’s Cancer Inst Australia for acute lymphoblastic leukemia

• Children’s Hospital of Philadelphia for neuroblastoma

Strategic Collaborations and License Agreements

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The MSK original license agreement was first amended in October 2015, further amended in August 2016, amended and restated in May 2017 and again amended and restated in October 2017.

In connection with the entry of the original license agreement and its amendments, MSK was issued or assigned an aggregate of 4,846 ordinary shares of Private SELLAS common stock for the year ended December 31, 2017.

These common stock shares were converted into our common stock shares upon the Merger.

In connection with the entry of the original license agreement and its amendments, MSK was issued or assigned an aggregate of 4,846 ordinary shares of the privately held Bermuda exempted company, Sellas Life Sciences Group Ltd., or Private SELLAS, common stock for the year ended December 31, 2017.

These common stock shares were converted into our common stock shares upon the business combination with Private SELLAS on December 29, 2017.

Under the terms of the current amended and restated MSK license agreement, we agreed to pay minimum royalty payments in the amount of $0.1 million each year commencing in 2015 and research funding costs of $0.2 million in each year and for three years commencing in January 2016.

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or (c) ten years from the first commercial sale in such country.

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Merck & Co., Inc.

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In September 2017, we entered into a clinical trial collaboration and supply agreement through a Merck subsidiary, whereby we agreed with the Merck subsidiary to collaborate on a clinical program to evaluate GPS as it is administered in combination with their PD1 blocker pembrolizumab in a Phase 1/2 clinical trial enrolling patients in up to five cancer indications, including both hematologic malignancies and solid tumors.

The Phase 1/2 clinical trial was designed to explore the combination of GPS plus pembrolizumab in patients with WT1+ relapsed or refractory tumors in both solid tumor and hematological cancer indications and to assess the efficacy and safety of the combination, comparing overall response rates and immune response markers achieved with the combination compared to prespecified rates based on those seen with pembrolizumab alone in comparable patient populations.

with the combination compared to prespecified rates based on those seen with pembrolizumab alone in comparable patient populations.

This trial was initiated in December 2018.

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In February 2022 we reported that we had completed enrollment of 17 evaluable patients in this study.

Data from 15 of the 17 evaluable patients is expected to be examined by mid-2022, with final data analysis for all evaluable patients expected by the end of 2022.

We plan to present final data from this study at a medical conference in the first half of 2023.

Exclusive License Agreement with 3D Medicines Inc.

In December 2020, we, together with our wholly-owned subsidiary, SLSG Limited, LLC, entered into an Exclusive License Agreement (the “3DMed License Agreement”) with 3D Medicines Inc., or 3DMed, pursuant to which we granted 3D Med a sublicensable, royalty-bearing license, under certain intellectual property owned or controlled by us, to develop, manufacture and have manufactured, and commercialize GPS and heptavalent GPS, or GPS-Plus, product candidates, or the Licensed Products, for all therapeutic and other diagnostic uses in mainland China, Hong Kong, Macau and Taiwan, or the 3DMed Territory.

The license is exclusive, except with respect to certain know-how that has been non-exclusively licensed to us and is sublicensed to 3DMed on a non-exclusive basis.

We have retained development, manufacturing and commercialization rights with respect to the Licensed Products in the rest of the world.

In partial consideration for the rights granted by us, 3DMed agreed to pay us (i) a one-time upfront cash payment of $7.5 million in order to reimburse us for certain expenses incurred with respect to the development of the Licensed Products prior to execution of the License Agreement, and (ii) milestone payments totaling up to $194.5 million in the aggregate upon the achievement of certain technology transfer, development and regulatory milestones, as well as certain net sales thresholds of Licensed Products in the 3DMed Territory in a given calendar year.

3DMed also agreed to pay tiered royalties based upon a percentage of annual net sales of Licensed Products in the 3DMed Territory ranging from the high single digits to the low double digits.

The royalties are payable on a Licensed Product-by-Licensed Product and region-by-region basis commencing on the first commercial sale of a Licensed Product in a region and continuing until the latest of (i) the date that is fifteen years from the receipt of marketing authorization for such Licensed Product in such region and (ii) the date that is ten years from the expiration of the last valid claim of a licensed patent covering or claiming such Licensed Product in such region.

The royalty rate is subject to reduction under certain circumstances, including when generic competition for a Licensed Product exists in a particular region.

3DMed is responsible for all costs related to developing, obtaining regulatory approval of and commercializing the Licensed Products in the 3DMed Territory.

3DMed is required to use commercially reasonable best efforts to develop and obtain regulatory approval for, and upon receipt of regulatory approval, commercialize the Licensed Products in the 3DMed Territory.

A joint development committee has been established between 3DMed and us to coordinate and review the development, manufacturing and commercialization plans with respect to the Licensed Products in the 3DMed Territory.

We and 3DMed also agreed to negotiate in good faith the terms and conditions of a clinical supply agreement, a commercial supply agreement, and related quality agreements pursuant to which we will manufacture or have manufactured and supply 3DMed with all quantities of the Licensed Product necessary for 3DMed to develop and commercialize the Licensed Products in the 3DMed Territory until 3DMed has received all approvals required for 3DMed or its designated contract manufacturing organization to manufacture the Licensed Products in the 3DMed Territory.

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The 3DMed License Agreement will expire on a Licensed Product-by-Licensed Product and region-by-region basis on the date of the expiration of all of 3DMed’s payment obligations to us.

Upon expiration of the 3DMed License Agreement, the license granted to 3DMed will become fully paid-up, perpetual and irrevocable.

In December 2020, we, together with our wholly-owned subsidiary, SLSG Limited, LLC, entered into an Exclusive License Agreement (the “3DMed License Agreement”) with 3D Medicines pursuant to which we granted 3D Medicines a sublicensable, royalty-bearing license, under certain intellectual property owned or controlled by us, to develop, manufacture and have manufactured, and commercialize GPS and heptavalent GPS, or GPS-Plus, product candidates, or the GPS Licensed Products, for all therapeutic and other diagnostic uses in Greater China, or the 3DMed Territory.

The license is exclusive, except with respect to certain know-how that has been non-exclusively licensed to us and is sublicensed to 3D Medicines on a non-exclusive basis.

We have retained development, manufacturing and commercialization rights with respect to the GPS Licensed Products in the rest of the world.

In partial consideration for the rights granted by us, 3D Medicines agreed to pay us (i) a one-time upfront cash payment of $7.5 million in order to reimburse us for certain expenses incurred with respect to the development of the GPS Licensed Products prior to execution of the 3DMed License Agreement, and (ii) milestone payments totaling up to $194.5 million in the aggregate upon the achievement of certain technology transfer, development and regulatory milestones, as well as certain net sales thresholds of GPS Licensed Products in the 3DMed Territory in a given calendar year.

3D Medicines also agreed to pay tiered royalties based upon a percentage of annual net sales of GPS Licensed Products in the 3DMed Territory ranging from the high single digits to the low double digits.

The royalties are payable on a GPS Licensed Product-by- GPS Licensed Product and region-by-region basis commencing on the first commercial sale of a GPS Licensed Product in a region and continuing until the latest of (i) the date that is 15 years from the receipt of marketing authorization for such GPS Licensed Product in such region and (ii) the date that is 10 years from the expiration of the last valid claim of a licensed patent covering or claiming such GPS Licensed Product in such region.

The royalty rate is subject to reduction under certain circumstances, including when generic competition for a GPS Licensed Product exists in a particular region.

3D Medicines is responsible for all costs related to developing, obtaining regulatory approval of and commercializing the GPS Licensed Products in the 3DMed Territory.

3D Medicines is required to use commercially reasonable best efforts to develop and obtain regulatory approval for, and upon receipt of regulatory approval, commercialize the GPS Licensed Products in the 3DMed Territory.

A joint development committee has been established between 3D Medicines and us to coordinate and review the development, manufacturing and commercialization plans with respect to the GPS Licensed Products in the 3DMed Territory.

We and 3D Medicines also agreed to negotiate in good faith the terms and conditions of a clinical supply agreement, a commercial supply agreement, and related quality agreements pursuant to which we will manufacture or have manufactured and supply 3D Medicines with all quantities of the GPS Licensed Product necessary for 3D Medicines to develop and commercialize the GPS Licensed Products in the 3DMed Territory until 3D Medicines has received all approvals required for 3D Medicines or its designated contract manufacturing organization to manufacture the GPS Licensed Products in the 3DMed Territory.

The 3DMed License Agreement will expire on a GPS Licensed Product-by-GPS Licensed Product and region-by-region basis on the date of the expiration of all of 3D Medicines’ payment obligations to us.

Upon expiration of the 3DMed License Agreement, the license granted to 3D Medicines will become fully paid-up, perpetual and irrevocable.

Either party may terminate the 3DMed License Agreement for the other party’s material breach following a cure period or upon certain insolvency events.

We may terminate the 3DMed License Agreement if 3DMed or its affiliates or sublicensees challenge the validity or enforceability of the licensed patents.

At any time following the two-year anniversary of the effective date, 3DMed has the right to terminate the 3DMed License Agreement for convenience, subject to certain requirements.

3DMed may terminate the 3DMed License Agreement upon prior notice to us if the grant of the license to 3DMed is prohibited or delayed for a period of time due to a change of United States export laws and regulations.

We may terminate the 3DMed License Agreement if 3D Medicines or its affiliates or sublicensees challenge the validity or enforceability of the licensed patents.

following the two-year anniversary of the effective date, 3D Medicines has the right to terminate the 3DMed License Agreement for convenience, subject to certain requirements.

3D Medicines may terminate the 3DMed License Agreement upon prior notice to us if the grant of the license to 3D Medicines is prohibited or delayed for a period of time due to a change of U.S.

export laws and regulations.

The 3DMed License Agreement includes customary representations and warranties, covenants and indemnification obligations for a transaction of this nature.

On March 30, 2022, the IND was approved by the NMPA triggering a $1.0 million milestone payment to the Company which is expected to be received in the second quarter of 2022.

The IND is for a small Phase I clinical trial investigating safety.

The University of Texas M.

Anderson Cancer Center and The Henry M.

Jackson Foundation for the Advancement of Military Medicine, Inc.

License Agreement

In September 2006, we acquired rights and assumed obligations under a license agreement among Apthera, Inc., our wholly owned subsidiary, the University of Texas M.D.

Anderson Cancer Center, or MDACC, and the Henry M.

Jackson Foundation for the Advancement of Military Medicine, Inc., or HJF, which grants exclusive worldwide rights to a U.S.

patent covering the nelipepimut-S peptide and several U.S.

and foreign patents and patent applications covering methods of using the peptide as a vaccine.

Under the license agreement we agreed to pay MDACC and HJF up to $3.8 million in aggregate milestone payments to the extent certain development and commercial milestones are reached and a $0.2 million annual maintenance fee.

We also agreed to pay MDACC and HJF a tiered royalty in the mid-single digits in the event of any commercial sales of licensed products.

Under the 3DMed License Agreement, we achieved regulatory milestones relating to agreement upon and completion of a technology transfer plan in March 2021 and June 2021, respectively, for $1 million each and upon approval by the NMPA in March 2022 of an IND for a Phase 1 study, which triggered a $1.0 million milestone payment to us.

A total of $191.5 million in potential future development, regulatory and sales milestones, not including future royalties, remains under the 3DMed License Agreement.

Exclusive License Agreement with GenFleet Therapeutics (Shanghai), Inc.

On March 31, 2022, or the GenFleet Agreement Effective Date, we entered into a License Agreement, or the GenFleet License Agreement, with GenFleet pursuant to which GenFleet granted to us a sublicensable, royalty-bearing license, under certain of its intellectual property, to develop, manufacture and have manufactured, and commercialize a small molecule CDK9 inhibitor, or the CDK9 Licensed Product, for the treatment, diagnosis or prevention of disease in humans and animals in all territories other than Greater China, or the GFH009 Territory.

The CDK9 inhibitor, known as GFH009, is currently in a Phase 1 clinical trial in the United States and China.

In consideration for these rights, we agreed to pay to GenFleet (i) an initial payment of $10.0 million as an upfront license fee and for a technology transfer, $4.5 million of which was paid within 30 days of the GenFleet Agreement Effective Date and $5.5 million of which is due upon the first day of the 15th calendar month following the GenFleet Agreement Effective Date, (ii) development and regulatory milestone payments for up to three indications totaling up to $48.0 million in the aggregate, and (iii) milestone payments totaling up to $92.0 million in the aggregate upon the achievement of certain net sales thresholds of CDK9 Licensed Products in the GFH009 Territory in a given calendar year.

We also agreed to pay GenFleet tiered royalties based upon a percentage of annual net sales of CDK9 Licensed Products in the GFH009 Territory ranging from the low to high single digits.

The royalties are payable on a CDK9 Licensed Product-by-CDK9 Licensed Product and region-by-region basis commencing on the first commercial sale of a CDK9 Licensed Product in a region and continuing until the later of (i) the date that is 10 years following the date of first commercial sale for such CDK9 Licensed Product in such region and (ii) the date of the expiration of the last valid claim of a licensed patent covering or claiming such CDK9 Licensed Product in such region.

The royalty rate is subject to reduction under certain circumstances, including when generic competition for a CDK9 Licensed Product exists in a particular region.

We are responsible for all costs related to developing, obtaining regulatory approval of and commercializing the CDK9 Licensed Products in the GFH009 Territory and we are required to use commercially reasonable efforts to develop and obtain regulatory approval for, and upon receipt of regulatory approval, commercialize the CDK9 Licensed Products in the GFH009 Territory.

We and GenFleet have established a joint steering committee to coordinate and review the development, manufacturing and commercialization plans with respect to the CDK9 Licensed Products in the GFH009 Territory.

We and GenFleet also have entered into a supply agreement and related quality agreement pursuant to which GenFleet is manufacturing, or having manufactured, and supplying us with all quantities of the CDK9 Licensed Product necessary for us to develop and commercialize the CDK9 Licensed Products in the GFH009 Territory.

The GenFleet License Agreement will expire on a CDK9 Licensed Product-by-CDK9 Licensed Product and region-by-region basis on the date of the expiration of all of our payment obligations to GenFleet.

Upon expiration of the GenFleet License Agreement, the license granted to us will become fully paid-up, perpetual and irrevocable.

Either party may terminate the GenFleet License Agreement for the other party’s material breach following a cure period or upon certain insolvency events.

During the period from the first anniversary of the GenFleet Agreement Effective Date until the first regulatory approval of a CDK9 Licensed Product in any country within the GFH009 Territory, we

will have the right to terminate the GenFleet License Agreement upon 180 days’ prior written notice to GenFleet if a clinical failure, as described in the GenFleet License Agreement, occurs.

If we terminate the GenFleet License Agreement before the first day of the 15th calendar month following the GenFleet Agreement Effective Date, then we will be required to pay to GenFleet the remainder of the $10 million initial payment upon the first day of the 15th calendar month following the GenFleet Agreement Effective Date.

Upon receipt of the first regulatory approval of a CDK9 Licensed Product and continuing throughout the term of the GenFleet License Agreement, we will have the right to terminate the GenFleet License Agreement upon one year’s prior written notice to GenFleet.

In addition, we may terminate the GenFleet License Agreement upon 90 days’ notice to GenFleet upon the occurrence of certain safety events described in the GenFleet License Agreement.

GenFleet may terminate the GenFleet License Agreement upon notice to us if we become in arrears in any payments due pursuant to the GenFleet License Agreement and we fail to make the required payment within 60 days after the delivery of written notice from GenFleet.

In addition, if we fail to meet the deadline for a diligence milestone event (as described in the GenFleet License Agreement), GenFleet may treat such failure as a material breach which has not been cured and GenFleet will be entitled to terminate the GenFleet License Agreement if such material breach is not cured within 90 days of receiving notice of such material breach.

At GenFleet’s request within 30 days of termination of the GenFleet License Agreement, other than termination by us for GenFleet’s material breach following a cure period, we will grant GenFleet an option to enter into negotiations with us with respect to a license agreement pursuant to which we would grant GenFleet a non-exclusive, royalty-bearing, worldwide license for certain of our intellectual property that is necessary and used to develop, commercialize and manufacture the terminated products.

Manufacturing

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We currently employ internal resources and third-party consultants to manage our manufacturing contractors.

Our sole CMO for GPS drug product is Lyophilization Services of New England, Inc., or LSNE.

In 2022, process improvements were introduced into the LSNE manufactured drug product batches.

The new manufacturing batch met all the release criteria and, to date, has shown favorable stability of at least 42 months on already known long-term conditions (-20°C) as well at least 12 months at accelerated conditions (5°C and 25°C).

Both long-term and accelerated stability are monitored to confirm that all drug product parameters are within the acceptance criteria and this optimized batch, based on the data to date, may ultimately allow for GPS to be stored in 5°C to 25°C conditions (versus -20°C), which would be more optimal for supply chain logistics.

The GPS drug substance is manufactured at PolyPeptide Group.

In October 2022, we entered into a Clinical Supply Agreement with GenFleet pursuant to which GenFleet will manufacture and/or have manufactured through third parties (with which GenFleet entered into agreements and to which we have access, as necessary), and supply GFH009 and any back-up molecule or intermediary related to GFH009 (including all methods, forms, presentations, dosage strengths, dosage forms, and formulations), for our use in all research and development activities necessary to obtain, maintain or expand regulatory approval worldwide, except Greater China.

Sales and Marketing

We have not yet defined our sales, marketing or product distribution strategy for our product candidates or any future product candidates.

Our commercial strategy may include the use of strategic partners, distributors, a contract sale force, or the establishment of our own commercial and specialty sales force, as well as similar strategies for regions and territories outside the United States.

We plan to further evaluate these alternatives as we approach approval for the use of our product candidates for one or more indications.

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The infrastructure required to commercialize oncology products is market and product dependent.

For a rare disease, such as AML, a relatively focused infrastructure may be sufficient which would make it cost-effective for us to internally develop a marketing, access and reimbursement function, and field-based sales force.

We will potentially build the infrastructure to commercialize our product candidates in North America and, possibly, Europe, if GPS or our other product candidates are approved by the FDA and other regulatory authorities.

However, we will remain opportunistic in seeking strategic partnerships in these and other markets when advantageous and increase shareholder value.

The commercial infrastructure of specialty oncology products typically consists of a targeted, specialty sales force that calls on a limited and focused group of physicians supported by sales management, internal sales support, an internal marketing group, and distribution support.

As GPS and our other product candidates may initially be developed for orphan indications with a relatively small number of treating physicians, we anticipate that a reduced infrastructure, including a small, targeted sales force, will be sufficient to support our sales and marketing objectives.

In 2022, we hired a Chief Commercial Officer, who will build the infrastructure for our commercial operations.

We may elect in the future to utilize strategic partners, distributors, or contract sales forces and clinical nurse educators to assist in the commercialization of our products.

We have retained sole rights to GPS and GPS+ outside of Greater China.

See Strategic Collaborations and License Agreements .

Intellectual Property

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The length of the patent term extension is related to the length of time the drug is under regulatory review.

Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only one patent applicable to an approved drug may be extended.

Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only one patent applicable to an

approved drug may be extended.

Similar provisions are available in the European Union and certain other foreign jurisdictions to extend the term of a patent that covers an approved drug.

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• Patent application co-owned by us and MSK:

◦ Applications in the United States, Australia, Canada, China, Europe, Israel, India, Japan, South Korea, Mexico and Russia covering a heptavalent (7-peptide) immunotherapy composition and methods of use for treating, reducing the incidence of, or inducing an immune response against a WT1-expressing cancer, which are pending and, if granted, are expected to expire in 2040.

• Applications in the United States, Australia, Canada, China, Europe, Hong Kong, Israel, India, Japan, South Korea, Mexico and Russia covering a heptavalent (7-peptide) immunotherapy composition and methods of use for treating, reducing the incidence of, or inducing an immune response against a WT1-expressing cancer, which are pending and, if granted, are expected to expire in 2040.

• Patents and patent applications in-licensed from MSK:

• Composition-of-matter patents covering certain WT1-targeting peptides and methods of use in the United States, Australia, China, several countries of the European Union, and Japan, which are expected to expire in 2034, and patent applications covering certain WT1-targeting peptides and methods of use pending in the United States, Australia, European Union, Canada, China, Hong Kong, and Japan, and which, if granted, are expected to expire in 2034;

• Patents covering methods for treating, reducing the incidence of, or inducing an immune response against a WT1-expressing cancer, using the peptides of GPS in combination with anti-PD-1 antibody checkpoint inhibitors in the United States, Australia, China, several countries in the European Union and Japan, and which are expected to expire in 2037(United States) and 2036 (Australia, China, European Union and Japan);

• Patent applications covering methods for treating, reducing the incidence of, or inducing an immune response against a WT1-expressing cancer, using the peptides of GPS in combination with immune checkpoint inhibitors in the United States, Australia, Canada, China, Hong Kong, European Union, South Korea, and Japan, and which if granted, are expected to expire in 2036.

• Composition-of-matter patents covering the WT1-A1 peptide of GPS which have issued in the United States, Canada, Australia, and several countries of the European Union, and which are expected to expire in the United States in 2026 and elsewhere in 2024;

• Composition-of-matter patents covering the WT1-427 long and WT1-331 long peptides of GPS issued in the United States, which is expected to expire in 2031, and patents covering the methods of use in the United States, and which are expected to expire in 2026;

patent covering peptide conjugates of the WT1-427 long peptide or WT1-331 long peptide, which is expected to expire in 2027;

and a patent application covering peptide conjugates of the WT1-427 long peptide or WT1-331 long peptide, and which, if granted, is expected to expire in 2026;

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• Composition-of-matter patents covering the WT1-427 long peptide of GPS and WT1-331 long peptide of GPS, and methods of use, which have issued in Australia and several countries of the European Union, and which are expected to expire in 2026;

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• Composition-of-matter patent covering the WT1-122A1 long peptide of GPS in the United States which is expected to expire in 2033;

patent covering the WT1-122A1 long peptide of GPS and methods of use in the United States, which is expected to expire in 2029;

and patent application covering the WT1-122A1 long peptide of GPS and methods of use in the United States, and which if granted, is expected to expire in 2027;

◦ Composition-of-matter patent covering the WT1-122A1 long peptide of GPS and methods of use in several countries of the European Union, which is expected to expire in 2027, and patent applications covering the WT1-122A1 long peptide of GPS and methods of use pending in the European Union and Canada, and which if granted, are expected to expire in 2027;

◦ Composition-of-matter patents covering certain WT1-targeting peptides and methods of use in the United States, Australia, China, several countries of the European Union, and Japan, which are expected to expire in 2034, and patent applications covering certain WT1-targeting peptides and methods of use pending in the United States, Australia, European Union, Canada, China, Hong Kong, and Japan, and which, if granted, are expected to expire in 2034;

◦ Patents covering methods for treating, reducing the incidence of, or inducing an immune response against a WT1-expressing cancer, using the peptides of GPS in combination with anti-PD-1 antibody checkpoint inhibitors in the United States and Japan, and which are expected to expire in 2037 and 2036, respectively;

◦ Patent applications covering methods for treating, reducing the incidence of, or inducing an immune response against a WT1-expressing cancer, using the peptides of GPS in combination with immune checkpoint inhibitors in the United States, Australia, Canada, China, Hong Kong, European Union, South Korea, and Japan, and which if granted, are expected to expire in 2036.

Patents and patent applications covering NPS:

• Patent applications owned by us:

◦ Patent applications in the United States, Australia, Canada, China, Europe, Israel, South Korea, Mexico and Russia covering treatment of TNBC using a combination of NPS and trastuzumab, and which, if granted, are expected to expire in 2039.

• Patents and patent applications in-licensed from HJF:

◦ Composition-of-matter patent covering modified NPS peptides, and method patent covering method of their production, and which issued in the United States which are expected to expire in 2025 and 2024, respectively;

and patent application pending in the United States covering modified NPS peptides and methods of use, and which, if granted, is expected to expire in 2023;

◦ Patents covering treatment of cancer expressing HER2/neu using a combination of NPS and trastuzumab, which have issued in the United States and Australia, and which are expected to expire in 2026;

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◦ Patents covering a method of inducing protective or therapeutic immunity against breast cancer having low/intermediate HER2 expression, which have issued in the United States, Australia, Canada, certain countries in the European Union, Japan, South Korea, and Mexico, and which are expected to expire in 2028;

and patent applications covering a method of inducing protective or therapeutic immunity against breast cancer having low/intermediate HER2/neu expression pending in the United States, China, European Union, Hong Kong, Japan, and South Korea, and which, if granted, are expected to expire in 2028.

• Composition-of-matter patent covering the WT1-122A1 long peptide of GPS and methods of use in several countries of the European Union, which is expected to expire in 2027, and patent applications covering the WT1-122A1 long peptide of GPS and methods of use pending in the European Union, Hong Kong and Canada, and which if granted, are expected to expire in 2027;

Patents and patent applications covering GFH009:

• Patents and patent applications in-licensed from GenFleet:

• Composition-of-matter patents covering GFH009 and use thereof in the treatment or amelioration of cancer, which have issued in the United States, Australia, Canada, Japan, Russia, South Korea, the United Kingdom, and several countries of the European Union, and which are expected to expire in 2038;

and a patent application covering GFH009 and use thereof in the treatment or amelioration of cancer, which is pending in Brazil and which, if granted, is expected to expire in 2038;

• Patent applications covering maleate or fumarate salt forms and polymorphs of GFH009, syntheses thereof, and use thereof in prevention or treatment of CDK9-related diseases, including cancer, pending in the United States, Australia, Brazil, Canada, Japan, Russia, South Korea, the United Kingdom and the European Union (via the European Patent Office), and several former Soviet block countries (via the Eurasian Patent Office), and which, if granted, are expected to expire in 2040.

Cancer immunotherapy has become a significant growth area for the biopharmaceutical industry, attracting large pharmaceutical companies as well as small niche players.

Generally, our principal competitors in the cancer immunotherapy market comprise both companies with currently approved products for various indications, such as manufacturers of approved cancer immunotherapy products and companies currently engaged in clinical development of such products.

Generally, the classes of these products include checkpoint inhibitors, bispecific antibodies, chimeric antigen receptor-engineered T-cell, or CAR-T, and NK-cell and T-cell receptor-engineered T-cell therapies, as well as interleukins, cytokines and tumor microenvironment inflammasome modulators.

While we believe that our scientific knowledge, assets, development experience and our ability to attract experienced commercial professionals provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, which either alone or together with their collaborative partners, have substantially greater resources than we have.

Generally, our competitors in the cancer immunotherapy market comprise both companies with currently approved cancer immunotherapy products and companies currently engaged in clinical development of such products.

The large and medium-size competitors who have successfully obtained approval for cancer immunotherapy products include Bristol-Myers Squib Company, or BMS, Merck & Co., Inc., Genentech, Inc.

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and Pfizer, Inc.

Most of these companies, either alone or together with their collaborative partners, have substantially greater resources than we do.

Any product candidates that we successfully develop and commercialize may compete with these existing therapies and new therapies that may become available in the future.

Companies developing novel products with similar indications to those we are pursuing are expected to influence our ability to penetrate and maintain market share.

Principal competitors for our AML indication broadly include both companies with currently approved products in AML, such as AbbVie/Genentech (the holders of rights to VENCLEXTA), Servier (the holder of U.S.

rights to TIBSOVO), Novartis AG (the holder of rights to RYDAPT), Astellas Pharmaceuticals (the holder of rights to XOSPATA), BMS (the holder of rights to ONUREG/VIDAZA and IDHIFA), Otsuka Pharmaceutical Co., Ltd.

(the holder of rights to DACOGEN), among others, as well as those with front-line chemotherapy drugs and maintenance therapies such as Jazz Pharmaceuticals, Inc.

(the holder of rights to VYXEOS), Pfizer, Inc.

(the holder of rights to MYLOTARG and DAURISMO), among others, as well as companies with drugs currently in development for AML, such as Daiichi Sankyo (the holder of rights to quizartinib/licensed in Japan under the name VANFLYTA), Karyopharm Therapeutics, Inc.

(the holder of rights to XPOVIO), Pfizer, Inc./AROG Pharmaceuticals, LLC (the holders of rights to crenolanib), Novartis AG (the holder of rights to sabatolimab, or MBG453), Johnson & Johnson/Janssen Pharmaceuticals, Inc.

(the holder of rights to cusatuzumab, or ARGX-110/JNJ-4550), Gilead Sciences, Inc.

(the holder of rights to magrolimab, or Hu5F9 G4), Actinium Pharmaceuticals, Inc.

(the holder of rights to [131]-iodine-apamistamab), Syndax (the holder of rights to SNDX-5613), Aptose Biosciences (the holder of rights to HM43239), among others.

Companies currently engaged in the clinical development of AML therapies with an immunological/immuno-modulatory mechanism of action include Pfizer, Inc./EMD Serono (the holders of rights to BAVENCIO), BMS (the holder of rights to YERVOY) MacroGenics, Inc./Les Laboratoires Servier, SA (the holders of rights to flotetuzumab, or MGD006), ImmunoGen (the holder of rights to IMGN632), Celyad Oncology SA (the holder of rights to CYAD-01), Fortress Biotech, Inc, (the holder of rights to CNDO-109), Glycostem Therapeutics BV (the holder of rights to oNKord), iCell Gene Therapeutics, LLC (the holder of rights to CLL-CD33 Compound CAR T-cell), among others.

Companies currently engaged in the clinical development of WT1-targeting vaccines (not specifically for AML) include Otsuka Pharmaceutical Co., Ltd.

(the holder of rights to OCV-501) and Dainippon Sumitomo Pharma Co., Ltd./ Boston Biomedical, Inc.

(the holder of rights to DSP-7888)/ade-gramotide/nelatimotide).

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For patients with early stage breast cancer, adjuvant therapy is often given to prevent recurrence and increase the chance of long-term DFS.

Adjuvant therapy for breast cancer can include chemotherapy, hormonal therapy, radiation therapy, or combinations thereof.

In addition, the HER2 targeting drug trastuzumab (HERCEPTIN) - alone or in combination with pertuzumab (PERJETA), both manufactured and marketed by Roche/Genentech, may be given to patients with tumors with high expression of HER2 (HER2-positive).

Various other novel targets are in clinical studies in breast cancer, such as MUC1, in the context of antigen-specific immunotherapy.

In addition, the FDA recently approved the first ever immunotherapy regimen for TNBC that cannot be removed with surgery and is locally advanced or metastatic, the combination of the PD-L1 checkpoint inhibitor atezolizumab (TECENTRIQ;

Roche/Genentech) with nab-paclitaxel (ABRAXANE;

Celgene/BMS).

This combination could be further developed for earlier stages of the disease, including the adjuvant setting, which could then become directly competitive with NPS.

The FDA also recently approved the HER2-targeting antibody drug conjugate (ADC) Fam-trastuzumab deruxtecan-nxki (ENHERTU, Daiichi Sankyo/AstraZeneca), which may have activity in patients harboring breast cancers with low-to-intermediate (IHC1+/2+) HER2 expression (including TNBC), and which has the potential of becoming directly competitive with NPS.

Three additional ADCs have shown clinical activity against metastatic TNBC.

The first (sacituzumab govetecan-hziy, or TROPELVY), targeting TROP-2 and developed by Gilead/Immunomedics, recently received FDA approval.

Both Daiichi Sankyo/AstraZeneca (the holders of rights to the TROP2-targeting DS-1062) and MacroGenics, Inc.

(the holder of rights to the B7-H3-targeting MGC018) are performing late-stage clinical trials in this setting.

These ADCs have the potential to move toward frontline therapy for early-state TNBC and could become directly competitive with NPS.

With regard to additional competition for NPS in the adjuvant setting for TNBC, there are several cancer vaccines in development for breast cancer, including but not limited toTPIV200, a folate receptor alpha peptide vaccine (Marker Therapeutics, Inc.), as well as two HER2-targeted vaccines:

AE-37 (NuGenerex Immuno-Oncology), and GP2 (Greenwich Lifesciences, Inc.).

While these development-stage product candidates are aimed at a number of different targets, and both AE-37 and GP2 have published data in the HER2-positive (IHC3+) breast cancer patient population, there is no guarantee that any of these compounds will not in the future be investigated in clinical trials in patients with low-to-intermediate (IHC1+/2+) HER2 breast cancer (including TNBC patients) and become directly competitive with NPS.

Both with regard to GPS and NPS, many of our competitors, either alone or with their strategic partners, have substantially greater financial, technical and human resources than we do, and also greater experience in obtaining FDA and other regulatory approvals of treatments and commercializing those treatments.

Accordingly, our competitors may be more successful than us in obtaining approval for cancer immunotherapy products and achieving widespread market acceptance.

Our competitors’ treatments may be more effectively marketed and sold than any products we may commercialize, thus causing limited market share before we can recover the expenses of developing and commercializing of our cancer immunotherapy product candidate.

Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors.

Principal competitors for our AML indication broadly include companies with currently marketed therapies to treat AML and are approved in the United States, such as AbbVie/Genentech (VENCLEXTA), Servier (TIBSOVO), Novartis AG (RYDAPT), Astellas Pharmaceuticals (XOSPATA), BMS (ONUREG/VIDAZA), among others.

While there are many companies developing therapies to treat AML that are in early-stage trials, the following companies have advanced to their later-stage:

GlycoMimetics (uproleselan);

Actinium Pharmaceuticals (Iomab-B);

Delta-Fly Pharma (radgocitabine);

Gilead (magrolimab);

Daiichi Sankyo

(VANFLYTA/quizartinib);

and AROG Pharmaceuticals (crenolanib).

Companies currently engaged in the clinical development of WT1-targeting therapies to treat AML are Astellas (ASP7517), BMS (JTCR016), NexImmune (NEXI-001), Roche (RG63441/RO7283420), and Cue Biopharma (CUE-102).

With respect to GFH009, we anticipate competition with companies who are currently engaged in the clinical development of selective CKD9-targeting therapies including Vincerx, Inc.

(VIP152), AstraZeneca (AZD4573), Kronos Bio (KB-0742), Sumitomo Dainippon Pharma Co., Ltd.

(TP-1287), MEI Pharma, Inc.

(voruciclib) and Prelude Therapeutics, Inc.

(PRT2527), among others.

These companies and others, some with collaborative agreements with larger companies, may compete in the same potential indications as GFH009.

Several companies are developing other CDK inhibitors (e.g., CDK1, CDK2, CDK5, CDK7), such as Cyclacel Pharmaceuticals (CYC065), Merck (SCH-727965), and Biotheryx, Inc., among others, possibly in the same indications as GFH009.

Both with regard to GPS and GFH009, many of our competitors, either alone or with their strategic partners, have substantially greater resources and expertise in research and development, manufacturing, preclinical testing, obtaining regulatory approvals, and marketing approved products than we have.

Mergers and acquisitions in the biotechnology, pharmaceutical and diagnostics industries may result in even more resources being concentrated among a smaller number of our competitors.

These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, the ability to work with specific clinical contract organizations due to conflict of interest, and also the conduct of trials in the ability to recruit clinical trial sites and subjects for our clinical trials.

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

These activities may lead to consolidated efforts that allow for more rapid development of cancer immunotherapy product candidates.

We expect any products that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, price and the availability of reimbursement from government and other third-party payors.

We expect the key competitive factors that could affect the success of any products that we develop and commercialize are likely to be efficacy, safety, price, level of generic competition, placement (or lack thereof) in clinical treatment guidelines 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 viewed as safer, more convenient or less expensive than any products that we may develop.

Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for our current product candidates or any other future product candidate, which could result in our competitors establishing a strong market position before we are able to enter the market.

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

If our therapeutic product candidates are approved, we believe that they would be priced at a premium over competitive generic products.

Human Capital/Employees

We have assembled a management team of biopharmaceutical experts with extensive experience in building and operating organizations that develop and deliver innovative medicines to patients with cancer.

Our management team has broad expertise and successful track records in clinical development and approval of cancer therapies.

As of March 1, 2023, we had 17 full time employees.

In addition to our full-time employees, we engage various independent consultants and advisors to support key areas of our business.

None of our employees are represented by a labor union or covered by collective bargaining agreements.

We believe our relationship with our employees is good.

We are committed to creating and maintaining a diverse, inclusive and safe work environment which encourages collaboration and integrity and inspires high performance and achievement.

Our employees have various backgrounds, experience and perspectives.

For example, as of March 1, 2023, of our 17 employees, 47% self-identify as women, 41% self-identify as racial or ethnic minorities and 65% have advanced degrees.

In addition, two of our six Board of Director members self-identify as women, including the Chair.

We believe we have built and continue to build a strong culture of cooperation, respect and acceptance.

We also invest in our employees and are able to recruit talented individuals through our competitive benefits, compensation packages and health and wellness initiatives, which are based on peer company benchmarks.

In addition, the health and safety of our employees is a top priority.

In response to the COVID-19 pandemic, we implemented additional safety protocols and procedures to reduce the risk of exposure for our employees.

Many of these protocols remain in place.

Government Regulation

The FDA and other regulatory authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of biologics such as those we are developing.

Along with third-party contractors, we will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of its current or future product candidates.

Along with our third-party contractors, we will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of its current or future product candidates.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local, and foreign statutes and regulations require the expenditure of substantial time and financial resources.

A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label.

The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following:

• completion of extensive preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices, or GLP, regulations or other applicable regulations;

A biologic candidate is licensed by the FDA through approval of a biologics license application, or BLA.

Assuming we receive positive data from our REGAL clinical trial for GPS, we will file a BLA.

A drug candidate must be approved by the FDA through a new drug application, or NDA.

For GFH009, we will seek marketing approval through the filing of an NDA.

The process required by the FDA before drug or biological product candidates may be marketed in the United States generally involves the following:

• completion of extensive nonclinical laboratory tests and animal studies performed in accordance with the FDA’s current good laboratory practice, or GLP, regulations or other applicable regulations;

• submission to the FDA of an IND application, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made;

• approval by an IRB, or ethics committee at each clinical site before the trial is begun;

• performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, and other clinical-trial related regulations to establish the safety, purity and potency of the investigational biologic product candidate for its proposed indication;

• preparation of and submission to the FDA of a BLA, after completion of all pivotal clinical trials;

• approval by an IRB or ethics committee at each clinical site before the trial is initiated at such sites;

• performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, and other clinical-trial related regulations to establish the safety and efficacy of the investigational product candidate for its proposed indication;

• preparation of and submission to the FDA of an NDA or BLA, after completion of all pivotal clinical trials;

• satisfactory completion of an FDA Advisory Committee review, if applicable;

• a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;

• satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current Good Manufacturing Practices, or cGMP, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency;

• potential audit of selected clinical trial sites to assess compliance with current GCP and the integrity of the clinical data submitted in support of the BLA;

• FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.

• a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review;

• satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current good manufacturing practice, or cGMP, regulations and to assure that the facilities, methods and controls are adequate to preserve the product’s continued identity, strength, quality and purity for a drug and safety, purity and potency for a biologic;

• potential audit of selected clinical trial sites to assess compliance with GCP and the integrity of the clinical data submitted in support of the NDA or BLA;

• FDA review and approval of the NDA or BLA to permit commercial marketing of the product for particular indications for use in the United States.

The testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our current or future product candidates will be granted on a timely basis, if at all.

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Preclinical studies

Preclinical testing

Before testing any drug or biological product candidate, including our product candidates, in humans, the product candidate must undergo rigorous preclinical testing.

The preclinical developmental stage generally involves laboratory evaluations of drug chemistry, formulation and stability, as well as studies to evaluate toxicity in animals, which support subsequent clinical testing.

Preclinical studies include laboratory evaluation of product chemistry and formulation, as well as in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for therapeutic use.

Nonclinical studies during the preclinical development stage include laboratory evaluation of product chemistry and formulation and typically include in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for therapeutic use.

The Consolidated Appropriations Act for 2023, signed into law on December 29, 2022, (P.L.

117-328) amended the FDCA and the Public Health Service Act to specify that nonclinical testing for drugs and biologics may, but is not required to, include in vivo animal testing.

According to the amended language, a sponsor may fulfill nonclinical testing requirements by completing various in vitro assays (e.g., cell-based assays, organ chips, or microphysiological systems), in silico studies (i.e., computer modeling), other human or nonhuman biology-based tests (e.g., bioprinting), or in vivo animal tests.

The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies.

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The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies.

The IND also includes the results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature.

The IND also includes the results of the nonclinical studies of the product candidate, together with manufacturing information, analytical data, any available clinical data or literature.

An IND must become effective before human clinical trials may begin.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial.

In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, issues a notice expressly authorizing the proposed trial to proceed or raises safety concerns or questions about the proposed clinical trial.

If the FDA raises concerns or places the trial on clinical hold, the IND may be placed on clinical hold and the IND sponsor and the agency must resolve any outstanding concerns or questions before the proposed trial can begin.

Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

Human clinical trials in support of a BLA

Human clinical trials in support of an NDA or BLA

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.

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Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government.

The NIH Final Rule on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and both NIH and FDA have recently begun enforcing those requirements against non-compliant clinical trial sponsors.

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For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap.

Final Rule on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and both NIH and FDA have brought enforcement actions against non-compliant clinical trial sponsors.

For purposes of NDA or BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap.

• Phase 1 -The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition.

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These so-called Phase 4 studies may be made a condition to approval of the BLA.

In the Consolidated Appropriations Act for 2023, Congress amended the FDCA to require sponsors of a Phase 3 clinical trial, or other “pivotal study” of a new drug to support marketing authorization, to submit a diversity action plan for such clinical trial.

The action plan must include the sponsor’s diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.

A sponsor must submit a diversity action plan to FDA by the time the sponsor submits the trial protocol to the agency for review.

The FDA may grant a waiver for some or all of the requirements for a diversity action plan.

It is unknown at this time how the diversity action plan may affect Phase 3 trial planning and timing or what specific information FDA will expect in such plans, but if FDA objects to a sponsor’s diversity action plan and requires the sponsor to amend the plan or take other actions, it may delay trial initiation.

Phase 1, Phase 2 and Phase 3 testing may not be completed successfully within a specified period, if at all, and there can be no assurance that the data collected will support FDA approval or licensure of the product.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events, or SAEs, occur.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if unexpected serious adverse events, or SAEs, occur.

The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk.

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the clinical protocol, GCP, or other IRB requirements or if the drug has been associated with unexpected serious harm to patients.

Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

Concurrent with clinical trials, companies may complete additional nonclinical studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must incorporate methods for testing the identity, strength, quality and purity of the final product, or for biologics, the safety, purity and potency.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

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BLA Submission and Review by the FDA

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, preclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.

The BLA must contain proof of the biological product candidate’s safety, purity, potency and efficacy for its proposed indication or indications in the form of relevant data available from pertinent preclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things.

Marketing Application Submission and Review by the FDA

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, preclinical studies and clinical trials are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one or more indications.

The NDA or BLA must contain proof of the product candidate’s safety and substantial evidence of effectiveness for its proposed indication or indications in the form of relevant data available from pertinent preclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things.

In particular, a marketing application must demonstrate that the manufacturing methods and quality controls used to produce the drug or biological product are adequate to preserve the drug’s identity, strength, quality, and purity for an NDA or a biologic’s safety, purity, and potency for a BLA.

Data can come from company-sponsored clinical studies intended to test the safety and effectiveness of a use of the product, or from a number of alternative sources, including studies initiated by investigators.

FDA approval of a BLA must be obtained before the corresponding biologic may be marketed in the United States.

Under federal law, the fee for the submission of a BLA for which clinical data is submitted and analyzed is substantial (for example, for FY2022 this application fee exceeds $3.1 million), and the sponsor of an approved BLA is also subject to an annual program fee, currently more than $360,000 per program.

FDA approval of an NDA or BLA must be obtained before the corresponding drug or biologic may be marketed in the United States.

Under federal law, the fee for the submission of an NDA or BLA for which clinical data is submitted and analyzed is substantial, and the sponsor of an approved NDA or BLA is also subject to an annual program fee.

These fees are typically increased annually, but exemptions and waivers may be available under certain circumstances (such as a waiver for the first human drug application submitted by a qualifying small business and exemptions for orphan products).

The FDA reviews all BLAs submitted to determine if they are substantially complete before it accepts them for filing and may request additional information rather than accepting an BLA for filing.

The FDA must make a decision on accepting a BLA for filing within 60 days of receipt and must inform the sponsor by the 74th day after the FDA’s receipt of the submission whether the application is sufficiently complete to permit substantive review.

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 requested by the agency.

The FDA reviews all NDAs and BLAs submitted to determine if they are substantially complete before it accepts them for filing and may request additional information rather than accepting a submission for filing.

The FDA must make a decision on accepting an NDA or BLA for filing within 60 days of receipt and must inform the sponsor by the 74th day after the FDA’s receipt of the submission whether the application is sufficiently complete to permit substantive review.

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

In this event, the marketing application must be resubmitted with the additional information requested by the agency.

The resubmitted application is also subject to review before the FDA accepts it for filing.

Once a BLA is accepted for filing, the FDA’s goal is to review the application within ten months after it accepts the application for filing, or, if the application meets the criteria for “priority review”, six months after the FDA accepts the application for filing.

The review process is often significantly extended by FDA requests for additional information or clarification after the BLA has been accepted for filing.

During the review process, the FDA reviews the BLA to determine, among other things, whether the product is safe, pure and potent and the facility in which it is manufactured, processed, packed, or held meets standards designed to assure the product’s continued safety, purity and potency.

The FDA may refer any BLA, including applications for novel biologic candidates which present difficult questions of safety or efficacy to an advisory committee to provide clinical insight on application review questions.

Once an NDA or BLA is accepted for filing, the FDA’s goal is to review the application within 10 months after it accepts the application for filing, or, if the application meets the criteria for “priority review”, six months after the FDA accepts the application for filing.

The review process is often significantly extended by FDA requests for additional information or clarification after the NDA or BLA has been accepted for filing.

The review process may be extended by the FDA for three additional months to consider new information or in the case of a clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.

During the review process, the FDA reviews the NDA or BLA to determine, among other things, whether the product is safe, effective, pure and potent and the facility in which it is manufactured, processed, packed, or held meets standards designed to assure the product’s continued safety, purity and potency.

The FDA may refer any NDA or BLA, including applications for novel drug or biologic candidates which present difficult questions of safety or efficacy to an advisory committee to provide clinical insight on application review questions.

Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.

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

Before approving a BLA, the FDA will typically inspect the facility or facilities where the product is manufactured.

Before approving an NDA or BLA, the FDA will typically inspect the facility or facilities where the product is manufactured.

The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies as part of the review process and often will request additional testing or information.

Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies as part of the review process

and often will request additional testing or information.

Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

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Under the Pediatric Research Equity Act, or PREA, amendments to the FDCA, a BLA or supplement to a BLA must contain data that are adequate to assess the safety and efficacy of the product candidate for the claimed indications in all relevant pediatric populations and to support dosing and administration for each pediatric population for which the product is safe and effective.

Under the Pediatric Research Equity Act, or PREA, amendments to the FDCA, an NDA or BLA or supplement to such applications must contain data that are adequate to assess the safety and efficacy of the product candidate for the claimed indications in all relevant pediatric populations and to support dosing and administration for each pediatric population for which the product is safe and effective.

The FDA may grant deferrals for submission of pediatric data or full or partial waivers.

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The FDA and the sponsor must reach an agreement on the PSP.

A sponsor can submit amendments to an agreed upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from pre-clinical studies, early-phase clinical trials or other clinical development programs.

A sponsor can submit amendments to an agreed upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early-phase clinical trials or other clinical development programs.

The testing and approval process requires substantial time, effort and financial resources, and each may take several years to complete.

The FDA may not grant approval on a timely basis, or at all, and we may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing its products.

After the FDA evaluates a BLA and conducts inspections of the manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a Complete Response Letter, or CRL.

After the FDA evaluates an NDA or BLA and conducts inspections of the manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a Complete Response Letter, or CRL.

An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.

A CRL indicates that the review cycle of the application is complete and the application is not ready for approval.

A CRL indicates that the review cycle of the application is complete and the application will not be approved in its present form.

A CRL generally outlines the deficiencies in the submission and may require substantial additional testing, information or clarification for FDA to reconsider the application.

The FDA may delay or refuse approval of a BLA if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.

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

If and when the deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA will issue an approval letter.

The FDA may delay or refuse approval of an NDA or BLA if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.

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

If and when the deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the marketing application, the FDA will issue an approval letter.

The FDA has committed to reviewing such resubmissions in response to an issued CRL in either two or six months depending on the type of information included.

Even if such data and information are submitted, the FDA may ultimately decide that the BLA does not satisfy the criteria for approval.

Even if such data and information are submitted, the FDA may ultimately decide that the NDA or BLA does not satisfy the criteria for approval.

If regulatory approval of a product is granted, such approval is limited to the conditions of use (e.g., patient population, indication) described in the application and may entail further limitations on the indicated uses for which such product may be marketed.

For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy, or REMS, plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

For example, the FDA may approve the NDA or BLA with a Risk Evaluation and Mitigation Strategy, or REMS, plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis.

If the FDA concludes a REMS plan is needed, the sponsor of the BLA must submit a proposed REMS.

The FDA will not approve a BLA without a REMS, if one is required.

If the FDA concludes a REMS plan is needed, the sponsor of the NDA or BLA must submit a proposed REMS.

The FDA will not approve an NDA or BLA without a REMS, if one is required.

The FDA also may condition approval on, among other things, changes to proposed labeling (e.g., adding contraindications, warnings or precautions) or the development of adequate controls and specifications.

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After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

In addition, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development.

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In addition, new government requirements, including those resulting from new

legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development.

Fast Track, Priority Review, and Breakthrough Therapy Designations

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Specifically, new drugs and biological products are eligible for Fast Track designation if they are intended to treat a serious or life-threatening condition and demonstrate the potential to address unmet medical needs for the condition.

Fast Track designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing application is filed, meaning that the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.

A Fast Track designated product candidate may also qualify for accelerated approval (described below) or priority review, under which the FDA sets the target date for FDA action on the BLA at six months after the FDA accepts the application for filing.

We have obtained Fast Track designation for GPS in AML, MPM, and MM, and for NPS in TNBC.

Fast Track designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing application is filed, meaning that the FDA may consider for review sections of the NDA or BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA or BLA, the FDA agrees to accept sections of the marketing 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.

A Fast Track designated product candidate may also qualify for accelerated approval (described below) or priority review, under which the FDA sets the target date for FDA action on the NDA or BLA at six months after the FDA accepts the application for filing.

We have obtained Fast Track designation for GPS in AML, MPM and MM.

Priority review is granted when there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition.

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The FDA may also grant accelerated approval for such a drug or biologic when it has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on IMM 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 drug or biologic receiving accelerated approval perform post-marketing clinical trials to verify and describe the predicted effect on IMM or other clinical endpoint, and the product may be subject to expedited withdrawal procedures.

withdrawal procedures.

Drugs and biologics granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

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For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit.

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An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug or biologic, such as an effect on IMM.

The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints, but has indicated that such endpoints generally may support accelerated approval when the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate long-term clinical benefit of a drug.

The accelerated approval pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure the intended clinical benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly.

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Failure to conduct required post-approval studies, or to confirm the predicted clinical benefit of the product during post-marketing studies, would allow the FDA to withdraw approval of the product.

As part of the Consolidated

Appropriations Act for 2023, Congress provided FDA additional statutory authority to mitigate potential risks to

patients from continued marketing of ineffective drugs or biologics previously granted accelerated approval.

the act’s amendments to the FDCA, FDA may require the sponsor of a product granted accelerated approval to have a confirmatory trial underway prior to approval.

The sponsor must also submit progress reports on a confirmatory trial every six months until the trial is complete, and such reports are published on FDA’s website.

The amendments also give FDA the option of using expedited procedures to withdraw product approval if the sponsor’s confirmatory trial fails to verify the claimed clinical benefits of the product.

All promotional materials for product candidates being considered and approved under the accelerated approval program are subject to prior review by the FDA.

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After the FDA grants Orphan Drug Product Designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

If a biologic product that has Orphan Drug Product Designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan product exclusivity or if FDA finds that the holder of the orphan product exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan product to meet the needs of patients with the disease or condition for which the biologic was designated.

If a drug or biologic product that has Orphan Drug Product Designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA or BLA, to market the same drug or biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan product exclusivity or if FDA finds that the holder of the orphan product exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan product to meet the needs of patients with the disease or condition for which the drug or biologic was designated.

Orphan product exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition.

Among the other benefits of Orphan Drug Product Designation are tax credits for certain research and a waiver of the BLA application user fee.

A biologic with Orphan Drug Product Designation may not receive orphan product exclusivity if it is approved for a use that is broader than the indication for which it received Orphan Drug Product Designation.

the other benefits of Orphan Drug Product Designation are tax credits for certain research and a waiver of the BLA application user fee.

A drug or biologic with Orphan Drug Product Designation may not receive orphan product exclusivity if it is approved for a use that is broader than the indication for which it received Orphan Drug Product Designation.

In addition, orphan product exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

Recent court cases have challenged FDA’s approach to determining the scope of orphan drug exclusivity;

however, at this time the agency continues to apply its long-standing interpretation of the governing regulations and has stated that it does not plan to change any orphan drug implementing regulations.

We have obtained Orphan Drug Product Designation in the United States for GPS in AML, MPM and MM.

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Pediatric exclusivity

Pediatric exclusivity is a type of non-patent marketing exclusivity available in the United States and, if granted, it provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or listed patents.

This six-month exclusivity may be granted if a BLA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

This six-month exclusivity may be granted if an NDA or BLA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

The data do not need to show the product to be effective in the pediatric population studied;

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The issuance of a written request does not require the sponsor to undertake the described studies.

Patent Term Restoration and Reference product exclusivity for biological products

Patent term restoration

Depending upon the timing, duration and specifics of FDA approval of the use of our product candidates, some of our United States patents may be eligible for limited patent term extension under the Hatch-Waxman Act.

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However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product candidate’s approval date.

The patent term restoration period is generally one half of the time between the effective date of an IND and the submission date of a BLA, plus the time between the submission date of a BLA and the approval of that application, except that the review period is reduced by any time during which the applicant failed to exercise due diligence.

The patent term restoration period is generally one half of the time between the effective date of an IND and the submission date of an NDA or BLA, plus the time between the submission date of the NDA or BLA and the approval of that application, except that the review period is reduced by any time during which the applicant failed to exercise due diligence.

Only one patent applicable to an approved product candidate is eligible for the extension and the application for extension must be made prior to expiration of the patent.

The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.

In the future, we intend to apply for restorations of patent term for some of our currently owned or licensed patents to add patent life beyond their current expiration date, depending on the expected length of clinical trials and other factors involved in the submission of the relevant BLA.

Abbreviated new drug applications for generic drugs

In 1984, with passage of the Drug Price Competition and Patent Term Restoration Act, or Hatch-Waxman Act, which established an abbreviated regulatory scheme authorizing the FDA to approve generic drugs based on an innovator or “reference” product, Congress also enacted Section 505(b)(2) of the FDCA, which provides a hybrid pathway combining features of a traditional NDA and a generic drug application.

To obtain approval of a generic drug, an applicant must submit an abbreviated new drug application, or ANDA, to the agency.

In support of such applications, a generic manufacturer may rely on the preclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference-listed drug, or RLD.

Specifically, in order for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients, the route of administration, the dosage form, and the strength of the drug.

At the same time, the FDA must also determine that the generic drug is “bioequivalent” to the innovator drug.

Under the statute, a generic drug is bioequivalent to an RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.”

Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book.

Clinicians and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD.

In addition, by operation of certain state laws and numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution of the generic drug without the knowledge or consent of either the prescribing clinicians or patient.

In contrast, Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

A Section 505(b)(2) applicant may eliminate the need to conduct certain preclinical or clinical studies, if it can establish that reliance on studies conducted for a previously approved product is scientifically appropriate.

In addition, under the Hatch-Waxman Act, the FDA might not approve an ANDA or 505(b)(2) NDA until any applicable period of non-patent exclusivity for the RLD has expired.

These market exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications.

The FDCA provides a period of five years of non-patent data exclusivity for a new drug containing a new chemical entity.

For the purposes of this provision, a new chemical entity, or NCE, is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA.

An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance.

In cases where such NCE exclusivity has been granted, an ANDA or 505(b)(2) NDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.

The FDCA also provides for a period of three years of exclusivity for an NDA, 505(b)(2) NDA or supplement thereto if one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the applicant are deemed by the FDA to be essential to the approval of the application.

This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication.

The three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving follow-on applications for drugs containing the original active agent.

Five-year and three-year exclusivity also will not delay the submission or approval of a traditional NDA filed under Section 505(b)(1) of the FDCA.

However, an applicant submitting a traditional NDA would be required to either conduct or obtain a right of reference to all of the preclinical studies and

adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Hatch-Waxman patent certification and the 30-month stay

Upon approval of an NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product.

Each of the patents listed by the NDA sponsor is published in the Orange Book.

When an ANDA applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking approval.

To the extent that the Section 505(b)(2) NDA applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would.

Specifically, the applicant must certify with respect to each patent that:

the required patent information has not been filed by the original applicant;

the listed patent has expired;

the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration;

the listed patent is invalid, unenforceable or will not be infringed by the manufacture, use or sale of the new product.

If a Paragraph I or II certification is filed, the FDA may make approval of the application effective immediately upon completion of its review.

If a Paragraph III certification is filed, the approval may be made effective on the patent expiration date specified in the application, although a tentative approval may be issued before that time.

If an application contains a Paragraph IV certification, a series of events will be triggered, the outcome of which will determine the effective date of approval of the ANDA or 505(b)(2) application.

If the follow-on applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the follow-on application in question has been accepted for filing by the FDA.

The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.

The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA or 505(b)(2) applicant.

Alternatively, if the listed patent holder does not file a patent infringement lawsuit within the required 45-day period, the follow-on applicant’s ANDA or 505(b)(2) NDA will not be subject to the 30-month stay.

Reference a product exclusivity for biological products

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) amended the PHSA to authorize the FDA to approve similar versions of innovative biologics such as ours, which are also known as “reference biological products.” The new pathway authorized under the BPCIA allows FDA to approve, under an abbreviated application, a biological product that are demonstrated to be “biosimilar” or “interchangeable” with an FDA-licensed reference biological product.

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Complexities associated with the larger, and often more complex, structures of biological products, as well as the process by which such products are manufactured, pose significant hurdles to implementation that are still being evaluated by the FDA.

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Under the BPCIA, a reference biological product is granted twelve years of data exclusivity from the date of first licensure of the product, which means that the FDA is barred from approving biosimilar applications for 12 years after the reference biological product receives initial marketing approval.

Under the BPCIA, a reference biological product is granted 12 years of data exclusivity from the date of first licensure of the product, which means that the FDA is barred from approving biosimilar applications for 12 years after the reference biological product receives initial marketing approval.

The first approved interchangeable biological product will be granted an exclusivity period of up to one year after it is first commercially marketed, and as part of the Consolidated Appropriations Act for 2023, Congress amended the PHSA in order to permit multiple interchangeable products approved on the same day to receive and benefit from this one-year exclusivity period.

In addition, the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product.

“First licensure” typically means the initial date the particular product at issue was licensed in the United States.

Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a supplement for the reference product for a subsequent application filed by the same sponsor or manufacturer of the reference product (or licensor, predecessor in interest or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength or for a modification to the structure of the biological product that does not result in a change in safety, purity or potency.

not result in a change in safety, purity or potency.

Therefore, one must determine whether a new product includes a modification to the structure of a previously licensed product that results in a change in safety, purity or potency to assess whether the licensure of the new product is a first licensure that triggers its own period of exclusivity.

Whether a subsequent application, if approved, warrants exclusivity as the “first licensure” of a biological product is determined on a case-by-case basis with data submitted by the sponsor.

The BPCIA is complex and only beginning to be interpreted and implemented by the FDA.

In addition, recent government proposals have sought to reduce the twelve-year reference product exclusivity period.

The BPCIA is complex and continues to be interpreted and implemented by the FDA.

In addition, recent government proposals have sought to reduce the 12-year reference product exclusivity period.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation.

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The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

If there are any modifications to the product, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or a BLA supplement, which may require the applicant to develop additional data or conduct additional pre-clinical studies and clinical trials.

If there are any modifications to the product, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new NDA or BLA or a supplement thereto, which may require the applicant to develop additional data or conduct additional preclinical studies and clinical trials.

The FDA may also place other conditions on approvals including the requirement for a REMS to assure the safe use of the product.

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Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing.

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FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMPs.

FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMP.

The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products.

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Future inspections by the FDA and other regulatory agencies may identify compliance issues at the facilities of our CMOs that may disrupt production or distribution or require substantial resources to correct.

In addition, the discovery of conditions that violate these rules, including failure to conform to cGMPs, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions on a product, manufacturer or holder of an approved BLA, including voluntary recall and regulatory sanctions as described below.

In addition, the discovery of conditions that violate these rules, including failure to conform to cGMP, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions on a product, manufacturer or holder of an approved BLA, including voluntary recall and regulatory sanctions as described below.

Once an approval or clearance of a drug is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

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• fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials;

• refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product approvals;

• refusal of the FDA to approve pending NDAs or BLAs or supplements to approved marketing authorizations, or suspension or revocation of product approvals;

• product seizure or detention, or refusal to permit the import or export of products;

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or mandated modification of promotional materials and labeling and the issuance of corrective information.

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In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level and sets minimum standards for the registration and regulation of drug distributors by the states.

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It is impossible to predict whether further legislative or regulatory changes will be enacted, whether FDA regulations, guidance or interpretations will be changed or what the impact of such changes, if any, may be.

Other Healthcare Laws and Compliance Requirements

Our sales, promotion, medical education and other activities following product approval will be subject to regulation by numerous regulatory and law enforcement authorities in the United States in addition to FDA, including potentially the Federal Trade Commission, or FTC, the Department of Justice, or DOJ, the Centers for Medicare and Medicaid Services, other divisions of the Department of Health and Human Services and state and local governments.

Other Health Care Laws and Compliance Requirements

Our sales, promotion, medical education and other activities following product approval will be subject to regulation by numerous regulatory and law enforcement authorities in the United States in addition to FDA, including potentially the Federal Trade Commission, or FTC, the Department of Justice, or DOJ, the Centers for Medicare and Medicaid Services, or CMS, other divisions of the Department of Health and Human Services and state and local governments.

Our promotional and scientific/educational programs must comply with the federal Anti-Kickback Statute, the Foreign Corrupt Practices Act, the False Claims Act, or FCA, the Veterans Health Care Act, physician payment transparency laws, privacy laws, security laws, and additional state laws similar to the foregoing.

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Remuneration has been broadly defined to include anything of value, including cash, improper discounts, and free or reduced-price items and services.

The government has enforced the Anti-Kickback Statute to reach large settlements with healthcare companies based on sham research or consulting and other financial arrangements with physicians.

The government has enforced the Anti-Kickback Statute to reach large settlements with health care companies based on sham research or consulting and other financial arrangements with physicians.

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

In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA.

In addition, the government may assert that a claim including items or services resulting from a violation of the federal

Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA.

Many states have similar laws that apply to their state health care programs as well as private payors.

In November 2020, HHS finalized significant changes to the regulations implementing the Anti-Kickback Statute, as well as the Physician Self-Referral Law (Stark Law) and the civil monetary penalty rules regarding beneficiary inducements, with the goal of offering the health care industry more flexibility and reducing the regulatory burden associated with those fraud and abuse laws, particularly with respect to value-based arrangements among industry participants.

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The FCA imposes liability on persons who, among other things, present or cause to be presented false or fraudulent claims for payment by a federal health care program.

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In addition, companies have been forced to implement extensive corrective action plans and have often become subject to consent decrees or corporate integrity agreements, restricting the manner in which they conduct their business.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, also created federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

Given the significant size of actual and potential settlements, it is expected that the government will continue to devote substantial resources to investigating healthcare providers’ and manufacturers’ compliance with applicable fraud and abuse laws.

In addition, there has been a recent trend of increased federal and state regulation of payments made to physicians and other healthcare providers.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, also created federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any health care benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services.

Given the significant size of actual and potential settlements, it is expected that the government will continue to devote substantial resources to investigating health care providers’ and manufacturers’ compliance with applicable fraud and abuse laws.

In addition, there has been a recent trend of increased federal and state regulation of payments made to physicians and other health care providers.

The federal Physician Payments Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act of 2010 (the “ACA”) requires manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the U.S.

Department of Health and Human Services information related to payments or other transfers of value made by them to U.S.-licensed physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Department of Health and Human Services information related to payments or other transfers of value made by them to U.S.-licensed physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician health care practitioners and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Failure to submit required information may result in civil monetary penalties .

Certain states also mandate implementation of commercial compliance programs, impose restrictions on drug manufacturer marketing practices and/or require the tracking and reporting of gifts, compensation and other remuneration to physicians and other healthcare professionals.

Effective January 1, 2022, these reporting obligations will extend to include transfers of value made in the previous year to certain non-physician providers, including physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiology assistants, and certified nurse midwives.

The federal criminal statutes enacted under HIPAA impose criminal liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program;

knowingly and willfully embezzling or stealing from a healthcare benefit program;

willfully preventing, obstructing, misleading, or delaying a criminal investigation of a healthcare offense;

and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services.

The federal criminal statutes enacted under HIPAA impose criminal liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program, including private third-party payors, or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program;

knowingly and willfully embezzling or stealing from a health care benefit program;

willfully preventing, obstructing, misleading, or delaying a criminal investigation of a health care offense;

Similar to the federal Anti-Kickback Statute, a person or entity need not have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

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We may also be subject to data privacy and security regulation by both the federal government and the states in which it conducts its business.

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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.

In addition, state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect.

Pricing and rebate programs must comply with the Medicaid rebate requirements of the U.S.

Omnibus Budget Reconciliation Act of 1990 and more recent requirements in the ACA.

If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.

Prescription drug and biologic products also must meet applicable child-resistant packaging requirements under the U.S, Poison Prevention Packaging Act.

We may also be subject to analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party-payors, including private insurers, and may be broader in scope than their federal equivalents.

state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect.

We may also be subject to analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving health care items or services reimbursed by non-governmental third-party payors, including private insurers, and may be broader in scope than their federal equivalents.

The laws of some U.S.

states and foreign jurisdictions require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers.

In addition, certain state and foreign laws and regulations require disclosures to regulatory agencies and/or commercial purchasers with respect to certain price increases that exceed a certain level as identified in the relevant statutes, require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, and restrict marketing practices or require disclosure of marketing expenditures and pricing information.

In addition, certain state and foreign laws and regulations require disclosures to regulatory agencies and/or commercial purchasers with respect to certain price increases that exceed a certain level as identified in the relevant statutes, require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers, and restrict marketing practices or require disclosure of marketing expenditures and pricing information.

states also require registration of pharmaceutical sales representatives.

If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to it, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to operate our business and our financial results.

If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to it, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, exclusion from participation in federal and state health care programs and imprisonment, any of which could adversely affect our ability to operate our business and our financial results.

Also, the U.S.

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Violations of these laws, or allegations of such violations, could result in fines, penalties or prosecution and have a negative impact on our business, results of operations and reputation.

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General Data Protection Regulation

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Coverage and Reimbursement

Sales of our products approved for marketing by the FDA and foreign regulatory authorities will depend, in part, on the extent to which our products will be covered by third-party payors, such as government health programs, commercial insurance and managed care organizations.

In the United States no uniform policy of coverage and reimbursement for drug or biological products exists.

Accordingly, decisions regarding the extent of coverage and amount of reimbursement to be provided for any of our products will be made on a payor-by-payor basis.

The process for determining whether a payor will provide coverage for a drug or biological product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the drug or biological product.

Third-party payors may limit coverage to specific drug or biological products on an approved list, or formulary, which might not include all of the FDA-approved drug or biological products for a particular indication.

Third-party payors are increasingly challenging drug prices and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.

In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable regulatory approvals.

Our drug or biological candidates may or may not be considered medically necessary or cost-effective or pay require prior authorizations before use.

A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

Moreover, eligibility for reimbursement does not imply that any product will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution.

Moreover, eligibility for reimbursement may not be available at a rate that covers our costs, including research, development, manufacture, sale and distribution.

Interim payments for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent.

Payment rates may vary according to the use of the product and the clinical setting in which it is used, may be based on payments allowed for lower cost products that are already reimbursed and may be incorporated into existing payments for other services.

Reimbursement rates may vary according to the use of the product and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost products and may be incorporated into existing payments for other services.

Net prices for products may be reduced by mandatory discounts or rebates required by third-party payors and by any future relaxation of laws that presently restrict imports of products from countries where they may be sold at lower prices than in the United States.

In the United States, third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but they also have their own methods and approval process apart from Medicare coverage and reimbursement determinations.

In the United States, third-party payors often rely upon CMS coverage policy and payment limitations in setting their own reimbursement policies, but they also have their own methods and approval process apart from CMS coverage and reimbursement determinations.

Accordingly, one third-party payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product.

Accordingly, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or granted at all.

The process for determining whether a payor will cover and how much it will reimburse a product may be separate from the process of seeking approval of the product or for setting the price of the product.

The coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or granted at all.

The process for determining whether a payor will cover and the reimbursement for a product may be separate from the process of seeking approval for or setting the price of the product.

Even if reimbursement is provided, market acceptance of our products may be adversely affected if the amount of payment for our products proves to be unprofitable for health care providers or less profitable than alternative treatments or if administrative burdens make our products less desirable to use.

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including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs.

For example, the ACA contains provisions that may reduce the profitability of drug products through increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs.

Adoption of general controls and measures, coupled with the tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceutical drugs.

The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of the Department of Health and Human Services as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished to Medicaid patients.

The ACA made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs from 15.1% of average manufacturer price, or AMP, to 23.1% of AMP and adding a new rebate calculation for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, as well as potentially impacting their rebate liability by modifying the statutory definition of AMP.

The ACA also expanded the universe of Medicaid utilization subject to drug rebates by requiring pharmaceutical manufacturers to pay rebates on Medicaid managed care utilization and by enlarging the population potentially eligible for Medicaid drug benefits.

As another example, the 2021 Consolidated Appropriations Act signed into law on December 27, 2020 incorporated extensive healthcare provisions and amendments to existing laws, including a requirement that all manufacturers of drugs and biological products covered under Medicare Part B report the product’s average sales price (“ASP”), to the DHHS beginning on January 1, 2022, subject to enforcement via civil money penalties.

Additionally, the United States government, state legislatures and foreign governments have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs.

For example, the ACA contains provisions that may reduce the profitability of drug products through increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on biopharmaceutical companies’ share of sales to federal health care programs.

Adoption of general controls and measures, coupled with the tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for drugs and biologics.

The Medicaid Drug Rebate Program requires biopharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of the Department of Health and Human Services as a condition for states to receive federal matching funds for the manufacturer’s outpatient therapeutic products furnished to Medicaid patients.

The ACA made several changes to the Medicaid Drug Rebate Program, including increasing biopharmaceutical manufacturers’ rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs from 15.1% of average manufacturer price, or AMP, to 23.1% of AMP and adding a new rebate calculation for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, as well as potentially impacting their rebate liability by modifying the statutory definition of AMP.

The ACA also expanded the universe of Medicaid utilization subject to drug rebates by requiring biopharmaceutical manufacturers to pay rebates on Medicaid managed care utilization and by enlarging the population potentially eligible for Medicaid drug benefits.

As another example, the 2021 Consolidated Appropriations Act, signed into law on December 27, 2020, incorporated extensive health care provisions and amendments to existing laws, including a requirement that all manufacturers of drugs and biological products covered under Medicare Part B report the product’s average sales price, or ASP, to the DHHS beginning on January 1, 2022, subject to enforcement via civil money penalties.

Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and as a result certain sections of the ACA have not been fully implemented or effectively repealed.

On June 17, 2021, the U.S.

Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

In addition, various legislative changes have been proposed and adopted since the ACA was enacted.

These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013 and will remain in effect through 2030 unless additional Congressional action is taken, with the exception of a temporary suspension by Congress of the 2% cut in Medicare payments from May 1, 2020 through June 30, 2022 (a 1% sequester will apply from April 1, 2022 through June 30, 2022) due to the COVID-19 pandemic.

However, following several years of litigation in the federal courts, in June 2021, the U.S.

Supreme Court upheld the ACA when it dismissed a legal challenge to the ACA’s brought constitutionality.

Various legislative changes have been proposed and adopted since the ACA was enacted.

These changes include aggregate reductions to Medicare payments to

providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013 and was extended by the Consolidated Appropriations Act for 2023, and will remain in effect through 2032 unless additional Congressional action is.

In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-governmental payors.

For a drug product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to U.S.

Under currently applicable U.S.

law, certain products that are not self-administered by the patient (including injectable drugs) may be eligible for coverage under Medicare through Medicare Part B.

For a drug or biological product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to U.S.

government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B Drug Pricing Program.

The maximum amount that a manufacturer may charge a 340B covered entity for a

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given product is the AMP reduced by the rebate amount paid by the manufacturer to Medicaid for each unit of that product.

As of 2010, the ACA expanded the types of entities eligible to receive discounted 340B pricing, although, under the current state of the law, with the exception of children’s hospitals, these newly eligible entities will not be eligible to receive discounted 340B pricing on orphan drugs.

In addition, as 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase.

Moreover, there has 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 federal and state 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 for drug products.

For example, the 2021 Consolidated Appropriations Act signed into law on December 27, 2020 incorporated extensive healthcare provisions and amendments to existing laws, including new requirements for (1) all manufacturers of drugs and biological products covered under Medicare Part B to report the product’s average sales price (“ASP”), to the DHHS beginning on January 1, 2022, subject to enforcement via civil money penalties, (2) certain Medicare plans to develop tools to display Medicare Part D prescription drug benefit information in real time, and (3) for group and health insurance issuers to report information on pharmacy benefit and drug costs to the Secretaries of Health and Human Services, Labor and the Treasury.

In addition, the Biden Administration, has indicated that lowering prescription drug prices is a priority.

For example, in July 2021, President Biden issued a sweeping executive order on promoting competition in the American economy that includes several mandates pertaining to the pharmaceutical and health care insurance industries.

Among other things, the executive order directs the FDA to work towards implementing a system for importing drugs from Canada (following on a Trump administration notice-and-comment rulemaking on Canadian drug importation that was finalized in October 2020).

The Biden order also called on HHS to release a comprehensive plan to combat high prescription drug prices, and it includes several directives regarding the Federal Trade Commission’s oversight of potentially anticompetitive practices within the pharmaceutical industry.

The drug pricing plan released by HHS in September 2021 in response to the executive order makes clear that the Biden Administration supports aggressive action to address rising drug prices, including allowing HHS to negotiate the cost of Medicare Part B and D drugs, but such significant changes will require either new legislation to be passed by Congress or time-consuming administrative actions.

Any future measures will require authorization through additional legislation or regulation to become effective, and it is uncertain whether Congress or the new Biden administration will seek new legislative and/or administrative measures to control drug costs.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

The maximum amount that a manufacturer may charge a 340B covered entity for a given product is the AMP reduced by the rebate amount paid by the manufacturer to Medicaid for each unit of that product.

As 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase.

There has 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 federal and state 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 for drug products.

For example, the 2021 Consolidated Appropriations Act signed into law on December 27, 2020 incorporated extensive health care provisions and amendments to existing laws, including new requirements for (1) all manufacturers of drugs and biological products covered under Medicare Part B to report the product’s ASP, to the DHHS beginning on January 1, 2022, subject to enforcement via civil money penalties, (2) certain Medicare plans to develop tools to display Medicare Part D prescription drug benefit information in real time, and (3) for group and health insurance issuers to report information on pharmacy benefit and drug costs to the Secretaries of Health and Human Services, Labor and the Treasury.

More recently, in August 2022, President Biden signed into the law the Inflation Reduction Act of 2022, or the IRA.

Among other things, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.

Starting in 2023, a manufacturer of a drug or biological product covered by Medicare Parts B or D must pay a rebate to the federal government if the drug product’s price increases faster than the rate of inflation.

This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.

Additionally, starting in payment year 2026, CMS will negotiate drug prices annually for a select number of single-source Part D drugs without generic or biosimilar competition.

CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.

If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control drug and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

We expect that federal, state and local governments in the United States will continue to consider legislation directed at lowering the total cost of health care.

In December 2020, the U.S.

Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers (“PBMs”) and other members of the health care and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.

Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmacy benefit managers, or PBMs, and other members of the health care and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.

The Federal Trade Commission in mid-2022 also launched sweeping investigations in the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements.

Significant efforts to change the PBM industry as it currently exists in the United States may affect the entire pharmaceutical supply chain and the business of other stakeholders, including biopharmaceutical developers like us.

As noted above, the marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement.

An increasing emphasis on cost containment measures in the United States has increased and we expect will continue to increase the pressure on pharmaceutical pricing.

An increasing emphasis on cost containment measures in the United States has increased and we expect will continue to increase the pressure on drug or biological product pricing.

Coverage policies and third-party reimbursement rates may change at any time.

Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

In some foreign countries, proposed pricing for a drug must be approved before the product may be lawfully marketed.

In some foreign countries, proposed pricing for drug and biological products must be approved before the product may be lawfully marketed.

The requirements governing drug pricing vary widely from country to country.

Some countries provide that drug products may be marketed only after agreement on a reimbursement price has been reached.

Some countries provide that drug and biological products may be marketed only after agreement on a reimbursement price has been reached.

Some countries may require additional studies that compare the cost-effectiveness of our product candidate to currently available therapies (so called health technology assessment, or HTA) in order to obtain reimbursement or pricing approval.

For example, the European Union provides options for its member states to restrict the range of medicinal

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products for which their national health insurance systems provide reimbursement and to control the prices of medicines.

For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicines.

A member state may approve a specific price for the product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market.

Other member states allow companies to fix their own drug prices but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions.

There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.

There can be no assurance that any country that has price controls or reimbursement limitations for drug and biological products will allow favorable reimbursement and pricing arrangements for any of our products.

Historically, products launched in the European Union do not follow price structures of the United States and generally tend to be priced significantly lower.

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Other national and EU-wide regulatory requirements may also apply.

The requirements and processes governing the conduct of clinical trials, product licensing, pricing and reimbursement in Europe vary from country to country, even though there is already some degree of legal harmonization in the E.

member states resulting from the national implementation of underlying EU legislation.

Currently, the extent to which clinical trials will be

governed by the Clinical Trials Regulation will depend on when the clinical trial is initiated or on the duration of an ongoing trial.

As of January 2023, all new clinical trials must comply with the Clinical Trials Regulation.

In addition, any clinical trial that was already under way as of January 1, 2023 and continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable (i.e., January 31, 2025), the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

In all cases, the clinical trials are conducted in accordance with GCP and other applicable regulatory requirements.

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The way in which a medicinal product can be approved in the EU depends on the nature of the medicinal product.

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The centralized procedure results in a single marketing authorization granted by the European Commission that is valid across the European Union, as well as in Iceland, Liechtenstein and Norway.

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The characteristic of the MRP is that the procedure builds on an already existing marketing authorization in an EU member state which is used as reference in order to obtain marketing authorizations in other EU member states.

In the MRP, a marketing authorization for a drug already exists in one or more member states of the EU and subsequently marketing authorization applications are made in other EU member states by referring to the initial marketing authorization.

the MRP, a marketing authorization for a drug already exists in one or more member states of the EU and subsequently marketing authorization applications are made in other EU member states by referring to the initial marketing authorization.

The member state in which the marketing authorization was first granted will then act as the reference member state.

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National marketing authorizations shall be granted within 30 days after acknowledgement of the agreement.

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Should any Member State refuse to recognize the marketing authorization by the reference member state, on the grounds of potential serious risk to public health, the issue will be referred to a coordination group.

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The data exclusivity, if granted, prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic or biosimilar application for eight years, after which generic marketing authorization can be submitted, and the innovator’s data may be referenced, but not approved for two years.

The overall ten-year period can be extended to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are determined to bring a significant clinical benefit in comparison with currently approved therapies.

The overall 10-year period can be extended to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are determined to bring a significant clinical benefit in comparison with currently approved therapies.

The criteria for designating an orphan medicinal product in the European Union are similar in principle to those in the United States.

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

The ten-year market exclusivity for orphan products in the European Union 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.

The 10-year market exclusivity for orphan products in the European Union 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:

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If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

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Health Care Reform in the U.S.

and Potential Changes to Health Care Laws

FDA and other regulatory authority policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our drug candidates.

For example in August 2017, the FDA Reauthorization Act was signed into law, which reauthorized the FDA’s user fee programs and included additional drug and device provisions that build on the Cures Act enacted in December 2016.

The next cycle of Congressional reauthorization for FDA’s prescription drug, biologic, and medical device user fee programs must be completed by mid-2022 and that periodic must-pass legislation is typically used as a vehicle to implement federal policy changes or other substantive amendments to the FDCA.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the health care system that could prevent or delay marketing approval of product and therapeutic candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product and therapeutic candidates that obtain marketing approval.

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product and therapeutic candidates.

As previously mentioned, the primary trend in the US health care industry and elsewhere is cost containment.

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For example, the 2020 Further Consolidated Appropriations Act (P.L.

116-94) included a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act of 2019 or the “CREATES Act.” The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers have improperly restricted the distribution of their products, including by invoking the existence of a REMS for certain products, to deny generic and biosimilar product developers access to samples of brand products.

116-94) included a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act of 2019, or the CREATES Act.

The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers have improperly restricted the distribution of their products, including by invoking the existence of a REMS for certain products, to deny generic and biosimilar product developers access to samples of brand products.

Because generic and biosimilar product developers need samples to conduct certain comparative testing required by the FDA, some have attributed the inability to timely obtain samples as a cause of delay in the entry of generic and biosimilar products.

To remedy this concern, the CREATES Act establishes a private cause of action that permits a generic or biosimilar product developer to sue the brand manufacturer to compel it to furnish the necessary samples on “commercially reasonable, market-based terms.” Whether and how generic and biosimilar product developments will use this new pathway, as well as the likely outcome of any legal challenges to provisions of the CREATES Act, remain highly uncertain and its potential effects on our future commercial products are unknown.

The Consolidated Appropriations Act of 2021 also includes, among other things, a new requirement for patent information to be submitted to the FDA and published in a “Purple Book” that contains detailed information about each FDA-licensed biological product, analogous to the Orange Book that provides information about approved small-molecule drug products and their patent and exclusivity information under the Hatch-Waxman Amendments.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.

We expect that additional state and federal health care reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for health care products and services.

Moreover, if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, our therapeutic candidates may lose any marketing approval that may have been obtained and we may not achieve or sustain profitability, which would adversely affect our business.

Table o f Contents

Corporate Information

5 unchanged sentences

On September 26, 2011, we changed our name to Galena Biopharma, Inc., or Galena.

In December 2017, we completed the Merger with Private SELLAS and changed our name to “SELLAS Life Sciences Group, Inc.”

In December 2017, we completed a business combination, or the Merger, with SELLAS Life Sciences Group, Ltd., a privately held Bermuda exempted company, or Private SELLAS, and changed our name to “SELLAS Life Sciences Group, Inc.”

A copy of our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are posted on our website, www.sellaslifesciences.com, under “Investors – Corporate Governance.”

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What changed 10-K

Item 1. Business