10-K
1
tnxp-10k_123120.htm
ANNUAL REPORT
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the Fiscal Year Ended December 31, 2020
Commission
File Number 001-36019
TONIX
PHARMACEUTICALS HOLDING CORP.
(Exact
name of registrant as specified in its charter)
Nevada
26-1434750
(State
or other jurisdiction of incorporation or organization)
(IRS
Employer Identification No.)
26
Main Street, Suite 101
Chatham,
New Jersey
07928
(Address
of principal executive office)
(Zip
Code)
(862) 904-8182
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading Symbol
Name
of each exchange on which registered
Common
Stock, $0.001 par value
TNXP
The
NASDAQ Stock Market LLC
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes ☐
No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically on its corporate Web site, if any, every Interactive Data File
required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer ☐
Accelerated
filer ☐
Non-accelerated
filer ☒
Smaller
reporting company ☒
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The
aggregate market value of the voting common equity held by non-affiliates as of June 30, 2020, based on the closing sales price
of the common stock as quoted on The NASDAQ Global Market was $63,913,845. For purposes of this computation, all officers, directors,
and 5 percent beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed an admission
that such directors, officers, or 5 percent beneficial owners are, in fact, affiliates of the registrant.
As
of March 15, 2021, there were 323,917,731 ,
shares of registrant’s common stock outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
PAGE
PART I
Item 1.
Business
3
Item 1A.
Risk Factors
48
Item 1B.
Unresolved Staff Comments
81
Item 2.
Properties
81
Item 3.
Legal Proceedings
82
Item 4.
Mine Safety Disclosures
82
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
82
Item 6.
Selected Financial Data
83
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
84
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
96
Item 8.
Financial Statements and Supplementary Data
F-1 – F-32
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
97
Item 9A.
Controls and Procedures
97
Item 9B.
Other Information
97
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
98
Item 11.
Executive Compensation
106
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
114
Item 13.
Certain Relationships and Related Transactions, and Director Independence
116
Item 14.
Principal Accounting Fees and Services
117
PART IV
Item 15.
Exhibits, Financial Statement Schedules
117
Signatures
121
2
PART I
ITEM 1 - BUSINESS
This Annual Report
on Form 10-K (including the section regarding Management’s Discussion and Analysis of Financial Condition and Results of
Operations) contains forward-looking statements regarding our business, financial condition, results of operations and prospects.
Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,”
“seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking
statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this
Annual Report on Form 10-K. Additionally, statements concerning future matters are forward-looking statements.
Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment
of our Management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking
statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results
and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences
in results and outcomes include, without limitation, those specifically addressed under the heading “Risks Factors”
below, as well as those discussed elsewhere in this Annual Report on Form 10-K. Readers are urged not to place undue reliance on
these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the
Securities and Exchange Commission (“SEC”). You can read and copy any materials we file or will file with the SEC,
which, among other places, can be found on the SEC's website at http://www.sec.gov, as well as on our corporate website at www.tonixpharma.com).
We undertake no obligation
to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date
of this Annual Report on Form 10-K. Readers are urged to carefully review and consider the various disclosures made throughout
the entirety of this annual Report, which attempt to advise interested parties of the risks and factors that may affect our business,
financial condition, results of operations and prospects.
Tonix Pharmaceuticals ® ,
Tonmya ®* , Protectic™, Angstro-Technology™ and other trademarks and intellectual property of ours appearing
in this report are our property. This report contains additional trade names and trademarks of other companies. We do not intend
our use or display of other companies’ trade names or trademarks to imply an endorsement or sponsorship of us by such
companies, or any relationship with any of these companies.
*Tonmya has been conditionally accepted
by the U.S. Food and Drug Administration (FDA) as the proposed trade name for TNX-102 SL (cyclobenzaprine HCl sublingual tablets)
for posttraumatic stress disorder, or PTSD. TNX-102 SL is an investigational new drug and has not been approved for any indication.
Business Overview
We are a clinical-stage
biopharmaceutical company focused on discovering, licensing, acquiring and developing small molecules and biologics to treat and
prevent human disease and alleviate suffering. Tonix’s portfolio is primarily composed of central nervous system, or CNS,
and immunology product candidates. The CNS portfolio includes both small molecules and biologics to treat pain, neurologic, psychiatric
and addiction conditions. The immunology portfolio includes vaccines to prevent infectious diseases and biologics to address organ
rejection, cancer, and autoimmune diseases. Our lead programs are TNX-102 SL*, a sublingual tablet for the management of fibromyalgia,
or FM, and TNX-1800**, a live replicating virus vaccine to protect against COVID-19.
Our most advanced CNS product candidate is TNX-102 SL*, a proprietary
sublingual tablet formulation of cyclobenzaprine, or CBP, designed for bedtime administration. TNX-102 SL has active investigational
new drug applications, or INDs, for FM, posttraumatic stress disorder, or PTSD, agitation in Alzheimer’s disease, or AAD,
and alcohol use disorder, or AUD. TNX-102 SL is in mid-Phase 3 development for the management of FM which is a pain disorder characterized
by chronic widespread pain, non-restorative sleep, fatigue and impaired cognition. We reported positive results from its
Phase 3 RELIEF study in December 2020 and expect interim analysis data from a second Phase 3 study, RALLY, in the third quarter
of 2021 1 , followed by topline data in the fourth quarter of 2021. We completed enrollment of 50% of participants in
the RALLY study in March 2021. For TNX-102 SL in PTSD, we completed the Phase 3 RECOVERY trial and reported topline results in
the fourth quarter of 2020 in which TNX-102 SL did not meet the primary efficacy endpoint. As a next step, we intend to meet with
the U.S. Food and Drug Administration, or FDA, to discuss potential new endpoints for the indication of treatment of PTSD and also
to discuss potential endpoints for an indication of PTSD-related Sleep Disturbance. PTSD is a serious psychiatric condition that
develops in response to experiencing a traumatic event. The AAD program is Phase 2 ready with an active IND and FDA Fast Track
designation. AAD, which includes emotional lability, restlessness, irritability, and aggression, is one of the most distressing
and debilitating of the behavioral complications of Alzheimer’s disease. The AUD program is also Phase 2 ready with an active
IND. AUD is a chronic relapsing brain disease characterized by compulsive alcohol use, loss of control over alcohol intake, and
a negative emotional state when not using alcohol.
Other CNS candidates in development include TNX-1900* (intranasal potentiated oxytocin), which is in development
as a candidate for prophylaxis of chronic migraine and for the treatment of craniofacial pain, insulin resistance and related conditions.
TNX-1900 was acquired from Trigemina, Inc. in 2020 and licensed from Stanford University in 2020. We intend to submit an IND to
the FDA in the second quarter of 2021 and initiate a Phase 2 study in migraine in the third quarter of 2021. Tonix also licensed
technology to use TNX-1900 for the treatment of insulin resistance from the University of Geneva. TNX-2900* is another intranasal
oxytocin-based therapeutic in development for the treatment of Prader-Willi syndrome, or PWS. The technology for TNX-2900 was licensed
from the French National Institute of Health and Medical Research. PWS, an orphan condition, is a rare genetic disorder of failure
to thrive in infancy, associated with uncontrolled appetite later in life.
3
TNX-601 CR* (tianeptine
oxalate and naloxone controlled-release tablets) is another CNS product candidate ,
in development as a daytime treatment for major depressive disorder, or depression, as well as for PTSD and neurocognitive dysfunction
associated with corticosteroid use. We completed a Phase 1 trial for formulation development outside of the U.S. and expect to
file an IND for TNX-601 for depression in the U.S. in 2021.
TNX-1300** (double-mutant cocaine esterase) is also in Tonix’s CNS portfolio and is in Phase 2 development
for the treatment of life-threatening cocaine intoxication. TNX-1300 has been granted Breakthrough Therapy designation, or BTD
by the FDA. TNX-1300 was licensed from Columbia University in 2019 after a Phase 2 study showed that it rapidly and efficiently
disintegrates cocaine in the blood of volunteers who had received intravenous, or i.v ., cocaine. We expect to initiate a
Phase 2 open-label safety study of TNX-1300 in an emergency room setting in the second quarter of 2021.
Our immunology portfolio includes vaccines to prevent infectious diseases and biologics to address organ
rejection, cancer, and autoimmune diseases. Our lead vaccine candidate, TNX-1800**, is a live replicating vaccine based on the
horsepox viral vector platform to protect against COVID-19, primarily by eliciting a T cell immune response. We reported positive
immune response data in non-human primates in the fourth quarter of 2020 and expect to report efficacy data from animal challenge
studies using live SARS-CoV-2 in the first quarter of 2021. TNX-801**, a live horsepox virus vaccine for percutaneous administration,
is in the pre-IND stages of development to protect against smallpox and monkeypox. Both TNX-1800 and TNX-801 are based on the proprietary
horsepox viral vector platform.
TNX-2100** is a skin test we are developing to measure SARS-CoV-2
exposure and T cell immunity. It is an intradermal test to measure delayed-type hypersensitivity (DTH) response to SARS-CoV-2.
We have manufactured GMP peptides designed to stimulate SARS-CoV-2 specific T cells and expect to submit an IND to the FDA in the
second quarter of 2021 and initiate clinical trials in the second half of 2021.
TNX-1500** is monoclonal antibody, or mAb, directed against CD40-ligand, or CD40L, engineered to modulate
binding to Fc receptors, that is being developed to prevent and treat organ transplant rejection and autoimmune conditions.
Finally, our preclinical pipeline includes TNX-1600*, TNX-1700**, TNX-701* and TNX-2300**. TNX-1600 is
an inhibitor of the reuptake of neurotransmitters serotonin, norepinephrine and dopamine (a triple reuptake inhibitor). TNX-1600
was licensed from Wayne State University in 2019 and is being developed as a daytime treatment for PTSD, depression and attention-deficit/hyperactivity
disorder, or ADHD. TNX-1700 is a recombinant modified form of Trefoil Family Factor 2, or rTFF2, that was licensed from Columbia
University in 2019, and is a biologic being developed to treat gastric and pancreatic cancers. TNX-701 is an undisclosed small
molecule, which is being developed to prevent deleterious effects of radiation exposure which has the potential to be used as a
medical countermeasure to improve biodefense. Tonix is also developing TNX-2300** as a second COVID-19 vaccine under an option
agreement with Kansas State university. TNX-2300 is a live replicating viral vector based on the bovine parainfluenza virus.
1 Pending submission and agreement
from FDA on statistical analysis plan.
*TNX-102 SL, TNX-601 CR, TNX-1600, TNX-1900,
TNX-2900 and TNX-701 are investigational new drugs and have not been approved for any indication.
**TNX-1800, TNX-801, TNX-2300, TNX-2100,
TNX-1300, TNX-1500 and TNX-1700 are investigational new biologics and have not been approved for any indication.
4
We are led by a management
team with significant industry experience in drug development. We complement our management team with a network of scientific,
clinical, and regulatory advisors that includes recognized experts in their respective fields.
Corporate Information
We were incorporated
on November 16, 2007 under the laws of the State of Nevada as Tamandare Explorations Inc. On October 11, 2011, we changed our name
to Tonix Pharmaceuticals Holding Corp. Our common stock is listed on The NASDAQ Global Market under the symbol “TNXP”.
Our principal executive offices are located at 26 Main Street, Suite 101, Chatham, New Jersey 07928, and our telephone number is
(862) 904-8182. Our website addresses are www.tonixpharma.com,
www.tonix.com, and www.krele.com .
TNX-102 SL – Fibromyalgia
TNX-102 SL is a small,
rapidly disintegrating tablet containing CBP for sublingual administration. TNX-102 SL employs a proprietary protective eutectic
formulation of CBP, Protectic™, which enables rapid systemic exposure and increased bioavailability through transmucosal
absorption. We are developing TNX-102 SL for the management of FM. TNX-102 SL for FM is a non-opioid, centrally-acting analgesic
that could potentially provide a new therapeutic option for FM patients. In September 2016, we interrupted the development of TNX-102
SL for the management of FM to focus on the treatment of PTSD. Our previous development efforts for TNX-102 SL in FM studied the
2.8 mg dose in a Phase 2 and a Phase 3 study. Based on our experience with higher doses of TNX-102 SL, 5.6 mg, in PTSD, we restarted
the clinical program in FM using TNX-102 SL 5.6 mg. We met with the FDA in March 2019 to discuss the clinical development plan
and the next Phase 3 study design to support the FM indication. We received guidance from the FDA to advance FM using TNX-102 SL
5.6 mg. We reported positive data for the RELIEF Phase 3 trial (F304) in December 2020. We are now in mid-Phase 3 development for
the management of fibromyalgia and are currently conducting a second Phase 3 study, the RALLY (F306) study, which started enrolling
patients in September 2020. Pending agreement with FDA, we plan to conduct an interim analysis, or IA, and we expect interim analysis
results from this study in the third quarter of 2021 and topline data in the fourth quarter of 2021. The program in FM is expected
to qualify for the 505(b)(2) regulatory pathway for FDA approval.
TNX-1800 – Potential COVID-19
Vaccine
TNX-1800 is a potential
vaccine for the novel coronavirus disease, COVID-19, based on a synthetic modified version of live horsepox virus grown in cell
culture. TNX-1800 is engineered to express the spike protein from SARS-CoV-2 virus, which causes COVID-19.
TNX-1800 is based on
our proprietary horsepox vector platform. Horsepox is closely related to vaccinia vaccines, which are a group of orthopoxviruses
that have been used as smallpox vaccines and as experimental vectors for certain other disease-related antigens. Orthopoxviruses,
like vaccinia, can be engineered to express foreign genes and have been explored as platforms for vaccine development because they
possess: (1) large packaging capacity for exogenous DNA inserts, (2) precise virus-specific control of exogenous gene insert expression,
(3) lack of persistence or genomic integration in the host, (4) strong immunogenicity as a vaccine, (5) ability to rapidly generate
vector/insert constructs, (6) potential to be manufactured at industrial scale, and (7) ability to provide direct antigen presentation
and T cell-mediated immune response. Although vaccinia vectors are available, different orthopoxvirus strains may behave differently
as vectors in part because of their different repertoire of genes that modulate immune responses and host range. Potential advantages
of horsepox-based vaccines include the strong immunogenicity we observed for TNX-801 in macaques and mice with good tolerability.
The protein synthesis connected with a replicating live virus vaccine provides direct antigen presentation, which can stimulate
cellular, or T Cell-mediated immunity in addition to humoral, or antibody-mediated, immunity.
In November 2020, we reported positive immune response results in
non-human primates following vaccination using TNX-1800. The research is part of an ongoing collaboration between us, Southern
Research Institute and the University of Alberta. At Day 14 after a single vaccination, all eight of the TNX-1800 vaccinated animals
made anti-SARS-CoV-2 neutralizing antibodies (≥1:40 titer) and, as expected, none of the eight TNX-801 vaccinated control animals,
or any of the four animals in the placebo group, made anti-SARS-CoV-2 neutralizing antibodies (≤1:10 titer). The level of neutralizing
anti-SARS-CoV-2 antibody production was similar between the low and high dose TNX-1800 groups (1 x 106 Plaque Forming Units [PFU]
and 3 x 106 PFU, respectively). TNX-1800 was well tolerated at both doses. In the second phase of the study, the TNX-1800 vaccinated
and control animals were challenged with SARS-CoV-2. Results are expected in the first quarter of 2021.
The further development
of TNX-1800 for human clinical trials will require manufacturing according to Good Manufacturing Practice, or GMP, standards and
sufficient animal testing. Tonix expects to initiate a Phase 1 safety study using TNX-1800 in humans in the second half of 2021.
We have filed a provisional
patent on TNX-1800’s technology. In addition, we expect TNX-1800 to be eligible for 12 years of non-patent-based exclusivity
under the Patient Protection and Affordable Care Act, or PPACA.
5
TNX-801 – Potential Smallpox
and Monkeypox Vaccine
TNX-801 is a novel
potential smallpox-preventing vaccine based on a synthetic version of live horsepox virus, grown in cell culture. Though it shares
structural characteristics with vaccinia-based vaccines, TNX-801 has unique properties that we believe indicate potential safety
advantages over existing live replicating vaccinia virus vaccines, which have been associated with adverse side effects such as
myopericarditis in some individuals. Emergent BioSolutions’ ACAM2000 ® is the only replicating vaccinia
virus vaccine currently approved by the FDA to protect against smallpox. We believe replicating virus vaccines have potential efficacy
advantages over non-replicating vaccines, relating to the stimulation of cell mediated immunity. Bavarian Nordic’s Jynneos ®
is the only non-replicating virus vaccine currently approved by the FDA to protect against smallpox and monkeypox. We believe TNX-801
has the potential to have improved tolerability relative to replicating vaccinia vaccines and the potential to have improved efficacy
relative to non-replicating vaccinia vaccines.
Smallpox was eradicated
by a World Health Organization program that vaccinated individuals with live replicating vaccinia vaccines wherever smallpox appeared.
In the 1970s, vaccination of civilians to protect against smallpox was discontinued in the U.S.; however, smallpox remains a material
threat to national security and a proportion of military personnel, including members of the Global Response Force, continue to
be vaccinated. We are developing TNX-801 as a potential smallpox-preventing vaccine for the U.S. strategic national stockpile and
for potential widespread immunization in the event of malicious reintroduction of variola, the virus that causes smallpox.
Monkeypox
is a growing problem in certain regions of Africa. Some cases of monkeypox have been reported outside of Africa in patients who
had been infected while in Africa.
In January 2020 at
the American Society of Microbiology Biothreats conference, we reported the results of experiments on TNX-801 that were performed
in collaboration with Southern Research, that showed TNX-801 vaccinated macaques were protected against monkeypox challenge. The
TNX-801 vaccinated macaques showed no overt clinical signs after monkeypox challenge. Furthermore, eight of eight animals vaccinated
with two different doses of TNX-801 showed no lesions after monkeypox challenge.
We have filed a patent to protect the TNX-801 vaccine candidate. In addition, we expect that TNX-801 will
be eligible for 12 years of non-patent-based exclusivity under the PPACA. Following the passage of the 21st Century Cures Act,
a law designed to help accelerate medical product development, we believe TNX-801 will qualify as a medical countermeasure and
would therefore be eligible for a Priority Review Voucher upon receiving FDA approval. However, the Priority Review Voucher program
provision of the 21st Century Cures Act is set to expire in 2023. If TNX-801 does not receive FDA approval by 2023, we may not
be able to capitalize on the incentives contained in the 21st Century Cures Act unless the provision allowing for the Priority
Review Voucher Program is extended until such time as TNX-801 is licensed by the FDA.
We intend to meet with
the FDA to discuss the most efficient and appropriate investigational plan, to establish the safety and effectiveness evidence
to support the licensure TNX-801.We are currently working to develop a vaccine that meets cGMP quality to support an IND study.
TNX-102 SL – Posttraumatic
Stress Disorder
We are developing TNX-102
SL for the treatment of PTSD. TNX-102 SL 5.6 mg was studied in the first Phase 3 study for military-related PTSD, HONOR (P301),
which was discontinued after the results of an interim analysis indicated the study met a pre-defined threshold p-value for futility.
Retrospective analysis of this Phase 3 study revealed a treatment effect in participants who experienced trauma less than or equal
to nine years prior to screening. This analysis defined an optimal treatment window for TNX-102 SL in PTSD within nine years after
the index trauma that resulted in PTSD. This retrospective analysis guided the design of the Phase 3 RECOVERY (P302) study, which
was initiated in March 2019. Based on interim analysis results of the first 50% of enrolled participants of the RECOVERY trial,
an Independent Data Monitoring Committee recommended stopping the study for futility as TNX-102 SL was unlikely to demonstrate
a statistically significant improvement over placebo on the primary endpoint after 12 weeks. We stopped enrollment of new participants
but continued to study those participants enrolled until completion. We reported topline data in December 2020, which revealed
that the RECOVERY study did not achieve statistical significance in the prespecified primary efficacy endpoint of change from baseline
to Week 12 in the Clinician-Administered PTSD Scale for DSM-5 (CAPS-5) between TNX-102 SL and placebo (p=0.343) (TNX-102 SL separated
from placebo in the first key secondary endpoint, Clinical Global Impression – Severity (CGI-S) scale (p=0.024) and in the
Patient Global Impression of Change (PGIC), (p=0.007). TNX-102 SL also trended for improvement on the PROMIS Sleep Disturbance
scale (p=0.055), consistent with the proposed mechanism of targeting the PTSD sleep disturbance. TNX-102 SL is generally well tolerated,
and no new safety signals were observed. We plan to meet with the FDA to discuss potential new endpoints for the indication of
treatment of PTSD and also to discuss potential endpoints for an indication of PTSD-related Sleep Disturbance. Sleep disturbance
is a core symptom of PTSD and believed to play roles in vulnerability, onset, progression and chronicity. Treating sleep disturbance
is recognized as a clinically valid approach for addressing global improvement in PTSD. We plan to begin enrolling a Phase 3 study
of police in Kenya in 2021. The program in PTSD is expected to qualify for the 505(b)(2) regulatory pathway for FDA approval.
TNX-102 SL – Agitation in Alzheimer’s
Disease (AAD)
We are developing TNX-102
SL for the treatment of AAD, which has been designated as a Fast Track development program by the FDA. The program is ready for
a Phase 2 study which could potentially serve as a pivotal efficacy study to support NDA approval. The program in AAD is expected
to qualify for the 505(b)(2) regulatory pathway for FDA approval.
TNX-102 SL – Alcohol Use Disorder
(AUD)
We are developing
TNX-102 SL for the treatment of alcohol use disorder (AUD). We announced clearance of the IND for AUD in August of 2020. The FDA
cleared the IND for the initiation of a Phase 2 proof-of-concept study. The program in AUD is expected to qualify for the 505(b)(2)
regulatory pathway for FDA approval.
6
TNX-1900 – Migraine and craniofacial pain
We are developing TNX-1900 (intranasal potentiated oxytocin) as
a candidate for prophylaxis of chronic migraine and for the treatment of insulin resistance and related conditions. TNX-1900 was
acquired from Trigemina in 2020 and licensed from Stanford University in 2020. Oxytocin is a naturally occurring human peptide
hormone that acts as a neurotransmitter in the brain. It was originally approved by the FDA as Pitocin®, an intravenous infusion
or intramuscular injection drug, for use in pregnant women to induce labor. An intranasal form of oxytocin was marketed in the
U.S. by Novartis to assist in the production of breast milk as Syntocinon® (oxytocin nasal 40 units/ml), but the product was
withdrawn, and the New Drug Application (NDA) has been discontinued. TNX-1900 is in the pre-Investigational New Drug (IND) stage
and have not been approved for any indication. We intend to submit an IND in the second quarter of 2021 and initiate a Phase 2
study in the third quarter of 2021.
TNX-2900 – Prader-Willi Syndrome
TNX-2900 (intranasal potentiated oxytocin)
is also based on our patented intranasal potentiated oxytocin formulation, like TNX-1900. TNX 2900 is being developed for the
treatment of Prader-Willi syndrome. We licensed technology using oxytocin-based therapeutics for the treatment of Prader-Willi
syndrome and non-organic failure to thrive disease from the French National Institute of Health and Medical Research (Inserm).
The licensing agreement has been negotiated and signed by Inserm Transfert, the private subsidiary of Inserm, on behalf of Inserm
(the French National Institute of Health and Medical Research), Aix-Marseille Université and Centre Hospitalier Universitaire
of Toulouse. Prader-Willi syndrome is recognized as the most common genetic cause of life-threatening childhood obesity and affects
males and females with equal frequency and all races and ethnicities. There is currently no approved treatment for either the
suckling deficit in infants or the obesity and hyperphagia in older children associated with Prader-Willi syndrome. Since Prader-Willi
syndrome is an orphan disease that occurs in approximately one in 15,000 births, we plan at the appropriate time to submit an
application to the FDA for Orphan Drug designation for TNX-2900.
TNX-601 CR – Major Depressive
Disorder, PTSD and Neurocognitive Dysfunction from Corticosteroids
We are developing TNX-601 CR (tianeptine oxalate and naloxone controlled release tablets) for the treatment
of major depressive disorder, or depression, PTSD, and neurocognitive dysfunction from corticosteroid therapies. TNX-601 CR is
a new, controlled release formulation of a novel salt of tianeptine. An immediate release form of tianeptine, with three times
a day dosing, has been marketed outside of the U.S. for the treatment of depression for several decades. Tianeptine is believed
to work in depression as a modulator of the glutamatergic system. Tianeptine and its major metabolite MC5 are also weak agonists
of the mu-opioid receptor. Neither tianeptine nor MC5 have been shown to bind other neurotransmitter receptors. No tianeptine
product is FDA approved in the U.S., but some products containing tianeptine are marketed as nutritional supplements in some states.
Other states have restricted the use of tianeptine as a controlled substance. In animals, tianeptine has been shown to reverse
the adverse neuroplastic changes that are observed during periods of extreme stress and elevated corticosteroid exposure. Tianeptine’s
reported pro-cognitive and anxiolytic effects as well as its ability to attenuate the neuropathological effects of excessive stress
responses suggest that it may be used to treat PTSD by a different mechanism of action than TNX-102 SL. Several preliminary clinical
studies conducted by others have suggested that tianeptine immediate release tablets have activity in combat and military-related
PTSD. We reported the results of a Phase 1 pharmacokinetic study in the fourth quarter of 2019, performed outside of the U.S.,
that was the basis for selecting the TNX-601 CR formulation with controlled release characteristics suitable for once-daily dosing.
TNX-601 CR is formulated with naloxone to prevent illicit parenteral abuse. Tonix is planning to start a Phase 2 study, pending
IND clearance from the FDA, in depression in the fourth quarter of 2021.
TNX-1300 – Cocaine Intoxication
We licensed TNX-1300 from Columbia University in May 2019. We are developing TNX-1300 for the treatment
of cocaine intoxication. TNX-1300 (T172R/G173Q double-mutant cocaine esterase 200 mg) is a recombinant protein enzyme produced
through rDNA technology in a non-disease-producing strain of E. coli bacteria. Cocaine Esterase (CocE) was identified
in a bacterium ( Rhodococcus ) that uses cocaine as its sole source of carbon and nitrogen and that grows in soil surrounding
coca plants. The gene encoding CocE was identified and the protein was extensively characterized. CocE catalyzes the breakdown
of cocaine into metabolites ecgonine methyl ester and benzoic acid. Wild-type CocE is unstable at body temperature, so targeted
mutations were introduced in the CocE gene and resulted in the T172R/G173Q double-mutant CocE, which shows activity for approximately
6 hours at human body temperature. In a Phase 2 study of volunteer cocaine abusers conducted prior to Tonix licensing the program,
TNX-1300 was well tolerated at 100 mg or 200 mg i.v. doses and rapidly, within a few minutes, interrupted cocaine effects
after cocaine 50 mg i.v. challenge. TNX-1300 has been granted BTD by the FDA for the treatment of cocaine intoxication.
In August 2019, we met with the FDA to seek guidance on the nonclinical study plans to support the clinical development of TNX-1300.
We intend to initiate a Phase 2 open-label safety study in an emergency department (ED) setting in the second quarter of 2021.
7
TNX-2100 – COVID-19 Skin Test
TNX-2100 (SARS-CoV-2 epitope
peptide mixtures for intradermal administration) is designed to measure T cell immunity to SARS-CoV-2 as a diagnostic skin test.
TNX-2100 measures the delayed-type hypersensitivity (DTH) reaction to SARS-CoV-2 (CoV-2), the virus that causes COVID-19. There
currently is no FDA approved laboratory test available to measure T cell immune responses to CoV-2. The research test currently
performed by specialized laboratories is called intracytoplasmic cytokine staining, or ICS, and is not standardized. FDA recently
granted Emergency Use Authorization to T-Detect™ COVID from Adaptive Biotechnologies Corporation, which is based on a novel
technology that identifies rearranged TCRβ sequences from patient genomic DNA and uses a proprietary algorithm to compare
patient sequences to a database of sequences from patients known to have been infected with SARS-CoV-2. From the available information,
it appears T-Detect COVID can assess past infection with SARS-CoV-2 by traces of SARS-CoV-2 specific T cells, but it does not appear
to be a measure of functional T cell immunity. T cell immunity to CoV-2 persists longer than antibody immunity, is sometimes present
in the absence of a measurable antibody response and is believed to provide an important element of protection against serious
COVID-19 illness after infection with CoV-2. Tonix’s proposed skin test has the potential to serve as: 1) a biomarker for
cellular immunity and protective immunity; 2) a method to stratify participants in COVID-19 vaccine trials by immune status; 3)
an endpoint in COVID-19 vaccine trials, and 4) a biomarker of durability of vaccine protection. Discovered in 1882 by Robert Koch,
the DTH reaction has been used for more than a century as a clinical test for T cell-mediated immune reactions. In the 1940s, Landsteiner
and Chase demonstrated that the reaction was mediated by the cellular and not the antibody arm of the immune system. When small
quantities of antigen are injected intradermally, a hallmark response is elicited which includes induration, swelling and monocytic
infiltration into the site of the lesion within 24 to 48 hours. This reaction has been shown to be dependent on the presence of
memory T cells. Both the CD4+ and CD8+ T cells have been shown to participate in this response. DTH skin tests have been commonly
used to detect T cell responses to tuberculosis, fungal pathogens, and mumps virus. Tonix expects to initiate clinical trials in
the second half of 2021, upon receiving IND clearance by the FDA.
TNX-1500 – anti-CD40L mAb
TNX-1500 (monoclonal antibody anti-CD40-L or anti-CD154) is a third-generation monoclonal antibody, or
mAb, currently in preclinical development as a potential first line monotherapy for preventing or treating organ transplant rejection
autoimmunity. Several studies have shown mAbs that react with the same molecular target as TNX-1500 to be active in the treatment
of human systemic lupus erythematosus and in transplant rejection. TNX-1500 is specifically designed to retain the efficacy
of anti-CD40L mAbs while mitigating potential side effects. In August 2019, we announced a research collaboration with the Massachusetts
General Hospital (MGH) in Boston for the testing of TNX-1500 for the prevention of heart transplant rejection. In January 2021,
we announced a second research collaboration with MGH for the testing of TNX-1500 for the prevention of kidney transplant rejection.
We expect to have GMP material available in the third quarter of 2021.
TNX-2300 – Potential COVID-19 Vaccine
We are party to a preclinical research and option agreement with Kansas State University to develop a
vaccine candidate for the prevention of COVID-19 that utilizes a novel live virus vaccine vector platform and the CD40-L, to stimulate
T cell immunity. Under the research agreement, Kansas State will advance preclinical development of a live replicating virus vaccine
to protect against COVID-19 based on bovine parainfluenza virus. Attenuated bovine parainfluenza virus has previously been shown
to be an effective antigen delivery vector in humans. Reports of testing in non-human primates, indicate the attenuated BPI3V was
well tolerated, infectious, and immunogenic. The vector is well suited for mucosal immunization using a nasal atomizer, but it
can also be delivered parenterally. The technology also includes CD40-ligand, as a molecular stimulant to trigger strong immunity
including T cell responses. The vaccine is designed to potentially stimulate immunity against the SARS-CoV-2 spike protein. We
expect data from small animals to measure efficacy in challenge studies using SARS-CoV-2 in the second quarter of 2021.
Other Preclinical Product Candidates
●
TNX-1600 – PTSD, Depression and Attention Deficit Hyperactivity Disorder, or ADHD
TNX-1600 was licensed from Wayne
State in August 2019 in a transaction that included an asset acquisition agreement with TRImaran, a biopharmaceutical company that
had previously licensed the technology from Wayne State. TNX-1600 is a triple reuptake inhibitor, which inhibits the reuptake
of dopamine, norepinephrine, and serotonin. TNX-1600 is in development to treat PTSD, depression and ADHD and potentially other
central nervous system disorders. TNX-1600 is a new chemical entity and is being developed as first line monotherapy, as an oral
daytime treatment.
●
TNX-1700 – Gastric and Pancreatic Cancers
TNX-1700 (rTFF2) was licensed
from Columbia University in September 2019. TNX-1700 is a biologic molecule currently in preclinical development as a treatment
for gastric and pancreatic cancers. TFF2 is a small, secreted protein, encoded by the TFF2 gene in humans, that is expressed in
gastrointestinal mucosa where it functions to protect and repair mucosal tissue. TFF2 is also expressed at low levels in splenic
immune cells and is now appreciated to have intravascular roles in spleen and in the microenvironment of tumors. In gastric cancer,
TFF2 is epigenetically silenced, and TFF2 is suggested to be protective against cancer development through several mechanisms.
The mechanism of action of rTFF2 is different from anti-PD-1 or anti-PD-L1 monoclonal antibodies and Tonix is studying rTFF2 to
determine whether there are additive or synergistic effects of combining rTFF2 with other anti-neoplastic treatments in gastric
and pancreatic cancers.
●
TNX-701
We own rights to intellectual
property on a biodefense technology relating to the development of protective agents against radiation exposure, which we refer
to as TNX-701. We have begun preclinical research and development on TNX-701. We plan to develop TNX-701 under the Animal Rule,
which is applicable when human efficacy studies are not ethical or feasible.
8
Our Strategy
Our objective is to develop and commercialize
our product candidates. The principal components of our strategy are to:
●
Develop TNX-102 SL for FM, PTSD,
AAD, AUD and Other Indications. We currently are developing TNX-102 SL for the management of FM and the treatment
of PTSD. Our broader development strategy is to leverage the patented formulation to explore the clinical potential of TNX-102
SL in multiple other pain, psychiatric, and addiction conditions, including AAD and AUD, that are either underserved by currently
approved medications or have no approved treatment thus representing large unmet medical needs;
●
Develop TNX-1800 for COVID-19. We currently are focusing on the development of TNX-1800 for protection against COVID-19. We expect to be engaged in laboratory experiments and animal experiments, followed by clinical trials to determine whether TNX-1800 protects against effects of SARS-CoV-2 virus infection;
●
Develop TNX-801 for preventing smallpox and monkeypox. We currently are focusing on the development of TNX-801 to protect against smallpox and monkeypox. Based on the results of TNX-801 in an experiment which showed protection of macaques against monkeypox, we are focused on manufacturing TNX-801 vaccine at GMP standard, for further studies;
●
Maximize the commercial potential of TNX-102 SL .
We plan to commercialize TNX-102 SL, either on our own or through collaboration with partners.
We believe TNX-102 SL can be marketed to U.S. physicians either by an internal sales force
that we would build or by a contract sales organization, which we would engage. An alternative
strategy would be to enter into partnership agreements with drug companies that already have
significant marketing capabilities in the same, or similar, therapeutic areas. If we determine
that such a strategy would be more favorable than developing our own sales capabilities, we
would seek to enter into collaborations with pharmaceutical or biotechnology companies for
the commercialization of TNX-102 SL;
●
Pursue a broad intellectual property strategy to protect our product candidates . We are pursuing a broad patent strategy for our product candidates, and we endeavor to generate new patent applications as supported by our innovations and conceptions as well as to advance their prosecution. In the cases of TNX-801 and TNX-1800, we own patent applications protecting their composition-of-matter and certain methods of its use. In the cases of TNX-102 SL, we own patents and patent applications protecting its composition-of-matter, certain methods of its use, its formulation, and its pharmacokinetic properties. We plan to opportunistically apply for new patents to protect TNX-102 SL and our other product candidates;
●
Provide value propositions to merit market demand and reimbursement for our product candidates . We are designing the development programs for our product candidates to demonstrate their value propositions to patients, prescribers, and third-party payors. In the case of TNX-102 SL, we have been engaged in market research and commercial assessment activities, the results of which we may use to inform future commercial strategy. We plan to continue these activities in tandem with our clinical development of TNX-102 SL and to conduct similar work in relation to our other product candidates as they advance in their development; and
●
Pursue additional indications and commercial opportunities for our product candidates . We will seek to maximize the value of TNX-102 SL, and our other product candidates by pursuing other indications and commercial opportunities for such candidates. For example, we own rights related to the development and commercialization of cyclobenzaprine for generalized anxiety disorder, depression, and fatigue related to disordered sleep.
Disease and Market Overview
Our product candidates
address disorders that are not well served by currently available therapies or have no approved treatment which represent large
potential commercial market opportunities. Background information on the disorders and related commercial markets that may be addressed
by our clinical-stage product candidates and lead COVID-19 vaccine candidate is set forth below.
9
Fibromyalgia
FM is a chronic syndrome
characterized by widespread musculoskeletal pain accompanied by fatigue, sleep, memory and mood issues. The peak incidence of FM
occurs between 20-50 years of age, and 80-90% of diagnosed patients are female. FM may have a substantial negative impact on social
and occupational function, including disrupted relationships with family and friends, social isolation, reduced activities of daily
living and leisure activities, avoidance of physical activity, and loss of career or inability to advance in career or education.
According to the American Chronic Pain Association, an estimated six to twelve million adults in the U.S. have FM.
According to a report
by Frost and Sullivan that we commissioned, despite the availability of approved medications, the majority of patients fail therapy
due to either insufficient efficacy, poor tolerability, or both. Prescription pain and sleep medications are frequently prescribed
off-label for symptomatic relief, despite the lack of evidence that such medications provide a meaningful or durable therapeutic
benefit, and many of these medications carry significant safety risks and risk of dependence. For example, approximately 30% of
patients diagnosed with FM take chronic opioids, despite the lack of evidence for their effectiveness and the risk of addiction
and toxicity, including overdose.
COVID-19
On December 31, 2019
the Wuhan Health Commission reported a cluster of atypical pneumonia cases in the city of Wuhan, China. The first patients began
experiencing symptoms of illness in mid-December 2019. Clinical isolates were found to contain a novel coronavirus. The novel coronavirus
is currently referred to as SARS-CoV-2 and is related to SARS coronavirus (SARS-CoV), although with only approximately 80% similarity
at the nucleotide level. The SARS-CoV-2 virus is reportedly highly contagious.
COVID-19
is a respiratory disease. Symptoms may appear 2-14 days after exposure and include fever, cough and shortness of breath. The World
Health Organization, or WHO, declared COVID-19 a global pandemic.
Coronaviruses are a
large family of viruses that are common in people and many different species of animals, including camels, cattle, cats, and bats.
Rarely, animal coronaviruses can infect people and then spread between people such as with MERS-CoV, SARS-CoV, and now with SARS-CoV-2.
New strains of SARS-CoV-2 have emerged and some appear to have the potential to evade vaccine-induced immunity.
Smallpox and Monkeypox
Smallpox is an acute
contagious disease caused by the variola virus, or VARV, which is a member of the orthopoxvirus family. Smallpox was declared eradicated
in 1980 following a global immunization campaign. Smallpox is transmitted from person to person by infective droplets during close
contact with infected symptomatic people. Monkeypox is an acute contagious disease caused by the monkeypox virus or MPXV, which
is also a member of the orthopoxvirus family. Monkeypox symptoms are similar to those of smallpox, although less severe. Monkeypox
is emerging as an important zoonotic infection in humans in Central and West Africa.
Smallpox was eradicated
by a World Health Organization program that vaccinated individuals with live replicating vaccinia vaccines wherever smallpox appeared.
In the 1970s, vaccination of civilians to protect against smallpox was discontinued in the U.S.; however, smallpox remains a material
threat to national security and a proportion of military personnel, including members of the Global Response Force continue to
be vaccinated. We are developing TNX-801 as a potential smallpox-preventing vaccine for the U.S. strategic national stockpile and
for potential widespread immunization in the event of malicious reintroduction of variola, which is the virus that causes smallpox.
Monkeypox is a growing problem in certain regions of Africa. Some cases of monkeypox have been reported outside of Africa in patients
who had been infected while in Africa.
Currently, there are
two FDA approved smallpox vaccines, one of which is also indicated for monkeypox. ACAM2000 ® (Smallpox [Vaccinia]
Vaccine, Live) was approved in 2007 and is indicated for active immunization against smallpox disease in persons determined to
be at high risk for smallpox infection. Jynneos ® (Smallpox and Monkeypox Vaccine, Live, Non-replicating) or MVA-BN
is indicated for the prevention of smallpox and monkeypox disease in adults 18 years of age and older determined to be at high
risk for smallpox or monkeypox infection.
These two smallpox
vaccines are FDA approved and purchased by the U.S. Strategic National Stockpile. The U.S. Strategic National Stockpile currently
stores more than 300 million doses of smallpox vaccine to protect the U.S. population in the event of reintroduction of variola.
We believe that the Strategic National Stockpile will continue to be stocked primarily with a live replicating virus vaccine and
secondarily with a non-replicating virus. ACAM2000 ® is the only replicating vaccinia virus vaccine currently approved
by the FDA to protect against smallpox. Jynneos ® is the only non-replicating virus vaccine currently approved by
the FDA to protect against smallpox. In the post-eradication world, the risk of variola infection is low, so non-replicating vaccines
like Jynneos have an appropriate ratio of risk and benefit. However, in a potential post-reintroduction world, we believe live
replicating virus vaccines like TNX-801 would be administered to healthy, immunocompetent, non-pregnant adults without risk factors
such as eczema or heart disease. The assessment of efficacy of modern smallpox vaccines and the expected benefit of vaccination
policy are based on the historical success of predicate live replicating vaccinia vaccines to control smallpox during the time
the disease was endemic. We believe TNX-801 has the potential to have improved safety and tolerability relative to replicating
vaccinia vaccines and the potential to have improved efficacy relative to non-replicating vaccinia vaccines.
10
Posttraumatic Stress Disorder, or
PTSD
PTSD is a chronic
condition that may develop after a person is exposed to one or more traumatic events, such as warfare, sexual assault, serious
injury, or threat of imminent death. The core symptom clusters of PTSD are avoidance, emotional numbing, hyperarousal, and intrusion,
where the triggering traumatic event is commonly re-experienced by the individual through intrusive, recurrent recollections, flashbacks,
and nightmares. People with PTSD suffer significant impairment in their daily functioning, including occupational activities and
social relations, and are at elevated risk for impulsive violent behaviors toward others and themselves, including suicide. Of
those who experience a significant trauma, approximately 20% of women and 8% of men develop PTSD. An estimated 12 million adults
annually in the U.S. suffer from PTSD. According to the U.S. Department of Veterans Affairs, the prevalence rate of PTSD in the
military population is higher than that among civilians. As of 2012, there were approximately 638,000 veterans receiving treatment
for PTSD in the Veterans Health Administration, or VHA. Based on March 2015 VHA data, more than 19% of military veterans involved
in recent conflicts in Iraq and Afghanistan were seen at VHA facilities for potential or provisional PTSD.
Many patients fail
to adequately respond to the medications approved for PTSD and approved medications show little evidence of a treatment effect
in men, lack evidence of efficacy in those for whom the traumatic event was combat-related, and carry suicidality warnings. Sleep
disturbances are central features of PTSD and are predictive of disease severity, depression, substance abuse, and suicidal ideation,
yet are resistant to the approved medications and present a difficult therapeutic challenge. Current PTSD treatments include off-label
use of anxiolytics, sedative-hypnotics, and antipsychotics, many of which lack reliable evidence of efficacy, and several have
significant safety liabilities and dependence risk.
Agitation in Alzheimer’s Disease
Alzheimer’s disease is a chronic neurodegenerative disease in which behavioral symptoms are a major
clinical complication. Sleep disturbances and agitation are common and co-morbid features of Alzheimer’s disease. Agitation,
which includes emotional lability, restlessness, irritability, and aggression, is one of the most distressing and debilitating
of these behavioral complications of Alzheimer’s disease. AAD is likely to affect more than half of the 6.2 million Americans
who currently suffer from Alzheimer’s disease, and this number is expected to nearly double by 2050. The presence of agitation
nearly doubles the cost of caring for patients with Alzheimer’s disease, and agitation is estimated to account for more than
12 percent of the $355 billion in healthcare and societal cost of associated with Alzheimer’s disease for the year 2021 in
the U.S.
Agitation in Alzheimer’s
disease is associated with significant negative consequences for both patients as well as their caregivers. Development of agitation,
or its worsening, is one of the most common reasons for patients having to transition to nursing homes and other long-term care
settings.
Currently, there is
no treatment approved by the FDA for behavioral symptoms such as agitation and aggression in Alzheimer’s which affect the
quality of life of both the patients and caregivers. Off-label use of atypical anti-psychotic medications for behavioral symptoms
in Alzheimer’s disease is a common practice, despite the lack of evidence for their effectiveness and significant morbidity
and mortality risks associated with their use in this population.
Alcohol Use Disorder
An estimated 36 million
adults in the U.S. have AUD. AUD is a chronic relapsing brain disease characterized by compulsive alcohol use, loss of control
over alcohol intake, and a negative emotional state when not using. Sleep disturbance is extremely common in alcohol recovery and
it significantly impacts daytime cognition, mood, and ability to participate in alcohol treatment, and, importantly, is associated
with increased risk of relapse. Three drugs have been approved by the FDA, but AUD remains an unmet need due to compliance and
safety issues.
Major Depressive Disorder
According to the National
Institute of Mental Health, depression affects approximately 16 million adults in the U.S., with approximately 2.5 million adults
treated with adjunctive therapy. Depression is a condition characterized by symptoms such as a depressed mood or loss of interest
or pleasure in daily activities most of the time for two weeks or more, accompanied by appetite changes, sleep disturbances, motor
restlessness or retardation, loss of energy, feelings of worthlessness or excessive guilt, poor concentration, and suicidal thoughts
and behaviors. These symptoms cause clinically significant distress or impairment in social, occupational, or other important areas
of functioning. The majority of people who suffer from depression do not respond adequately to initial antidepressant therapy.
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Cocaine Intoxication
Cocaine is an illegal recreational drug which is taken for its pleasurable effects and associated euphoria.
Pharmacologically, cocaine blocks the reuptake of the neurotransmitter dopamine from central nervous system synapses, resulting
in the accumulation of dopamine within the synapse and an amplification of dopamine signaling that is related to its role in creating
positive feeling. With the continued use of cocaine, however, intense cocaine cravings occur resulting in a high potential for
abuse and addiction, or dependence, as well as the risk of cocaine intoxication. Cocaine intoxication refers to the deleterious
effects on other parts of the body, especially those involving the cardiovascular system. Common symptoms of cocaine intoxication
include tachyarrhythmias and elevated blood pressure, either of which can be life-threatening. As a result, individuals with
known or suspected cocaine intoxication are sent immediately to the emergency department, preferably by ambulance in case cardiac
arrest occurs during transit. There are approximately 505,000 emergency room visits for cocaine abuse each year in the U.S.,
of which 61,000 require detoxification services. According to the National Institute on Drug Abuse, over 15,883 individuals
died of cocaine overdose in 2019.
Attention Deficit Hyperactivity Disorder
Previously called hyperkinetic
syndrome, ADHD is defined by a persistent pattern of inattention and/or hyperactivity-impulsivity that interferes with functioning
or development. Symptoms of ADHD must have been present prior to 12 years of age and must have been present in two or more settings,
e.g. at home, school, work; with friends or relatives; in other activities. And there must be clear evidence that the symptoms
interfere with, or reduce the quality of, social, academic, or occupational functioning. ADHD is a
chronic condition that begins in childhood and is one of the most common mental disorders among children. While high activity levels
and short attention spans are generally observed in young children, children with ADHD have greater hyperactivity and inattention
relative to children their same age. The consequences of ADHD can cause distress for the individual and result in behavioral problems
in structured environments such as school, as well as in less structured environments which occur in social settings or in the
home. For a majority of these individuals, the diagnosis will carry into adulthood, and symptoms may only partially remit. The
American Psychiatric Association estimates that 8.4 percent of children and 2.5 percent of adults have ADHD.
Migraine Headaches
Migraine is a primary
headache disorder characterized by recurrent headaches that are moderate to severe. Typically, episodes affect one side of the
head, are pulsating in nature, and last from a few hours to three days. Associated symptoms may include nausea, vomiting, and sensitivity
to light, sound, or smell. The pain is generally made worse by physical activity, although regular exercise may have prophylactic
effects. Up to one-third of people affected have aura: typically a short period of visual disturbance that signals that the headache
will soon occur. Occasionally, aura can occur with little or no headache following it. Approximately one billion individuals worldwide
suffer from migraine (~14% of the population). Migraine is the second leading cause of years lived with disability. Chronic migraine
(≥ 15 headache/migraine days per month) affects about 1-2% of individuals (~75-150 million individuals worldwide; 3-7 million
in the U.S.). CGRP antibodies are the only migraine specific prophylaxis drugs approved in decades, but they require parenteral
administration and there are long term safety concerns with prolonged systemic blockade of CGRP receptor.
Prader-Willi Syndrome
Prader-Willi syndrome
is recognized as the most common genetic cause of life-threatening childhood obesity and affects males and females with equal frequency
and all races and ethnicities. The hallmarks of Prader-Willi syndrome are lack of suckling in infants and, in children and adults,
severe hyperphagia, an overriding physiological drive to eat, leading to severe obesity and other complications associated with
significant mortality. Prader-Willi syndrome is an orphan disease that occurs in approximately one in 15,000 births. There is currently
no approved treatment for either the suckling deficit in babies or the obesity and hyperphagia in older children associated with
Prader-Willi syndrome.
12
Clinical-Stage Product Candidates
We believe that our product candidates offer innovative therapeutic
approaches and may provide significant advantages relative to available therapies. The following table summarizes our most prioritized
and advanced product candidates as well as our COVID-19 vaccine candidates, for which we plan to complete the required clinical
studies to support their NDA approvals:
Product Candidate
Indication
Stage of Development
Commercialization Rights
TNX-102 SL
Fibromyalgia
Mid-Phase 3
Worldwide
TNX-1800
COVID-19 vaccine
Pre-clinical
Worldwide
TNX-801
Smallpox and monkeypox vaccine
Pre-clinical
Worldwide
TNX-102 SL
Posttraumatic stress disorder
Phase 3
Worldwide
TNX-102 SL
Agitation in Alzheimer’s disease
Phase 2 ready
Worldwide
TNX-102 SL
Alcohol Use Disorder
Phase 2 ready
Worldwide
TNX-601 CR
Depression, PTSD, Neurocognitive Dysfunction from Corticosteroids
Pre-IND
Worldwide
TNX-1300
Cocaine Intoxication
Phase 2
Worldwide
TNX-1900
Migraine and craniofacial pain
Pre-IND
Worldwide
TNX-2100
COVID-19 Skin test
Pre-clinical
Worldwide
TNX-102 SL
Overview
TNX-102 SL, in clinical development for registration in four indications. TNX-102 SL is a proprietary
sublingual tablet formulation of CBP that efficiently delivers CBP across the oral mucosal membrane into the systemic circulation.
We are developing TNX-102 SL as a bedtime treatment for FM, PTSD, AAD and AUD. We own all rights to TNX-102 SL in all geographies,
and we bear no obligations to third-parties for any future development or commercialization. Excipients used in TNX-102 SL are
approved for pharmaceutical use. Some of the excipients were specially selected to promote a local oral environment that facilitates
mucosal absorption of CBP.
The current TNX-102
SL sublingual tablets contain 2.8 mg of CBP. For the treatment of FM and PTSD, TNX-102 SL 5.6 mg (two 2.8 mg tablets) at bedtime
is in Phase 3 development. We selected this dose with the goal of providing a balance of efficacy, safety, and tolerability that
would be acceptable as a first-line therapy and for long-term use, and in-patient populations characterized by burdensome symptoms
and sensitivity to medications.
The active ingredient
in TNX-102 SL, is cyclobenzaprine or CBP, a serotonin-2A and alpha-1 adrenergic receptor antagonist as well as an inhibitor of
serotonin and norepinephrine reuptake. In addition, TNX-102 SL acts upon other receptors in the central nervous system not targeted
by products approved for PTSD, including the serotonin-2A, adrenergic alpha-1, muscarinic M 1 and histaminergic
H 1 receptors.
CBP is the active ingredient of two products that are approved in
the U.S. for the treatment of muscle spasm: Flexeril ® (5 mg and 10 mg oral immediate-release, or IR, tablet)
and Amrix ® (15 mg and 30 mg oral extended-release capsule). The Flexeril brand of CBP IR tablet has been discontinued
since May 2013. There are numerous generic versions of CBP IR tablets on the market. CBP-containing products are approved for short
term use (two to three weeks) only as an adjunct to rest and physical therapy for relief of muscle spasm associated with acute,
painful musculoskeletal conditions. CBP IR tablets are recommended for three times per day dosing, which results in relatively
stable blood levels of CBP after several days of treatment. Extended-release CBP capsules taken once a day mimic, and flatten,
the pharmacokinetic profile of three times per day CBP IR tablets.
We designed TNX-102
SL to be administered once-daily at bedtime and with the intention for long-term use. We believe the selected dose of TNX-102 SL
and its unique pharmacokinetic profile will enable it to achieve a desirable balance of efficacy, safety, and tolerability in PTSD
and FM. Our Phase 1 comparative trials showed that, on a dose-adjusted basis, TNX-102 SL results in faster systemic absorption
and significantly higher plasma levels of CBP in the first hour following sublingual administration relative to oral IR CBP tablets.
It also showed that the sublingual route of administration, which largely bypasses the “first pass” hepatic metabolism
that swallowed medications undergo, results in a higher plasma ratio of CBP to its main active metabolite, norcyclobenzaprine.
In clinical studies, TNX-102 SL 2.8 mg and TNX-102 SL 5.6 mg were generally well-tolerated, with no drug-related serious and unexpected
adverse reactions reported in these studies. Some subjects experienced transient numbness of the tongue after TNX-102 SL administration.
We have successfully completed the pivotal exposure bridging study
with TNX-102 SL compared to Amrix. Results from this study support the approval of TNX-102 SL under Section 505(b)(2) of
the Federal Food, Drug and Cosmetic Act, or FDCA, with Amrix as the reference listed drug, or RLD. In general, the development
timeline for a 505(b)(2) NDA is shorter and less expensive than an NDA developed under Section 505(b)(1), which is for new chemical
entities, or NCEs, that have never been approved in the U.S. We believe that TNX-102 SL has the potential to provide clinical benefit
to FM and PTSD patients and possibly other CNS (central nervous system) indications that are underserved by currently marketed
products or have no approved treatment.
13
TNX 102 SL – FM program
We are developing TNX-102 SL as a bedtime treatment for FM under an effective IND application. The potential
approval of TNX-102 SL for FM is expected to be under Section 505(b)(2) of the FDCA.
Clinical Development Plan
Ongoing Phase 3 RALLY Study (F306)
We are enrolling patients
into the Phase 3 RALLY study. We enrolled the first patient in September 2020. The RALLY study is a double-blind, randomized, placebo-controlled
adaptive design trial designed to evaluate the efficacy and safety of TNX-102 SL in FM. The trial is expected to enroll approximately
670 patients across approximately 40 U.S. sites. For the first two weeks of treatment, there will be a run-in period in which patients
will start on TNX-102 SL 2.8 mg (1 tablet) or placebo. After the first two weeks, all patients will have the dose increased to
TNX-102 SL 5.6 mg (2 x 2.8 mg tablets) or two placebo tablets for 12 weeks. The primary endpoint is daily diary pain severity score
change from baseline to Week 14 (using the weekly averages of the daily numerical rating scale scores), analyzed by mixed model
repeated measures with multiple imputation.
The RALLY study is expected
to have one unblinded interim analysis by an IDMC when the study has results from approximately the first 50% of efficacy-evaluable
patients, pending agreement with the FDA. We expect results from the interim analysis in the third quarter of 2021 and topline
results from this study in the fourth quarter of 2021, assuming the sample size remains 670 patients. We completed enrollment of
50% of participants in the RALLY study in March 2021.
Completed Phase 3 RELIEF Study (F304)
In the fourth quarter
of 2020, we announced the results of a randomized, double-blind, placebo-controlled, 12-week Phase 3 study of TNX-102 SL in 503
participants with FM, which we refer to as the RELIEF study. The primary objective of this study was to evaluate the potential
clinical benefit of using TNX-102 SL to treat FM at a dose of 5.6 mg, administered sublingually once daily at bedtime for 12 weeks.
The primary endpoint of the RELIEF trial was the daily diary pain severity score change from baseline to Week 14 (using the weekly
averages of the daily numerical rating scale scores), analyzed by mixed model repeated measures with multiple imputation. The RELIEF
study achieved statistical significance on the primary efficacy endpoint: change from baseline in the weekly average of daily diary
pain severity numerical rating scale (NRS) scores for TNX-102 SL 5.6 mg (LS mean [SE]: -1.9 [0.12] units) versus placebo (-1.5
[0.12] units), analyzed by mixed model repeated measures with multiple imputation (LS mean [SE] difference: -0.4 [0.16] units,
p=0.010). The statistically significant improvement in pain is further substantiated when diary pain was analyzed by another standard
statistical approach, a 30 percent responder analysis, with 46.8% on active and 34.9% on placebo having a 30 percent or greater
reduction in pain (logistic regression; odds ratio [95% CI]: 1.67 [1.16, 2.40]; p=0.006). Consistent with the proposed mechanism
that TNX-102 SL acts in fibromyalgia through improving sleep quality, TNX-102 SL showed nominal improvement of sleep by several
measures. For daily diary sleep quality ratings, TNX-102 SL (-2.0 [0.12] units) compared to placebo (-1.5 [0.12] units) was nominally
significant (LS mean difference: -0.6 [0.17] units; p<0.001). For the PROMIS Sleep Disturbance instrument, TNX-102 SL was also
nominally significant over placebo on T-scores (LS mean difference: -2.9 [0.82] units; p<0.001). The effect sizes on the diary
sleep ratings and PROMIS Sleep Disturbance instrument were 0.31 and 0.32, respectively.
In the RELIEF study,
TNX-102 SL was similarly well tolerated as in Phase 2 BESTFIT and Phase 3 AFFIRM studies which both studied TNX-102 SL at a lower
dose of 2.8 mg daily. There were no new safety signals observed in the RELIEF study at the 5.6 mg daily dose. Among participants
randomized to the TNX-102 SL and placebo arms, 82.3% and 83.5%, respectively, completed the 14-week dosing period. As expected
based on prior TNX-102 SL studies, administration site reactions are the most commonly reported adverse events and were higher
in the TNX-102 SL treatment group, including rates of oral numbness (17.3% vs. 0.8%), oral pain/discomfort (11.7% v. 2.0%), taste
impairment (6.5% vs. 0.4%), and oral tingling (5.6% v. 0.4%). Oral numbness or tingling and taste impairment were local administration
site effects nearly always temporally related to dose administration and transiently expressed (<60 minutes) in almost all occurrences.
The only systemic treatment-emergent adverse events that occurred at a rate of 5.0% or greater in either arm was somnolence/sedation
at 5.6 percent in the TNX-102 SL arm vs. 1.2% in placebo, which was consistent with known side effects of marketed oral cyclobenzaprine.
Adverse events resulted in premature study discontinuation in 8.9% of those who received TNX-102 SL compared with 3.9% of placebo
recipients. There were a total of seven serious adverse events in the study, none of which were deemed related to investigational
product; five in placebo arm, and two in TNX-102 SL arm. Of the two in the TNX-102 SL arm, one was a motor vehicle accident with
multiple bone fractures, and the other was a pneumonia secondary to an infection.
14
Completed Phase 3 AFFIRM Study (F301)
In the third quarter
of 2016, we announced the results of a randomized, double-blind, placebo-controlled, 12-week Phase 3 study of TNX-102 SL in 519
participants with FM, which we refer to as the AFFIRM study. The primary objective of this study was to evaluate the potential
clinical benefit of using TNX-102 SL to treat FM at a dose of 2.8 mg, administered sublingually once daily at bedtime for 12 weeks.
The primary endpoint of the AFFIRM trial was the 30% pain responder analysis in which a responder is defined as a subject for whom
pain intensity was reduced by at least 30% at Week 12 as compared to baseline. AFFIRM did not achieve statistical significance
at the primary endpoint (p=0.095). Yet, statistical significance was achieved when pain was analyzed instead as a continuous
variable, either by MMRM (p<0.001) or by MMRM with multiple imputation for missing data (p=0.005), a generally accepted approach
to pain data. TNX-102 SL also showed statistically significant improvements in the declared secondary analyses of the Patient
Global Impression of Change, or PGIC (p=0.038) and the Fibromyalgia Impact Questionnaire-Revised, or FIQ-R (p<0.001). The study
also showed statistically significant improvement with TNX-102 SL on measures of sleep quality, including the Patient-Reported
Outcomes Measurement Information System, or PROMIS, Sleep Disturbance instrument (p<0.001). We believe that given the consistent
results of the analyses of pain as a continuous endpoint, as well as the nominal significance shown on multiple key
secondary endpoints, TNX-102-SL 2.8 mg taken daily at bedtime for 12 weeks showed meaningful clinical
benefit in this typical FM population. Although, in light of improved results in PTSD with the higher TNX-102 SL
5.6 mg dose, and also better effects on pain in PTSD of 5.6 mg over 2.8 mg, it was predicted that TNX-102 SL 5.6 mg would have
a stronger effect on pain in FM.
TNX-102 SL was well
tolerated in the AFFIRM trial. Among patients randomized to the active and control arms, 78% and 86%, respectively, completed the
12-week dosing period. The most common adverse events were local in nature, with transient tongue or mouth numbness occurring in
40% of participants on TNX-102 SL vs. 1% on placebo. These local adverse events did not appear to affect either rates of retention
of study participants or their compliance with taking TNX-102 SL. Systemic adverse events were similar between TNX-102 SL and placebo.
No serious adverse events were reported.
Regulatory Update
In October 2011, we
filed the first IND for TNX-102 SL 2.8 mg indicated for the management of FM.
In March 2019, we had
a Type C Clinical Guidance meeting with the FDA to discuss the clinical development plan for TNX-102 SL 5.6 mg and obtained
the FDA’s agreement on the Phase 3 RELIEF study design to support the FM indication.
Other NDA Requirements
The Agreed Initial Pediatric Study Plan, or Agreed iPSP, was accepted
by the FDA in September 2015. An amendment to the Agreed iPSP will be submitted in the second quarter of 2021 for FDA agreement
prior to marketing application.
Based on our discussions
with the FDA and the FDA official meeting minutes, we will not have to conduct special populations, such as geriatric and renal/hepatic
impaired patients, drug-drug interaction or cardiovascular safety studies to support the TNX-102 SL NDA filing since the pivotal
systemic exposure bridging study using Amrix as the reference listed drug, or RLD, has been successfully completed. Due to the
well-established safety profile of CBP at much higher doses than we proposed for FM and the long-term safety data in PTSD, up to
15 months, on TNX-102 SL 5.6 mg, the FDA has not requested a risk management plan or medication guide for this product.
Phase 1 Bioequivalence, Bridging PK, Food-Effect
and Dose-Proportionality Studies
Completed Bioequivalence Study
We completed a Phase
1 bioequivalence study that compared the pharmacokinetic profiles of a single-dose of TNX-102 SL 2.8 mg tablets manufactured at
two facilities: (i) the facility used to produce TNX-102 SL 2.8 mg tablets for the Phase 2 BESTFIT study; and (ii) the facility
used to produce TNX-102 SL 2.8.mg tablets for our clinical studies required to support the FM NDA submission and the to-be-marketed
product. This bioequivalence study demonstrated that TNX-102 SL, 2.8 mg tablets manufactured at these two facilities were bioequivalent,
supporting the use of the Phase 2 study to support the Phase 3 studies.
Completed Multi-dose Bridging PK
Study
We intend to seek
the FDA’s marketing approval for TNX-102 SL pursuant to Section 505(b)(2) of the FDCA using AMRIX ® extended-release,
or ER, capsules (30 mg) as our RLD. We completed a study of TNX-102 SL 5.6 mg (2 x 2.8 mg tablets) in comparison to AMRIX 30 mg
ER capsules in a randomized, open-label, parallel, multiple-dose bridging PK study to provide a systemic exposure bridge.
The TNX-102 SL initial dose and at steady state exposures were less than the RLD maximum approved dose (30 mg) and the metabolic
profile was similar to AMRIX. The results of this study provide the necessary systemic exposure bridge of TNX-102 SL to AMRIX.
The approval of TNX-102 SL for FM can thus rely on the safety findings (clinical and nonclinical) and relevant labeling information
in the approved AMRIX prescribing information.
Food Effect and Dose-proportionality
Study
To support the TNX-102
SL product registration, a randomized, open-label, 3-way crossover, food-effect, dose-proportionality, comparative bioavailability
study of TNX-102 SL 5.6 mg following a single dose in healthy subjects under fasting and fed conditions, and comparing TNX-102
SL 2.8 mg to TNX-102 SL 5.6 mg (administered as 2 x 2.8 mg tablets) in healthy subjects under fasting conditions has been completed
(TNX-CY-F110). Results from this study confirmed that the rate and extent of absorption of cyclobenzaprine and its long-lived
metabolite, norcyclobenzaprine, increased in a dose-proportional manner from 2.8 mg to 5.6 mg of TNX-102 SL. No food effect was
observed for cyclobenzaprine or norcyclobenzaprine for TNX-102 SL 5.6 mg.
Cyclobenzaprine Hydrochloride Nonclinical
Development
The
FDA has accepted our proposed nonclinical data package to support our FM NDA filing. In October 2016, we completed the six-month
repeated-dose toxicology study of the active ingredient, CBP, in rats and a nine-month repeated-dose toxicology study in dogs
required for the NDA filing and to support Phase 3 clinical studies outside the U.S., if necessary. These chronic toxicity studies
were requested by the FDA to augment the nonclinical information in the AMRIX prescribing information, or labeling, which is necessary
to support the TNX-102 SL labeling for long-term use. Due to the lack of evidence of potential abuse in clinical studies of TNX-102
SL, the FDA agreed that nonclinical study to assess CBP abuse and dependency potential is not required to support the TNX-102
SL NDA filing.
Manufacturing
TNX-102
SL drug product for Phase 3 and the associated registration batches for the NDA were manufactured at commercial cGMP facilities.
We currently have in excess of 24 months stability data in the proposed packaging configurations ready for commercialization.
The FDA has reviewed the proposed CMC data package to support TNX-102 SL’s NDA approval and commercial manufacturing plans
as part of the IND process. Tonix is ready to manufacture TNX-102 SL commercial product for the forecasted FM market.
TNX-1800 – Potential COVID-19
Vaccine
Overview
We are developing TNX-1800 (live modified horsepox virus vaccine
for percutaneous administration), a potential vaccine to protect against COVID-19. TNX-1800, which is based on Tonix’s proprietary
horsepox vaccine platform, expresses the spike protein from the virus (SARS-CoV-2) that causes COVID-19. We believe the platform
can be engineered to express relevant protein antigens from different infectious diseases to make a variety of vaccines. On November
16, 2020, we announced that TNX-1800 was well tolerated in non-human primates and vaccination with TNX-1800 resulted in the production
of antibodies that neutralize SARS-CoV-2. As part of our continued collaboration with Southern Research and the University of Alberta,
vaccinated non-human primates were exposed to SARS-CoV-2 and monitored for disease progression and immunological responses. We
expect to report the results of that study in the first quarter of 2021. The further development of TNX-1800 for human clinical
trials will require manufacturing according to Good Manufacturing Practice, or GMP, standards and sufficient animal testing in
small animals and in non-human primates.
Multiple companies
and research institutions are developing potential COVID-19 vaccines. TNX-1800 is in the pre-clinical, pre-Investigational New
Drug application, or pre-IND, stage of development and has not been approved for any indication.
We intend to
meet with the FDA to discuss the most efficient and appropriate investigational plan to establish the safety and effectiveness
evidence to support the licensure of TNX-1800. We recently filed a patent on the COVID-19 vaccine. In addition, 12 years of non-patent-based
exclusivity is expected under the Patient Protection and Affordable Care Act, or PPACA.
15
TNX-801 – Potential Smallpox and
Monkeypox Vaccine
Overview
TNX-801 (live horsepox
virus vaccine for percutaneous administration), Investigational Smallpox and Monkeypox Vaccine, consists of a live replicating
horsepox virus. The investigational product formulation for nonclinical GLP and clinical studies has not been finalized but is
expected to be a sterile liquid for administration by percutaneous scarification. TNX-801 is being developed for the prevention
of smallpox and monkeypox disease for immunocompetent, non-pregnant adults at high risk for infection, who lack risk factors such
as eczema or heart disease.
We are developing TNX-801
as a prophylactic vaccine for active immunization against smallpox and monkeypox disease for individuals at high risk for infection.
We believe the efficacy and safety data generated in the course of the proposed studies would facilitate a biologics license application
(BLA) for both smallpox and monkeypox vaccine indications.
Smallpox is an acute
contagious disease caused by the variola virus, or VARV, which is a member of the orthopoxvirus family. Smallpox was declared eradicated
in 1980 following a global immunization campaign. Smallpox is transmitted from person to person by infective droplets during close
contact with infected symptomatic people. Monkeypox is an acute contagious disease caused by the monkeypox virus, which is also
a member of the orthopoxvirus family. Monkeypox symptoms are similar to those of smallpox, although less severe. Monkeypox is emerging
as an important zoonotic infection in humans in Central and West Africa. Monkeypox is a growing problem in certain regions of Africa.
Some cases of monkeypox have been reported outside of Africa in patients who had been infected while in Africa.
Smallpox was eradicated
by a World Health Organization program that vaccinated individuals with live replicating vaccinia vaccines wherever smallpox appeared.
In the 1970s, vaccination of civilians to protect against smallpox was discontinued in the U.S.; however, smallpox remains a material
threat to national security and a proportion of military personnel, including members of the Global Response Force continue to
be vaccinated. We are developing TNX-801 as a potential smallpox-preventing vaccine for the U.S. strategic national stockpile and
for potential widespread immunization in the event of malicious reintroduction of variola, the virus that causes smallpox.
Currently, there are
two FDA approved smallpox vaccines, one of which is also indicated for monkeypox. Smallpox (Vaccinia) Vaccine, Live (ACAM2000 ® )
was approved in 2007 and is indicated for active immunization against smallpox disease in persons determined to be at high risk
for smallpox infection. In September 2019, the FDA approved J Jynneos ® (or MVA-BN), Smallpox and Monkeypox Vaccine,
Live, Non-replicating. Jynneos ® is indicated for the prevention of smallpox and monkeypox disease in adults 18 years
of age and older determined to be at high risk for smallpox or monkeypox infection. Certain potential limitations of ACAM2000 and
MVA-BN have prompted Tonix to pursue the development of TNX-801 based on evidence suggesting TNX-801 could provide an alternative
to the two approved vaccines. TNX-801 may have advantages for use in healthy, immunocompetent non-pregnant individuals, without
a history of eczema or cardiac disease, and as part of a public health vaccination policy to respond to an event of variola reintroduction.
The assessment of efficacy of modern smallpox vaccines and the expected benefit of vaccination policy are based on the historical
success of predicate live replicating vaccinia vaccines to control smallpox during the time the disease was endemic.
The FDA-approved label
for ACAM2000 carries a boxed warning related to suspected cases of myocarditis and/or pericarditis in healthy adult primary vaccinees
and other safety concerns. The rate of cardiac adverse events (AEs) was estimated at 5.7 per 1000 [95% Confidence Interval (CI):
1.9-13.3]. The molecular mechanism of ACAM2000 associated cardiotoxicity remains unclear.
Since the eradication
of smallpox in 1980, the risk and reward ratio of vaccination against smallpox has changed. At the present time, the risks associated
with universal ACAM2000 vaccination of the general population outweigh the potential benefits. In addition, ACAM2000 vaccination
is not indicated even for first responders. In most of the U.S., routine vaccination against smallpox ended in the early 1970s.
In the military, routine vaccinations were limited to recruits entering basic training starting in 1984. In 1990, the Department
of Defense (DoD) discontinued routine vaccination of recruits, primarily due to its cardiotoxicity risks. ACAM2000 is currently
used primarily in US military personnel deployed to areas that the US government has determined to be at increased risk of malicious
smallpox reintroduction and in laboratory workers at potential occupational risk for exposure to orthopoxviruses. According to
the Military Health System Smallpox Vaccine Q&A’s, more than 2.6 million service members received a smallpox vaccination
between December 2002 and December 2017. Currently, it is believed that approximately 60,000 US military personnel are vaccinated
each year, mostly in the global response force. This represents hundreds of potential cases of myocarditis and pericarditis among
vaccinated troops. Since the threat of intentional or accidental release of VARV and the reemergence of smallpox has not completely
disappeared, we believe efforts to develop safer smallpox vaccines must continue.
In the post-eradication
world, the risk of variola infection is low, so non-replicating vaccines like Jynneos have an appropriate ratio of risk and benefit.
However, in a potential post-reintroduction world, we believe live replicating virus vaccines like TNX-801 would be administered
to healthy, immunocompetent, non-pregnant adults without risk factors such as eczema or heart disease. The assessment of efficacy
of modern smallpox vaccines and the expected benefit of vaccination policy are based on the historical success of predicate live
replicating vaccinia vaccines to control smallpox during the time the disease was endemic. We believe TNX-801 has the potential
to have improved tolerability relative to replicating vaccinia vaccines and the potential to have improved efficacy relative to
non-replicating vaccinia vaccines.
The FDA approved Jynneos
in 2019 based on the demonstration of immunologic non-inferiority to ACAM2000 in humans (peak serum neutralizing antibody titers)
and protection against MPXV challenge in a non-human primate (NHP) model. While live replicating vaccinia virus vaccines are administered
by a single percutaneous scarification procedure, Jynneos is administered by subcutaneous injection and requires two injections
separated by a month or more to induce acceptable neutralizing antibodies.
We intend to meet with
the FDA to discuss the most efficient and appropriate investigational plan to establish the safety and effectiveness evidence to
support the licensure of TNX-801. We recently filed a patent on the novel virus vaccine. In addition, 12 years of non-patent-based
exclusivity is expected under the Patient Protection and Affordable Care Act, or PPACA. Following the recent passage of the 21st
Century Cures Act, we believe TNX-801 qualifies as a medical countermeasure, and therefore should be eligible for a Priority Review
Voucher upon receiving FDA licensure. However, the Priority Review Voucher program provision of the 21st Century Cures Act is set
to expire in 2023. If TNX-801 does not receive FDA licensure by 2023, we may not be able to capitalize on the incentives contained
in the 21st Century Cures Act unless the provision allowing for the Priority Review Voucher Program is extended until such time
as TNX-801 is licensed. We are currently working to develop a vaccine that meets cGMP quality to support an IND study.
16
TNX-102 SL – Posttraumatic
Stress Disorder Program
We are developing TNX-102 SL as a bedtime treatment of PTSD under an effective IND application. The potential
approval of TNX-102 SL for PTSD is expected to be under Section 505(b)(2) of the FDCA.
Phase 3 RECOVERY Study (P302)
We initiated the
RECOVERY study (P302) in March 2019. The RECOVERY Phase 3 study is a double-blind, randomized, placebo-controlled study of TNX-102
SL 5.6 mg (2 x 2.8 mg sublingual tablets) over 12 weeks of treatment. The RECOVERY study is being conducted at approximately 30
U.S. sites. The study planned to enroll 250 participants with civilian and military-related PTSD. The design of
this study was guided based on the results of the Phase 3 HONOR study and Phase 2 AtEase study. RECOVERY restricts enrollment of
study participants to individuals with PTSD who experienced an index trauma within nine years of screening. The two previous PTSD
studies of TNX-102 SL (P201 and P301) restricted enrollment to participants who experienced traumas during military service since
2001. The primary efficacy endpoint is the Week 12 mean change from baseline in the severity of PTSD symptoms as measured
by CAPS-5 between those treated with TNX-102 SL and those receiving placebo. Based on interim analysis results of the first
50% of enrolled participants, an Independent Data Monitoring Committee recommended stopping the Phase 3 RECOVERY trial (P302) in
PTSD for futility as TNX-102 SL was unlikely to demonstrate a statistically significant improvement in the primary endpoint of
overall change from baseline in the severity of PTSD symptoms between those treated with TNX-102 SL and those receiving placebo.
New enrollment for the RECOVERY study was stopped in February 2020, but we continued studying those participants currently enrolled
until completion and proceeded with a full analysis of the unblinded data to determine the next steps in this program. Topline
data was reported during the fourth quarter of 2020, which revealed that the RECOVERY study did not achieve statistical significance
in the prespecified primary efficacy endpoint of change from baseline to Week 12 in the CAPS-5 between TNX-102 SL and placebo (p=0.343).
TNX-102 SL separated from placebo in the first key secondary endpoint, CGI-S scale (p=0.024) and in the PGIC, (p=0.007). TNX-102
SL also trended for improvement on the PROMIS Sleep Disturbance scale (p=0.055), consistent with the proposed mechanism of targeting
the PTSD sleep disturbance. TNX-102 SL is generally well tolerated and no new safety signals were observed. Tonix plans to meet
with the FDA to discuss potential new endpoints for the indication of treatment of PTSD and also to discuss potential endpoints
for an indication of PTSD-related Sleep Disturbance. Sleep disturbance is a core symptom of PTSD and believed to play roles in
vulnerability, onset, progression and chronicity. Treating sleep disturbance is recognized as a clinically valid approach for addressing
global improvement in PTSD.
Discontinued Phase 3 HONOR Study (P301)
In the third quarter
of 2018, we announced the results of a randomized, double-blind, placebo-controlled Phase 3 study of TNX-102 SL, planned for enrollment
of approximately 550 participants with military-related PTSD conducted at approximately 40 U.S. sites, which we refer to as the
HONOR study. This study was an adaptive design study based on the results of the Phase 2 AtEase study. The study design was very
similar to the Phase 2 AtEase study, except there was one planned IA and the involvement of an IDMC, which reviewed the unblinded
IA results. In addition, only one active dose (5.6 mg administered as 2 x 2.8 mg tablets) was investigated and the baseline severity
entrance criterion was a CAPS-5 total score ≥ 33 in this Phase 3 study. The primary efficacy endpoint of the HONOR study was
the 12-week mean change from baseline in the severity of PTSD symptoms as measured by the Clinician-Administered PTSD Scale for
DSM-5, or CAPS-5, between those treated with TNX-102 SL and those receiving placebo. The CAPS-5 is a standardized structured clinical
interview and serves as the standard in research for measuring the symptom severity of PTSD. The IA was conducted when approximately
50% of the initially planned participant enrollment was evaluable for efficacy. HONOR was discontinued after the results of the
IA indicated a pre-defined threshold p-value for continuing enrollment was not achieved, i.e. IDMC recommended stopping for futility.
The modified Intent-to-Treat (mITT) population analyzed at the time of the IA included 252 participants.
The HONOR study demonstrated
that TNX-102 SL was well tolerated and that the 5.6 mg (administered as 2 x 2.8 mg tablets) dose showed meaningful improvement
in overall PTSD symptoms at Week 4. At Week 4, the TNX-102 SL treated group separated from placebo in CAPS-5 (p = 0.019) and in
the Clinical Global Impression – Improvement (CGI-I) scale (p = 0.015), a key secondary endpoint. A CGI-I responder analysis,
with responder defined as ‘much improved’ or ‘very much improved’ on the CGI-I, demonstrated significantly
greater responders in the TNX-102 SL group (29.1% v 45.6%; p=0.007) at Week 4. Also, at Week 4, sleep quality improved as
measured by both the PROMIS Sleep Disturbance scale (p=0.015) and the CAPS-5 sleep disturbance item (p=0.002), supporting the proposed
mechanism of action of TNX-102 SL. And the CAPS-5 reckless or self-destructive behavior item at Week 4 was significantly more improved
(p=0.013). Safety data from these participants did not reveal any serious and unexpected adverse events. The most common adverse
events were mostly related to local administration site reactions, such as oral hypoaesthesia (37.3%), abnormal product taste (11.9%),
and oral paraesthesia (9.7%). The most common systemic adverse event was somnolence (15.7%).
Retrospective analysis
of the HONOR study revealed a treatment effect in participants who experienced trauma less than or equal to nine years prior to
screening. In the participants who experienced trauma within nine years, the p-value of the CAPS-5 primary endpoint at Week 12,
using mixed model repeated measures with multiple imputation (MMRM with MI), was 0.039, with a least-squares mean difference from
placebo of -5.9 units. In contrast, there was no difference in CAPS-5 in the participants who experienced trauma more than nine
years prior to screening compared to placebo. This analysis defined an optimal treatment window for treatment with TNX-102 SL for
PTSD of the first nine years after the index trauma that resulted in PTSD and guided the design of the next Phase 3 study in PTSD,
RECOVERY.
17
Long-Term Safety Exposure Study for
TNX-102 SL
In October 2019, we
completed long-term safety exposure studies in participants with PTSD to evaluate the tolerability of TNX-102 SL 5.6 mg to support
an NDA for the treatment of PTSD. The data provide us with exposure data of daily dosing of TNX-102 SL 5.6 mg for at least
12 months in more than 50 individuals, and daily dosing of TNX-102 SL 5.6 mg for at least 6 months in more than 100 individuals.
The data was collected in OLE studies of the PTSD program. Based on the FDA’s guidance, the long-term safety exposure
studies in PTSD are also expected to support an NDA for the management of FM.
Regulatory Update
In May 2014, we submitted
an IND for TNX-102 SL indicated for the treatment of PTSD.
In August 2019, we held a Breakthrough Therapy Type B Meeting for continuing BTD with the FDA. FDA agreed
to consider the Phase 3 HONOR study additional data and information we presented at the meeting. In May 2020, the FDA rescinded
the Breakthrough Therapy Designation for TNX-102 SL because the criteria for designation are no longer met.
In February 2020, based on interim analysis results of the first 50% of enrolled participants, an Independent
Data Monitoring Committee recommended stopping the Phase 3 RECOVERY trial (P302) in PTSD for futility as TNX-102 SL was unlikely
to demonstrate a statistically significant improvement in the primary endpoint of overall change from baseline in the severity
of PTSD symptoms between those treated with TNX-102 SL and those receiving placebo. New enrollment for the RECOVERY study was stopped
in February 2020, but continued studying those participants enrolled until completion and then proceeded with a full analysis of
the unblinded data in December 2020 to determine the next steps in this program.
Other NDA Requirements
An Agreed Initial Pediatric
Study Plan, or Agreed iPSP, is required for the initial NDA submission. We submitted a revised iPSP in the first quarter of 2017,
which incorporated the FDA comments received on our iPSP submitted in the third quarter of 2016. Additional comments from the FDA
were received in second quarter of 2017 on our revised iPSP. We plan to submit an Agreed PSP once a therapeutic dose in adults
is established. An acceptable Pediatric Study Plan will be determined at the time of the NDA approval.
Based on our discussions
with the FDA and the FDA official meeting minutes, we will not have to conduct special populations (geriatric and renal/hepatic
impaired), drug-drug interaction or cardiovascular safety studies to support the TNX-102 SL NDA filing since the pivotal systemic
exposure bridging study using AMRIX as the reference listed drug, or RLD, has been successfully completed. Due to the well-established
safety profile of CBP at much higher doses than we proposed for PTSD and the long-term safety data (up to 15 months) on TNX-102
SL 2.8 mg in a prior FM program, the FDA has not requested a risk management plan or medication guide for this product.
18
TNX 102 SL – Agitation in Alzheimer’s Disease
Regulatory Update
In November 2017, we
held a pre-IND meeting with the FDA to discuss our proposed development of TNX-102 SL for the treatment of AAD. We received the
formal minutes from that meeting in December 2017 that reflect that we have the data needed to file an IND to support a Phase 2
study which can potentially be one of the pivotal efficacy studies. In April 2018, the FDA cleared our IND to support a Phase 2
potential pivotal efficacy study.
In July 2018, the FDA
granted Fast Track Therapy designation to TNX-102 SL for the treatment of AAD.
In September 2018,
we received the FDA’s comments on our proposed Phase 2 potential pivotal efficacy study protocol. The proposed Phase 2 study
can potentially serve as a pivotal efficacy study to support NDA approval.
TNX 102 SL – Alcohol Use Disorder
Regulatory Update
In October 2019, we
held a Type B pre-IND meeting with the FDA to discuss our proposed 505(b)(2) development plan for TNX-102 SL as a treatment of
alcohol use disorder (AUD). We received the formal minutes from that meeting in November 2019 which provided guidance and feedback
supportive of our clinical development plans.
Based on this feedback, we submitted an IND application in July
2020 and FDA clearance of an IND application was received in August 2020. This program is now Phase 2 proof-of-concept ready and
is expected to qualify for the 505(b)(2) regulatory pathway for approval.
19
Additional Product Candidates
We also have a pipeline
of other drug and biologic candidates, including, TNX-601 CR, a pre-IND daytime treatment for depression, PTSD, and Neurocognitive
Dysfunction from Corticosteroids; TNX-701, a preclinical drug candidate for radioprotection; TNX-1300, a Phase 2 candidate for
cocaine intoxication, TNX-1500 a preclinical candidate for transplant organ rejection and autoimmune conditions, TNX-1600, a preclinical
candidate for PTSD, ADHD and depression, TNX-1700 a preclinical candidate for cancers of the gastrointestinal system,TNX-1900,
a pre-IND candidate for migraine and craniofacial pain as well as insulin resistance disorders, TNX-2900 for Prader-Willi syndrome
and TNX-2100, a DTH SARS-CoV-2 skin test for T cell immunity.
TNX-601 CR
TNX-601 is a novel oral controlled release, or CR, formulation of
tianeptine oxalate and naloxone controlled release tablet, in the pre-IND stage of development for the once-daily treatment for
depression and PTSD. Currently there is no tianeptine-containing product approved in the U.S., but tianeptine sodium (amorphous)
immediate release tablets have been marketed in Europe, Asia, and Latin America as a three-times-a-day treatment for depression
since 1987. Tianeptine sodium is reportedly effective in various depressive states and also improves depression-associated anxiety
and somatic complaints. We have discovered a novel oxalate salt and polymorph, which we believe may provide improved stability,
consistency, and manufacturability relative to the known forms of tianeptine. Like CBP, tianeptine shares structural similarities
with classic tricyclic antidepressants, but it has unique pharmacological and neurochemical properties. Tianeptine modulates the
glutamatergic system indirectly and reverses the neuroplastic changes that are observed during periods of stress and corticosteroid
use. It is a weak mu-opioid receptor agonist, but does not have significant affinity for other known neurotransmitter receptors.
Due to its decades of use in Europe, Asia, and Latin America, tianeptine has an established safety profile. In addition to being
used to treat depression, several published studies support the potential of tianeptine as an effective and safe therapy for patients
with PTSD. Leveraging our development expertise in PTSD, TNX-601 CR is being developed for daytime usage as a first-line monotherapy
for depression, PTSD and neurocognitive dysfunction from corticosteroids use. Tianeptine’s reported pro-cognitive and anxiolytic
effects as well as its ability to attenuate the neuropathological effects of excessive stress responses suggest that it may be
used to treat PTSD by a different mechanism of action than TNX-102 SL.
We intend to develop
TNX-601 CR under Section 505(b)(1) of the FDCA as a potential daytime treatment for depression and PTSD. TNX-601 CR will also be
developed as a treatment for a potential indication, neurocognitive dysfunction associated with corticosteroid use. Pharmaceutical
development work on TNX-601 CR has been initiated. We completed a non-IND formulation selection pharmacokinetic study ex-U.S. in
the fourth quarter of 2019.
TNX-701
We own rights to intellectual
property on a biodefense technology relating to the development of protective agents against radiation exposure, which we refer
to as TNX-701. We have begun nonclinical research and development on TNX-701. We plan to develop TNX-701 under the Animal Rule,
which is applicable when human efficacy studies are not ethical or feasible.
TNX-1900
TNX-1900 (Intranasal
Potentiated Oxytocin) is in development as a candidate for prophylaxis of chronic migraine and for the treatment of insulin resistance
and related conditions. TNX-1900 was acquired from Trigemina in 2020 and licensed from Stanford University in 2020. It has been
observed that low oxytocin levels in the body can lead to increase in headache frequency, and that increased oxytocin levels can
relieve headaches. Oxytocin, when delivered via the nasal route, results in enhanced binding of oxytocin to receptors on neurons
in the trigeminal system, inhibiting transmission of pain signals. Intranasal oxytocin has been well tolerated in several clinical
trials in adults and children. Intranasal oxytocin has been shown to block calcitonin gene-related peptide (CGRP) release in animals,
a pathway known to be critical to the pathogenesis of migraine attacks. TNX-1900 is believed to interrupt pain signals at the trigeminal
ganglia by suppressing electrical impulses, a potentially different activity than drugs that just block CGRP. Migraine attacks
are caused, in part, by the release of CGRP from pain-sensing nerve cells that are part of the trigeminal system. Targeted delivery
results in low systemic exposure and lower risk of non-nervous system, off-target effects which could potentially occur with systemic
CGRP antagonists. For example, CGRP has roles in dilating blood vessels in response to ischemia, including in the heart. We believe
targeted delivery of oxytocin could translate into selective blockade of CGRP release in the trigeminal ganglion and not throughout
the body, which could be a potential safety advantage over systemic CGRP inhibition. TNX-1900 is also believed to provide augmented
or potentiated analgesia in the treatment of pain, relative to oxytocin.
TNX-2900
TNX-2900 is based on Tonix’s patented
intranasal potentiated oxytocin formulation, or TNX-1900, but being developed for Prader-Willi syndrome. Tonix licensed technology
using oxytocin-based therapeutics for the treatment of Prader-Willi syndrome and non-organic failure to thrive disease from the
French National Institute of Health and Medical Research (Inserm). The licensing agreement has been negotiated and signed by Inserm
Transfert, the private subsidiary of Inserm, on behalf of Inserm (the French National Institute of Health and Medical Research),
Aix-Marseille Université and Centre Hospitalier Universitaire of Toulouse. Prader-Willi syndrome is recognized as the most
common genetic cause of life-threatening childhood obesity1 and affects males and females with equal frequency and all races and
ethnicities. There is currently no approved treatment for either the suckling deficit in babies or the obesity and hyperphagia
in older children associated with Prader-Willi syndrome. Since Prader-Willi syndrome is an orphan disease that occurs in approximately
one in 15,000 births, we plan at the appropriate time to submit an application to the U.S. Food and Drug Administration for Orphan
Drug and Fast Track designations for TNX-2900.
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TNX-2100
TNX-2100 (SARS-CoV-2 epitope peptide mixtures for intradermal administration)
is designed to measure T cell immunity to CoV-2 as a diagnostic skin test. TNX-2100 measures the delayed-type hypersensitivity
(DTH) reaction to SARS-CoV-2 (CoV-2), the virus that causes COVID-19. There currently is no standardized laboratory test available
to measure T cell immune responses to CoV-2. T cell immunity to CoV-2 persists longer than antibody immunity, is sometimes present
in the absence of a measurable antibody response and is believed to provide an important element of protection against serious
COVID-19 illness after infection with CoV-2. The proposed skin test has the potential to serve as: 1) a biomarker for cellular
immunity and protective immunity; 2) a method to stratify participants in COVID-19 vaccine trials by immune status; 3) an endpoint
in COVID-19 vaccine trials, and 4) a biomarker of durability of vaccine protection/ Discovered in 1882 by Robert Koch, the DTH
reaction has been used for more than a century as a clinical test for T cell-mediated immune reactions1. In the 1940s, Landsteiner
and Chase demonstrated that the reaction was mediated by the cellular and not the antibody arm of the immune system2. When small
quantities of antigen are injected intradermally, a hallmark response is elicited which includes induration, swelling and monocytic
infiltration into the site of the lesion within 24 to 48 hours. This reaction has been shown to be dependent on the presence of
memory T cells. Both the CD4+ and CD8+ T cells have been shown to participate in this response. DTH skin tests have been commonly
used to detect T cell responses to tuberculosis, fungal pathogens, and mumps virus. We expect to submit an IND application in the
second quarter of 2021and initiate clinical trials in the second half of 2021.
Competition
Our industry
is highly competitive and subject to rapid and significant technological change. Our potential competitors include large pharmaceutical
and biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government agencies and
research institutions. We believe that key competitive factors that will affect the development and commercial success of our product
candidates are efficacy, safety, tolerability, reliability, price and reimbursement level. Many of our potential competitors, including
many of the organizations named below, have substantially greater financial, technical, and human resources than we do and significantly
greater experience in the discovery and development of product candidates, obtaining the FDA’s and other regulatory approvals
of products and the commercialization of those products. Accordingly, our competitors may be more successful than we may be in
obtaining FDA approval for drugs and achieving widespread market acceptance. Our competitors’ drugs may be more effective,
or more effectively marketed and sold, than any drug we may commercialize and may render our product candidates obsolete or non-competitive
before we can recover the expenses of developing and commercializing any of our product candidates. We anticipate that we will
face intense and increasing competition as new drugs enter the market and advanced technologies become available. Further, the
development of new treatment methods for the conditions we are targeting could render our drugs non-competitive or obsolete. Summarized
below is the competitive landscape for the indications in which Tonix has product candidates in or nearing the clinical stages
of development.
Fibromyalgia
Three drugs have been
approved by the FDA for the management of FM: Pfizer’s Lyrica® (pregabalin), Lilly’s Cymbalta (duloxetine) and
Allergan’s Savella (milnacipran). Lyrica and Cymbalta have lost patent protection and are available in generic forms. Savella
remains on patent.
A
number of companies are developing prescription medicines for FM, including Aptinyx (NYX-2925), Virios Therapeutics (celecoxib
and famciclovir or IMC-1), Teva (Ajovy® or fremanezumab),), Axsome (eseboxetine or AXS-14) and Knop Laboratorios (cannabis
sativa extract or KL16-012). NYX-2925 is in Phase 2 for the treatment of FM and painful diabetic peripheral neuropathy (DPN) and
has been granted a Fast Track Designation by the FDA for DPN. IMC-1 has completed a successful Phase 2a trial and has been granted
a Fast Track Designation by the FDA for the treatment of FM. Ajovy (fremanezumab) is in the Phase 2. AXS-14 (esreboxetine)
was licensed by Axsome from Pfizer and already includes non-clinical and clinical data supporting its use in FM and is currently
in Phase 3 development. KL-16-012 is in Phase 2 for the treatment of FM.
PTSD
Companies with approved
drugs for the treatment of PTSD are GlaxoSmithKline (Paxil ® or paroxetine) and Pfizer (Zoloft ® or
sertraline). Paxil and Zoloft lost their U.S. patent exclusivities in 2003 and 2006, respectively.
Other companies and institutions are known to be developing prescription medications for PTSD, including
Bionomics (BNC-210), Otsuka/Lundbeck (Rexulti ® or brexpiprazole), the Multidisciplinary Association of Psychedelic
Studies (methylenedioxymethamphetamine [MDMA]) and Aptinyx (NYX-783). Bionomics’ BNC-210 completed a Phase 2 for PTSD and
Bionomics announced that after reformulation a new Phase 2 will be initiated. Rexulti is an atypical antipsychotic in Phase
3 development as an adjunctive treatment to the SSRI sertraline for treatment of PTSD.. NYX-783
is in Phase 2 for PTSD and is a modulator of the NMDA receptor. MDMA is in Phase 3 for PTSD and is a DEA schedule 1 hallucinogen
that is being studied for drug-assisted psychotherapy. MDMA was granted BTD by the FDA in August 2017 and is currently being evaluated
in Phase 3 trial in PTSD. A number of other companies and institutions have or may be developing prescription medications for PTSD,
including: Mt. Sinai Hospital and Medical School in New York City is developing ketamine which is in Phase 2 and targets the NMDA
receptor, and the University of California, San Diego (UCSD) is developing losartan which is in Phase 2 and is an angiotensin receptor
blocker (ARB), Nobilis Therapeutics is developing NBTX-001, a noble gas, which is in Phase 2b, and Seelos Therapeutics is developing
an intranasal racemic ketamine to treat major depressive disorder (MDD) and PTSD. Several institutions have been assessing the
potential of intranasal oxytocin to treat PTSD in Phase 2 trials.
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Several companies have
clinical candidates for which PTSD is being considered as a secondary indication. Johnson and Johnson is developing CERC-501 or
aticaprant which is in Phase 2 for depression, targeting the kappa opioid receptor. Merck is studying Belsomra ®
(suvorexant) for PTSD, which is already approved for insomnia, NeuroRx is developing NRX-101 which is in Phase 2 for bipolar depression
and which comprises a treatment regimen starting with ketamine, and followed by a proprietary combination of lurasidone and d -cycloserine.
Agitation in Alzheimer’s
Disease
There are currently
no drugs FDA approved for Alzheimer’s disease agitation or AAD. A number of companies are developing prescription medicines
for AAD, including Otsuka/Lundbeck (Rexulti ® or brexpiprazole), Avanir/Otsuka (AVP-786 or deudextromethorphan/quinidine),
Axsome (AXS-05 or dextromethorphan/buproprion) and Intra-Cellular Therapies (Caplyta® or lumateperone or ITI-007). Rexulti ®
has completed two pivotal studies in AAD. AVP-786 is in Phase 3 for the treatment of AAD. AXS-05 completed Phase 2 and Phase
3 trials for the treatment of resistant depression and completed a Phase 3 trial for the treatment of AAD. Lumateperone is in Phase
3 for treating behavioral disturbances associated with dementia and was recently approved as Caplyta® for the treatment of
schizophrenia.
Alcohol Use Disorder
Several
medications are beyond their patent life and are generally produced by generic drug companies, including disulfiram (Anabuse®),
naltrexone (ReVia®), and acamprosate (Campral®). Alkemes currently markets a branded formulation of naltrexone (Vivitrol®).
Adial is developing a reformulation of ondansetron or AD04 using a pharmacogenomic approach and is currently in Phase 3.
Chronic or Episodic
Migraine Prophylaxis
Currently there are several classes of drugs
that are approved for the prophylactic treatment of chronic or episodic migraine, including generic beta blockers (propranolol,
timolol), and anticonvulsants (divalproex, topiramate). Other drug classes that are used off-label to treat migraine prophylaxis,
include tricyclic antidepressants (e.g., amitriptyline). Also, Allergan (acquired by AbbVie) markets Botox® (onabotulinumtoxinA).
More recently, several companies have introduced to the market CGRP inhibitors including Amgen/Novartis (Aimovig® or erenumab),
Teva (Ajovy® or fremanezumab), Eli Lilly (Emgality® or galcanezumab) and Lundbeck (Yvepti® or eptinezumab). Other therapies
are approved as abortive treatment for acute migraine.
Cocaine Intoxication
There are no approved
antidotes for the treatment of cocaine intoxication. Patients generally receive supportive care. Tonix is not aware of any drugs
in development for the treatment of cocaine intoxication.
Skin Test for COVID-19
(measure of T cell immune response)
There
currently is no standardized laboratory test available to measure T cell immune responses to SARS-CoV-2, however the FDA recently
granted Emergency Use Authorization to T-Detect™ COVID test by Adaptive Biotechnologies Corporation, which is not standardized.
The only other currently available methods to detect T cell immunity to SARS-CoV-2 require several tubes of blood from the test
subject, a multi-step sample preparation process including isolation of peripheral blood mononuclear cells, tissue culture with
in vitro T cell stimulation in highly specialized laboratories that have fluorescent activated cells sorting (FACS) flow
cytometry technology, methodologies that have not been amenable to standardization or scalability for commercial clinical services.
Tonix is not aware of other development efforts to test for SARS-CoV-2 specific T cell immune responses using an in vivo
diagnostic.
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Major Depressive
Disorder
Many antidepressant
medications are beyond their patent life and are generally produced by generic drug companies, including several compounds in the
tricyclic class (e.g., amitriptyline), the serotonin-selective reuptake inhibitor class (e.g, fluoxetine, paroxetine and sertraline),
the serotonin-norepinephrine reuptake inhibitor class (e.g., venlafaxine), as well as the norepinephrine-dopamine reuptake inhibitor,
bupropion. A number of companies are marketing prescription drugs for depression, including Johnson & Johnson’s Janssen
division. Janssen markets Spravato® (intranasal esketamine). A number of companies are developing novel prescription
medicines for depression including Axsome, Johnson & Johnson, BlackThorn, Sage, Relmada, Clexio, AbbVie and Otsuka.
Axsome is developing AXS-05 or dextromethorphan/bupropion combination which is currently in Phase 3 development and for which the
NDA is expected to be submitted soon. Janssen is developing seltorexant (JNJ-61393215), a selective orexin receptor type-2 antagonist
currently in Phase 3 to treat MDD with insomnia symptoms. Johnson & Johnson is also developing CERC-501 or aticaprant which
is in Phase 2 for depression, targeting the kappa opioid receptor. BlackThorn is developing BTRX-335140, a selective kappa opioid
receptor antagonist and is in a Phase 2 trial. Sage Therapeutics and Biogen are developing zuranolone (SAGE-217), a neurosteroid,
currently in Phase 2 for episodic short-course treatment of major depressive disorder and post-partem depression and acute treatment
of MDD when co-initiated with a new antidepressant. Relmada is developing REL-1017 or dextromethadone which is in Phase 3 development
as adjunctive therapy in MDD. Clexio is developing adjunctive CLE-100, an oral NMDA modulator in a Phase 2 trial. AbbVie
(which acquired Allergan) is developing its FDA-approved antipsychotic Vraylar® (cariprazine) as an adjunct to antidepressant
treatment and is in Phase 3. Otsuka is developing its FDA approved antipsychotic Rexulti as an adjunct to antidepression treatment
and is in Phase 3 trials. Several academic institutions are studying ketamine as a fast-acting antidepressant, alone or in combination.
COVID-19 Vaccine
Development Projects
The environment for
developing vaccines for COVID-19 is competitive and includes over 150 companies and academic institutions in various stages of
development. Vaccines based on RNA technology developed by Moderna and Pfizer-BioNTech currently have emergency use authorization
from the FDA and are called mRNA-1273 and BNT162b2, respectively. Johnson & Johnson’s vaccine, a nonreplicating virus,
called Ad.26.COV2S or JNJ-78436725 also recently received emergency use authorization from the FDA. Other vaccines have been received
emergency use authorization in other international markets. Globally, as of early February 2021, there are 40 vaccines in Phase
1 trials, 27 in Phase 2, 20 in Phase 3, 6 authorized for early or limited use and 6 approved for full use.
Smallpox vaccines
and antivirals
A number of companies
are marketing or developing vaccines and treatments for smallpox, including Emergent BioSolutions, Bavarian Nordic, SIGA Technologies
and Chimerix. Emergent BioSolutions markets ACAM2000, which is a live replicating vaccinia vaccine for the prevention of smallpox.
Bavarian Nordic markets Jynneos ® (or Modified Virus Ankara, strain BN or MVA-BN), which is a non-replicating
vaccinia virus vaccine for the prevention of smallpox and monkeypox. SIGA markets TPOXX ® (tecovirimat), which
is an antiviral for smallpox. Chimerix is developing brincidofovir (CMX001), which is an antiviral for the treatment of smallpox
and an NDA has been filed with the FDA.
Anti-CD40-ligand
Monoclonal Antibodies
A number of companies
are developing biologics that target the CD40-L interaction with CD40. UCB, in collaboration with Biogen, is developing dapirolizumab
pegol, which is an mAb conjugated to polyethylene glycol for systemic lupus erythematosus. Eledon Pharmaceuticals, formerly known
as Novus Therapeutics, Inc., acquired Anelixis and is developing anti-CD40L monoclonal AT1501 for Amyotrophic Lateral Sclerosis
or ALS, which is also known as Lou Gehrig’s Disease; organ transplant rejection and nephritis. AT1501 is in Phase
2 development for ALS. Horizon Therapeutics Public Limited Company is buying Viela Bio, Inc. Viela is developing inebilizumab
or VIB4920, formerly MED14920, is a novel CD40-L antagonist and Tn3 fusion protein that is in Phase 2 development for Sjögren’s
syndrome (SS) and organ transplant rejection, Sanofi is developing INX-021, which was licensed from Immunext. Biological activity
similar to anti-CD40L mAbs is found with mAbs that are antagonistic to its counter-receptor CD40. A number of companies are developing
antagonistic anti-CD40 mAbs for autoimmune indications or prevention of transplant rejection, including Novartis, Boehringer Ingelheim, and
Kyowa Kirin Pharmaceutical Development Inc. Novartis is developing iscalimab (CFZ533), licensed from Xoma, Kyowa Kirin Pharmaceutical
Development Inc. is developing. bleselumab (ASKP1240). Boehringer Ingelheim is developing BI 655064. Kiniksa Pharmaceuticals
developed KPL-404, the humanized form of 2C10R4, licensed from Mass Biologics.
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Intellectual Property
We believe that we
have an extensive patent portfolio and substantial know-how relating to TNX-1800, TNX-801, TNX-102 SL and our other product candidates.
Our patent portfolio, described more fully below, includes claims directed to TNX-102 SL compositions and methods of use. As of
March 9, 2021, the patents we are either the owner of record of or own the contractual right to include 29 issued U.S. patents
and 199 issued non-U.S. patents. We are actively pursuing an additional 27 U.S. patent applications, of which 9 are provisional
and 18 are non-provisional, 5 international patent applications, and 187 non-U.S./non-international patent applications.
We strive to protect
the proprietary technology that we believe is important to our business, including our proprietary technology platform, our product
candidates, and our processes. We seek patent protection in the U.S. and internationally for our products, their methods of use
and processes of manufacture, and any other technology to which we have rights, where available and when appropriate. We also rely
on trade secrets that may be important to the development of our business.
Our success will
depend on 1) the ability to obtain and maintain patent and other proprietary rights in commercially important technology, inventions
and know-how related to our business, 2) the validity and enforceability of our patents, 3) the continued confidentiality of our
trade secrets, and 4) our ability to operate without infringing the valid and enforceable patents and proprietary rights of third
parties. We also rely on continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary
position.
We cannot be certain
that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications
we may own or license in the future, nor can we be certain that any of our existing patents or any patents we may own or license
in the future will be useful in protecting our technology. For this and more comprehensive risks related to our intellectual property,
please see “Risk Factors — Risks Relating to Our Intellectual Property.”
The term of individual
patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file,
the patent term is 20 years from the date of filing the first non-provisional priority application. In the United States, a patent’s
term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the PTO in granting
a patent or may be shortened if a patent is terminally disclaimed over another patent.
The term of a U.S.
patent that covers a drug approved by the FDA or methods of making or using that drug may also be eligible for patent term extension,
which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Drug
Price Competition and Patent Term Restoration Act, also known as the Hatch-Waxman Act, is a federal law that encourages new drug
research by restoring patent term lost to regulatory delays by permitting a patent term extension of up to five years beyond the
statutory 20-year term of the patent for the approved product or its methods of manufacture or use if the active ingredient has
not been previously approved in the U.S. The length of the patent term extension is related to the length of time the drug is under
regulatory review. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date
of product approval and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe
and some other foreign jurisdictions to extend the term of a patent that covers an approved drug. When possible, depending upon
the length of clinical trials and other factors involved in the filing of an NDA, we expect to apply for patent term extensions
for patents covering our product candidates and their methods of use.
The patent portfolios
for our proprietary technology platform and our five most advanced product candidates as of March 9, 2021 are summarized below.
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TNX-102 SL – Central Nervous System Conditions
Our patent portfolio
for TNX-102 SL includes patent applications directed to compositions of matter of CBP, formulations containing CBP, and methods
for treating CNS conditions, such as TNX-102 SL for PTSD, for sleep disturbances in fibromyalgia, for alcohol abuse, for sexual
dysfunction, for depression in fibromyalgia and for agitation in neurodegenerative conditions, e.g. AAD, utilizing these compositions
and formulations.
Certain eutectic
compositions were discovered by development partners and are termed the “Eutectic Technology.” The patent portfolio
for TNX-102 SL relating to the Eutectic Technology includes patent applications directed to eutectic compositions containing CBP,
eutectic CBP formulations, methods for treating PTSD and other CNS conditions utilizing eutectic CBP compositions and formulations,
and methods of manufacturing eutectic CBP compositions. The Eutectic Technology patent portfolio includes U.S. patent applications,
such as U.S. Patent Application No. 14/214,433 (now U.S. Patent No. 9,636,408). If U.S. and non-U.S. patents claiming priority
from those applications issue, those patents would expire in 2034 or 2035, excluding any patent term adjustments or extensions.
The unique pharmacokinetic
profile of TNX-102 SL, or the PK Technology, was discovered by Tonix and its development partners. The patent portfolio for TNX-102
SL relating to the PK Technology includes patent applications directed to compositions of matter of CBP, formulations containing
CBP, methods for treating PTSD, agitation in neurodegenerative conditions, and other CNS conditions utilizing these compositions
and formulations. The PK Technology patent portfolio includes U.S. Patent Application No. 13/918,692. If U.S. and non-U.S. patents
claiming priority from those applications issue, those patents would expire in 2033, excluding any patent term adjustments or extensions.
On May 2, 2017, U.S.
Patent No. 9,636,408 entitled “Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride”,
issued. The patent claims recite pharmaceutical compositions comprising the eutectic. The patent claims also recite methods of
manufacturing the eutectic.
On September 13, 2017,
European patent 2,501,234, entitled “Methods and Compositions for Treating Symptoms Associated with PTSD Using Cyclobenzaprine”,
issued. This patent recites the use of CBP for the treatment of PTSD, which covers the use of TNX-102 SL for the treatment of PTSD,
since the active ingredient in TNX-102 SL is CBP and provides TNX-102 SL with European market exclusivity until 2030 and may be
extended based on the timing of the European marketing authorization of TNX-102 SL for PTSD. In response to an opposition
filed in June 2018, the European Patent Office’s Opposition Division in October 2019 upheld the patent in unamended form.
Opponent has appealed.
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On December 15, 2017,
Japanese Patent No. 6259452, entitled “Compositions and Methods for Transmucosal Absorption”, issued. These claims
relate to the pharmacokinetic profile of TNX-102 SL.
On March 20, 2018,
U.S. Patent No. 9,918,948 entitled “Methods and Compositions for Treating Symptoms Associated with PTSD Using Cyclobenzaprine”,
issued. The claims recite a method of using TNX-102 SL’s active ingredient cyclobenzaprine to treat PTSD and provides TNX-102
SL with US market exclusivity until 2030, excluding any patent term extensions.
On March 23, 2018,
Japanese Patent No. 6310542 entitled “Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride”,
issued. The claims recite pharmaceutical compositions comprising the eutectics and methods of manufacturing these eutectic
formulations.
On May 1, 2018,
U.S. Patent No. 9,956,188, entitled “Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride”,
issued. The claims recite a eutectic of cyclobenzaprine hydrochloride and mannitol and methods of making those eutectics.
On November 6,
2018, U.S. Patent No. 10,117,936, entitled “Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride”,
issued. The claims recite pharmaceutical compositions of eutectics of cyclobenzaprine hydrochloride and mannitol and methods of
making those compositions.
On July 23, 2019, U.S.
Patent No. 10,357,465 entitled “Eutectic Formulations of Cyclobenzaprine Hydrochloride”, issued. The claims recite
pharmaceutical compositions comprising eutectics of cyclobenzaprine hydrochloride and mannitol and methods of making those compositions.
On December 11, 2019,
European patent 2968992, entitled “Eutectic Formulations of Cyclobenzaprine Hydrochloride”, issued. This patent recites
pharmaceutical compositions comprising a eutectic of mannitol and Cyclobenzaprine HCl and methods of making the same. In September
2020, Hexal AG filed an opposition against this patent. The opposition is in the initial stages.
On December 25, 2019,
European patent 2,683,245, entitled “Methods and Compositions for Treating Depression Using Cyclobenzaprine”, issued.
The claims recite the use of CBP for the treatment of depression in a FM patient. This patent provides TNX-102 SL with European
market exclusivity until March 2032 and may be extended based on the timing of the European marketing authorization of TNX-102
SL for depression in a FM patient. In September 2020, Hexal AG filed an opposition against this patent. The opposition is in the
initial stages.
On December 15, 2020,
U.S. Patent No. 10,864,175 entitled “Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride”,
issued. The claims recite a eutectic comprising cyclobenzaprine hydrochloride and beta-mannitol.
TNX-1800 – Live HPXV Vaccine for Prevention of
COVID-19
We are developing
TNX-1800, a live HPXV that is being developed as a new COVID-19 preventing vaccine. We have filed two patent applications directed
to synthetic poxviruses comprising a SARS-CoV-2 protein, poxvirus delivery vectors for SARS-CoV-2 proteins and methods of using
these modified poxviruses to protect individuals against COVID-19. This patent applications are U.S. Provisional Patent Application
Nos. 62/981,997 and 63/114,514. On February 26, 2021, we filed International Patent Application No. PCT/US2021/020119 (as well
as applications in 2 non-PCT countries) and U.S. Application No. 17/187,678, entitled “Recombinant Poxvirus Based Vaccine
Against SARS-CoV-2”.
TNX-801 — Live Horsepox Vaccine
for Prevention of Smallpox
We own the rights to
develop a potential biodefense technology, TNX-801, a live horsepox that is being developed as a new smallpox and monkeypox preventing
vaccine, we have patent applications directed to synthetic chimeric poxviruses and methods of using these poxviruses to protect
individuals against smallpox. These applications include U.S. non-provisional Patent Application No. 15/802,189 and International
Patent Application No. PCT/US2017/059782 (nationalized in 15 countries and filed in filed in 4 non-PCT countries) We also own
the rights to develop other vaccine candidates against smallpox. With respect to these vaccine candidates, we own U.S. Patent
Application No. 14/207,727 and International Patent Application No. PCT/US2019/030486 and the non-convention and national phase
applications related thereto. The smallpox vaccine technologies relate to proprietary forms of live horsepox and vaccinia vaccines
which may be safer than ACAM2000, the only currently available replication competent, live vaccinia vaccine to protect against
smallpox disease. We believe that this technology, after further development, may be of interest to biodefense agencies in the
U.S. and other countries.
TNX-601
— Depression, Posttraumatic Stress Disorder, Neurocognitive Dysfunction
Our patent portfolio
for tianeptine oxalate includes U.S. Patent No. 9,314,469 and European Patent No. 2,299,822, both entitled “Method for Treating
Neurocognitive Dysfunction”, which issued on April 29, 2016 and July 26, 2017, respectively. The ’822 patent
recites pharmaceutical compositions comprising various compounds (which include tianeptine) and uses thereof. This patent
provides TNX-601 with European market exclusivity until April 2029 and may be extended based on the timing of the European marketing
authorization of TNX-601 for neurocognitive side effects associated with the use of corticosteroids. The ‘469 patent claims
methods of treating cognitive impairment associated with corticosteroid treatment using compounds, including tianeptine, excluding
patent term extensions, the patent provides TNX-601 with US marketing exclusivity until 2028.
On February 27, 2019,
European Patent No. 3,246,031 entitled “Method for Treating Neurodegenerative Dysfunction”, issued. The claims recite
the use of TNX-601, or tianeptine oxalate and other salts, for treating neurocognitive dysfunction associated with corticosteroid
treatment. This patent provides TNX-601 with European market exclusivity until April 2029 and may be extended based on the timing
of the European market authorization of TNX-601 for neurocognitive disfunction associated with corticosteroid treatment.
26
On October 22, 2019,
U.S. Patent No. 10,449,203 issued. The claims recite anhydrous crystalline oxalate salts of tianeptine and provides TNX-601
with US market exclusivity until 2037, excluding any patent term extensions.
Our patent portfolio
for TNX-601 also includes International Patent Application PCT/IB2017/001709 (now nationalized in 16 countries). It includes claims
directed to crystalline tianeptine oxalate and compositions of those crystal forms, and disclosures directed to methods of using
those crystalline forms and their compositions.
TNX-1300 — Cocaine Intoxication
Treatment
We have licensed rights
from Columbia University, University of Michigan, and The Kentucky Research Foundation to develop a potential product, TNX-1300,
for the treatment of cocaine intoxication. The licensed patents are directed to mutant cocaine esterase polypeptides and
methods of using these polypeptides as anti-cocaine therapeutics. They include U.S. Patent Nos. 8,318,156 and 9,200,265,
entitled “Anti-Cocaine Compositions and Treatment” and various counterpart patents outside of the U.S. These patents
provide TNX-1300 with US market exclusivity until February 2029. They provide market exclusivity outside of the U.S. until
July 10, 2027. These dates may be subject to patent term extensions.
TNX-1500 — anti-CD40L Therapeutics
We are collaborating with Harvard Medical School to develop TNX-1500, a humanized monoclonal antibody
(mAb) that targets CD40L for the prevention and treatment of organ transplant rejection. In this regard, we filed International
Application No. PCT/EP2020/068589, entitled “Anti-CD154 antibodies and uses thereof” on July 1, 2020. We also filed
International Patent Application No. PCT/US2020/028002 on April 13, 2020, entitled “Inhibitors of CD40-CD154 Binding”.
We also filed U.S. Provisional Application No. 63/134,413, entitled “Methods of Inducing Immune Tolerance with Modified Anti-CD154
Antibodies” on January 6, 2021.
TNX-1600 — Triple Reuptake
Inhibitor to Treat PTSD
We have licensed rights
from Wayne State University to develop a potential product, TNX-1600, for PTSD treatment. The licensed patents directed to
pyranbased derivatives and analogues. They include U.S. Patent Nos. 7,915,433, 8,017,791, 8,519,159, 8,841,464, and 8,937,189,
entitled “Tri-substituted 2-benzhydryl 5-benzlamino-tetrahydro-pyran-4-OL and 6-benzhydryl-4-benzylamino-tetrahydro-pyran-3-OL
analogues, and novel 3,6 disubstituted pyran derivatives” and U.S. Patent No. 9,458,124, entitled “Substituted Pyran
Derivatives”. These patents provide TNX-1600 with US market exclusivity between April 2024 and February 2034, respectively,
subject to any patent term extensions.
TNX-1700 — Recombinant Trefoil
Family Factor 2 (rTFF2) to Treat Gastric and Pancreatic Cancers
We have licensed rights from Columbia University to develop a potential
product, TNX-1700, for the treatment of gastric and pancreatic cancers. The licensed patent and patent application are directed
to TFF2 compositions and methods of treatment. The licensed patent is U.S. Patent No. 10,124,037. We have also
filed U.S. Patent Application No. 16/189,868, entitled “Trefoil Family Factor Proteins and Uses Thereof” on November
13, 2019. The licensed patent provides TNX-1700 with US market exclusivity until April 2033, subject to any patent term extensions.
On August 27, 2020, we filed International Patent Application No. PCT/IB2020/000699 entitled “Modified TFF2 Polypeptides.
TNX-1900 – Oxytocin-based treatments for Migraine, Pain, Insulin
Resistance, Diabetes and Obesity
We have acquired the migraine and pain treatment technologies of
Trigemina, Inc., and have assumed its license rights to related technologies from Stanford University. TNX-1900, an enhanced formulation
of nasal oxytocin, has demonstrated activity in several non-clinical studies in pain, including migraine. As part of our acquisition,
we acquired International Patent Application No. PCT/US2016/012512, filed on January 7, 2016, entitled “Magnesium-Containing
Oxytocin Formulations and Methods of Use” (nationalized in 13 countries). We also acquired U.S. Patent No. 9,629,894, entitled
“Magnesium-Containing Oxytocin Formulations and Methods of Use”, which will expire in January 2036, excluding any patent
term extensions. We also have rights to International Patent Application No. PCT/US2019/020419, filed on April 12, 2017, entitled
“Labeled Oxytocin and Method of Manufacture and Use” (nationalized in the U.S., European Patent Office and Japan).
We have entered into an exclusive license to the University of Geneva’s
technology for using oxytocin to treat insulin resistance and related syndromes, including obesity. This license expands our intranasal
potentiated oxytocin development program, TNX-1900, into cardiometabolic syndromes. Under the license, we have rights to European
Patent No. EP2571511B1, entitled “ New Uses of Oxytocin-like Molecules
and Related Methods”. We also have rights to U.S. Patent No. 9,101,569, entitled “Methods for the Treatment of Insulin
Resistance”. The U.S. and non-U.S. patents expire in May 2031, excluding any patent term adjustments or extensions.
27
TNX-2900 - Oxytocin-based therapeutics for Prader-Willi syndrome
We have licensed technology using oxytocin-based therapeutics for
the treatment of Prader-Willi syndrome and non-organic failure to thrive disease from the French National Institute of Health and
Medical Research (INSERM). The co-exclusive license relates to TNX-2900, an intranasal potentiated oxytocin, for the treatment
of Prader-Willi syndrome. Under the license, we have rights to European Patent No. EP2575853B1, entitled “Methods and Pharmaceutical
Composition for the Treatment of a Feeding Disorder with Early-Onset in a Patient”; U.S. Patent No. 8,853,158, entitled “Methods
for the Treatment of a Feeding Disorder with Onset During Neonate Development Using an Agonist of the Oxytocin Receptor”;
and U.S. Patent No. 9,125,862, entitled “Methods for the Treatment of Prader-Willi-like Syndrome or Non-Organic Failure to
Thrive (NOFITT) Feeding Disorder Using an Agonist of the Oxytocin Receptor”. The U.S. and non-U.S. patents expire in May
2031, excluding any patent term extensions.
TNX-701 — Radioprotection Biodefense Technology
We own the rights to
develop a potential biodefense technology, which is a potential radioprotective therapy. For protection of our intellectual property,
we have not disclosed the identity of the new development candidate. On May 8, 2020, we filed U.S. provisional application 63/021,937.
It claims compounds, compositions and methods of use in radioprotection.
TNX-1200 — Smallpox Vaccine Technology
We own the rights to
develop a potential biodefense technology, TNX-1200, a live vaccinia virus that is being developed as a new smallpox preventing
vaccine, we have patent applications directed to synthetic chimeric poxviruses and methods of using these poxviruses to protect
individuals against smallpox. These applications include U.S. non-provisional Patent Application No. 17/050,946 and International
Patent Application No. PCT/US2019/030486 (nationalized in 15 countries and filed in 3 non-PCT countries). We believe that this
technology, after further development, may be of interest to biodefense agencies in the U.S. and other countries.
Trade Secrets
In addition to patents,
we rely on trade secrets and know-how to develop and maintain our competitive position. For example, significant aspects of our
proprietary technology platform are based on unpatented trade secrets and know-how. Trade secrets and know-how can be difficult
to protect. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements and invention assignment
agreements with our employees, consultants, scientific advisors, contractors, and commercial partners. These agreements are designed
to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies
that are developed through a relationship with a third party. We also seek to preserve the integrity and confidentiality of our
data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information
technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may
be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or
be independently discovered by competitors. To the extent that our contractors use intellectual property owned by others in their
work for us, disputes may arise as to rights in related or resulting inventions and know-how.
Issued Patents
Our current patents
owned include:
Sublingual CBP/Amitriptyline
Patent No.
Title
Country / Region
Expiration
Date
6259452
Compositions and Methods for Transmucosal Absorption
Japan
June 14, 2033
631144
Compositions and Methods for Transmucosal Absorption
New Zealand
June 14, 2033
I590820
Compositions and Methods for Transmucosal Absorption
Taiwan R.O.C.
June 14, 2033
2013274003
Compositions and Methods for Transmucosal Absorption
Australia
June 14, 2033
I642429
Compositions and Methods for Transmucosal Absorption
Taiwan R.O.C.
June 14, 2033
726488
Compositions and Methods for Transmucosal Absorption
New Zealand
June 14, 2033
I683660
Compositions and Methods for Transmucosal Absorption
Taiwan R.O.C.
June 14, 2033
2018241128
Compositions and Methods for Transmucosal Absorption
Australia
June 14, 2033
28
CBP – Depression
Patent No.
Title
Country / Region
Expiration
Date
2012225548
Methods and Compositions for Treating Depression
Using Cyclobenzaprine
Australia
March 6, 2032
2016222412
Methods and Compositions for Treating Depression
Using Cyclobenzaprine
Australia
March 6, 2032
2018204633
Methods and Compositions for Treating Depression
Using Cyclobenzaprine
Australia
March 6, 2032
614725
Methods and Compositions for Treating Depression
Using Cyclobenzaprine
New Zealand
March 6, 2032
714294
Methods and Compositions for Treating Depression
Using Cyclobenzaprine
New Zealand
March 6, 2032
2683245
Methods and Compositions for Treating Depression
Using Cyclobenzaprine
European Patent Office – Albania, Austria, Belgium, Bulgaria, Switzerland, Cyprus, Czechia, Germany, Denmark, Estonia, Spain, Finland, France, United Kingdom, Greece, Croatia, Hungary, Ireland, Iceland, Italy, Lithuania, Luxembourg, Latvia, Monaco, Republic of North Macedonia, Malta, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Sweden, Slovenia, Slovakia, San Marino, and Turkey
March 6, 2032
29
CBP – PTSD
Patent No.
Title
Country / Region
Expiration
Date
9,918,948
Methods and Compositions for Treating Symptoms Associated with Post-Traumatic Stress Disorder Using Cyclobenzaprine
U.S.A.
November 18, 2030
2501234
(AL/P/17/691 in Albania; 602010045270.0 in Germany; 3094254
in Greece; 502017000142469 in Italy; MK/P/17/000807 in Republic of North Macedonia; 56634 in Serbia; SM-T-201700578 in San Marino;
201717905 in Turkey)
Methods and Compositions for Treating Symptoms Associated with Post-Traumatic Stress Disorder Using Cyclobenzaprine
European Patent Office – Albania, Austria, Belgium, Bulgaria, Switzerland, Cyprus, Czechia, Germany, Denmark, Estonia, Spain, Finland, France, United Kingdom, Greece, Croatia, Hungary, Ireland, Iceland, Italy, Lithuania, Luxembourg, Latvia, Monaco, Republic of North Macedonia, Malta, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Sweden, Slovenia, Slovakia, San Marino, Turkey
November 16, 2030
HK1176235
Methods and Compositions for Treating Symptoms Associated with Post-Traumatic Stress Disorder Using Cyclobenzaprine
Hong Kong
November 16, 2030
CBP Fatigue
Patent No.
Title
Country / Region
Expiration
Date
9,474,728
Methods and Compositions for Treating Fatigue Associated with Disordered Sleep Using Very Low Dose Cyclobenzaprine
U.S.A.
June 9, 2031
10,722,478
Methods and Compositions for Treating Fatigue Associated with Disordered Sleep Using Very Low Dose Cyclobenzaprine
U.S.A.
June 9, 2031
Tianeptine – Neurocognitive
Dysfunction
Patent No.
Title
Country / Region
Expiration
Date
9,314,469
Method for Treating Neurocognitive Dysfunction
U.S.A.
September 24, 2030
2723688
Method for Treating Neurodegenerative Dysfunction
Canada
April 30, 2029
2299822 (602009047361.1 in Germany)
Method for Treating Neurodegenerative Dysfunction
Europe – Austria, Belgium, Switzerland, Germany, Spain, France, United Kingdom, Ireland, Luxembourg, Monaco, Portugal
April 30, 2029
3246031 (602009057284.9 in Germany)
Method for Treating Neurocognitive Dysfunction
Europe – Austria, Belgium, Switzerland, Germany, Spain, France, United Kingdom, Ireland, Luxembourg, Monaco, Portugal
April 30, 2029
30
Eutectic CBP/Amitriptyline
Patent No.
Title
Country / Region
Expiration
Date
631152
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
New Zealand
March 14, 2034
747040
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
New Zealand
March 14, 2034
9,636,408
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
U.S.A.
March 14, 2034
9,956,188
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
U.S.A.
March 14, 2034
10,117,936
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
U.S.A.
March 14, 2034
10,322,094
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
U.S.A.
March 14, 2034
10,357,465
Eutectic Formulations of Cyclobenzaprine Hydrochloride
U.S.A.
September 18, 2035
10,736,859
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
U.S.A.
March 14, 2034
10,864,175
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
U.S.A.
March 14, 2034
10,864,176
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
U.S.A.
March 14, 2034
6310542
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Japan
March 14, 2034
6614724
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Japan
September 18, 2035
6717902
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Japan
September 18, 2035
6088
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Saudi Arabia
March 14, 2034
ZL201480024011.1
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
China
March 14, 2034
ZL.201580050140.2
Eutectic Formulations of Cyclobenzaprine Hydrochloride
China
September 18, 2035
2014233277
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Australia
March 14, 2034
I661825
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Taiwan R.O.C.
March 14, 2034
IDP000055516
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Indonesia
March 14, 2034
IDP000063221
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Indonesia
September 18, 2035
2968992
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
European Patent Office -Albania, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Republic of North Macedonia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom
March 14, 2034
241353
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Israel
March 14, 2034
251218
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Methods of Producing Same
Israel
September 18, 2035
370021
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Mexico
March 14, 2034
2015/07443
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
South Africa
March 14, 2034
2017/01637
Eutectic Formulations of Cyclobenzaprine Hydrochloride
South Africa
September 18, 2035
31
Tianeptine Oxalate – Salts and Crystalline Forms
Patent No.
Title
Country / Region
Expiration
Date
10,449,203
Tianeptine Oxalate Salts and Polymorphs
U.S.A.
December 28, 2037
10,946,027
Tianeptine Oxalate Salts and Polymorphs
U.S.A.
December 28, 2037
Anti-Cocaine Therapeutics
Patent No.
Title
Country / Region
Expiration
Date
8,318,156
Anti-Cocaine Compositions and Treatment
U.S.A.
February 14, 2029
9,200,265
Anti-Cocaine Compositions and Treatment
U.S.A.
December 30, 2027
2007272955
Anti-Cocaine Compositions and Treatment
Australia
July 10, 2027
2014201653
Anti-Cocaine Compositions and Treatment
Australia
July 10, 2027
2657246
Anti-Cocaine Compositions and Treatment
Canada
July 10, 2027
612929
Anti-Cocaine Compositions and Treatment
New Zealand
July 10, 2027
2046368 (602007045044.6 in Germany; 502016000056543 in Italy; ES2574088T3 in Spain)
Anti-Cocaine Compositions and Treatment
Europe – (Germany, Spain, France, United Kingdom, and Italy)
July 10, 2027
2009/00197
Anti-Cocaine Compositions and Treatment
South Africa
July 10, 2027
305483
Anti-Cocaine Compositions and Treatment
Mexico
July 10, 2027
196411
Anti-Cocaine Compositions and Treatment
Israel
July 10, 2027
Triple reuptake inhibitor therapeutics
Patent No.
Title
Country / Region
Expiration
Date
7,915,433
Tri-substituted 2-benzhydryl 5-benzlamino-tetrahydro-pyran-4-OL and 6-benzhydryl-4-benzylamino-tetrahydro-pyran-3-OL analogues, and novel 3,6 disubstituted pyran derivatives
U.S.A
March 10, 2028
8,017,791
Tri-substituted 2-benzhydryl 5-benzlamino-tetrahydro-pyran-4-OL and 6-benzhydryl-4-benzylamino-tetrahydro-pyran-3-OL analogues, and novel 3,6 disubstituted pyran derivatives
U.S.A.
April 14, 2024
8,519,159
Tri-substituted 2-benzhydryl 5-benzlamino-tetrahydro-pyran-4-OL and 6-benzhydryl-4-benzylamino-tetrahydro-pyran-3-OL analogues, and novel 3,6 disubstituted pyran derivatives
U.S.A
December 7, 2025
8,841,464
Tri-substituted 2-benzhydryl 5-benzlamino-tetrahydro-pyran-4-OL and 6-benzhydryl-4-benzylamino-tetrahydro-pyran-3-OL analogues, and novel 3,6 disubstituted pyran derivatives
U.S.A
April 15, 2025
8,937,189
Tri-substituted 2-benzhydryl 5-benzlamino-tetrahydro-pyran-4-OL and 6-benzhydryl-4-benzylamino-tetrahydro-pyran-3-OL analogues, and novel 3,6 disubstituted pyran derivatives
U.S.A
January 12, 2027
9,458,124
Substituted Pyran Derivatives
U.S.A
February 6, 2034
TFF2 therapeutics
Patent No.
Title
Country / Region
Expiration
Date
10,124,037
Trefoil family factor proteins and uses thereof
U.S.A
April 2, 2033
32
Oxytocin therapeutics
Patent No.
Title
Country / Region
Expiration
Date
9,629,894
Magnesium-Containing Oxytocin Formulations and Methods of Use
U.S.A.
January 7, 2036
11201705591P
Magnesium-Containing Oxytocin Formulations and Methods of Use
Singapore
January 7, 2036
EP2575853B1
Methods and Pharmaceutical Composition for the Treatment of a Feeding Disorder with Early-Onset in a Patient
Europe – (Spain, France, and United Kingdom)
May 25, 2031
8,853,158
Methods for the Treatment of a Feeding Disorder with Onset During Neonate Development Using an Agonist of the Oxytocin Receptor
U.S.A.
May 25, 2031
9,125,862
Methods for the Treatment of Prader-Willi-like Syndrome or Non-Organic Failure to Thrive (NOFITT) Feeding Disorder Using an Agonist of the Oxytocin Receptor
U.S.A.
May 25, 2031
EP2571511B1
New Uses of Oxytocin-like Molecules and Related Methods
Europe – (Switzerland, Spain, France, United Kingdom, and Ireland)
May 17, 2031
9,101,569
Methods for the Treatment of Insulin Resistance
U.S.A.
June 22, 2031
Nociceptin/Orphanin FQ therapeutics
Patent No.
Title
Country / Region
Expiration
Date
8,551,949
Methods for treatment of pain
U.S.A.
August 11, 2031
9,238,053
Methods for treatment of pain
U.S.A.
October 12, 2030
2010281436
Methods for treatment of pain
Australia
July 27, 2030
ZL 201080042858.4
Methods for treatment of pain
China
July 27, 2030
2459183 (602010028120.5 in Germany)
Methods for treatment of pain
Europe – (Switzerland, Germany, Denmark, France, and United Kingdom)
July 27, 2030
1169804
Methods for treatment of pain
Hong Kong
July 27, 2030
329837
Methods for treatment of pain
Mexico
July 27, 2030
597763
Methods for treatment of pain
New Zealand
July 27, 2030
10201406930U
Methods for treatment of pain
Singapore
July 27, 2030
201200584
Methods for treatment of pain
South Africa
July 27, 2030
Pending Patent Applications
Our current pending
patent applications are as follows:
CBP/Amitriptyline Eutectic Formulations
Application No.
Title
Country / Region
17/121,547
16/518,338
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline
Hydrochloride
Eutectic Formulations of Cyclobenzaprine Hydrochloride
U.S.A.
U.S.A.
17/082,949
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
U.S.A.
2015317336
Eutectic Formulations of Cyclobenzaprine Hydrochloride (Allowed)
Australia
2020289838
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Australia
BR112015022095-9
Pharmaceutical Composition, Method of Fabrication, Eutectic Composition and Use of Compositions Containing Cyclobenzaprine HCl and Mannitol
Brazil
BR112017005231-8
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Brazil
BR122020020968-2
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Brazil
2,904,812
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride (Allowed)
Canada
2,961,822
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Canada
201910263541.6
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
China
202011576351.9
Eutectic Formulations of Cyclobenzaprine Hydrochloride
China
15841528.1
Eutectic Formulations of Cyclobenzaprine Hydrochloride
European Patent Office
19214535.7
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
European Patent Office
16106690.2
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Hong Kong
18101200.4
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Hong Kong
42020003105.2
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Hong Kong
42020019748.1
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Hong Kong
P00201808623
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Indonesia
277814
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Methods of Producing Same
Israel
3392/KOLNP/2015
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
India
201717013182
Eutectic Formulations of Cyclobenzaprine Hydrochloride
India
2019-151766
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Japan
2019-236602
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Japan
33
Application No.
Title
Country / Region
MX/a/2017/003644
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Mexico
MX/a/2019/014200
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Mexico
PI 2015703142
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Malaysia
PI 2017700889
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Malaysia
730379
Eutectic Formulations of Cyclobenzaprine Hydrochloride
New Zealand
768064
Eutectic Formulations of Cyclobenzaprine Hydrochloride
New Zealand
517381123
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Saudi Arabia
10201707528W
10201902203V
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline
Hydrochloride
Eutectic Formulations of Cyclobenzaprine Hydrochloride
Singapore
Singapore
108114946
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Taiwan R.O.C.
2014-000391
Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline Hydrochloride
Venezuela
Sublingual CBP/Amitriptyline
Application No.
Title
Country / Region
13/918,692
Compositions and Methods for Transmucosal Absorption
U.S.A.
P20130102101
Compositions and Methods for Transmucosal Absorption
Argentina
BR112014031394-6
Compositions and Methods for Transmucosal Absorption
Brazil
BR122019024508-8
Compositions and Methods for Transmucosal Absorption
Brazil
2,876,902
Compositions and Methods for Transmucosal Absorption
Canada
202010024102.2
Compositions and Methods for Transmucosal Absorption
China
13804115.7
Compositions and Methods for Transmucosal Absorption
European Patent Office
2013/24661
2013/37088
Compositions and Methods for Transmucosal Absorption
Compositions and Methods for Transmucosal Absorption
Gulf Cooperation Council
Gulf Cooperation Council
2013/40660
Compositions and Methods for Transmucosal Absorption
Gulf Cooperation Council
15110186.6
Compositions and Methods for Transmucosal Absorption
Hong Kong
42020020336.2
Compositions and Methods for Transmucosal Absorption
Hong Kong
P-00 2015 00202
Compositions and Methods for Transmucosal Absorption
Indonesia
236268
Compositions and Methods for Transmucosal Absorption
Israel
2019-91262
Compositions and Methods for Transmucosal Absorption
Japan
MX/a/2014/015436
Compositions and Methods for Transmucosal Absorption (Allowed)
Mexico
PI 2014703784
Compositions and Methods for Transmucosal Absorption
Malaysia
10201605407T
Compositions and Methods for Transmucosal Absorption
Singapore
2013-000737
Compositions and Methods for Transmucosal Absorption
Venezuela
2015/00288
Compositions and Methods for Transmucosal Absorption
South Africa
CBP – PTSD
Application No.
Title
Country / Region
15/915,688
Methods and Compositions for Treating Symptoms Associated with Post-Traumatic Stress Disorder Using Cyclobenzaprine
U.S.A.
CBP - Fatigue
Application No.
Title
Country / Region
16/903,965
Methods and Compositions for Treating Fatigue Associated with Disordered Sleep Using Very Low Dose Cyclobenzaprine
U.S.A.
34
CBP - Agitation in Neurodegenerative
Condition
Application No.
Title
Country / Region
16/215,952
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
U.S.A.
2018383098
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Australia
BR112020011345-0
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Brazil
3,083,341
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Canada
201880079917.1
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
China
18847270.8
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
European Patent Office
P00202004178
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Indonesia
275289
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Israel
202017023747
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
India
2020-531611
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Japan
MX/a/2020/006140
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Mexico
PI2020002800
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Malaysia
765792
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
New Zealand
520412146
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Saudi Arabia
11202004799T
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Singapore
2020/03243
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
South Africa
6202002246.2
Cyclobenzaprine Treatment for Agitation, Psychosis and Cognitive Decline in Dementia and Neurodegenerative Conditions
Hong Kong
CBP - Depression
Application No.
Title
Country / Region
13/412,571
Methods and Compositions for Treating Depression Using Cyclobenzaprine
U.S.A.
2020203874
Methods and Compositions for Treating Depression Using Cyclobenzaprine
Australia
2,829,200
Methods and Compositions for Treating Depression Using Cyclobenzaprine
Canada
19214568.8
Methods and Compositions for Treating Depression Using Cyclobenzaprine
European Patent Office
Analogs of CBP
Application No.
Title
Country / Region
16/630,832
CA3069699
201880050758.2
EP18831505.5
Analogs of Cyclobenzaprine and Amitryptilene
Analogs of Cyclobenzaprine and Amitryptilene
Analogs of Cyclobenzaprine and Amitryptilene
Analogs of Cyclobenzaprine and Amitryptilene
Analogs of Cyclobenzaprine and Amitryptilene
U.S.A.
Canada
China
European Patent Office
2020-526592
Analogs of Cyclobenzaprine and Amitryptilene
Japan
35
Tianeptine Oxalate – Salts and Crystalline Forms
Application No.
Title
Country / Region
2017385958
Tianeptine Oxalate Salts and Polymorphs
Australia
BR112019013244-9
Tianeptine Oxalate Salts and Polymorphs
Brazil
3,048,324
Tianeptine Oxalate Salts and Polymorphs
Canada
201780085697.9
Tianeptine Oxalate Salts and Polymorphs
China
17844642.3
Tianeptine Oxalate Salts and Polymorphs
European Patent Office
62020006380.3
Tianeptine Oxalate Salts and Polymorphs
Hong Kong
62020006381.1
Tianeptine Oxalate Salts and Polymorphs
Hong Kong
P00201906474
Tianeptine Oxalate Salts and Polymorphs
Indonesia
267708
Tianeptine Oxalate Salts and Polymorphs, Compositions Comprising Same and Uses Thereof
Israel
201917029300
Tianeptine Oxalate Salts and Polymorphs
India
2019-535330
MX/a/2019/007891
PI2019003711
754797
519402021
11201905974W
2019/04185
Tianeptine Oxalate Salts and Polymorphs
Tianeptine Oxalate Salts and Polymorphs
Tianeptine Oxalate Salts and Polymorphs
Tianeptine Oxalate Salts and Polymorphs
Tianeptine Oxalate Salts and Polymorphs
Tianeptine Oxalate Salts and Polymorphs
Tianeptine Oxalate Salts and Polymorphs
Japan
Mexico
Malaysia
New Zealand
Saudi Arabia
Singapore
South Africa
Tianeptine Neurocognitive Dysfunction
Application No.
Title
Country / Region
16/937,919
Method for Treating Neurocognitive Dysfunction
U.S.A.
Novel Smallpox Vaccines
Application No.
Title
Country / Region
14/207,727
Novel Smallpox Vaccines
U.S.A.
Synthetic Chimeric Poxviruses
Application No.
Title
Country / Region
15/802,189
Synthetic Chimeric Poxviruses
U.S.A.
P 20170103043
Synthetic Chimeric Poxviruses
Argentina
2017/34209
Synthetic Chimeric Poxviruses
Gulf Cooperation Council
106137976
Synthetic Chimeric Poxviruses
Taiwan R.O.C.
2017353868
Synthetic Chimeric Poxviruses
Australia
BR112019008781-8
Synthetic Chimeric Poxviruses
Brazil
3,042,694
Synthetic Chimeric Poxviruses
Canada
201780078546.0
Synthetic Chimeric Poxviruses
China
17868045.0
Synthetic Chimeric Poxviruses
European Patent Office
201917021814
PID201904682
Synthetic Chimeric Poxviruses
Synthetic Chimeric Poxviruses
India
Indonesia
266399
2019-545700
Synthetic Chimeric Poxviruses
Synthetic Chimeric Poxviruses
Israel
Japan
PI2019002462
Synthetic Chimeric Poxviruses
Malaysia
MX/a/2019/005102
752893
11201903893P
Synthetic Chimeric Poxviruses
Synthetic Chimeric Poxviruses
Synthetic Chimeric Poxviruses
Mexico
New Zealand
Singapore
2019/02868
Synthetic Chimeric Poxviruses
South Africa
2017-000418
Synthetic Chimeric Poxviruses
Venezuela
62020003684.1
Synthetic Chimeric Poxviruses
Hong Kong
62020003675.9
Synthetic Chimeric Poxviruses
Hong Kong
36
Synthetic Vaccinia Virus
Application No.
Title
Country / Region
2019/37492
Synthetic Chimeric Vaccinia Virus
Gulf Cooperation Council
20190101165
Synthetic Chimeric Vaccinia Virus
Argentina
108115290
Synthetic Chimeric Vaccinia Virus
Taiwan R.O.C.
17/050,946
Synthetic Chimeric Vaccinia Virus
U.S.A.
2019262149
Synthetic Chimeric Vaccinia Virus
Australia
BR112020022181-3
Synthetic Chimeric Vaccinia Virus
Brazil
3099330
Synthetic Chimeric Vaccinia Virus
Canada
201980029677.9
Synthetic Chimeric Vaccinia Virus
China
19796145.1
Synthetic Chimeric Vaccinia Virus
European Patent Office
202017052398
Synthetic Chimeric Vaccinia Virus
India
P00202008694
Synthetic Chimeric Vaccinia Virus
Indonesia
278419
Synthetic Chimeric Vaccinia Virus
Israel
2020-560920
Synthetic Chimeric Vaccinia Virus
Japan
PI 2020005696
Synthetic Chimeric Vaccinia Virus
Malaysia
MX/a/2020/011586
Synthetic Chimeric Vaccinia Virus
Mexico
768999
Synthetic Chimeric Vaccinia Virus
New Zealand
11202010272P
Synthetic Chimeric Vaccinia Virus
Singapore
2020/06350
Synthetic Chimeric Vaccinia Virus
South Africa
Stem cells-scPV treatment
Application No.
Title
Country / Region
2019/37505
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
Gulf Cooperation Council
20190101166
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
Argentina
108115294
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
Taiwan R.O.C.
17/049,741
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
U.S.A.
2019262150
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
Australia
3098145
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
Canada
201980029672.6
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
China
19797026.2
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
European Patent Office
278420
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
Israel
2020-561064
Stem Cells Comprising Synthetic Chimeric Vaccinia Virus and Methods of Using Them
Japan
Poxvirus vaccine against COVID-19
Application No.
Title
Country / Region
PCT/US2021/020119
Recombinant Poxvirus Based Vaccine against SARS-CoV-2 virus
PCT
17/187,678
Recombinant Poxvirus Based Vaccine against SARS-CoV-2 virus
U.S.A.
110107179
Recombinant Poxvirus Based Vaccine against SARS-CoV-2 virus
Taiwan
20210100512
Recombinant Poxvirus Based Vaccine against SARS-CoV-2 virus
Argentina
CBP – ASD and PTSD
Application No.
Title
Country / Region
2019/38140
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Gulf Cooperation Council
108129709
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Taiwan R.O.C.
17/269,106
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
U.S.A.
2019323764
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Australia
PI2021000802
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Malaysia
772889
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
New Zealand
37
Application No.
Title
Country / Region
108129709
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Taiwan R.O.C.
280921
Cyclobenzaprine or Amitriptyline Containing Compositions for Use in Treating Stress Disorders
Israel
2021-509201
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Japan
BR1120210033107-3
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Brazil
MX/a/2021/002012
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Mexico
CA 3109258
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Canada
11202101443W
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Singapore
2021/01121
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
South Africa
P00202101716
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
Indonesia
Not yet assigned
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
India
Not yet assigned
Methods of Treating Acute Stress Disorder and Posttraumatic Stress Disorder
China
Salts of glutathione
Application No.
Title
Country / Region
PCT/IB2020/000237
Salt forms of S-(N, N-diethylcarbamolyl) glutathione
PCT
CD40 and CD154 Therapeutics
Application No.
Title
Country / Region
PCT/EP2020/068589
Anti-CD154 antibodies and uses thereof
PCT
63/134,413
Methods of Inducing Immune Tolerance with Modified
Anti-CD154 Antibodies
U.S.A.
PCT/US2020/028002
Inhibitors of CD40-CD154 Binding
U.S.A.
TFF2 therapeutics
Application No.
Title
Country / Region
16/189,868
Trefoil Family Factor Proteins and Uses Thereof
U.S.A.
PCT/IB2020/000699
Modified TFF2 polypeptides
PCT
Radioprotection therapeutics
Application No.
Title
Country / Region
63/021,937
Radio- and Chemo-Protective Compounds
U.S.A.
CBP – Sexual dysfunction
Application No.
Title
Country / Region
63/007,251
Cyclobenzaprine Treatment for Sexual Dysfunction
U.S.A.
Detecting SARS-CoV-2
Application No.
Title
Country / Region
63/053,484
Skin-based Testing for Detection of SARS-CoV2
U.S.A.
63/143,021
Skin-based Testing for Detection of Cell-Mediated Immune Responses to SARS-CoV-2
U.S.A.
63/147,235
Skin-based Testing for Detection of Cell-Mediated Immune Responses to SARS-CoV-2
U.S.A.
Clinical data statistical analysis
Application No.
Title
Country / Region
63/104,472
Randomization Honoring Methods to Assess the Significance of Interventions on Outcomes in Disorders
U.S.A.
38
Oxytocin therapeutics
Application No.
Title
Country / Region
15/541,991
Magnesium-Containing Oxytocin Formulations and Methods of Use
U.S.A.
2020286221
Magnesium-Containing Oxytocin Formulations and Methods of Use
Australia
BR1120170145456
Magnesium-Containing Oxytocin Formulations and Methods of Use
Brazil
2972975
Magnesium-Containing Oxytocin Formulations and Methods of Use
Canada
2016800138095
Magnesium-Containing Oxytocin Formulations and Methods of Use
China
16735422.4
Magnesium-Containing Oxytocin Formulations and Methods of Use
European Patent Office
18112297.5
Magnesium-Containing Oxytocin Formulations and Methods of Use
Hong Kong
253347
Magnesium-Containing Oxytocin Formulations and Methods of Use
Israel
2017-535877
Magnesium-Containing Oxytocin Formulations and Methods of Use
Japan
1020177021998
Magnesium-Containing Oxytocin Formulations and Methods of Use
Republic of Korea
MX/A/2017008913
Magnesium-Containing Oxytocin Formulations and Methods of Use
Mexico
734097
Magnesium-Containing Oxytocin Formulations and Methods of Use
New Zealand
771693
Magnesium-Containing Oxytocin Formulations and Methods of Use
New Zealand
201705176
Magnesium-Containing Oxytocin Formulations and Methods of Use
South Africa
16/976,912
Labeled Oxytocin and Method of Manufacture and Use
U.S.A.
19710979.6
Labeled Oxytocin and Method of Manufacture and Use
European Patent Office
2020-545532
Labeled Oxytocin and Method of Manufacture and Use
Japan
16/093,104
Magnesium-Containing Oxytocin Formulations and Methods of Use
U.S.A.
2017250505
Magnesium-Containing Oxytocin Formulations and Methods of Use
Australia
3,020,179
Magnesium-Containing Oxytocin Formulations and Methods of Use
Canada
2017800361853
Magnesium-Containing Oxytocin Formulations and Methods of Use
China
17783080.9
Magnesium-Containing Oxytocin Formulations and Methods of Use
European Patent Office
19128645.9
Magnesium-Containing Oxytocin Formulations and Methods of Use
Hong Kong
2018-553235
Magnesium-Containing Oxytocin Formulations and Methods of Use
Japan
MX/a/2018/012351
Magnesium-Containing Oxytocin Formulations and Methods of Use
Mexico
747221
Magnesium-Containing Oxytocin Formulations and Methods of Use
New Zealand
Nociceptin/Orphanin FQ therapeutics
Application No.
Title
Country / Region
BR112012001819-1
Methods for Treatment of Pain
Brazil
2,769,347
Methods for Treatment of Pain
Canada
13103181.8
Methods for Treatment of Pain
Hong Kong
1614/CHENP/2012
Methods for Treatment of Pain
India
CBP - Fibromyalgia
Application No.
Title
Country / Region
63/122,469
Cyclobenzaprine Treatment for Fibromyalgia
U.S.A.
Assessing Clinical Response – PTSD
Application No.
Title
Country / Region
63/145,968
An Improved Method of Assessing Clinical Response in the Treatment of PTSD Symptoms
U.S.A.
Trademarks and Service Marks
We seek trademark
and service mark protection in the United States and outside of the United States where available and when appropriate. We are
the owner of the following U.S. federally registered marks: TONIX PHARMACEUTICALS (Reg. No. 4656463, issued December 16, 2014)
and TONMYA (Reg. No. 4868328, issued December 8, 2015).
We are the owner of the following marks for which applications for U.S. federal registration are currently
pending: FYMRALIN (Serial No. 88/064191, filed August 3, 2018), MODALTIN (Serial No. 88/196892, filed November 16, 2018), RAPONTIS
(Serial No. 88/196897, filed November 16, 2018), PROTECTIC (Serial No. 88/196912, filed November 16, 2018), TONIX PHARMACEUTICALS
(Serial No. 88/896150, filed April 30, 2020) and ANGSTRO-TECHNOLOGY (Serial No. 88/690384, filed November 13, 2019).
39
Research and Development
We have
approximately 17 employees dedicated to research and development. Our research and development operations are located in
Chatham, NJ, Dartmouth, MA, San Diego, CA, Dublin, Ireland and Montreal, Canada. We have used, and expect to continue to use,
third parties to conduct our nonclinical and clinical studies.
Manufacturing
We have contracted
with a third-party cGMP-compliant contract manufacturer organization, or CMOs, for the manufacture of TNX-102 SL drug substances
and drug products for investigational purposes, including nonclinical and clinical testing. For TNX-102 SL, we have engaged a cGMP
facility for manufacturing of to-be-marketed product for Phase 3 clinical and commercial. Our manufacturing operations are managed
and controlled in Dublin, Ireland.
All of our small molecules
drug candidates are synthesized using industry standard processes, and our drug products are formulated using commercially available
pharmaceutical grade excipients.
Our smallpox-preventing
vaccine candidate is a biologic and uses live form of horsepox. Both the drug substance (HPVX and the cell bank) and the drug product
(vaccine) will be manufactured by contract cGMP-compliant facilities capable of manufacturing for nonclinical/clinical testing
and licensed product.
On September 28, 2020,
we completed the purchase of our 40,000 square foot facility in Massachusetts, to house our new Advanced Development Center for
accelerated development and manufacturing of vaccines. As of December 31, 2020, the asset has not been placed in service.
On December 23, 2020,
we completed the purchase of our approximately 44-acre site in Hamilton, Montana, for the construction of a vaccine development
and commercial scale manufacturing facility. As of December 31, 2020, the asset has not been placed in service.
On March 5, 2021, the Company announced that it entered into a $2.9 million non-binding Purchase and Sale
Agreement in connection with a property in Massachusetts. The Property is intended for process development activities.
Government Regulations
The FDA and other federal,
state, local and foreign regulatory agencies impose substantial requirements upon the clinical development, approval, labeling,
manufacture, marketing and distribution of drug products. These agencies regulate, among other things, research and development
activities and the testing, approval, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, advertising
and promotion of our product candidates. The regulatory approval process is generally lengthy and expensive, with no guarantee
of a positive result. Moreover, failure to comply with applicable requirements by the FDA or other requirements may result in civil
or criminal penalties, recall or seizure of products, injunctive relief including partial or total suspension of production, or
withdrawal of a product from the market.
The FDA regulates,
among other things, the research, manufacture, promotion and distribution of drugs in the U.S. under the FDCA and other statutes
and implementing regulations. The process required by the FDA before prescription drug product candidates may be marketed in the
U.S. generally involves the following:
●
completion of extensive nonclinical laboratory tests, animal studies and formulation studies, all performed in accordance with the FDA’s Good Laboratory Practice regulations;
●
submission to the FDA of an IND, which must become effective before human clinical trials may begin;
●
performance of adequate and well-controlled human clinical trials in accordance with the FDA’s regulations, including Good Clinical Practices, to establish the safety and efficacy of the product candidate for each proposed indication;
●
submission to the FDA of an NDA for drug products, or a Biologics License Application, or BLA, for biologic products;
●
satisfactory completion of a preapproval inspection by the FDA of the manufacturing facilities at which the product is produced to assess compliance with cGMP regulations; and
●
the FDA’s review and approval of the NDA or BLA prior to any commercial marketing, sale or shipment of the drug.
The testing and approval
process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our product
candidates will be granted on a timely basis, if at all.
40
Nonclinical tests include
laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animals and
other animal studies. The results of nonclinical tests, together with manufacturing information and analytical data, are submitted
as part of an IND to the FDA. Some nonclinical testing may continue even after an IND is submitted. The IND also includes one or
more protocols for the initial clinical trial or trials and an investigator’s brochure. An IND automatically becomes effective
30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions relating to the proposed
clinical trials as outlined in the IND and places the clinical trial on a clinical hold. In such cases, the IND sponsor and the
FDA must resolve any outstanding concerns or questions before any clinical trials can begin. Clinical trial holds also may be imposed
at any time before or during studies due to safety concerns or non-compliance with regulatory requirements. An independent Institutional
Review Board, or IRB, at each of the clinical centers proposing to conduct the clinical trial must review and approve the plan
for any clinical trial before it commences at that center. An IRB considers, among other things, whether the risks to individuals
participating in the trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the consent
form signed by the trial participants and must monitor the study until completed.
Clinical Trials
Clinical trials involve
the administration of the product candidate to human subjects under the supervision of qualified medical investigators according
to approved protocols that detail the objectives of the study, dosing procedures, subject selection and exclusion criteria, and
the parameters to be used to monitor participant safety. Each protocol for a U.S. study is submitted to the FDA as part of the
IND.
Human clinical trials
are typically conducted in three sequential phases, but the phases may overlap, or be combined.
●
Phase 1 clinical trials typically involve the initial introduction of the product candidate into healthy human volunteers. In Phase 1 clinical trials, the product candidate is typically tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics.
●
Phase 2 clinical trials are generally conducted in a limited patient population to gather evidence about the efficacy of the product candidate for specific, targeted indications; to determine dosage tolerance and optimal dosage; and to identify possible adverse effects and safety risks. Phase 2 clinical trials, in particular Phase 2b trials, can be undertaken to evaluate clinical efficacy and to test for safety in an expanded patient population at geographically dispersed clinical trial sites.
●
Phase 3 clinical trials are undertaken to evaluate clinical efficacy and to test for safety in an expanded patient population at geographically dispersed clinical trial sites. The size of Phase 3 clinical trials depends upon clinical and statistical considerations for the product candidate and disease. Phase 3 clinical trials are intended to establish the overall risk-benefit ratio of the product candidate and provide an adequate basis for product labeling.
Post-approval clinical
trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial approval. These clinical trials are used
to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term
safety follow-up.
Clinical testing must
satisfy the extensive regulations of the FDA. Reports detailing the results of the clinical trials must be submitted at least annually
to the FDA and safety reports must be submitted for serious and unexpected adverse events. Success in early-stage clinical trials
does not assure success in later-stage clinical trials. The FDA, an IRB or we may suspend a clinical trial at any time on various
grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk.
41
New Drug Applications
Assuming successful
completion of the required clinical trials, the results of product development, nonclinical studies and clinical trials are submitted
to the FDA as part of an NDA (or BLA, in the case of a biologic product). An NDA or BLA also must contain extensive manufacturing
information, as well as proposed labeling for the finished product. An NDA or BLA applicant must develop information about the
chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in accordance with cGMP.
The manufacturing process must be capable of consistently producing quality product within specifications approved by the FDA.
The manufacturer must develop methods for testing the quality, purity and potency of the final product. In addition, appropriate
packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product does not undergo
unacceptable deterioration over its shelf life. Prior to approval, the FDA will conduct an inspection of the manufacturing facilities
to assess compliance with cGMP.
The FDA reviews all
NDAs and BLAs submitted before it accepts them for filing. The FDA may request additional information rather than accept an NDA
for filing. In this event, the NDA or BLA must be resubmitted with the additional information and is subject to review before the
FDA accepts it for filing. After an application is filed, the FDA may refer the NDA or BLA to an advisory committee for review,
evaluation and recommendation as to whether the application should be approved and under what conditions. The FDA is not bound
by the recommendations of an advisory committee, but it considers them carefully when making decisions. The FDA may deny approval
of an NDA or BLA if the applicable regulatory criteria are not satisfied. Data obtained from clinical trials are not always conclusive
and the FDA may interpret data differently than we interpret the same data. The FDA may issue a complete response letter, which
may require additional clinical or other data or impose other conditions that must be met in order to secure final approval of
the NDA or BLA. If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages
or the indications for use may otherwise be limited, which could restrict the commercial value of the product. In addition, the
FDA may require us to conduct Phase 4 testing which involves clinical trials designed to further assess a drug’s safety and
effectiveness after NDA or BLA approval, and may require surveillance programs to monitor the safety of approved products which
have been commercialized. Once issued, the FDA may withdraw product approval if ongoing regulatory requirements are not met or
if safety or efficacy questions are raised after the product reaches the market.
Section 505(b)
NDAs
There are two types
of NDAs: the Section 505(b)(1) NDA, or full NDA, and the Section 505(b)(2) NDA. We intend to file Section 505(b)(2) NDAs for TNX-102
SL for FM and PTSD, and for certain other products, that might, if accepted by the FDA, save time and expense in the development
and testing of our product candidates. We may need to file a Section 505(b)(1) NDA for certain other products in the future. A
full NDA is submitted under Section 505(b)(1) of the FDCA, and must contain full reports of investigations conducted by the applicant
to demonstrate the safety and effectiveness of the drug. A Section 505(b)(2) NDA may be submitted for a drug for which one or more
of the investigations relied upon by the applicant was not conducted by or for the applicant and for which the applicant has no
right of reference from the person by or for whom the investigations were conducted. A Section 505(b)(2) NDA may be submitted based
in whole or in part on published literature or on the FDA’s finding of safety and efficacy of one or more previously approved
drugs, which are known as reference drugs. Thus, the filing of a Section 505(b)(2) NDA may result in approval of a drug based on
fewer clinical or nonclinical studies than would be required under a full NDA. The number and size of studies that need to be conducted
by the sponsor depends on the amount and quality of data pertaining to the reference drug that are publicly available, and on the
similarity of and differences between the applicant’s drug and the reference drug. In some cases, extensive, time-consuming,
and costly clinical and nonclinical studies may still be required for approval of a Section 505(b)(2) NDA.
42
Our drug approval strategy
for our new formulations of approved chemical entities is to submit Section 505(b)(2) NDAs to the FDA. As such, we plan to submit
an NDA under Section 505(b)(2) for TNX-102 SL for FM and PTSD. The FDA may not agree that this product candidate is approvable
for FM and PTSD as a Section 505(b)(2) NDA. If the FDA determines that a Section 505(b)(2) NDA is not appropriate and that a full
NDA is required for TNX-102 SL, the time and financial resources required to obtain FDA approval for TNX-102 SL could substantially
and materially increase, and TNX-102 SL might be less likely to be approved. If the FDA requires a full NDA for TNX-102 SL, or
requires more extensive testing and development for some other reason, our ability to compete with alternative products that arrive
on the market more quickly than our product candidates would be adversely impacted. If CBP-containing products are withdrawn from
the market by the FDA for a safety reason, we may not be able to reference such products to support our anticipated TNX-102 SL
505(b)(2) NDA, and we may be required to follow the requirements of Section 505(b)(1).
Patent Protections
An applicant submitting
a Section 505(b)(2) NDA must certify to the FDA with respect to the patent status of the reference drug upon which the applicant
relies in support of approval of its drug. With respect to every patent listed in the FDA’s Orange Book, which is the FDA’s
list of approved drug products, as claiming the reference drug or an approved method of use of the reference drug, the Section
505(b)(2) applicant must certify that: (1) there is no patent information listed in the orange book for the reference drug; (2)
the listed patent has expired; (3) the listed patent has not expired, but will expire on a particular date; (4) the listed patent
is invalid or will not be infringed by the manufacture, use, or sale of the product in the Section 505(b)(2) NDA; or (5) if the
patent is a use patent, that the applicant does not seek approval for a use claimed by the patent. If the applicant files a certification
to the effect of clause (1), (2) or (5), FDA approval of the Section 505(b)(2) NDA may be made effective immediately upon successful
FDA review of the application, in the absence of marketing exclusivity delays, which are discussed below. If the applicant files
a certification to the effect of clause (3), the Section 505(b)(2) NDA approval may not be made effective until the expiration
of the relevant patent and the expiration of any marketing exclusivity delays.
If the Section 505(b)(2)
NDA applicant provides a certification to the effect of clause (4), referred to as a paragraph IV certification, the applicant
also must send notice of the certification to the patent owner and the holder of the NDA for the reference drug. The filing of
a patent infringement lawsuit within 45 days of the receipt of the notification may prevent the FDA from approving the Section
505(b)(2) NDA for 30 months from the date of the receipt of the notification unless the court determines that a longer or shorter
period is appropriate because either party to the action failed to reasonably cooperate in expediting the action. However, the
FDA may approve the Section 505(b)(2) NDA before the 30 months have expired if a court decides that the patent is invalid or not
infringed, or if a court enters a settlement order or consent decree stating the patent is invalid or not infringed.
Notwithstanding
the approval of many products by the FDA pursuant to Section 505(b)(2), over the last few years certain brand-name pharmaceutical
companies and others have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA’s interpretation of
Section 505(b)(2) is successfully challenged in court, the FDA may be required to change its interpretation of Section 505(b)(2)
which could delay or even prevent the FDA from approving any Section 505(b)(2) NDA that we submit. The pharmaceutical industry
is highly competitive, and it is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA
seeking to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions
can significantly delay, or even prevent, the approval of the new product. Moreover, even if the FDA ultimately denies such a petition,
the FDA may substantially delay approval while it considers and responds to the petition.
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Marketing Exclusivity
Market exclusivity
provisions under the FDCA can delay the submission or the approval of Section 505(b)(2) NDAs, thereby delaying a Section 505(b)(2)
product from entering the market. The FDCA provides five-year marketing exclusivity to the first applicant to gain approval of
an NDA for an NCE, meaning that the FDA has not previously approved any other drug containing the same active moiety. This exclusivity
prohibits the submission of a Section 505(b)(2) NDA for any drug product containing the active ingredient during the five-year
exclusivity period. However, submission of a Section 505(b)(2) NDA that certifies that a listed patent is invalid, unenforceable,
or will not be infringed, as discussed above, is permitted after four years, but if a patent infringement lawsuit is brought within
45 days after such certification, FDA approval of the Section 505(b)(2) NDA may automatically be stayed until 7½ years after
the NCE approval date. The FDCA also provides three years of marketing exclusivity for the approval of new and supplemental NDAs
for product changes, including, among other things, new indications, dosage forms, routes of administration or strengths of an
existing drug, or for a new use, if new clinical investigations, other than bioavailability studies, that were conducted or sponsored
by the applicant are deemed by FDA to be essential to the approval of the application. Five-year and three-year exclusivity will
not delay the submission or approval of another full NDA; however, as discussed above, an applicant submitting a full NDA under
Section 505(b)(1) would be required to conduct or obtain a right of reference to all of the nonclinical and adequate and well-controlled
clinical trials necessary to demonstrate safety and effectiveness.
Other types of exclusivity
in the United States include orphan drug exclusivity and pediatric exclusivity. The FDA may grant orphan drug designation to a
drug intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals
in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that
the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered
from sales in the United States for that drug. Seven-year orphan drug exclusivity is available to a product that has orphan drug
designation and that receives the first FDA approval for the indication for which the drug has such designation. Orphan drug exclusivity
prevents approval of another application for the same drug for the same orphan indication, for a period of seven years, regardless
of whether the application is a full NDA or a Section 505(b)(2) NDA, except in limited circumstances, such as a showing of clinical
superiority to the product with orphan exclusivity. Pediatric exclusivity, if granted, provides an additional six months to an
existing exclusivity or statutory delay in approval resulting from a patent certification. This six-month exclusivity, which runs
from the end of other exclusivity protection or patent delay, may be granted based on the voluntary completion of a pediatric study
in accordance with an FDA-issued “Written Request” for such a study.
Section 505(b)(2) NDAs
are similar to full NDAs filed under Section 505(b)(1) in that they are entitled to any of these forms of exclusivity if they meet
the qualifying criteria. They also are entitled to the patent protections described above, based on patents that are listed in
the FDA’s Orange Book in the same manner as patents claiming drugs and uses approved for NDAs submitted as full NDAs.
Breakthrough Therapy Designation
The Food and Drug Administration Safety and Innovation Act, or FDASIA, Section 902 provides for Breakthrough
Therapy designation. A Breakthrough Therapy is a drug:
●
intended alone or in combination with one or more other drugs to treat a serious or life-threatening disease or condition; and
●
preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
44
Fast Track Designation
A Fast Track is a designation
by the FDA of an investigational drug which:
●
intended alone or in combination with one or more other drugs to treat a serious or life-threatening disease or condition; and
●
non-clinical or clinical data demonstrate the potential to address an unmet medical need
Fast
track is a process designed to facilitate the development and expedite the review of drugs to treat serious conditions and fill
an unmet medical need. The benefits of a Fast Track designation include rolling submission of portions of the NDA for the drug
candidate and eligibility for priority review of the NDA. Additionally, more frequent meetings and written communication with the
FDA regarding the development plan and trial design for the drug candidate are encouraged throughout the entire drug development
and review process, with the goal of having earlier drug approval and access for patients.
Material Threat Medical Countermeasures
In 2016, the 21 st
Century Cures Act, or Act, was signed into law to support ongoing biomedical innovation. One part of the Act, Section 3086,
is aimed at “Encouraging Treatments for Agents that Present a National Security Threat.” The Act created a new priority
review voucher program for approved “material threat medical countermeasure applications.” The Act defines such countermeasures
as drug or biological products, including vaccines intended to treat biological, chemical, radiological, or nuclear agents that
present a national security threat or to treat harm from a condition that may be caused by administering a drug or biological product
against such an agent. The Department of Homeland Security has identified 13 such threats, including anthrax, smallpox, Ebola/Marburg,
tularemia, botulinum toxin, and pandemic influenza, which includes the SARS coronavirus 2, known as SARS-CoV-2. A priority review
voucher can be applied to any other product application; it shortens the FDA review timeline for a new application from 10-12 months
to 6 months. The recipient of a priority review voucher may transfer it. We intend to seek a priority review voucher if and when
a TNX-801 Biologics License Application is approved as a material threat medical countermeasure. However, the Priority Review Voucher
program provision of the 21st Century Cures Act is set to expire in 2023. If TNX-801 does not receive FDA licensure by 2023, we
may not be able to capitalize on the incentives contained in the 21st Century Cures Act unless the provision allowing for the Priority
Review Voucher Program is extended until such time as TNX-801 is licensed.
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Other Regulatory Requirements
Maintaining substantial
compliance with appropriate federal, state and local statutes and regulations requires the expenditure of substantial time and
financial resources. Drug manufacturers are required to register their establishments with the FDA and certain state agencies,
and after approval, the FDA and these state agencies conduct periodic unannounced inspections to ensure continued compliance with
ongoing regulatory requirements, including cGMPs. In addition, after approval, some types of changes to the approved product, such
as adding new indications, manufacturing changes and additional labeling claims, are subject to further FDA review and approval.
The FDA may require post-approval testing and surveillance programs to monitor safety and the effectiveness of approved products
that have been commercialized. Any drug products manufactured or distributed by us pursuant to FDA approvals are subject to continuing
regulation by the FDA, including:
●
record-keeping requirements;
●
reporting of adverse experiences with the drug;
●
providing the FDA with updated safety and efficacy information;
●
reporting on advertisements and promotional labeling;
●
drug sampling and distribution requirements; and
●
complying with electronic record and signature requirements.
In addition, the FDA
strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. There
are numerous regulations and policies that govern various means for disseminating information to health-care professionals as well
as consumers, including to industry sponsored scientific and educational activities, information provided to the media and information
provided over the Internet. Drugs may be promoted only for the approved indications and in accordance with the provisions of the
approved label.
The FDA has very broad
enforcement authority and the failure to comply with applicable regulatory requirements can result in administrative or judicial
sanctions being imposed on us or on the manufacturers and distributors of our approved products, including warning letters, refusals
of government contracts, clinical holds, civil penalties, injunctions, restitution and disgorgement of profits, recall or seizure
of products, total or partial suspension of production or distribution, withdrawal of approvals, refusal to approve pending applications,
and criminal prosecution resulting in fines and incarceration. The FDA and other agencies actively enforce the laws and regulations
prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject
to significant liability. In addition, even after regulatory approval is obtained, later discovery of previously unknown problems
with a product may result in restrictions on the product or even complete withdrawal of the product from the market.
46
Coverage
and Reimbursement
Sales
of our product candidates, if approved, will depend, in part, on the extent to which such products will be covered by third-party
payors, such as government health care programs, commercial insurance and managed healthcare organizations. These third-party payors
are increasingly limiting coverage or reducing reimbursements for medical products and services. In addition, the U.S. government,
state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions
on reimbursement and requirements for substitution of generic products. Third-party payors decide which therapies they will pay
for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in
setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement
to be provided for any drug candidates that we develop will be made on a payor-by-payor basis. Each payor determines
whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier
of its formulary it will be placed. The position on a payor’s list of covered drugs, or formulary, generally determines the co-payment that
a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians.
Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing
controls and measures, could further limit our net revenue and results. Decreases in third-party reimbursement for our product
candidates or a decision by a third-party payor to not cover our product candidates could reduce physician usage of our product
candidates, once approved, and have a material adverse effect on our sales, results of operations and financial condition.
Other
Healthcare Laws
Because
of our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party
payors, we will also be subject to healthcare regulation and enforcement by the federal government and the states and foreign governments
in which we will conduct our business, including our clinical research, proposed sales, marketing and educational programs. Failure
to comply with these laws, where applicable, can result in the imposition of significant civil penalties, criminal penalties, or
both. The U.S. laws that may affect our ability to operate, among others, include: the federal Health Insurance Portability and
Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, which
governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information;
certain state laws governing the privacy and security of health information in certain circumstances, some of which are more stringent
than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance
efforts; the federal healthcare programs’ Anti-Kickback Statute, which prohibits, among other things, persons from knowingly
and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either
the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made
under federal healthcare programs such as the Medicare and Medicaid programs; federal false claims laws which prohibit, among other
things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid,
or other third-party payors that are false or fraudulent; federal criminal laws that prohibit executing a scheme to defraud any
healthcare benefit program or making false statements relating to healthcare matters; the Physician Payments Sunshine Act, which
requires manufacturers of drugs, devices, biologics, and medical supplies to report annually to the U.S. Department of Health and
Human Services information related to payments and other transfers of value to physicians (defined to include doctors, dentists,
optometrists, podiatrists and chiropractors) and teaching hospitals, and ownership and investment interests held by physicians
and their immediate family members; and state law equivalents of each of the above federal laws, such as anti-kickback and false
claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.
47
In
addition, many states have similar laws and regulations, such as anti-kickback and false claims laws that may be broader in scope
and may apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. Additionally,
to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws.
The Impact of New Legislation and Amendments to Existing
Laws
The FDCA is subject
to routine legislative amendments with a broad range of downstream effects. In addition to new legislation, such as the FDA Reauthorization
Act of 2017 or the FDASIA in 2012, Congress introduces amendments to reauthorize drug user fees and address emerging concerns every
five years. We cannot predict the impact of these new legislative acts and their implementing regulations on our business. The
programs established or to be established under the legislation may have adverse effects upon us, including increased regulation
of our industry. Compliance with such regulation may increase our costs and limit our ability to pursue business opportunities.
In addition, the FDA’s regulations, policies and guidance are often revised or reinterpreted by the agency or the courts
in ways that may significantly affect our business and our products.
We
expect that additional federal and state, as well as foreign, healthcare reform measures will be adopted in the future, any of
which could result in reduced demand for our products or additional pricing pressure.
Human Capital
Resources
As of March 15, 2021, we had 26 full-time employees, of whom nine
hold M.D. or Ph.D. degrees. We have 17 employees dedicated to research and development. None of our employees are represented by
a collective bargaining agreement. We believe that the skills, experience and industry knowledge of our key employees significantly
benefit our operations and performance. Our research and development operations are located in Chatham, NJ, San Diego, CA, Dublin,
Ireland and Montreal, Canada. We have used, and expect to continue to use, third parties to conduct our nonclinical and clinical
studies as well as part-time employees.
Employee health and
safety in the workplace is one of our core values. The COVID-19 pandemic has underscored for us the importance of keeping our employees
safe and healthy. In response to the pandemic, we have taken actions aligned with the World Health Organization and the Centers
for Disease Control and Prevention in an effort to protect our workforce so they can more safely and effectively perform their
work.
Employee levels are
managed to align with the pace of business and management believes it has sufficient human capital to operate its business successfully.
Corporate Information
We lease the space
for our principal executive offices, which are located at 26 Main Street, Suite 101, Chatham, New Jersey 07928, and our telephone
number is (862) 904 8182. Our website addresses are www.tonixpharma.com, www.tonix.com, and www.krele.com. We do not incorporate
the information on our websites into this annual report, and you should not consider such information part of this annual report.
We were incorporated
on November 16, 2007 under the laws of the State of Nevada as Tamandare Explorations Inc. On October 11, 2011, we changed our name
to Tonix Pharmaceuticals Holding Corp.
Item 1A. Risk Factors
Summary of Risk Factors
● We have a history of operating losses and may never generate revenues or achieve profitability.
● We expect our operating results to fluctuate, which may make it difficult to predict our future
performance.
● Our product candidates are novel and still in development.
● We do not expect to generate any revenues from product sales in the foreseeable future, if at all.
● We are largely dependent on the success of TNX-102 SL for FM and PTSD and cannot be certain that
this product candidate will receive regulatory approval or be successfully commercialized.
● We may not commence or advance clinical trials for TNX-1800 if the COVID-19 disease outbreak subsides.
● Successful development of our products is uncertain.
● Clinical studies required for our product candidates are expensive and time-consuming, and their
outcome is uncertain.
● We are subject to extensive and costly government regulation.
● We do not have, and may never obtain, the regulatory approvals we need to market our product candidates.
● We have never submitted an NDA before, and may be unable to do so for TNX-102 SL or other product
candidates we are developing.
● Our product candidates may cause serious adverse events or undesirable side effects which may delay
or prevent marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety
warnings or otherwise limit their sales.
● We may be unable to meet our anticipated development and commercialization timelines for approval
of TNX-102 SL.
● Any fast track designation or grant of priority review status by the FDA may not actually lead
to a faster development or regulatory review or approval process, nor assure FDA approval of our product candidates.
● Even if approved, our products will be subject to extensive post-approval regulation.
● Even if approved, our products may not be accepted by the market.
48
● We may use our financial and human resources to pursue a particular research program or product
candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater
likelihood of success.
● Our independent registered public accounting firm has included an explanatory paragraph relating
to our ability to continue as a going concern in its report on our audited financial statements. We may be unable to continue to
operate without the threat of liquidation for the foreseeable future.
● We will need additional capital. If additional capital is not available or is available at unattractive
terms, we may be forced to delay, reduce the scope of or eliminate our research and development programs, reduce our commercialization
efforts or curtail our operations.
● Outbreaks of communicable diseases may materially and adversely affect our business, financial
condition and results of operations.
● Competition and technological change may make our product candidates and technologies less attractive
or obsolete.
● If we fail to protect our intellectual property rights, our ability to pursue the development of
our technologies and products would be negatively affected.
● We may be involved in lawsuits to protect or enforce our patents, which could be expensive and
time consuming.
● If we infringe the rights of third parties we could be prevented from selling products, forced
to pay damages, and defend against litigation.
● There are risks to our intellectual property based on our international business initiatives.
● If preclinical and nonclinical testing or clinical studies for our product candidates are unsuccessful
or delayed, we will be unable to meet our anticipated development and commercialization timelines.
● We rely on third parties to conduct, supervise and monitor our clinical studies, and if those third
parties perform in an unsatisfactory manner, it may harm our business.
● We will need to expand our operations and increase the size of our company, and we may experience
difficulties in managing growth.
● Our executive officers and other key personnel are critical to our business, and our future success
depends on our ability to retain them.
● If we are unable to hire additional qualified personnel, our ability to grow our business may be
harmed.
● We rely on third parties to manufacture the compounds used in our studies, and we intend to rely
on them for the manufacture of any approved products for commercial sale. If these third parties do not manufacture our product
candidates in sufficient quantities and at an acceptable cost, clinical development and commercialization of our product candidates
could be delayed, prevented or impaired.
● Failure by our third-party manufacturers to comply with the regulatory guidelines set forth by
the FDA with respect to our product candidates could delay or prevent the completion of clinical studies, the approval of any product
candidates or the commercialization of our products.
● Corporate and academic collaborators may take actions to delay, prevent, or undermine the success
of our products.
● Data provided by collaborators and others upon which we rely that has not been independently verified
could turn out to be false, misleading, or incomplete.
● Our product candidates may face competition sooner than expected.
● If we fail to establish marketing, sales and distribution capabilities, or fail to enter into arrangements
with third parties, we will not be able to create a market for our product candidates.
● Our relationships with customers, physicians, and third-party
payors will be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health
information privacy and security laws, and other healthcare laws and regulations. If we are unable to comply, or have not fully
complied, with such laws, we could face substantial penalties.
● Coverage and adequate reimbursement may not be available
for our current or any future drug candidates, which could make it difficult for us to sell profitably, if approved.
● Healthcare legislative reform measures may have a negative impact on our business and results of operations.
● If we obtain approval to commercialize any approved products outside of the United States, a variety
of risks associated with international operations could materially adversely affect our business.
● We face the risk of product liability claims and may not be able to obtain insurance.
● We use hazardous chemicals in our business. Potential claims relating to improper handling, storage
or disposal of these chemicals could affect us and be time consuming and costly.
● We use hazardous chemicals in our business. Potential claims relating to improper handling, storage
or disposal of these chemicals could affect us and be time consuming and costly.
● If we retain collaborative partners and our partners do not satisfy their obligations, we will
be unable to develop our partnered product candidates.
● We may be unsuccessful in obtaining a priority review voucher for material threat medical countermeasures.
● There may not be market interest in TNX-801.
● If technology developed for the purposes of developing new medicines or vaccines can be applied
to the creation or development of biological weapons, then our technology may be considered “dual use” technology and
be subject to limitations on public disclosure or export.
● We face risks in connection with existing and future collaborations with respect to the development,
manufacture, and commercialization of our product candidates.
● We face risks in connection with the testing, production and storage of our vaccine product candidates.
● Sales of additional shares of our common stock could cause
the price of our common stock to decline.
● An active trading market for our common stock may not be sustained.
● The market price for our common stock may be volatile, and your investment in our common stock
could decline in value.
● We could be delisted from Nasdaq, which could seriously harm the liquidity of our stock and our
ability to raise capital.
● We do not anticipate paying dividends on our common stock and, accordingly, shareholders must rely
on stock appreciation for any return on their investment.
49
● We expect that our quarterly results of operations will fluctuate, and this fluctuation could cause
our stock price to decline.
● The rights of the holders of common stock may be impaired by the potential issuance of preferred stock.
● If we fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to accounting
controls and procedures, or if we discover material weaknesses and deficiencies in our internal control and accounting procedures,
our stock price could decline significantly and raising capital could be more difficult.
● If securities or industry analysts do not publish research or reports about our business, or if
they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.
● Other companies may have difficulty acquiring us, even if doing so would benefit our stockholders,
due to provisions under our corporate charter and bylaws, as well as Nevada law.
● Other companies may have difficulty acquiring us, even if doing so would benefit our stockholders,
due to provisions under our corporate charter and bylaws, as well as Nevada law.
● Our bylaws designate the Eighth Judicial District Court of Clark County, Nevada as the sole and
exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’
ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
RISKS RELATED TO OUR BUSINESS
We have a history of operating losses
and expect to incur losses for the foreseeable future. We may never generate revenues or, if we are able to generate revenues,
achieve profitability.
We are focused on product
development, and we have not generated any revenues to date. We have incurred losses in each year of our operations, and we expect
to continue to incur operating losses for the foreseeable future. These operating losses have adversely affected and are likely
to continue to adversely affect our working capital, total assets and shareholders’ equity.
50
We and our prospects should be examined
in light of the risks and difficulties frequently encountered by new and early-stage companies in new and rapidly evolving markets.
These risks include, among other things, the speed at which we can scale up operations, our complete dependence upon development
of our product candidates that currently have no market acceptance, our ability to establish and expand our brand name, our ability
to expand our operations to meet the commercial demand of our clients, our development of and reliance on strategic and customer
relationships and our ability to minimize fraud and other security risks.
The process of developing
our products requires significant clinical, nonclinical and CMC development, laboratory testing and clinical studies. In addition,
commercialization of our product candidates will require that we obtain necessary regulatory approvals and establish sales, marketing
and manufacturing capabilities, either through internal hiring or through contractual relationships with others. We expect to incur
substantial losses for the foreseeable future as a result of anticipated increases in our research and development costs, including
costs associated with conducting preclinical and nonclinical testing and clinical studies, and regulatory compliance activities.
We expect to incur
substantial additional operating expenses over the next several years as our research, development, preclinical and nonclinical
testing, and clinical study activities increase , and if and when we acquire rights to additional product candidates. The
amount of future losses and when, if ever, we will achieve profitability are uncertain. We have no products that have generated
any commercial revenue, do not expect to generate revenues from the commercial sale of products in the near future, and might never
generate revenues from the sale of products. Our ability to generate revenue and achieve profitability will depend on, among other
things, successful completion of the development of our product candidates; obtaining necessary regulatory approvals from the FDA;
establishing manufacturing, sales, and marketing arrangements with third parties; successfully commercializing our products; establishing
a favorable competitive position; and raising sufficient funds to finance our activities. Many of these factors will depend on
circumstances beyond our control. We might not succeed at any of these undertakings. If we are unsuccessful at some or all of these
undertakings, our business, prospects, and results of operations may be materially adversely affected.
We expect a number of factors to
cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.
We are a development-stage
biopharmaceutical and our operations to date have been primarily limited to developing our technology and undertaking preclinical
and nonclinical testing and clinical studies of our clinical-stage product candidate, TNX-102 SL for FM and PTSD. We have not yet
obtained regulatory approvals for TNX-102 SL or any of our other product candidates. Consequently, any predictions made about our
future success or viability may not be as accurate as they could be if we had a longer operating history or commercialized products.
Our financial condition has varied significantly in the past and will continue to fluctuate from quarter-to-quarter or year-to-year
due to a variety of factors, many of which are beyond our control. Factors relating to our business that may contribute to these
fluctuations include other factors described elsewhere in this annual report and also include, among other things:
●
our ability to obtain additional funding to develop our product candidates;
●
delays in the commencement, enrollment and timing of clinical studies;
●
the success of our clinical studies through all phases of clinical development, including studies of our most advanced product candidate, TNX-102 SL for FM and PTSD;
●
any delays in regulatory review and approval of product candidates in clinical development;
●
our ability to obtain and maintain regulatory approval for our product candidate TNX-102 SL for FM and PTSD or any of our other product candidates in the United States and foreign jurisdictions;
51
●
potential nonclinical toxicity and/or side effects of our product candidates that could delay or prevent commercialization, limit the indications for any approved drug, require the establishment of REMS, or cause an approved drug to be taken off the market;
●
our ability to establish or maintain collaborations, licensing or other arrangements;
●
market acceptance of our product candidates;
●
competition from existing products or new products that may emerge;
●
the ability of patients or healthcare providers to obtain coverage of or sufficient reimbursement for our products;
●
our ability to leverage our proprietary technology platform to discover and develop additional product candidates;
●
our ability and our licensors’ abilities to successfully obtain, maintain, defend and enforce intellectual property rights important to our business; and
●
potential product liability claims;
Accordingly,
the results of any quarterly or annual periods should not be relied upon as indications of future operating performance.
RISKS RELATED TO PRODUCT DEVELOPMENT,
REGULATORY APPROVAL, MANUFACTURING AND COMMERCILAIZATION
Our product candidates are novel
and still in development.
We are a clinical-stage
pharmaceutical company focused on the development of drug product candidates, all of which are still in development. Our drug development
methods may not lead to commercially viable drugs for any of several reasons. For example, we may fail to identify appropriate
targets or compounds, our drug candidates may fail to be safe and effective in clinical studies, or we may have inadequate financial
or other resources to pursue development efforts for our drug candidates. Our drug candidates will require significant additional
development, clinical studies, regulatory clearances and additional investment by us or our collaborators before they can be commercialized.
Further, we and our
product candidates are subject to extensive regulation by the FDA and comparable regulatory authorities in other countries governing,
among other things, research, testing, clinical studies, manufacturing, labeling, promotion, selling, adverse event reporting and
recordkeeping. We are not permitted to market any of our product candidates in the United States until we receive approval of an
NDA for a product candidate from the FDA or the equivalent approval from a foreign regulatory authority. Obtaining FDA approval
is a lengthy, expensive and uncertain process. We currently have one product candidate, TNX-102 SL, in Phase 3 development for
the treatment of PTSD and FM. The success of our business currently depends on the successful development, approval and commercialization
of TNX-1800, TNX-801 and TNX-102 SL. Any projected sales or future revenue predictions are predicated upon FDA approval and market
acceptance of TNX-102 SL. If projected sales do not materialize for any reason, it would have a material adverse effect on our
business and our ability to continue operations.
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As we have no approved products on
the market, we do not expect to generate any revenues from product sales in the foreseeable future, if at all.
To date, we have no
approved product on the market and have generated no product revenues. We have funded our operations primarily from sales of our
securities. We have not received, and do not expect to receive for at least the next couple of years, if at all, any revenues from
the commercialization of our product candidates. To obtain revenues from sales of our product candidates, we must succeed, either
alone or with third parties, in developing, obtaining regulatory approval for, manufacturing and marketing drugs with commercial
potential. We may never succeed in these activities, and we may not generate sufficient revenues to continue our business operations
or achieve profitability.
We are largely dependent on the success
of our clinical-stage product candidate, TNX-102 SL for FM and PTSD, and we cannot be certain that this product candidate will
receive regulatory approval or be successfully commercialized.
TNX-102 SL has not
completed the clinical development process; therefore, we have not yet submitted an NDA or foreign equivalent or received marketing
approval for this product candidate anywhere in the world. The clinical development program for TNX-102 SL for FM and PTSD may
not lead to commercial products for a number of reasons, including if we fail to obtain necessary approvals from the FDA or foreign
regulatory authorities because our clinical studies fail to demonstrate to their satisfaction that this product candidate is safe
and effective or a clinical program may be put on hold due to unexpected safety issues. We may also fail to obtain the necessary
approvals if we have inadequate financial or other resources to advance our product candidates through the clinical study process.
Any failure or delay in completing clinical studies or obtaining regulatory approvals for TNX-102 SL for FM and PTSD in a timely
manner would have a material adverse impact on our business and our stock price.
We may not commence or advance clinical
trials for TNX-1800 if the COVID-19 disease outbreak subsides.
Disease outbreaks are
unpredictable. For example, the SARS virus disappeared just four months after it caused a global panic. In the event that COVID-19
has a similar disease cycle, we may be forced to abandon or delay the development of TNX-1800 due to a lack of patients or government
funding.
Successful development of our products
is uncertain.
Our development of
current and future product candidates is subject to the risks of failure and delay inherent in the development of new pharmaceutical
products, including: delays in product development, clinical testing, or manufacturing; unplanned expenditures in product development,
clinical testing, or manufacturing; failure to receive regulatory approvals; emergence of superior or equivalent products; inability
to manufacture on its own, or through any others, product candidates on a commercial scale; and failure to achieve market acceptance.
Because of these risks,
our research and development efforts may not result in any commercially viable products. If a significant portion of these development
efforts are not successfully completed, required regulatory approvals are not obtained or any approved products are not commercially
successfully, our business, financial condition, and results of operations may be materially harmed.
Clinical studies required for our
product candidates are expensive and time-consuming, and their outcome is uncertain.
In order to obtain
FDA approval to market a new pharmaceutical product, we must demonstrate proof of safety and effectiveness in humans. To meet these
requirements, we must conduct “adequate and well controlled” clinical studies. Conducting clinical studies is a lengthy,
time-consuming, and expensive process. The length of time may vary substantially according to the type, complexity, novelty, and
intended use of the product candidate, and often can be several years or more per study. Delays associated with products for which
we are directly conducting clinical studies may cause us to incur additional operating expenses. The commencement and rate of completion
of clinical studies may be delayed by many factors, including, for example: inability to manufacture sufficient quantities of stable
and qualified materials under cGMP, for use in clinical studies; slower than expected rates of patient recruitment; failure to
recruit a sufficient number of patients; modification of clinical study protocols; changes in regulatory requirements for clinical
studies; the lack of effectiveness during clinical studies; the emergence of unforeseen safety issues; delays, suspension, or termination
of the clinical studies due to the ITB responsible for overseeing the study at a particular study site; and government or regulatory
delays or “clinical holds” requiring suspension or termination of the studies.
53
The results from early
clinical studies are not necessarily predictive of results obtained in later clinical studies. Accordingly, even if we obtain positive
results from early clinical studies, we may not be able to confirm the results in future clinical studies. In addition, clinical
studies may not demonstrate sufficient safety and effectiveness to obtain the requisite regulatory approvals for product candidates.
Our clinical studies
may be conducted in patients with CNS conditions, and in some cases, our product candidates are expected to be used in combination
with approved therapies that themselves have significant adverse event profiles. During the course of treatment, these patients
could suffer adverse medical events or die for reasons that may or may not be related to our product candidates. We cannot ensure
that safety issues will not arise with respect to our product candidates in clinical development.
The failure of clinical
studies to demonstrate safety and effectiveness for the desired indications could harm the development of that product candidate
and other product candidates. This failure could cause us to abandon a product candidate and could delay development of other product
candidates. Any delay in, or termination of, our clinical studies would delay the filing of our NDAs with the FDA and, ultimately,
our ability to commercialize our product candidates and generate product revenues. Any change in, or termination of, our clinical
studies could materially harm our business, financial condition, and results of operations.
We are subject to extensive and costly
government regulation.
Product candidates
employing our technology are subject to extensive and rigorous domestic government regulation including regulation by the FDA,
the Centers for Medicare and Medicaid Services, other divisions of the United States Department of Health and Human Services, the
United States Department of Justice, state and local governments, and their respective foreign equivalents. The FDA regulates the
research, development, preclinical and nonclinical testing and clinical studies, manufacture, safety, effectiveness, record-keeping,
reporting, labeling, storage, approval, advertising, promotion, sale, distribution, import, and export of biopharmaceutical products.
The FDA regulates small molecule chemical entities as drugs, subject to an NDA under the FDCA. The FDA applies the same standards
for biologics, requiring an IND application, followed by a Biologic License Application, or BLA, prior to licensure. Other products,
such as vaccines, are also regulated under the Public Health Service Act. FDA has conflated the standards for approval of NDAs
and BLAs so that they require the same types of information on safety, effectiveness, and CMCs. If products employing our technologies
are marketed abroad, they will also be subject to extensive regulation by foreign governments, whether or not they have obtained
FDA approval for a given product and its uses. Such foreign regulation may be equally or more demanding than corresponding United
States regulation.
Government regulation
substantially increases the cost and risk of researching, developing, manufacturing, and selling our products. The regulatory
review and approval process, which includes preclinical and nonclinical testing and clinical studies of each product candidate,
is lengthy, expensive, and uncertain. We or our collaborators must obtain and maintain regulatory authorization to conduct clinical
studies. We or our collaborators must obtain regulatory approval for each product we intend to market, and the manufacturing facilities
used for the products must be inspected and meet legal requirements. Securing regulatory approval requires the submission of extensive
preclinical, nonclinical and clinical data and other supporting information for each proposed therapeutic indication in order
to establish the product’s safety and efficacy, and in the case of biologics also potency and purity, for each intended
use. The development and approval process takes many years, requires substantial resources, and may never lead to the approval
of a product.
54
Even if we are
able to obtain regulatory approval for a particular product, the approval may limit the indicated medical uses for the product,
may otherwise limit our ability to promote, sell, and distribute the product, may require that we conduct costly post-marketing
surveillance, and/or may require that we conduct ongoing post-marketing studies. Material changes to an approved product, such
as, for example, manufacturing changes or revised labeling, may require further regulatory review and approval. Once obtained,
any approvals may be withdrawn, including, for example, if there is a later discovery of previously unknown problems with the product,
such as a previously unknown safety issue.
If we, our collaborators,
or our CMOs fail to comply with applicable regulatory requirements at any stage during the regulatory process, such noncompliance
could result in, among other things delays in the approval of applications or supplements to approved applications; refusal of
a regulatory authority, including the FDA, to review pending market approval applications or supplements to approved applications;
warning letters; fines; import and/or export restrictions; product recalls or seizures; injunctions; total or partial suspension
of production; civil penalties; withdrawals of previously approved marketing applications or licenses; recommendations by the FDA
or other regulatory authorities against governmental contracts; and/or criminal prosecutions.
We do not have, and may never obtain,
the regulatory approvals we need to market our product candidates.
Following completion
of clinical studies, the results are evaluated and, depending on the outcome, submitted to the FDA in the form of an NDA or BLA
in order to obtain FDA approval of the product and authorization to commence commercial marketing. In responding to an NDA, the
FDA may require additional testing or information, may require that the product labeling be modified, may impose post-approval
study and other commitments or reporting requirements or other restrictions on product distribution, or may deny the application.
The FDA has established performance goals for review of NDAs or BLAs: six months for priority applications and ten months for standard
applications. However, the FDA is not required to complete its review within these time periods. The timing of final FDA review
and action varies greatly but can take years in some cases and may involve the input of an FDA advisory committee of outside experts.
Product sales in the United States may commence only when an NDA or BLA is approved.
To date, we have not
applied for or received the regulatory approvals required for the commercial sale of any of our products in the United States or
in any foreign jurisdiction. None of our product candidates have been determined to be safe and effective, and we have not submitted
an NDA or BLA to the FDA or an equivalent application to any foreign regulatory authorities for any of our product candidates.
It is possible that
none of our product candidates will be approved for marketing. Failure to obtain regulatory approvals, or delays in obtaining regulatory
approvals, may adversely affect the successful commercialization of any drugs or biologics that we or our partners develop, may
impose additional costs on us or our collaborators, may diminish any competitive advantages that we or our partners may attain,
and/or may adversely affect our receipt of revenues or royalties.
We have never submitted an NDA before,
and may be unable to do so for TNX-102 SL or other product candidates we are developing.
We completed a successful
Phase 3 study in FM in the fourth quarter of 2019. We initiated a second Phase 3 study in FM in the third quarter of 2020. As this
study is intended to provide efficacy and safety evidence to support marketing approval by the FDA, it is considered a pivotal,
confirmatory or registration studies. We initiated a Phase 3 study in civilian and military-related PTSD in the first quarter of
2019 and stopped new enrollment in February 2020 after the IDMC recommended stopping the study for futility after reviewing the
IA results. Topline results for this study were reported in December 2020.
55
The conduct of pivotal clinical studies and the submission of a
successful NDA is a complicated process. Although members of our management team have extensive industry experience, including
in the development and clinical testing of drug candidates and the commercialization of drug, have limited experience in preparing,
submitting and prosecuting regulatory filings, and have not submitted an NDA before. Consequently, we may be unable to successfully
and efficiently execute and complete this planned clinical study in a way that leads to NDA submission and approval of TNX-102
SL and other product candidates we are developing. We may require more time and incur greater costs than our competitors and may
not succeed in obtaining regulatory approvals of product candidates that we develop. Failure to commence or complete, or delays
in, our planned clinical studies would prevent or delay commercialization of TNX-102 SL and other product candidates we are developing.
Our product candidates may cause
serious adverse events, or SAEs, or undesirable side effects which may delay or prevent marketing approval, or, if approval is
received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales.
SAEs or undesirable
side effects from any of our other product candidates could arise either during clinical development or, if approved, after the
approved product has been marketed. The results of future clinical studies may show that our product candidates cause SAEs or undesirable
side effects, which could interrupt, delay or halt clinical studies, resulting in delay of, or failure to obtain, marketing approval
from the FDA and other regulatory authorities.
If any of our other
product candidates cause SAEs or undesirable side effects or suffer from quality control issues:
●
regulatory authorities may impose a clinical hold or risk evaluation and mitigation strategies, or REMS, which could result in substantial delays, significantly increase the cost of development, and/or adversely impact our ability to continue development of the product;
●
regulatory authorities may require the addition of statements, specific warnings, or contraindications to the product label, or restrict the product’s indication to a smaller potential treatment population;
●
we may be required to change the way the product is administered or conduct additional clinical studies;
●
we may be required to implement a risk minimization action plan, which could result in substantial cost increases and have a negative impact on our ability to commercialize the product;
●
we may be required to limit the participants who can receive the product;
●
we may be subject to limitations on how we promote the product;
●
we may, voluntarily or involuntarily, initiate field alerts for product recall, which may result in shortages;
●
sales of the product may decrease significantly;
●
regulatory authorities may require us to take our approved product off the market;
●
we may be subject to litigation or product liability claims; and
●
our reputation may suffer.
56
Any of these events
could prevent us from achieving or maintaining market acceptance of the affected product or could substantially increase commercialization
costs and expenses, which in turn could delay or prevent us from generating significant revenues from the sale of our products.
If we are unable to file for approval
of TNX-102 SL under Section 505(b)(2) of the FDCA or if we are required to generate additional data related to safety and efficacy
in order to obtain approval under Section 505(b)(2), we may be unable to meet our anticipated development and commercialization
timelines.
Our current plans for
filing NDAs for our most advanced product candidate, TNX-102 SL, include efforts to minimize the data we will be required to generate
in order to obtain marketing approval and therefore reduce the development time. We intend to file Section 505(b)(2) NDAs for TNX-102
SL for FM, PTSD, and for other proposed indications, that might, if accepted by the FDA, save time and expense in the development
and testing of TNX-102 SL.
TNX-102 SL for FM and PTSD are our most advanced development programs
which are in the Phase 3 stages. For the FM program, we held an End-of-Phase 2 meeting with the FDA in February 2013 to discuss
the development and NDA submissions of TNX-102 SL for the management of FM. In late 2014, following the results of the Phase 2
BESTFIT study, we corresponded with the FDA to discuss the results and the development of the first Phase 3 study (AFFIRM) and
our registration program. In September 2016, following the results of the AFFIRM study, we temporarily discontinued the FM
program to focus on the development of the PTSD program. In March 2019, we resumed the clinical development of the FM program and
held a Clinical Guidance Meeting with the FDA to discuss the study design of the now-completed Phase 3 study (RELIEF) and the currently
ongoing Phase 3 study (RALLY).
In December 2018, the FDA issued an Intent-to-Rescind letter for BTD status for TNX-102 SL for the treatment
of PTSD because the IA results of the HONOR study did not meet the criteria for the BTD. In March 2019, the FDA rescinded the BTD,
but subsequently withdrew the BTD rescission in April 2019 and granted a meeting in August 2019 to discuss the continuation of
BTD. In August 2019, we held a Breakthrough Therapy Type B Meeting for continuing BT designation with the FDA. FDA agreed to consider
the Phase 3 HONOR study additional data and information we presented at the meeting. In May 2020, the FDA rescinded the Breakthrough
Therapy Designation for TNX-102 SL because the criteria for designation are no longer met.
Our interactions with
the FDA have encouraged our efforts to continue to develop TNX-102 SL for FM and PTSD, however, based on interim analysis results
of the first 50% of enrolled participants, an Independent Data Monitoring Committee recommended stopping the Phase 3 RECOVERY trial
in PTSD for futility as TNX-102 SL was unlikely to demonstrate a statistically significant improvement in the primary endpoint
of overall change from baseline in the severity of PTSD symptoms. While we studied those participants enrolled until completion
and then proceeded with a full analysis of the unblinded data in December 2020 to determine the next steps in this program, there
is no assurance that we will satisfy the FDA’s requirements for approval in this indication. The timeline for filing and
review of our NDA for TNX-102 SL for FM and PTSD is based on our plan to submit this NDA under Section 505(b)(2) of the FDCA, which
would enable us to rely in part on data in the public domain or elsewhere. We have not yet filed an NDA under Section 505(b)(2)
for any of our product candidates. Depending on the data that may be required by the FDA for approval, some of the data may be
related to products already approved by the FDA. If the data relied upon is related to products already approved by the FDA and
covered by third-party patents, we would be required to certify that we do not infringe the listed patents or that such patents
are invalid or unenforceable. As a result of the certification, the third-party would have 45 days from notification of our certification
to initiate an action against us. In the event that an action is brought in response to such a certification, the approval
of our NDA could be subject to a stay of up to 30 months or more while we defend against such a suit. Approval of our product candidates
under Section 505(b)(2) may therefore be delayed until patent exclusivity expires or until we successfully challenge the applicability
of those patents to our product candidates. Alternatively, we may elect to generate sufficient Alternatively, we may elect
to generate sufficient additional clinical data so that we no longer rely on data which triggers a potential stay of the approval
of our product candidates. Even if no exclusivity periods apply to our applications under Section 505(b)(2), the FDA has broad
discretion to require us to generate additional data on the safety and efficacy of our product candidates to supplement third-party
data on which we may be permitted to rely. In either event, we could be required, before obtaining marketing approval for any of
our product candidates, to conduct substantial new research and development activities beyond those we currently plan to engage
in order to obtain approval of our product candidates. Such additional new research and development activities would be costly
and time consuming.
57
We may not be able
to realize a shortened development timeline for TNX-102 SL for FM or PTSD (or other proposed indications under TNX-102 SL), and
the FDA may not approve our NDA based on their review of the submitted data. If cyclobenzaprine-containing products are withdrawn
from the market by the FDA for any safety reason, we may not be able to reference such products to support a 505(b)(2) NDA for
TNX-102 SL, and we may need to fulfill the more extensive requirements of Section 505(b)(1). If we are required to generate additional
data to support approval, we may be unable to meet our anticipated development and commercialization timelines, may be unable to
generate the additional data at a reasonable cost, or at all, and may be unable to obtain marketing approval of our lead product
candidate.
Any fast track designation or grant
of priority review status by the FDA may not actually lead to a faster development or regulatory review or approval process, nor
will it assure FDA approval of our product candidates. Additionally, our product candidates may treat indications that do not qualify
for priority review vouchers.
We have received fast
track designation for TNX-102 SL for the treatment of agitation in Alzheimer’s disease and may seek fast track designation
for other product candidates or priority review of applications for approval of our product candidates for certain indications.
If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address
unmet medical needs for this condition, the drug sponsor may apply for FDA fast track designation. If a product candidate offers
major advances in treatment, the FDA may designate it eligible for priority review. The FDA has broad discretion whether or not
to grant these designations, so even if we believe a particular product candidate is eligible for these designations, we cannot
assure you that the FDA would decide to grant them. Even if we do receive fast track designation or priority review, we may not
experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw fast
track designation if it believes that the designation is no longer supported by data from our clinical development program.
Even if approved, our products will
be subject to extensive post-approval regulation.
Once a product is approved,
numerous post-approval requirements apply. Among other things, the holder of an approved NDA is subject to periodic and other FDA
monitoring and reporting obligations, including obligations to monitor and report adverse events and instances of the failure of
a product to meet the specifications in the NDA. Application holders must submit new or supplemental applications and obtain FDA
approval for certain changes to the approved product, product labeling, or manufacturing process. Application holders must also
submit advertising and other promotional material to the FDA and report on ongoing clinical studies.
Depending on the circumstances,
failure to meet these post-approval requirements can result in criminal prosecution, fines, injunctions, recall or seizure of products,
total or partial suspension of production, denial or withdrawal of pre-marketing product approvals, or refusal to allow us to enter
into supply contracts, including government contracts. In addition, even if we comply with FDA and other requirements, new information
regarding the safety or effectiveness of a product could lead the FDA to modify or withdraw product approval.
58
Even if we obtain regulatory approval
to market our product candidates, our product candidates may not be accepted by the market.
Even if the FDA approves
one or more of our product candidates, physicians and patients may not accept it or use it. Even if physicians and patients would
like to use our products, our products may not gain market acceptance among healthcare payors such as managed care formularies,
insurance companies or government programs such as Medicare or Medicaid. Acceptance and use of our products will depend upon a
number of factors including: perceptions by members of the health care community, including physicians, about the safety and effectiveness
of our drug or device product; cost-effectiveness of our product relative to competing products; availability of reimbursement
for our product from government or other healthcare payors; and effectiveness of marketing and distribution efforts by us and our
licensees and distributors, if any.
The degree of market
acceptance of any pharmaceutical product that we develop will depend on a number of factors, including:
●
cost-effectiveness;
●
the safety and effectiveness of our products, including any significant potential side effects (including drowsiness and dry mouth), as compared to alternative products or treatment methods;
●
the timing of market entry as compared to competitive products;
●
the rate of adoption of our products by doctors and nurses;
●
product labeling or product insert required by the FDA for each of our products;
●
reimbursement policies of government and third-party payors;
●
effectiveness of our sales, marketing and distribution capabilities and the effectiveness of such capabilities of our collaborative partners, if any; and
●
unfavorable publicity concerning our products or any similar products.
Because we expect sales
of our current product candidates, if approved, to generate substantially all of our product revenues for the foreseeable future,
the failure of these products to find market acceptance would harm our business and could require us to seek additional financing.
We may use our financial and human
resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates
that may be more profitable or for which there is a greater likelihood of success.
Because we have limited
financial and human resources, we are currently focusing on the development of TNX-1800 to protect against COVID-19, TNX-801 to
protect against smallpox and monkeypox, and TNX-102 SL for the management of FM and the treatment of PTSD. As a result, we may
forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater
commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable
market opportunities. Our spending on existing and future product candidates for specific indications may not yield any commercially
viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate,
we may relinquish valuable rights to that product candidate through strategic alliance, licensing or other royalty arrangements
in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product
candidate, or we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more
advantageous to enter into a partnering arrangement.
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RISKS RELATED TO OUR FINANCIAL CONDITION AND CAPITAL
REQUIREMENTS; COMPETITION
Our independent registered public
accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our
audited financial statements. We may be unable to continue to operate without the threat of liquidation for the foreseeable future.
In connection with our management’s assessment, our report
from our independent registered public accounting firm for the fiscal year ended December 31, 2020 includes an explanatory
paragraph stating that our recurring losses from operations and net capital deficiency raise substantial doubt about our ability
to continue as a going concern. If we are unable to obtain sufficient funding, our business, prospects, financial condition and
results of operations will be materially and adversely affected and we may be unable to continue as a going concern. For example,
we anticipate that our existing cash and cash equivalents will enable us to maintain our current operations through March 31, 2022,
but not beyond. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than
the value at which those assets are carried on our consolidated financial statements, and investors will likely lose all or a part
of their investment. Future reports from our independent registered public accounting firm may also contain statements expressing
substantial doubt about our ability to continue as a going concern. If we seek additional financing to fund our business activities
in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing
sources may be unwilling to provide additional funding on commercially reasonable terms or at all.
We will need additional capital.
If additional capital is not available or is available at unattractive terms, we may be forced to delay, reduce the scope of or
eliminate our research and development programs, reduce our commercialization efforts or curtail our operations.
In order to develop and bring our product candidates to market, we must commit substantial resources to
costly and time-consuming research, preclinical and nonclinical testing, clinical studies and marketing activities and the buildout
of our research and development and manufacturing facilities. We anticipate that our existing cash and cash equivalents will enable
us to maintain our current operations through March 31, 2022, but not beyond. We anticipate using our cash and cash equivalents
to fund further research and development with respect to our lead product candidate. We will, however, need to raise additional
funding sooner if our business or operations change in a manner that consumes available resources more rapidly than we anticipate.
Our requirements for additional capital will depend on many factors, including:
●
successful commercialization of our product candidates;
●
the time and costs involved in obtaining regulatory approval for our product candidates;
●
costs associated with protecting our intellectual property rights;
●
development of marketing and sales capabilities;
●
payments received under future collaborative agreements, if any; and
●
market acceptance of our products.
To the extent we raise
additional capital through the sale of equity securities, the issuance of those securities could result in dilution to our shareholders.
In addition, if we obtain debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal
and interest on such indebtedness, thus limiting funds available for our business activities. If adequate funds are not available,
we may be required to delay, reduce the scope of or eliminate our research and development programs, reduce our commercialization
efforts or curtail our operations. In addition, we may be required to obtain funds through arrangements with collaborative partners
or others that may require us to relinquish rights to technologies, product candidates or products that we would otherwise seek
to develop or commercialize ourselves or license rights to technologies, product candidates or products on terms that are less
favorable to us than might otherwise be available.
We will require substantial
additional funds to support our research and development activities, and the anticipated costs of preclinical and nonclinical testing
and clinical studies, regulatory approvals and eventual commercialization. Such additional sources of financing may not be available
on favorable terms, if at all. If we do not succeed in raising additional funds on acceptable terms, we may be unable to commence
or complete clinical studies or obtain approval of any product candidates from the FDA and other regulatory authorities. In addition,
we could be forced to discontinue product development, forego sales and marketing efforts and forego attractive business opportunities.
Any additional sources of financing will likely involve the issuance of our equity securities, which will have a dilutive effect
on our shareholders.
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There is no assurance
that we will be successful in raising the additional funds needed to fund our business plan. If we are not able to raise sufficient
capital in the near future, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise
transfer all or substantially all of our remaining assets.
Outbreaks of communicable diseases
may materially and adversely affect our business, financial condition and results of operations.
We may face risks related
to health epidemics or outbreaks of communicable diseases. The outbreak of such communicable diseases, such as COVID-19, has and
may result in future widespread health crisis that adversely affect general commercial activity and the economies and financial
markets of many countries. An outbreak of communicable diseases, or the perception that such an outbreak could occur, and the measures
taken by the governments of countries affected could adversely affect our business, financial condition or results of operations.
For example, an outbreak could significantly disrupt our business by limiting our ability to travel or ship materials within or
outside of an affected country and forcing temporary closure of facilities or service providers that we rely upon. An outbreak
could also impact our ability to conduct our ongoing multicenter clinical trials if trial participant attendance at requisite study
visits is substantially reduced and if a significant percentage of study participants and study staff are adversely affected by
coronavirus or other infections and the resulting disease course. Moreover, government or community shutdowns such as those caused
by the COVID-19 pandemic, may impair our ability to analyze and submit the results from our clinical and preclinical trials, leading
to further delays in the development and approval of our product candidates.
Competition and technological change
may make our product candidates and technologies less attractive or obsolete.
We compete with established
pharmaceutical and biotechnology companies that are pursuing other forms of treatment for the same or similar indications we are
pursuing and that have greater financial and other resources. Other companies may succeed in developing products earlier than us,
obtaining FDA approval for products more rapidly, or developing products that are more effective than our product candidates. Research
and development by others may render our technology or product candidates obsolete or noncompetitive, or result in treatments or
cures superior to any therapy we develop. We face competition from companies that internally develop competing technology or acquire
competing technology from universities and other research institutions. As these companies develop their technologies, they may
develop competitive positions that may prevent, make futile, or limit our product commercialization efforts, which would result
in a decrease in the revenue we would be able to derive from the sale of any products.
There can be no assurance
that any of our product candidates will be accepted by the marketplace as readily as these or other competing treatments. Furthermore,
if our competitors’ products are approved before ours, it could be more difficult for us to obtain approval from the FDA.
For example, at least three vaccines for the prevention of COVID-19 have been approved to date, and we expect that other vaccines
will be approved prior to the approval of our CVOID-19 vaccine candidate, if it is approved at all. Even if our products are successfully
developed and approved for use by all governing regulatory bodies, there can be no assurance that physicians and patients will
accept our product(s) as a treatment of choice.
Additionally, if a
competitor receives FDA approval before we do for a drug that is similar to one of our product candidates, FDA approval for our
product candidate may be precluded or delayed due to periods of non-patent exclusivity and/or the listing with the FDA by the competitor
of patents covering its newly-approved drug product. Periods of non-patent exclusivity for new versions of existing drugs such
as our current drug product candidate, TNX-102 SL, can extend up to three and one-half years.
Furthermore, the pharmaceutical
research industry is diverse, complex, and rapidly changing. By its nature, the business risks associated therewith are numerous
and significant. The effects of competition, intellectual property disputes, market acceptance, and FDA regulations preclude us
from forecasting revenues or income with certainty or even confidence.
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RISKS RELATED TO OUR INTELLECTUAL
PROPERTY RIGHTS AND REGULATORY EXCLUSIVITY
If we fail to protect our intellectual
property rights, our ability to pursue the development of our technologies and products would be negatively affected.
Our success will depend
in part on our ability to obtain patents and maintain adequate protection of our technologies and products. If we do not adequately
protect our intellectual property, competitors may be able to use our technologies to produce and market drugs using our technologies
and patents in direct competition with us and erode our competitive advantage. Some foreign countries lack rules and methods for
defending intellectual property rights and do not protect proprietary rights to the same extent as the United States. Many companies
have had difficulty protecting their proprietary rights in these foreign countries. We may not be able to prevent misappropriation
of our proprietary rights and intellectual property rights in these and other countries.
We have received, and
are currently seeking, patent protection for numerous compounds and methods of treating diseases. However, the patent process is
subject to numerous risks and uncertainties, and there can be no assurance that we will be successful in protecting our products
by obtaining and defending patents related to them. These risks and uncertainties include the following: patents that may be issued
or licensed may be challenged, invalidated, or circumvented, or otherwise may not provide us any competitive advantage; our competitors,
many of which have substantially greater resources than we and many of which have made significant investments in competing technologies,
may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell
our potential products either in the United States or in international markets; there may be significant pressure on the United
States government and other international governmental bodies to limit the scope of patent protection both inside and outside the
United States for treatments that prove successful as a matter of public policy regarding worldwide health concerns; and countries
other than the United States may have less robust patent laws than those upheld by United States courts, allowing foreign competitors
the ability to exploit these laws to create, develop, and market competing products using our technologies and patents.
Moreover, any patents
issued to us may not provide us with meaningful protection, or others may challenge, circumvent or narrow our patents. Third parties
may also independently develop products similar to our products, duplicate our unpatented products or design around any patents
or propriety technologies on products we develop. Additionally, extensive time is required for development, testing and regulatory
review of a potential product. While extensions of patent term due to regulatory delays may be available, it is possible that,
before any of our product candidates can be commercialized, any related patent, even with an extension, may expire or remain in
force for only a short period following commercialization, thereby reducing any advantages to us of the patent.
In addition, the PTO
and patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical and/or biotechnology-related
inventions be limited or narrowed substantially to cover only the innovations specifically exemplified in the patent application,
thereby limiting the scope of protection against competitive challenges. Thus, even if we or our licensors are able to obtain patents,
the patents may be substantially narrower than anticipated.
Our success depends
on our patents and patent applications that may be licensed exclusively to us and other patents and patent applications to which
we may obtain assignment or licenses. We may not be aware, however, of all patents, published applications or published literature
that may affect our business either by blocking our ability to commercialize our product candidates, by preventing the patentability
of our product candidates to us or our licensors, or by covering the same or similar technologies. These patents, patent applications,
and published literature may limit the scope of our future patent claims or adversely affect our ability to market our product
candidates.
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In addition to patents,
we rely on a combination of trade secrets, confidentiality, nondisclosure and other contractual provisions, and security measures
to protect our confidential and proprietary information. These measures may not adequately protect our trade secrets or other proprietary
information. If they do not adequately protect our rights, third parties could use our technology, and we could lose any competitive
advantage we may have. In addition, others may independently develop similar proprietary information or techniques or otherwise
gain access to our trade secrets, which could impair any competitive advantage we may have.
Patent protection and
other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial risk
that such protections will prove inadequate.
We may be involved in lawsuits to
protect or enforce our patents, which could be expensive and time consuming.
The pharmaceutical
industry has been characterized by extensive litigation regarding patents and other intellectual property rights, and companies
have employed intellectual property litigation to gain a competitive advantage. We may become subject to infringement claims or
litigation arising out of present and future patents and other proceedings of our competitors. The defense and prosecution of intellectual
property suits are costly and time-consuming to pursue, and their outcome is uncertain. Litigation may be necessary to determine
the enforceability, scope, and validity of the proprietary rights of others. An adverse determination in litigation to which we
may become a party could subject us to significant liabilities, require us to obtain licenses from third parties, or restrict or
prevent us from selling our products in certain markets. Although patent and intellectual property disputes might be settled through
licensing or similar arrangements, the costs associated with such arrangements may be substantial and could include our paying
large fixed payments and ongoing royalties. Furthermore, the necessary licenses may not be available on satisfactory terms or at
all.
Competitors may infringe
our patents, and we may file infringement claims to counter infringement or unauthorized use. Third parties may assert that our
patents are invalid and/or unenforceable in these proceedings. Such litigation can be expensive, particularly for a company of
our size, and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid
or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do
not cover its technology. An adverse determination of any litigation or defense proceedings could put one or more of our patents
at risk of being invalidated or interpreted narrowly.
Third parties may also
assert that our patents are invalid in patent office administrative proceedings. These proceedings include oppositions in the European
Patent Office and inter partes review and post-grant review proceedings in the PTO. The success rate of these
administrative challenges to patent validity in the United States is higher than it is for validity challenges in litigation.
Interference or derivation
proceedings brought before the PTO may be necessary to determine priority of invention with respect to innovations disclosed in
our patents or patent applications. During these proceedings, it may be determined that we do not have priority of invention for
one or more aspects in our patents or patent applications and could result in the invalidation in part or whole of a patent or
could put a patent application at risk of not issuing. Even if successful, an interference or derivation proceeding may result
in substantial costs and distraction to our management.
Furthermore, because
of the substantial amount of discovery required in connection with intellectual property litigation or interference or derivation
proceedings, there is a risk that some of our confidential information could be compromised by disclosure. In addition, there could
be public announcements of the results of hearings, motions or other interim proceedings or developments. If investors perceive
these results to be negative, the price of our common stock could be adversely affected.
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There are no unresolved
communications, allegations, complaints or threats of litigation related to the possibility that our patents are invalid or unenforceable.
Any litigation or claims against us, whether or not merited, may result in substantial costs, place a significant strain on our
financial resources, divert the attention of management and harm our reputation. An adverse decision in litigation or administrative
proceedings could result in inadequate protection for our product candidates and/or reduce the value of any license agreements
we have with third parties.
If we infringe the rights of third
parties we could be prevented from selling products, forced to pay damages, and defend against litigation.
If our products, methods,
processes and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we may
have to: obtain licenses, which may not be available on commercially reasonable terms, if at all; abandon an infringing product
candidate; redesign our products or processes to avoid infringement; stop using the subject matter claimed in the patents held
by others; pay damages; and/or defend litigation or administrative proceedings which may be costly whether we win or lose, and
which could result in a substantial diversion of our financial and management resources.
There are risks to our intellectual
property based on our international business initiatives.
We may face risks to
our technology and intellectual property as a result of our conducting strategic business discussions outside of the United States,
and particularly in jurisdictions that do not have comparable levels of protection of corporate proprietary information and assets
such as intellectual property, trademarks, trade secrets, know-how and customer information and records. While these risks are
common to many companies, conducting business in certain foreign jurisdictions, housing technology, data and intellectual property
abroad, or licensing technology to joint ventures with foreign partners may have more significant exposure. For example, we have
shared intellectual properties with entities in China pursuant to confidentiality agreements in connection with discussions on
potential strategic collaborations, which may expose us to material risks of theft of our proprietary information and other intellectual
property, including technical data, manufacturing processes, data sets or other sensitive information. For example, our technology
may be reverse engineered by the parties or other parties, which could result in our patents being infringed or our know-how or
trade secrets stolen. The risk can be by direct intrusion wherein technology and intellectual property is stolen or compromised
through cyber intrusions or physical theft through corporate espionage, including with the assistance of insiders, or via more
indirect routes.
GENERAL COMPANY-RELATED RISKS
If preclinical and nonclinical testing
or clinical studies for our product candidates are unsuccessful or delayed, we will be unable to meet our anticipated development
and commercialization timelines.
We rely and expect
to continue to rely on third parties, including contract research organizations, or CROs, and outside consultants, to conduct,
supervise or monitor some or all aspects of preclinical and nonclinical testing and clinical studies involving our product candidates.
We have less control over the timing and other aspects of these preclinical and nonclinical testing activities and clinical studies
than if we performed the monitoring and supervision entirely on our own. Third parties may not perform their responsibilities for
our preclinical and nonclinical testing and clinical studies on our anticipated schedule or, for clinical studies, consistent with
a clinical study protocol. Delays in preclinical and nonclinical testing, and clinical studies could significantly increase our
product development costs and delay product commercialization. In addition, many of the factors that may cause, or lead to, a delay
in the clinical studies may also ultimately lead to denial of regulatory approval of a product candidate.
The commencement of
clinical studies can be delayed for a variety of reasons, including delays in:
●
demonstrating sufficient safety and efficacy to obtain regulatory approval to commence a clinical study;
●
reaching agreement on acceptable terms with prospective CROs and study sites;
●
developing a stable formulation of a product candidate;
●
manufacturing sufficient quantities of a product candidate; and
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●
obtaining institutional review board, or IRB, approval to conduct a clinical study at a prospective site.
Once a clinical study
has begun, it may be delayed, suspended or terminated by us or the FDA or other regulatory authorities due to a number of factors,
including:
●
ongoing discussions with the FDA or other regulatory authorities regarding the scope or design of our clinical studies;
●
failure to conduct clinical studies in accordance with regulatory requirements;
●
lower than anticipated recruitment or retention rate of patients in clinical studies;
●
inspection of the clinical study operations or study sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;
●
lack of adequate funding to continue clinical studies;
●
negative results of clinical studies;
●
investigational drug product out-of-specification; or
●
nonclinical or clinical safety observations, including adverse events and SAEs.
If clinical studies
are unsuccessful, and we are not able to obtain regulatory approvals for our product candidates under development, we will not
be able to commercialize these products, and therefore may not be able to generate sufficient revenues to support our business.
We rely on third parties to conduct,
supervise and monitor our clinical studies, and if those third parties perform in an unsatisfactory manner, it may harm our business.
We rely on CROs and
clinical study sites to ensure the proper and timely conduct of our clinical studies. While we have agreements governing their
activities, we will have limited influence over their actual performance. We will control only certain aspects of our CROs’
activities. Nevertheless, we will be responsible for ensuring that our clinical studies are conducted in accordance with the applicable
protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.
We and our CROs are required to comply with the FDA’s cGCP
for conducting, recording and reporting the results of clinical studies to assure that data and reported results are credible and
accurate and that the rights, integrity and confidentiality of clinical study participants are protected. The FDA enforces these
cGCPs through periodic inspections of study sponsors, principal investigators and clinical study sites. If we or our CROs fail
to comply with applicable cGCPs, the clinical data generated in our clinical studies may be deemed unreliable and the FDA may require
us to perform additional clinical studies before approving any marketing applications. Upon inspection, the FDA may determine that
our clinical studies did not comply with cGCPs. In addition, our clinical studies, including our ongoing Phase 3 RALLY study, will
require a sufficiently large number of fibromyalgia participants to evaluate the effectiveness and safety of TNX-102 SL in FM.
Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of participants, our clinical
studies may be delayed or we may be required to repeat such clinical studies, which would delay the regulatory approval process.
Our CROs are not our
employees, and we are not able to control whether or not they devote sufficient time and resources to our clinical studies. These
CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting
clinical studies, or other drug development activities which could harm our competitive position.
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If our CROs do not
successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy
of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements,
or for any other reasons, our clinical studies may be extended, delayed or terminated, and we may not be able to obtain regulatory
approval for, or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects
for such product candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed.
We also rely
on other third parties to store and distribute drug products for our clinical studies. Any performance failure on the part of our
distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products,
if approved, producing additional losses and depriving us of potential product revenue.
We will need to expand our operations
and increase the size of our company, and we may experience difficulties in managing growth.
As we advance our product candidates through preclinical and nonclinical testing and clinical studies,
and develop new product candidates and buildout of our research and development and manufacturing facilities, we will need to increase
our product development, scientific, regulatory and compliance and administrative headcount to manage these programs. In addition,
to meet our obligations as a public company, we will need to increase our general and administrative capabilities. Our management,
personnel and systems currently in place may not be adequate to support this future growth. Our need to effectively manage our
operations, growth and various projects requires that we:
●
successfully attract and recruit new employees with the expertise and experience we will require;
●
manage our clinical programs effectively, which we anticipate being conducted at numerous clinical sites;
●
develop a marketing, distribution and sales infrastructure in addition to a post-marketing surveillance program if we seek to market our products directly; and
●
continue to improve our operational, manufacturing, quality assurance, financial and management controls, reporting systems and procedures.
If we are unable to
successfully manage this growth and increased complexity of operations, our business may be adversely affected.
Our executive officers and other
key personnel are critical to our business, and our future success depends on our ability to retain them.
Our success depends
to a significant extent upon the continued services of Dr. Seth Lederman, our President and Chief Executive Officer and Dr. Gregory
M. Sullivan, our Chief Medical Officer. Dr. Lederman has overseen Tonix Pharmaceuticals, Inc., a wholly-owned subsidiary, since
inception and provides leadership for our growth and operations strategy as well as being an inventor on many of our patents. Dr.
Sullivan has served as our Chief Medical Officer since 2014 and directed the Phase 2 AtEase study, Phase 3 HONOR study, the Phase
3 RECOVERY study, Phase 3 RELIEF study and is directing the Phase 3 RALLY study. Loss of the services of Drs. Lederman or Sullivan
would have a material adverse effect on our growth, revenues, and prospective business. The loss of any of our key personnel, or
the inability to attract and retain qualified personnel, may significantly delay or prevent the achievement of our research, development
or business objectives and could materially adversely affect our business, financial condition and results of operations.
Any employment agreement
we enter into will not ensure the retention of the employee who is a party to the agreement. In addition, we have only limited
ability to prevent former employees from competing with us. Furthermore, our future success will also depend in part on the continued
service of our key scientific and management personnel and our ability to identify, hire, and retain additional personnel. We experience
intense competition for qualified personnel and may be unable to attract and retain the personnel necessary for the development
of our business. Moreover, competition for personnel with the scientific and technical skills that we seek is extremely high and
is likely to remain high. Because of this competition, our compensation costs may increase significantly.
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If we are unable to hire additional
qualified personnel, our ability to grow our business may be harmed.
Over time we will need
to hire additional qualified personnel with expertise in drug development, product registration, clinical, preclinical and nonclinical
research, quality compliance, government regulation, formulation and manufacturing, financial matters and sales and marketing.
We compete for qualified individuals with numerous biopharmaceutical companies, universities and other research institutions. Competition
for such individuals is intense, and we cannot be certain that our search for such personnel will be successful. Attracting and
retaining qualified personnel will be critical to our success.
We rely on third parties to manufacture
the compounds used in our studies, and we intend to rely on them for the manufacture of any approved products for commercial sale.
If these third parties do not manufacture our product candidates in sufficient quantities and at an acceptable cost, clinical development
and commercialization of our product candidates could be delayed, prevented or impaired.
We have no manufacturing
facilities, and we have no experience in the clinical or commercial-scale manufacture of drugs or in designing drug manufacturing
processes. We intend to rely on CMOs to manufacture some or all of our product candidates in clinical studies and our products
that reach commercialization. Completion of our clinical studies and commercialization of our product candidates requires the manufacture
of a sufficient supply of our product candidates. We have contracted with outside sources to manufacture our development compounds,
including TNX-102 SL. If, for any reason, we become unable to rely on our current sources for the manufacture of our product candidates,
either for clinical studies or, at some future date, for commercial quantities, then we would need to identify and contract with
additional or replacement third-party manufacturers to manufacture compounds for nonclinical, preclinical, clinical, and commercial
purposes. Although we are in discussions with other manufacturers we have identified as potential alternative CMOs of TNX-102 SL,
we may not be successful in negotiating acceptable terms with any of them.
We believe that there
are a variety of manufacturers that we may be able to retain to produce these products. However, once we retain a manufacturing
source, if our manufacturers do not perform in a satisfactory manner, we may not be able to develop or commercialize potential
products as planned. Certain specialized manufacturers are expected to provide us with modified and unmodified pharmaceutical compounds,
including finished products, for use in our preclinical and nonclinical testing and clinical studies. Some of these materials are
available from only one supplier or vendor. Any interruption in or termination of service by such sole source suppliers could result
in a delay or interruption in manufacturing until we locate an alternative source of supply. Any delay or interruption in manufacturing
operations (or failure to locate a suitable replacement for such suppliers) could materially adversely affect our business, prospects,
or results of operations. We do not have any short-term or long-term manufacturing agreements with many of these manufacturers.
If we fail to contract for manufacturing on acceptable terms or if third-party manufacturers do not perform as we expect, our development
programs could be materially adversely affected. This may result in delays in filing for and receiving FDA approval for one or
more of our products. Any such delays could cause our prospects to suffer significantly.
Failure by our third-party manufacturers
to comply with the regulatory guidelines set forth by the FDA with respect to our product candidates could delay or prevent the
completion of clinical studies, the approval of any product candidates or the commercialization of our products.
Such third-party manufacturers
must be inspected by FDA for cGMP compliance before they can produce commercial product. We may be in competition with other companies
for access to these manufacturers’ facilities and may be subject to delays in manufacture if the manufacturers give other
clients higher priority than they give to us. If we are unable to secure and maintain third-party manufacturing capacity, the development
and sales of our products and our financial performance may be materially affected.
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Manufacturers
are obligated to operate in accordance with FDA-mandated requirements. A failure of any of our third-party manufacturers to establish
and follow cGMP requirements and to document their adherence to such practices may lead to significant delays in the availability
of material for clinical studies, may delay or prevent filing or approval of marketing applications for our products, and may cause
delays or interruptions in the availability of our products for commercial distribution following FDA approval. This could result
in higher costs to us or deprive us of potential product revenues.
Drug manufacturers
are subject to ongoing periodic unannounced inspections by the FDA, the Drug Enforcement Administration, or DEA, and corresponding
state and foreign agencies to ensure strict compliance with cGMP requirements and other requirements under Federal drug laws, other
government regulations and corresponding foreign standards. If we or our third-party manufacturers fail to comply with applicable
regulations, sanctions could be imposed on us, including fines, injunctions, civil penalties, failure by the government to grant
marketing approval of drugs, delays, suspension or withdrawal of approvals, seizures or recalls of product, operating restrictions
and criminal prosecutions.
Corporate and academic collaborators
may take actions to delay, prevent, or undermine the success of our products.
Our operating and financial
strategy for the development, clinical testing, manufacture, and commercialization of drug candidates is heavily dependent on our
entering into collaborations with corporations, academic institutions, licensors, licensees, and other parties. Our current strategy
assumes that we will successfully establish these collaborations, or similar relationships; however, there can be no assurance
that we will be successful establishing such collaborations. Some of our existing collaborations are, and future collaborations
may be, terminable at the sole discretion of the collaborator. Replacement collaborators might not be available on attractive terms,
or at all. The activities of any collaborator will not be within our control and may not be within our power to influence. There
can be no assurance that any collaborator will perform its obligations to our satisfaction or at all, that we will derive any revenue
or profits from such collaborations, or that any collaborator will not compete with us. If any collaboration is not pursued, we
may require substantially greater capital to undertake development and marketing of our proposed products and may not be able to
develop and market such products effectively, if at all. In addition, a lack of development and marketing collaborations may lead
to significant delays in introducing proposed products into certain markets and/or reduced sales of proposed products in such markets.
Data provided by collaborators and
others upon which we rely that has not been independently verified could turn out to be false, misleading, or incomplete.
We rely on third-party
vendors, scientists, and collaborators to provide us with significant data and other information related to our projects, clinical
studies, and our business. If such third parties provide inaccurate, misleading, or incomplete data, our business, prospects, and
results of operations could be materially adversely affected.
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Our product candidates may
face competition sooner than expected.
We intend to seek data exclusivity or market exclusivity for our product candidates provided under the
FDCA and similar laws in other countries. We believe that TNX-801 could qualify for 12 years of data exclusivity under the Biologics
Price Competition and Innovation Act of 2009, or BPCIA, which was enacted as part of the Patient Protection and Affordable Care
Act. Under the BPCIA, an application for a biosimilar product or BLA cannot be submitted to the FDA until four years, or if approved
by the FDA, until 12 years, after the original brand product identified as the reference product is approved under a BLA. The BPCIA
provides an abbreviated pathway for the approval of biosimilar and interchangeable biological products. The new abbreviated regulatory
pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation
of a biosimilar as “interchangeable” based on its similarity to an existing brand product. The new law is complex and
is only beginning to be interpreted and implemented by the FDA. While it is uncertain when any such processes may be fully adopted
by the FDA, any such processes could have a material adverse effect on the future commercial prospects for any of our product candidates
that are biologics. There is also a risk that BPCIA could be repealed or amended to shorten this exclusivity period, potentially
creating the opportunity for biosimilar competition sooner than anticipated after the expiration of our patent protection. Although
there is no current discussion of repeal or modification of the BPCIA, the future remains uncertain. Moreover, the extent to which
a biosimilar, once approved, will be substituted for any reference product in a way that is similar to traditional generic substitution
for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still
developing.
Our product candidates
that are not, or are not considered, biologics that would qualify for exclusivity under the BPCIA may be eligible for market exclusivity
as drugs under the FDCA. The FDCA provides a five-year period of non-patent marketing exclusivity within the U.S. to the first
applicant to gain approval of an NDA for an NCE. A drug is an NCE if the FDA has not previously approved any other new drug containing
the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period,
the FDA may not accept for review an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA, submitted by another company
for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for
approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement.
The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical
investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to
be essential to the approval of the application, for example, for new indications, dosages, or strengths of an existing drug. This
three-year exclusivity covers only the conditions associated with the new clinical investigations and does not prohibit the FDA
from approving ANDAs for drugs containing the original active agent.
Even if, as we expect,
our product candidates are considered to be reference products eligible for 12 years of exclusivity under the BPCIA or five years
of exclusivity under the FDCA, another company could market competing products if the FDA approves a full BLA or full NDA for such
product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate
the safety, purity and potency of the products. Moreover, an amendment or repeal of the BPCIA could result in a shorter exclusivity
period for our product candidates, which could have a material adverse effect on our business.
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If we fail to establish marketing,
sales and distribution capabilities, or fail to enter into arrangements with third parties, we will not be able to create a market
for our product candidates.
Our strategy with our
product candidates is to control, directly or through contracted third parties, all or most aspects of the product development
process, including marketing, sales and distribution. Currently, we do not have any sales, marketing or distribution capabilities.
In order to generate sales of any product candidates that receive regulatory approval, we must either acquire or develop an internal
marketing and sales force with technical expertise and with supporting distribution capabilities or make arrangements with third
parties to perform these services for us. The acquisition or development of a sales and distribution infrastructure would require
substantial resources, which may divert the attention of our management and key personnel and defer our product development efforts.
To the extent that
we enter into marketing and sales arrangements with other companies, our revenues will depend on the efforts of others. These efforts
may not be successful. If we fail to develop sales, marketing and distribution channels, or enter into arrangements with third
parties, we will experience delays in product sales and incur increased costs.
Sales of pharmaceutical
products largely depend on the reimbursement of patients’ medical expenses by government health care programs and private
health insurers. Without the financial support of the government or third-party payors, the market for our products will be limited.
These third-party payors are increasingly challenging the price and examining the cost effectiveness of medical products and services.
Recent proposals to change the health care system in the United States have included measures that would limit or eliminate payments
for medical products and services or subject the pricing of medical treatment products to government control. Significant uncertainty
exists as to the reimbursement status of newly approved health care products. Third-party payors may not reimburse sales of our
products or enable our collaborators to sell them at profitable prices.
Our business strategy
might involve out-licensing product candidates to or collaborating with larger firms with experience in marketing and selling pharmaceutical
products. There can be no assurance that we will be able to successfully establish marketing, sales, or distribution relationships;
that such relationships, if established, will be successful; or that we will be successful in gaining market acceptance for our
products. To the extent that we enter into any marketing, sales, or distribution arrangements with third parties, our product revenues
will be lower than if we marketed and sold our products directly, and any revenues we receive will depend upon the efforts of such
third-parties. If we are unable to establish such third-party sales and marketing relationships, or choose not to do so, we will
have to establish and rely on our own in-house capabilities.
We, as a company, have
no experience in marketing or selling pharmaceutical products and currently have no sales, marketing, or distribution infrastructure.
To market any of our products directly, we would need to develop a marketing, sales, and distribution force that both has technical
expertise and the ability to support a distribution capability. The establishment of a marketing, sales, and distribution capability
would significantly increase our costs, possibly requiring substantial additional capital. In addition, there is intense competition
for proficient sales and marketing personnel, and we may not be able to attract individuals who have the qualifications necessary
to market, sell, and distribute our products. There can be no assurance that we will be able to establish internal marketing, sales,
or distribution capabilities. If we are unable to, or choose not to establish these capabilities, or if the capabilities we establish
are not sufficient to meet our needs, we will be required to establish collaborative marketing, sales, or distribution relationships
with third parties.
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Our
relationships with customers, physicians, and third-party payors will be subject, directly or indirectly, to federal and state
healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and
regulations. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.
Healthcare
providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation
and prescription of any drug candidates for which we obtain marketing approval. Our current and future arrangements with healthcare
professionals, principal investigators, consultants, customers and third-party payors may subject us to various federal and state
fraud and abuse laws and other health care laws, including, without limitation, the federal Anti-Kickback Statute, the federal
civil and criminal false claims laws and the law commonly referred to as the Physician Payments Sunshine Act and regulations. These
laws will impact, among other things, our clinical research, proposed sales, marketing and educational programs. In addition, we
may be subject to patient privacy laws by both the federal government and the states in which we conduct or may conduct our business.
The laws that will affect our operations include, but are not limited to:
●
the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, in return for the purchase, recommendation, leasing or furnishing of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;
●
federal civil and criminal false claims laws, including, without limitation, the False Claims Act, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
●
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud any healthcare benefit program, regardless of the payor (e.g., public or private);
●
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act; Other Modifications to HIPAA, published in January 2013, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, health care clearinghouses and health care providers, and their respective business associates;
●
federal transparency laws, including the federal Physician Payments Sunshine Act, which is part of PPACA, that require certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to: (i) payments or other “transfers of value’’ made to physicians and teaching hospitals; and (ii) ownership and investment interests held by physicians and their immediate family members;
●
state and foreign law equivalents of each of the above federal laws, state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, and state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers; and
●
state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
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Because
of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some
of our business activities could be subject to challenge under one or more of such laws.
It
is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes,
regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found
to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant
civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion of drugs from government funded
healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate
integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment
or restructuring of our operations.
The
risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by
the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Efforts to ensure that
our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial
costs. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant
legal expenses and divert our management’s attention from the operation of our business. The shifting compliance environment
and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance
and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.
Coverage
and adequate reimbursement may not be available for our current or any future drug candidates, which could make it difficult for
us to sell profitably, if approved.
Market
acceptance and sales of any drug candidates that we commercialize, if approved, will depend in part on the extent to which reimbursement
for these drugs and related treatments will be available from third-party payors, including government health administration authorities,
managed care organizations and other private health insurers. Third-party payors decide which therapies they will pay for and establish
reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own
coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided
for any drug candidates that we develop will be made on a payor-by-payor basis. One payor’s determination to provide
coverage for a drug does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug. Additionally,
a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will
be approved. Each payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer
for the therapy, and on what tier of its formulary it will be placed. The position on a payor’s list of covered drugs, or
formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly
influence the adoption of such therapy by patients and physicians. Patients who are prescribed treatments for their conditions
and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare
costs. Patients are unlikely to use our drugs unless coverage is provided and reimbursement is adequate to cover a significant
portion of the cost of our drugs.
A
primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control
costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement
will be available for any drug that we commercialize and, if reimbursement is available, what the level of reimbursement will
be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any drug for which we obtain marketing approval.
If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully
commercialize our current and any future drug candidates that we develop.
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Healthcare legislative or regulatory
reform measures, including government restrictions on pricing and reimbursement, may have a negative impact on our business and
results of operations.
In the United States
and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes
regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval
activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval.
Among policy makers
and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the
stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical
industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. For
example, in the United States, the Patient Protection and Affordable Care Act of 2010 (“ACA”) substantially changed
the way healthcare is financed by both the government and private insurers ,
and significantly affects the pharmaceutical industry. Many provisions of the ACA impact the biopharmaceutical industry, including
that in order for a biopharmaceutical product to receive federal reimbursement under the Medicare Part B and Medicaid programs
or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate
in the drug pricing program under the Public Health Services Act, or PHS. Since its enactment, there have been judicial and Congressional
challenges and amendments to certain aspects of the ACA. There is continued uncertainty about the implementation of the ACA, including
the potential for further amendments to the ACA and legal challenges to or efforts to repeal the ACA.
Additionally, there
has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost
of prescription drugs and biologics. Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted
federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship
between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. At the
federal level, the now-departed Trump administration proposed numerous prescription drug cost control measures. Similarly,
the new Biden administration has made lowering prescription drug prices one of its priorities. The Biden administration has
not yet proposed any specific plans, but we expect that these will be forthcoming in the near term. At the state level, legislatures
are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing,
including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure
and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Other
examples of proposed changes include, but are not limited to, expanding post-approval requirements, changing the Orphan Drug Act,
and restricting sales and promotional activities for pharmaceutical products.
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We cannot be sure whether
additional legislative changes will be enacted, or whether government regulations, guidance or interpretations will be changed,
or what the impact of such changes would be on the marketing approvals, sales, pricing, or reimbursement of our drug candidates
or products, if any, may be. We expect that these and other healthcare reform measures that may be adopted in the future, may result
in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved drug. Any
reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private
payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate
revenue, attain profitability, or commercialize our drugs.
In addition, FDA regulations
and guidance may be revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Any
new regulations or guidance, or revisions or reinterpretations of existing regulations or guidance, may impose additional costs
or lengthen FDA review times for our product candidates. We cannot determine how changes in regulations, statutes, policies, or
interpretations when and if issued, enacted or adopted, may affect our business in the future. Such changes could, among other
things, require:
• additional
clinical trials to be conducted prior to obtaining approval;
• changes
to manufacturing methods;
• recalls,
replacements, or discontinuance of one or more of our products; and
• additional
recordkeeping.
Such changes would
likely require substantial time and impose significant costs, or could reduce the potential commercial value of our product candidates.
In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any other products would harm our
business, financial condition, and results of operations.
If we obtain approval to commercialize
any approved products outside of the United States, a variety of risks associated with international operations could materially
adversely affect our business.
If TNX-102 SL or any
of our other product candidates are approved for commercialization outside of the United States, we intend to enter into agreements
with third parties to market them on a worldwide basis or in more limited geographical regions. We expect that we will be subject
to additional risks related to entering into international business relationships, including:
●
different regulatory requirements for drug approvals;
●
reduced protection for intellectual property rights, including trade secret and patent rights;
●
unexpected changes in tariffs, trade barriers and regulatory requirements;
●
economic weakness, including inflation, or political instability in particular foreign economies and markets;
●
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
●
foreign taxes, including withholding of payroll taxes;
●
foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;
●
workforce uncertainty in countries where labor unrest is more common than in the United States;
●
production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;
●
business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, hurricanes, floods and fires; and
●
difficulty in importing and exporting clinical study materials and study samples.
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We face the risk of product liability
claims and may not be able to obtain insurance.
Our business
exposes us to the risk of product liability claims that are inherent in the development of drugs. If the use of one or more of
our or our collaborators’ drugs harms people, we may be subject to costly and damaging product liability claims brought against
us by clinical study participants, consumers, health care providers, pharmaceutical companies or others selling our products. Our
inability to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability
claims could prevent or inhibit the commercialization of pharmaceutical products we develop, alone or with collaborators. While
we currently carry clinical study insurance and product liability insurance, we cannot predict all of the possible harms or side
effects that may result and, therefore, the amount of insurance coverage we hold now or in the future may not be adequate to cover
all liabilities we might incur. We intend to expand our insurance coverage to include the sale of commercial products if we obtain
marketing approval for our drug candidates in development, but we may be unable to obtain commercially reasonable product liability
insurance for any products approved for marketing. If we are unable to obtain insurance at an acceptable cost or otherwise protect
against potential product liability claims, we will be exposed to significant liabilities, which may materially and adversely affect
our business and financial position. If we are sued for any injury allegedly caused by our or our collaborators’ products,
our liability could exceed our total assets and our ability to pay the liability. A product liability claim or series of claims
brought against us would decrease our cash and could cause our stock price to fall.
We use hazardous chemicals in our
business. Potential claims relating to improper handling, storage or disposal of these chemicals could affect us and be time consuming
and costly.
Our research and development
processes and/or those of our third party contractors may involve the controlled use of hazardous materials and chemicals. These
hazardous chemicals are reagents and solvents typically found in a chemistry laboratory. Our operations also produce hazardous
waste products. Federal, state and local laws and regulations govern the use, manufacture, storage, handling and disposal of hazardous
materials. While we attempt to comply with all environmental laws and regulations, including those relating to the outsourcing
of the disposal of all hazardous chemicals and waste products, we cannot eliminate the risk of contamination from or discharge
of hazardous materials and any resultant injury. In the event of such an accident, we could be held liable for any resulting damages
and any liability could materially adversely affect our business, financial condition and results of operations.
Compliance with environmental
laws and regulations may be expensive. Current or future environmental regulations may impair our research, development or production
efforts. We might have to pay civil damages in the event of an improper or unauthorized release of, or exposure of individuals
to, hazardous materials. We are not insured against these environmental risks.
If we enter into collaborations
with third parties, they might also work with hazardous materials in connection with our collaborations. We may agree to indemnify
our collaborators in some circumstances against damages and other liabilities arising out of development activities or products
produced in connection with these collaborations.
In addition, the federal,
state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous or radioactive
materials and waste products may require us to incur substantial compliance costs that could materially adversely affect our business,
financial condition and results of operations.
Our insurance policies are expensive
and protect us only from some business risks, which will leave us exposed to significant uninsured liabilities.
We carry insurance
for most categories of risk that our business may encounter, however, we may not have adequate levels of coverage. We currently
maintain general liability, clinical study, property, workers’ compensation, products liability and directors’ and
officers’ insurance, along with an umbrella policy, which collectively costs approximately $1,700,000 per annum. We cannot
provide any assurances that we will be able to maintain existing insurance at current or adequate levels of coverage. Any significant
uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations.
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If we retain collaborative partners
and our partners do not satisfy their obligations, we will be unable to develop our partnered product candidates.
In the event we enter
into any collaborative agreements, we may not have day-to-day control over the activities of our collaborative partners with respect
to any of these product candidates. Any collaborative partner may not fulfill its obligations under these agreements. If a collaborative
partner fails to fulfill its obligations under an agreement with us, we may be unable to assume the development of the products
covered by that agreement or enter into alternative arrangements with a third party. In addition, we may encounter delays in the
commercialization of the product candidate that is the subject of the agreement. Accordingly, our ability to receive any revenue
from the product candidates covered by these agreements will be dependent on the efforts of our collaborative partner. We could
also become involved in disputes with a collaborative partner, which could lead to delays in or termination of our development
and commercialization programs and time-consuming and expensive litigation or arbitration. In addition, any such dispute could
diminish our collaborators’ commitment to us and reduce the resources they devote to developing and commercializing our products.
Conflicts or disputes with our collaborators, and competition from them, could harm our relationships with our other collaborators,
restrict our ability to enter future collaboration agreements and delay the research, development or commercialization of our product
candidates. If any collaborative partner terminates or breaches its agreement, or otherwise fails to complete its obligations in
a timely manner, our chances of successfully developing or commercializing these product candidates would be materially and adversely
affected. We may not be able to enter into collaborative agreements with partners on terms favorable to us, or at all. Our inability
to enter into collaborative arrangements with collaborative partners, or our failure to maintain such arrangements, would limit
the number of product candidates that we could develop and ultimately, decrease our sources of any future revenues.
We may be unsuccessful in obtaining
a priority review voucher for material threat medical countermeasures.
In 2016, the 21st Century
Cures Act, or the Act, was signed into law to support ongoing biomedical innovation. One part of the Act, Section 3086, is aimed
at “Encouraging Treatments for Agents that Present a National Security Threat.” The Act created a new priority review
voucher program for approved “material threat medical countermeasures.” The Act defines such countermeasures as drug
or biologic products, including vaccines, intended to treat biological, chemical, radiological, or nuclear agents that present
a national security threat or to treat harm from a condition that may be caused by administering a drug or biological product against
such an agent. The Department of Homeland Security has identified 13 such threats, including anthrax, smallpox, Ebola/Marburg,
tularemia, botulinum toxin, and pandemic influenza, which includes the SARS coronavirus 2 known as SARS-CoV-2. A priority review
voucher can be applied to any other product; it shortens the FDA review timeline for a new application from 10 to 12 months to
6 months. The recipient of a priority review voucher may transfer it.
We intend to seek a
priority review voucher if and when a TNX-801 Biologics License Application is approved as a material threat medical countermeasure.
However, the structure of voucher programs limits the number of medical countermeasures eligible for a priority review voucher.
Further, the medical countermeasure must qualify for priority review in order to be eligible and may not include any commercially
approved indication. Moreover, the Priority Review Voucher program provision of the 21st Century Cures Act is set to expire in
2023. If TNX-801 does not receive FDA approval by 2023, we may not be able to capitalize on the incentives contained in the 21st
Century Cures Act unless the provision allowing for the Priority Review Voucher Program is extended until such time as TNX-801
is approved.
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There may not be market interest
in TNX-801.
The government is the
only market for most medical countermeasures. This is because unlike other drugs and vaccines, these products are not sold to doctors,
hospitals, or pharmacies. The BioShield Special Reserve Fund, or SRF, has been the sole medical countermeasures market for the
last decade. The SRF is now appropriated annually and has not kept pace with the need for purchasing products ready for stockpiling.
During 2020, $735 million was appropriated to SRF. As such, even if TNX-801 were to receive FDA licensure, the commercial success
of TNX-801 remains uncertain.
Government
entities may take actions that directly or indirectly have the effect of limiting opportunities for TNX-1800 as a vaccine for COVID-19.
Various
government entities, including the U.S. government, are offering incentives, grants and contracts to encourage additional investment
by commercial organizations into preventative and therapeutic agents against COVID-19, which may have the effect of increasing
the number of competitors and/or providing advantages to competitors. Accordingly, there can be no assurance that we will be able
to successfully establish a competitive market share if we ultimately receive regulatory approval for TNX-1800 as a vaccine for
COVID-19. COVID-19 vaccines may also be subject to government pricing controls, which could adversely affect the profitability
of any COVID-19 vaccine we are able to develop and commercialize.
If technology developed for the purposes
of developing new medicines or vaccines can be applied to the creation or development of biological weapons, then our technology
may be considered “dual use” technology and be subject to limitations on public disclosure or export.
Our research and development
of synthetic poxviruses is dedicated not only to creating tools that better protect public health but also to safeguarding any
information with broad, dual-use potential that could be inappropriately applied. “Dual use research” is research conducted
for legitimate purposes that generates knowledge, information, technologies, and/or products that can be reasonably anticipated
to provide knowledge, information, products, or technologies that could be directly misapplied to pose a significant threat to
public health, agricultural crops, or national security. Because variola, the agent that causes smallpox, is a pox virus, the technology
we created could be considered dual use and could be subject to export control, for example under the Wassenaar Arrangement. Further,
if federal authorities determine that our research is subject to institutional oversight, we will need to implement a risk-management
plan developed in collaboration with the institutional review entity. Failure to comply with the plan may result in suspension,
limitation, or termination of federal funding or loss of future federal funding opportunities for any of our research.
We face risks in connection with
existing and future collaborations with respect to the development, manufacture, and commercialization of our product candidates.
We face a number of
risks in connection with our current collaborations. Our collaboration agreements are subject to termination under various circumstances.
Our collaborators may change the focus of their development and commercialization efforts or may have insufficient resources to
effectively assist in the development of our products. Any future collaboration agreements may have the effect of limiting the
areas of research and development that we may pursue, either alone or in collaboration with third parties. Further, disagreements
with collaborators, including disagreements over proprietary rights, contract interpretation, or the preferred course of development,
might cause delays, might result in litigation or arbitration, or might result in termination of the research, development or commercialization
of our products. Any such disagreements would divert management attention and resources and be time-consuming and costly.
We face risks in connection with
the testing, production and storage of our vaccine product candidates.
Developing our TNX-1800
and TNX-801 vaccine candidates each require testing of challenges with monkeypox or SARS-CoV-2 viruses under controlled experimental
conditions. The testing of TNX-1800 and TNX-801 may carry risk of infection and harm to individuals.
In addition, our TNX-1800
and TNX-801 vaccine candidates are both live forms of the horsepox. We have initiated vaccine-manufacturing activities to support
further nonclinical testing of TNX-801. The production and storage of the synthesized horsepox virus stock and, once initiated,
TNX-1800 virus stock, may carry risk of infection and harm to individuals. Any such infection could expose us to product and general
liability claims, and may carry risk of infection and harm to individuals.
77
RISKS RELATED TO OUR STOCK
Sales
of additional shares of our common stock could cause the price of our common stock to decline.
Sales
of substantial amounts of our common stock in the public market, or the availability of such shares for sale, by us or others,
including the issuance of common stock upon exercise of outstanding options and warrants, could adversely affect the price of our
common stock. We and our directors and officers may sell shares into the market, which could adversely affect the market price
of shares of our common stock.
An active trading market for our
common stock may not be sustained.
Although our common
stock is listed on the NASDAQ Global Market, the market for our shares has demonstrated varying levels of trading activity. Furthermore,
the current level of trading may not be sustained in the future. The lack of an active market for our common stock may impair investors’
ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the fair
market value of their shares and may impair our ability to raise capital to continue to fund operations by selling shares and may
impair our ability to acquire additional intellectual property assets by using our shares as consideration.
The market price for our common stock
may be volatile, and your investment in our common stock could decline in value.
The stock market in
general has experienced extreme price and volume fluctuations. The market prices of the securities of biotechnology and specialty
pharmaceutical companies, particularly companies like ours without product revenues and earnings, have been highly volatile and
may continue to be highly volatile in the future. This volatility has often been unrelated to the operating performance of particular
companies. The following factors, in addition to other risk factors described in this section, may have a significant impact on
the market price of our common stock:
●
announcements of technological innovations or new products by us or our competitors;
●
announcement of FDA approval, disapproval or delay of approval of our product candidates or other product-related actions;
●
developments involving our discovery efforts and clinical studies;
●
developments or disputes concerning patents or proprietary rights, including announcements of infringement, interference or other litigation against us or our potential licensees;
●
developments involving our efforts to commercialize our products, including developments impacting the timing of commercialization;
●
announcements concerning our competitors, or the biotechnology, pharmaceutical or drug delivery industry in general;
●
public concerns as to the safety or efficacy of our product candidates or our competitors’ products;
●
changes in government regulation of the pharmaceutical or medical industry;
●
changes in the reimbursement policies of third party insurance companies or government agencies;
●
actual or anticipated fluctuations in our operating results;
●
changes in financial estimates or recommendations by securities analysts;
78
●
developments involving corporate collaborators, if any;
●
changes in accounting principles; and
●
the loss of any of our key scientific or management personnel.
In the past, securities
class action litigation has often been brought against companies that experience volatility in the market price of their securities.
Whether or not meritorious, litigation brought against us could result in substantial costs and a diversion of management’s
attention and resources, which could adversely affect our business, operating results and financial condition.
We could be delisted from Nasdaq,
which could seriously harm the liquidity of our stock and our ability to raise capital.
We have had in the
past, and may in the future, have difficulty satisfying Nasdaq listing requirements for our common stock. Although we are currently
in compliance with Nasdaq listing requirements, if we are unable to maintain such compliance, we will cease to be eligible to trade
on Nasdaq. In such event:
●
We may have to pursue trading on a less recognized or accepted market, such as the OTC Bulletin Board or the “pink sheets.”
●
Shares of our common stock could be less liquid and marketable, thereby reducing the ability of stockholders to purchase or sell our shares as quickly and as inexpensively as they have done historically. If our stock is traded as a “penny stock,” transactions in our stock would be more difficult and cumbersome.
●
We may be unable to access capital on favorable terms or at all, as companies trading on alternative markets may be viewed as less attractive investments with higher associated risks, such that existing or prospective institutional investors may be less interested in, or prohibited from, investing in our common stock. This may also cause the market price of our common stock to decline.
We do not anticipate paying dividends
on our common stock and, accordingly, shareholders must rely on stock appreciation for any return on their investment.
We have never declared
or paid cash dividends on our common stock and do not expect to do so in the foreseeable future. The declaration of dividends is
subject to the discretion of our board of directors and will depend on various factors, including our operating results, financial
condition, future prospects and any other factors deemed relevant by our board of directors. You should not rely on an investment
in our company if you require dividend income from your investment in our company. The success of your investment will likely depend
entirely upon any future appreciation of the market price of our common stock, which is uncertain and unpredictable. There is no
guarantee that our common stock will appreciate in value.
We expect that our quarterly results
of operations will fluctuate, and this fluctuation could cause our stock price to decline.
Our quarterly operating
results are likely to fluctuate in the future. These fluctuations could cause our stock price to decline. The nature of our business
involves variable factors, such as the timing of the research, development and regulatory pathways of our product candidates, which
could cause our operating results to fluctuate.
Due to the possibility
of fluctuations in our revenues and expenses, we believe that quarter-to-quarter comparisons of our operating results are not a
good indication of our future performance.
The rights of the holders of common stock may be impaired
by the potential issuance of preferred stock.
Our articles of incorporation
give our board of directors the right to create new series of preferred stock. As a result, the board of directors may, without
stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights which could adversely
affect the voting power and equity interest of the holders of common stock. Preferred stock, which could be issued with the right
to more than one vote per share, could be utilized as a method of discouraging, delaying or preventing a change of control. The
possible impact on takeover attempts could adversely affect the price of our common stock. Although we have no present intention
to issue any shares of preferred stock or to create a series of preferred stock, we may issue such shares in the future.
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If we fail to comply with the rules
under the Sarbanes-Oxley Act of 2002 related to accounting controls and procedures, or if we discover material weaknesses and deficiencies
in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more
difficult.
If we fail to comply
with the rules under the Sarbanes-Oxley Act of 2002 related to disclosure controls and procedures, or, if we discover material
weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly
and raising capital could be more difficult. Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the
effectiveness of our internal control over financial reporting. If material weaknesses or significant deficiencies are discovered
or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can
conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of
the Sarbanes-Oxley Act. Moreover, effective internal controls are necessary for us to produce reliable financial reports and are
important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and
operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price
of our common stock could drop significantly.
If securities or industry analysts
do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our
stock price and trading volume could decline.
The trading market
for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our
business. Our research coverage by industry and financial analysts is currently limited. Even if our analyst coverage increases,
if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline. If one or more of these
analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets,
which in turn could cause our stock price or trading volume to decline.
Other companies may have difficulty
acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate charter and bylaws, as well
as Nevada law.
Provisions in our articles
of incorporation, our bylaws, and under Nevada law could make it more difficult for other companies to acquire us, even if doing
so would benefit our stockholders. Our articles of incorporation and bylaws contain the following provisions, among others, which
may inhibit an acquisition of our company by a third party:
●
advance notification procedures for matters
to be brought before stockholder meetings
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●
a limitation on who may call stockholder meetings
●
a limitation on the removal of directors
●
the ability of our board of directors to issue up to 5,000,000 shares of preferred stock without a stockholder vote
We are also subject
to provisions of Nevada law that prohibit us from engaging in any business combination with any “interested stockholder,”
meaning generally that a stockholder who beneficially owns 10 percent or more of our stock cannot acquire us for a period of time
after the date this person became an interested stockholder, unless various conditions are met, such as approval of the transaction
by our board of directors and stockholders.
Our bylaws designate the Eighth Judicial
District Court of Clark County, Nevada as the sole and exclusive forum for certain types of actions and proceedings that may be
initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes
with us or our directors, officers, employees or agents.
Our bylaws require
that, to the fullest extent permitted by law, and unless the Company consents in writing to the selection of an alternative forum,
the Eighth Judicial District Court of Clark County, Nevada, will, to the fullest extent permitted by law, be the sole and exclusive
forum for each of the following:
●
any derivative action or proceeding brought in the name or right of the Company or on its behalf,
●
any action asserting a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of the Company to the Company or the Company’s stockholders,
●
any action arising or asserting a claim arising pursuant to any provision of NRS Chapters 78 or 92A or any provision of our articles of incorporation or bylaws, or
●
any action asserting a claim governed by the internal affairs doctrine, including, without limitation, any action to interpret, apply, enforce or determine the validity of our articles of incorporation or bylaws.
Because the applicability
of the exclusive forum provision is limited to the extent permitted by law, we believe that the exclusive forum provision would
not apply to suits brought to enforce any duty or liability created by the Securities Exchange Act of 1934, as amended (Exchange
Act), or any other claim for which the federal courts have exclusive jurisdiction, and that federal courts have concurrent jurisdiction
over all suits brought to enforce any duty or liability created by the Securities Act of 1933, as amended (Securities Act). We
note that there is uncertainty as to whether a court would enforce the provision and that investors cannot waive compliance with
the federal securities laws and the rules and regulations thereunder. Although we believe this provision benefits us by providing
increased consistency in the application of Nevada law in the types of lawsuits to which it applies, the provision may have the
effect of discouraging lawsuits against our directors and officers.
ITEM 1B – UNRESOLVED STAFF COMMENTS
There are no unresolved
staff comments at December 31, 2020.
ITEM 2 – PROPERTIES
We maintain our principal office at 26 Main Street, Suite 101, Chatham,
New Jersey 07928. Our telephone number at that office is (862) 904-8182 and our fax number is (212) 923-5700. On August 28, 2020,
we entered into a lease, whereby we agreed to lease new office space, commencing September 2020 and expiring December 2025. In
connection therewith, we maintain a letter of credit, which has a remaining balance of $139,711 as of December 31, 2020, and such
amount is deposited into the restricted cash account maintained at the bank that issued the letter of credit. The total square
footage of our principal office space is approximately 4,269.
On December 6, 2018, we entered into a lease amendment, whereby we agreed to lease new office space in
New York, New York, commencing January 15, 2019 and expiring on November 30, 2020. In August 2020, we signed a one-year extension,
expiring in November 2021. In connection therewith, we maintain a letter of credit, which has a remaining balance of $100,301 as
of December 31, 2020, and such amount is deposited into the restricted cash account maintained at the bank that issued the letter
of credit. The total square footage of our office space is approximately 2,658.
On September 28, 2020,
we completed the purchase of our 40,000 square foot facility in Massachusetts for $4,000,000, to house our new Advanced Development
Center for accelerated development and manufacturing of vaccines. As of December 31, 2020, the asset has not been placed in service.
On December 23, 2020,
we completed the purchase of our approximately 44-acre site in Hamilton, Montana for $4.4 million, for the construction of a vaccine
development and commercial scale manufacturing facility. As of December 31, 2020, the asset has not been placed in service.
On March 5, 2021 we announced that we had entered into a $2.9 million non-binding Purchase and Sales Agreement
in connection with a property in Massachusetts. The Property is intended for process development activities.
Future minimum lease
payments are as follows (in thousands):
Year Ending December 31,
2021
$ 610
2022
281
2023
158
2024
145
2025
149
1,343
Included interest
(32 )
$ 1,311
We believe that our
existing facilities are suitable and adequate to meet our current business requirements.
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ITEM 3 - LEGAL PROCEEDINGS
From time to time,
we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation
is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm
our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in
the aggregate, a material adverse effect on our business, financial condition, operating results or cash flows.
ITEM 4 – MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5 - MARKET FOR REGISTRANT’S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
On March 12,
2021, the closing sale price of our common stock, as reported by The NASDAQ Stock Market, was $1.27 per share. On March 12,
2021, there were 106 holders of record of our common stock. Because many of our shares of common stock are held by brokers
and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by
these record holders.
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Dividend Policy
We have never paid
any cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in the foreseeable
future. We intend to retain future earnings to fund ongoing operations and future capital requirements of our business. Any
future determination to pay cash dividends will be at the discretion of the Board and will be dependent upon our financial condition,
results of operations, capital requirements and such other factors as the Board deems relevant.
Recent Sales of Unregistered Securities
None.
Repurchases of Equity Securities by
the Issuer and Affiliated Purchasers
We did not purchase
any of our registered securities during the period covered by this Annual Report.
ITEM 6 – SELECTED FINANCIAL DATA
Not required under
Regulation S-K for “smaller reporting companies.”
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ITEM 7 - MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s
Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect
Management’s current views with respect to future events and financial performance. You can identify these statements by
forward-looking words such as “may” “will,” “expect,” “anticipate,” “believe,”
“estimate” and “continue,” or similar words. Those statements include statements regarding the intent,
belief or current expectations of us and members of its management team as well as the assumptions on which such statements are
based and should be read together with the “Risk Factors” section of this Annual Report on Form 10-K for a discussion
of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking
statements contained in the following discussion and analysis. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual
Report and in other reports we file with the Securities and Exchange Commission, particularly those under “Risk Factors.”.
Business Overview
We are a clinical-stage biopharmaceutical company focused on discovering,
licensing, acquiring and developing small molecules and biologics to treat and prevent human disease and alleviate suffering. Our
portfolio is primarily composed of central nervous system (CNS) and immunology product candidates. The CNS portfolio includes both
small molecules and biologics to treat pain, neurologic, psychiatric and addiction conditions. Our lead CNS candidate, TNX-102
SL 1 , is in mid-Phase 3 development for the management of fibromyalgia, and positive data on the RELIEF Phase 3 trial
were recently reported. We expect interim data from a second Phase 3 study, RALLY, in the third quarter of 2021 2 and
topline data in the fourth quarter of 2021. We completed enrollment of 50% of participants in the RALLY study in March 2021. The
immunology portfolio includes vaccines to prevent infectious diseases and biologics to address immunosuppression, cancer, and autoimmune
diseases. Our lead vaccine candidate, TNX-1800 3 , is a live replicating vaccine based on the horsepox viral vector platform
to protect against COVID-19, primarily by eliciting a T cell response. We expect efficacy data from animal studies of TNX-1800
in the first quarter of 2021. TNX-801 3 , live horsepox virus vaccine for percutaneous administration, is in development
to protect against smallpox and monkeypox.
1 TNX-102
SL is an investigational new drug and has not been approved for any indication.
2 Pending
submission and agreement from FDA on statistical analysis plan.
3 TNX-1800
and TNX-801 are investigational new biologics and have not been approved for any indication.
Current Operating Trends
Our current
research and development efforts are focused on developing TNX-102 SL for the treatment of FM, PTSD, AAD and AUD, TNX-1800 as a
potential COVID-19 vaccine, TNX-801 as a potential smallpox vaccine, but we also expend effort on our other pipeline programs,
primarily related to TNX-1300, TNX-1900, TNX-601, TNX-701, TNX-1500, TNX-1600, TNX-1700, TNX-2100, TNX-2300 and TNX-2900. Our research
and development expenses consist of manufacturing work and the cost of drug ingredients used in such work, fees paid to consultants
for work related to clinical trial design and regulatory activities, fees paid to providers for conducting various clinical studies
as well as for the analysis of the results of such studies, and for other medical research addressing the potential efficacy and
safety of our study drugs. We believe that significant investment in product development is a competitive necessity, and we plan
to continue these investments in order to be in a position to realize the potential of our product candidates and proprietary technologies.
We expect that all
of our research and development expenses in the near-term future will be incurred in support of our current and future preclinical
and clinical development programs rather than technology development. These expenditures are subject to numerous uncertainties
relating to timing and cost to completion. We test compounds in numerous preclinical studies for safety, toxicology and efficacy.
At the appropriate time, subject to the approval of regulatory authorities, we expect to conduct early-stage clinical trials for
each drug candidate. We anticipate funding these trials ourselves, and possibly with the assistance of federal grants, contracts
or other agreements. As we obtain results from trials, we may elect to discontinue or delay clinical trials for certain products
in order to focus our resources on more promising products. Completion of clinical trials may take several years, and the length
of time generally varies substantially according to the type, complexity, novelty and intended use of a product candidate.
The commencement and
completion of clinical trials for our products may be delayed by many factors, including lack of efficacy during clinical trials,
unforeseen safety issues, slower than expected participant recruitment, lack of funding or government delays. In addition, we may
encounter regulatory delays or rejections as a result of many factors, including results that do not support the intended safety
or efficacy of our product candidates, perceived defects in the design of clinical trials and changes in regulatory policy during
the period of product development. As a result of these risks and uncertainties, we are unable to accurately estimate the specific
timing and costs of our clinical development programs or the timing of material cash inflows, if any, from our product candidates.
Our business, financial condition and results of operations may be materially adversely affected by any delays in, or termination
of, our clinical trials or a determination by the FDA that the results of our trials are inadequate to justify regulatory approval,
insofar as cash in-flows from the relevant drug or program would be delayed or would not occur.
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Results of Operations
We anticipate that
our results of operations will fluctuate for the foreseeable future due to several factors, such as the progress of our research
and development efforts and the timing and outcome of regulatory submissions. Due to these uncertainties, accurate predictions
of future operations are difficult or impossible to make.
Fiscal year Ended December 31, 2020
Compared to Fiscal year Ended December 31, 2019
Research and
Development Expenses . Research and development expenses for the fiscal year ended December 31, 2020 were $36.2 million,
an increase of $18.0 million, or 99%, from $18.2 million for the fiscal year ended December 31, 2019. This increase in predominately
due to the acquisition of the Trigemina asset for $2.4 million, timing of development milestones related to the Phase 3 RELIEF
study in FM for TNX-102 SL in 2020, initiation of a second Phase 3 study in FM, RALLY, in 2020, as well as new activities related
to the development of TNX-1800 as a potential COVID-19 vaccine, increased activities related to the development of TNX-801 as a
potential smallpox vaccine, and increased spending related to our development pipeline.
General
and Administrative Expenses . General and administrative expenses for the fiscal year ended December 31, 2020 were
$14.4 million, an increase of $3.8 million, or 36%, from $10.6 million incurred in the fiscal year ended December 31, 2019. The
increase is primarily due to an increase in compensation expense of $1.6 million driven by additional personnel added in 2020,
an increase in legal fees of $1.0 million due to increased corporate legal fees and patent prosecution costs, increased financial
reporting expenses of $0.4 million due to multiple shareholder meetings held during the year, an increase in IR/PR costs of $0.3
million, and an increase in insurance premiums of $0.1 million.
License Agreements
On February 11, 2021,
we announced that we have licensed technology using oxytocin-based therapeutics for the treatment of Prader-Willi syndrome and
non-organic failure to thrive disease from Inserm (the French National Institute of Health and Medical Research), Aix-Marseille
Université and Centre Hospitalier Universitaire of Toulouse. The licensing agreement has been negotiated and signed by Inserm
Transfert, the private subsidiary of Inserm, on behalf of Inserm.
The co-exclusive license
allows us to expand our intranasal potentiated oxytocin development program to a new indication. The patents covering the technology
are expected to provide market exclusivity for the co-licensees in the U.S. and Europe through 2031, which exclusivity could be
extended after marketing authorization by a Supplemental Protection Certificate in Europe or a Patent Term Extension in the U.S.,
independent of other Tonix-held patents covering the formulation and oxytocin potentiation technologies for intranasal administration.
On September 16, 2019,
we entered into an exclusive License Agreement (the “Columbia License Agreement”) with the Trustees of Columbia University
in the City of New York (“Columbia”) pursuant to which Columbia granted to us an exclusive license, with the right
to sublicense, certain patents and technical information (collectively, the “TFF2 Technology”) related to a recombinant
Trefoil Family Factor 2 (TFF2), and to develop and commercialize products thereunder (each, a “TFF2 Product”). Pursuant
to the terms of the Columbia License Agreement, Columbia has reserved for itself the right to practice the TFF2 Technology for
academic research and educational purposes.
We paid a five-digit
license fee to Columbia as consideration for entering into the Columbia License Agreement, which was recorded to research and development
expenses in the statement of operations for the year ended December 31, 2019. We are obligated to use Commercially Reasonable Efforts,
as defined in the Columbia License Agreement, to develop and commercialize the TFF2 Product, and to achieve specified developmental
milestones.
We have agreed to pay
Columbia single-digit royalties on net sales of (i) TFF2 Products sold by us or a sublicensee and (ii) any other products that
involve material or technical information related to the TFF2 Product and transferred to us pursuant to the License Agreement (“Other
Products”) sold by us or a sublicensee. Royalties on each particular TFF2 Product are payable on a country-by-country and
Product-by-Product basis until the latest of (i) the date of expiration of the last valid claim in the last to expire of the issued
patents covered by the Columbia License Agreement, and (ii) a specified period of time after the first commercial sale of a TFF2
Product in the country in question. Royalties on each particular Other Product are payable on a country-by-country and product-by-product
basis until a specified period of time after the first commercial sale of such particular Other Product in such country. Royalties
payable on net sales of the TFF2 Product and Other Products may be reduced by 50% of the royalties payable by us to any third party
for intellectual property rights which are necessary for the practice of the rights licensed to us under the Columbia License Agreement,
provided that the royalty payable on a TFF2 Product or Other Product may not be reduced by more than 50%.
We are also obligated
to make contingent milestone payments to Columbia totaling $4.1 million on a Product-by-Product basis upon the achievement of certain
development, approval and sales milestones related to a TFF2 Product. In addition, we shall pay Columbia 5% of consideration, other
than royalty payments and certain other categories of consideration, payable to us by a sublicensee. As of December 31, 2020, no
milestone payments have been accrued or paid in relation to this agreement.
On May 20, 2019, we
entered into an exclusive License Agreement (the “License Agreement”) with Columbia pursuant to which Columbia, for
itself and on behalf of the University of Kentucky and the University of Michigan (collectively, the “Institutions”)
granted to us an exclusive license, with the right to sublicense, certain patents, technical information and material (collectively,
the “Technology”) related to a double-mutant cocaine esterase, and to develop and commercialize products thereunder
(each, a “Product”). Pursuant to the terms of the License Agreement, Columbia has reserved for itself and the Institutions
the right to practice the Technology for academic research and educational purposes.
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We agreed to pay a six-digit license fee to Columbia as consideration for entering into the License Agreement.
We are obligated to use Commercially Reasonable Efforts, as defined in the License Agreement, to develop and commercialize the
Product, and to achieve specified developmental milestones. The first 50% of the license fee was paid by June 30, 2019, while the
remaining 50% license fee, was paid during the second quarter of 2020. Both installments of the license fee were recorded to research
and development expenses in the 2019 statement of operations.
We agreed to pay Columbia
single-digit royalties on net sales of (i) Products sold by us or a sublicensee and (ii) any other products that involve material
or technical information related to the Product and transferred to us pursuant to the License Agreement (“Other Products”)
sold by us or a sublicensee. Royalties on each particular Product are payable on a country-by-country and Product-by-Product basis
until the latest of (i) the date of expiration of the last valid claim in the last to expire of the issued patents covered by the
License Agreement, (ii) a specified period of time after the first commercial sale of a Product in the country in question, or
(iii) expiration of any market exclusivity period granted by a regulatory agency. Royalties on each particular Other Product are
payable on a country-by-country and product-by-product basis until the later of (i) a specified period of time after the first
commercial sale of such particular Other Product in such country or (ii) expiration of any market exclusivity period granted by
a regulatory agency. Royalties payable on net sales of the Product and Other Products may be reduced by 50% of the royalties payable
by us to any third party for intellectual property rights which are necessary for the practice of the rights licensed to us under
the License Agreement, provided that the royalty payable on a Product or Other Product may not be reduced by more than 50%.
We are also obligated
to make contingent milestone payments to Columbia totaling $3 million on a Product-by-Product basis upon the achievement of certain
development, approval and sales milestones related to a Product. In addition, we shall pay Columbia 5% of consideration, other
than royalty payments and certain other categories of consideration, payable to us by a sublicensee. As of December 31, 2020, no
milestone payments have been accrued or paid in relation to this agreement.
Asset Purchase Agreements
On December 22, 2020, we entered into an asset purchase agreement (the “Asset Purchase Agreement”)
with Katana Pharmaceuticals, Inc. (“Katana”) pursuant to which we acquired Katana assets related to insulin resistance
and related syndromes, including obesity (the “Katana Assets”). In connection with the acquisition of the Assets, we
assumed Katana’s rights and obligations under that certain Exclusive License Agreement by and between Katana and The University
of Geneva (“Geneva”) (the “Geneva License “Agreement”) pursuant to an Assignment and Assumption Agreement
with Geneva (“Geneva Assignment and Assumption Agreement”), dated December 22, 2020. As consideration for entering
into the Asset Purchase Agreement, we paid $0.7 million to Katana. The costs associated with the cash payments were recorded to
research and development expenses in the statement of operations for the year ended December 31, 2020. Because the Katana intellectual
property was acquired prior to FDA, the cash consideration totaling $0.7 million, was expensed as research and development costs
since there is no alternative future use and the acquired intellectual property does not constitute a business.
Pursuant to the terms
of the Geneva Assignment and Assumption Agreement, Geneva granted us an exclusive license, with the right to sublicense, certain
patents related to the Katana Assets. We are obligated to use commercially reasonable efforts to diligently develop, manufacture,
and sell products claimed or covered by the patent and will use commercially reasonable efforts to diligently develop markets for
such products. The Geneva License Agreement specifies developmental milestones and the period of time during which such milestones
must be completed and provides for an annual maintenance fee payable to Geneva.
As of December 31,
2020, no milestone payments have been accrued or paid in relation to this agreement.
On June 11, 2020, we entered into an asset purchase agreement (the “Trigemina Asset Purchase Agreement”)
with Trigemina, Inc. (“Trigemina”) and certain shareholders named therein (the “Executive Shareholders”)
pursuant to which we acquired Trigemina assets related to migraine and pain treatment technologies (the “Trigemina Assets”).
In connection with the acquisition of the Trigemina Assets, we assumed Trigemina’s rights and obligations under that certain
Amended and Restated Exclusive License Agreement, dated November 30, 2007, as amended, by and between Trigemina and The Board of
Trustees of the Leland Stanford Junior University (“Stanford”) (the “Stanford License “Agreement”)
pursuant to an Assignment and Assumption Agreement with Stanford (“Assignment and Assumption Agreement”), dated June
11, 2020. As consideration for entering into the Trigemina Asset Purchase Agreement, we paid $824,759 to Trigemina and issued to
Trigemina 2,000,000 shares of our common stock and paid Stanford $250,241 pursuant to the terms of the Assignment and Assumption
Agreement. The common stock is unregistered and subject to a 12 month lock-up and a Shareholder Voting Agreement, dated June 11,
2020, pursuant to which Trigemina and the Executive Shareholders have agreed to vote the common stock on any matter put to a vote
of our shareholders in accordance with management’s recommendations. Both the costs associated with the cash payments and
share issuance, totaling $2.4 million, were recorded to research and development in the statement of operations for the year ended
December 31, 2020. Because the Trigemina intellectual property was acquired prior to FDA approval, the cash and stock consideration
was expensed as research and development costs since there is no alternative future use and the acquired intellectual property
does not constitute a business.
Pursuant to the terms
of the Assignment and Assumption Agreement, Stanford has granted us an exclusive license, with the right to sublicense, certain
patents related to the Trigemina Assets. Stanford has reserved for itself the right to practice under the patents for academic
research and educational purposes. We are obligated to use commercially reasonable efforts to diligently develop, manufacture,
and sell products claimed or covered by the patent and will use commercially reasonable efforts to diligently develop markets for
such products. The Stanford License Agreement specifies developmental milestones and the period of time during which such milestones
must be completed, and provides for an annual maintenance fee payable to Stanford.
As of December 31,
2020, no milestone payments have been accrued or paid in relation to this agreement.
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On August 19, 2019, we entered into an asset purchase agreement (the “TRImaran Asset Purchase Agreement”)
with TRImaran Pharma, Inc. (“TRImaran”) and the selling shareholders named therein (the “Selling Shareholders”)
pursuant to which we acquired TRImaran’s assets related to certain pyran-based compounds (the “TRImaran Assets”).
In connection with the acquisition of the TRImaran Assets, we entered into a First Amended and Restated Exclusive License Agreement
(the “WSU License Agreement”) with Wayne State University (“WSU”) on August 19, 2019. As consideration
for entering into the TRImaran Asset Purchase Agreement, we paid $100,000 to TRImaran and have assumed certain liabilities of TRImaran
totaling $68,500. The $168,500 was recorded to research and development expenses in the statement of operations in 2019. Upon the
achievement of specified development, regulatory and sales milestones, we also agreed to pay TRImaran and the Selling Shareholders,
in restricted stock or cash, at our option, a total of approximately $3.4 million. Pursuant to the terms of the TRImaran Asset
Purchase Agreement, TRImaran and the Selling Shareholders are prohibited from disclosing confidential information related to the
TRImaran Assets and are restricted from engaging, for a period of three years, in the development or commercialization of any therapeutic
containing any pyran-based drug compound for the treatment of post-traumatic stress disorder, attention deficit hyperactivity disorder
or major depressive disorder. Also for a period of three years, if TRImaran or any Selling Shareholder engage in the research or
development of any potential therapeutic compound for the treatment of any central nervous system disorder, TRImaran or such Selling
Shareholder is obliged to provide notice and opportunity to Tonix to make an offer to acquire or license rights with respect to
such product candidate. As of December 31, 2020, no milestone payments have been accrued or paid in relation to this agreement.
Pursuant to the terms
of the WSU License Agreement, WSU granted us an exclusive license, with the right to sublicense, certain patents, technical information
and material (collectively, the “Technology”) related to the TRImaran Assets. WSU has reserved for itself the right
to practice the Technology for academic research and educational purposes. We are obligated to use commercially reasonable efforts
to obtain regulatory approval for one or more products utilizing the Technology (“WSU Products”) and to use commercially
reasonable marketing efforts throughout the term of the WSU License Agreement. The WSU License Agreement specifies developmental
milestones and the period of time during which such milestones must be completed and provides for an annual maintenance fee payable
to WSU. We are obligated to substantially manufacture WSU Products in the United States if WSU Products will be sold in the United
States.
Pursuant to the WSU
License Agreement, we paid $75,000 to WSU as reimbursement of certain patent expenses, and, upon the achievement of specified development,
regulatory and sales milestones, we also agreed to pay WSU, milestone payments totaling approximately $3.4 million. We also agreed
to pay WSU single-digit royalties on net sales of WSU Products sold by us or a sublicensee on a tiered basis based on net sales,
and additional sublicense fees on certain consideration received from sublicensees. Royalties on each particular WSU Product are
payable on a country-by-country and Product-by-Product basis until the date of expiration of the last valid claim in the last to
expire of the issued patents covered by the WSU License Agreement. Royalties payable on net sales of WSU Products may be reduced
by 50% of the royalties payable by us to any third party for intellectual property rights which are necessary for the practice
of the rights licensed to us under the WSU License Agreement, provided that the royalty payable on a WSU Product may not be reduced
by more than 50%. Each party also has the right to terminate the agreement for customary reasons such as material breach and bankruptcy.
The WSU License Agreement contains provisions relating to termination, indemnification, confidentiality and other customary matters
for an agreement of this kind. As of December 31, 2020, no milestone payments have been accrued or paid in relation to this agreement.
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Liquidity and Capital Resources
As of December
31, 2020, we had working capital of $78.2 million, comprised primarily of cash and cash equivalents of $77.1 million and prepaid
expenses and other of $10.9 million, offset by $4.6 million of accounts payable and $4.6 million of accrued expenses. A significant
portion of the accounts payable and accrued expenses are due to work performed in relation to our Phase 3 clinical trial in FM
and our vaccine program. For the years ended December 31, 2020 and 2019, we used approximately $48.6 million and $26.7 million
of cash in operating activities, respectively, which represents cash outlays for research and development and general and administrative
expenses in such periods. The increase in cash outlays principally resulted from an increase in research and development and general
and administrative activities. For the year ended December 31, 2020 and 2019, net proceeds from financing activities were $123.1
million and $12.9 million, respectively, predominately from the sale of our common stock and exercise of warrants.
Cash used by
investing activities for the years ended December 31, 2020 and 2019 was approximately $8.6 million and $17,000, respectively, related
to the purchase of property and equipment.
We believe that our cash resources at December 31, 2020 and the proceeds that we raised from equity offerings
in the first quarter of 2021 will meet our operating and capital expenditure requirements through March 31, 2022, but not beyond.
We continue to face
significant challenges and uncertainties and, as a result, our available capital resources may be consumed more rapidly than currently
expected due to changes we may make in our research and development spending plans. These factors raise substantial doubt about
our ability to continue as a going concern for the one year period from the date of filing of this Form 10-K. We have the ability
to obtain additional funding through public or private financing or collaborative arrangements with strategic partners to increase
the funds available to fund operations. Without additional funds, we may be forced to delay, scale back or eliminate some of our
research and development activities, or other operations and potentially delay product development in an effort to provide sufficient
funds to continue our operations. If any of these events occurs, our ability to achieve our development and commercialization goals
would be adversely affected.
Future Liquidity Requirements
We expect to incur losses from operations for the near future. We expect to incur increasing research
and development expenses, including expenses related to additional clinical trials and the buildout of our research and development
operations and manufacturing. We will not have enough resources to meet our operating requirements for the one-year period from
filing date of this report.
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Our future capital
requirements will depend on a number of factors, including the progress of our research and development of product candidates,
the timing and outcome of regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending and
enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing
and our success in developing markets for our product candidates.
We will need to obtain
additional capital in order to fund future research and development activities. Future financing may include the issuance of equity
or debt securities, obtaining credit facilities, or other financing mechanisms. Even if we are able to raise the funds required,
it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience
unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt
securities, shareholders may experience additional dilution or the new equity securities may have rights, preferences or privileges
senior to those of existing holders of our common stock.
If additional financing
is not a
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.