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Item 1. Business

2024-02-29 compared with 2023-02-23 · 380 added, 324 removed, 589 unchanged (54% of the section changed)

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We have created a novel approach to immune modulation by designing biologics with structural characteristics that may not be achievable by existing therapeutic modalities, including monoclonal or bispecific antibodies.

Compounds derived from our proprietary Agonist Redirected Checkpoint, or ARC ® , platform simultaneously inhibit checkpoint molecules and activate costimulatory molecules with a single therapeutic.

Our ARC® platform was designed to simultaneously inhibit checkpoint molecules and activate costimulatory molecules with a single therapeutic as a potential treatment for cancer.

We also have at varying stages of preclinical development, dual-sided fusion proteins, distinct from our Agonist Redirected Checkpoint (“ARC”) platform, that have therapeutic potential in autoimmune and inflammatory diseases, among other therapeutic areas.

Our lead product candidate, SL-172154, is designed to simultaneously inhibit the CD47/SIRPα macrophage checkpoint interaction and activate the CD40 costimulatory receptor to induce an antitumor immune response.

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We are pursuing a broad clinical development strategy in both solid and hematologic tumors, with multiple ongoing clinical trials.

SL-172154 is in an ongoing Phase 1 clinical trial for the treatment of patients with ovarian cancer.

W e are also evaluating SL-172154 in an ongoing Phase 1 clinical trial for the treatment of patients with certa in hematologic malignancies, including acute myeloid leukemia, or AML, and higher-risk myelodysplastic syndromes, or HR-MDS.

SL-172154 is in an ongoing Phase 1B clinical trial for the treatment of patients with ovarian cancer.

W e are also evaluating SL-172154 in an ongoing Phase 1B clinical trial for the treatment of patients with certa in hematologic malignancies, including acute myeloid leukemia (“AML”), and higher-risk myelodysplastic syndromes (“HR-MDS”).

We believe our clinical development plan may provide both first-in-class and best-in-class development opportunities for SL-172154.

We believe that data shared to date in human cancer patients have demonstrated that the unique protein engineering and physical properties of the ARC platform have led to a differentiated profile in terms of safety and on-target immune activation, demonstrated by unique pharmacodynamic findings, as compared to monoclonal or bispecific antibodies.

In addition to our clinical-stage ARC product candidate, we possess a deep pipeline of potential product candidates in preclinical development.

As an example, SL-9258, an ARC compound in preclinical development, is designed to inhibit the TIGIT/PVR checkpoint interaction while simultaneously activating HVEM and LTβ costimulatory receptors.

Furthermore, our expertise in dual-sided fusion proteins has led to the development of a second novel platform technology.

We call this our gamma delta T cell engager, or GADLEN ™ , platform.

The most advanced compounds from this platform are a CD20-directed GADLEN and a B7-H3-directed GADLEN.

Longer-term, we are pursuing additional disease areas, including autoimmune diseases, where our dual-sided fusion protein platforms may provide advantages over current treatment modalities.

We believe that data shared to date in human cancer patients demonstrate that the unique protein engineering and physical properties of the ARC platform have led to a differentiated profile in terms of safety and on-target immune activation, demonstrated by unique pharmacodynamic findings, as compared to monoclonal or bispecific antibodies.

Further, clinical data generated with our ARC platform has guided our preclinical research efforts to further expand our pipeline, and we are advancing certain potential product candidates through preclinical development.

We expect to nominate one or more additional product candidates to our clinical pipeline in the future, potentially for indications outside of oncology, by selecting product candidates where there is an expectation of monotherapy efficacy and where our scientific and protein engineering expertise has led to a product candidate with advantages over current treatment modalities.

In February 2024, we announced a strategic collaboration and license agreement (the “Ono Agreement”) with Ono Pharmaceutical Co., Ltd.

(“Ono”) in which we will lead research and preclinical development of certain compounds selected by Ono from our pipeline of bifunctional fusion proteins to a pair of prespecified targets for potential treatment of autoimmune and inflammatory diseases.

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In clinical studies, we believe that SL-172154 has further differentiated from other CD47/SIRPα inhibitors both in terms of safety and tolerability and has demonstrated pharmacodynamic evidence of potent CD40 activation in human cancer patients.

We are conducting a Phase 1 clinical trial evaluating SL-172154 in patients with platinum-resistant ovarian cancer.

In November 2021, at the 36th annual meeting of the Society for Immunotherapy Cancer, or the SITC Meeting, we a nnounced initial data from 15 patients in the first four dose-escalation cohorts from our Phase 1A monotherapy dose-escalation clinical trial.

These data demonstrated that SL-172154 was well tolerated through 3 mg/kg, with no treatment-related grade 3 or greater adverse events.

Near-complete target occupancy on leukocytes was observed for both CD47 and CD40 at 3 mg/kg.

We also observed pharmacodynamic activity, including dose-dependent margination of CD40 expressing leukocytes from the peripheral blood and dose-dependent increases in cytokines, such as IL-12, that are associated with antitumor immunity.

Subsequently, we completed the Phase 1A monotherapy dose-escalation clinical trial.

We completed enrollment at the anticipated top dose level of 10 mg/kg, which was the maximum administered dose.

A maximum tolerated dose was not reached in this clinical trial.

The data collected through 10 mg/kg demonstrated that the pharmacodynamic activity, including increased serum cytokines and margination of CD40 positive leukocytes, observed at 3 mg/kg was maintained through 10 mg/kg, with no evidence of a “bell shaped” dose response curve.

As a result, we selected the 3 mg/kg dose level to advance into the Phase 1B combination cohorts in platinum-resistant ovarian cancer patients.

We have initiated a Phase 1B clinical trial with two combination cohorts due to the observation of monotherapy immunologic activity across the administered dose range, as described above, and because multiple approved agents in the platinum-resistant ovarian cancer patient population are known to provide the prophagocytic, or “eat me”, signal necessary to drive efficacy in the setting of CD47 inhibition.

We have initiated a combination cohort evaluating SL-172154 in combination with liposomal doxorubicin, and a second combination cohort evaluating SL-172154 in combination with mirvetuximab soravtansine, in patients with platinum-resistant ovarian cancer.

We expect to announce additional data from the Phase 1A monotherapy dose-escalation clinical trial and initial data from the Phase 1B cohort in combination with liposomal doxorubicin midyear 2023.

In addition to evaluating SL-172154 in solid tumors, we have initiated our clinical trial of SL-172154 in certain hematologic malignancies.

We are conducting a Phase 1A/B clinical trial in patients with AML and HR-MDS, wherein patients will be enrolled into either a Phase 1A monotherapy cohort or Phase 1B combination cohort in a staggered parallel design.

In HR-MDS and TP53 mutant AML, we intend to study SL-172154 in combination with azacitidine.

In AML, we intend to study SL-172154 in combination with azacitidine and venetoclax.

We expect to announce initial data, as monotherapy and in combination, from the dose-escalation portion of this Phase 1A/B trial in the first half of 2023.

We are leveraging our proprietary ARC and GADLEN platforms to discover and develop dual-sided, bi-functional fusion protein product candidates.

We own, or have exclusively licensed, the intellectual property rights to our product candidates.

The following table highlights our clinical-stage product candidate and selected preclinical compounds:

We are conducting a Phase 1A/B clinical trial in patients with AML and HR-MDS.

We completed the Phase 1A dose-escalation portion of this clinical trial in 2023 and are currently enrolling patients in the Phase 1B expansion cohorts evaluating SL-172154 in combination with azacitidine in frontline HR-MDS or frontline TP53 mutant (“TP53m”) AML.

In AML patients without TP53 mutations (“TP53 wild type”, or “TP53wt”), we intend to study SL-172154 in combination with azacitidine and venetoclax.

In December 2023, we shared initial data from both the HR-MDS and TP53m AML Phase 1B combination cohorts.

In the frontline HR-MDS cohort, as of the data cutoff date of December 1, 2023, out of 14 evaluable patients, five patients achieved a complete response (“CR”) and f our patients achieved a marrow complete response (“mCR”).

In the frontline TP53m AML cohort, as of the data cutoff date of December 1, 2023, out of 11 evaluable patients, two patients achieved a CR, and another patient achieved a complete response with incomplete hematologic recovery (“ CRi”) and was taken to allogeneic hematopoietic stem cell transplantation (“allo-HSCT”).

As of the cutoff date of December 1, 2023, SL-172154 had an acceptable safety and tolerability profile at 3 mg/kg in combination with azacitidine.

After completing enrollment in the initial Phase 1B combination expansion cohorts in HR-MDS or TP53m AML patients in 2023, and on the basis of the encouraging

initial data, we are further expanding both cohorts to generate additional data and to inform our subsequent clinical trial plans.

We expect to announce additional data from the HR-MDS and TP53m AML Phase 1B combination cohorts mid-year 2024.

We are also conducting a Phase 1B clinical trial evaluating SL-172154 in patients with platinum-resistant ovarian cancer (“PROC”) .

This Phase 1B clinical trial contains two combination expansion cohorts combining SL-172154 with either pegylated liposomal doxorubicin (“PLD”), or mirvetuximab soravtansine (“mirvetuximab” or, “Elahere”).

In November 202 3 , we announced initial data from our ongoing Phase 1B clinical trial expansion cohort evaluating SL-172154 in combination with PLD.

As of the data cutoff date of October 31, 2023, we had 11 patients evaluable for response, and we observed one confirmed partial response (“PR”) and two unconfirmed PRs.

As of the data cutoff of October 31, 2023, SL-172154 had an acceptable safety and tolerability profile at 3 mg/kg in combination with PLD.

We expect to announce additional data from the Phase 1B cohort in combination with PLD mid-year 2024 and initial data from the Phase 1B cohort in combination with mirvetuximab mid-year 2024.

The following table highlights our clinical-stage pipeline:

In addition to our clinical-stage ARC product candidate, we possess a deep pipeline of preclinical immuno-oncology compounds.

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Utilizing a proprietary animal model of PD-1 acquired resistance, SL-9258 demonstrated differentiation from antibody-mediated TIGIT blockade in its ability to overcome checkpoint inhibitor acquired resistance.

In addition to our preclinical ARC compounds, we have a pipeline of preclinical GADLEN compounds.

The two most advanced compounds from our GADLEN platform are a CD20-directed GADLEN and a B7-H3-directed GADLEN.

We have shared in vitro preclinical data demonstrating that the CD20-directed GADLEN stimulated human gamma delta T cells to target and kill human CD20 expressing B cells.

Additionally, we conducted a non-GLP (as defined below) non-human primate study that demonstrated that the CD20-directed GADLEN was both well tolerated and led to B cell depletion in a dose-dependent manner.

The CD20-directed GADLEN may have therapeutic utility in certain autoimmune indications, via depletion of autoantibody producing CD20-positive B-cells.

The B7-H3-directed GADLEN may have therapeutic utility in certain solid tumors.

We plan to provide additional detail and further guidance on our GADLEN platform in 2023.

In February 2023, following completion of our Phase 1 dose-escalation clinical trial of SL-279252 in patients with advanced solid tumors, and evaluation of the relevant data, we discontinued clinical development of SL-279252.

We did not observe an overall response rate necessary to justify continued development in a very difficult PD-1 relapsed/refractory patient population.

Our Platforms

Our ARC Platform

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We developed the ARC platform to address the need for a single therapeutic that consolidates multiple immune functions.

Compounds developed from our ARC platform simultaneously block immune checkpoint receptors and activate costimulatory molecules in the tumor necrosis factor, or TNF, superfamily.

Compounds developed from our ARC platform simultaneously block immune checkpoint receptors and activate costimulatory molecules in the tumor necrosis factor (“TNF”) superfamily.

The functional domains of ARC compounds are derived from native human proteins, rather than antibody binding domains.

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We designed the ARC platform as a modular scaffold wherein three principal components are fused together, comprising a human Type 1 extracellular domain protein, an optimized, proprietary Fc domain, and a human Type 2 extracellular domain protein.

As shown in Figure 1 below, one end of the ARC compound consists of a checkpoint receptor domain and the opposite end consists of a TNF ligand domain, connected by an optimized, proprietary scaffold such as an Fc domain.

As shown in Figure 1 below, one end of the ARC

compound consists of a checkpoint receptor domain and the opposite end consists of a TNF ligand domain, connected by an optimized, proprietary scaffold such as an Fc domain.

We designed ARC compounds to self-assemble into a hexameric structure, as shown in Figure 1 below, comprising six distinct checkpoint receptor domains and six distinct TNF ligand domains, which importantly form two trimerized costimulatory ligand domains.

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While many TNF receptor agonist antibodies have been developed and tested in human clinical trials, most have been discontinued prior to pivotal studies due to toxicity.

As shown in Panel A of Figure 2 below, activation of TNF receptors, such as CD40, and downstream signaling requires the assembly of three receptor molecules, or trimerization.

As shown in Panel A of Figure 2 below, activation of TNF receptors, such as CD40, and downstream signaling requires the assembly of three receptor molecules (“trimerization”).

As shown in Panel B of Figure 2 below, there is a structural mismatch between bivalent antibody therapeutics and trimeric TNF receptors.

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As shown in Panel C of Figure 2, ARCs are designed to self-assemble into two sets of TNF trimers, which induces trimerization of TNF receptor targets and drives a costimulatory signal.

We believe that the totality of our clinical data generated to date, from multiple ARC-derived product candidates and across multiple indications, provide strong evidence that our ARC compounds can uniquely activate members of the TNF superfamily by addressing certain structural properties of these receptors.

superfamily by addressing certain structural properties of these receptors.

For example, our clinical data demonstrate that high levels of receptor occupancy of CD40 are achievable with an ARC, and that the “bell shaped” dose-response curve observed with antibodies was not seen in humans treated with SL-172154.

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We utilize our understanding of disease pathology and immune dysfunction to identify pairings of optimal targets within a single therapeutic.

Our GADLEN Platform

Our expertise in engineering dual-sided, bi-functional fusion proteins has enabled the development of our GADLEN platform, which is designed to leverage gamma delta T cells for the treatment of cancer and autoimmune disorders.

The therapeutic utilization of gamma delta T cells represents an emerging approach for the treatment of cancer.

This approach may be particularly beneficial in targeting tumors that are not addressable by alpha beta T cells.

Additionally, as immunotherapies that stimulate alpha beta T cell-dependent immune response are increasingly utilized across cancer treatment paradigms, we expect the proportion of patients who will become refractory to alpha beta T cell-mediated therapies will also increase over time, creating an opportunity for therapeutics which harness the antitumor activity of gamma delta T cells.

A majority of T cells in the human body bear an alpha beta T cell receptor, which recognizes tumor antigens presented on major histocompatibility complex, or MHC, molecules.

Some cancer cells reduce the expression of MHC molecules or tumor antigens, rendering those cancer cells invisible to most alpha beta T cells.

The predominant gamma delta T cell population in the peripheral blood expresses the V gamma 9 / V delta 2 T cell receptor and is activated by a heterodimer consisting of butyrophilin 2A1 and butyrophilin 3A1.

Thus, therapeutics which are designed to display a heterodimer of butyrophilin 2A1 and 3A1 may provide a means of modulating gamma delta T cells in vivo .

We have leveraged our expertise in engineering dual-sided bi-functional fusion proteins to develop a suite of heterodimerized butyrophilin proteins connected to antigen-targeted single chain antibody fragments.

GADLEN compounds are comprised of two distinct fusion protein chains, and an engineered Fc linker domain that facilitates heterodimerization between the two chains.

As shown in Figure 3 below, the assembled GADLEN compound contains the extracellular domains of heterodimerized butyrophilin proteins on one side and is linked to tumor antigen specific single chain antibody fragments on the opposite side.

The gamma delta T cell receptors recognize and are activated by specific butyrophilin protein heterodimers.

Thus, the GADLEN construct is designed to facilitate targeting of specific gamma delta T cells to tumor cells expressing a defined antigen.

Figure 3—GADLEN Platform Overview

To demonstrate the feasibility of the GADLEN approach, a murine GADLEN construct was developed incorporating a butyrophilin 1, or BTNL1, and butyrophilin 6, or BTNL 6, heterodimer and an scFv domain targeting the CD19 antigen.

In both mice and humans, gamma delta T cells represent approximately 2% to 5% of the total T cell population, as shown in Figure 4 below, in a murine model.

We treated mice on Days 0, 3, and 6 with the murine GADLEN, mBTNL1/6-Fc-CD19scFv.

We observed dose-dependent expansion of the endogenous gamma delta T cell compartment to approximately 12% of all T cells 24 hours after the second treatment.

Concurrent with expansion, mBTNL1/6-Fc-CD19scFv also caused activation of murine gamma delta T cells, as demonstrated by upregulation of the CD69 activation marker, shown in Figure 4 below.

Murine B cells express CD19, and therefore were a potential target of gamma delta T cells following treatment with mBTNL1/6-Fc-CD19scFv.

Accordingly, we observed depletion of the endogenous B cell compartment concurrent with gamma delta T cell expansion and activation following treatment with mBTNL1/6-Fc-CD19scFv, as shown in Figure 4 below.

Importantly, when mice with established CD19 positive tumors were treated with mBTNL1/6-Fc-CD19scFv, dose-dependent reduction in tumor growth and rejection was observed.

Figure 4—Dose Dependent Gamma T Cell Expansion, Activation, and Killing Activity Following Administration of the GADLEN Compound mBTNL1/6-Fc-CD19scFv

As a result of these data, we have developed multiple human GADLEN compounds.

A human GADLEN compound comprising a heterodimer of BTN2A1 and BTN3A1, adjoined via an engineered Fc linker to a CD20 antigen specific scFv domain, was shown in our preclinical model systems to stimulate human gamma delta T cells to target and kill human CD20-expressing B cells in a dose-dependent manner.

We believe that gamma delta T cell engagers may also have a broader therapeutic window than CD3-directed T cell engagers, both because gamma delta T cells represent a smaller proportion of the overall T cell pool in humans, and because gamma delta T cells do not recognize traditional MHC/antigen complexes.

To explore this hypothesis, we evaluated the CD20-targeted GADLEN in a non-GLP, dose-range finding and safety study in non-human primates.

These data demonstrated that the CD20-targeted GADLEN was well tolerated through at least 25 mg/kg in non-human primates, with no evidence of cytokine release syndrome, and led to rapid and dose-dependent depletion of CD20-expressing B cells within a few hours in non-human primates.

We believe these studies indicate that GADLEN compounds may enable therapeutic modulation of gamma delta T cells in vivo , and that GADLEN compounds may be designed to activate tissue-restricted populations of endogenous gamma delta T cells to target specific tumor antigens in both solid and liquid tumors, and with potential therapeutic utility in autoimmune disorders.

We plan to provide additional detail and further guidance in 2023.

Our goal is to become the world leader in the discovery, development, and commercialization of dual-sided, bi-functional fusion proteins for the treatment of cancer and autoimmune diseases.

We plan to achieve this by utilizing our proprietary ARC and GADLEN platforms to create novel therapeutics to treat patients who lack effective treatment options.

We plan to achieve this by utilizing our proprietary ARC platform and protein engineering expertise to create novel therapeutics to treat patients who lack effective treatment options.

Key elements of our strategy include:

• Rapidly advancing our clinical-stage ARC product candidate, SL-172154, through clinical development and marketing approval

• Leveraging our ARC and GADLEN platforms to rapidly advance additional product candidates into clinical development

• Leveraging our ARC platform to rapidly advance additional product candidates into clinical development

• Applying our clinical learnings from our ARC platform in oncology to identify, develop, and advance novel fusion protein compounds in autoimmune and inflammatory diseases, among other therapeutic areas

• Continuing to augment our fusion protein manufacturing capabilities

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A Dual CD47/SIRPα Blocking and CD40-Activating ARC Compound

We believe that SL-172154 is a highly differentiated CD47 inhibitor with potential for both best-in-class and first-in-class development opportunities.

We are conducting Phase 1 clinical trials evaluating the administration of SL-172154 in both solid tumors and hematologic malignancies.

As a class, CD47 inhibitors are being developed in combination with other agents that potentiate phagocytosis and initiate an immune response, such as chemotherapy, antibody-dependent cellular phagocytosis (“ADCP”)-competent antibodies, antibody drug conjugates, and others.

We see an opportunity for SL-172154 to continue to differentiate from other compounds in the field due to the combined effects of CD47 blockade and CD40 costimulation.

We believe that our preclinical and initial clinical data from both our Phase 1A and Phase 1B clinical trials in PROC and Phase 1A/B clinical trial in HR-MDS and AML indicate that SL-172154 may differentiate from other CD47/SIRPα inhibitors in one or more of the following ways:

• Improved overall response rate due to CD40-mediated activation of both innate and adaptive immunity

• Improved response durability due to enhanced CD40-mediated activation of adaptive immunity

• Differentiated safety profile due to the absence of dose-limiting toxicities due to anemia or thrombocytopenia

Acute Myeloid Leukemia and Higher-Risk Myelodysplastic Syndromes

Clinical Data to Date

In November 2021, at the SITC Meeting, we presented data from the dose-escalation portion of our completed Phase 1A dose-escalation clinical trial of SL-172154 as monotherapy in heavily pretreated platinum-resistant ovarian cancer patients.

As of a September 15, 2021 data cutoff, we had enrolled a total of 15 patients across four dose levels ranging from 0.1 mg/kg to 3 mg/kg.

Dose escalation was conducted according to the Modified Toxicity Probability Interval-2 trial design.

Patients received SL-172154 on either a weekly schedule or, after doses on day one, day eight, and day 15, a bi-weekly schedule.

The patients treated as of September 15, 2021 were heavily pretreated with a median of five prior lines of systemic therapies.

As of October 7, 2021, 14 of the 15 patients treated with SL-172154 in platinum-resistant ovarian cancer had a post-baseline scan at eight weeks and were evaluable for efficacy.

Four patients had stable disease as best response including one patient with stable disease of 16 weeks or greater at 0.3 mg/kg and nine had progressive disease.

Subsequently, we completed our Phase 1A monotherapy dose-escalation clinical trial in patients with platinum-resistant ovarian cancer.

In this clinical trial, 10 mg/kg was defined as the maximum administered dose, and a maximum tolerated dose was not reached.

To date, SL-172154 has been generally well tolerated.

In December 2023, we announced initial data from the Phase 1B portion of our ongoing Phase 1A/B clinical trial evaluating SL-172154 in combination with azacitidine in frontline HR-MDS and TP53m AML.

As of the data cutoff date of December 1, 2023, we had enrolled 22 patients with previously untreated HR-MDS.

14 of these patients were evaluable for response (13 of whom had TP53m or deletion), of which five patients achieved a CR, four patients achieved a mCR (three with hematologic improvement in at least one lineage), and two patients achieved stable disease (“SD”) (both with hematologic improvement in at least one lineage).

Figure 3 below depicts both the interim maximum percent reductions in bone marrow blasts from baseline and the interim best response in individual patients with HR-MDS as of December 1, 2023.

Figure 3 — Interim Response Assessment & Percent Reductions in Bone Marrow Blasts in HR-MDS Patients

As of the data cutoff date of December 1, 2023, we had enrolled 14 patients with previously untreated TP53m AML.

11 of these patients were evaluable for response, and two patients had achieved a CR and another patient achieved a CRi and was taken to allo-HSCT.

Seven additional patients with stable disease had blast reductions, five of which had recovery of platelets or neutrophils and remain on study and their response may improve.

Blast count reductions were observed in 100% of these patients.

One patient died during the first cycle.

The left panel of Figure 4 below, depicts the kinetics of bone marrow blast reductions from baseline in individual patients with TP53m AML as of December 1, 2023.

The right panel of Figure 4 below depicts both the interim maximum percent reductions in bone marrow blasts from baseline and the interim best response in individual patients with TP53m AML as of December 1, 2023.

Figure 4 — Kinetics of Bone Marrow Blast Reduction and Interim Response Assessment in TP53 Mutant AML Patients

As of the data cutoff date of December 1, 2023, SL-172154 had an acceptable safety and tolerability profile.

Infusion-related reactions (“IRRs”) were the most common SL-172154 related treatment-emergent adverse events (“TEAEs”).

In the HR-MDS and TP53m AML cohorts, IRRs were reported in seven patients (32%) and seven patients (50%) respectively.

Grade 3 or 4 adverse events (“AEs”) related to SL-172154 were reported in four patients (18%) in HR-MDS and two patients (14%) in TP53m AML, including;

IRR (2), aspartate aminotransferase (“AST”) increased (1), alanine aminotransferase (“ALT”) increased (1), fatigue (1), hypoxia (1), pneumonia (1), chondrocalcinosis (1), and febrile neutropenia (1).

There were no reports of destructive anemia.

In the TP53m AML expansion cohort, there was one Grade 5 AE of cardiac arrest reported in one patient with history of coronary artery disease, recent arrhythmia, and hypokalemia in the setting of amiodarone use.

In the HR-MDS cohort, there were no Grade 5 AEs related to SL-172154 reported.

Additionally, in December 2023, in a poster at the American Society for Hematology annual meeting, we announced data from the Phase 1A parallel staggered dose escalation trial of SL-172154 as monotherapy and in combination with azacitidine in primarily relapsed/refractory (“R/R”) AML and HR-MDS patients.

As of the data cut-off date of September 15, 2023, 32 adult patients with R/R AML or HR-MDS received SL-172154 as monotherapy or in combination with azacitidine in the parallel staggered dose-escalation portion of a Phase 1A/B clinical trial.

Patients had a median of two prior lines of therapy.

An additional five subjects with frontline TP53m HR-MDS received SL-172154 with azacitidine.

We observed a monotherapy response in a heavily pre-treated R/R AML patient.

This patient achieved a morphologic leukemia-free state and subsequently proceeded to allo-HSCT.

Anti-tumor activity was also observed in combination with azacitidine in previously untreated TP53m HR-MDS patients.

Out of four evaluable previously untreated TP53m HR-MDS patients, there was one CR and one mCR.

Two patients, one with mCR and one with SD, proceeded to allo-HSCT.

Additionally, we observed SL-172154 bound to both healthy immune cells and myeloid blast cells in bone marrow biopsies collected after intravenous infusion of SL-172154, as shown in Figure 5 below.

Figure 5 — SL-172154 Binding to Leukemic Blasts, T Cells and Monocytes in Patient Bone Marrow Biopsies

Clinical Development Strategy and Upcoming Milestones

We are conducting a Phase 1A/B clinical trial for SL-172154 in patients with AML and HR-MDS.

This ongoing Phase 1 clinical trial will evaluate the safety, tolerability, pharmacokinetics, antitumor activity, and pharmacodynamic effects of SL-172154, as both monotherapy and in combination with azacitidine.

We completed the Phase 1A dose-escalation portion of this trial and subsequently completed enrollment in the initial Phase 1B expansion cohorts in combination with azacitidine in TP53m AML and HR-MDS patients during 2023.

The Phase 1A dose-escalation portion of our clinical trial was primarily conducted in patients with R/R AML or HR-MDS, included both monotherapy SL-172154 cohorts and SL-172154 plus azacitidine combination cohorts, and supported selection of 3 mg/kg as the appropriate dose to explore in the Phase 1B expansion cohorts.

The initial Phase 1B expansion cohorts were conducted in patients with previously untreated TP53m AML or HR-MDS, using the 3 mg/kg dose of SL-172154 in combination with azacitidine.

Based on the initial safety and efficacy profile, we amended the protocol for both the TP53m AML and HR-MDS cohorts to add additional patients to strengthen our confidence in the safety and efficacy profile and to further inform our future clinical trial plans.

In TP53wt AML, we plan to evaluate SL-172154 in combination with both azacitidine and venetoclax.

Azacitidine plus venetoclax is the standard of care for frontline TP53wt AML patients.

We believe there may be an opportunity for the addition of SL-172154 to azacitidine plus venetoclax to differentiate from the current standard of care.

We expect to announce additional data from the Phase 1B expansion cohorts in previously untreated TP53m AML and HR-MDS, including safety, objective response rates and initial response durability mid-year in 2024.

Platinum-Resistant Ovarian Cancer

Clinical Data to Date

In November 2023, we announced initial data from our ongoing Phase 1B combination clinical trial evaluating SL-172154 in combination with PLD in PROC.

As of the data cutoff date of October 31, 2023, we had enrolled 16 patients with PROC.

11 of these patients were evaluable for efficacy, and we observed one confirmed PR and two unconfirmed PRs.

Patients had a median of 1.5 prior lines of systemic therapy, 88% were resistant to treatment with frontline platinum, 47% had bulky disease measuring >5 cm, and 56% were pre-treated with bevacizumab.

As of the cutoff date, the patient population treated was similar to the population enrolled in the Pfizer-sponsored JAVELIN Ovarian 200 clinical trial (results published in 2021), wherein PLD monotherapy provided an overall response rate of 4%.

Another clinical trial, the Roche-sponsored Aurelia trial (subgroup analysis published in 2014), provided for a 7.8% overall response rate for PLD monotherapy.

Figure 6 below depicts the interim best percent change in the size of the target lesion, as well as interim best response, in individual patients with PROC, as of October 31, 2023.

Figure 6 — Interim Response Assessment and Percent Change in Tumor Diameter in PROC Patients Treated with SL-172154 in Combination with PLD

As of the cutoff date of October 31, 2023, SL-172154 in combination with PLD had an acceptable safety profile and is consistent with the safety profile of the individual agents.

Among the 16 treated patients, the most common SL-172154-related AEs were IRRs, nausea, fatigue, headache and neutropenia, mostly in Grades 1 or 2.

SL-172154-related AEs in Grades 3 or 4 were observed in six patients:

anemia (n=2), AST increased (n=2), neutropenia (n=2), ALT increased (n=1), embolism (n=1) and thrombocytopenia (n=1).

SL-172154-related IRRs occurred in four patients but were manageable and did not prevent the completion of dosing or lead to discontinuation.

There were no Grade 5 adverse events.

In June 2023, in a poster presented at the American Society of Clinical Oncology annual meeting, we announced data from our Phase 1A monotherapy dose escalation clinical trial in PROC As of the data cutoff of January 3, 2023, 27 patients with PROC had been enrolled, with ovarian (70%), fallopian tube (15%) or primary peritoneal (15%) cancer.

These patients had a median of four prior systemic therapies (range two to nine).

As of a data cutoff date of January 3, 2023, 10 mg/kg was defined as the maximum administered dose, and a maximum tolerated dose was not reached.

As of the data cutoff of January 3, 2023, SL-172154 as monotherapy had an acceptable safety and tolerability profile.

We observed a single dose-limiting toxicity of elevated liver enzymes in a single patient at the 10mg/kg dose level.

We also frequently observed infusion-related reactions, which are manageable by slowing the rate of infusion and/or by the administration of certain premedication(s).

Importantly, however, we have not observed dose-limiting hemolytic anemia, thrombocytopenia or other cytopenias (toxicities which have limited the development of some CD47 inhibitors).

We also frequently observed infusion-related reactions, which were manageable by slowing the rate of infusion and/or by the administration of certain premedication(s).

Grade 3/4 treatment-related AEs in greater than one patient were AST increased (G3) and lymphopenia (G4), each in 2 patients (7%);

all were fully resolved with no dose modifications.

There were no fatal AEs, no AEs that led to drug discontinuation and no events of cytokine release syndrome.

The frequency of IRR events increased with increasing dose, and slowing the rate of infusion was utilized for mitigation.

Importantly, however, we have not observed dose-limiting toxicities due to hemolytic anemia, thrombocytopenia or other cytopenias (toxicities which have limited the development of some CD47 inhibitors).

We believe that SL-172154 may have a differentiated safety profile, which may be due to the lack of an Fc gamma receptor binding Fc domain.

We have observed high levels of target occupancy of SL-172154 on both CD47 and CD40 through 10 mg/kg.

As shown in Figure 5, we observed preferential binding of SL-172154 to CD47 positive leukocytes compared to red blood cells.

Binding to leukocytes approached near-full CD47 target occupancy at doses greater than 1 mg/kg.

Figure 5—CD47 Targets Occupancy of SL-172154 on White Blood Cells and Red Blood Cells

We have also observed unique pharmacodynamic effects consistent with on-target CD40 activation.

Immediately post-infusion of SL-172154, a rapid, dose-dependent margination of CD40 positive B cells from the circulation was observed, as shown in Panel A and Panel B of Figure 6.

We also observed an increase in B cell activation markers CD86 and CD95 following each infusion of SL-172154, as shown in Panel C of Figure 6.

Additionally, increases in on-target cytokines such as IL-12, CCL2, CCL3, CCL4 and CCL22 have been observed following each infusion of SL-172154.

No evidence of a bell-shaped dose response curve was observed through 10 mg/kg, a dose at which high levels of CD40 target occupancy were observed.

Figure 6—CD40 Activation of SL-172154 with Dose-Dependent Margination and Activation B Cells

In paired biopsies collected from our Phase 1A clinical trial in patients with platinum-resistant ovarian cancer, we have observed increases in CD68 positive macrophages as well as both CD40 and MHC Class II activation markers in the tumor microenvironment, consistent with induction of an innate immune response.

Additionally, we have seen an increase in PD-L1 expression by the combined positive score, suggesting that the increase in tumor-infiltrating CD8 positive T cells induced a

local interferon response.

We have also observed increases in Ki67 positive CD8 T cells and the Granzyme B positive CD8 T cells.

These findings are consistent with the postulated mechanism of action of SL-172154:

simultaneous CD47 inhibition and CD40 activation bridging an innate to adaptive immune response.

Clinical Development Strategy

We believe that SL-172154 is a highly differentiated CD47 inhibitor with potential for both best-in-class and first-in-class development opportunities.

We are conducting Phase 1 clinical trials evaluating the administration of SL-172154 in both solid tumors and hematologic malignancies.

As a class, CD47 inhibitors are being developed in combination with other agents that potentiate phagocytosis and initiate an immune response, such as chemotherapy, ADCP-competent antibodies, antibody drug conjugates, and others.

Ovarian Cancer

Clinical Development Strategy and Upcoming Milestones

Ovarian cancer expresses the highest levels of CD47 of any solid tumor and is a tumor type with a significant infiltration of macrophages, which express CD40.

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The secondary objectives include evaluation of the pharmacokinetic and pharmacodynamic profiles and the antitumor activity of SL-172154.

We have completed our Phase 1A monotherapy dose-escalation clinical trial in patients with platinum-resistant ovarian cancer.

We completed the Phase 1A monotherapy dose-escalation clinical trial in patients with PROC in 2023.

In this clinical trial, we reached a maximum administered dose of 10 mg/kg.

We did not reach a maximum tolerated dose.

We are evaluating SL-172154 in a Phase 1B combination dose-escalation and dose-expansion clinical trial in platinum-resistant ovarian cancer in combination with liposomal doxorubicin.

Also in 2023, we completed initial enrollment to the Phase 1B dose-expansion portion of our clinical trial in PROC evaluating SL-172154 in combination with PLD.

We have selected a starting dose of 3 mg/kg of SL-172154 in this trial.

Our protocol allows for further dose escalation in the combination, if warranted.

Liposomal doxorubicin is a standard-of-care chemotherapy for this patient population.

According to the literature, liposomal doxorubicin upregulates calreticulin, an endogenous “eat me” signal, on the surface of tumor cells.

Consequently, we believe that liposomal doxorubicin is an attractive combination partner due to upregulation of calreticulin and induction of immunogenic cell death.

In in vivo preclinical studies, we observed improved anti-tumor activity with the combination of liposomal doxorubicin and SL-172154 compared to liposomal doxorubicin alone or SL-172154 alone.

Furthermore, because the overall response rate of this patient population to liposomal doxorubicin is approximately 10%, there is significant opportunity for improved response rates in combination with SL-172154, wherein we believe the contribution of SL-172154 will be discernible.

In addition to our combination strategy of SL-172154 in combination with liposomal doxorubicin, we are evaluating SL-172154 in a Phase 1B combination dose-escalation and dose-expansion clinical trial in platinum-resistant ovarian cancer in combination with mirvetuximab soravtansine, marketed by ImmunoGen, Inc, or ImmunoGen.

Mirvetuximab soravtansine is an antibody-drug conjugate targeting folate receptor alpha, or FRα, which provides for both direct tumor cell killing as well as enhanced macrophage phagocytosis through binding with Fc gamma receptors, and has received accelerated approval for platinum-resistant ovarian cancer patients whose tumors are shown to be FRα positive, defined as ≥75%, as determined by the VENTANA FOLR1 (FOLR1-2.1) Assay, using the PS2+ scoring method.

PLD is a standard-of-care chemotherapy for this patient population.

According to the literature, PLD upregulates calreticulin, an endogenous “eat me” signal, on the surface of tumor cells.

Consequently, we believe that PLD is an attractive combination partner due to upregulation of calreticulin and induction of immunogenic cell death.

In in vivo preclinical studies, we observed improved anti-tumor activity with the combination of PLD and SL-172154 compared to PLD alone or SL-172154 alone.

Furthermore, because the overall response rate of this patient population to PLD is approximately 4-8%, there is significant opportunity for improved response rates in combination with SL-172154, wherein we believe the contribution of SL-172154 will be discernible.

In addition to our combination strategy of SL-172154 in combination with PLD, we are evaluating SL-172154 in a Phase 1B combination dose-escalation and dose-expansion clinical trial in PROC in combination with mirvetuximab soravtansine, marketed by AbbVie, Inc (“AbbVie”) as Elahere.

Mirvetuximab soravtansine is an antibody-drug conjugate (“ADC”) targeting folate receptor alpha (“FRα”) which provides for both direct tumor cell killing as well as enhanced macrophage phagocytosis through binding with Fc gamma receptors, and has received accelerated approval for PROC patients whose tumors are shown to be FRα positive, defined as ≥75%, as determined by the VENTANA FOLR1 (FOLR1-2.1) Assay, using the PS2+ scoring method.

Pre-clinical studies have shown that both of these mechanisms may be complementary to the mechanism of SL-172154 by enhancing the activity of macrophages to phagocytose FRα- expressing ovarian cancer cells, and that SL-172154 may broaden the activity of mirvetuximab soravtansine, particularly for patients with tumors that express lower levels of FRα.

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Based on our preclinical data, we believe that the addition of SL-172154 to mirvetuximab soravtansine will increase responses rates in the “medium” and “low” expressors of FRα and/or potentially provide a more durable response across the entire spectrum of FRα expressors.

We expect to announce complete data from the Phase 1A monotherapy dose-escalation trial and initial data from the Phase 1B combination clinical trial with liposomal doxorubicin midyear 2023.

Additionally, we expect to announce initial data from the Phase 1B combination clinical trial with mirvetuximab soravtansine in the second half of 2023.

Acute Myeloid Leukemia and Higher-Risk Myelodysplastic Syndrome

We are conducting a Phase 1A/B clinical trial for SL-172154 in patients with AML and HR-MDS.

This ongoing Phase 1 clinical trial will evaluate the safety, tolerability, pharmacokinetics, antitumor activity, and pharmacodynamic effects of SL-172154, as both monotherapy and in combination.

In AML, we plan to evaluate SL-172154 in combination with both

azacitidine and venetoclax.

In both HR-MDS and TP53 mutant AML, we plan to evaluate SL-172154 in combination with azacitidine.

We are conducting the Phase 1B dose-escalation portion of this trial of SL-172154 in combination with azacitidine in a parallel staggered manner.

Monotherapy dose-escalation and initial dose-escalation combination cohorts are anticipated to be in a heavily pretreated, predominantly refractory patient population.

Once a recommended dose and schedule have been determined in combination with azacitidine, we plan to enroll patients in expansion cohorts in combination with azacitidine, with or without venetoclax, depending on the indication.

As a class, CD47 inhibitors have demonstrated clinical activity in both AML and HR-MDS, in combination with these standard-of-care chemotherapies that provide the requisite “eat me” signals.

We see an opportunity for SL-172154 to continue to differentiate from other compounds in the field due to the combined effects of CD47 blockade and CD40 costimulation.

Specifically, we believe that our preclinical and initial clinical data from our Phase 1A clinical trial in ovarian cancer indicate that SL-172154 may differentiate from other CD47/SIRPα inhibitors in one or more of the following ways:

• Improved overall response rate due to CD40-mediated activation of both innate and adaptive immunity

• Improved response durability due to enhanced CD40-mediated activation of adaptive immunity

• Differentiated safety profile due to the absence of dose-limiting anemia or thrombocytopenia

We expect to announce initial data, as monotherapy and in combination, from the dose-escalation portion of this Phase 1A/B trial in the first half of 2023.

Following the COVID-19 pandemic, we have experienced delays in our clinical trials of SL-172154.

In particular, we have experienced:

delays with certain third-party vendors supporting this trial, including third-party manufacturers;

difficulty procuring sufficient quantities of raw materials required for our manufacturing processes;

and staffing shortages at many clinical trial sites.

We expect to continue to experience some or all of these delays in the future.

Preclinical Experience

We expect to announce data for both the PLD and mirvetuximab soravtansine combination trials in 2024.

We expect to announce data, including topline overall response rate and an initial look at duration of response, from the Phase 1B combination clinical trial with PLD mid-year 2024.

We also expect to announce initial data from the Phase 1B combination clinical trial with mirvetuximab soravtansine mid-year 2024.

SL-172154 Preclinical Experience

Our lead product candidate, SL-172154, simultaneously inhibits CD47 and activates the CD40 receptor.

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After two hours, the proportion of tumor cells phagocytosed by human macrophages was determined and reported as the phagocytosis index.

We also performed standard in vitro tumor cell phagocytosis assays to demonstrate whether SL-172154 enhanced macrophage-mediated phagocytosis across a range of tumor cells expressing varying levels of FRα expression, both alone and in combination with mirvetuximab soravtansine, an antibody drug conjugate, or ADC, composed of a FRα-binding antibody, cleavable linker, and the maytansinoid payload DM4, a potent tubulin-targeting agent, designed to kill the targeted cancer cells.

in combination with mirvetuximab soravtansine, an ADC composed of a FRα-binding antibody, cleavable linker, and the maytansinoid payload DM4, a potent tubulin-targeting agent, designed to kill the targeted cancer cells.

As shown in Figure 8 below, consistent with the mechanism of action of CD47 blocking agents, SL-172154 significantly enhanced the ability of macrophages to phagocytose tumor cells in the presence of mirvetuximab soravtansine.

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After treatment, the proportion of tumor cells phagocytosed by human macrophages was determined and reported as the phagocytosis index.

Preclinical Research and Development

Our facility in Durham, North Carolina, houses our research laboratory as well as our technical operations group.

This includes both expertise and infrastructure to advance novel biologics from discovery to cell line development, analytical and process development, and into production in our manufacturing pilot plant facility.

These internal capabilities have enabled development of additional potential product candidates from our ARC platform in oncology indications.

Further, these capabilities have led to collaborations with outside institutions, such as our studies to understand mechanisms of acquired resistance to checkpoint inhibitors with Memorial Sloan Kettering Cancer Center, Cancer Research UK, and Astra Zeneca, which were published in Cancer Cell in January 2024.

In addition, we have produced and studied multiple dual-sided fusion proteins for non-oncology indications, including dual-sided TNFR2-Fc, CTLA4-Fc and GLP1-Fc fusion proteins.

Another collaboration with Moderna was published in Cancer Research in February 2024, wherein the feasibility of delivering certain dual-sided fusion proteins as lipid-encapsulated mRNA was studied.

This work has informed our internal plans for advancing certain dual-sided fusion proteins in non-oncology indications, wherein mRNA/LNP based delivery methods may provide pharmacokinetic, pharmacodynamic and pharmacoeconomic advantages in comparison to traditional, intravenous delivery of recombinant proteins for chronic, non-lethal diseases.

Finally, the ARC platform was generated based on the goal of linking an immune checkpoint inhibitor to a TNF superfamily ligand.

This expertise in TNF ligand and receptor biology has provided a basis to develop other potential product candidates to inhibit certain TNF receptors, including TNFRSF25.

Collaboration and License Agreements

Collaboration Agreement with Takeda

On August 8, 2017, we entered into a collaboration agreement with Millennium Pharmaceuticals, Inc., or Takeda, a wholly-owned subsidiary of Takeda Pharmaceutical Company, Ltd., or the Collaboration Agreement.

The Collaboration

Agreement was mutually terminated pursuant to the termination agreement, or the Termination Agreement, dated November 8, 2021.

Under the terms of the Termination Agreement, we are not required to satisfy any remaining performance obligations, we will not make any payments to or receive any future milestone or royalty payments from Takeda, and all options to license and rights of first negotiation held by Takeda under the Collaboration Agreement were terminated.

Strategic Collaboration and Option Agreement with Ono Pharmaceutical Co., Ltd.

On February 9, 2024, we entered into the Ono Agreement, effective February 13, 2024, pursuant to which we and Ono will collaborate in the research and preclinical development of certain prespecified compounds directed toward a pair of targets selected by Ono from our pipeline of bifunctional fusion proteins (the “Development Compounds”).

We are primarily responsible for carrying out the research activities in accordance with a mutually agreed upon research plan (the “Research Plan”), subject to the oversight of a joint research committee consisting of representatives from both parties.

Pursuant to the Ono Agreement, we granted to Ono an exclusive option (the “Option”) to obtain an exclusive, sublicensable license to research, develop, manufacture and commercialize multiple products resulting from the Development Compounds in any therapeutic area worldwide.

The option period will extend from the effective date of the Ono Agreement until 90 days after we deliver our final report pursuant to the Research Plan, and following any exercise of the Option, Ono will be responsible for further development and commercialization of the Development Compounds.

In connection with entering into the Ono Agreement and conducting the Research Plan, we are entitled to receive up to $9 million consisting of an initial upfront payment and additional amounts payable upon the achievement of certain milestones specified in the Research Plan.

Additionally, Ono has agreed to pay for all of our costs and expenses incurred in conducting the Research Plan.

In the event Ono exercises the Option for the Development Compounds, we are entitled to receive licensing, clinical and regulatory, and commercial milestone payments of up to $217.5 million upon the exercise of the Option, the achievement of certain specified clinical and regulatory milestones and commercial milestones and, in addition, a tiered percentage royalty on global net sales ranging from mid-single digits to low double digits.

Royalties are payable by Ono on a licensed product-by-licensed product and country-by-country basis for a maximum of ten years after the first commercial sale of such licensed product in such country.

The Ono Agreement may be terminated by mutual agreement of both parties or by either us or Ono upon an uncured material breach of the Ono Agreement or the insolvency of the other party.

Ono may terminate the Ono Agreement at any time upon 90 days’ written notice to us.

If Ono exercises such termination right, Ono will pay all of our costs up through the date of termination.

In addition, after the conditions to exercise the Option have been met, we may terminate the Ono Agreement if Ono discontinues its development or commercialization efforts and other conditions are met.

The foregoing description of the Ono Agreement does not purport to be complete and is qualified in its entirety by reference to the Ono Agreement.

We intend to file the Ono Agreement as an exhibit to its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

Clinical Trial Collaboration and Supply Agreement with ImmunoGen

On February 4, 2022, we entered into a Clinical Trial Collaboration and Supply Agreement, or the Clinical Trial Collaboration Agreement, with ImmunoGen.

Pursuant to the Clinical Trial Collaboration Agreement, ImmunoGen will supply us with a sufficient quantity of mirvetuximab soravtansine for use in our Phase 1B combination cohort evaluating SL-172154 in combination with mirvetuximab soravtansine in patients with platinum-resistant ovarian cancer, or the Study.

On February 4, 2022, we entered into a Clinical Trial Collaboration and Supply Agreement (“the Clinical Trial Collaboration Agreement”), with ImmunoGen, Inc.

(“ImmunoGen”).

We will bear all other costs associated with the conduct of the Study, except that ImmunoGen will reimburse us for $2.0 million of the costs we incur.

We have sole authority over the design, conduct, and control of the Study.

We will provide ImmunoGen with a final study report, or the Final Study Report, relating to the Study promptly following completion thereof.

We will provide ImmunoGen with a final study report (the “Final Study Report”), relating to the Study promptly following completion thereof.

Unless sooner terminated, the term of the Clinical Trial Collaboration Agreement continues until the delivery of the Final Study Report.

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In addition, either party may terminate the agreement due to a material breach by the other party (subject to a cure period), if either party determines in good faith, based on a review of the clinical data or other information, that the Study poses imminent danger to patients, if a regulatory authority takes any action that causes it to be unreasonable for, or otherwise prevents, the terminating party from supplying its compound for the Study, or if a party withdraws any applicable regulatory approval for its compound or discontinues development of its compound for any reason.

Nighthawk License Agreement

In June 2016, we entered into an Exclusive License Agreement, or the Nighthawk License Agreement, with Nighthawk Biosciences, Inc.

(f/k/a Heat Biologics Inc.), or Nighthawk.

The Nighthawk License Agreement was subsequently amended in November 2016, December 2016, and March 2017.

Pursuant to the Nighthawk License Agreement, Nighthawk granted to us (1) a worldwide, sublicensable exclusive license to research, develop, manufacture, and commercialize products under three provisional patent applications, including all patents issuing from such applications, or the Fusion Protein Patent Rights, and (2) a worldwide, sublicensable nonexclusive license to research, develop, manufacture, and commercialize certain know-how owned and controlled by Nighthawk related to the Fusion Protein Patent Rights.

Under the Nighthawk License Agreement, Nighthawk was required to conduct certain research and development services under a mutually-agreed upon research and development plan and Nighthawk was eligible to receive financial support from us for these efforts.

Effective March 2017, Nighthawk completed all research and development services under the Nighthawk License Agreement and assigned to us three patent applications and all data derived from the research and development activities, referred to collectively as the Research Services Inventions.

Pursuant to the terms of the Nighthawk License Agreement, we are obligated to use commercially reasonable efforts to diligently research and develop at least one product covered by the Fusion Protein Patent Rights, including the obligation to file an Investigational New Drug, or IND, application for such product.

In February 2024, ImmunoGen was acquired by AbbVie.

Kopfkino License Agreement

We are party to an Exclusive License Agreement (as amended, “the Kopfkino License Agreement”), with Kopfkino IP, LLC (“Kopfkino”).

Pursuant to the Kopfkino License Agreement, we have (1) a worldwide, sublicensable exclusive license to research, develop, manufacture, and commercialize products under three provisional patent applications, including all patents issuing from such applications (the “Fusion Protein Patent Rights”) and (2) a worldwide, sublicensable nonexclusive license to research, develop, manufacture, and commercialize certain know-how related to the Fusion Protein Patent Rights.

We originally entered into the Kopfkino License Agreement in June 2016 with Scorpius Holdings, Inc.

(“Scorpius”) (f/k/a Nighthawk Biosciences, Inc.

f/k/a Heat Biologics Inc.).

The Kopfkino License Agreement was subsequently amended in November 2016, December 2016, and March 2017.

In January 2024, Scorpius assigned its right, title and interest in and under the Kopfkino License Agreement, along with the underlying patents and patent applications, to Kopfkino.

Under the Kopfkino License Agreement, Scorpius was required to conduct certain research and development services under a mutually-agreed upon research and development plan and Scorpius was eligible to receive financial support from us for these efforts.

Effective March 2017, Scorpius completed all research and development services under the Kopfkino License Agreement and assigned to us three patent applications and all data derived from the research and development activities, referred to collectively as the Research Services Inventions.

Pursuant to the terms of the Kopfkino License Agreement, we are obligated to use commercially reasonable efforts to diligently research and develop at least one product covered by the Fusion

Protein Patent Rights, including the obligation to file an Investigational New Drug (“IND”) application for such product.

Our development efforts to date, including the development of SL-279252 and certain other ARC compounds, satisfy these obligations.

In addition, we are to provide annual reports to Nighthawk on or before the anniversary of the effective date of the Nighthawk License Agreement to inform Nighthawk of our progress.

Unless sooner terminated or extended, the term of the Nighthawk License Agreement continues until the later of (1) 20 years following the effective date, and (2) the expiration of the last-to-expire royalty term.

In addition, we are to provide annual reports to Kopfkino on or before the anniversary of the effective date of the Kopfkino License Agreement to inform Kopfkino of our progress.

Unless sooner terminated or extended, the term of the Kopfkino License Agreement continues until the later of (1) 20 years following the effective date, and (2) the expiration of the last-to-expire royalty term.

Either party may terminate the agreement due to a material breach by the other party (subject to a 90-day cure period) or if the other party files for bankruptcy.

In the event we terminate the Nighthawk License Agreement due to a material breach by Nighthawk, Nighthawk must assign to us all right, title, and interest in the patent rights licensed under the Nighthawk License Agreement.

In addition to an upfront payment of $50,000, which we made in 2016, the Nighthawk License Agreement requires us to make further payments to Nighthawk in the future of up to $20.6 million in the aggregate for the achievement of specified development, regulatory, and commercial sale milestones for certain licensed products.

We are also required to pay Nighthawk a percentage of certain upfront fees or other non-royalty payments that are not tied to milestone events which we receive in connection with certain sublicenses of the Fusion Protein Patent Rights.

We are also required to pay Nighthawk a royalty on all worldwide net sales by us, our affiliates, and sublicenses of certain licensed products in the low single digits.

In the event we terminate the Kopfkino License Agreement due to a material breach by Kopfkino, Kopfkino must assign to us all right, title, and interest in the patent rights licensed under the Kopfkino License Agreement.

In addition to an upfront payment of $50,000, which we made in 2016, and a payment of $100,000 upon the successful completion of the first Phase 1 clinical trial, which we made in 2023, the Kopfkino License Agreement requires us to make further payments to Kopfkino in the future of up to $20.5 million in the aggregate for the achievement of specified development, regulatory, and commercial sale milestones for certain licensed products.

We are also required to pay Kopfkino a percentage of certain upfront fees or other non-royalty payments that are not tied to milestone events which we receive in connection with certain sublicenses of the Fusion Protein Patent Rights.

We are also required to pay Kopfkino a royalty on all worldwide net sales by us, our affiliates, and sublicenses of certain licensed products in the low single digits.

Royalties are payable, on a product-by-product and country-by-country basis, commencing on the first commercial sale of such product and continuing until the last-to-expire valid patent claim to the licensed patent rights that cover such product in that country.

Manufacturing and Supply

By working with third-party vendors to conduct activities in compliance with current Good Manufacturing Practices, or cGMP, we have invested significant resources to identify and scale up a suitable manufacturing process for our product candidates and ARC compounds, including SL-172154.

Currently, ARC compounds are produced by mammalian cell lines commonly used in the manufacture of monoclonal antibodies, including Chinese hamster ovary, or CHO, cells.

SL-172154 has achieved cell culture titer greater than two grams per liter, and another ARC compound has achieved titers exceeding seven grams per liter.

By working with third-party vendors to conduct activities in compliance with current Good Manufacturing Practices (“cGMP”) we have invested significant resources to identify and scale up a suitable manufacturing process for our product candidates and ARC compounds, including SL-172154.

Currently, ARC compounds are produced by mammalian cell lines commonly used in the manufacture of monoclonal antibodies, including Chinese hamster ovary (“CHO”) cells.

SL-172154 has achieved cell culture titer greater than four grams per liter, and another ARC compound has achieved titers exceeding seven grams per liter.

Purification of ARC compounds initially utilizes affinity chromatography directed to the Fc domain for capture, and subsequent chromatography steps are designed to remove process-related impurities including CHO derived DNA and proteins.

To date, we have manufactured bulk drug substance, or BDS, for our product candidates utilizing the services of a limited number of third-party contract manufacturers, with whom we maintain master service agreements, pursuant to which we may manufacture BDS on a per project basis.

To date, we have manufactured bulk drug substance (“BDS”) for our product candidates utilizing the services of a limited number of third-party contract manufacturers, with whom we maintain master service agreements, pursuant to which we may manufacture BDS on a per project basis.

We may terminate the master services agreements at any time for convenience in accordance with the terms of the agreement.

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These agreements include confidentiality and intellectual property provisions to protect our proprietary rights related to our product candidates.

Given the complexity of manufacturing our dual-sided, bi-functional fusion proteins, our increased need for manufacturing driven by multiple clinical trial programs, and the challenges faced by biologics manufacturing facilities during the COVID-19 pandemic, we work to ensure that we have arrangements with multiple contract manufacturers to reduce the risk of single-source procurement of BDS.

Additionally, we built an in-house facility to support our cell line development, manufacturing process development, analytical assay development, and non-GMP manufacturing activities.

Given the complexity of manufacturing our dual-sided, bi-functional fusion proteins and our increased need for manufacturing driven by multiple clinical trial programs, we work to ensure that we have arrangements with multiple contract manufacturers to reduce the risk of single-source procurement of BDS.

Additionally, in 2022, we completed the build out of an in-house facility to support our cell line development, manufacturing process development, analytical assay development, and non-GMP manufacturing activities.

We expect to continue to devote significant resources to process development and optimization of the manufacture of our product candidates.

We believe that we have developed a manufacturing process for SL-172154 suitable for Phase 3 clinical trials and for supply of commercial drug product.

A cGMP batch has not yet been initiated or completed using this improved process, however we expect that tech transfer of the manufacturing process and validation of a series of analytical methods required for release of drug substance and drug product to support Phase 3 clinical trials will be completed over the course of 2024 and into 2025.

To our knowledge, no other company has successfully scaled up commercial manufacturing of dual-sided, bi-functional fusion proteins.

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Each master cell bank is or will be stored in two independent locations, and we intend to produce working cell banks for each product candidate later in product development.

It is possible that we could lose multiple cell banks from multiple locations and have our manufacturing severely impacted by the need to replace the cell banks.

It is possible that we could lose multiple

cell banks from multiple locations and have our manufacturing severely impacted by the need to replace the cell banks.

However, we believe we have adequate backup should any particular cell bank be lost in a catastrophic event.

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With respect to our lead product candidate, SL-172154, we are aware of other competing clinical-stage therapeutics that target the CD47 pathway or the CD40 pathway, which include, but are not limited to magrolimab, evorpacept, lemzoparlimab TTI-621, TTI-622, DSP107, and APX005M.

With respect to our second proprietary platform, the GADLEN platform, we are aware of potentially competing efforts to develop compounds to utilize gamma delta t cells through various modalities for the treatment of certain cancer indications, including, but not limited to, efforts by Adicet Bio, Gamma Delta Therapeutics, ImCheck Therapeutics, and Lava Therapeutics.

It is possible that the competitive landscape for CD47 inhibitors may change over the course of 2024 as the sponsors of these compounds are no longer providing guidance to potential approvals, including magrolimab, TTI-621 and TTI-622.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do.

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We could see a reduction or elimination of our commercial opportunity if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we or our collaborators may develop.

Our competitors also may obtain FDA or foreign regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we or our collaborators are able to enter the market.

Our competitors also may obtain U.S.

Federal Food and Drug Administration (“FDA”) or foreign regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we or our collaborators are able to enter the market.

The key competitive factors affecting the success of all our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of companion diagnostics, if required, the level of biosimilar or generic competition, and the availability of reimbursement from government and other third-party payors.

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Our future commercial success depends, in part, on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions, and know-how related to our business, including our platform technologies and product candidates, defend and enforce our intellectual property rights, in particular our patents rights, preserve the confidentiality of our trade secrets, and operate without infringing, misappropriating, or violating the valid and enforceable patents and proprietary rights of third parties.

Our ability to stop third parties from making, using, selling, offering to sell, or importing our products may depend on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.

Our ability to stop third parties from making, using, selling, offering

to sell, or importing our products may depend on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.

The patent positions of biotechnology companies like ours are generally uncertain and can involve complex legal, scientific, and factual issues.

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patent may also be lengthened by a Patent Term Adjustment in order to address administrative delays by the U.S.

Patent and Trademark Office in granting a patent.

Patent and Trademark Office (“U.S.

PTO”) in granting a patent.

In the United States, the term of a patent that covers an FDA-approved drug or biologic may be eligible for Patent Term Extension in order to restore the period of a patent term lost during the premarket FDA regulatory review process.

The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a Patent Term Extension of up to five years beyond the natural expiration of the patent (but the total patent term, including the extension period, must not exceed 14 years following FDA approval).

The Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”) permits a Patent Term Extension of up to five years beyond the natural expiration of the patent (but the total patent term, including the extension period, must not exceed 14 years following FDA approval).

The term extension period granted on a patent covering a product is typically one-half the time between the effective date of a clinical investigation involving human beings is begun and the submission date of an application, plus the time between the submission date of an application and the ultimate approval date.

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The application for the extension must be submitted prior to the expiration of the patent.

The United States Patent and Trademark Office reviews and approves the application for any Patent Term Extension in consultation with the FDA.

PTO reviews and approves the application for any Patent Term Extension in consultation with the FDA.

In the future, we may decide to apply for restoration of patent term for one of our currently owned or licensed patents to extend its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant biologics license application.

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We generally file patent applications directed to our key technologies and programs in an effort to secure our intellectual property positions.

As of January 17, 2023, we own or exclusively license (i) more than 20 patents and more than 15 pending non-provisional patent applications in the United States and (ii) 10 patents and more than 120 pending patent applications in jurisdictions outside of the United States.

We also own additional pending provisional patent applications in the United States and pending international patent applications filed under the Patent Cooperation Treaty, or PCT.

As of February 1, 2024, we own or exclusively license (i) more than 25 patents and more than 20 pending non-provisional patent applications in the United States and (ii) 20 patents and more than 150 pending patent applications in jurisdictions outside of the United States.

We also own additional pending provisional patent applications in the United States and pending international patent applications filed under the Patent Cooperation Treaty (“PCT”).

Patent prosecution is a lengthy process, during which the scope of the claims initially submitted for examination by the U.S.

Patent and Trademark Office and other patent offices may be significantly revised before issuance, if granted at all.

PTO and other patent offices may be significantly revised before issuance, if granted at all.

SL-172154 Product Candidate

As of January 17, 2023, we own or exclusively license (i) 5 patents and 5 pending non-provisional patent applications in the United States and (ii) 7 patents and more than 25 pending patent applications in jurisdictions outside of the United States (including, among others, Australia, Canada, China, Europe, and Japan) that relate to SL-172154.

As of February 1, 2024, we own or exclusively license (i) 6 patents and 6 pending non-provisional patent applications in the United States and (ii) 11 patents and more than 25 pending patent applications in jurisdictions outside of the United States (including, among others, Australia, Canada, China, Europe, and Japan) that relate to SL-172154.

These patents and applications originate from several different patent families.

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The terms of individual patents granted in jurisdictions outside of the United States depends on the legal term for patents in those jurisdictions.

As of January 17, 2023, we own or exclusively license (i) more than 15 patents and 15 pending non-provisional patent applications in the United States and (ii) 10 patents and more than 100 pending patent applications in jurisdictions outside of the United States (including, among others, Australia, Canada, China, Europe, and Japan) that relate to the ARC platform.

As of February 1, 2024, we own or exclusively license (i) more than 20 patents and 15 pending non-provisional patent applications in the United States and (ii) 11 patents and more than 125 pending patent applications in jurisdictions outside of the United States (including, among others, Australia, Canada, China, Europe, and Japan) that relate to the ARC platform.

These include patents and/or patent applications related to SL‑172154 and other ARC compounds combining TIM3, PD‑1, SIRPα, TIGIT, CSF1R, VSIG8, or FLT3L with OX40, CD40L, 4-1BBL, or LIGHT.

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The terms of individual patents granted in jurisdictions outside of the United States depends on the legal term for patents in those jurisdictions.

GADLEN Platform

As of January 17, 2023, we (i) own 2 patents and 2 pending non-provisional patent application in the United States and (ii) more than 10 pending patent applications in jurisdictions outside of the United States (including, among others, Australia, Canada, China, Europe, and Japan) that relate to the GADLEN platform.

These patents and applications originate from a family generally directed to compositions and methods of treating cancer.

Patents granted in this family are expected to expire in the United States in 2040, without taking potential patent term extension or adjustment into account.

Trademark Protection

As of February 3, 2023, we own a registered trademark and an allowed application for “ARC” and an allowed application for “GADLEN” with the U.S.

Patent and Trademark Office.

As of February 1, 2024, we own a registered trademark for “ARC” with the U.S.

We plan to register trademarks in connection with our biological products.

Licensed Intellectual Property from Nighthawk Biosciences, Inc.

In June 2016, we entered into an exclusive license agreement with Nighthawk, pursuant to which we received an exclusive (as to the patent rights), non-transferable, sublicensable, worldwide, royalty-bearing, non-field restricted license to certain patent rights and know-how, including rights related to the ARC platform.

We paid Nighthawk an initial license fee of $50,000, and we are obligated to pay Nighthawk fees upon receipt of certain sublicensing income, achievement of certain milestones, and royalties upon sales of commercial products.

The Nighthawk license provides us rights in the patent family including PCT/US16/54598.

As of January 17, 2023, that family includes (i) 11 patents and 2 pending non-provisional patent applications in the United States, and (ii) 7 patents and more than 25 pending applications in jurisdictions outside of the United States (including, among others, Australia, Canada, China, Europe, and Japan).

Licensed Intellectual Property from Kopfkino IP, LLC

We are party to the Kopfkino License Agreement, with Kopfkino.

Under the Kopfkino License Agreement, we have an exclusive (as to the patent rights), non-transferable, sublicensable, worldwide, royalty-bearing, non-field restricted license to certain patent rights and know-how, including rights related to the ARC platform.

We are obligated to pay Kopfkino fees upon receipt of certain sublicensing income, achievement of certain milestones, and royalties upon sales of commercial products.

The Kopfkino license provides us rights in the patent family including PCT/US16/54598.

As of February 1, 2024, that family includes (i) 11 patents and 1 pending non-provisional patent applications in the United States, and (ii) 11 patents and more than 25 pending applications in jurisdictions outside of the United States (including, among others, Australia, Canada, China, Europe, and Japan).

We control prosecution, maintenance, and enforcement of this family of patents and patent applications.

We originally entered into the Kopfkino License Agreement in June 2016 with Scorpius.

The agreement was subsequently amended in November 2016, December 2016, and March 2017.

In January 2024, Scorpius assigned its right, title, and interest in and under the Kopfkino License Agreement, along with the underlying patents and patent applications, to Kopfkino.

Government Regulation

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Biologics Regulation

In the United States, biological products are subject to regulation under the Federal Food, Drug, and Cosmetic Act, or FDCA, and the Public Health Service Act, or PHSA, and other federal, state, local, and foreign statutes and regulations.

In the United States, biological products are subject to regulation under the Federal Food, Drug, and Cosmetic Act (“FDCA”), the Public Health Service Act (“PHSA”) and other federal, state, local, and foreign statutes and regulations.

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

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

• completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices (“GLP”) regulation;

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

• approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before the trial is commenced;

• approval by an independent institutional review board (“IRB”) or ethics committee at each clinical site before the trial is commenced;

• manufacture of the proposed biologic candidate in accordance with cGMPs;

• performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose;

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

• performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (“GCP”) requirements to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose;

• preparation of and submission to the FDA of a biologics license application (“BLA”) after completion of all pivotal clinical trials;

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

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The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day 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.

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

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

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

In addition to the IND submission process, supervision of human gene transfer trials includes evaluation and assessment by an institutional biosafety committee (“IBC”) a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution.

The IBC assesses the safety of the research and identifies any potential risk to public health or the environment and such review may result in some delay before initiation of a clinical trial.

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Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites.

geographically dispersed clinical trial sites.

These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval.

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The submission of a BLA requires payment of a substantial application user fee to the FDA, unless a waiver or exemption applies.

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

The Food and Drug Administration Safety and Innovation Act requires that a sponsor who is planning to submit a marketing application for a biological product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial pediatric study plan, or PSP, within sixty days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.

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

The Food and Drug Administration Safety and Innovation Act requires that a sponsor who is planning to submit a marketing application for a biological product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial pediatric study plan within sixty days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.

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

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In issuing the Complete Response letter, the FDA may recommend actions that the applicant might take to place the BLA in condition for approval, including requests for additional information or clarification.

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.

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 regulatory approval of a product is granted, such approval will be granted for particular indications and may entail 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, to ensure the benefits of the product outweigh its risks.

For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy (“REMS”) to ensure the benefits of the product outweigh its risks.

A REMS is a safety strategy to manage a known or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and 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.

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Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace.

The FDA may require

one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

The FDA may require one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

Expedited Development and Review Programs

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The fast track program is intended to expedite or facilitate the process for reviewing new products that meet certain criteria.

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

Specifically, new products are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and data demonstrate the potential to address unmet medical needs for the disease or condition.

Fast track designation applies to the combination of the product and the specific indication for which it is being studied.

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Any marketing application for a biologic submitted to the FDA for approval, including a product with a fast track designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval.

A product is eligible for priority review if it has the potential to provide a significant improvement in the treatment, diagnosis or prevention of a serious disease or condition.

A product is eligible for priority review if it has the potential to provide a significant improvement in safety or effectiveness of the treatment, diagnosis or prevention of a serious disease or condition.

For original BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (as compared to ten months under standard review).

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As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit.

Under the Food and Drug Omnibus Reform Act of 2022, the FDA may require, as appropriate, that such studies be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.

Products receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required post-marketing studies or if such studies fail to verify the predicted clinical benefit.

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

In 2017, the FDA established a new regenerative medicine advanced therapy, or RMAT, designation as part of its implementation of the 21st Century Cures Act.

In 2017, the FDA established a new regenerative medicine advanced therapy (“RMAT”) designation as part of its implementation of the 21st Century Cures Act.

The RMAT designation program is intended to fulfill the 21st Century Cures Act requirement that the FDA facilitate an efficient development program for, and expedite review of, any drug that meets the following criteria:

(i) the drug qualifies as a RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions;

(ii) the drug is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition;

drug is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition;

and (iii) preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such a disease or condition.

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Fast track designation, breakthrough therapy designation, priority review and RMAT designation do not change the standards for approval but may expedite the development or approval process.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the

time period for FDA review or approval will not be shortened.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

In May 2018, the Right to Try Act established a new regulatory pathway to increase access to unapproved, investigational treatments for patients diagnosed with life-threatening diseases or conditions who have exhausted approved treatment options and who are unable to participate in a clinical trial.

The Consolidated Appropriations Act, 2023 strengthens the FDA’s authority to require and regulate post-approval studies of accelerated approval drugs and to expedite the rescission of accelerated approval based on these post-approval studies.

Orphan Drug Designation

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

There is some uncertainty with respect to the FDA’s interpretation of the scope of orphan drug exclusivity.

Historically, exclusivity was specific to the orphan indication for which the drug was approved.

As a result, the scope of exclusivity was interpreted as preventing approval of a competing product.

However, in 2021, the federal court in Catalyst Pharmaceuticals, Inc.

Becerra suggested that orphan drug exclusivity covers the full scope of the orphan-designated “disease or condition” regardless of whether a drug obtained approval for a narrower use.

Post-Approval Requirements

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Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented.

FDA regulations also require investigation and correction of any deviations from cGMPs and impose reporting requirements upon us and any third-party manufacturers that we may decide to use.

FDA regulations also require

investigation and correction of any deviations from cGMPs and impose reporting requirements upon us and any third-party manufacturers that we may decide to use.

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMPs and other aspects of regulatory compliance.

The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information;

Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information;

imposition of post-market studies or clinical studies to assess new safety risks;

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Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution.

The two primary types of FDA marketing authorization applicable to a medical device are premarket notification, also called 510(k) clearance, and premarket approval, or PMA approval.

The two primary types of FDA marketing authorization applicable to a medical device are premarket notification, also called 510(k) clearance, and premarket approval (“PMA approval”).

We expect that any companion diagnostic developed for our drug candidates will utilize the PMA pathway.

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For diagnostic tests, a PMA application typically includes data regarding analytical and clinical validation studies.

As part of its review of the PMA, the FDA will conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the Quality System Regulation, or QSR, which requires manufacturers to follow design, testing, control, documentation and other quality assurance procedures.

As part of its review of the PMA, the FDA will conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the Quality System Regulation, which requires manufacturers to follow design, testing, control, documentation and other quality assurance procedures.

FDA review of an initial PMA may require several years to complete.

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A not approvable letter will outline the deficiencies in the application and, where practical, will identify what is necessary to make the PMA approvable.

The FDA may also determine that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted and then the data submitted in an amendment to the PMA.

The FDA may also determine that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are

conducted and then the data submitted in an amendment to the PMA.

Once granted, PMA approval may be withdrawn by the FDA if compliance with post approval requirements, conditions of approval or other regulatory standards is not maintained or problems are identified following initial marketing.

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The guidance also explains that a companion diagnostic device used to make treatment decisions in clinical trials of a drug generally will be considered an investigational device, unless it is employed for an intended use for which the device is already approved or cleared.

If used to make critical treatment decisions, such as patient selection, the diagnostic device generally will be considered a significant risk device under the FDA’s Investigational Device Exemption, or IDE, regulations.

Thus, the sponsor of the diagnostic device will be required to comply with the IDE regulations.

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Biosimilars and Reference Product Exclusivity

The Affordable Care Act, or ACA, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009, or BPCIA, which created an abbreviated approval pathway for biological products that are highly similar, or “biosimilar,” to or interchangeable with an FDA-approved reference biological product.

The Affordable Care Act (“ACA”) includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are highly similar, or “biosimilar,” to or interchangeable with an FDA-approved reference biological product.

The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.

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

The first biologic product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against other biologics submitted under the abbreviated approval pathway for the lesser of (i) one year after the first commercial marketing, (ii) eighteen months after approval if there is no legal challenge, (iii) eighteen months after the resolution in the applicant’s favor of a lawsuit challenging the biologics’ patents if an application has been submitted, or (iv) 42 months after the application has been approved if a lawsuit is ongoing within the 42-month period.

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

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In July 2018, the FDA announced an action plan to encourage the development and efficient review of biosimilars, including the establishment of a new office within the agency that will focus on therapeutic biologics and biosimilars.

On December 20, 2020, Congress amended the PHSA as part of the COVID-19 relief bill to further simplify the biosimilar review process by making it optional to show that conditions of use proposed in labeling have been previously approved for the reference product, which used to be a requirement of the application.

On December 20, 2020, Congress amended the

PHSA as part of the COVID-19 relief bill to further simplify the biosimilar review process by making it optional to show that conditions of use proposed in labeling have been previously approved for the reference product, which used to be a requirement of the application.

In addition, government proposals have sought to reduce the 12-year reference product exclusivity period.

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As a result, the ultimate impact, implementation, and impact of the BPCIA is subject to significant uncertainty.

As discussed below, the Inflation Reduction Act of 2022, or IRA, is a significant new law that intends to foster generic and biosimilar competition and to lower drug and biologic costs.

As discussed below, the Inflation Reduction Act of 2022 (“IRA”) is a significant new law that intends to foster generic and biosimilar competition and to lower drug and biologic costs.

Other Healthcare Laws and Compliance Requirements

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Such laws include, without limitation:

the federal Anti-Kickback Statute, or AKS;

the federal False Claims Act, or FCA;

HIPAA and similar foreign, federal and state fraud, abuse and transparency laws.

the federal Anti-Kickback Statute (“AKS”);

the federal False Claims Act (“FCA”);

the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and similar foreign, federal and state fraud, abuse and transparency laws.

The AKS prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under any federal healthcare program.

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The AKS has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand, and prescribers and purchasers on the other.

The government often takes the

position that to violate the AKS, only one purpose of the remuneration need be to induce referrals, even if there are other legitimate purposes for the remuneration.

The government often takes the position that to violate the AKS, only one purpose of the remuneration need be to induce referrals, even if there are other legitimate purposes for the remuneration.

There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from AKS prosecution, but they are drawn narrowly and practices that involve remuneration, such as consulting agreements, that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.

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Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances.

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

Civil and criminal false claims laws, including the FCA, and civil monetary penalty laws, which can be enforced through civil whistleblower or qui tam actions, prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment of federal government funds, including in federal healthcare programs, that are false or fraudulent.

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state and foreign law equivalents of each of the above federal laws, which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts.

If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.

If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we

may be subject to penalties, including, without limitation, civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.

Data Privacy and Security

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In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations, govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners.

For example, HIPAA, as amended by HITECH, and their respective implementing regulations imposes privacy, security, and breach notification obligations on certain health care providers, health plans, and health care clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve using, disclosing, creating, receiving, maintaining, or transmitting individually identifiable health information for or on behalf of such covered entities.

Entities that are found to be in violation of HIPAA may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance.

Further, entities that knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA covered entity in a manner that is not authorized or permitted by HIPAA may be subject to criminal penalties.

For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations imposes privacy, security, and breach notification obligations on certain health care providers, health plans, and health care clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve using, disclosing, creating, receiving, maintaining, or transmitting individually identifiable health information for or on behalf of such covered entities.

The requirements imposed by HIPAA and HITECH on covered entities and business associates include entering into agreements that require business associates protect PHI provided by the covered entity against improper use or disclosure, among other things;

following certain standards for the privacy of PHI, which limit the disclosure of a patient’s past, present or future physical or mental health or condition or information about a patient’s receipt of health care if the information identifies, or could reasonably be used to identify, the individual;

ensuring the confidentiality, integrity and availability of all PHI created, received, maintained or transmitted in electronic form, to identify and protect against reasonably anticipated threats or impermissible uses or disclosures to the security and integrity of such PHI;

and reporting of such breaches of PHI to individuals and regulators.

Significant civil and criminal fines and other penalties may be imposed for violating HIPAA.

A covered entity or business associate is also liable for civil money penalties for a violation that is based on an act or omission of any of its agents, which may include a downstream business associate, as determined according to the federal common law of agency.

HITECH also increased the civil and criminal penalties applicable to covered entities and business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions.

To the extent that we submit electronic healthcare claims and payment transactions that do not comply with the electronic data transmission standards established under HIPAA and HITECH, payments to us may be delayed or denied.

Even when HIPAA does not apply, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

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Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.

For example, the CCPA, which went into effect on January 1, 2020, creates new data privacy obligations for covered companies and provides new privacy rights to California residents.

For example, the California Consumer Privacy Act of 2018 (“CCPA”), as amended by the California Privacy Rights Act of 2020 (“CPRA”), which went into effect on January 1, 2020, creates new data privacy obligations for covered companies and provides new privacy rights to California residents.

The CCPA/CPRA applies to personal data of consumers, business representatives, and employees, and imposes obligations on certain businesses that do business in California, including to provide specific disclosures in privacy notices, rights to California residents in relation to their personal information.

Health information falls under the CCPA/CPRA’s definition of personal information where it identifies, relates to, describes, or is reasonably capable of being associated with or could reasonably be linked with a particular consumer or household—unless it is subject to HIPAA—and is included under a new category of personal information, “sensitive personal information,” which is offered greater protection.

Coverage and Reimbursement

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Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.

As a result, 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 product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

As a result, 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 product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Third-party payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical or biological products, medical devices and medical services, in addition to questioning safety and efficacy.

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Other legislative changes have been proposed and adopted since the ACA was enacted, including automatic aggregate reductions of Medicare payments to providers of 2% per fiscal year as part of the federal budget sequestration under the Budget Control Act of 2011.

These reductions went into effect in April 2013 and, due to subsequent legislative amendments, will remain in effect through 2030 with the exception of a temporary suspension from May 1, 2020 through December 31, 2020, unless additional action is taken by Congress.

These reductions went into effect in April 2013 and, due to subsequent legislative amendments, will remain in effect through 2030 unless additional action is taken by Congress.

In addition, the Bipartisan Budget Act of 2018, among other things, amended the Medicare Act (as amended by the ACA) to increase the point-of-sale discounts that manufacturers must agree to offer under the Medicare Part D coverage discount program from 50% to 70% off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs being covered under Medicare Part D.

Moreover, there has recently 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 measures designed to, among other things, reduce the cost of prescription drugs, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

measures designed to, among other things, reduce the cost of prescription drugs, 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, in May 2019, CMS adopted a final rule allowing Medicare Advantage Plans the option to use step therapy for Part B drugs, permitting Medicare Part D plans to apply certain utilization controls to new starts of five of the six protected class drugs, and requiring the Explanation of Benefits for Part D beneficiaries to disclose drug price increases and lower cost therapeutic alternatives, which went into effect on January 1, 2021.

Notwithstanding the Inflation Reduction Act, continued legislative and enforcement interest exists in the United States with respect to specialty drug pricing practices.

Notwithstanding the IRA, continued legislative and enforcement interest exists in the United States with respect to specialty drug pricing practices.

Specifically, we expect regulators to continue pushing for transparency to drug pricing, reducing the cost of prescription drugs under Medicare, reviewing the relationship between pricing and manufacturer patient programs, and reforming government program reimbursement methodologies for drugs.

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European Data Laws

The collection and use of personal health data and other personal data in the EU is governed by the provisions of the European General Data Protection Regulation (EU) 2016/679, or GDPR, which came into force in May 2018, and related data protection laws in individual EU Member States.

The GDPR imposes a number of strict obligations and restrictions on the

ability to process, including collecting, analyzing and transferring, personal data of individuals, in particular with respect to health data from clinical trials and adverse event reporting.

The collection and use of personal health data and other personal data in the EU is governed by the provisions of the European General Data Protection Regulation (EU) 2016/679 (“GDPR”), which came into force in May 2018, and related data protection laws in individual EU Member States.

The GDPR imposes a number of strict obligations and restrictions on the ability to process, including collecting, analyzing and transferring, personal data of individuals, in particular with respect to health data from clinical trials and adverse event reporting.

The GDPR includes requirements relating to the legal basis of the processing (such as consent of the individuals to whom the personal data relates), the information provided to the individuals prior to processing their personal data, the notification obligations to the national data protection authorities, and the security and confidentiality of the personal data.

EU Member States may also impose additional requirements in relation to health, genetic and biometric data through their national legislation.

In addition, the GDPR imposes specific restrictions on the transfer of personal data to countries outside of the EU/EEA that are not considered by the EC to provide an adequate level of data protection (including the United States).

In addition, the GDPR imposes specific restrictions on the transfer of personal data to countries outside of the European Economic Area (“EEA”) that are not considered by the European Commission (“EC”) to provide an adequate level of data protection.

Appropriate safeguards are required to enable such transfers.

Among the appropriate safeguards that can be used, the data exporter may use the standard contractual clauses, or SCCs.

On March 25, 2022, the EC and the United States announced that they have agreed in principle on a new Trans-Atlantic Data Privacy Framework.

Following this statement, on October 7, 2022, President Biden signed an Executive Order on ‘Enhancing Safeguards for United States Signals Intelligence Activities’, which implemented the agreement in principle.

On that basis, the EC prepared a draft adequacy decision and launched its adoption procedure.

While this new EU-U.S.

privacy framework is expected to enter into force in 2023, there is still some uncertainty around the new framework.

Among the appropriate safeguards that can be used, the data exporter may use the standard contractual clauses (“SCCs”).

With regard to the transfer of data from the EEA to the US, on July 10, 2023, the European Commission adopted its adequacy decision for the EU-US Data Privacy Framework.

On the bases of the new adequacy decision, personal data can flow from the EEA to US companies participating in the framework.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States may result in significant monetary fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater, other administrative penalties and a number of criminal offenses (punishable by uncapped fines) for organizations and, in certain cases, their directors and officers, as well as civil liability claims from individuals whose personal data was processed.

Data protection authorities from the different EU Member States may still implement certain variations, enforce the GDPR and national data protection laws differently, and introduce additional national regulations and guidelines, which adds to the complexity of processing personal data in the EU.

Guidance developed at both the EU level and at the national level in individual EU Member States concerning implementation and compliance practices are often updated or otherwise revised.

Guidance developed at both the

EU level and at the national level in individual EU Member States concerning implementation and compliance practices are often updated or otherwise revised.

Furthermore, there is a growing trend towards the required public disclosure of clinical trial data in the EU, which adds to the complexity of obligations relating to processing health data from clinical trials.

Such public disclosure obligations are provided in the new EU CTR, EMA disclosure initiatives and voluntary commitments by industry.

Such public disclosure obligations are provided in the new EU Clinical Trials Regulation (EU) No.

536/2014 (“CTR”), European Medicines Agency (“EMA”) disclosure initiatives and voluntary commitments by industry.

Failure to comply with these obligations could lead to government enforcement actions and significant penalties against us, harm to our reputation, and adversely impact our business and operating results.

The uncertainty regarding the interplay between different regulatory frameworks, such as the CTR and the GDPR, further adds to the complexity that we face with regard to data protection regulation.

With regard to the transfer of data from the EU to the United Kingdom, or UK, personal data may now freely flow from the EU to the UK since the UK is deemed to have an adequate data protection level.

However, the adequacy decisions include a ‘sunset clause’ which entails that the decisions will automatically expire four years after their entry into force.

Additionally, following the UK’s withdrawal from the EU and the EEA, companies also have to comply with the UK’s data protection laws (including the GDPR, as incorporated into UK national law), the latter regime having the ability to separately fine up to the greater of £17.5 million or 4% of global turnover.

With regard to the transfer of personal data from the EEA to the United Kingdom (“UK”), personal data may now freely flow from the EU to the UK since the UK is deemed to have an adequate data protection level.

However, the adequacy decisions include a ‘sunset clause’ which entails that the decisions will automatically expire four years after their entry into force, unless renewed.

Additionally, following the UK’s withdrawal from the EU and the EEA, companies also have to comply with the UK’s data protection laws (including the UK GDPR, as defined in section 3(10) (as supplemented by section 205(4)) of the Data Protection Act 2018 (the “DPA 2018”) (“UK GDPR”), the DPA 2018, and related data protection laws in the UK).

Separately to the fines that can be imposed by the GDPR, the UK regime has the ability to impose fines up to the greater of £17.5 million or 4% of global turnover.

Following the UK’s withdrawal from the EU and the EEA, companies are subject to specific transfer rules under the UK regime;

personal data may flow freely from the UK to the EEA, since the EEA is deemed to have an adequate data protection level for purposes of the UK regime.

These UK international transfer rules broadly mirror the GDPR rules.

On February 2, 2022, the UK Secretary of State laid before the UK Parliament the international data transfer agreement (“IDTA”) and the international data transfer addendum to the European Commission’s standard contractual clauses for international data transfers (“Addendum”) and a document setting out transitional provisions.

The IDTA and Addendum came into force on March 21, 2022 and replaced the old SCCs for the purposes of the UK regime.

However, the transitional provisions, adopted with the IDTA and the Addendum, provide that contracts concluded on or before September 21, 2022 on the basis of any old SCCs continue to provide appropriate safeguards for the purpose of the UK regime until March 21, 2024, provided that the processing operations that are the subject matter of the contract remain unchanged and reliance on those clauses ensures that the transfer of personal data is subject to appropriate safeguards.

With regard to the transfer of personal data from the UK to the United States, the UK government has adopted an adequacy decision for the United States (the “UK-US Data Bridge”), which came into force on October 12, 2023.

The UK-US Data Bridge recognizes the United States as offering an adequate level of data protection where the transfer is to a U.S.

company participating in the EU-US Data Privacy Framework and the UK Extension to the EU-US Data Privacy Framework.

Drug and Biologic Development Process

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This means that clinical trials conducted in the EU/EEA have to comply with EU clinical trial legislation but also that clinical trials conducted outside the EU/EEA have to comply with ethical principles equivalent to those set out in the EEA, including adhering to international good clinical practice and the Declaration of Helsinki.

The conduct of clinical trials in the EU is governed by the EU Clinical Trials Regulation (EU) No.

536/2014, or CTR, which entered into force on January 31, 2022.

The conduct of clinical trials in the EU is governed by the CTR, which entered into force on January 31, 2022.

The CTR replaced the Clinical Trials Directive 2001/20/EC (“Clinical Trials Directive”) and introduced a complete overhaul of the existing regulation of clinical trials for medicinal products in the EU.

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The approval must be obtained from two separate entities:

the National Competent Authority, or NCA, and one or more Ethics Committees.

the National Competent Authority (“NCA”) and one or more Ethics Committees.

The NCA of the EU Member States in which the clinical trial will be conducted must authorize the conduct of the trial, and the independent Ethics Committee must grant a positive opinion in relation to the conduct of the clinical trial in the relevant EU member state before the commencement of the trial.

Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be submitted to or approved by the relevant NCA and Ethics Committees.

Under the current regime all suspected unexpected serious adverse

reactions to the investigated drug that occur during the clinical trial must be reported to the NCA and to the Ethics Committees of the EU member state where they occur.

Under the current regime all suspected unexpected serious adverse reactions to the investigated drug that occur during the clinical trial must be reported to the NCA and to the Ethics Committees of the EU member state where they occur.

A more unified procedure will apply under the new CTR.

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One national regulatory authority (the reporting EU member state proposed by the applicant) will take the lead in validating and evaluating the application consult and coordinate with the other concerned EU Member States.

If an application is rejected, it may be amended and resubmitted through the EU clinical trials portal.

If an application is rejected, it may be amended and resubmitted through the EU

clinical trials portal.

If an approval is issued, the sponsor may start the clinical trial in all concerned EU Member States.

However, a concerned EU member state may in limited circumstances declare an “opt-out” from an approval and prevent the clinical trial from being conducted in such member state.

The CTR also aims to streamline and simplify the rules on safety reporting, and introduces enhanced transparency requirements such as mandatory submission of a summary of the clinical trial results to the EU Database.

The CTR foresees a three-year transition period.

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On January 31, 2023, submission of initial clinical trial applications via CTIS became mandatory, and by January 31, 2025, all ongoing trials approved under the former Clinical Trials Directive will need to comply with the CTR and have to be transitioned to CTIS.

Under both the former regime and the new CTR, national laws, regulations, and the applicable Good Clinical Practice, or GCP, and Good Laboratory Practice standards must also be respected during the conduct of the trials, including the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, or ICH, guidelines on Good Clinical Practice and the ethical principles that have their origin in the Declaration of Helsinki.

During the development of a medicinal product, the European Medical Agency, or EMA and national regulators within the EU provide the opportunity for dialogue and guidance on the development program.

At the EMA level, this is usually done in the form of scientific advice, which is given by the Committee for Medicinal Products for Human Use, or CHMP, on the recommendation of the Scientific Advice Working Party, or SAWP.

Under both the former regime and the new CTR, national laws, regulations, and the applicable GCP and GLP standards must also be respected during the conduct of the trials, including the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use guidelines on GCP and the ethical principles that have their origin in the Declaration of Helsinki.

During the development of a medicinal product, the EMA and national regulators within the EU provide the opportunity for dialogue and guidance on the development program.

At the EMA level, this is usually done in the form of scientific advice, which is given by the Committee for Medicinal Products for Human Use (“CHMP”) on the recommendation of the Scientific Advice Working Party.

A fee is incurred with each scientific advice procedure, but is significantly reduced for designated orphan medicines.

Advice from the EMA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical testing and clinical studies, and pharmacovigilance plans and risk-management programs.

Advice is not legally binding with regard to any future Marketing Authorization Application, or MAA, of the product concerned.

Advice is not legally binding with regard to any future Marketing Authorization Application (“MAA”) of the product concerned.

Drug Marketing Authorization

In the European Union, medicinal products, including advanced therapy medicinal products, or ATMPs, are subject to extensive pre- and post-market regulation by regulatory authorities at both the European Union and national levels.

In the European Union, medicinal products, including advanced therapy medicinal products (“ATMPs”), are subject to extensive pre- and post-market regulation by regulatory authorities at both the European Union and national levels.

ATMPs comprise gene therapy products, somatic cell therapy products and tissue engineered products, which are genes, cells or tissues that have undergone substantial manipulation and that are administered to human beings in order to cure, diagnose or prevent diseases or regenerate, repair or replace a human tissue.

Pursuant to the ATMP Regulation, the Committee on Advanced Therapies, or CAT, is responsible in conjunction with the CHMP for the evaluation of ATMPs.

Pursuant to the ATMP Regulation, the Committee on Advanced Therapies (“CAT”) is responsible in conjunction with the CHMP for the evaluation of ATMPs.

The CHMP and CAT are also responsible for providing guidelines on ATMPs.

These guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs and include, among other things, the preclinical studies required to characterize ATMPs manufacturing and control information that should be submitted in a In the EU and in Iceland, Norway and Liechtenstein (together the European Economic Area, or EEA), after completion of all required clinical testing, pharmaceutical products may only be placed on the market after obtaining a Marketing Authorization, or MA.

To obtain an MA of a drug under European Union regulatory systems, an applicant can submit an Marketing Authorization Application, or MAA, through, amongst others, a centralized or decentralized procedure.

These guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs and include, among other things, the preclinical studies required to characterize ATMPs manufacturing and control information that should be submitted in a In the EU and in Iceland, Norway and Liechtenstein (together the EEA) after completion of all required clinical testing, pharmaceutical products may only be placed on the market after obtaining a Marketing Authorization (“MA”).

To obtain an MA of a drug under European Union regulatory systems, an applicant can submit an MAA through, amongst others, a centralized or decentralized procedure.

Centralized Authorization Procedure

The centralized procedure provides for the grant of a single MA that is issued by the European Commission, or EC, following the scientific assessment of the application by the European Medicines Agency, or EMA, that is valid for all EU Member States as well as in the three additional EEA Member States.

The centralized procedure is compulsory for specific medicinal products, including for medicines developed by means of certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products, or ATMP, and medicinal products with a new active substance indicated for the treatment of certain diseases (AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases).

The centralized procedure provides for the grant of a single MA that is issued by the EC following the scientific assessment of the application by the EMA that is valid for all EU Member States as well as in the three additional EEA Member States.

The centralized procedure is compulsory for specific medicinal products, including for medicines developed by means of certain biotechnological processes, products designated as orphan medicinal products, ATMPs and medicinal products with a new active substance indicated for the treatment of certain diseases (AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases).

For medicinal products containing a new active substance not yet authorized in the EEA before May 20, 2004 and indicated for the treatment of other diseases, medicinal products that constitute significant therapeutic, scientific or technical innovations or for which the grant of a MA through the centralized procedure would be in the interest of public health at EU level, an applicant may voluntarily submit an application for a marketing authorization through the centralized procedure.

Under the centralized procedure, the Committee for Medicinal Products for Human Use, or CHMP, established at the EMA, is responsible for conducting the initial assessment of a drug.

The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing

authorization.

Under the centralized procedure, the CHMP established at the EMA, is responsible for conducting the initial assessment of a drug.

The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization.

Under the centralized procedure, the timeframe for the evaluation of an MAA by the EMA’s CHMP is, in principle, 210 days from receipt of a valid MAA.

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Upon request, the CHMP can reduce the time frame to 150 days if the applicant provides sufficient justification for an accelerated assessment.

The CHMP will provide a positive opinion regarding the application only if it meets certain quality, safety and efficacy requirements.

The CHMP will provide a positive opinion regarding the application only if it meets certain quality, safety and efficacy

requirements.

This opinion is then transmitted to the EC, which has the ultimate authority for granting MA within 67 days after receipt of the CHMP opinion.

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Risk Management Plan

All new MAAs must include a Risk Management Plan, or RMP, describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.

All new MAAs must include a Risk Management Plan (“RMP”) describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.

RMPs are continually modified and updated throughout the lifetime of the medicine as new information becomes available.

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The regulatory authorities may also impose specific obligations as a condition of the MA.

RMPs and Periodic Safety Update Reports, or PSURs, are routinely available to third parties requesting access, subject to limited redactions.

Since October 20, 2023, all RMPs for centrally authorized products are published by the EMA, subject to only limited redactions.

MA Validity Period

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Data and Market Exclusivity

As in the United States, it may be possible to obtain a period of market and / or data exclusivity in the EU that would have the effect of postponing the entry into the marketplace of a competitor’s generic, hybrid or biosimilar product (even if the pharmaceutical product has already received a MA) and prohibiting another applicant from relying on the MA holder’s pharmacological, toxicological and clinical data in support of another MA for the purposes of submitting an application, obtaining MA or placing the product on the market.

New Chemical Entities, or NCE, approved in the EU qualify for eight years of data exclusivity and 10 years of marketing exclusivity.

obtaining MA or placing the product on the market.

New Chemical Entities (“NCE”) approved in the EU qualify for eight years of data exclusivity and 10 years of marketing exclusivity.

An additional non-cumulative one-year period of marketing exclusivity is possible if during the data exclusivity period (the first eight years of the 10-year marketing exclusivity period), the MA holder obtains an authorization for one or more new therapeutic indications that are deemed to bring a significant clinical benefit compared to existing therapies.

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Even if a compound is considered to be a NCE and the MA applicant is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the medicinal product if such company can complete a full MAA with their own complete database of pharmaceutical tests, preclinical studies and clinical trials and obtain MA of its product.

On April 26, 2023, the EC submitted a proposal for the reform of the European pharmaceutical legislation.

The current draft envisages, e.g., a shortening of the periods of data exclusivity, however, there is currently neither a final version of this draft nor a date for its entry into force.

Orphan Designation and Exclusivity

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Designated orphan medicines are eligible for conditional marketing authorization.

The EMA’s Committee for Orphan Medicinal Products, or COMP, reassesses the orphan drug designation of a product in parallel with the review for a marketing authorization;

The EMA’s Committee for Orphan Medicinal Products, reassesses the orphan drug designation of a product in parallel with the review for a marketing authorization;

for a product to benefit from market exclusivity it must maintain its orphan drug designation at the time of marketing authorization review by the EMA and approval by the EC.

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A similar medicinal product is defined as a medicinal product containing a similar active substance or substances as contained in a currently authorized orphan medicinal product, and which is intended for the same therapeutic indication.

An orphan medicinal product can also obtain an additional two years of market exclusivity for an orphan-designated condition when the results of specific studies are reflected in the Summary of Product Characteristics, or SmPC, addressing the pediatric

population and completed in accordance with a fully compliant Pediatric Investigation Plan, or PIP.

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

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In the EU, companies developing a new medicinal product are obligated to study their product in children and must therefore submit a PIP together with a request for agreement to the EMA.

The EMA issues a decision on the PIP based on an opinion of the EMA’s Pediatric Committee, or PDCO.

The EMA issues a decision on the PIP based on an opinion of the EMA’s Pediatric Committee.

Companies must conduct pediatric clinical trials in accordance with the PIP approved by the EMA, unless a deferral (e.g.

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The MAA for the medicinal product must include the results of all pediatric clinical trials performed and details of all information collected in compliance with the approved PIP, unless a waiver or a deferral has been granted, in which case the pediatric clinical trials may be completed at a later date.

Medicinal products that are granted a marketing authorization, or MA, on the basis of the pediatric clinical trials conducted in accordance with the approved PIP are eligible for a six month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity.

Medicinal products that are granted an MA on the basis of the pediatric clinical trials conducted in accordance with the approved PIP are eligible for a six month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity.

This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the approved PIP are developed and submitted.

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In March 2016, the EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist.

The Priority Medicines, or PRIME, scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure.

The Priority Medicines (“PRIME”) scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure.

Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies on the basis of compelling non-clinical data and tolerability data from initial clinical trials.

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MA holders must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, who is responsible for oversight of that system.

Key obligations include expedited reporting of suspected serious adverse reactions and submission of PSURs in relation to medicinal products for which they hold MAs.

Key obligations include expedited reporting of suspected serious adverse reactions and submission of Periodic Safety Update Reports (“PSURs”) in relation to medicinal products for which they hold MAs.

The EMA reviews PSURs for medicinal products authorized through the centralized procedure.

If the EMA has concerns that the risk benefit profile of a product has varied, it can adopt an opinion advising that the existing MA for the product be suspended, withdrawn or varied.

The agency can advise that the MA holder be obliged to conduct post-authorization Phase IV safety studies.

The agency can advise that the MA holder be obliged to conduct post-authorization Phase 4 safety studies.

If the EC agrees with the opinion, it can adopt a decision varying the existing MA.

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The manufacturing process for pharmaceutical products in the European Union is highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations.

Manufacturing requires a manufacturing authorization, and the manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive 2003/94/EC, Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice, or GMP.

These requirements include compliance with EU GMP standards when manufacturing pharmaceutical products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the European Union with the intention to import the active pharmaceutical ingredients into the European Union.

Manufacturing requires a manufacturing authorization, and the manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive 2003/94/EC (repealed by Directive 2017/1572 on January 31, 2022), Regulation (EC) No 726/2004 and the European Commission Guidelines for cGMP.

These requirements include compliance with EU cGMP standards when manufacturing pharmaceutical products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the European Union with the intention to import the active pharmaceutical ingredients into the European Union.

Similarly, the distribution of pharmaceutical products into and within the European Union is subject to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for distribution granted by the competent authorities of the EU Member States.

The manufacturer or importer must have a qualified person who is responsible for certifying that each batch of product has been manufactured in accordance with GMP, before releasing the product for commercial distribution in the European Union or for use in a clinical trial.

Manufacturing facilities are subject to periodic inspections by the competent authorities for compliance with GMP.

The manufacturer or importer must have a qualified person who is responsible for certifying that each batch of product has been manufactured in accordance with cGMP, before releasing the product for commercial distribution in the European Union or for use in a clinical trial.

Manufacturing facilities are subject to periodic inspections by the competent authorities for compliance with cGMP.

Sales and Marketing Regulations

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Payments made to physicians in certain EU Member States also must be publicly disclosed.

Moreover, agreements with physicians must often be the subject of prior notification and approval by the physician’s employer, his/her regulatory

professional organization, and/or the competent authorities of the individual EU Member States.

Moreover, agreements with physicians must often be the subject of prior notification and approval by the physician’s employer, his/her regulatory professional organization, and/or the competent authorities of the individual EU Member States.

These requirements are provided in the national laws, industry codes, or professional codes of conduct, applicable in the individual EU Member States.

Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

Other Markets

The UK formally left the EU on January 31, 2020 and the transition period, during which EU laws continued to apply to the UK, expired on December 31, 2020.

This means EU laws now only apply to the UK in respect of Northern Ireland as laid out in the Protocol on Ireland and Northern Ireland.

Following the end of the transition period, the EU and the UK concluded the TCA, which applied provisionally from January 1, 2021 and entered into force on May 1, 2021.

The TCA includes provisions affecting the life sciences sector (including on customs and tariffs) but areas for further discussion between the EU and the UK remain.

Some specific provisions concerning pharmaceuticals are in place, including the mutual recognition of Good Manufacturing Practice, or GMP, and issued GMP documents.

Regulation in the UK and Other Markets

The UK formally left the EU on January 31, 2020.

EU laws now only apply to the UK in respect of Northern Ireland as laid out in the Protocol on Ireland and Northern Ireland and as amended by the Windsor Framework agreed by the UK and EU on February 27, 2023.

Amongst other things, the Windsor Framework sets out a long-term set of arrangements for the supply of medicines into Northern Ireland.

From January 1, 2025, medicines will need to be approved and licensed on a UK-wide basis by the UK’s Medicine and Healthcare products Regulatory Agency (“MHRA”), with medicines using the same packaging and labelling across the UK.

The EMA will have no role in approving or licensing new drugs for provision in Northern Ireland.

The EU and the UK have agreed on a trade and cooperation agreement (“TCA”), which includes provisions affecting the life sciences sector (including on customs and tariffs).

There are some specific provisions concerning pharmaceuticals, including the mutual recognition of cGMP, inspections of manufacturing facilities for medicinal products and issued cGMP documents.

The TCA does not, however, contain wholesale mutual recognition of UK and EU pharmaceutical regulations and product standards.

Since January 1, 2021, the EU laws which have been transposed into UK law through secondary legislation continue to be applicable in the UK as “retained EU law.” As there is no general power to amend these regulations, the UK government has enacted the Medicines and Medical Devices Act 2021.

The purpose of the act is to enable the existing regulatory frameworks in relation to human medicines, clinical trials of human medicines, veterinary medicines and medical devices to be updated.

The powers under the act may only be exercised in relation to specified matters and must safeguard public health.

Specified provisions of the Medicines and Medical Devices Act 2021 entered into force on February 11, 2021.

The remaining provisions came into effect within two months of February 11, 2021 or will otherwise come into effect as stipulated in subsequent statutory instruments.

The Medicines and Medical Devices Act 2021 supplements the UK Medical Devices Regulations 2002, or the UK Regulations, which are based on the EU Medical Devices Directive as amended to reflect the UK’s post-Brexit regulatory regime.

Notably, the UK Regulations do not include any of the revisions that have been made by the EU Medical Devices Regulation (EU) 2017/745, which, since May 26, 2021, now applies in all EU Member States.

The UK’s Medicines and Healthcare products Regulatory Agency, or MHRA, conducted a comprehensive consultation between September and November 2021 on proposals to develop a new UK regime for medical devices in the UK.

The proposals include more closely aligning definitions for medical devices and in vitro medical devices with internationally recognized definitions and changing the classification of medical devices according to levels or risk.

The proposals are intended to improve patient and public safety and increase the appeal of the UK market.

The new regime is planned to come into force on July 1, 2023, which will align with the date from which the UK is due to stop accepting CE marked medical devices and require UK Conformity Assessed marking.

It is envisaged that, in Northern Ireland, the amended regime could run in parallel with any existing or future EU rules in accordance with the Protocol on Ireland and Northern Ireland.

The UK government has adopted the Medicines and Medical Devices Act 2021 (“MMDA”) to enable the UK’s regulatory frameworks to be updated following the UK’s departure from the EU.

The MMDA introduces regulation-making, delegated powers covering the fields of human medicines, clinical trials of human medicines, veterinary medicines and medical devices.

The MHRA has since been consulting on future regulations for medicines and medical devices in the UK.

Drug Marketing Authorizations

To be used or sold in the UK, a drug must have an effective marketing authorization obtained by a centralized application through EMA or a national application.

National applications are governed by the Human Medicines Regulations (SI 2012/1916) (“HMRs”).

Applications are made electronically through the MHRA Submissions Portal.

The process from application to authorizations generally takes up to 210 days, excluding time taken to provide any additional information or data required by the MHRA.

On August 30, 2023, the MHRA published detailed guidance on its recently announced new International Reliance Procedure (“IRP”) for MAAs.

Effective January 1, 2024, the IRP took effect and replaces existing EU reliance procedures to apply for authorizations from seven international regulators (e.g.

Health Canada, Swiss Medic, FDA, EMA, among others).

The IRP allows medicinal products approved in other jurisdictions that meet certain criteria to undergo a fast-tracked MHRA review to obtain and/or update a marketing authorization in the UK or Great Britain.

Applicants can submit initial MAAs to the IRP but the procedure can also be used throughout the lifecycle of a product for post-authorization procedures including line extensions, variations and renewals.

Any authorization which is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid.

For the UK, the period of three years during which the drug has not been marketed in Great Britain will be restarted from the date of conversion to a Great Britain marketing authorization.

Conversion refers to the procedure by which, as of January 1, 2021, MAs granted on the basis of a centralized procedure in the EU are only valid in Northern Ireland but not in Great Britain, whereas, prior EU authorizations have all been automatically converted into UK MAs effective in Great Britain only.

Orphan Designation

In the UK, since January 1, 2021, a system for incentivizing the development of orphan medicines was introduced.

Overall, the requirements for orphan designation largely replicate the requirements in the EU and the benefit of market exclusivity has been retained.

Products with an orphan designation in the EU can be considered for an orphan marketing authorization in Great Britain, but a UK-wide orphan marketing authorization can only be considered in the absence of an active EU orphan designation.

The MHRA will review applications for orphan designation at the time of a marketing authorization, and will offer incentives, such as market exclusivity and full or partial refunds for marketing authorization fees to encourage the development of medicines in rare diseases.

Pediatric Development

In the UK, the MHRA has published guidance on the procedures for UK Paediatric Investigation Plans (“PIPs”) which, where possible, mirror the submission format and requirements of the EU system.

EU PIPs remain applicable for Northern Ireland and EU PIPs agreed by the EMA prior to January 1, 2021 have been adopted as UK PIPs.

Sales and Marketing Regulation

EU regulation with regards to dispensing, sale and purchase of medicines has generally been preserved in the UK after its exit from the EU, through the HMRs.

However, organizations wishing to sell medicines online need to register with the MHRA.

The requirements to display the common logo no longer apply to UK-based online sellers, except for those established in Northern Ireland.

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

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Human Capital Management

Shattuck Employees

As of December 31, 2022, Shattuck employed 105 full-time employees at two locations in the United States in Austin, TX and Durham, NC.

During 2022, we expanded our capabilities across the two sites by hiring 34 new employees.

These employees were hired to support our clinical development, preclinical research and development, and efforts associated with operating as a public company.

We may continue to hire additional employees in 2023 and beyond with a focus on increasing expertise and bandwidth in preclinical and clinical research and development and in-house process development and manufacturing.

The Company continually evaluates business needs and opportunities, with a hiring philosophy that balances in-house expertise with outsourced services, and management of overall operating expense.

As of December 31, 2023, we employed 75 full-time employees at two locations in the United States, in Austin, TX and Durham, NC.

We may hire additional employees in 2024 and beyond with a focus on increasing expertise and bandwidth in preclinical and clinical research and development, in-house process development and manufacturing, and clinical operations to support potential later-stage clinical trials.

We continue to evaluate business needs and opportunities, with a hiring philosophy that seeks to balance in-house expertise with outsourced services, and management of overall operating expense.

Currently, we outsource clinical trial work to clinical research organizations and drug manufacturing to contract manufacturers.

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Pharmaceutical companies compete for a limited number of highly qualified applicants to fill specialized positions.

To attract these applicants to the Company, Shattuck offers a total rewards package consisting of a base salary and cash target bonus targeting the 25th to 75th percentile of market based on geography, a comprehensive benefit package and equity compensation for full-time employees.

To attract these applicants to the Company, we offer a total rewards package consisting of a base salary and cash target bonus targeting the 25th to 75th percentile of market based on geography, a competitive benefit package and equity compensation for full-time employees.

Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility.

We believe our management team has the experience necessary to effectively execute our strategy and advance our product and technology leadership.

A large majority of Shattuck’s employees have obtained advanced degrees in their professions.

Shattuck supports our employees’ further development with individualized development plans, mentoring, coaching, group training and conference attendance.

A large majority of our employees have obtained advanced degrees in their professions.

We support our employees’ further development with individualized development plans, mentoring, coaching, group training and conference attendance.

Research and Development

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Information contained on or accessible through our website is not a part of this Annual Report on Form 10-K, and the inclusion of our website address in this Annual Report on Form 10-K is for convenience only and the information on the referenced website does not constitute a part of nor is incorporated by reference into this report.

Our reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, including our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K, and amendments to those reports, are accessible through our website, free of charge, as soon as reasonably practicable after these reports are filed electronically with, or otherwise furnished to, the SEC.

Our reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K, and amendments to those reports, are accessible through our website, free of charge, as soon as reasonably practicable after these reports are filed electronically with, or otherwise furnished to, the Securities and Exchange Commission (the “SEC”).

These SEC reports can be accessed through the “Investors” section of our website.

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