What changed in this filing

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Item 1. Business

2023-03-06 compared with 2022-03-10 · 160 added, 149 removed, 820 unchanged (27% of the section changed)

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We believe STK-001 has the potential to significantly reduce both the occurrence and frequency of seizures and also non-seizure comorbidities.

If we see evidence of efficacy following clinical data, then we would plan to meet with regulatory authorities to discuss expedited regulatory pathways.

We plan to meet with regulatory authorities to discuss expedited regulatory pathways if the data are appropriate.

If approved, we intend to leverage a lean, targeted internal commercial organization to bring STK-001 to patients.

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STK-002 is designed to upregulate OPA1 protein expression by leveraging the non-mutant (wild-type) copy of the OPA1 gene.

Preclinical toxicology studies are currently ongoing to support future clinical trials for STK-002.

We have submitted a Clinical Trial Authorisation (“CTA”) in the United Kingdom and, subject to approval by the United Kingdom Medicines and Healthcare Products Regulatory Agency (the “MHRA”), we expect to begin a Phase 1/2 trial for STK-002 in 2024.

Expand our pipeline through internal discovery and collaboration to fully exploit the potential of our proprietary platform (TANGO).

We have built a target discovery process utilizing proprietary bioinformatics algorithms and extensive in-house expertise in whole transcriptome RNA sequencing to rapidly and systematically identify diseases that we believe can be addressed using our platform.

We have built a target discovery process utilizing proprietary bioinformatics algorithms and extensive in-house expertise in whole transcriptome RNA sequencing to rapidly and systematically identify

diseases that we believe can be addressed using our platform.

We are also advancing additional early programs focused on multiple targets, including haploinsufficiency diseases of the central nervous system (the “CNS”) and eye.

In January 2022, we announced a collaboration with Acadia Pharmaceuticals to pursue RNA-based

treatments for severe and rare genetic neurodevelopmental diseases of the CNS.

In January 2022, we announced a collaboration with Acadia Pharmaceuticals to pursue RNA-based treatments for severe and rare genetic neurodevelopmental diseases of the CNS.

The collaboration combines our TANGO research platform with Acadia’s expertise in neurology drug development and commercialization.

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Exhibits 1 and 2 shown below illustrate the TANGO mechanism for increasing protein synthesis in a prospective patient with a haploinsufficiency.

To date, we have demonstrated this TANGO mechanism in preclinical models of

haploinsufficiencies .

To date, we have demonstrated this TANGO mechanism in preclinical models of haploinsufficiencies.

Exhibit 1 illustrates the prospective patient with a haploinsufficiency possessing one wild-type allele and one mutant allele.

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Our preclinical studies show that any increase in mutant mRNA would have no effect on the net protein level.

Haploinsufficiency without TANGO-ASO Exhibit 2:

Haploinsufficiency without TANGO-ASO

Haploinsufficiency with TANGO-ASO

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The net effect is increased expression of functional protein from the wild-type allele.

The two categories of non-productive splicing events amenable to TANGO are retained introns and nonsense-mediated mRNA decay of the resulting mRNA.

While we benefit from leveraging previously-validated ASO chemistries, both of these TANGO mechanisms are novel.

The first category of non-productive splicing events amenable to TANGO is retained introns.

Retained introns are found in approximately 60% of gene transcripts and are part of the wild-type sequence of the gene.

In some cases, retained introns are part of normal gene regulation.

The non-productive mRNA, which contains these retained introns, remain in the nucleus of the cell and are not translated into protein, and offer a reservoir of non-productive mRNA that can be converted into productive mRNA.

Our ASOs bind to the pre-mRNA and redirect the splicing machinery to remove the retained intron.

This splice-switching decreases non-productive mRNA and increases productive mRNA, which is translated into increased protein expression from the wild-type allele.

This is shown in the Exhibits 3 and 4 below, with the left panel illustrating non-productive mRNA, which includes retained introns, and the right panel illustrating our ASOs binding to the pre-mRNA and redirecting the splicing machinery.

Retained introns without TANGO-ASO Exhibit 4:

Retained introns with TANGO-ASO

The second category of non-productive splicing events amenable to TANGO is alternative splicing that leads to nonsense-mediated mRNA decay, or NMD, of the resulting mRNA.

One category of non-productive splicing events amenable to TANGO is alternative splicing that leads to nonsense-mediated mRNA decay, or NMD, of the resulting mRNA.

An example of a NMD event is a NMD exon, which is found in over 25% of gene transcripts.

Like retained introns, NMD exons are part of the wild-type sequence of the genes.

NMD exons are part of the wild-type sequence of the genes.

In some cases, NMD exons are part of normal gene regulation.

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Our ASOs bind to the pre-mRNA and redirect the splicing machinery to prevent inclusion of the NMD exon.

As with retained introns, this splice-switching decreases non-productive mRNA and increases productive mRNA, which is translated into increased protein expression from the wild-type allele.

This splice-switching decreases non-productive mRNA and increases productive mRNA, which is translated into increased protein expression from the wild-type allele.

In contrast to current exon skipping therapies, which remove a coding exon and result in a truncated protein, our TANGO mechanism skips out a non-coding NMD exon and yields a full-length functional protein.

Our lead product candidates, STK-001 and STK-002, target an NMD exon and the general mechanism is shown in exhibits 3 and 4 below, with the left panel showing the non-productive mRNA failing to be translated into protein and the right panel showing our ASOs binding to the pre-mRNA and redirecting the splicing machinery.

NMD exon without TANGO-ASO Exhibit 6:

NMD exon without TANGO-ASO

NMD exon with TANGO-ASO

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RNAseq uses next-generation sequencing to determine the quantity and sequences of RNA in a sample.

We leverage large internal datasets of

RNAseq from key tissues known to be addressable with antisense, such as the CNS, eye, liver and kidney, that are purpose-built to enhance the capture of non-productive events.

We leverage large internal datasets of RNAseq from key tissues known to be addressable with antisense, such as the CNS, eye, liver and kidney, that are purpose-built to enhance the capture of non-productive events.

We employ machine learning to iteratively refine our search and scoring criteria for the most addressable non-productive mRNA elements based on internal target validation and hit identification data.

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The cognitive impairment in Dravet syndrome is not purely a consequence of seizures.

Patients with few seizures have been observed to possess severe encephalopathy, and conversely patients with frequent seizures have been observed to

exhibit relatively minimal cognitive decline.

Patients with few seizures have been observed to possess severe encephalopathy, and conversely patients with frequent seizures have been observed to exhibit relatively minimal cognitive decline.

In addition, there does not appear to be a correlation between cognitive outcome and SCN1A mutation type, whether a missense or truncating mutation.

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These data demonstrate that STK-001 has an impact on Na v 1.1 protein expression and we believe this may translate to a favorable dosing regimen in humans.

Increase of Na v 1.1 in Dravet Syndrome (DS) mice after a single dose of STK-001

Han et al ., Science Trans Med, 2020

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This is illustrated in exhibit 7.

Reduction in premature mortality in DS mice after administration of STK-001

Han et al ., Science Trans Med, 2020

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These biological studies demonstrate that STK-001 is highly specific for SCN1A among the highly homologous family of sodium channel genes, limiting the likelihood of off-target activities.

Fold change in mRNA of Scn gene family ion channels

We also investigated the pharmacology, distribution and tolerability of STK-001 in a study with cynomolgus monkeys.

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This program draws on a well-defined patient population based on routine genetic testing and learnings from drugs approved for the treatment of Dravet syndrome to inform the clinical and regulatory pathways for STK-001.

MONARCH and ADMIRAL Phase 1/2a Studies

We have two ongoing Phase 1/2a open-label studies of STK-001, MONARCH in the United States and ADMIRAL in the United Kingdom.

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Initial data from BUTTERFLY suggest that commonly used cognition assessments, BSID-III (Bayley Scales of Infant Development, Third Edition), and WPPSI-IV (Wechsler Preschool and Primary Scale of Intelligence, Fourth Edition) may be useful for clinical studies assessing neurodevelopment and adaptive behavior in patients with Dravet syndrome.

All three assessments showed relatively low intra-patient variability and no significant change from baseline three months after baseline assessments for all 36 patients enrolled.

All three assessments showed relatively low intra-patient variability.

Small improvements in receptive communication over twelve months were observed in patients and appear to be driven by younger patients, but otherwise no significant change from baseline to twelve months after baseline assessments was observed in the assessments across all other scales.

In March 2020, we announced the FDA had placed a partial clinical hold on doses of STK-001 above 20mg in the MONARCH study, pending additional preclinical testing to determine the safety profile of doses higher than the current no observed adverse effect level (“NOAEL”).

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We are measuring non-seizure aspects of the disease, such as overall clinical status and quality of life, as secondary endpoints.

In the second half of 2021, we announced positive interim safety, PK, CSF exposure, and efficacy data from the MONARCH study.

The interim analysis was based on data from 22 patients who were treated in the single 10mg (n=5), 20mg (n=4), or 30mg (n=7) dose cohorts of STK-001 and who were followed for at least three months after their last dose.

Also included in this analysis were six patients from the 20mg MAD dose cohort, most of whom had received three monthly doses of STK-001.

Key findings from the interim analysis include:

Single doses of STK-001 up to 30mg, and three 20mg doses of STK-001 given every four weeks were found to be well tolerated with no safety concerns related to the study drug.

In the second half of 2021, we announced positive interim safety, PK, CSF exposure, and efficacy data from the MONARCH study based on data from patients who were treated in the 20mg MAD dose cohort, most of whom had received three monthly doses of STK-001, or the single 10mg, 20mg or 30mg dose cohorts.

Key findings from the interim analysis included that single doses of STK-001 up to 30mg, and three 20mg doses of STK-001 given every four weeks were found to be well tolerated.

The most common treatment-emergent adverse events (“TEAEs”) were headache, vomiting, seizure, irritability, and back pain.

18.2% (4/22) of patients experienced a TEAE that was related to study drug, none of which were severe.

22.7% (5/22) patients had a serious treatment-emergent adverse event (“SAE”), none of which were related to study drug.

70.6% (12/17) patients treated with single doses (10mg, 20mg, 30mg) or multiple doses (20mg) of STK-001 experienced a reduction from baseline in convulsive seizure frequency measured from Day 29 to Day 84 after receiving their first dose of STK-001.

All patients ages 2-12 (n=7) experienced a reduction from baseline in convulsive seizure frequency measured from Day 29 to Day 84.

Reductions in seizure frequency were also observed among patients ages 13-18 in the higher dose cohorts.

This is illustrated in exhibits 11 and 12 below

Interim Safety, PK, and CSF Exposure Data from the Phase 1/2a MONARCH Study of STK-001, an Antisense Oligonucleotide (AS0), in Children and Adolescents with Dravet Syndrome (DS) (AES 2021)

Across all cohorts median reductions of 17% to 37% from baseline in convulsive seizure frequency from Day 29 to Day 84 were observed.

This is illustrated in exhibit 13 shown below.

Interim Safety, PK, and CSF Exposure Data from the Phase 1/2a MONARCH Study of STK-001, an Antisense Oligonucleotide (AS0), in Children and Adolescents with Dravet Syndrome (DS) (AES 2021)

In 2021, a population PK model for intrathecal STK-001 was developed using non-human primate data and was scaled and adjusted using clinical data to predict STK-001 concentrations in plasma, CSF, and brain in pediatric patients with Dravet syndrome.

STK-001 levels in plasma and CSF in patients treated with STK-001 correlated very well with model predictions, indicating that plasma and CSF levels observed in patients are good predictors of STK-001 brain levels in

Modeling of clinical data also suggest that more than 95% of patients are predicted to have pharmacologically active STK-001 brain levels following three doses of 30mg administered one month apart and half of all patients are anticipated to maintain greater than minimum pharmacologically active levels of STK-001 for approximately three months after their last dose as shown in as shown in exhibit 14.

A Pharmacokinetic (PK) Model for STK-001, an Antisense Oligonucleotide (AS), Based on Data from Non-human Primates (NHP) Enables Dose Selection in Patients with Dravet Syndrome (DS) (AES 2021)

MONARCH and ADMIRAL continue to progress with enrollment and dosing of patients ongoing.

We expect to announce preliminary clinical data on 30mg MAD doses of STK-001 in the second half of 2022.

Enrollment and dosing of patients is ongoing in the 45mg SAD cohort of MONARCH.

The first patients have also been dosed with STK-001 at 45mg in the ADMIRAL study, which is a multiple ascending dose study.

In January 2021, we initiated enrollment and dosing in our SWALLOWTAIL Open Label Extension (OLE) study of STK-001 for children and adolescents with Dravet syndrome.

Patients who participated in the MONARCH study and meet study entry criteria are eligible to continue treatment in SWALLOWTAIL which is designed to evaluate the long-term safety and tolerability of repeated doses of STK-001.

SWALLOWTAIL will also provide valuable information on the preliminary effects of STK-001 on seizures along with non-seizure aspects of the disease, such as quality of life and cognition.

In this study, patients will initially be administered the same dose level they received in the previous study and will receive a maximum of three doses.

One dose will be administered every four months.

Additionally, 70.6% (12 of 17) patients treated with single doses (10mg, 20mg, 30mg) or multiple

doses (20mg) of STK-001, and all patients ages 2-12 (7 of 7), experienced a reduction from baseline in convulsive seizure frequency measured from Day 29 to Day 84 after receiving their first dose of STK-001.

In November and December 2022, we announced additional positive interim safety, PK, CSF exposure and efficacy data from the MONARCH and ADMIRAL studies, which, along with other data, was presented at the American Epilepsy Society (AES) 2022 Annual Meeting.

The pooled data from these two studies demonstrated that, as of the time of the 2022 interim analysis, single and multiple doses of STK-001 up to 45mg were well-tolerated.

27% (15 of 55) of patients experienced a TEAE related to the study drug, all of which were mild or moderate in severity.

22% (12 of 55) of patients had a treatment-emergent serious adverse event, none of which were related to the study drug.

The most common TEAEs observed were vomiting, headache and seizures.

33% (18 of 55) of patients experienced CSF protein elevation (>50mg/dL) after dosing, but no clinical manifestations were observed.

No TEAEs led to study drug withdrawal.

One of several secondary endpoints for both the MONARCH and ADMIRAL studies was a comparison of the percentage change in convulsive seizure frequency as measured by daily seizure diaries and calculated over 4-week periods:

between baseline and 12 weeks after treatment;

and between baseline and end of study.

Preliminary analysis using pooled data from the MONARCH and ADMIRAL studies showed that 74% (20 of 27) of patients who were treated with multiple doses of 20mg, 30mg or 45mg of STK-001 and were followed for at least three months after their last dose experienced a reduction from baseline in seizure frequency.

Median reductions from baseline in convulsive seizure frequency of 55% (45mg, n=6), 20% (30mg, n=17) and 41% (20mg, n=4) were observed in patients treated with three doses of STK-001 as measured from Day 29 after their first dose to three months after receiving their last dose as illustrated in exhibit 9 below.

Reduction in convulsive seizure frequency (SF) for all ages combined by cohort

MONARCH and ADMIRAL Interim Analyses:

Phase 1/2a Studies Investigating Safety and Drug Exposure of STK-001, an Antisense Oligonucleotide (ASO), in Children and Adolescents with Dravet Syndrome (DS) (AES 2022)

Reductions in seizures were observed across all age groups, with seizure reductions more evident among patients 2-12 as seen in exhibits 10 and 11 below.

Reductions in SF for younger patients

Reductions in SF for older patients

MONARCH and ADMIRAL Interim Analyses:

Phase 1/2a Studies Investigating Safety and Drug Exposure of STK-001, an Antisense Oligonucleotide (ASO), in Children and Adolescents with Dravet Syndrome (DS) (AES 2022)

As presented at the AES 2022 Annual Meeting and illustrated by exhibits 12 and 13 below, topline data from six patients treated with three doses of 45mg of STK-001 showed:

a 55% median reduction from baseline in convulsive seizure frequency from day 29 after the first dose to three months after receiving the last dose;

a greater than 50% reduction in convulsive seizure frequency in 67% (4 of 6) of patients:

reductions from baseline in convulsive seizure frequency in 83% (5 of 6) of patients;

that reductions in seizure frequency began after the first dose and continued with additional treatment, consistent with the anticipated mechanism of action of STK-001.

Changes in SF from baseline

Median changes in SF over time

MONARCH and ADMIRAL Interim Analyses:

Phase 1/2a Studies Investigating Safety and Drug Exposure of STK-001, an Antisense Oligonucleotide (ASO), in Children and Adolescents with Dravet Syndrome (DS) (AES 2022)

The following PK and CSF exposure findings were also observed as of the time of the 2022 interim analysis:

(i) a dose-dependent increase in study drug exposure was observed in plasma with a greater increase observed between 30mg and 45mg than between 20mg and 30mg;

(ii) the plasma PK profile was consistent across ADMIRAL and MONARCH patients who were treated at the same dose level;

and (iii) CSF exposure was measurable up to six months following single and multiple intrathecal doses of STK-001, indicating sustained exposure of STK-001 in the brain.

MONARCH and ADMIRAL continue to progress.

In the United States, MONARCH enrollment is nearing completion, and dosing is ongoing in the expanded 45mg multiple dose cohort.

In the United Kingdom, ADMIRAL

enrollment is now complete and dosing is ongoing at the 70mg multiple dose cohort .

We expect to announce preliminary clinical data on 45 mg MAD doses of STK-001 in mid-2023 and additional preliminary clinical data on 70mg MAD doses of STK-001 in the second half of 2023 .

SWALLOWTAIL and LONGWING Open Label Extension Studies

In January 2021, we initiated enrollment and dosing in our SWALLOWTAIL Open Label Extension (OLE) study of STK-001 for children and adolescents with Dravet syndrome in the United States, and in May 2022, we began dosing patients in our LONGWING OLE study of STK-001 for children and adolescents with Dravet syndrome in the United Kingdom.

Patients who participated in the MONARCH study in the United States or the ADMIRAL study in the United Kingdom and meet study entry criteria are eligible to continue treatment in SWALLOWTAIL or LONGWING, respectively, both of which are designed to evaluate the long-term safety and tolerability of repeated doses of STK-001.

SWALLOWTAIL and LONGWING will also provide valuable information on the preliminary effects of STK-001 on seizures along with non-seizure aspects of the disease, such as quality of life and cognition.

Following interactions with regulatory agencies, we have agreed to limit chronic dosing in SWALLOWTAIL to 30mg and in LONGWING to 45mg.

In December 2021 we presented initial data from the SWALLOWTAIL study that demonstrated that multiple doses up to 30mg of STK-001 intrathecally every four months appears to be well tolerated.

Enrollment and dosing in SWALLOWTAIL are underway.

While we continue working to minimize any potential delay to continued clinical testing of STK-001, we expect that the COVID-19 pandemic may directly or indirectly impact the timeline.

Our ability to continue the clinical trials may be adversely affected, directly or indirectly, by the COVID-19 pandemic.

For example, although MONARCH and ADMIRAL have not been delayed, we plan to have clinical trial sites in various parts of the United States and the United Kingdom, some of which have had high incident rates of COVID-19 patients.

Restrictions on travel and/or transport of clinical materials, as well as diversion of hospital staff and resources to COVID-19 infected patients, could disrupt trial operations as well as recruitment, possibly resulting in a slowdown in enrollment and/or deviations from or disruptions in key clinical trial activities, such as clinical trial site monitoring.

These challenges may lead to difficulties in meeting protocol-specified procedures.

In addition, preliminary data from a small cohort of patients treated in the SWALLOWTAIL OLE was presented at the AES 2022 Annual Meeting and showed the effects of ongoing treatment with 30mg of STK-001, including:

a safety profile consistent with MONARCH and ADMIRAL;

reductions in convulsive seizure frequency that were observed in MONARCH were maintained with ongoing treatment in the SWALLOWTAIL OLE, as illustrated in exhibit 14 below;

Median change in SF from MONARCH baseline over time

An Open-Label Extension (OLE) Study for Children and Adolescents with Dravet Syndrome (DS) who Previously Participated in a Study of Antisense Oligonucleotide (ASO) STK-001 (AES 2022)

a trend toward improvement in non-seizure comorbidities as measured by the BRIEF-P, an assessment of executive function that was one of several exploratory endpoints, was observed among patients in the SWALLOWTAIL OLE, while one-year data from the BUTTERFLY observational study, which did not include treatment with STK-001, showed little change from baseline to 12 months in the mean BRIEF-P Scores and other commonly used cognition assessments, as illustrated in exhibit 15 below.

Mean change in BRIEF-P measurements from BUTTERFLY and SWALLOWTAIL studies

Twelve-month Analysis of BUTTERFLY:

An Observational Study to Investigate Cognition and Other Non-seizure Comorbidities in Children and Adolescents with Dravet Syndrome (DS) (AES 2022).

An Open-Label Extension (OLE) Study for Children and Adolescents with Dravet Syndrome (DS) who Previously Participated in a Study of Antisense Oligonucleotide (ASO) STK-001 (AES 2022)

We have not yet discussed with regulatory authorities the evidence necessary for approval of STK-001.

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To date, we have generated preclinical data demonstrating proof-of-mechanism and proof-of-concept for STK-002.

Based on preclinical data generated to date, we believe that STK-002 has the potential to be the first disease-modifying therapy for people living with ADOA.

Preclinical toxicology studies are underway to support future clinical trials for STK-002.

Disease Overview

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or visual electrophysiology.

Patients suspected of ADOA are recommended to receive genetic testing to confirm the clinical diagnosis, help identify other family members who are affected and ensure patients avoid stressors that could increase disease progression (e.g.

Patients suspected of ADOA are

recommended to receive genetic testing to confirm the clinical diagnosis, help identify other family members who are affected and ensure patients avoid stressors that could increase disease progression (e.g.

smoking, alcohol).

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Retinal exposure of ASO-14 surrogate (ST-1102) was elevated with increased dosing, dose-dependent target engagement was seen at all three time-points examined, and protein increase of OPA1 protein was observed at both Day 15 and Day 29 of the study.

We further showed that in OPA1 haploinsufficient human cells, ASO-14-mediated increase in OPA1 protein

translates to improved mitochondrial function as measured by the substantial restoration of ATP levels in the treated cells (exhibit 18 below).

We further showed that in OPA1 haploinsufficient human cells, ASO-14-mediated increase in OPA1 protein translates to improved mitochondrial function as measured by the substantial restoration of ATP levels in the treated cells (exhibit 19 below).

ATP is produced by the mitochondria and is the key energy carrying molecule in cells.

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May 1-7, 2021.

As with STK-001 for Dravet syndrome, our study and development of STK-002 and the use of our TANGO technology to treat ADOA is subject to the risks and uncertainties stemming from the COVID-19 pandemic, which may directly or indirectly impact our ability to pursue this new target, and the timing in which we do so.

In May 2022, we presented further preclinical data for STK-002 demonstrating in-vivo , dose-related target engagement and OPA1 protein upregulation with sustained effect in NHP retinal tissue following administration of STK-002 (Exhibit 21).

Additionally, a dose-related increase in OPA1 protein was detected in retinal ganglion cells of NHPs treated with STK-002.

Dose-related target engagement and OPA1 protein upregulation in retinal tissue of NHPs following administration of STK-002

Source Venkatesh A, et al.

STK-002, an Antisense Oligonucleotide (ASO) for the Treatment of Autosomal Dominant Optic Atrophy (ADOA), is Taken Up by Retinal Ganglion Cells (RGC) and Upregulates OPA-1 Protein Expression After Intravitreal Administration to Non-human Primates (NHPs).

May 16-19, 2022.

Clinical Plans

In August 2022, we announced enrollment of the first patient in our two-year prospective natural history study of people ages 8 to 60 who have a confirmed diagnosis of ADOA that is caused by an OPA1 mutation (FALCON study).

The FALCON study is designed to evaluate the rate of change in structural and functional ophthalmic assessments.

Data collected from the FALCON study will support the clinical development of STK-002.

We submitted a CTA in the United Kingdom in the first half of 2023 to enable a potential Phase 1/2 trial for STK-002 in 2024.

Additional product opportunities

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Acadia agreed to fund the research to identify potential licensed products for MECP2 and the neurodevelopmental target, and we will equally fund with Acadia the research to identify potential licensed products for SYNGAP1.

We are e ligible to receive up to $907,500,000 in potential total milestone payments based upon the achievement of certain development, regulatory, first commercial sales and sales milestone events across the programs for the three targets, assuming each milestone were achieved at least once.

With respect to licensed products for MECP2 and the neurodevelopmental target, we are also eligible to receive tiered royalties at percentages ranging from the mid-single digits to the mid-teens on future net sales by Acadia of licensed products worldwide.

Royalties payable under the agreement are subject to standard royalty reductions.

We are e ligible to receive up to $907.5 million in potential total milestone payments based upon the achievement of certain development, regulatory, first commercial sales and sales milestone events across the programs for the three targets, assuming each milestone were achieved at least once.

With respect to licensed products for MECP2 and the neurodevelopmental target, we are also eligible

to receive tiered royalties at percentages ranging from the mid-single digits to the mid-teens on future net sales by Acadia of licensed products worldwide.

Royalties payable under the a greement are subject to standard royalty reductions.

For SYNGAP1 licensed products that we are co-developing and co-commercializing, we will be responsible for 50% of the development and commercialization costs and will receive 50% of the profits from global commercialization.

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Currently, there are no FDA-approved medicines for the treatment of Rett syndrome.

Business Update Regarding COVID-19

The current COVID-19 pandemic continues to present a substantial public health and economic challenge around the world and is affecting our employees, patients, communities and business operations, as well as the U.S.

We continue to monitor the impact of the COVID-19 pandemic in an effort to mitigate interruptions to our clinical programs, research efforts and other business activities and to monitor the safety and well-being of our employees, patients and communities, as well as its impact on the U.S.

economy and financial markets.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, liquidity and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including the timing and effectiveness of global efforts to roll out vaccines, new information that may emerge concerning COVID-19 and COVID-19 variants, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets.

To date, our third party contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other third-party vendors have been able to continue to provide services and supply reagents, materials, and products and currently do not anticipate any significant disruption in services or interruptions in supply.

We have pursued mitigation strategies to keep key research activities on track.

Our third-party CMOs continue to operate their manufacturing facilities at or near normal levels.

While we currently do not anticipate any significant interruptions in our manufacturing processes, it is possible that the COVID-19 pandemic and response efforts may have an impact in the future on our third-party suppliers and CMO’s ability to manufacture reagents, materials, or products that we need to use in our research and clinical trial.

However, we are continuing to assess the potential impact of the COVID-19 pandemic on our business and operations, including our expenses, our observational study, our clinical trials, and our ability to hire and retain employees.

Our ability to continue our clinical trials and our observational study may be adversely affected, directly or indirectly, by the COVID-19 pandemic.

Currently we are monitoring patient enrollment and participation in our clinical trials and our observational study, including the duration and degree to which we may see declines in enrollment, delays in conducting in-person follow-ups, and disruptions in our ability to monitor patients due to hospitals closing sites or diverting the resources that are necessary to conduct our clinical trials and our observational study.

While we continue to enroll and

dose patients in our clinical trials at sites across the United States and the United Kingdom, we take into consideration that COVID-19 precautions may directly or indirectly impact the timeline for some of our clinical trial activities due to hospitals closing sites and/or diverting the resources that are necessary to conduct clinical trials.

We are pursuing approaches to help mitigate the impact to our clinical trials.

Currently we have not experienced any significant delays in our clinical trials due to COVID-19.

The COVID-19 pandemic has caused us to modify our business practices including but not limited to curtailing or modifying employee travel, moving to partial remote work, and minimizing some physical participation in meetings, events and conferences.

We continue to monitor our operations and applicable governmental recommendations, and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, patients and business partners.

Our office-based employees had been primarily working from home from early March 2020 through early September 2021.

Since then, our office-based staff have been working in a hybrid-model fluctuating between work from home and work from the office.

Throughout the pandemic, we continue to ensure that essential staffing levels in our operations remain in place, including maintaining key personnel in our laboratories

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, liquidity and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 and COVID-19 variants, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets.

For additional information on the various risks posed by the COVID-19 pandemic, please read Item 1A.

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If our current product candidate, STK-001, is approved for the treatment of Dravet syndrome, it may compete with other products currently marketed or in development.

Currently marketed anti-seizure medicines (ASMs) range from cannabidiols, such as Jazz Pharmaceuticals’ Epidiolex, Fintepla® (fenfluramine) from Zogenix, to GABA receptor agonists, such as clobazam and stiripentol, to glutamate blockers, such as topiramate.

Companies such as Ovid Therapeutics/Takeda, Xenon Pharmaceuticals, Eisai Pharmaceuticals, Longboard Pharmaceuticals and Encoded Therapeutics are also developing treatments for Dravet syndrome.

Currently marketed ASMs range from cannabidiols, such as Jazz Pharmaceuticals’ Epidiolex, Fintepla® (fenfluramine) from UCB , to GABA receptor agonists, such as clobazam and stiripentol, to glutamate blockers, such as topiramate.

Companies such as Ovid Therapeutics/Takeda, Xenon Pharmaceuticals, Eisai Pharmaceuticals, Epygenix, Longboard Pharmaceuticals , CAMP4, Encoded Therapeutics and others are also developing treatments for Dravet syndrome.

Many of the currently marketed ASMs are available as generics.

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Importantly, we believe none of the drugs in clinical development address the underlying genetic cause of Dravet syndrome.

Our second product candidate, STK-002, is in development for treatment of Autosomal Dominant Optic Atrophy (ADOA).

Our second product candidate, STK-002, is in development for treatment of ADOA.

There are no products currently marketed or in clinical development for treatment of ADOA.

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In many countries, the pricing review period begins after marketing approval is granted.

In some foreign markets, prescription biopharmaceutical pricing remains subject

to continuing governmental control even after initial approval is granted.

In some foreign markets, prescription biopharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted.

As a result, a drug company can obtain regulatory approval for a product in a country, but then be subject to price regulations that delay commercial launch of that product.

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Reimbursement rates may be based on payments allowed for lower cost drugs or therapeutic biologics that are already reimbursed, may be incorporated into existing payments for other services and may reflect budgetary constraints or imperfections in Medicare data.

Net prices for drugs or therapeutic biologics may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs or therapeutic biologics from countries where they may be sold at lower prices than in the United States.

Net prices for drugs or therapeutic biologics may be reduced

by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs or therapeutic biologics from countries where they may be sold at lower prices than in the United States.

Further, no uniform policy for coverage and reimbursement exists in the United States.

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patent applications and pending foreign patent applications that we have licensed from Cold Spring Harbor Laboratory are anticipated to expire in 2035, absent any patent term adjustments or extensions.

Separately, we have filed patent applications with claims that are intended to cover compositions of matter of oligonucleotides designed to target specific elements in genes for many genetic diseases that we believe are amenable to upregulation of target protein expression using our TANGO platform.

As of December 31, 2021, any patents that may issue

from these currently pending patent applications, including PCT international applications, U.S.

Separately, we have obtained patents and filed patent applications with claims that are intended to cover compositions of matter of oligonucleotides designed to target specific elements in genes for many genetic diseases that we believe are amenable to upregulation of target protein expression using our TANGO platform.

As of December 31, 2022, the issued U.S.

patents, the issued foreign patents and any patents that may issue from the currently pending patent applications, including PCT international applications, U.S.

patent applications, and foreign patent applications, are expected to expire between 2036 and 2043, absent any patent term adjustments or extensions.

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As of December 31, 2022, we also own U.S.

patents, a pending U.S.

patent application, a PCT international application, foreign patents and pending foreign patent applications relating to STK-001, and the U.S.

patent any patents that may issue from these pending patent applications are expected to expire between 2038 and 2040, absent any patent term adjustments or extensions.

patents, pending U.S.

patent applications, foreign patents and pending foreign patent applications relating to STK-001, and the U.S.

patents any patents that may issue from these pending patent applications are expected to expire between 2038 and 2043, absent any patent term adjustments or extensions.

With respect to STK-002, as of December 31, 2022, we have exclusively licensed U.S.

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The issued patents and any patents that may issue from these pending patent applications are expected to expire between 2035 and 2036, absent any patent term adjustments or extensions.

As of December 31, 2021, we also own a pending U.S.

patent application, a PCT international application, and pending foreign patent applications relating to STK-002, and any patents that may issue from these pending patent applications are expected to expire between 2038 and 2041, absent any patent term adjustments or extensions.

As of December 31, 2022, we also own pending U.S.

patent applications, and pending foreign patent applications relating to STK-002, and any patents that may issue from these pending patent applications are expected to expire between 2038 and 2041, absent any patent term adjustments or extensions.

The term of individual patents depends upon the laws of the countries in which they are obtained.

In most countries in which we file, the patent term is 20 years from the earliest date of filing of a non-provisional patent application.

However, the term of United States patents may be extended for delays incurred due to compliance with the FDA requirements or by delays encountered during prosecution that are caused by the United States Patent and Trademark Office, or the USPTO.

term of United States patents may be extended for delays incurred due to compliance with the FDA requirements or by delays encountered during prosecution that are caused by the United States Patent and Trademark Office, or the USPTO.

For example, for drugs that are regulated by the FDA under the Hatch-Waxman Act, it is permitted to extend the term of a patent that covers such drug for up to five years beyond the normal expiration date of the patent.

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For these reasons, we may have competition for our TANGO platform and product candidates.

Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that before any product candidate can be commercialized, any

related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent.

Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that before any product candidate can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent.

For this and other risks related to our proprietary technology, inventions, improvements, platforms and product candidates, please see the section entitled “Risk Factors—Risks Related to our Intellectual Property.”

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In the case of employees, the agreements provide that all inventions conceived by the individual, and which are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property.

In many cases our confidentiality and other agreements with consultants, outside scientific collaborators, sponsored researchers and other advisors require them to assign or grant us licenses to inventions they invent as a result of the work or services they render under such agreements or grant us an option to negotiate a license to use such inventions.

In many cases our confidentiality

and other agreements with consultants, outside scientific collaborators, sponsored researchers and other advisors require them to assign or grant us licenses to inventions they invent as a result of the work or services they render under such agreements or grant us an option to negotiate a license to use such inventions.

Despite these efforts, we cannot provide any assurances that all such agreements have been duly executed, and any of these parties may breach the agreements and disclose our proprietary information, and we may not be able to obtain adequate remedies for such breaches.

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License and research agreements

In July 2015, we entered into a worldwide license agreement (the “CSHL Agreement”), with CSHL, with respect to TANGO patents.

The CSHL Agreement was subsequently amended in May 2019 and in July 2020.

In July 2015, we entered into a worldwide license agreement, or the CSHL Agreement, with CSHL, with respect to TANGO patents.

Under the CSHL Agreement, we receive an exclusive (except with respect to certain government rights and non-exclusive licenses), worldwide license under certain patents and applications relating to TANGO.

As part of the CSHL Agreement, we granted CSHL 164,927 shares of common stock valued based on an independent appraisal at approximately $0.07 million.

The CSHL Agreement obligates us to make additional payments that are contingent upon certain milestones being achieved.

The CSHL Agreement obligates us to make payments that are contingent upon certain milestones being achieved.

We are also required to pay royalties, tiered based on the scope of patent coverage for each licensed product, ranging from a low-single digit percentage to a mid-single digit percentage on annual net sales.

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Additionally, certain licenses under the CSHL Agreement require us to reimburse CSHL for certain past and ongoing patent related expenses, however there were no expenses related to these reimbursable patent costs during the years ended December 31, 2022 and 2021.

In February 2023, we delivered a notice of termination of the CSHL Agreement to CSHL, and we expect the CSHL Agreement to be terminated within 90 days of such notice.

We do not expect the termination of the CSHL Agreement to have a significant impact on the intellectual property underlying any of our current product candidates, including STK-001 and STK-002, or our continued development of the TANGO platform.

In April 2016, we entered into an exclusive, worldwide license agreement with the University of Southampton (the “Southampton Agreement”), whereby we acquired rights to foundational technologies related to our TANGO technology.

Under the Southampton Agreement, we received an exclusive, worldwide license under certain licensed patents and applications relating to TANGO.

As part of the Southampton Agreement, we paid 0.06 million pounds sterling (approximately $0.07 million as of the date thereof) as an up-front license fee.

Under the Southampton Agreement, we may

be obligated to make additional payments that are contingent upon certain milestones being achieved, as well as royalties on future product sales.

Under the Southampton Agreement, we receive an exclusive, worldwide license under certain licensed patents and applications relating to TANGO.

Under the Southampton Agreement, we may be obligated to make additional payments that are contingent upon certain milestones being achieved, as well as royalties on future product sales.

These royalty obligations survive until the latest of (i) the expiration of the last valid claim of a licensed patent covering a subject product or (ii) the expiration of any regulatory exclusivity for the subject product in a country.

In addition, if we sublicense our rights under the Southampton Agreement, we are required to pay a mid-single digit percentage of the sublicense revenue to the University of Southampton.

The maximum aggregate potential milestone payments payable by us totaled approximately 0.4 million pounds sterling (approximately $0.5 million as of December 3 1 , 202 1 ).

As of December 3 1 , 202 1 , and December 31, 2020 , we had recorded no liabilities under the Southampton Agreement.

Additionally, certain licenses under the Southampton Agreement require the Company to reimburse the University of Southampton for certain past and ongoing patent related expenses.

For the three months ended December 3 1 , 2021 these expenses were $0.03 million compared to $0.0 5 million for three months ended December 31 , 2020 and for the year ended December 3 1 , 2021 these expenses were $0.

12 million compared to $0.0 9 million for the year ended December 3 1 , 2020.

In addition, if we sublicense its rights under the Southampton Agreement, we are required to pay a mid-single digit percentage of the sublicense revenue to the University of Southampton.

As of December 31, 2022, we had paid $0.7 million under the Southampton Agreement as a result of entering into the Acadia Pharmaceuticals Inc.

license and collaboration agreement in January 2022 (See Note 8 to the consolidated financial statements included elsewhere in this Form 10-K).

Additionally, certain licenses under the Southampton Agreement require us to reimburse the University of Southampton for certain past and ongoing patent related expenses.

For the year ended December 31, 2022 these expenses were $0.02 million compared to $0.12 million for the year ended December 31, 2021.

Government Regulation

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The Federal Food, Drug, and Cosmetic Act (the “FDCA”) and other federal and state statutes and regulations govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling and import and export of pharmaceutical products.

Failure to comply with applicable U.S.

Failure to comply with

applicable U.S.

regulations may subject a company to a variety of administrative or judicial sanctions, such as a clinical hold, FDA refusal to approve pending new drug applications, or NDAs, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.

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Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap.

In Phase 1, the initial introduction of the drug into healthy human subjects or patients, the drug is tested

to assess metabolism, pharmacokinetics, pharmacological actions, side effects associated with increasing doses, and, if possible, early evidence of effectiveness.

In Phase 1, the initial introduction of the drug into healthy human subjects or patients, the drug is tested to assess metabolism, pharmacokinetics, pharmacological actions, side effects associated with increasing doses, and, if possible, early evidence of effectiveness.

Phase 2 usually involves trials in a limited patient population to determine the effectiveness of the drug generally for a specific indication, dosage tolerance and optimum dosage, and to identify common adverse effects and safety risks.

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ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries.

The requirement for a REMS can materially affect the potential market and profitability of the

The requirement for a REMS can materially affect the potential market and profitability of the drug.

FDA may also require a REMS for a drug that is already on the market if it determines, based on new safety information, that a REMS plan is necessary to ensure that the products benefits outweigh its risks.

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Fast Track Designation is intended to facilitate development and expedite review of drugs to treat serious and life-threatening conditions so that an approved product can reach the market expeditiously.

If a submission is granted Fast Track Designation, the sponsor may engage in more frequent interactions with FDA, and FDA may review sections of the NDA before the full application is complete.

If a submission is granted Fast Track Designation, the sponsor may engage in more frequent interactions with FDA, and FDA may review sections of the NDA before the full

application is complete.

This rolling review is available if, in agreement with the FDA, the applicant provides, a schedule for the submission of the remaining information.

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All promotional materials for drug candidates approved under accelerated regulations are subject to priority review by FDA.

The Food and Drug Omnibus Reform Act (“FDORA”) was recently enacted, which included provisions related to the accelerated approval pathway.

Pursuant to FDORA, the FDA is authorized to require a post-approval study to be underway prior to approval or within a specified time period following approval.

FDORA also requires the FDA to specify conditions of any required post-approval study, which may include milestones such as a target date of study completion and requires sponsors to submit progress reports for required post-approval studies and any conditions required by the FDA not later than 180 days following approval and not less frequently than every 180 days thereafter until completion or termination of the study.

FDORA enables the FDA to initiate enforcement action for the failure to conduct with due diligence a required post-approval study, including a failure to meet any required conditions specified by the FDA or to submit timely reports.

A drug candidate is eligible for priority review, or review within a six-month time frame from the time an NDA is filed by FDA, if the drug candidate is intended for the treatment, diagnosis or prevention of a serious or life-threatening condition, demonstrates the potential to address an unmet medical need, or provides a significant improvement compared to marketed drugs.

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for that product, for that indication.

During the seven-year exclusivity period, FDA may not approve any other applications to market the same drug for the same disease, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.

During the seven-year exclusivity period, FDA may not approve any other applications to market the same drug for the same disease, except in limited circumstances, such

as a showing of clinical superiority to the product with orphan drug exclusivity.

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

Among the other benefits of Orphan Drug Designation are tax credits for certain research and an exemption from the NDA application user fee.

Among the other benefits of Orphan Drug Designation are tax credits for certain research and an exemption from the NDA user fee.

Rare Pediatric Disease Priority Review Voucher program

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Adverse event reporting and submission of periodic reports are required following FDA approval of an NDA.

FDA also may require post-marketing testing or studies, known as Phase 4 commitments, risk evaluation and mitigation strategies, or REMS, and surveillance to monitor the effects of an approved product, or FDA may place conditions on an approval that could restrict the distribution or use of the product.

FDA also may require post-marketing testing or studies, known as Phase 4 commitments, REMS and surveillance to monitor the effects of an approved product, or FDA may place conditions on an approval that could restrict the distribution or use of the product.

In addition, quality control, drug manufacture, packaging and labeling procedures must continue to conform to cGMPs after approval.

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Pediatric information

Under the Pediatric Research Equity Act, or PREA, NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.

Under the Pediatric Research Equity Act (the “PREA”), NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.

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

With certain exceptions, PREA does not apply to any drug for an indication for which orphan designation has been granted.

The Best Pharmaceuticals for Children Act, or BPCA, provides NDA holders a six-month extension of any exclusivity—patent or nonpatent—for a drug if certain conditions are met.

With certain exceptions, the PREA does not apply to any drug for an indication for which orphan designation has been granted.

The Best Pharmaceuticals for Children Act (the “BPCA”), provides NDA holders a six-month extension of any exclusivity—patent or nonpatent—for a drug if certain conditions are met.

Conditions for exclusivity include FDA’s determination that information relating to the use of a new drug in the pediatric population may produce health benefits in that population, FDA making a written request for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe.

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This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other.

Although there are a number of statutory exceptions and regulatory safe harbors protecting certain

common activities from prosecution or other regulatory sanctions, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor.

Although there are a number of statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor.

Federal civil and criminal false claims laws, including the federal civil False Claims Act, prohibit any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to have a false claim paid.

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Most states also have statutes or regulations similar to the federal Anti-Kickback Statute and False Claims Act, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

Other federal statutes pertaining to healthcare fraud and abuse include the civil monetary penalties statute, which prohibits, among other things, the offer or payment of remuneration to a Medicaid or Medicare beneficiary that the offeror or payor knows or should know is likely to influence the beneficiary to order a receive a reimbursable item or service from a particular supplier, and the additional federal criminal statutes created by the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or obtain by means of false or fraudulent pretenses, representations or promises any money or property owned by or under the control of any healthcare benefit program in connection with the delivery of or payment for healthcare benefits, items or services.

Other federal statutes pertaining to healthcare fraud and abuse include the civil monetary penalties statute, which prohibits, among other things, the offer or payment of remuneration to a Medicaid or Medicare beneficiary that the offer o r or payor knows or should know is likely to influence the beneficiary to order a receive a reimbursable item or service from a particular supplier, and the additional federal criminal statutes created by the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or obtain by means of false or fraudulent pretenses, representations or promises any money or property owned by or under the control of any healthcare benefit program in connection with the delivery of or payment for healthcare benefits, items or services.

In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, including the Final Omnibus Rule published on January 25, 2013, impose obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services involving the storage, use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information.

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Efforts to ensure that business arrangements with third parties comply with applicable healthcare laws and regulations involve substantial costs.

imprisonment, the curtailment or restructuring of its operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other federal or state government healthcare programs, including Medicare and Medicaid, integrity oversight and reporting obligations, imprisonment, and reputational harm.

If a drug company’s operations are found to be in violation of any such requirements, it may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of its operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other federal or state government healthcare programs, including Medicare and Medicaid, integrity oversight and reporting obligations, imprisonment, and reputational harm.

Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated.

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government rebate programs and additional downward pressure on pharmaceutical product prices.

On September 9, 2021, the Biden administration published a wide-ranging list of policy proposals, most of which would need to be carried out by Congress, to reduce drug prices and drug payment.

The HHS plan includes, among other reform measures, proposals to lower prescription drug prices, including by allowing Medicare to negotiate prices and disincentivizing price increases, and to support market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase price transparency.

Many similar proposals, including the plans to give Medicare Part D authority to negotiate drug prices, require drug manufacturers to pay rebates on drugs whose prices increase greater than the rate of inflation, and cap out-of-pocket costs, have already been included in policy statements and legislation currently being considered by Congress.

It is unclear to what extent these and other statutory, regulatory, and administrative initiatives will be enacted and implemented.

Healthcare reform proposals recently culminated in the enactment of the Inflation Reduction Act (the “IRA”), which will, among other things, allow the U.S.

Department of Health and Human Services (“HHS”) to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D (excluding drugs and biologics that are designated and approved for only one rare disease or condition), although only high-expenditure single-source drugs that have been approved for at least 7

years ( 11 years for biologics ) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.

The negotiated prices, which will first become effective in 2026, will be capped at a statutory ceiling price.

Beginning in October 2022 for Medicare Part D and January 2023 for Medicare Part B, the IRA will also penalize drug manufacturers that increase prices of Medicare Part D and Part B drugs at a rate greater than the rate of inflation .

In addition, the IRA will eliminate, beginning in 2025, the coverage gap under Medicare Part D by significantly lowering the enrollee maximum out-of-pocket cost and requiring manufacturers to subsidize, through a newly established manufacturer discount program, 10% of Part D enrollees’ prescription costs for brand drugs below the out-of-pocket maximum, and 20% once the out-of-pocket maximum has been reached.

The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties.

It is unclear to what extent other statutory, regulatory, and administrative initiatives will be enacted and implemented.

Foreign regulation

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The grant of marketing authorization in the EU is governed by Directive 2001/83/EC of the European Parliament and of the Council, commonly known as the Community Code and Regulation (EC) No 726/2004 of the European Parliament and of the Council of 31 March 2004 laying down Community procedures for the authorization and supervision of medicinal products for human and veterinary use and establishing the European Medicines Agency (the “EMA”), commonly referred to as the EMA Regulation.

In addition, Regulation 1394/2007/EC on advanced therapy

medicinal products (“ATMP”) lays down specific rules concerning the authorization, supervision and pharmacovigilance of gene therapy medicinal products, somatic cell therapy medicinal products and tissue engineered products.

In addition, Regulation 1394/2007/EC on advanced therapy medicinal products (“ATMP”) lays down specific rules concerning the authorization, supervision and pharmacovigilance of gene therapy medicinal products, somatic cell therapy medicinal products and tissue engineered products.

The EMA’s Committee for Advanced Therapies (“CAT”) is responsible for assessing the quality, safety and efficacy of ATMP.

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Innovative medicinal products are authorized in the EU on the basis of a full marketing authorization application (as opposed to an application for marketing authorization that relies, in whole or in part, on data in the marketing authorization dossier for another, previously approved medicinal product).

Applications for marketing authorization for innovative medicinal products must contain the results of pharmaceutical tests, preclinical tests and clinical trials conducted with the medicinal product for which marketing authorization is sought.

Applications for marketing authorization for innovative

medicinal products must contain the results of pharmaceutical tests, preclinical tests and clinical trials conducted with the medicinal product for which marketing authorization is sought.

EU legislation provides for a system of regulatory data and market exclusivity.

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The MHRA reviews applications for orphan designation at the time of a marketing authorization application or as part of a subsequent variation to that authorization.

chronically debilitating, the prevalence of the condition must not be more than 5 in 10,000 or it must be unlikely that the marketing would generate sufficient returns to justify investment and no satisfactory method of diagnosis, prevention or treatment must exist in Great Britain or, if such a method exists the medicine must be of significant benefit to those affected by the condition.

To qualify for orphan designation, a medicine must meet certain criteria in the United Kingdom including that the medicine for the treatment, prevention or diagnosis of a disease that is life-threatening or chronically debilitating, the prevalence of the condition must not be more than 5 in 10,000 or it must be unlikely that the marketing would generate sufficient returns to justify investment and no satisfactory method of diagnosis, prevention or treatment must exist in Great Britain or, if such a method exists the medicine must be of significant benefit to those affected by the condition.

On grant of a marketing authorization with orphan status, the medicinal product will benefit from up to 10 years of market exclusivity from similar products in the approved orphan indication starting from the date of first approval of the product in Great Britain.

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As of December 31, 2022, approximately 55% of our employees are female, and approximately 47% of our management team (which we define as at the vice president level and above) are female.

More than one-third of our employees self-identify as racially or ethnically diverse as of December 31, 2021.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.

More than 40% of our employees self-identify as racially or ethnically diverse as of December 31, 2022.

Our human capital resources objectives include, as applicable, identifying, recruiting, integrating, motivating, developing, and retaining our existing and additional employees.

The principal purposes of our equity incentive and cash-based performance bonus plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards.

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

What changed 10-K

Item 1. Business