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Item 1. Business

2024-03-13 compared with 2023-03-29 · 178 added, 170 removed, 643 unchanged (35% of the section changed)

We are a biopharmaceutical company focused on developing and commercializing precision therapies for genetically defined cancers with alterations in mTOR pathway genes.

Our lead drug product, FYARRO ® , is a form of sirolimus bound to albumin.

Sirolimus is a potent inhibitor of the mTOR biological pathway, the activation of which pathway can promote tumor growth.

We believe our approach to utilizing albumin bound sirolimus has the potential to produce transformational therapies for cancer patients with mTOR pathway driver alterations where other mTOR inhibitors have not or cannot be effectively exploited due to problems of pharmacology, effective drug delivery, safety, or effective targeting to the disease site.

We are a biopharmaceutical company focused on developing and commercializing precision therapies for cancers with alterations in the mTOR pathway, a key regulator of cell growth and cancer progression.

Our lead drug product, FYARRO ® (sirolimus protein-bound particles for injectable suspension (albumin-bound);

nab -sirolimus), combines two established technologies - nanoparticle albumin-bound ( nab ) technology and the anti-cancer agent, sirolimus.

Nab -sirolimus is a potent inhibitor of the mTOR biological pathway with demonstrated anti-cancer activity in our lead indication, advanced malignant perivascular epithelioid cell tumor (“PEComa”), a rare cancer.

We believe our approach to utilizing the novel combination of technologies has the potential to produce transformational therapies for patients with cancers beyond PEComa that have known mTOR pathway activation and/or cancers in which other mTOR inhibitors have not been fully exploited due to problems of pharmacology, effective drug delivery, safety, or effective targeting to the disease site.

We exclusively license FYARRO, previously called ABI-009, nab -sirolimus, from Abraxis BioScience, LLC, a wholly owned subsidiary of Celgene Corporation, which is a wholly owned subsidiary of Bristol-Myers Squibb Company (“BMS”).

Throughout this document we refer to FYARRO ( nab -sirolimus, sirolimus protein-bound particles for injectable suspension (albumin-bound)) as FYARRO in the context of commercialization for the treatment of advanced malignant perivascular epithelioid cell tumor (“PEComa”), investigational use, our clinical trials, regulatory matters such as orphan drug designation and our license agreement with BMS, all further discussed below and throughout this document.

Throughout this document we refer to FYARRO ( nab -sirolimus, sirolimus protein-bound particles for injectable suspension (albumin-bound)) as FYARRO in the context of commercialization for the treatment of advanced malignant PEComa, investigational use, our clinical trials, regulatory matters such as orphan drug designation and our license agreement with BMS and collaboration agreement with Mirati Therapeutics, Inc.

("Mirati"), all further discussed below and throughout this document.

On November 22, 2021, the U.S.

Food and Drug Administration (the “FDA”) approved FYARRO sirolimus protein-bound particles for injectable suspension (albumin-bound) for the treatment of adult patients with locally advanced unresectable or metastatic malignant PEComa.

On February 22, 2022, we launched FYARRO in the United States for treatment of advanced malignant PEComa and recognized net revenue from product sales of $15.2 million for the year ended December 31, 2022.

In addition to advanced malignant PEComa, based on exploratory data from the completed Phase 2 registrational study, Advanced Malignant PEComa Trial (“AMPECT”) and our expanded access program (the "Expanded Access Program"), we initiated a registration-directed tumor-agnostic Phase 2 study (“PRECISION 1”) of FYARRO in patients with Tuberous Sclerosis Complex 1 and 2 (“ TSC1” & “ TSC2” ) alterations.

We have completed a Type B meeting with the FDA in which we discussed the trial design and the PRECISION 1 trial was opened for enrollment in the United States during the first quarter of 2022, with dosing of our first patient in March 2022.

Our objective is to develop and commercialize innovative drugs that address the serious unmet medical needs of cancer patients and patients with other diseases that are driven by alterations in the mTOR pathway.

On February 22, 2022, we launched FYARRO in the United States for treatment of advanced malignant PEComa and recognized net product sales of $24.4 million and $15.2 million for the years ended December 31, 2023 and 2022, respectively.

In addition to advanced malignant PEComa, based on exploratory data from the completed Phase 2 registrational study, Advanced Malignant PEComa Trial (“AMPECT”) and data for FYARRO in other solid tumors with TSC1 and TSC2 inactivating alterations , we initiated a registration-directed tumor-agnostic Phase 2 study (“PRECISION1”) of FYARRO in patients with Tuberous Sclerosis Complex 1 (“ TSC1 ”) and Tuberous Sclerosis Complex 2 (“ TSC2 ”) alterations.

The PRECISION1 trial was opened for enrollment in the United States during the first quarter of 2022, with dosing of our first patient in March 2022.

On December 14, 2023, we announced results from an interim analysis on the first third of participants in the PRECISION1 trial (discussed below).

As of December 2023, 80 patients were enrolled in the PRECISION1 trial and we expect the trial to be fully enrolled by May 2024 and completed by the end of 2024 with results anticipated in early 2025.

Our objective is to develop and commercialize innovative drugs that address the serious unmet medical needs of cancer patients that are driven by alterations in the mTOR pathway.

The principal components of our strategy include:

• Commercialize FYARRO in advanced malignant PEComa .

For FYARRO, we are initially targeting advanced malignant PEComa, an ultra-rare sarcoma with no approved therapies other than FYARRO.

In May 2021, we completed the filing of a rolling new drug application ("NDA") submission with the FDA for FYARRO for the treatment of advanced malignant PEComa based on the positive results from AMPECT, our pivotal Phase 2 study in this patient population, which met its primary endpoint.

The FDA accepted the NDA in July 2021 and we were granted approval for commercial sale of FYARRO on November 22, 2021.

We built a cross functional commercial team and infrastructure and launched FYARRO for advanced malignant PEComa in the United States in the first quarter of 2022.

• Expand the market opportunity for FYARRO by pursuing development of a tumor-agnostic indication in cancer patients with alterations in the TSC1 or TSC2 genes.

We have presented initial data for FYARRO in patients with different cancer types having alterations in the TSC1 or TSC2 genes as part of the Expanded Access Program.

Based on exploratory data in patients with TSC1 or TSC2 alterations from the completed AMPECT and the Expanded Access Program, in the first quarter of 2022, we initiated a registration-directed tumor-agnostic study called PRECISION 1 in patients with malignant solid tumors driven by TSC1 or TSC2 alterations.

The PRECISION 1 trial was opened for enrollment in the United States during the first quarter of 2022 and our first patient was dosed in March 2022.

Tuberous Sclerosis Complex acts upstream of mTOR in the pathway to inhibit mTOR activity and negatively regulate cell growth.

In cancer, Tuberous Sclerosis Complex genes, TSC1 and TSC2 are tumor suppressors that when activated by gene alterations can contribute to cancer progression.

We estimate that TSC1 and TSC2 inactivating alterations occur at a rate of approximately 2% across cancers, or approximately 16,000 new cases each year, with no approved therapies for TSC1 or TSC2 inactivating alterations.

Based on exploratory data in patients with TSC1 or TSC2 alterations from the completed AMPECT, we initiated a registration-directed tumor-agnostic study called PRECISION1 in patients with malignant solid tumors driven by TSC1 or TSC2 alterations.

• Expand the application of FYARRO as a monotherapy and combination therapy with other agents.

We believe there is a significant opportunity to utilize FYARRO in other indications as a monotherapy as well as in combination with other targeted therapies, particularly in mTOR adjacent signaling pathways.

These additional indications may be important drivers of commercial value and we believe that strategic

partnerships, particularly in combination therapies, may be an effective means of developing and commercializing these opportunities.

We believe there is a significant opportunity to utilize FYARRO in other cancers, particularly in combination with other anti-cancer therapies where there is potential additive benefit of mTOR inhibition.

These additional indications may be important drivers of commercial value, and we believe that strategic partnerships, particularly in combination therapies, may be an effective means of developing and commercializing these

opportunities.

While we are primarily focused on cancer, the mTOR pathway is also relevant in other indications and we may opportunistically study these indications to broaden the application of FYARRO or satisfy unmet medical needs.

In October 2022, we entered into a collaboration and supply agreement with Mirati Therapeutics, Inc.

(“Mirati”) to evaluate the combination of Mirati’s adagrasib, a KRAS G12C selective inhibitor, and FYARRO in KRAS G12C mutant non-small cell lung cancer ("NSCLC") and other solid tumors.

Under the terms of the agreement, Mirati is responsible for sponsoring and operating the Phase 1/2 study and we will supply study drug and jointly share the cost of the study.

We are currently enrolling patients in (i) a Phase 2 open-label, multi-institutional study to evaluate the efficacy and safety of the combination of FYARRO with letrozole for the treatment of advanced or recurrent endometrioid-type endometrial cancer ("EEC") and (ii) a Phase 2 multicenter, open-label, single-arm trial to evaluate adult patients with functional or non-functional, well-differentiated, locally advanced unresectable or metastatic neuroendocrine tumors ("NETs") of the GI tract, lung, or pancreas who have received ≤2 prior lines of therapy excluding somatostatin analogs (SSTa).

In addition, in October 2022, we entered into a collaboration and supply agreement with Mirati to evaluate the combination of Mirati’s adagrasib, a KRAS G12C selective inhibitor, and FYARRO in KRAS G12C mutant non-small cell lung cancer ("NSCLC") and other solid tumors.

• Continue to commercialize FYARRO in advanced malignant PEComa .

For FYARRO, we initially targeted advanced malignant PEComa, an ultra-rare sarcoma with no approved therapies other than FYARRO.

The FDA accepted the NDA in July 2021 and we were granted approval for commercial sale of FYARRO on November 22, 2021.

We built a cross functional commercial team and infrastructure and launched FYARRO for advanced malignant PEComa in the United States in the first quarter of 2022.

• Establish capabilities and/or partnerships outside the United States to effectively commercialize and maximize the value of FYARRO.

We have built capabilities in the United States to commercialize our products.

We have built capabilities in the United States to commercialize FYARRO.

Outside the United States, we intend to selectively evaluate strategic partnerships with partners whose development and commercial capabilities complement our own.

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Sirolimus (also known as rapamycin) is an allosteric inhibitor of mTOR, which binds to the 12-kDa FK506-binding protein 12 ("FKBP12"), and the complex directly and strongly inhibits mTORC1.

Figure 1 – mTOR Pathway

Currently approved mTOR inhibitors are limited in their applicability due to poor and variable absorption of the oral drugs (sirolimus and everolimus) or variable conversion from prodrug to active drug (temsirolimus) and premedication requirements (temsirolimus).

These drugs have a narrow therapeutic index and a reduction from the labelled dose can result in a decrease in efficacy.

These drugs have a narrow therapeutic index and a reduction from the labelled dose can result in decreased efficacy.

Preclinical study comparisons with FYARRO showed significantly higher tumor uptake, greater downstream mTOR target suppression and increased suppression of tumor growth for FYARRO compared to the oral mTOR inhibitors.

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Nanoparticle Albumin-Bound (nab) Technology

The nanoparticle albumin-bound, or nab, technology was created and developed by Neil Desai, our founder and Executive Chairman, and former colleagues while at Abraxis Bioscience.

The nanoparticle albumin-bound, or nab , technology was created and developed by Neil Desai, our founder and Executive Chairman, and former colleagues while at Abraxis Bioscience, LLC.

This technology takes advantage of the protein albumin, a natural carrier of water insoluble molecules (e.g., various nutrients, vitamins and hormones) found in humans.

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The first clinical and commercial validation of this technology is BMS's Abraxane ® , which is approved in the United States and worldwide for the treatment of breast cancer, non-small cell lung cancer and pancreatic cancer.

Abraxane has generated >$1.0 billion of sales in the United States every year since 2018.

Abraxane has generated greater than $1.0 billion of sales in the United States every year since 2018 until its loss of market exclusivity in 2022.

We are applying the nab technology to the molecule sirolimus, a potent inhibitor of the mTOR pathway that is hindered in large part by a poor pharmacologic profile (e.g., poor and variable absorption with incomplete target suppression).

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Ultimately, nab technology allows FYARRO to take advantage of albumin transport pathways to accumulate at high levels in tumors and deliver sirolimus directly to cancer cells where it can effectively inhibit mTOR.

The accumulation of albumin in tumors can be easily visualized by using the dye evans blue which has a high affinity for

Intravenous injection of albumin-evans blue complex in animals bearing tumors resulted in rapid accumulation of the complex within the tumors which could be easily visualized in a few hours after injection.

The accumulation of albumin in tumors can be easily visualized by using evans blue dye which has a high affinity for

Similarly, a fluorescent labelled albumin when injected into human glioblastoma patients 24-48 hours before surgery resulted in excellent visualization of the tumors during surgery under fluorescent light and allowed the complete resection of the tumor margins in the majority of the patients treated.

Figure 2 – Albumin Accumulation

FYARRO ® ( nab -sirolimus, sirolimus protein-bound particles for injectable suspension (albumin-bound))

FYARRO ® ( sirolimus protein-bound particles for injectable suspension (albumin-bound))

FYARRO is a form of sirolimus bound to albumin.

Sirolimus is a potent inhibitor of the mTOR biological pathway and inhibits downstream signaling from mTOR, which can promote tumor growth.

FYARRO is composed of nanoparticles of sirolimus bound to human albumin with average size less than 100 nanometers.

Sirolimus is a potent inhibitor of the mTOR biological pathway and inhibits downstream signaling from mTOR, the activation of which can promote tumor growth.

FYARRO is composed of nanoparticles of sirolimus bound to human albumin with an average size less than 100 nanometers.

An artist’s impression of these nanoparticles is shown below.

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We believe that FYARRO’s differentiated pharmacologic profile, high tumor accumulation, and ability to effectively inhibit important targets in the mTOR pathway make it a well-positioned drug to address resistance and suboptimal efficacy of existing mTOR inhibitors.

We are studying FYARRO in cancers with known mTOR pathway activation, including tumor-agnostic indications targeting specific genomic alterations that activate the mTOR pathway.

In addition, we have ongoing studies as well as studies in planning for testing the safety and efficacy of FYARRO in combination with other targeted agents, such as our current collaboration with Mirati to evaluate the combination of Mirati’s adagrasib, a KRASG12C selective inhibitor, and FYARRO in KRASG12C mutant non-small cell lung cancer (NSCLC) and other solid tumors.

Our ongoing studies and studies in planning are summarized in the figure below.

We are studying FYARRO in cancers with known mTOR pathway activation, including indications targeting specific genomic alterations that activate the mTOR pathway, such as our trial to evaluate adult patients with functional or non-functional, well-differentiated, locally advanced unresectable or metastatic NETs of the GI tract, lung, or pancreas who have received ≤2 prior lines of therapy excluding somatostatin (SSTa).

We have additional ongoing studies evaluating FYARRO in combination with other targeted agents, such as our study to evaluate the efficacy and safety of the combination of FYARRO with letrozole for the treatment of advanced or recurrent EEC and our current collaboration with Mirati to evaluate the combination of Mirati’s adagrasib, a KRAS G12C selective inhibitor, and FYARRO in KRAS G12C mutant non-small cell lung cancer (NSCLC) and other solid tumors.

Our ongoing studies are summarized in the figure below.

Figure 5 – Pipeline

Our EAP was opened to bridge access to FYARRO until market authorization and has since been closed in the United States following the commercial availability of FYARRO.

The EAP is available for advanced malignant PEComa patients in certain countries outside the United States.

FYARRO - Commercial

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The disease is often treated with the cytotoxic chemotherapy regimens used in soft tissue sarcomas, which have shown only modest benefit for malignant PEComa.

PEComas commonly show evidence of mTORC1 activation at least in part due to loss-of-function mutations in or deletions of the TSC1 or TSC2 genes.

PEComas commonly show evidence of mTORC1 activation due at least in part to loss-of-function mutations in or deletions of the TSC1 or TSC2 genes.

In a retrospective analysis, patients with malignant PEComa treated with available mTOR inhibitors (mTORi, sirolimus, everolimus, and temsirolimus) benefited from treatment suggesting that mTORC1 inhibition may be a promising therapeutic approach for malignant PEComa.

As a result, available mTOR inhibitors may also be used to treat malignant PEComa.

In May 2021, we completed the filing of a rolling NDA for FYARRO to the U.S.

Food and Drug Administration (the “FDA”), for approval to treat patients with advanced malignant PEComa.

The NDA was based on results from our Phase 2 registration-directed study, Advanced Malignant PEComa Trial, (“AMPECT”), in advanced malignant PEComa for which there were, prior to FYARRO, no approved therapies in the United States and for which there had never been a prior prospective clinical trial.

In May 2021, we completed the filing of a rolling NDA for FYARRO to the FDA for approval to treat patients with advanced malignant PEComa.

The NDA was based on results from AMPECT, our Phase 2 registration-directed study in advanced malignant PEComa, which met its primary endpoint.

In advanced malignant PEComa, other than FYARRO, there are no existing FDA approved therapies or drugs that have been studied in prospective clinical trials.

Following FDA approval, the National Comprehensive Cancer Network (“NCCN”) Sarcoma panel included FYARRO as the only preferred regimen for treatment of malignant PEComa.

On February 22, 2022, we launched FYARRO in the United States for treatment of advanced malignant PEComa and recognized net product sales of $15.2 million for the year ended December 31, 2022.

FYARRO - Clinical Development

Preclinical profile FYARRO

We demonstrated the antitumor activity of FYARRO in a series of nonclinical pharmacology studies.

FYARRO exhibited antitumor activity as a single agent and in combination with other therapeutic agents in a wide range of tumor types.

As a single agent, FYARRO significantly inhibited tumor growth of multiple human and mouse tumor models with known mTOR pathway activation including colon, breast, ovarian, bladder, and liver human tumor xenograft models, and in a melanoma mouse tumor model.

In nonclinical PK studies, we have shown that FYARRO intravenous (“IV”) administration resulted in significant, rapid, and prolonged sirolimus distribution to different organs and in tumors.

As a single agent monotherapy and in combination with other therapies, FYARRO was well tolerated with limited body weight loss.

In March 2019, at the American Association for Cancer Research Annual Meeting, we presented preclinical data that describes the tumor accumulation, mTOR target inhibition, and antitumor activity of FYARRO IV in comparison to oral sirolimus and oral everolimus in athymic mice bearing UMUC3 human bladder tumor xenografts.

At a clinically relevant dose of 15 mg/kg/week for all agents, FYARRO resulted in higher drug accumulation in tumors and stronger suppression of mTOR target pS6, which correlated with significantly greater tumor growth inhibition and prolonged survival compared with equal weekly dose of oral sirolimus and everolimus.

We also determined the antitumor activity of FYARRO in comparison to oral Rapamune against TSC2-null SNU-398 human liver tumor xenografts.

At equal weekly dose of 15 mg/kg/week, FYARRO IV resulted in significantly greater tumor growth inhibition and longer animal survival, which correlated with stronger suppression of mTOR downstream targets pS6K, pS6, and p4EBP1 as measured by western blot.

Both as a single agent and in combination, the nonclinical studies support the clinical development of FYARRO as an anticancer therapy.

FYARRO - Ongoing Clinical Development

FYARRO in TSC1 and TSC2 inactivating alterations (PRECISION1 Clinical Trial)

PRECISION1 is a registration-directed tumor-agnostic Phase 2 study of FYARRO in patients with TSC1 and TSC2 inactivating alterations that is based on evidence of activity seen in patients with TSC1 and TSC2 inactivating alterations from the completed AMPECT trial (presented at the Connective Tissue Oncology Society (CTOS) Annual Meeting in

2020) and our expanded access program (presented at the ASCO Annual Meeting in 2021).

We have completed a Type B meeting with the FDA in which we discussed the trial design with the FDA.

The PRECISION1 trial opened for enrollment in the United States during the first quarter of 2022 and the first patient was dosed in March 2022.

The TSC1 and TSC2 genes encode for proteins that form a tumor suppressor complex that down regulates mTORC1 activity.

Inactivating alterations in the TSC1 or TSC2 genes can result in activation of mTORC1.

TSC1 or TSC2 alterations have been reported across a broad range of cancer types.

Real-world next-generation sequencing analysis of nearly 440,000 patients with advanced cancer showed that TSC1 or TSC2 known or likely pathogenic alterations occurred in approximately 2% of all solid tumors (see chart titled “ TSC1 and TSC2 Inactivating Alterations Represent Significant Opportunity Across Common Cancer Types” below).

While there are no therapies approved specifically for TSC1 or TSC2 alterations, numerous case reports show durable responses to mTOR inhibition in patients with these alterations.

Figure 6 - TSC1 and TSC2 Prevalence

On December 14, 2023, we reported results from a planned interim analysis on the first third of participants in the PRECISION1 trial.

The interim analysis included data from the first third of trial participants (n=40) with a minimum of

4.5 months of follow-up, including investigator-assessed response and safety analyzed separately in each of the TSC1 and TSC2 arms.

Nine different tumor types were enrolled in the TSC1 arm and 13 tumor types were enrolled in the TSC2 arm.

Table 1 - PRECISION1 Interim Analysis Tumor Types

With respect to the efficacy of nab -sirolimus in patients with tumors harboring pathogenic inactivating alteration in TSC1 , of the 22 patients enrolled, 19 patients received ≥ 1 post baseline scan and were evaluable for efficacy.

Observations included:

• a 26% Overall Response Rate (ORR) including 5 partial responses (PR) with 4 confirmed responses and 1 unconfirmed response (uPR).

The patient with uPR remains on treatment and is awaiting a confirmatory scan;

• 9 patients had stable disease (SD), 3 of which were greater than or equal to six months in duration, resulting in a clinical benefit rate of 42% (5 PR + 3 SD ≥ 6 months);

• patients were heavily pre-treated with median of 3 prior lines of therapy;

• median time to response was 1.4 months and all responses were ongoing at time of data cutoff;

• responses were seen across four different epithelial carcinomas;

• 60% of responders experienced > 50% tumor reduction.

With respect to the efficacy of nab -sirolimus in patients with tumors harboring pathogenic inactivating alteration in TSC2 , of the 18 patients enrolled, all 18 patients received ≥ 1 post baseline scan and were evaluable for efficacy.

Observations included:

• An 11% ORR including 2 PRs with 1 confirmed and 1 uPR;

• 12 patients had SD, 3 of which were greater than or equal to six months resulting in a clinical benefit rate of 28% (2 PR + 3 SD ≥ 6 mos);

• Patients were heavily pre-treated with median of 3.5 prior lines of therapy;

50% had ≥ 5 prior lines of therapy;

• Responses were seen in one epithelial carcinoma and one sarcoma.

No new safety signals were observed, and no grade four treatment-related events or deaths occurred.

One patient discontinued the study due to grade two pneumonitis that completely resolved after discontinuation of therapy.

Across both arms, the safety profile was consistent with the nab -sirolimus label and the mTOR inhibitor drug class.

As of December 2023, 80 patients were enrolled in the PRECISION1 trial, supporting the two-thirds interim analysis that we expect in the third quarter of 2024.

The ORR analysis in two-thirds interim analysis cohort will be based on

independent radiological review with a minimum of six months of follow-up for all patients.

We expect the trial to be fully enrolled by May 2024 and completed by the end of 2024, with results anticipated in early 2025.

FYARRO in endometrial cancer

In August 2023, we announced the expansion of our FYARRO clinical pipeline through the further investigation of mTOR pathway inhibition by studying FYARRO in endometrioid endometrial cancer (EEC).

We are currently enrolling patients in a Phase 2 open-label, multi-institutional study to evaluate the efficacy and safety of the combination of FYARRO with letrozole for the treatment of advanced or recurrent EEC.

Endometrial cancer is the most common cancer of the female reproductive organs, with an estimated 10,000 cases of EEC diagnosed annually in the United States.

The mTOR pathway is known to be activated in many cases of endometrial cancer;

approximately 93% of EEC patients have mutations in the PI3k/AKT/mTOR pathway.

In previous clinical trials, mTOR inhibitor everolimus in combination with letrozole (an anti-estrogen agent) has demonstrated efficacy in the EEC population.

FYARRO in neuroendocrine tumors

In August 2023, we also announced the study of FYARRO in neuroendocrine tumors (NETs).

We are currently enrolling a Phase 2 multicenter, open-label, single-arm trial to evaluate FYARRO in adult patients with functional or non-functional, well-differentiated, locally advanced unresectable or metastatic NETs of the GI tract, lung, or pancreas who have received ≤2 prior lines of therapy, excluding somatostatin analogs (SSTa).

NETs develop from neuroendocrine cells found in various organs throughout the body, including the pancreas, gastrointestinal tract, and lung, with approximately 3,500 cases diagnosed annually in the United States.

While NETs are slow growing, they may result in a variety of severe symptoms, including pain, organ dysfunction, and in the case of functional (hormone secreting) NETs, intractable diarrhea, refractory gastric ulcers, or uncontrolled glucose levels that may respond poorly to treatment.

While everolimus is approved for NETs based on a progression free survival benefit over placebo, we believe, based in part on everolimus's preclinical studies results, that there is an opportunity for nab -sirolimus to provide enhanced therapeutic benefit.

FYARRO in combination with KRAS G12C inhibitors for KRAS G12C -mutated cancer xenografts

In 2022, we conducted preclinical studies to investigate the antitumor activity of mTOR inhibitors, FYARRO or everolimus, in combination with KRAS G12C inhibitors, sotorasib or adagrasib, in KRAS G12C-mutated cancer xenografts.

KRAS is frequently mutated in non-small cell lung cancer (NSCLC) and other tumor types, with the KRAS G12C present in approximately 9% of NSCLC patients.

The mTOR pathway is often activated in patients with the KRAS mutation and contributes to adaptive resistance to KRAS inhibitors.

We conducted these studies to determine the utility of a combination of the mTOR inhibitor nab- sirolimus and KRAS inhibitors, which could have synergistic potential in the treatment of KRAS mutated cancers.

Results of these studies showed that combining FYARRO with either of the KRAS G12C inhibitors significantly improved response against KRAS G12C mutant lung cancer and bladder cancer tumors in vivo and FYARRO also showed significantly greater potency in the combination compared to everolimus.

FYARRO - Historical Clinical Development

Advanced Malignant PEComa Trial (AMPECT)

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At the time of the primary analysis (predefined as when all patients had an opportunity to be treated for 6 months), the median for the key secondary endpoint of DOR was not yet reached, with 9 of 12 responders still on treatment (DOR range 4.2+, 27.7+ months).

At 1.5-years of follow-up after the primary analysis date (i.e., 2-years after the last patient-initiated treatment), 7 of 12 responders were still receiving treatment and the median DOR was still not reached, with 50% of patients exceeding 2.5 years (DOR range 5.6, 47.2+ months).

At 1.5-years of follow-up after the primary analysis date

(i.e., 2-years after the last patient-initiated treatment), 7 of 12 responders were still receiving treatment and the median DOR was still not reached, with 50% of patients exceeding 2.5 years (DOR range 5.6, 47.2+ months).

Figure 9 shows the target tumor responses (waterfall plot).

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11 patients had a one dose reduction from 100 mg/m2 to 75 mg/m2 and 2 patients had two dose reductions to 56 mg/m2.

Table 2 – Treatment-related adverse events

TRAE Any Grade ≥ 25%, No.

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In particular, TSC2 mutations were significantly associated with response (89% of patients) to FYARRO.

Figure 9 – Spider plot demonstrating change in the sum of target tumor measurements over time, based on mutation status .

Figure 8 – Spider plot demonstrating change in the sum of target tumor measurements over time, based on mutation status based on exploratory mutational analysis conducted on patients treated with FYARRO in the AMPECT study .

* Arrowheads indicate patients who were still on treatment

TSC1 and TSC2 Alterations in the Expanded Access Program

The Expanded Access Program was opened to bridge access to FYARRO until market authorization for patients with advanced malignant PEComa;

this program also included patients with various other malignancies having relevant genetic mutations in the mTOR pathway.

Preliminary data was presented at American Society of Clinical Oncology (“ASCO”) Annual Meeting in 2021 showing the early results in tumors bearing TSC1 or TSC2 inactivating alterations in patients with histologies other than advanced malignant PEComa.

Of the 8 patients treated with FYARRO, 7 patients were evaluable for response analysis and 1 patient progressed before the first scan.

Five of 8 patients (63%, 95% CI:

25%-92%) achieved a confirmed PR.

Amongst the patients who were mTOR inhibitor-naïve, 5 of 6 (83%, 95% CI:

36%-99+%) achieved a confirmed PR.

Duration of response at data cutoff ranged from 3.1 to 9.7+ months and 3 of 5 responders continue on treatment.

A waterfall plot of tumor response is provided below Figure 9.

Figure 10 shows the prior therapy and duration of treatment for each patient.

Patients with inactivating alterations in either TSC1 or TSC2 achieved tumor shrinkage and clinical benefit.

TEAEs (30%) included edema, infections, mucositis, and pain (71% each), nail changes and vomiting (57% each), and hypertension and nausea (43% each).

The majority of the events were G1/G2.

Treatment-related serious adverse events (“TESAE”) were reported in 2 patients and included hyperglycemia and infection (patients #4 and #5) and acute kidney injury (patient #7) possibly also related to administration of contrast.

Dose reductions occurred in 3/8 patients (38%) from 100 mg/m2 to 75 mg/m2.

A recent published case report summarized the results of a patient with malignant PEComa patient with a TSC1 alteration who enrolled in the EAP after having progressed through treatment with the mTOR inhibitor everolimus.

The patient demonstrated a rapid and durable response to FYARRO.

FYARRO in patients with prior mTOR inhibitors

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Of patients with TSC1 or TSC2 inactivating alterations, 44% had a response.

PRECISION 1 Clinical Trial.

PRECISION 1 is a registration-directed tumor-agnostic Phase 2 study of FYARRO in patients with TSC1 and TSC2 inactivating alterations that is based on evidence of activity seen in patients with TSC1 and TSC2 inactivating alterations from the completed AMPECT trial (presented at the Connective Tissue Oncology Society (CTOS) Annual Meeting in 2020) and the Expanded Access Program (presented at the ASCO Annual Meeting in 2021).

We have completed a Type B meeting with the FDA in which we discussed the trial design with the FDA.

The PRECISION 1 trial was opened for enrollment in the United States during the first quarter of 2022 and the first patient was dosed in March 2022.

We anticipate having preliminary data on a meaningful number of patients in the PRECISION 1 trial during the second quarter of 2023.

The TSC1 and TSC2 genes encode for proteins that form a tumor suppressor complex that down regulates mTORC1 activity.

Inactivating alterations in the TSC1 or TSC2 genes can result in activation of mTORC1.

TSC1 or TSC2 alterations have been reported across a broad range of cancer types.

Based on the SEER cancer statistics database and an analysis of mutation frequency by cancer type using the TCGA and cBioPortal databases, we believe there is a significant number of new patients with TSC1 or TSC2 inactivating alterations per year in the U.S (see chart titled “Projected Annual Incidence of Cancers with TSC1 and TSC2 Alterations” below).

While there are no therapies approved specifically for TSC1 or TSC2 alterations, numerous case reports show durable responses to mTOR inhibition in patients with these alterations.

FYARRO in combination with KRAS G12C inhibitors for KRAS G12C -mutated cancer xenografts

KRAS is frequently mutated in non-small cell lung cancer (NSCLC) and other tumor types, with the KRAS G12C present in approximately 9% of NSCLC patients.

The mTOR pathway is often activated in patients with the KRAS mutation and contributes to adaptive resistance to KRAS inhibitors.

We conducted these studies to determine the utility of a combination of the mTOR inhibitor nab-sirolimus and KRAS inhibitors, which could have synergistic potential in the treatment of

KRAS mutated cancers.

FYARRO for other indications

FYARRO is planned to be investigated in additional cancer indications as both single-agent or in combination with other drugs.

We believe there is a significant opportunity to utilize FYARRO in other indications as a monotherapy, e.g., in other mTOR pathway mutations, as well as in combination with other targeted therapies, particularly in mTOR adjacent signaling pathways.

For example, we currently are collaborating with Mirati to evaluate the combination of Mirati’s adagrasib, a KRAS G12C selective inhibitor, and FYARRO in KRAS G12C mutant NSCLC and other solid tumors.

These additional indications may be important drivers of commercial value and will continue to be evaluated.

Intellectual Property

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patent is expected to expire in 2029, and the other four are expected to expire in 2030, 2036, 2036 and 2040, respectively.

In addition, we licensed related patents in Europe, Australia, North America, South America, and Asia that are expected to expire between 2023 and 2037.

We also licensed many pending U.S.

In addition, we licensed related patents in Europe, Australia, North America, South America, and Asia that are expected to expire between

2026 and 2037.

We also own or licensed many pending U.S.

applications and related pending applications in Europe, Australia, North America, South America, Africa, and Asia.

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Only one patent among those eligible for an extension and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended.

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

Similar provisions are available in Europe and in certain other jurisdictions to extend the term of a patent that covers an approved dr ug.

In January 2022, we filed an application for patent term extension based on the approval of FYARRO.

We also intend to seek patent term extensions in any jurisdictions where they are available, however, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.

In addition to patent protection, we also rely on trade secret protection for our proprietary information that is not amenable to, or that we do not consider appropriate for, patent protection, including, for example, certain aspects of our

manufacturing processes for the nanoparticle compositions.

We also intend t o seek patent term extensions in any jurisdictions where they are available, however, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.

However, trade secrets can be difficult to protect.

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We have built a cross-functional commercial organization and infrastructure to support the commercialization of FYARRO for advanced malignant PEComa in the United States and will continue to evaluate potential partners in markets outside the United States.

We have an experienced oncology commercial team including marketing, market access, commercial operations and sales personnel to educate physicians who are prescribers of treatments for advanced malignant PEComa.

Our sales team is supported by marketing, commercial operations, and market access functions.

We have an experienced oncology commercial team including marketing, commercial operations and sales personnel to promote FYARRO to physicians who are prescribers of treatments for advanced malignant PEComa.

We have assembled a network of specialty distributors and a specialty pharmacy to distribute FYARRO across multiple sites of care in the United States.

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These companies include divisions of large pharmaceutical companies and biotechnology companies of various sizes.

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

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

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

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As of today, we are not aware of any other companies pursuing FDA approval for drugs to treat advanced malignant PEComa.

Competition for FYARRO in Truncating TSC1 and TSC2 Inactivating Alterations

For truncating TSC1 or TSC2 inactivating alterations, there are no existing FDA approved drugs.

Competition for FYARRO in TSC1 and TSC2 Inactivating Alterations

For TSC1 or TSC2 inactivating alterations, there are no existing FDA approved drugs.

If FYARRO receives marketing approval, it may face competition from available mTOR inhibitors including sirolimus, everolimus, and temsirolimus or other drug candidates in clinical trials that target the mTOR pathway, such as dual mTORC1/2 inhibitors or other next-generation mTOR inhibitors.

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On January 13, 2022, we entered into a Negotiated Purchase Order Terms and Conditions for Clinical and Commercial Product, as amended effective as of August 1, 2022 (the “Fresenius Agreement”), with Fresenius Kabi, LLC (“Fresenius Kabi”) pursuant to which Fresenius Kabi will manufacture FYARRO for us, and we will purchase FYARRO as a finished drug product from Fresenius Kabi, on a purchase-order basis.

Under the Fresenius Agreement, which is effective through March 31, 2024 (or such later date as may be agreed between the parties in writing), we may purchase FYARRO for either clinical or commercial purposes for use in the United States and Canada.

The Fresenius Agreement is effective through March 31, 2024 (or such later date as may be agreed between the parties in writing) and we are currently negotiating an extension to such agreement.

Under the Fresenius Agreement, we may purchase FYARRO for either clinical or commercial purposes for use in the United States and Canada.

We have a fully validated commercial manufacturing process in place for FYARRO at the Fresenius Kabi's Grand Island Manufacturing facility.

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In addition to manufacturing, Fresenius Kabi will perform specified labeling, packaging and serialization activities in respect of FYARRO for our benefit.

The price of FYARRO will be fixed, subject to the ability of Fresenius Kabi to increase pricing under specified circumstances.

The price of FYARRO is fixed, subject to the ability of Fresenius Kabi to increase pricing under specified circumstances.

We have an obligation to purchase certain minimum quantities of FYARRO.

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A new IND, or a separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments.

Furthermore, an independent review board ("IRB") for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial

and its informed consent form before the clinical trial begins at that site and must monitor the study until completed.

Furthermore, an independent review board ("IRB") for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site and must monitor the study until completed.

Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the clinical trial is unlikely to meet its stated objectives.

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A manufacturer of an investigational drug for a serious disease or condition is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for individual patient access to such investigational drug.

This requirement applies on the earlier of the first initiation of a Phase 2 or Phase 3 trial of the

investigational drug or, as applicable, 15 days after the drug receives a designation as a breakthrough therapy, fast track product, or regenerative advanced therapy.

If our clinical trials continue to be impacted by COVID-19, we may be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from the COVID-19 virus.

For example, since the start of the pandemic, the FDA has issued various COVID-19 related guidance documents, including guidance on conducting clinical trials during the COVID-19 pandemic, good manufacturing practice considerations for responding to COVID-19 infection in employees in drug products manufacturing;

manufacturing, supply chain, and drug and biological product inspections during COVID-19 public health emergency;

and remote interactive evaluations of drug manufacturing and bioresearch monitoring facilities during the COVID-19 public health emergency.

Changes in FDA’s operations and policies, including delays in providing regulatory review or feedback to sponsors or delays in pre-approval inspections, as a result of the COVID-19 public health emergency can materially impact our clinical development plans and regulatory approval.

Recently, President Biden announced that the administration intends to end the COVID-19 national and public health emergencies on May 11, 2023.

The full impact of the termination of the public health emergencies on FDA and other regulatory policies and operations are unclear.

This requirement applies on the earlier of the first initiation of a Phase 2 or Phase 3 trial of the investigational drug or, as applicable, 15 days after the drug receives a designation as a breakthrough therapy, fast track product, or regenerative advanced therapy.

NDA and the FDA Review Process

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In addition, before approving an NDA, the FDA may also audit data from clinical trials to ensure compliance with GCP requirements.

After the FDA evaluates the application, manufacturing process, and manufacturing facilities where the drug product and/or its API will be produced, it may issue an approval

letter or a Complete Response Letter.

After the FDA evaluates the application, manufacturing process, and manufacturing facilities where the drug product and/or its API will be produced, it may issue an approval letter or a Complete Response Letter.

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

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

With regard to a fast track product, the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

With regard to a fast track product, the FDA may consider for review sections of the NDA on a

rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

Any product submitted to the FDA for approval, including a product with a fast track designation, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval.

A product is eligible for priority review if it has the potential to provide safe and effective therapy where no

satisfactory alternative therapy exists or a significant improvement in the treatment, diagnosis, or prevention of a disease compared to marketed products.

A product is eligible for priority review if it has the potential to provide safe and effective therapy where no satisfactory alternative therapy exists or a significant improvement in the treatment, diagnosis, or prevention of a disease compared to marketed products.

The FDA will attempt to direct additional resources to the evaluation of an application for a new drug designated for priority review in an effort to facilitate the review.

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In addition, the drug may be subject to accelerated withdrawal procedures.

On December 29, 2022, the Consolidated Appropriations Act, 2023, including the Food and Drug Omnibus Reform Act (FDORA), was signed into law.

FDORA made several changes to the FDA’s authorities and its regulatory framework, including, among other changes, reforms to the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements.

The Food and Drug Omnibus Reform Act made several changes to the FDA’s authorities and its regulatory framework, including, among other changes, reforms to the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements.

The Food and Drug Administration Safety and Innovation Act established a category of drugs referred to as “breakthrough therapies” that may be eligible to receive breakthrough therapy designation.

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Post-Marketing Requirements

Following approval of a new drug, a pharmaceutical company and the approved drug are subject to continuing regulation by the FDA, including, among other things, establishment registration and drug listing, monitoring and recordkeeping activities, reporting to the applicable regulatory authorities of adverse experiences with the drug, providing the regulatory authorities with updated safety and efficacy information, drug sampling and distribution requirements, and complying with promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, restrictions on promoting drugs for uses or in patient populations that are not described in the drug’s approved labeling, limitations on industry-sponsored scientific and educational activities, and requirements for promotional activities involving the internet.

restrictions on promoting drugs for uses or in patient populations that are not described in the drug’s approved labeling, limitations on industry-sponsored scientific and educational activities, and requirements for promotional activities involving the internet.

In particular, the FDA closely regulates the marketing, labeling, advertising, and promotion of drug products.

A company can make only those claims relating to safety and efficacy that are approved by the FDA and in accordance with the

provisions of the approved label.

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

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

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The relevant European legislation provides that a product can be designated as an orphan drug by the European Commission if its sponsor can establish:

that the product is intended for the diagnosis, prevention, or treatment of (1) a life-threatening or chronically debilitating condition affecting not more than 5 in 10,000 persons in the European Union when the application is made, or (2) a life-threatening, seriously debilitating, or serious and chronic condition in the European Union and that without incentives it is unlikely that the marketing of the product in the European Union would generate sufficient return to justify the necessary investment.

For either of these conditions, the applicant must also demonstrate that there exists no satisfactory method of diagnosis, prevention, or treatment of the condition in question that has been authorized in the European Union or, if such method exists, the product has to be of significant

benefit compared to products available for the condition.

that the product is intended for the diagnosis, prevention, or

treatment of (1) a life-threatening or chronically debilitating condition affecting not more than 5 in 10,000 persons in the European Union when the application is made, or (2) a life-threatening, seriously debilitating, or serious and chronic condition in the European Union and that without incentives it is unlikely that the marketing of the product in the European Union would generate sufficient return to justify the necessary investment.

Additionally, designation is granted for products intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating, or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug or biological product.

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Regulatory Matters

Manufacturing, sales, promotion, and other activities following drug approval are also subject to regulation by numerous regulatory authorities in addition to the FDA, including, in the United States, the Centers for Medicare & Medicaid Services (“CMS”), other divisions of the U.S.

Services (“CMS”), other divisions of the U.S.

Department of Health and Human Services (“HHS”), the Drug Enforcement Administration for controlled substances, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency, and state and local governments.

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Pricing and rebate programs must comply with the Medicaid rebate requirements of the U.S.

Omnibus Budget Reconciliation Act of 1990 and more recent requirements in the Patient Protection and Affordable Care Act as amended by

the Health Care and Education Reconciliation Act of 2010 (the “ACA”).

Omnibus Budget Reconciliation Act of 1990 and more recent requirements in the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010 (the “ACA”).

If drugs are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.

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government, state legislatures, and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement, and requirements for substitution of generic drugs.

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.

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 FYARRO or a decision by a third-party payor to not cover FYARRO could reduce physician usage of such drug and have a material adverse effect on our sales, results of operations and financial condition.

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Omnibus Budget Reconciliation Act of 1990.

Under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufactures pay to state Medicaid programs will be eliminated.

The American Rescue Plan Act of 2021 eliminated the statutory cap on Medicaid Drug Rebate Program rebates that manufactures pay to state Medicaid programs.

Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of products, which could have a material impact on our business.

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For example, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.

These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031, with the exception of a temporary suspension implemented under various COVID-19 relief legislation from May 1, 2020 through March 31, 2022, unless additional

congressional action is taken.

Under current legislation, the actual reduction in Medicare payments can vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester.

The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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With regard to pharmaceutical products, the ACA, among other things, addressed a new methodology by which rebates owed by manufacturers under the MDRP are calculated for drugs that are inhaled, infused, instilled, implanted, or injected, increased the minimum Medicaid rebates owed by manufacturers under the MDRP and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% (increased pursuant to the Bipartisan Budget Act of 2018, effective as of 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

Under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs will be eliminated.

The American Rescue Plan Act of 2021 eliminated the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs.

Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than they receive on the sale of products, which could have a material impact on our business.

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In June 2021, the Supreme Court held that Texas and other challengers had no legal standing to challenge the ACA, upholding the ACA.

In January 2021, President Biden also issued an executive order to initiate a special enrollment period to allow people to obtain health insurance coverage through the ACA marketplace and instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, among others.

predict how future litigation, healthcare reform measures of the Biden administration, or what other regulations will ultimately be implemented at the federal or state level, or the effect of any future legislation or regulation may have on our business.

In January 2021, President Biden also issued an executive order to initiate a special enrollment period

to allow people to obtain health insurance coverage through the ACA marketplace and instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, among others.

We cannot predict how future litigation, healthcare reform measures of the Biden administration, or what other regulations will ultimately be implemented at the federal or state level, or the effect of any future legislation or regulation may have on our business.

Moreover, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

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In an effort to curb Medicare patients’ out-of-pocket costs for prescription drugs, the Part D redesign legislation requires manufacturers to contribute to the catastrophic coverage phase for Part D Drugs, as discounts through a manufacturer discount program.

Various industry stakeholders have initiated lawsuits against the federal government asserting that the price negotiation provisions of the Inflation Reduction Act are unconstitutional.

The impact of these judicial challenges as well as future actions and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.

Furthermore, any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors.

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At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical 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.

For example, the FDA recently authorized the state of Florida to import certain prescription drugs from Canada for a period of two years to help reduce drug costs, provided that Florida’s Agency for Health Care Administration meets the requirements set forth by the FDA.

Other states may follow Florida.

We expect that additional federal and state healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare drugs and services, and in turn could significantly reduce the projected value of certain development projects and reduce our profitability and may increase our regulatory burdens and operating costs.

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Other Healthcare Laws

For our product and any product candidates that obtain regulatory approval and are marketed in the United States, our arrangements, directly or indirectly, with third-party payors, healthcare providers, and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell, and distribute any products for which we obtain marketing approval.

arrangements and relationships through which we market, sell, and distribute any products for which we obtain marketing approval.

Our employees, consultants, and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

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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;

consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm customers, foreign and state laws, including the E.U.

General Data Protection Regulation (“GDPR”), governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;

consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm customers;

foreign and state laws, including the EU General Data Protection Regulation

(“GDPR”) and a version of the GDPR adopted in the United Kingdom (“UK GDPR”), and state laws and regulations, including general legislation such as the California Consumer Protection Act (“CCPA”), and sector- or subject matter-specific laws and regulations, governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;

and state laws related to insurance fraud in the case of claims involving private insurers.

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Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions, and settlements in the healthcare industry.

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, including those of our contractors or agents who conduct business for or on our behalf, are found to be in violation of any of these laws or any other related governmental regulations that may apply to us, we may be subject to significant civil, criminal, and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion of drugs from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight, and reporting obligations if we becomes subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations.

If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to similar actions, penalties, and sanctions, which may also adversely affect our business.

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, and we could also be subject to claims, demands, and litigation initiated by private individuals or entities related to these matters.

If our operations, including those of our contractors or agents who conduct business for or on our behalf, are alleged or found to be in violation of any of these laws or any other related governmental regulations that may apply to us, we may be subject to significant civil, criminal, and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion of drugs from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight, and reporting obligations if we becomes subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations.

If any of the physicians or other healthcare providers or entities with whom we expect to do business is alleged or found to be not in compliance with applicable laws, they may be subject to similar actions, penalties, and sanctions, which may also adversely affect our business.

Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from the business.

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For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations also impose obligations on covered entities such as health insurance plans, healthcare clearinghouses, and certain health care providers and their respective business associates and their covered subcontractors, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information, State data privacy and security laws may differ from each other in significant ways and often are not pre-empted by HIPAA, which may complicate compliance efforts in states or jurisdictions we conduct business.

For example, California recently enacted the California Consumer Privacy Act (“CCPA”), which creates new individual privacy rights for California consumers, as defined in the law, and places increased privacy and security obligations on entities handling personal data of consumers or households.

The CCPA will require covered companies to provide certain disclosures to consumers about its data collection, use and sharing practices, and to provide affected California residents with ways to opt-out of certain sales or transfers of personal information.

For example, in 2020, California enacted the CCPA, which created new individual privacy rights for California consumers, as defined in the law, and placed increased privacy and security obligations on entities handling personal data of consumers or households.

The CCPA requires covered companies to provide certain disclosures to consumers about its data collection, use and sharing practices, and to provide affected California residents with ways to opt-out of certain sales or transfers of personal information.

The CCPA went into effect on January 1, 2020 and became enforceable by the California Attorney General on July 1, 2020.

While there is currently an exception for protected health information that is subject to HIPAA and clinical trial regulations, as currently written, the CCPA may impact our business activities.

California also passed the California Privacy Rights Act, which imposes additional data protection obligations on companies doing business in California.

These and other applicable state and foreign privacy laws, as well as uncertain changes in future regulation and legislation, could impact our business strategies, increase our potential liability, increase our compliance costs, and adversely affect our business.

The collection and use of personal health data in the European Union are governed by the provisions of the Data Protection Directive, and as of May 2018, the General Data Protection Regulation (“GDPR”).

This directive imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, notification of data processing obligations to the competent national data protection authorities, and the security and confidentiality of the personal data.

The Data Protection Directive and GDPR also impose strict rules on the transfer of personal data out of the European Union to the U.S.

Failure to comply with the requirements of the Data Protection Directive, the GDPR, and the related national data protection laws of the European Union member states may result in fines and other administrative penalties.

The GDPR introduces new data protection requirements in the European Union and substantial fines for breaches of the data protection rules.

The GDPR regulations may impose additional responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules.

It was further amended and supplemented by the California Privacy Rights Act, which became effective on January 1, 2023, and imposes additional privacy and security obligations on companies doing business in California.

While there is currently an exception in the CCPA for protected health information that is subject to HIPAA and clinical trial regulations, as currently written, numerous other states have enacted legislation similar to the CCPA, and several states have enacted other privacy and security legislation, such as Washington’s My Health, My Data Act, which includes a private right of action.

The CCPA and such other new and evolving legislation may impact our business activities significantly, and these and other applicable state and foreign privacy laws, as well as uncertain changes in future regulation and legislation, could impact our business strategies, increase our potential liability, increase our compliance costs, and adversely affect our business.

The collection and use of personal health data in the European Union are governed by the GDPR and applicable member state legislation.

The GDPR and related member state legislation impose several requirements relating to consent of the individuals to whom the personal data relates, information provided to the individuals, and the security and confidentiality of personal data.

Legislation similar to the GDPR, the UK GDPR, also has been adopted in the United Kingdom.

The GDPR and UK GDPR also impose strict rules on the transfer of personal data out of the European Union and United Kingdom, respectively, to the U.S.

Both the GDPR and UK GDPR provide for substantial fines for noncompliance.

Failure to comply with the requirements of the GDPR, UK GDPR, or data protection laws of European Union member states may result in fines and other administrative penalties.

The GDPR and UK GDPR may impose additional responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms in an

effort to achieve and maintain compliance with their obligations.

This may be onerous and adversely affect our business, financial condition, results of operations, and prospects.

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

Under the current regime, all suspected unexpected serious adverse reactions

to the investigated drug that occur during the clinical trial have to be reported to the NCA and ECs of the member state where they occurred.

Under the current regime, all suspected unexpected serious adverse reactions to the investigated drug that occur during the clinical trial have to be reported to the NCA and ECs of the member state where they occurred.

In 2014, a new Clinical Trials Regulation 536/2014 (“Clinical Trials Regulation”), replacing the current Directive, was adopted.

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A transition period began on February 1, 2020, during which EU pharmaceutical law remains applicable to the United Kingdom and ended on December 31, 2020.

Although the United Kingdom is no longer a member of the EU, EU law remains applicable in Northern Ireland.

Although the United Kingdom is no longer a member of the EU, EU law remains applicable in Northern Ireland, as set forth in the Protocol on Ireland and Northern Ireland and as amended by the Windsor Framework, which will be implemented in Northern Ireland on January 1, 2025.

There are a number of new marketing authorization routes available in the United Kingdom, Great Britain (England, Scotland and Wales) or Northern Ireland, in addition to the national procedure.

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As of December 31, 2023, we had 89 full-time or part-time employees.

Of these employees, 47 employees are engaged in research and development activities and 32 employees are engaged in general and administrative activities.

Of these employees, 55 employees are engaged in research and development activities and 34 employees are engaged in selling, general and administrative activities.

In February 2024, we reduced our workforce by 12 employees, primarily related to restructuring of our commercial, medical affairs and corporate support functions.

Following the restructuring, as of March 4, 2024, we had 74 full-time or part time employees, with 50 and 24 of these employees engaged in research and development activities and in selling, general and administrative activities, respectively.

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

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Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees, advisors and consultants, while being committed to a diverse and dynamic workplace.

The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to increase shareholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

The principal purposes of our equity incentive plans are to attract, retain and reward personnel through

the granting of equity-based compensation awards in order to increase shareholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

Our Corporate Information

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Information contained in our website does not constitute a part of this Annual Report on Form 10-K or any of our other filings with the SEC unless specifically incorporated herein by reference.

In addition, our filings with the SEC may be

accessed through the SEC’s Electronic Data Gathering, Analysis, and Retrieval system at http://www.sec.gov.

In addition, our filings with the SEC may be accessed through the SEC’s Electronic Data Gathering, Analysis, and Retrieval system at http://www.sec.gov.

All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

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

What changed 10-K

Item 1. Business