ITEM
1. BUSINESS.
Overview
Our
Business
We
are a cell therapy company focused on immunotherapy. Since our inception, we have been involved with the development of proprietary immune
system management technology (“Cell Source technology”) licensed from Yeda Research & Development Company Limited
(“Yeda”), the commercial arm of the Weizmann Institute of Science (“Weizmann Institute”) in Israel. The current
focus of our Research and Development efforts is at the University of Texas MD Anderson Cancer Center (“MD Anderson”) in
Houston, Texas.
This
technology addresses one of the most fundamental challenges within human immunology: how to tune the immune response such that it tolerates
selected desirable foreign cells, but continues to attack all other (undesirable) targets. In simpler terms, a number of potentially
life-saving treatments have limited effectiveness today because the patient’s immune system rejects them. For example, while HSCT
- hematopoietic stem cell transplantation (e.g. bone marrow transplantation) has become a preferred therapeutic approach for treating
blood cell cancer, most patients do not have a matched family donor. Although matched unrelated donors and cord blood can each provide
an option for such patients, haploidentical stem cell transplants (sourced from partially mismatched family members) are rapidly gaining
favor as a treatment of choice. This is still a risky and difficult procedure primarily due to potential conflicts between host and donor
immune systems and as well as viral infections that often follow even successful HSCT while the compromised new immune system works to
reconstitute itself by using the transplanted stem cells. Today, rejection is partially overcome using aggressive immune suppression
treatments that leave the patient exposed to many dangers by compromising their immune system.
The
unique advantage of Cell Source technology lies in the ability to induce sustained tolerance of transplanted cells (or organs) by the
recipient’s immune system in a setting that requires only mild immune suppression, while avoiding the most common transplant related
complications. The scientific term for inducing such tolerance in a transplantation setting is chimerism, where the recipient’s
immune system tolerates the co-existence of the (genetically different) donor type and host (recipient) type cells. Attaining sustained
chimerism is an important prerequisite to achieving the intrinsic GvL (graft versus leukemia) effect of HSCT and supporting the
reconstitution of normal hematopoiesis (generation of blood cells, including those that protect healthy patients from cancer) in blood
cancer patients. Preclinical data, as well as initial clinical data show that Cell Source’s Veto Cell technology (currently in
a trial in the US) can provide superior results in allogeneic (donor-derived) HSCT by allowing for haploidentical stem cell transplants
under a mild conditioning regimen, while avoiding the most common post-transplant complications. Combining this with CAR (Chimeric Antigen
Receptor) T cell therapy employing Veto Cells, as a VETO CAR-T treatment, we will be able to treat patients in relapse as well as those
in remission and use the cancer killing power of CAR-T to protect the patient while their immune system fully reconstitutes, thus providing
an end-to-end solution for blood cancer treatment by potentially delivering a fundamentally safer and more effective allogeneic HSCT:
prevention of relapse; avoidance of graft versus host disease (GvHD); prevention of viral infections; and enhanced persistence of GvL
effect. This means that the majority of patients will be able to find a donor, and will have access to a potentially safer procedure
with higher long term survival rates than what either donor-derived HSCT or autologous CAR-T each on their own currently provide.
The
ability to induce permanent chimerism (and thus sustained tolerance) in patients – which allows the transplantation to overcome
rejection without having to compromise the rest of the immune system - may open the door to effective treatment of a number of severe
medical conditions, in addition to blood cancers, which are characterized by this need. These include:
| ● | The
broader set of cancers, including solid tumors, that can potentially be treated effectively
using genetically modified cells such as CAR-T cell therapy, but also face efficacy and economic
constraints due to limited persistence based on immune system issues (i.e., the need to be
able to safely and efficiently deliver allogeneic CAR-T therapy). Inducing sustained tolerance
to CAR-T cells may bring reduced costs and increased efficacy by allowing for off-the-shelf
(vs. patient-derived) treatments with more persistent cancer killing capability. |
| | |
| ● | Organ
failure and transplantation. A variety of conditions can be treated by the transplantation
of vital organs. However, transplantation is limited both by the insufficient supply of available
donor organs and the need for lifelong, daily anti-reject treatments post-transplant. Haploidentical
organ transplants, with sustained chimerism, have the potential to make life saving transplants
accessible to the majority of patients, with the prospect of improved life quality and expectancy. |
| | |
| ● | Non-malignant
hematological conditions (such as type one diabetes and sickle cell anemia) which could,
in many cases, also be more effectively treated by stem cell transplantation if the procedure
could be made safer and more accessible by inducing sustained tolerance in the stem cell
transplant recipient. |
Corporate
History
Cell
Source, Inc. (the “Company”) is a Nevada corporation formed on June 6, 2012 under the name Ticket to See, Inc. (“TTSI”).
Cell Source Ltd. (“Cell Source Israel”) was founded in 2011 in order to commercialize a suite of inventions that were the
result of over ten (10) years of research at the Weizmann Institute. Pursuant to a Research and License Agreement by and between Cell
Source Israel and Yeda, dated October 3, 2011, as amended in April, 2014, November, 2016, March, 2018, August 2019, December, 2019, November,
2020, and December, 2021 (the “Yeda License Agreement”), Yeda, the commercial arm of the Weizmann Institute, granted Cell
Source Israel an exclusive, worldwide license to certain patents, discoveries, inventions, and other intellectual property generated
(together with others) by Yair Reisner, Ph.D. (“Dr. Reisner”), former head of the Immunology Department at the Weizmann Institute.
Implications
of being a Smaller Reporting Company
As
a company with less than $100 million in revenue during our last fiscal year and a public float of less than $250 million, we qualify
as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. A “smaller reporting company”
may take advantage of reduced reporting requirements and disclosure obligations that are otherwise applicable to public companies. These
provisions include, but are not limited to:
● | being
permitted to present only two years of audited financial statements and only two years of
related Management’s Discussion & Analysis of Financial Condition and Results of
Operations in this report on Form 10-K; |
● | not
being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act; and |
● | reduced
disclosure obligations regarding executive compensation in our periodic reports, proxy statements
and registration statements. |
We
have elected to take advantage of certain of the reduced disclosure obligations and may elect to take advantage of other reduced reporting
requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might receive
from other public reporting companies in which you hold equity interests. Decreased disclosures in our SEC filings due to our status
as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
Hematological
Malignancies
Hematological malignancies (blood cancers) comprise
a variety of lymphomas and leukemias. A very important treatment protocol for these malignancies involves the use of HSCT. To the best
of our knowledge, over 1,500,000 HSCT have been performed worldwide with the annual number of procedures approaching 100,000 (table below).
Our technology has immediate relevance for, at a minimum, the roughly 40,000 worldwide stem cell transplants that are allogeneic (using
cells taken from another individual, not the patient). According to the Center for International Blood and Marrow Transplant Research
(“CIMBTR”), there were 8,326 allogeneic stem cell transplants in the US in 2020.
Source:
American Society of Hematology
HSCT often has a curative effect when successful.
However, it is very risky. HSCT typically involves destroying the patient’s native immune system with radiation or chemotherapy
(myeloablation) before the transplantation, and then suppressing immune response (immunosuppression) with drugs to manage the conflicts
between host and donor cells. The majority of patients are unable to find a matched family donor. Over 50% of all adult haploidentical
transplant patients in the US suffering from AML (the most common indication for allogeneic HSCT) die within three years of transplantation.
Among adult patients receiving haploidentical HSCT, of those who die in the first 100 days post-transplant, 35% die from either infections
(associated with a compromised immune system), graft rejection or GvHD (Graft versus Host Disease).
Myeloablation
and immunosuppression are dangerous and difficult to tolerate, especially in patients over age 50. Therefore, HSCT has been used mainly
with younger patients.
Another
very important treatment protocol for blood cancers is CAR-T cell therapy. This novel approach uses the patient’s own immune system
cells to directly attack cancer cells. CAR-T cells are made by removing a specific set of cells from the blood, genetically modifying
them in order to intensify the immune system’s natural response to cancer, and then re-injecting them into the patient. This form
of cellular therapy has produced exceptional near term results in blood cancer patients and is currently being tested against a variety
of different cancer types.
CAR
T-cell therapy has been approved by the U.S. Food and Drug Administration as standard therapy for some patients with lymphoma (drug names
Yescarta, Kymriah, Tecartus and Breyanzi), leukemia (drug name Kymriah) and multiple myeloma (drug names Abecma and Carvykti).
These
approved treatments use the patient’s own cells in order to create CAR-T cells, which involves high cost (between $373,000 and
$475,000 per infusion) and significant safety risks (e.g. high rate of relapse, significant incidence of Cytokine Release Syndrome (CRS)).
While a number of companies are attempting to develop allogeneic or “off-the-shelf” CAR-T, they face several challenges including
rejection by the host’s immune system and GvHD. The currently approved CAR-T treatments, while showing high early response rates,
have not shown long term survival results for blood cancer that exceed those of allogeneic HSCT.
This
means that:
| a) | many
blood cancer patients are not candidates for the primary treatment (HSCT) that represents
a potential cure; |
| b) | there
is high mortality among those patients who are candidates for HSCT and do undergo the procedure; |
| c) | CAR-T
cell therapy, which is currently used in limited indications and has had relatively slow
adoption, has yet to demonstrate long term survival that substantively exceeds that of HSCT. |
There
is widespread awareness of the need for improved immune-system management technologies for HSCT - both to improve outcomes of transplantations
for the traditional target set of patients and to expand the use of the procedure by making transplantation safe enough to become appropriate
for a broader set of patients.
There
is also a strong awareness for the need of an off-the-shelf approach to CAR-T that overcomes rejection, avoids GvHD, and has increased
persistence so as to deliver longer-term efficacy.
We
aspire to use VETO CAR-T, combining Veto Cell technology with allogeneic CAR-T cell therapy, to dramatically improve the outcomes of
the allogeneic transplantations already being performed, and thereby to rapidly penetrate the current market. However, our target population
greatly exceeds those patients who currently undergo HSCT or CAR-T, as the firm’s tolerizing technology could potentially make
allogeneic transplantation and off-the-shelf CAR-T an option for a much larger proportion of the diseased population. The following table
shows the incidence of the specific hematological malignancies on which we will focus:
Initial
Malignancy Indications (note
estimates for North America and EU only) | |
Incidence (Annual
New Cases) | | |
Annual HSCT | |
Lymphoma | |
| 225,241 | | |
| 22,505 | |
Leukemia | |
| 156,898 | | |
| 26,423 | |
Multiple
Myeloma | |
| 83,868 | | |
| 38424 | |
| |
| | | |
| | |
Total | |
| 466,007 | | |
| 87,352 | |
Source:
National Cancer Institute, World Health Organization, Leukemia & Lymphoma Society, Lymphoma
Coalition
Europe, EMBT, HRSA, CIMBTR
For
the purposes of this document, it is assumed that the immediate candidates for Cell Source-enabled HSCT will be the subset of cancer
patients that today receive transplantations as part of their cancer treatment (rightmost column in table above). We believe that a portion
of these patients will benefit from Veto Cell adjunct therapy, as such therapy aspires to improve the success and reduce the risk and
mortality of a procedure that they are having anyway. With time, as Veto Cell treatment becomes more widespread and data is accumulated,
we believe that the percentage of patients that will be referred for Veto Cell enabled HSCT will increase significantly.
It
is also important to note that incidence of these diseases is increasing. The global market for blood cancer therapeutics was estimated
at $41 billion in 2020 and is projected to increase in size to over $90 billion by 2028 according to Polaris Market Research Blood
Cancer Drugs Market Share, Size, Trends, Industry Analysis Report June. The aging of the US population and the increased incidence
of hematologic malignancies are expected to significantly increase the number of older patients who receive allogeneic HSCT.
HSCT
Market Trends
There
are four important market trends affecting the hematological malignancies market:
| 1) | As
noted above, increasing incidence of these disorders, largely driven by the aging population. |
| | |
| 2) | Improvement
and proliferation of HSCT treatments. |
| | |
| 3) | A
“virtuous circle” of lowered death rate due to better transplantations leading
to more aggressive focus on HSCT. |
| | |
| 4) | The
growing use of milder conditioning regimens, which makes the procedure more survivable for
older patients (see table below). |
However,
despite the above trends, the use of HSCT, especially allogeneic, remains limited because of the risks associated with the myeloablative
treatments required to reduce the host immune response, viral infections and GvHD. This means that the “gold-standard” of
treatment is largely unavailable to an age cohort that constitute a significant proportion of sufferers of these diseases.
The
Company aspires to address this issue in a distinctive manner by significantly reducing the need for myeloablative treatment while avoiding
the risk of GvHD, thereby improving the outlook for allogeneic transplantations and enabling their use in a much larger population set.
CAR-T
cell therapy
One
of the most promising new approaches to treating hematological malignancies is by using genetically modified T cells in treatments such
as CAR-T and TCR. CAR-T cell therapy for blood cancers, which has already been approved by the FDA, has shown the ability to attain remissions
in a significant proportion of those patients treated. That said, the number of patients treated has been relatively low, in part due
to the significant costs associated with this treatment. Since the approved treatment products rely on autologous (patient derived) production
of the CAR-T cells, the costs can run into the hundreds of thousands of dollars for a single treatment, with the cost of the infusion
alone ranging between $373,000 and $475,000 in the US. The broader hope for CAR-T cell therapy is for an allogeneic or “off the
shelf” version that is expected to significantly lower the treatment costs.
Cell
Source has completed a preclinical proof-of-concept in collaboration with Professor Zelig Eshhar, the inventor of CAR-T cell technology,
combining CAR-T and Veto Cell technology so as to allow for a successful allogeneic approach to CAR-T cell therapy.
Relevant
Non-Malignant Diseases
While
Hematological malignancies represent the Company’s initial focus, the Company’s selective immune response blocking technology
may also be effective in treating certain non-malignant organ diseases as well as blood and immune system disorders. This would represent
an additional growth opportunity for the Company.
The
target non-malignant diseases are widespread. The Company’s first non-malignant disorder target is expected to be is support of
organ transplantations (kidney, liver, etc.). Approximately 100,000 kidney and 35,000 liver transplants are conducted worldwide
each year. As with bone marrow transplantations, organ transplantations require substantial and ongoing immunosuppression to prevent
rejection. This ongoing treatment is dangerous, quality-of-life and life expectancy reducing, and costly. The Company’s Veto Cell
technology can potentially be used to selectively reduce immune response to the transplanted organ, thus broadening the donor pool and
reducing or possibly eliminating the need for daily, life-long immunosuppression post transplantation.
A
second target within non-malignant disorders are blood diseases such as sickle cell disease, aplastic anemia, beta thalassemia
and scleroderma. Sickle cell anemia, for example, can be effectively treated by HSCT. However, because of HSCT’s riskiness, the
procedure is currently used only in extreme cases. If successful in enabling safer HSCT, the Company can make this treatment available
to a broader set of sickle cell anemia sufferers. Preclinical data have also shown the potential effectiveness of Veto Cells in preventing
the development of Type 1 Diabetes.
Market
Access and Channels
The
market for stem cell transplantation is relatively concentrated. There are over 1,700 transplantation centers worldwide, of which some
700 are in North America and Western Europe.
A
relatively small subset of these (often termed “Centers of Excellence”) tends to set the practice standards for the entire
transplantation community. Therefore, as discussed in the “Strategy” section, the Company plans to focus its initial penetration
strategy on a relatively small group of influential centers. There are over 150 centers in the US today that provide CAR-T cell therapy
treatments.
Reimbursement
issues for our therapies are expected to be relatively straightforward. Once clinical effectiveness and regulatory approval are established,
the value-proposition for payors and providers is expected to be clear and compelling. Issues connected with immunosuppression and rejection
constitute a major component of bone marrow transplantation costs, and significant improvement in this area is expected to bring substantive
cost-savings for payors.
Sector
Focus
We
are in the overall arena of immunotherapy. The cancer immunotherapy market was estimated at approximately $85 billion for 2021 and projected
to grow to over $277 billion by 2030, according to Precedence Research.
Within
the immunotherapy field, our initial focus is on allogeneic therapies (treatments using donor derived-as opposed to patient derived-cells),
with a focus on haploidentical transplantations (transplantations that use cells from partially matched-as opposed to fully matched-donors
and recipients). While potentially valuable, allogeneic therapies are relatively complex, risky, and expensive. A key driver of this
complexity and associated costs is the conflict between host and donor immune systems, as discussed above.
Our
technology, which in preclinical studies, as well as in a first-in-human proof of concept, has shown the ability to enable tolerance
of donor cells without affecting other immune processes, is fundamentally enabling. We expect it to significantly increase the safety,
reduce the overall treatment cost, and therefore broaden the scope of indications for such procedures.
The
delivery method for Veto Cell treatments would take the form of a non-invasive cell suspension treatment administered intravenously.
For HSCT treatments, Veto Cells are derived from stem cells taken from the same donor who is providing the stem cells for the transplantation
itself. In the case of VETO CAR-T cell therapy, this will initially be combined with HSCT, but a more generic “off the shelf”
modality offering is planned, which would eventually be marketed as a pre-packaged suspension of cells and medium, prepared and stored
in advance.
Our
Value Drivers
Our
current positioning in the cancer immunotherapy value chain is typical of an early clinical stage company: developing, validating and
attaining regulatory approvals for the various applications of our technology platforms. Going forward, once the products are commercialized,
physician and patient interest in these treatments is expected to drive insurer reimbursement for patients - a key demand lever. The
generic value chain for biotechnology development commences with an invention which is formulated, patented and successful in pre-clinical
animal trials. We have already passed this stage with our Veto Cell technology platform, for which we have an exclusive license to use
from Yeda, the owner of these patents. We are currently at the stage of human trials (testing both safety and efficacy). Finally, the
offering earns regulatory approval and patient treatment, along with the ensuing revenues, can commence. This can be a particularly lengthy
process in the United States and therefore some medical treatments are approved in Europe or Asia and generate revenues there prior to
commencing U.S. sales. Recently expanded “fast track” regulation in the U.S. is aimed at getting critical treatments for
life threatening conditions to patients more quickly.
Our
successful preclinical validation of the Veto Cell treatment involved basic laboratory research including both in-vivo (live) animal
trials and in-vitro (in a glass dish) human cell trials. This validated the protocol prior to commencing human clinical trials. Human
clinical trials fine-tune the treatment protocol and confirm both safety and efficacy in treating patents. In parallel, the patents on
the core technology go into the national phase in various countries and are emended with claims associated with exact treatment protocols,
bolstering the protection afforded by already issued patents on the base technology.
In
some cases, successful biotech companies have been able to capitalize on positive human clinical results (even prior to full approval
for patient treatment) by either signing lucrative non-dilutive distribution option deals or by being partially or fully acquired by
larger market participants. KITE Pharmaceuticals, a CAR-T cell therapy company, was acquired outright by Gilead Sciences in 2017 for
$11.9 billion in cash, prior to having attained FDA approval and prior to commencing any product sales. In 2018, Juno Therapeutics was
acquired by Celgene Corporation for approximately $9 billion, also without having FDA approval for its CAR-T cell therapy technology.
There is no indication or assurance that we are currently under consideration for any option or acquisition deal.
We
are currently conducting a human clinical trial for approval for the Veto Cell based treatments in the United States. We have
had positive preclinical results for three of our cell therapy treatments. Yeda, the proprietary owners of the patents underlying our
technologies from whom we license our patents, has been granted patents for its original Veto Cell. The revised versions of the Veto
Cell are the subject of patent applications which have been granted in some jurisdictions and are pending in others. These newer patent
applications both leverage the priority of the already granted patents and extend the protection period for more advanced versions. We
are currently engaged in our first human clinical trial. If such trials are successful, they will demonstrate both safety (the patients
survived and were not harmed) and initial indications of efficacy (there are signs of successful engraftment under a mild conditioning
regimen, with a reduction in GvHD, and in the case of cancer patients prolonging the progression free period).
Science
and Technology Overview
The
patent portfolio that we license from Yeda includes a variety of cell therapy applications. The portfolio includes both granted and pending
patents. The total relevant patent portfolio consists of 15 patent “families” (i.e. grouping of similar patent applications
in different territorial jurisdictions) which currently include: 56 granted patents; 5 allowed/accepted patents; and a
further 43 pending patents. The key terms of the agreement pursuant to which we license all of Yeda’s patents related to
our technology is set forth in the section entitled “Intellectual Property” herein. The license period (per product, per
country) is for the full life of the patents and expires at the later of the patent expiration date in that country or 15 years after
the date that the FDA or local equivalent regulatory authority in each country approves that particular product for sale in that country.
Provided that Cell Source either sponsors research or pays either a nominal license fee of $50,000 per year (total for use of all the
products), or pays royalties on product sales on at least one product as per the license agreement, the license will remain in effect
continuously and expire only with the expiration of the patent or 15 years after regulatory approval (later of the two) per product per
country as described above.
Professor
Yair Reisner, the inventor of Veto Cell technology, left the Weizmann Institute and relocated to MD Anderson in Houston, Texas. He has
been awarded a $6 million grant from the Cancer Research and Prevention Institute of Texas. This, coupled with research funding from
the University itself, provides him with a total funding commitment of $10 million for five years. Professor Reisner is now the Head
of Stem Cell Research at the Department of Stem Cell Transplantation & Cellular Therapy as well as the Reisner Laboratory at MD Anderson.
Cell
Source is currently sponsoring ongoing research by Professor Reisner and his team, many of whom have also relocated from the Weizmann
Institute to MD Anderson, for developing existing and new applications for Veto Cell technology and plans to license any new intellectual
property developed there on an exclusive basis, as it does from Yeda. MD Anderson is the largest HSCT center in the United States, performing
over 850 transplantations per year. MD Anderson is currently conducting a human clinical trial sponsored by Cell Source for its Anti-Viral
Veto Cell. Professor Richard Champlin (who Chairs their Department of Stem Cell Transplantation and Cellular Therapy and is a longtime
associate and collaborator of Professor Reisner) serves as Principal Investigator for this trial.
Although
Yeda has applied for and been granted various patents related to our technology, a granted patent only provides Yeda, and the Company
by virtue of its exclusive license, the right to use the underlying invention. However, in order for our cell therapy and cancer therapy
to be legally sold and administered to patients, the FDA or similar regulatory agencies must approve its use. In other words, having
a patent provides legal “freedom to operate” for a certain technology, and may provide the ability to prevent others from
using the same technology without the patent holder’s permission. However, in order to legally manufacture and distribute products,
a company must go through all of the typical approval steps delineated in the “Overview” section above.
The
following sections provide an overview of each platform. Further information on the underlying science is available upon written request
and the execution of an appropriate nondisclosure agreement.
Our
licensed technology portfolio consists of 15 patent families, 56 granted patents, 5 allowed/accepted patents and a further 43 pending
patents. The following table lists the patents and patent applications that Yeda holds and which we have a license to use in each of
the below-referenced countries:
Anti Third Party
Central Memory T Cells, Methods of Producing Same and Use of Same in Transplantation and Disease Treatment |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA |
|
9,738,872 | |
29-Oct-2009 | |
29-Oct-2029 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Europe |
|
2365823 | |
29-Oct-2009 | |
29-Oct-2029 | |
Granted | |
Yeda Research and Development Co. Ltd. |
China |
|
ZL200980153053.4 | |
29-Oct-2009 | |
29-Oct-2029 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Israel |
|
212587 | |
29-Oct-2009 | |
29-Oct-2029 | |
Granted | |
Yeda Research and Development Co. Ltd. |
India |
|
285832 | |
29-Oct-2009 | |
29-Oct-2029 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Russian Federation |
|
2506311 | |
29-Oct-2009 | |
29-Oct-2029 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Use of Anti
Third Party Central Memory T Cells for Anti-Leukemia/Lymphoma Treatment |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA |
|
9,421,228 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
USA (Continuation) |
|
2016-0354410-A1 | |
08-Sep-2011 | |
08-Sep-2031 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Europe |
|
2613801 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Canada |
|
2,810,632 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
China |
|
ZL201180053858.9 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Israel |
|
225102 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Japan |
|
5,977,238 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Hong Kong |
|
HK1187528 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Republic of Korea |
|
10-1788826 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Singapore |
|
188473 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Mexico |
|
357746 | |
08-Sep-2011 | |
08-Sep-2031 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Anti Third Party
Central Memory T Cells, Methods of Producing Same and Use of Same in Transplantation and Disease Treatment |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA (Divisional) |
|
2018-0193384-A1 | |
06-Sep-2012 | |
06-Sep-2032 | |
Allowed | |
Yeda Research and Development Co. Ltd. |
Europe |
|
2753351 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Canada |
|
2,848,121 | |
06-Sep-2012 | |
06-Sep-2032 | |
Allowed | |
Yeda Research and Development Co. Ltd. |
China |
|
ZL201280054739.X | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Israel |
|
231397 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Australia |
|
2012305931 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
New Zealand |
|
622749 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Japan |
|
6,196,620 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Hong Kong |
|
HK1200099 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Republic of Korea |
|
10-2073901 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Singapore |
|
11201400513P | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Brazil |
|
BR 11 2014 005355 3 | |
06-Sep-2012 | |
06-Sep-2032 | |
Allowed | |
Yeda Research and Development Co. Ltd. |
Mexico |
|
351226 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
South Africa |
|
2014/01993 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
India |
|
375463 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Russian Federation |
|
2636503 | |
06-Sep-2012 | |
06-Sep-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Use of Anti
Third Party Central Memory T Cells |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
Europe |
|
3322424 | |
14-Jul-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
China |
|
CN 108025026 A | |
14-Jul-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Methods Of Transplantation
And Disease Treatment |
Country | |
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA | |
10,933,124 | |
14-Jul-2016 | |
14-JuL-2036 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Genetically
Modified Anti-Third Party Central Memory T Cells and Use of Same in Immunotherapy |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA |
|
11,179,448 | |
14-July-2016 | |
16-Jul-2036 | |
Granted | |
Yeda Research and Development Co. Ltd. |
USA (Continuation) |
|
17/531,897 | |
14-July-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Europe |
|
3322425 | |
14-July-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Canada |
|
2,991,690 | |
14-July-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
China |
|
CN 108135938 A | |
14-July-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
China (Divisional) |
|
62/193,229 | |
14-July-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Israel |
|
256916 | |
14-July-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Australia |
|
2016291825 | |
14-July-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Japan |
|
2018-501339 | |
14-July-2016 | |
16-Jul-2036 | |
Allowed | |
Yeda Research and Development Co. Ltd. |
Hong Kong |
|
1255063A | |
14-July-2016 | |
16-Jul-2036 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Veto Cells Generated
from Memory T-Cells |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA |
|
10,961,504 | |
27-Jun-2017 | |
27-Jun-2037 | |
Granted | |
Yeda Research and Development Co. Ltd. |
USA (Continuation) |
|
2021-0214687-A1 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Europe |
|
3475414 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Canada |
|
3,029,001 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
China |
|
CN 109661463 A | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Israel |
|
263924 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Australia |
|
2017289879 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Japan |
|
2018-567129 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Hong Kong |
|
40007502A | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Singapore |
|
11201811563R | |
27-Jun-2017 | |
27-Jun-2037 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Republic of Korea |
|
10-2019-7002824 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Mexico |
|
MX/a/2019/000022 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
India |
|
201927002672 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Russian Federation |
|
2019101826 | |
27-Jun-2017 | |
27-Jun-2037 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Methods of Transplantation
and Disease Treatment |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA |
|
10,751,368 | |
18-Jan-2018 | |
18-Jan-2038 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Genetically
Modified Veto Cells and Use of Same in Immunotherapy |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA |
|
2019-0338247-A1 | |
18-Jan-2018 | |
18-Jan-2038 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Europe |
|
3571295 | |
18-Jan-2018 | |
18-Jan-2038 | |
Pending | |
Yeda Research and Development Co. Ltd. |
China |
|
CN 110392736 A | |
18-Jan-2018 | |
18-Jan-2038 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Israel |
|
268126 | |
18-Jan-2018 | |
18-Jan-2038 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Anti-Viral
Central Memory CD8+ Veto Cells in Haploidentical Stem Cell Transplantation |
Country | |
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
Canada NP | |
3,149,379 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Japan | |
2022-506965 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Brazil | |
62/883,164 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Israel | |
290337 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Mexico | |
62/883,164 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
USA | |
17/633,294 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Australia | |
62/883,164 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
India | |
202227011269 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Europe | |
20850208.8 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
China | |
62/883,164 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Russian Federation | |
2022105687 | |
06-Aug-2020 | |
06-Aug-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Veto CAR-T Cells |
Country | |
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
PCT | |
WO2022/034593 | |
11-Aug-2020 | |
11-Aug-2021 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Use of Veto
Cells for the Treatment of Sickle Cell Disease |
Country | |
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
PCT | |
WO2021/090320 | |
05-Nov-2020 | |
05-Nov-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Use of Veto
Cells in Treatment of T Cell Mediated Autoimmune Diseases |
Country | |
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
PCT | |
WO2021/090321
| |
05-Nov-2020 | |
05-Nov-2040 | |
Pending | |
Yeda Research and Development Co. Ltd. |
A Combination
Therapy for a Stable and Long Term Engraftment |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA |
|
10,369,172 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
USA (Continuation) |
|
2019-0328793-A1 | |
20-Dec-2012 | |
20-Dec-2032 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Europe |
|
2793914 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Israel |
|
233303 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Australia |
|
2012355990 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
New Zealand |
|
627272 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Hong Kong |
|
HK1202810 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Republic of Korea |
|
2109643 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Singapore (Divisional) |
|
10201801905W | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Mexico |
|
370404 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Russian Federation |
|
2657758 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
A Combination
Therapy for a Stable and Long Term Engraftment Using Specific Protocols for T/B Cell Depletion |
Country |
|
Patent Number | |
Filed | |
Expires | |
Status | |
Assignee |
USA |
|
10,434,121 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
USA (Continuation) |
|
2019-0358269-A1 | |
20-Dec-2012 | |
20-Dec-2032 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Europe |
|
2797421 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Canada |
|
2,859,952 | |
20-Dec-2012 | |
20-Dec-2032 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Israel |
|
233302 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Australia |
|
2012355989 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Australia (Divisional) |
|
2016259415 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
New Zealand |
|
627549 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Japan |
|
6,313,219 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Hong Kong |
|
1202775 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Singapore |
|
11201403456U | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Brazil |
|
BR 11 2014 015959 9 | |
20-Dec-2012 | |
20-Dec-2032 | |
Pending | |
Yeda Research and Development Co. Ltd. |
Mexico |
|
372502 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
South Africa |
|
2014/05298 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Russian Federation |
|
2648354 | |
20-Dec-2012 | |
20-Dec-2032 | |
Granted | |
Yeda Research and Development Co. Ltd. |
Veto
Cell Technology Platform
Background
Our
Veto Cell technology is a next generation immunotherapy technology that enables the selective attenuation of the immune system. In other
words, pre-clinical studies as well as initial human clinical trial results suggest that the treatment has the ability to reduce the
immune response to selective “threats,” with low risk for adverse side effects.
What
makes the Veto Cell approach distinctive is the degree to which it leverages the inherent specificity of the human immune system. The
immune system defends the body by creating a specific stream of T-cell clones for each of millions of possible individual threats. A
given T-cell will attack only its specific target, ignoring all other threats. Our technology might enable the physician to selectively
attenuate immune response, thus effectively “switching-off” an individual stream of T-cell clones without affecting any other
such streams of T-cell clones dispatched by the immune system to attack unwanted incursions.
The
technology is based on the discovery that certain T-cells can acquire the property of attracting and proactively neutralizing immune
attacks on them.
The
technology has achieved distinctive results in animal live trial models. See, e.g., Eran Ophir et al. Murine anti-third party
central-memory CD8+ promote hematopoietic chimerism under mild conditioning: lymph-node sequestration and deletion of anti-donor T cells,
BLOOD, Feb. 14, 2013, at 1220; Towards off-the-shelf genetically modified T cells: prolonging functional engraftment in Mice by CD8
veto T cells, Leukemia 32, 2018; 1038-1040. Veto cells for safer nonmyeloablative haploidentical HSCT and CAR T cell therapy
Seminars in Hematology 56, 2019; 173-182. It has also demonstrated both safety and efficacy thus far in human clinical trials.
If it continues to succeed in human clinical trials, we believe that it may have meaningful and potentially broad impact on the field
of stem cell transplantation:
| 1) | Significantly
improve outcomes of transplantations by reducing the host (transplant recipient) rejection
rate of T-cell depleted stem cells (e.g. from bone marrow) – thus supporting successful
engraftment of the transplanted cells, which is the treatment for the blood cancer itself.
In order to improve the safety of this cancer treatment, Veto Cell technology has shown in
both preclinical studies and initial clinical data that it can markedly reduce both the risk
of GvHD and the need for using aggressive amounts of immunosuppression medications, as well
as, in preclinical studies and anticipated to be shown as clinical studies progress, preventing
viral infections that typically threaten patients post transplantation. This safer means
of deliver stem cell transplants would significantly reduce the HSCT mortality rate and therefore
lead to broader use of this treatment. Furthermore, by adding CAR-T to the HSCT protocol,
we can bridge between the initial transplantation and the conclusion of immune reconstitution,
thus providing both short-term and ongoing protection against remission. This has the potential
to significantly improve efficacy beyond that of the current outcomes of either CAR-T or
HSCT on their own. |
| | |
| 2) | Substantively
increase the number of transplantations by enabling successful engraftment under lower levels
of immune suppression and therefore making the therapy accessible to older and sicker patients
(who today may not survive ablation). |
| | |
| 3) | Further
increase the number of transplantations by making transplantation appropriate for other indications
(for which today transplantation would be considered an inappropriately risky treatment). |
In
addition, our Veto Cell technology may possibly play a role in the treatment of a number of serious and currently poorly treated non-malignant
diseases. Finally, based on preclinical studies using genetically modified cells, we believe that Veto Cells will be able to act as critical
enabler for other cell therapies, most notably CAR-T cell therapy, which has recently shown strong initial indications of being effective
in the near term in treating blood cancer.
Yeda
filed two patent applications that extend the usage of Veto Cell technology as a critical enabler for other cell therapy treatments.
One patent application highlights, based on preclinical data, the ability of Veto Cells to accompany other cell therapy treatments and
help them overcome rejection and avoid GvHD in an allogeneic treatment setting. The other patent application involves a genetically modified
Veto Cell that can have sustained survival in the patient’s body while avoiding rejection and GvHD. These patents have both
been granted in the United States Both of these, as well as a more recent patent application filed showing data which combines Veto Cells
with CAR-T cells, highlight the potential to make CAR-T cells, which to date have been effective primarily in an autologous (patient’s
own cells) setting, succeed in an allogeneic setting. What follows is a description of the significance of these two new patent applications:
| - | Gene
modified cell therapy is considered to be one of the most promising cancer treatment approaches
in decades, with companies like Kite Pharma and JUNO Therapeutics having recently been acquired
at multi-billion-dollar valuations after having successfully treated relatively small
numbers of patients in clinical trials. |
| | |
| - | While
gene modified treatments such as CAR-T have shown remarkable results in cancer treatment
trials, their published successes to date have been mostly limited to “autologous”
blood cell cancer treatments using the patient’s own cells. There are concerns that
this type of “personalized” treatment may not have favorable economics on a large-scale
basis. |
| | |
| - | The
ideal, more lucrative commercial path for CAR-T and similar genetically engineered cell therapies
is to become allogeneic or off the shelf product with drug-like distribution economics and
to treat a broad spectrum of cancers including solid tumors. Allogene Therapeutics, an early-stage
clinical company focused on allogeneic CAR-T, has attained a valuation of $6 billion,
whereas Legend Biotech valuation reached $8 billion and Fate Therapeutics valuation attained
the $10B level, underlining the importance of off-the-shelf CAR as a potential cancer treatment.
Cell Source licenses Yeda’s patent applications for combining Veto Cells with genetically
modified T cells and is currently exploring active collaboration with CAR-T cell providers
to move Veto and CAR-T combined cell therapy towards the clinic. |
| | |
| - | In
the case of blood cancer treatment, we believe that a VETO CAR-T combined treatment will
provide sustained protection for patients in relapse as well as a fundamentally superior
approach for those in remission |
Cell
Source has completed a collaboration, through its licensing agreement with Yeda, with Professor Zelig Eshhar, the inventor of CAR-T cells.
Professor Eshhar has served as both a scientist at the Weizmann Institute and on the Scientific Advisory Board of KITE Pharma. This collaboration
confirmed the strength of combining Veto Cell technology with CAR-T cell therapy. Cell Source plans to introduce allogeneic VETO CAR-T
HSCT combined cell treatment for lymphoma and leukemia and, eventually, off the shelf VETO CAR-T for these and other cancers, including
solid tumors.
Furthermore,
Yeda has filed a patent application, licensed to Cell Source, which was recently granted in the United States, as well as a new patent
based on more advanced data, for an Anti-Viral Veto Cell. Below is an explanation of the potential for this application:
| - | Other
than primary disease (typically blood cell cancer) the leading causes of death in unrelated
donor bone marrow transplants are rejection, GvHD, where the donor bone marrow rejects the
host or recipient), and infections, which collectively are responsible for 35%-40%
of deaths after haploidentical donor transplants within the first 100 days post-transplant. |
| | |
| - | It
is well established that GvHD can be prevented by T cell depletion of the bone marrow transplant.
However, this procedure is also associated with an increased rate of graft rejection. Preclinical
studies and initial clinical results suggest that this problem can be overcome by adding
Veto Cells to the bone marrow transplant, as well as allowing for a reduced intensity conditioning
(RIC) regimen. However, viruses such as CMV and EBV remain a major threat to patients post-transplant. |
| | |
| - | Cell
Source has developed a next generation Veto Cell that not only facilitates mismatched transplants
but also protects the transplant recipient against these common viruses. During the initial
period after a stem cell transplantation the patient’s body undergoes an immune system
reconstitution period. While the “new” immune system is building up, the patient
is particularly vulnerable to viral infections, which develop in over 90% of bone marrow
transplant recipients during the first 100 days post transplantation. Veto cells can fend
off CMV and similar viral infection until such time as the patient’s own immune system
reconstitutes to the point that it can fight off the infection on its own. |
| | |
| - | Combining
GvHD prevention by using T cell depleted transplants with anti-rejection action, under a
mild conditioning regimen, as well as virus prevention, Veto Cell could potentially significantly
increase survival rates post-transplant. Further adding the short-term cancer killing of
CAR-T can combine to deliver even better long-term survival outcomes. |
| | |
| - | Based
on preclinical data, Veto Cells can also be used to facilitate organ transplants (e.g. kidney
transplant combined with a bone marrow transplant) with partially mismatched donors and either
reduce or eliminate the need for lifelong daily anti-rejection treatment currently given
to even fully matched donor organ recipients. |
Mechanism
Our
Veto Cell is a CD8 central memory anti-3rd party T-cell that has five critical properties:
| 1) | It
has an outer surface coating that triggers attack by specific host T-cells (and only those
specific T-cells). |
| | |
| 2) | It
can annihilate an attacking T-cell without itself being damaged (specifically, it exposes
or releases a death-signaling molecule when an attacking T-cell binds to it). |
| | |
| 3) | It
has been oriented to attack cells of a simulated third party (i.e., neither host nor donor),
or a set of viral peptides, and thus exhibits markedly reduced risk of GvHD or graft rejection. |
| | |
| 4) | It
is long-lived and endures in the body for extended periods. |
| | |
| 5) | It
migrates to the thymus and lymph nodes. |
The
outcome is that when a large number of these cells are introduced into the body, they effectively eliminate the T-cell clones that the
immune system dispatches to attack the desirable, transplanted stem cells.
Thus,
for example, if a population of Veto Cells is derived from a donor, they will express the same peptide as do the donor’s cells.
Therefore, the specific stream of host T-cells that would ordinarily attack the donor stem cells, are instead directed to “decoy”
Veto Cells and disabled before they reach the transplantation.
Described
in a Blood editorial as a “substantial advance in Cell Therapy,” a notable characteristic of our Veto Cell is that
this mechanism is quite specific. Only those specific T-cell clones that were generated to attack cells from this specific donor are
disabled. The rest of the immune system essentially remains intact.
This
is in marked contrast with conventional immunosuppression which degrades the entire immune system and is therefore associated with severe
risk of infection and, in the case of stem cell transplantations, high mortality.
This
effect is long-lived. Firstly, the Veto Cells themselves are long-lived memory cells. Secondly, when infused with stem cells the latter
migrate to the thymus where, over time, they create a new “identity” in the host and initiate chimerism where the host and
donor cells peacefully co-exist. This chimerism has the effect of “educating” new T-cells being generated by the thymus to
tolerate donor cells and this tolerance can become permanent. Furthermore, by inducing permanent tolerance to donor cells, Veto Cells
may be able to enable both acceptance (i.e. mitigate both host rejection and GvH rejection) and thus persistence (i.e. extended survival
resulting in enhanced efficacy) of important cell therapy treatments such as CAR-T cells, TCRs and NK cells in treating both blood cell
and solid tumor cancers. Beyond this, Veto Cells can be directed not only to kill host anti-donor rejecting cells, but also common viruses
such as EBV and CMV that are a common cause of post-transplantation morbidity and mortality.
Target
Indications
Our
Veto Cell technology, an intravenously administered cell suspension, if successful, could initially be used in stem cell (e.g. bone marrow)
transplantations and other treatments associated with malignant disorders (i.e., cancers). Veto Cell technology may also be applied to
selected non-malignant conditions. The following sections provide a brief overview of the use of the Veto Cell technology in both of
these scenarios.
i.
Stem Cell Transplantation
In
order to describe the effect of Veto Cells in transplantation, it is helpful to first briefly review the state of the art:
In
a conventional stem cell transplant, the recipient first receives myeloablative conditioning - powerful chemotherapy and/or radiation
therapy intended to destroy his/her own bone marrow cells. This has a threefold purpose:
| 1) | It
destroys the host T-cells so they will not attack (reject) the donor bone marrow cells. |
| | |
| 2) | It
makes space in the host bone marrow for the new donor cells. |
| | |
| 3) | It
destroys diseased host blood cells so that they do not proliferate and cause relapse following
the procedure. |
In
practice however, there are three major problems:
| ● | Host
rejection - the myeloablative conditioning does not destroy all of the host T-cells. Those
that remain may aggressively attack the donor bone marrow cells before they can engraft. |
| | |
| ● | GvHD
- the transplanted cells include donor T-cells which recognize the host’s body as foreign
and attack it. |
| | |
| ● | Infections
are a common complication from HSCT and result in 26% of early patients deaths in
haploidentical transplants of adult patients in the US. |
Rejection,
GvHD and viral infections are all potentially life-threatening complications in and of themselves and also lead to the use of dangerous
and costly immunosuppression medications.
ii.
Veto Cell in Transplantation
The
Veto Cell technology addresses not only rejection but also GvHD and infections. In a transplantation scenario, a population of donor
Veto Cells is created to “escort” the stem cells when they are transplanted. This population is created by identifying donor
cells with Veto Cell properties, exposing them to simulated 3rd party cells (e.g., selecting only those that react to a third person
and therefore by definition will not react to either host or donor) or to viral peptides, and expanding their population in the lab.
The
Veto Cells are then introduced into the host following the transplantation of the stem cells. The host mounts its normal immune response
to the donor cells by generating a population of T-cell clones that will bind to any cells expressing markers from this specific donor.
In a conventional transplantation, these T-cells would bind to and destroy donor stem-cells thus causing rejection of the transplant.
However,
when the transplantation treatment involves a large number of Veto Cells, this rejection mechanism is “ambushed.” Since the
Veto Cells express the same donor markers as the stem cells, the host T-cell clones will attempt to bind to the donor-derived Veto Cells
as noted above, which act as decoys by attracting and then counterattacking and killing the clones before they ever reach the stem cell
transplantation. These same Veto Cells concurrently attack viruses such as CMV and EBV which are a common source of infections that threaten
HSCT patients. Based on additional preclinical data, in June of 2016 Yeda filed a U.S. provisional patent application, which has since
been granted, and in 2019 a further patent application based on additional data, also licensed by Cell Source, which show the ability
of Veto Cells to be directed against these types of viruses that typically cause infections in bone marrow transplant patients. This
additional functionality, when combined with attacking host anti-donor rejecting cells, may even further enhance survival rates for patients.
iii.
VETO CAR-T combined therapy
HSCT
are well known to be an effective treatment for hematological malignancies. Making these treatments safer and more accessible by reducing
the need for harmful immune suppression, avoiding GvHD and fending off common post-transplantation viruses are expected to facilitate,
through successful Veto Cell treatments, a broader and more successful use of HSCT for not only the most severe cases, but also for older
or weaker patients who are not capable of tolerating high intensity conditioning (high levels of radiation and chemotherapy). This is
expected to significantly increase the number of patients who can receive successful cancer treatments that require allogeneic HSCT.
CAR-T
cell therapy has shown strong cancer killing efficacy in the near term, mainly in an autologous setting. Longer term efficacy to date
has been significantly lower, and to date there has been little success in establishing a successful approach to allogeneic CAR-T therapy.
Having worked with Zelig Eshhar, the inventor of CAR-T therapy, to combine the CAR-T cell and the Veto Cell in to single cell which both
directly attacks cancer cells and facilitates T cell depleted HSCT under RIC, Cell Source intends to combine Veto Cell powered HSCT with
CAR-T cell therapy for blood cell cancers into a single treatment, thus providing a comprehensive end-to-end solution which addresses
both short-term cancer killing (via CAR-T) and long term relapse prevention (through a more safely delivered reconstituted immune system).
iv.
Enabling Third Party Cell Therapies
Based
on preclinical studies using genetically modified cells, in July of 2015 Yeda filed two U.S. provisional patent applications, both of
which have since been granted in the United States, which are also licensed exclusively by Cell Source on a worldwide basis. These patent
applications show the ability of Veto Cells to enhance the performance of cell therapy treatments involving genetically modified receptors.
When combined with CAR-T or TCR cell therapy for example, these would potentially greatly enhance the ability of these treatments to
be used in an allogeneic or “off the shelf” setting, and also increase their efficacy by avoiding both rejection and GvHD,
thus increasing their persistence (survival in the patient’s body). A new patent, based on the Cell Source collaboration with Dr.
Zelig Eshhar, the inventor of CAR-T technology, showing the effectiveness of Veto Cells combined with CAR-T cell therapy, was filed by
Yeda, under license to Cell Source, in 2020.
This
combined VETO CAR-T or similar treatment (e.g. combining Veto with NK cells) is expected to result in broadly applicable effective treatments
for both blood cell cancers and, eventually, a variety of solid tumor cancers as well.
v.
In Non-Malignant Diseases
There
are two major categories of non-malignant disorders that the Veto Cell technology aspires to address: organ transplantation and non-malignant
hematological disorders.
In
the case of organ transplantations and congenital non-malignant hematological disorders, the goal of the Veto Cells is to enable transplantation
(stem cell or organ) by reducing host/donor immune system conflicts. This could potentially allow for mismatched (partial vs. full identity
match between donor and host) kidney transplants, for example, and also obviate the need for lifelong daily anti-rejection medication
which is the current standard of care. Such an outcome could improve quality of life, reduce cost of care and significantly increase
life expectancy for a broader audience of prospective transplant recipients.
In
the case of congenital non-malignant diseases such as sickle cell disease and aplastic anemia, the body’s bone marrow produces
“flawed” cells. An effective treatment is HSCT which replaces the flawed host bone marrow with healthy donor cells. These
cells then produce healthy blood cells, basically curing the anemia. As noted elsewhere however, today HSCT is a risky procedure because
of the graft/host immune conflicts. It is therefore used infrequently to treat sickle cell disease. The Veto Cell tolerizing technology
would increase the target population for this treatment by significantly reducing these conflicts and by extension the procedure’s
risk. Yeda has filed patent applications, licensed to Cell Source, based on preclinical data that show Veto Cells’ effectiveness
in reversing Sickle Cell Disease and their use in the treatment of T-cell mediated auto immune diseases such as preventing the development
of Type 1 Diabetes.
Development
Status
The
Veto Cell platform has been extensively tested by in vitro studies (on both human and mouse disease) and confirmed in animal trials.
The results appear to be consistently effective.
1.
Inducing chimerism:
The
following images show some example data from the Veto Cell animal studies. Skin of black mice has been grafted onto the backs of white
mice. The data show that T-cells from host and donor mice are fully coexisting in the treatment group using the Veto Cells (“chimerism”).
2.
Successful bone marrow transplantation under reduced levels of immune suppression:
The
anti-rejection effect in the data below shows mice with lymphoma treated with Veto Cell therapy.
The
control group mice (left side) all die by day 27. By contrast, the Veto Cell treatment group (right side) show far better results.
Administration
We
envision that Veto Cell therapy will be administered in an in-patient setting, typically as part of the existing procedures involved
with stem cell transplantations. Blood will be taken from the donor. The blood will be sent to a regional Company center where the Veto
Cells will be developed and expanded - a process that lasts up to two weeks. The Veto Cells will then be sent to the transplantation
center where they will be infused to the patient intravenously along with the transplantation.
Patent
Status
Cell
Source’s CD8 TcM (central memory T-cells) Veto Cell, are protected by granted patents in the US, Mexico, Europe, China, Japan,
Hong Kong, Korea, Singapore, Israel, India and the Russian Federation as well as Canada, Australia, New Zealand and South Africa. More
recent patent applications, including those for the Genetically Modified Veto Cell and the Anti-Viral Veto Cell have been granted in
the US and are in the national phase in a broad set of jurisdictions.
Development
Roadmap
The
Veto Cell platform roadmap comprises two main programs as outlined in the table below. The specific clinical trials planned for each
are detailed in the Clinical Trials section of this document.
Offering |
|
Objective |
|
Major
Activities |
|
|
Estimated
timing |
VETO
CAR-T (with and without HSCT) |
|
Validate
and introduce new commercial treatment to deliver safer and more successful haploidentical HSCT combined with CAR-T cell therapy |
|
1.
Establish initial safety and efficacy for Anti-viral Veto Cell, then
augment
existing trial protocol with CAR-T 2. Commence multi-center registration study
3.
Introduce approved
product
to high profile
US
HSCT centers |
|
|
●2023
●2025-2026
●2027-2028
|
|
|
|
|
|
|
|
|
Veto
Cell Organ Transplantation |
|
Validate
efficacy of Veto Cells in attaining engraftment and reducing need for ongoing post-transplant anti-rejection treatment for haploidentical
kidney transplants |
|
1.
Finalize treatment
protocol
and
commence
Phase 1/2
study
2.
Show sustained
tolerance
post-
transplant
without need for daily
anti-rejection
therapy |
|
|
●2022-2023
●2023-2024 |
Products
and Services
Currently,
we do not have any products, and there is no assurance that we will be able to develop any products.
The
following products are currently planned:
1. | VETO
CAR-T HSCT cell therapy for donor mismatched allogeneic stem cell transplantations for treatment
of blood cancer. |
This
is our flagship (as an initial platform for increasing transplantation success) and is focused on haploidentical allogeneic stem cell
transplantations. Treatment will comprise infusion of VETO CAR-T cells derived from the donor and processed in a Company (or subcontracted)
facility that will be accessible to the transplantation center at the time of transplantation.
2. | Veto
Cell based haploidentical organ transplantation initially for kidney and then also for liver
transplants. |
This
therapy will involve a partially mismatched donor organ transplant followed by an Anti-Viral Veto powered HSCT using stem cells derived
from the same donor.
3. | Off
the shelf VETO CAR-T cell therapy. |
This
treatment would be use Veto Cells to increase persistence and hence efficacy of CAR-T cell therapy, without the use of HSCT, for blood
cancers and eventually solid tumors as well.
4. |
Veto
Cell tolerance therapy for non-malignant disorders. |
This
is the application of Veto Cell technology to treatment of non-malignant (i.e., non-cancerous) diseases, as discussed in the Technology
section. Target indications for Veto Cell therapy for nonmalignant disorders are likely to be: tolerizing therapy for allogeneic transplantations
for sickle cell anemia and aplastic anemia (by using stem cell transplantations as referenced in no. 2 above) and tolerizing therapy
for a broader range of congenital immune system related disorders, possibly including preventing the development of Type 1 Diabetes in
Diabetes prone or early onset Diabetes patients.
Our
Overall Development Status and Future Development Program
Prior
to commercializing its products, the Company must conduct human clinical trials and obtain FDA approval and/or approvals from comparable
foreign regulatory authorities.
Generally
speaking, as a preclinical biotechnology firm, Cell Source needs to go through several necessary steps in order to commercialize its
products and commence revenue generation. These steps are per product, but can run in parallel for multiple products, which are each
in different stages of the development “pipeline”, so that, for example, when a certain product is already in a human clinical
trial, another product may still be in preclinical development and a third may be awaiting regulatory approval to commence human trials.
These can also take place in parallel, and varied stages, for the same product in different geographic jurisdictions. The typical steps
per product (and range of time frame for each) are:
| 1) | Complete
development of human treatment protocol (2-5 years) |
| 2) | Apply
for and receive approval to commence human trials (9-18 months) |
| 3) | Recruit
patients (1-6 months) |
| 4) | Conduct
Phase 1 trials showing safety of product (1-2 years) |
| 5) | Apply
for and receive approval to conduct trials showing product efficacy (6-12 months) |
| 6) | Data
collecting and analysis (6-12 months) |
| 7) | Conduct
Phase 2 efficacy trials (2-3 years) |
| 8) | Data
collecting and analysis (6-12 months) |
| 9) | Apply
for and receive approval to conduct trials showing efficacy in larger numbers of patients
(6-12 months) |
| 10) | Conduct
Phase 3 efficacy trials with larger numbers of patients (2-4 years) |
| 11) | Data
collecting and analysis (6-12 months) |
| 12) | Apply
for and receive approval for production scale manufacturing facilities (6-12 months) |
| 13) | Contract
third party or establish own production facilities (6-30 months) |
| 14) | Contract
third party or establish own distribution platform (6-18 months) |
| 15) | Commence
manufacturing and distribution (6-12 months) |
Notably,
steps 12-15 can be conducted in parallel with some of the steps above. In the case of Cell Source and other firms that treat terminal
patients with either rare diseases or those for which there is currently no effective treatment, or where preclinical studies indicate
a reasonable expectation to increase life expectancy and survival rates by a substantive margin, several of these steps can be combined
and or shortened, subject to regulatory discretion. For example, Phase 1 and 2 (safety and efficacy) can be combined in a single concurrent
step; approvals for subsequent steps can be accelerated; in some countries patients can already be treated commercially after the end
of Phase 2, foregoing the requirement for Phase 3 data prior to commencing commercial treatments.
The
specific detailed next steps the company must take to get the treatments or products to market include the following:
In
the case of the Megadose Drug Combination, the Hematology and Bone Marrow Transplantation Unit of the University of Parma in Italy on
May 14, 2014 requested and on October 23, 2014 obtained approval from the Italian Medicine Association (the Italian equivalent of the
U.S. FDA) to conduct human clinical trials using the “Megadose + Drug Combination.” While we are not mentioned in the application
nor in the approval, we may indirectly benefit from the outcome of the trial, if successful, although we are not the sponsor of this
trial. There are no written or verbal agreements between the hospital and Cell Source regarding the use of the technology. That said,
Cell Source is aware and in favor of the hospital’s plans to use the technology and would of course find a positive initial outcome
encouraging. Since the treatment is being done on compassionate grounds as a non-commercial clinical trial, there is no legal requirement
for the hospital to obtain approval to use the treatment protocol. The hospital successfully treated the first cancer patient using the
Megadose Drug Combination technology that Cell Source exclusively licenses from Yeda. The patient who was suffering from late-stage multiple
myeloma, was released from hospital within a month of being treated and has since been cancer free for over seven years, with
no GvHD, as initially reported in Blood Advances, vol. 1 no. 24 2166-2175 which was published online October 27, 2017.
While
Cell Source was not a sponsor of the trial, the results provide a positive initial indication with respect to the technology. The patient
received a bone marrow transplantation from a haploidentical or “mismatched” donor under a RIC regimen (i.e., a relatively
low level of immune suppression treatment). There was successful initial engraftment of the transplantation in the absence of GvHD.
In November 2018, we executed a sponsored research
agreement with MD Anderson, which was amended in December 2020 and in October 2021. The Company engaged MD Anderson to perform research
services in the amount of approximately $1,500,000 from January 1, 2019 to December 31, 2021 (approximately $500,000 each year for three
years). The agreement was amended in December 2020 in order to increase the research budget for the year ending December 31, 2021 from
approximately $500,000 to $800,000. In October 2021, the agreement was amended to extend the agreement by one year to November 27, 2022
and define the budget during such one-year period to be approximately $1,300,000.
In February 2019, we executed a second agreement with MD Anderson for the production of Veto Cells and the conducting of a Phase
1/2 FDA trial for the Anti-Rejection, Anti-Viral Veto Cell. The treatment protocol was submitted to the FDA by MD Anderson in February
of 2019. Cell Source has conducted Veto Cell production development in cooperation with the Medical Center at the Julius Maximilian University
of Würzburg in Germany.
For
the Anti-Viral Veto Cell product candidate, MD Anderson is currently conducting a Phase 1/2 human clinical trial, sponsored by Cell Source.
The trial has successfully completed the first treatment cohort, with 3 patients each receiving a haploidentical HSCT under reduced intensity
conditioning with Veto Cells. This first in human dose optimization trial has thus far shown that the initial dose is in fact the optimal
dose, as all three patients had successful stem cell engraftment after 42 days, in the absence of GvHD. Cell Source is now continuing
the trial as it proceeds with additional cohorts of patients, using the same dose level. Cell Source anticipates that the US Phase 1/2
trial, once augmented with CAR-T cancer killing capability in the anticipated VETO CAR-T cell HSTC combined therapy, will last through
2023 or 2024. This would be followed by completion of a Phase 2 trial and Phase 3 trial, which could each last another 2-3 years. While
under a fast track FDA program such as RMAT initial marketing approval could potentially be attained after a Phase 2 registration study
as early as in 2025 or 2026, full approval, if successful, may not be attained until 2027 or later. Cell Source has concluded an initial
proof-of-concept collaboration with Professor Zelig Eshhar, the inventor of CAR-T cell therapy, with respect to combining CAR-T cell
therapy with Veto Cells. This is expected to lead to the augmentation of the existing Veto Cell treatment protocol at MD Anderson to
include VETO CAR-T cells in 2022 or 2023, which may lead to fast track approval by 2025 or 2026 but may last until 2027 or 2028.
As
referenced above, it is possible that Cell Source treatments could qualify for any or all of Fast Track, Breakthrough Therapy, Accelerated
Approval, RMAT or Priority Review designation under the FDA, which would hasten their approval if successful. The estimated costs for
each step of development, in terms of clinical trials, are delineated below:
Cell
Source estimates the cost of clinical trials alone to be at least $5 million over the coming two years and overall company financing
requirements of at least $50 million in order to reach commercialization for the Veto Cell products. This would mean that Cell Source
will need to secure one or more significant capital infusions in order to reach the point that meaningful revenues could be generated.
The
following table summarizes the development plan through 2026:
Competition
In
the area of allogeneic HSCT and related GvHD and virus management, our competitors include: the so-called “Baltimore” protocol,
which employs a T-cell replete approach under RIC; companies who which have been focused on reducing GvHD in a T-cell depleted setting,
with high intensity conditioning (e.g. Bellicum); companies working to treat GvHD after it occurs (e.g. Abbvie, Incyte and Kadmon); and
finally cell therapy companies developing anti-viral treatments (e.g. Atara, Allovir). In the area of CAR-T cell therapy, our competitors
include allogeneic CAR-T companies (e.g. Allogene, Legend, Fate) and autologous CAR-T focused players (e.g. Novartis, Gilead (KITE),
BMS/Celgene (JUNO)).
Haploidentical
HSCT is gaining popularity in the US, outflanking UCB (umbilical cord blood) and growing more quickly than MUD (matched unrelated donor)
based transplants. In the US, the majority of haploidentical HSCT are performed under RIC, mostly using T- cell replete transplants with
post-transplant cyclophosphamide treatment. While this “Baltimore” RIC approach has gained popularity (mainly due to safety
reasons) – as a T-cell replete approach it carries the risk of marked GvHD. Although some T-cell depleted
approaches have shown reductions in GvHD, they face significant safety issues due to their aggressive use of immune suppression. Similarly,
while currently approved CAR-T therapy for blood cancer has shown compelling short-term efficacy, the initial longer term data
have shown a marked drop off in overall survival rates. Cell Source’s planned distinctive combination of a T-cell depleted
HSCT with RIC, complemented by anti-viral activity and enhanced by CAR-T short-term cancer killing, aims to provide
the “best of both worlds” with safer, more effective HSTC leading to a reconstituted immune system, supported by “bridging”
CAR-T remission induction and relapse prevention during the immune reconstitution period.
Many
of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical
testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Earlier stage companies
may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. While
our commercial opportunities may be reduced or eliminated if our competitors develop and commercialize products that are safer, more
effective, have fewer side effects or are less expensive than our own products, we believe that if our human trials show efficacy at
the same levels of our animal trials, we would have the potential to develop at least a niche market share. Also, a number of large US
cancer centers such as Johns Hopkins in Baltimore, Fred Hutchinson in Seattle, City of Hope in Duarte, CA and Dana Farber in Boston are
conducting clinical trials and providing treatments on a compassionate care basis that can be funded on a not for profit basis and provide
competition to Cell Source.
We
expect that our ability to compete effectively will depend upon our capacity to:
| ● | successfully
complete adequate and well-controlled clinical trials that demonstrate statistically significant
safety and efficacy and to obtain all requisite regulatory approvals in a timely and cost-effective
manner; |
| | |
| ● | effectively
use patents and possibly exclusive partnership agreements with important third-party treatment
providers and collaboration partners to maintain a stable competitive stance for our Technology; |
| | |
| ● | attract
and retain appropriate clinical and commercial personnel and service providers; and |
| | |
| ● | establish
adequate distribution relationships for our products. |
Failure
in efficiently developing and executing these capabilities may have an adverse effect on our business, financial condition or results
of operations.
Strategy
Overview
Our
strategy is based on two underlying drivers: (a) that animal studies (supported by initial human data) show Veto Cell technology to be
consistently effective and have advantages over competitors; and (b) that the lead indications (the most common blood cancers) are relatively
common, have high mortality and have limited treatment options today.
Based
on the foregoing drivers, we have developed a business plan with the objective of obtaining regulatory approvals and subsequently launching
product sales with a focus on the United States, Europe and Asia.
Key
Strategy Elements
We
are pursuing a staged entry strategy. The first several years will be narrowly focused, both in terms of market segments (blood cancers,
kidney disease) and products (VETO CAR-T and VETO Organ Transplants).
Subsequently,
we plan to broaden the segmentation strategy to include, stand-alone cancer treatments without HSCT (e.g. for solid tumors) and additional
HSCT indications (e.g. selected genetic non-malignant diseases).
Our
strategy can be summarized as follows:
Strategy
Element |
|
Introductory
period
(years 1 -3 post FDA approval) |
|
Years
4+ |
|
|
|
|
|
Market
Segments |
|
●
Lymphoma and leukemia
●
Multiple myeloma
●
Kidney disease |
|
●
Same as before plus solid tumor cancer targets, liver failure, sickle cell anemia beta thalassemia, diabetes and other non-malignant
hematological disorders; |
|
|
|
|
|
Product
Rollout |
|
●
VETO CAR-T (with or without HSCT) for B-cell malignancies
●
Veto Cell Kidney transplants |
|
●
VETO CAR-T for solid tumors
●
Veto Cell liver transplants
●
Veto HSCT for non-malignant disorders |
|
|
|
|
|
Customer/
Geographic Focus |
|
●
United States
●
Western Europe
●
China |
|
●
Major markets worldwide |
|
|
|
|
|
Channels/Go
to Market |
|
●
Direct relationships with leading transplantation centers
●
Partnerships with global pharma players |
|
●
Out-licensing to, or outright acquisition by, global pharma players
|
|
|
|
|
|
Pricing |
|
●
Consistent with other cell therapy offerings currently associated with transplantations and immuno-oncology |
|
●
Potentially higher volume, lower cost for “off the shelf” offerings |
|
|
|
|
|
Operations |
|
● Three
production centers:
-
US
-
Western Europe
-
Far East
●
Initial capacity leased from or situated adjacent to major transplantation center. |
|
●
Regional production centers owned outright or JV with partners |
Segment
Selection
Within
the general market for immune therapies, we have selected target market segments (i.e., medical conditions) for initial focus based on
two (2) key criteria:
| 1) | Severity
of unmet medical need: degree of severity of the indication and the effectiveness of existing
treatments. These criteria help determine the proper regulatory pathway. |
| | |
| 2) | Technology
relevance: relative value of the ability to manage immune response to the treatment of a
given indication. |
We
will initially focus on indications that score highly with respect to both criteria (e.g., blood cancers, kidney failure). These conditions
may qualify for Fast Track status with the FDA, and, due to the cost and relative efficacy of current treatment alternatives, could potentially
support profitable price points for effective new treatments.
Product
Rollout
Cell
Source plans to seek approval initially in the US and Europe and, in parallel but with a delayed start, in China and possibly Japan.
A successful first-in-human Phase 1/2 trial in the US, which could be concluded by 2023 or 2024, would serve as a strong foundation for
trials in other countries. Limited sales on a “compassionate grounds” basis may, depending on qualification for Breakthrough
Therapy or other Accelerated Approval designation, commence as early as 2025 or 2026. Full approval by the FDA in the U.S. can take as
long as 8 years, or until 2028.
Future
products may include VETO CAR-T HSCT combined cell therapy for allogeneic stem cell transplantations as well as Veto Cell based organ
transplantation. Following the initial market penetration and establishment of solid market positioning, we plan to broaden the product
offering to address a wider variety of indications which may include custom Veto Cell developments for specific collaborations with other
cell therapy treatments. For example, we believe that one area in which we could broaden our product offerings is to utilize our Veto
Cell technology, if successful in humans, to address the rejection problems being faced by companies developing NK, TCR and similar cell
therapy products, as an enabler for these treatments to help them overcome some of the rejection and persistence related performance
issues their technology currently seems to be facing. If our Veto Cell technology proves to be successful in humans, we plan to continue
to explore such potential applications in the future.
Customer/Geographic
Focus
Assuming
positive clinical trials, we will initially focus our sales efforts of Veto Cell anti-rejection therapy on centers dealing with late-stage
B-cell malignancies. High profile, high volume HSCT facilities can be targeted to market this treatment.
Current
plans are to introduce the products first in North America and Western Europe, and, perhaps concurrently, in China. Focusing on key transplantation
facilities in target geographic markets will allow us to both refine the administration of our products and bolster our reputation in
both these and a broader set of geographic markets.
After
the introductory period, we plan to expand activities in these initial markets while simultaneously broadening geographic coverage. In
Stage 2, we plan to initiate active marketing efforts in the remaining Western European countries, Japan, Australia, and possibly Russia
and India.
Marketing
Strategy
The
initial target market is concentrated and networked. It comprises the approximately 100 leading transplantation centers in the target
geographies. As discussed in the “Market Access” and “Channels” section, these centers are well connected to
each other and tend to quickly share innovations and best practices.
The
planned penetration strategy is to introduce Veto Cell into the best-known and most influential centers in North America and Western
Europe, and benefit from the exposure and industry leadership provided by these centers.
This
initial penetration strategy includes incorporating some of these centers into clinical trials so as to expose and involve their medical
leadership.
In
the longer term, we plan to drive use and awareness within and across the broader oncology community in order to encourage oncologists
to refer their patients to centers that already use our products and therapies and to encourage pull-influence on additional centers
to adopt our products and therapies.
The
broader provider community will be addressed both through a presence in leading peer-reviewed publications and by attending conferences
where research and best clinical practices are shared, seminars are conducted, and networking opportunities are provided for the physicians.
Furthermore, a dedicated sales force will approach leading bone marrow transplant physicians in the United States, as well as other key
points of contact at the leading HSCT centers in the US as referenced above.
Operating
Strategy
Veto
Cell doses are to be prepared by Cell Source facilities or qualified production partners. This is to both protect trade secrets and directly
control quality during the initial stages.
The
graphic below outlines the general operating model in each geographic market.
Patient
care facilities send frozen cells to a Cell Source processing center. Most likely, the first processing center will consist of lab space
leased from or adjacent to a large transplantation center, such as MD Anderson in Texas. Such a transplantation center has appropriate
equipment and infrastructure, along with available production capacity, and will also represent an immediate market for our offerings
for use in their own procedures. The Cell Source processing center processes the cells and sends the treated cells and appropriate protocols
back to the caregiver for infusion at time of transplantation.
In
the introductory post regulatory approval phase, we plan on establishing one center in the U.S., one in Western Europe (most likely Germany),
and one in the Far East. Specific locations and timing are to be determined. Initially, we plan to outsource production capacity from
existing facilities operated by Contract Manufacturing Organizations (CMO) adjacent to large hospitals, or, where capacity is available,
contract directly with major cancer treatment centers who have accredited GMP facilities and experienced cell production staff for Veto
Cell production. Subsequently, sales from these centers can justify and fund stand-alone facilities.
The
general goal of the initial centers is to support the FDA process, provide full coverage for the North American and European markets,
and provide access to the Chinese market. Following the introductory period in each respective market, we may elect to migrate the production
facilities from leased space in transplantation center laboratories or contract services with specialized CMOs to company-owned stand-alone
facilities.
In
general, we assume a capital cost per stand-alone production facility of at least $10 million. This estimate is based, in part, on the
projected high costs of GMP “clean rooms,” each of which can cost $1 million to set up. We will need to obtain financing
in order to fund the setup of such facilities. There can be no assurance that financing will be available in amounts or on terms acceptable
to us, if at all.
Clinical
Trials Overview
We
will initially focus our clinical trials on stem cell transplantation for patients suffering from blood cancers (lymphoma, leukemia,
myeloma), for which our Veto Cell technology constitutes a potential breakthrough. These indications have unmet needs as evidenced by
the valuations of leading CAR-T players who thus far have chiefly presented data treating these diseases.
We
commenced our first Phase 1/2 clinical trial in late 2019. This trial combines traditional Phase 1 safety with Phase 2 efficacy inasmuch
as it is a safety trial conducted on sick patients, so as to both establish safety and show initial indications of efficacy concurrently.
The goal is to demonstrate safety and initial efficacy in several indications. Management has structured the trials such that an additional
goal of showing initial markers pointing to successful engraftment, in the absence of GvHD, while preventing viral infections, already
within Phase 1/2.
The
chart below provides an overview of the current trials plan, which can of course vary based on both finalization of human protocols and
timing or regulatory approvals:
Trial
Plans
Trials
are planned for the US and Europe. The current initial US trial plans to treat 24 patients. We plan to focus on haploidentical (donor
mismatched) stem cell bone transplantation under reduced intensity conditioning (reduced levels of immune suppression treatment) for
B-cell malignancies and possibly non-malignant indications (e.g. sickle cell disease). We are currently conducting preclinical trials
for VETO CAR-T cell therapy. Once we complete a proof of concept, we plan to augment the current clinical trial protocol for blood cell
cancer to include VETO CAR-T cells, and to develop an Off-the-shelf VETO CAR-T treatment, without a stem cell transplant, for patients
in relapse. In the future, we plan to conduct clinical trials for solid tumor patients as well. Also, once we have shown safety and efficacy
for Veto Cell based stem cell transplants, we plan to combine these with haploidentical kidney transplants in patient trials.
Regulatory
Issues Overview
We
are seeking regulatory approval from the U.S. FDA, the European Medicines Agency (“EMA”) in Europe and plan to approach similar
agencies elsewhere for approvals to both produce and sell our products.
We
commenced a 24 patient human clinical trials for Anti-Viral Veto Cells, our lead product candidate, in the US in late 2019.
Regulatory
Process and Expectations
We
have developed and will continue to develop our clinical trial protocols with the support of highly experienced medical practitioners
who have vast experience in working with their local regulators. MD Anderson, for example, as the largest stem cell transplantation center
and leading cancer treatment facility in the US, has a thoroughgoing internal protocol approval process which serves to refine every
aspect of each patient protocol, in great detail, in anticipation of any potential issues that the FDA would typically wish to see addressed.
The
clinical trials outlined in the previous section are designed to lead to regulatory approval for Veto Cell-based therapy in treating
blood cancers and stem cell transplantation applications and, thereafter, solid organ transplantations and, eventually, solid tumor cancers.
Interim
Revenue Opportunities
While
our focus is to conclude Phase 3 approval for cancer treatments, the Company is also exploring complementary shorter-term opportunities
for generating revenue before additional FDA approvals are received, namely:
| 1) | Treating
patients after the end of Phase 2 (based on US Fast Track approvals and/or European Marketing
Authorization Approvals) with either partial or full insurance reimbursement available);
and |
| 2) | Potential
upfront and milestone driven licensing revenues from collaborations with third parties. |
Intellectual
Property
Pursuant
to the Yeda License Agreement, Yeda granted the Company an exclusive worldwide license to certain patents, discoveries, inventions and
other intellectual property generated (together with others) by Professor Yair Reisner at the Immunology Department at the Weizmann Institute.
Under the Yeda License Agreement, the Company grants Yeda a 4% royalty on sales of patented products. Cell Source is required
to pay Yeda a $50,000 annual license fee until such time as payment of royalties commences. The Yeda License Agreement also requires
the Company to proceed with the development of the technologies on a timely basis.
The
license period (per product, per country) is for the full life of the patents and expires at the later of the patent expiration date
in that country or 15 years after the date that the FDA or local equivalent regulatory authority in each country approves that particular
product for sale in that country. As long as Cell Source sponsors research or pays either a nominal license fee of $50,000 per year (total
for use of all the products) or royalties on product sales on at least one product as per the license agreement, the license will remain
in effect continuously and expire only with the expiration of the patent or 15 years after regulatory approval (later of the two) per
product per country as described above. Cell Source voluntarily sponsors Research at the Weizmann Institute for the sake of developing
its products and treatments from initial invention through to finalization of human treatment protocols.
The
agreement with Yeda, as amended most recently on December 2, 2021, includes certain development milestones. If the Company fails
to achieve any one of the milestones set forth in the Yeda License Agreement (as per the current amended version) which are listed below,
then Yeda will be entitled to (i) modify the related license such that it will become non-exclusive or (ii) terminate the Yeda License
Agreement upon thirty (30) days written notice:
| a. | by
January 1, 2025, to have commenced Phase 2 clinical trials with respect to a Product;
provided that in the interim the company continues to substantively sponsor research and
clinical trials; |
| | |
| b. | by
January 1, 2028, to have either commenced Phase 3 clinical trials or to have received FDA
or EMA marketing approval in a respect of a Product (“Marketing Approval”); |
| | |
| c. | within
12 (twelve) months from the date of Marketing Approval, to have made a First Commercial Sale
of a Product; or |
| | |
| d. | in
case commercial sale of any Product having commenced, there shall be a period of 12 (twelve)
months or more during which no sales of any Product shall take place by the Company or its
Sublicensees (except as a result of force majeure or other factors beyond the control of
the Company). |
Additionally,
the Yeda License Agreement also provides that:
| ○ | Title.
All right, title and interest in and to the Licensed Information and the Patents (as
those terms are defined in the Yeda License Agreement) and all right, title and interest
in and to any drawings, plans, diagrams, specifications, other documents, models, or any
other physical matter in any way containing, representing or embodying any of the foregoing,
vest and shall vest in Yeda and subject to the license granted in the Yeda License Agreement.
|
| ○ | Patents.
Both Yeda and the Company shall consult with one another on the filing of patent applications
for any portion of Licensed Information and/or corresponding to patent application existing
at the time the Yeda License Agreement was executed. Yeda shall retain outside patent counsel
that will be approved by Cell Source, to prepare, file and prosecute patent applications.
All applications will be filed in Yeda’s name. |
| ○ | Patents;
Patent Infringements. Where the Company determines that a third party is infringing one or
more of the Patents or is sued, in prosecuting or defending such litigation, the Company
must pay any expenses or costs or other liabilities incurred in connection with such litigation
(including attorney’s fees, costs and other sums awarded to the counterparty in such
action). The Company agreed to indemnify Yeda against any such expenses or costs or other
liabilities. |
| | |
| ○ | License.
With regard to the expiration of Patents, a Product is deemed to be covered by a Patent
so long as such Product is protected by “Orphan Drug” status (or the like). The
Company has an exclusive worldwide license under the Licensed Information and the Patents
for the development, manufacture and sales of the Products. License remains in force in each
country with respect to each Product until the later of (i) the expiration of the last Patent
in such country covering such Product or (ii) the expiration of a 15-year period commencing
the day FDA New Drug Approval is received for a Product in such country. |
The
Company may grant a Sublicense only with Yeda’s prior written consent, which shall not be withheld unreasonably provided that:
| i. | the
proposed Sublicense is for monetary consideration only; |
| | |
| ii. | the
proposed Sublicense is to be granted in a bona fide arm’s length commercial transaction; |
| | |
| iii. | a
copy of the agreement granting the Sublicense and all amendments thereof shall be made available
to Yeda, 14 days before their execution and Cell Source shall submit to Yeda copies of all
such Sublicenses and all amendments thereof promptly upon execution thereof; and |
| | |
| iv. | the
proposed Sublicense is made by written agreement, the provisions of which are consistent
with the terms of the License and contain, inter alia, the following terms and conditions,
including: the Sublicense shall expire automatically on the termination of the License for
any reason. |
However,
Yeda’s prior written consent is not needed if the sublicense is limited to China, and the Company grants it to a Chinese affiliated
entity of the Company.
| ○ | Termination.
The Yeda License Agreement terminates on the later of: (i) the expiration of the last
of the Patents or (ii) the expiry of a continuous period of 20 years during which there shall
not have been a First commercial sale of any product in any country. Yeda may terminate by
written notice, effective immediately, if the Company challenges the validity of any of the
Patents. If a challenge is unsuccessful, then in addition to Yeda’s right to termination,
the Company shall pay to Yeda liquidated damages in the amount of $8,000,000. Either the
Company or Yeda may terminate the Yeda License Agreement and the License by serving a written
notice upon (i) occurrence of a material breach or (ii) the granting of a winding-up order.
Additionally, Yeda may terminate for failure to reimburse Yeda for patent application and/or
prosecution expenses. |
Our
technology portfolio includes a patented platform termed “Veto Cell” (more formally described as “Anti 3rd party central
memory T cell”), which is an immune tolerance biotechnology that enables the selective blocking of immune responses.
For
a list of all the patents and pending patents that Yeda holds and which we have a license to use, please refer to the table in the section
entitled “Science and Technology Overview” above.
Patents
& Proprietary Rights
Our
success will depend in part on our ability to protect our existing product candidates and the products we acquire or license by obtaining
and maintaining a strong proprietary position. To develop and maintain our position, we intend to continue relying upon patent protection,
orphan drug status, Hatch-Waxman exclusivity, trade secrets, know-how, continuing technological innovations and licensing opportunities.
We intend to seek patent protection whenever available for any products or product candidates and related technology we acquire in the
future.
We
may also seek orphan drug status whenever it is available. If a product which has an orphan drug designation subsequently receives the
first regulatory approval for the indication for which it has such designation, the product is entitled to orphan exclusivity, meaning
that the applicable regulatory authority may not approve any other applications to market the same drug for the same indication, except
in very limited circumstances, for a period of seven years in the U.S. and Canada, and 10 years in the EU. Orphan drug designation does
not prevent competitors from developing or marketing different drugs for the same indication or the same drug for a different clinical
indication.
It
is our policy to require our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute
confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all
confidential information made known to the individual during the course of the individual’s relationship with us is to be kept
confidential and may not be disclosed to third parties except in specific circumstances. In the case of employees, the agreements provide
that all inventions conceived by the individual shall be our exclusive property.
Government
Regulation and Product Approval
We
submitted our first IND application to the FDA, which was done on our behalf by MD Anderson, in February 2019. Cell Source itself has
not had any contact with any regulator anywhere regarding treatment approvals or clinical trials associated with regulatory approvals.
We are aware that a hospital in Italy has independently requested and received approval to conduct a trial with a treatment protocol
the patents for which we license from Yeda, which today forms part of the broader protocol that we plan to use in the US and European
clinical trials, but we are not mentioned in the application nor in the approval. However, we may indirectly benefit from the outcome
of the trial, if successful, although we are not the sponsor of this trial. There are no written or verbal agreements between the hospital
and Cell Source regarding the use of the technology. That said, Cell Source is aware and in favor of the hospital’s plans to use
the technology and would find a positive initial outcome encouraging. Since the treatment is being done on compassionate grounds as a
non-commercial clinical trial, there is no legal requirement for the hospital to obtain approval to use the treatment protocol.
Cell
Source commenced a human clinical trial, conducted on its behalf by MD Anderson, in 2019 to show initial safety, and possibly efficacy,
results in the US.
Regulation
by governmental authorities in the U.S. and other countries is a significant factor, affecting the cost and time of our research and
product development activities, and will be a significant factor in the manufacture and marketing of any approved products. All of our
products require regulatory approval by governmental agencies prior to commercialization. In particular, our products are subject to
rigorous pre-clinical and clinical testing and other approval requirements by the FDA and similar regulatory authorities in other countries.
Various statutes and regulations also govern or influence the manufacturing, safety, reporting, labeling, transport and storage, record
keeping and marketing of our products. The lengthy process of seeking these approvals, and the subsequent compliance with applicable
statutes and regulations, require the expenditure of substantial resources. Any failure by us to obtain, or any delay in obtaining, the
necessary regulatory approvals could harm our business.
The
regulatory requirements relating to the testing, manufacturing and marketing of our products may change from time to time and this may
impact our ability to conduct clinical trials and the ability of independent investigators to conduct their own research with support
from us.
The
clinical development, manufacturing and marketing of our products are subject to regulation by various authorities in the U.S., the EU
and other countries, including, in the U.S., the FDA, in Canada, Health Canada, and, in the EU, the EMA. The Federal Food, Drug, and
Cosmetic Act, the Public Health Service Act in the U.S. and numerous directives, regulations, local laws and guidelines in Canada and
the EU and elsewhere govern the testing, manufacture, safety, efficacy, labeling, storage, record keeping, approval, advertising and
promotion of our products. Product development and approval within these regulatory frameworks takes a number of years and involves the
expenditure of substantial resources.
Regulatory
approval will be required in all the major markets in which we seek to develop our products. At a minimum, approval requires the generation
and evaluation of data relating to the quality, safety, and efficacy of an investigational product for its proposed use. The specific
types of data required and the regulations relating to this data will differ depending on the territory, the treatment candidate involved,
the proposed indication and the stage of development.
In
general, new cell compositions are tested in animals until adequate evidence of safety is established to support the proposed clinical
study protocol designs. Clinical trials for new products are typically conducted in three sequential phases that may overlap. In Phase
1, the initial introduction of the pharmaceutical into either healthy human volunteers or patients with the disease (typically 20 to
50 subjects), the emphasis is on testing for safety (adverse effects), dosage tolerance, metabolism, distribution, excretion and clinical
pharmacology. Phase 2 involves studies in a limited patient population (typically 50 to 200 patients) to determine the initial efficacy
of the pharmaceutical for specific targeted indications, to determine dosage tolerance and optimal dosage and to identify possible adverse
side effects and safety risks. Once a treatment protocol shows preliminary evidence of some efficacy and is found to have an acceptable
safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to more fully evaluate clinical outcomes in a larger patient population
in adequate and well-controlled studies designed to yield statistically sufficient clinical data to demonstrate efficacy and safety.
In
the U.S., specific pre-clinical data, manufacturing and chemical data, as described above, need to be submitted to the FDA as part of
an IND application, which, unless the FDA objects, will become effective thirty (30) days following receipt by the FDA. Phase 1 studies
in human volunteers may commence only after the application becomes effective. Prior regulatory approval for human healthy volunteer
studies is also required in member states of the EU. Currently, in each member state of the EU, following successful completion of Phase
1 studies, data are submitted in summarized format to the applicable regulatory authority in the member state in respect of applications
for the conduct of later Phase 2 studies. In many places in Europe, a two-tiered approval system mandates approval at the regional level
prior to applying for national approval. Regional approval cycle times, including multiple iterations where questions are answered and
the specific details of the protocol may be fine-tuned, can last several months prior to applying to the national (federal government
level) regulator. The national regulatory authorities in the EU typically have between one and three months in which to raise any objections
to the proposed study, and they often have the right to extend this review period at their discretion. In the U.S., following completion
of Phase 1 studies, further submissions to regulatory authorities are necessary in relation to Phase 2 and 3 studies to update the existing
IND. Authorities may require additional data before allowing the studies to commence and could demand that the studies be discontinued
at any time if there are significant safety issues. In addition to the regulatory review, a study involving human subjects has to be
approved by an independent body. The exact composition and responsibilities of this body will differ from country to country. In the
U.S., for example, each study will be conducted under the auspices of an independent institutional review board at each institution at
which the study is conducted. This board considers among other things, the design of the study, ethical factors, the privacy of protected
health information as defined under the Health Insurance Portability and Accountability Act, the safety of the human subjects and the
possible liability risk for the institution. Equivalent rules to protect subjects’ rights and welfare apply in each member state
of the EU, where one or more independent ethics committees, which typically operate similarly to an institutional review board, will
review the ethics of conducting the proposed research. These ethical review committees typically exist at the regional level, where approval
is required prior to applying for national approval. Other regulatory authorities around the rest of the world have slightly differing
requirements involving both the execution of clinical trials and the import/export of pharmaceutical products. It is our responsibility
to ensure we conduct our business in accordance with the regulations of each relevant territory.
By
leveraging existing pre-clinical and clinical data, we are seeking to build upon an existing pre-clinical safety and efficacy database
to accelerate our research. In addition, our focus on an end-stage population which has limited current treatment options may result
in relatively shorter approval cycle times. Approval by the FDA in this category generally has been based on objective response rates
and duration of responses rather than demonstration of survival benefit. As a result, trials of drugs to treat end-stage refractory cancer
indications have historically involved fewer patients and generally have been faster to complete than trials of drugs for other indications.
We are aware that the FDA and other similar agencies are regularly reviewing the use of objective endpoints for commercial approval and
that policy changes may impact the size of trials required for approval, timelines and expenditures significantly. The trend over the
past few years has been to shorten approval cycles for terminal patients in the U.S. by employing a “fast track” approach.
In
order to gain marketing approval, we must submit a dossier to the relevant authority for review, which is known in the U.S. as an NDA
and in the EU as a marketing authorization application, or MAA. The format is usually specific and laid out by each authority, although
in general it will include information on the quality of the chemistry, manufacturing and pharmaceutical aspects of the product as well
as the non-clinical and clinical data. Once the submitted NDA is accepted for filing by the FDA, it undertakes the review process that
takes ten (10) months, unless an expedited priority review is granted which takes six (6) months to complete. Approval can take several
months to several years, if multiple ten (10) month review cycles are needed before final approval is obtained, if at all.
The
approval process can be affected by a number of factors. The NDA may be approvable requiring additional pre-clinical, manufacturing data
or clinical trials which may be requested at the end of the ten (10) month NDA review cycle, thereby delaying marketing approval until
the additional data are submitted and may involve substantial unbudgeted costs. The regulatory authorities usually will conduct an inspection
of relevant manufacturing facilities, and review manufacturing procedures, operating systems and personnel qualifications. In addition
to obtaining approval for each product, in many cases each drug manufacturing facility must be approved. Further inspections may occur
over the life of the product. An inspection of the clinical investigation sites by a competent authority may be required as part of the
regulatory approval procedure. As a condition of marketing approval, the regulatory agency may require post-marketing surveillance to
monitor for adverse effects or other additional studies as deemed appropriate. After approval for the initial indication, further clinical
studies are usually necessary to gain approval for any additional indications. The terms of any approval, including labeling content,
may be more restrictive than expected and could affect the marketability of a product.
The
FDA offers a number of regulatory mechanisms that provide expedited or accelerated approval procedures for selected drugs in the indications
on which we are focusing our efforts. These include accelerated approval under Subpart H of the agency’s NDA approval regulations,
fast track drug development procedures and priority review. At this time, we have not determined whether any of these approval procedures
will apply to any of our current treatment candidates.
The
US, EU and other jurisdictions may grant orphan drug designation to drugs intended to treat a “rare disease or condition,”
which, in the US, is generally a disease or condition that affects no more than 200,000 individuals. In the EU, orphan drug designation
can be granted if: the disease is life threatening or chronically debilitating and affects no more than fifty (50) in 100,000 persons
in the EU; without incentive it is unlikely that the drug would generate sufficient return to justify the necessary investment; and no
satisfactory method of treatment for the condition exists or, if it does, the new drug will provide a significant benefit to those affected
by the condition. If a product that has an orphan drug designation subsequently receives the first regulatory approval for the indication
for which it has such designation, the product is entitled to orphan exclusivity, meaning that the applicable regulatory authority may
not approve any other applications to market the same drug for the same indication, except in very limited circumstances, for a period
of seven years in the U.S. and ten (10) years in the EU. Orphan drug designation does not prevent competitors from developing or marketing
different drugs for the same indication or the same drug for different indications. Orphan drug designation must be requested before
submitting an NDA or MAA. After orphan drug designation is granted, the identity of the therapeutic agent and its potential orphan use
are publicly disclosed. Orphan drug designation does not convey an advantage in, or shorten the duration of, the review and approval
process; however, this designation provides an exemption from marketing authorization (NDA) fees.
We
are also subject to numerous environmental and safety laws and regulations, including those governing the use and disposal of hazardous
materials. The cost of compliance with and any violation of these regulations could have a material adverse effect on our business and
results of operations. Although we believe that our safety procedures for handling and disposing of these materials comply with the standards
prescribed by state and federal regulations, accidental contamination or injury from these materials may occur. Compliance with laws
and regulations relating to the protection of the environment has not had a material effect on our capital expenditures or our competitive
position. However, we are not able to predict the extent of government regulation, and the cost and effect thereof on our competitive
position, which might result from any legislative or administrative action pertaining to environmental or safety matters.
In
various countries, animal rights activism has led to either formal or informal boycotting of certain types of animal trials. This may
have an adverse impact on our business as we rely on animal experiments as precursors to human trials.
Employees
Other
than our Chief Executive Officer, we currently do not have any full-time employees, but retain the services of independent contractors/consultants
on a contract-employment basis. Our ability to manage growth effectively will require us to continue to implement and improve our management
systems and to recruit and train new employees. Although we have done so in the past and expect to do so in the future, there can be
no assurance that we will be able to successfully attract and retain skilled and experienced personnel. We anticipate that in the near
future, other key personnel will enter into employment agreements with the Company on customary terms.
ITEM
1A. RISK FACTORS.
An
investment in the Company’s Common Stock involves a high degree of risk. You should carefully consider the risks described below
as well as other information provided to you in this Annual Report on Form 10-K, including information in the section of this document
entitled “Information Regarding Forward Looking Statements.” The risks and uncertainties described below are not the only
ones facing us. Additional risks and uncertainties not presently known to us or that we currently believe are immaterial may also impair
our business operations. If any of the following risks actually occur, our business, financial condition or results of operations could
be materially adversely affected, the value of our Common Stock could decline, and you may lose all or part of your investment.
Risks
related to our Business and our Industry
We
may not receive regulatory approvals for our product candidates or there may be a delay in obtaining such approvals.
Our
products and our ongoing development activities are subject to regulation by regulatory authorities in the countries in which we or our
collaborators and distributors wish to test, manufacture or market our products. For instance, the FDA will regulate the product in the
U.S. and equivalent authorities, such as the EMA, will regulate in Europe. Regulatory approval by these authorities will be subject to
the evaluation of data relating to the quality, efficacy and safety of the product for its proposed use, and there can be no assurance
that the regulatory authorities will find our data sufficient to support product approval.
The
time required to obtain regulatory approval varies between countries. In the U.S., for products without “Fast Track” status,
it can take up to eighteen (18) months after submission of an application for product approval to receive the FDA’s decision. Even
with Fast Track status, FDA review and decision can take up to twelve (12) months.
Different
regulators may impose their own requirements and may refuse to grant, or may require additional data before granting, an approval, notwithstanding
that regulatory approval may have been granted by other regulators. Regulatory approval may be delayed, limited or denied for a number
of reasons, including insufficient clinical data, the product not meeting safety or efficacy requirements or any relevant manufacturing
processes or facilities not meeting applicable requirements as well as case load at the regulatory agency at the time.
Clinical
trials for our product candidates are expensive and time consuming, and their outcome is uncertain.
The
process of obtaining and maintaining regulatory approvals for new therapeutic products is expensive, lengthy and uncertain. Costs and
timing of clinical trials may vary significantly over the life of a project owing to any or all of the following non-exclusive reasons:
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the
duration of the clinical trial; |
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the
number of sites included in the trials; |
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the
countries in which the trial is conducted; |
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the
length of time required and ability to enroll eligible patients; |
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the
number of patients that participate in the trials; |
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the
number of doses that patients receive; |
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the
drop-out or discontinuation rates of patients; |
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per
patient trial costs; |
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third
party contractors failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner; |
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our
final product candidates having different properties in humans than in laboratory testing; |
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the
need to suspend or terminate our clinical trials; |
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insufficient
or inadequate supply of quality of necessary materials to conduct our trials; |
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potential
additional safety monitoring, or other conditions required by FDA or comparable foreign regulatory authorities regarding the scope
or design of our clinical trials, or other studies requested by regulatory agencies; |
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problems
engaging institutional review boards (“IRB”) to oversee trials or in obtaining and maintaining IRB approval of studies; |
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the
duration of patient follow-up; |
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the
efficacy and safety profile of a product candidate; |
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the
costs and timing of obtaining regulatory approvals; and |
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the
costs involved in enforcing or defending patent claims or other intellectual property rights. |
Late-stage
clinical trials are especially expensive, typically
requiring tens of millions of dollars, and take years to reach their outcomes. Such outcomes often fail to reproduce the results of earlier
trials. It is often necessary to conduct multiple late-stage trials, including multiple Phase 3 trials, in order to obtain sufficient
results to support product approval, which further increases the expense. Sometimes trials are further complicated by changes in requirements
while the trials are underway (for example, when the standard of care changes for the disease that is being studied in the trial). Accordingly,
any of our current or future product candidates could take a significantly longer time to gain regulatory approval than we expect, or
may never gain approval, either of which could delay or stop the commercialization of our product candidates.
We
may be required to suspend or discontinue clinical trials due to unexpected side effects or other safety risks that could preclude approval
of our product candidates.
Our
clinical trials may be suspended at any time for a number of reasons. For example, we may voluntarily suspend or terminate our clinical
trials if at any time we believe that they present an unacceptable risk to the clinical trial patients. In addition, the FDA or other
regulatory agencies may order the temporary or permanent discontinuation of our clinical trials at any time if they believe that the
clinical trials are not being conducted in accordance with applicable regulatory requirements or that they present an unacceptable safety
risk to the clinical trial patients.
Administering
any product candidate to humans may produce undesirable side effects. These side effects could interrupt, delay or halt clinical trials
of our product candidates and could result in the FDA or other regulatory authorities denying further development or approval of our
product candidates for any or all targeted indications. Ultimately, some or all of our product candidates may prove to be unsafe for
human use. Moreover, we could be subject to significant liability if any volunteer or patient suffers, or appears to suffer, adverse
health effects as a result of participating in our clinical trials.
Delays
in our clinical trials could result in us not achieving anticipated developmental milestones when expected, increased costs and delay
our ability to obtain regulatory approval and commercialize our product candidates.
Delays
in our ability to commence or enroll patients for our clinical trials could result in us not meeting anticipated clinical milestones
and could materially impact our product development costs and delay regulatory approval of our product candidates. We do not know whether
planned clinical trials will be commenced or completed on schedule, if at all. Clinical trials can be delayed for a variety of reasons,
including:
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delays
in the development of manufacturing capabilities for our product candidates to enable their consistent production at clinical trial
scale; |
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delays
in the commencement of clinical trials as a result of clinical trial holds or the need to obtain additional information to complete
an Investigational New Drug Application (IND); |
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delays
in obtaining regulatory approval to commence new trials; |
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adverse
safety events experienced during our clinical trials; |
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insufficient
efficacy during trials leading to withdrawal of product candidate; |
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delays
in obtaining clinical materials; |
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slower
than expected patient recruitment for participation in clinical trials; and |
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delays
in reaching agreement on acceptable clinical trial agreement terms with prospective sites or obtaining institutional review board
approval. |
If
we do not successfully commence or complete our clinical trials on schedule, the price of our common stock may decline.
Our
product candidates must undergo rigorous clinical testing, the results of which are uncertain and could substantially delay or prevent
us from bringing them to market.
Before
we can obtain regulatory approval for a product candidate, we must undertake extensive clinical testing in humans to demonstrate safety
and efficacy to the satisfaction of the FDA or other regulatory agencies. Clinical trials of new drug candidates sufficient to obtain
regulatory marketing approval are expensive and take years to complete.
We
cannot be certain of successfully completing clinical testing within the time frame we have planned, or at all. We may experience numerous
unforeseen events during, or as a result of, the clinical trial process that could delay or prevent us from receiving regulatory approval
or commercializing our product candidates, including the following:
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our
clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional
clinical and/or preclinical testing or to abandon programs; |
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the
results obtained in earlier stage clinical testing may not be indicative of results in future clinical trials; |
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clinical
trial results may not meet the level of statistical significance required by the FDA or other regulatory agencies; |
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enrollment
in our clinical trials for our product candidates may be slower than we anticipate, resulting in significant delays and additional
expense; |
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we,
or regulators, may suspend or terminate our clinical trials if the participating patients are being exposed to unacceptable health
risks; and |
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the
effects of our product candidates on patients may not be the desired effects or may include
undesirable side effects or other characteristics that may delay or preclude regulatory approval
or limit their commercial use, if approved.
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Completion
of clinical trials depends, among other things, on our ability to enroll a sufficient number of patients, which is a function of many
factors, including:
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therapeutic endpoints chosen for evaluation; |
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eligibility criteria defined in the protocol; |
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the
perceived benefit of the investigational drug under study; |
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the
size of the patient population required for analysis of the clinical trial’s therapeutic endpoints; |
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our
ability to recruit clinical trial investigators and sites with the appropriate competencies
and experience; |
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ability to obtain and maintain patient consents; and |
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competition
for patients by clinical trial programs for other treatments. |
We
may experience difficulties in enrolling patients in our clinical trials, which could increase the costs or affect the timing or outcome
of these clinical trials. This is particularly true with respect to diseases with relatively small patient populations.
Preclinical
studies and Phase 1 or 2 clinical trials of our product candidates may not predict the results of subsequent human clinical trials.
Preclinical
studies, including studies of our product candidates in animal models, may not accurately predict the result of human clinical trials
of those product candidates. In particular, promising animal studies suggesting the efficacy of our products may not predict the ability
of these products to treat humans. Our technology may be found not to be efficacious when studied in human clinical trials.
To
satisfy FDA or foreign regulatory approval standards for the commercial sale of our product candidates, we must demonstrate in adequate
and controlled clinical trials that our product candidates are safe and effective. Success in early clinical trials, including Phase
2 trials, does not ensure that later clinical trials will be successful. Our initial results from Phase 1/2 clinical trials also may
not be confirmed by later analysis or subsequent larger clinical trials. A number of companies in the pharmaceutical industry have suffered
significant setbacks in advanced clinical trials, even after obtaining promising results in earlier clinical trials.
Our
clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates or any future product
candidates, which would prevent or delay or limit the scope of regulatory approval and commercialization.
To
obtain the requisite regulatory approvals to market and sell any of our product candidates and any other future product candidates, we
must demonstrate through clinical trials that our product candidates are safe and effective for use in each targeted indication. Clinical
testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during
the clinical development process. Most product candidates that begin clinical trials are never approved by regulatory authorities for
commercialization. We may be unable to establish clinical endpoints that applicable regulatory authorities would consider clinically
meaningful, and a clinical trial can fail at any stage of testing.
Further,
the process of obtaining regulatory approval is expensive, often takes many years following the commencement of clinical trials, and
can vary substantially based upon the type, complexity, and novelty of the product candidates involved, as well as the target indications,
patient population, and regulatory agency. Prior to obtaining approval to commercialize our product candidates and any future product
candidates in the United States or abroad, we or our potential future collaborators must demonstrate with substantial evidence from adequate
and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product
candidates are safe and effective for their intended uses.
Clinical
trials that we conduct may not demonstrate the efficacy and safety necessary to obtain regulatory approval to market our product candidates.
In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product
candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of
the patient populations, changes in and adherence to the clinical trial protocols, and the rate of dropout among clinical trial participants.
If the results of our ongoing or future clinical trials are inconclusive with respect to the efficacy of our product candidates, if we
do not meet the clinical endpoints with statistical and clinically meaningful significance, or if there are safety concerns associated
with our product candidates, we may be delayed in obtaining marketing approval, if at all. Additionally, any safety concerns observed
in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates
in those and other indications.
Even
if the trials are successfully completed, clinical data are often susceptible to varying interpretations and analyses, and we cannot
guarantee that the FDA or comparable foreign regulatory authorities will interpret the results as we do, and more trials could be required
before we submit our product candidates for approval. We cannot guarantee that the FDA or comparable foreign regulatory authorities will
view our product candidates as having efficacy even if positive results are observed in clinical trials. The FDA or comparable foreign
regulatory authorities may not agree with our manufacturing strategy or find comparability between our clinical trial product candidates
and proposed commercial product candidates even if positive results are observed in clinical trials, which may result in regulatory delays
or a need to perform additional clinical studies. Moreover, results acceptable to support approval in one jurisdiction may be deemed
inadequate by another regulatory authority to support regulatory approval in that other jurisdiction. To the extent that the results
of the trials are not satisfactory to the FDA or comparable foreign regulatory authorities for support of a marketing application, approval
of our product candidates and any future product candidates may be significantly delayed, or we may be required to expend significant
additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product
candidates. Even if regulatory approval is secured for a product candidate, the terms of such approval may limit the scope and use of
the specific product candidate, which may also limit its commercial potential.
We
are subject to various government regulations.
The
manufacture and sale of human therapeutic and diagnostic products in the U.S., Canada and foreign jurisdictions are governed by a variety
of statutes and regulations. These laws require approval of manufacturing facilities, controlled research and testing of products and
government review and approval of a submission containing manufacturing, preclinical and clinical data in order to obtain marketing approval
based on establishing the safety and efficacy of the product for each use sought, including adherence to current Good Manufacturing Practice
(or cGMP) during production and storage, and control of marketing activities, including advertising and labeling.
The
products we are currently developing will require significant development, preclinical and clinical testing and investment of substantial
funds prior to their commercialization. The process of obtaining required approvals can be costly and time-consuming, and there can be
no assurance that future products will be successfully developed and will prove to be safe and effective in clinical trials or receive
applicable regulatory approvals. Markets other than the U.S. and Canada have similar restrictions. Potential investors and shareholders
should be aware of the risks, problems, delays, expenses and difficulties which we may encounter in view of the extensive regulatory
environment which controls our business.
We
may become subject to increased government regulation.
Increased
government regulation could: (i) reduce any future revenues; (ii) increase our operating expenses; and (iii) expose us to significant
liabilities. We cannot be sure what effect any future material noncompliance by us with any future laws and regulations or any material
changes in current laws and regulations could have on our business, operating results and financial condition.
We
may fail to comply with regulatory requirements.
Our
success will be dependent upon our ability, and our collaborative partners’ abilities, to maintain compliance with regulatory requirements,
including cGMP, and safety reporting obligations. The failure to comply with applicable regulatory requirements can result in, among
other things, fines, injunctions, civil penalties, total or partial suspension of regulatory approvals, refusal to approve pending applications,
recalls or seizures of products, operating and production restrictions and criminal prosecutions.
Regulatory
approval of our product candidates may be withdrawn at any time.
After
regulatory approval has been obtained for medicinal products, the product and the manufacturer are subject to continual review, including
the review of adverse experiences and clinical results that are reported after our products are made available to patients, and there
can be no assurance that such approval will not be withdrawn or restricted. Regulators may also subject approvals to restrictions or
conditions or impose post-approval obligations on the holders of these approvals, and the regulatory status of such products may be jeopardized
if such obligations are not fulfilled. If post-approval studies are required, such studies may involve significant time and expense.
The
manufacturer and manufacturing facilities we use to make any of our products will also be subject to periodic review and inspection by
the FDA or EMA, as applicable. The discovery of any new or previously unknown problems with the product, manufacturer or facility may
result in restrictions on the product or manufacturer or facility, including withdrawal of the product from the market. We will continue
to be subject to the FDA or EMA requirements, as applicable, governing the labeling, packaging, storage, advertising, promotion, recordkeeping,
and submission of safety and other post-market information for all of our product candidates, even those that the FDA or EMA, as applicable,
had approved. If we fail to comply with applicable continuing regulatory requirements, we may be subject to fines, suspension or withdrawal
of regulatory approval, product recalls and seizures, operating restrictions and other adverse consequences.
Even
if approved, our products may not gain market acceptance, in which case we may not be able to generate product revenues, which will materially
adversely affect our business, financial condition, and results of operations.
Even
if the FDA or any comparable foreign regulatory authority approves the marketing of any product candidates that we develop, physicians,
healthcare providers, patients, or the medical community may not accept or use them. Additionally, the product candidates that we are
developing are based on our proprietary platforms, which are new technologies. If these products do not achieve an adequate level of
acceptance, we may not generate significant product revenues or any profits from operations. The degree of market acceptance of any of
our product candidates will depend on a variety of factors, including:
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timing of market introduction; |
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the
terms of any approvals and the countries in which approvals are obtained; |
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the
number and clinical profile of competing products; |
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our
ability to provide acceptable evidence of safety and efficacy; |
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the
prevalence and severity of any side effects; |
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relative
convenience and ease of administration; |
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cost-effectiveness; |
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patient
diagnostics and screening infrastructure in each market; |
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marketing
and distribution support; |
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adverse
publicity about our product candidates; |
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availability
of coverage, adequate reimbursement and sufficient payment from health maintenance organizations and other insurers, both public
and private, for our product candidates, or the procedures utilizing our product candidates, if approved; |
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the
willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities; and |
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other
potential advantages over alternative treatment methods. |
In
addition, although we are not utilizing replication competent vectors, adverse publicity due to the ethical and social controversies
surrounding the therapeutic use of such technology, and reported side effects from any clinical trials using these technologies or the
failure of such trials to demonstrate that these therapies are safe and effective may limit market acceptance of our product candidates.
If our product candidates are approved but fail to achieve market acceptance among physicians, patients, hospitals, cancer treatment
centers or others in the medical community, we will not be able to generate significant revenue.
If
our product candidates fail to gain market acceptance, this will have a material adverse impact on our ability to generate revenues to
provide a satisfactory, or any, return on our investments. Even if some products achieve market acceptance, the market may prove not
to be large enough to allow us to generate significant revenues.
We
do not own any patents and rely on the patents we license from Yeda Research and Development Limited.
We
do not currently own any patents and only have an exclusive worldwide license to certain intellectual property owned by Yeda pursuant
to a license agreement between us and Yeda. Under the license agreement with Yeda, Yeda retains ownership of the licensed patents. If
we were to default under the license agreement, then our rights to Yeda’s intellectual property would be extinguished and we would
lose all rights to operate the license. In such an event, we would effectively cease to operate unless we re-obtained licensing with
Yeda.
We
are dependent on protecting our proprietary rights.
Our
success and competitive position and future overall revenues will depend in part on our ability to obtain and maintain patent protection
over the patents that we have an exclusive license to use for our product candidates, methods, process and other technologies to preserve
our trade secrets, to prevent third parties from infringing on our proprietary rights and to operate without infringing the proprietary
rights of third parties. Although our patents and related technologies are owned by Yeda, under our exclusive license agreement, we are
required to pay all patent related expenses for applications, renewals, etc., as well as any and all legal or other costs associated
with the defending and protecting such proprietary rights. However, we cannot predict:
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the
degree and range of protection any patents will afford us against competitors, including whether third parties will find ways to
invalidate or otherwise circumvent the patents that we license; |
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whether
or not others will obtain patents claiming aspects similar to those covered by the patents that we license; or |
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whether
we will need to initiate litigation or administrative proceedings, which may be costly whether we win or lose. |
For
a complete list of the patents that we license from Yeda, please see the section entitled “Science and Technology Overview”
of this Annual Report on Form 10-K.
We
may be required to obtain licenses from third parties to avoid infringing patents or other proprietary rights. No assurance can be given
that any licenses required under any such patents or proprietary rights would be made available, if at all, on terms we find acceptable.
If we do not obtain such licenses, we could encounter delays in the introduction of products, or could find that the development, manufacture
or sale of products requiring such licenses could be prohibited.
A
number of pharmaceutical, biopharmaceutical and biotechnology companies and research and academic institutions have developed technologies,
filed patent applications or received patents on various technologies that may be related to or affect our business. Some of these technologies,
applications or patents may conflict with our technologies or patent applications. Such conflict could limit the scope of the patents,
if any, that we may be able to obtain. Such conflict may also result in the denial of our patent applications. In addition, if patents
that cover our activities are issued to other companies, there can be no assurance that we would be able to obtain licenses to these
patents at a reasonable cost or be able to develop or obtain alternative technology. If we do not obtain such licenses, we could encounter
delays in the introduction of products, or could find that the development, manufacture or sale of products requiring such licenses could
be prohibited. In addition, we could incur substantial costs in defending ourselves in suits brought against us on patents that our products
might infringe or in filing suits against others to have such patents declared invalid.
Patent
applications in the U.S. are maintained in secrecy and not published if either: i) the application is a provisional application or, ii)
the application is filed and we request no publication and certify that the invention disclosed “has not and will not” be
the subject of a published foreign application. Otherwise, U.S. applications or foreign counterparts, if any, publish 18 months after
the priority application has been filed. Since publication of discoveries in the scientific or patent literature often lag behind actual
discoveries, we cannot be certain that we or any licensor were the first creator of inventions covered by pending patent applications
or that we or such licensor was the first to file patent applications for such inventions. Moreover, we might have to participate in
interference proceedings declared by the U.S. Patent and Trademark Office to determine priority of invention, which could result in substantial
cost to us, even if the eventual outcome were favorable to us. There can be no assurance that our patents, if issued, would be held valid
or enforceable by a court or that a competitor’s technology or product would be found to infringe such patents.
Much
of our know-how and technology may not be patentable. To protect our rights, we require employees, consultants, advisors and collaborators
to enter into confidentiality agreements. There can be no assurance, however, that these agreements will provide meaningful protection
for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure. Further, our business
may be adversely affected by competitors who independently develop competing technologies, especially if we obtain no, or only narrow,
patent protection.
Confidentiality
agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information.
In
addition to the protection afforded by patents, we seek to rely on trade secret protection and confidentiality agreements to protect
proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce, and
any other elements of our product candidates, technology and product discovery and development processes that involve proprietary know-how,
information, or technology that is not covered by patents. Any disclosure, either intentional or unintentional, by our employees, the
employees of third parties with whom we share our facilities or third-party consultants and vendors that we engage to perform research,
clinical trials or manufacturing activities, or misappropriation by third parties (such as through a cybersecurity breach) of our trade
secrets or proprietary information could enable competitors to duplicate or surpass our technological achievements, thus eroding our
competitive position in our market. Because we expect to rely on third parties in the development and manufacture of our product candidates,
we must, at times, share trade secrets with them. Our reliance on third parties requires us to share our trade secrets, which increases
the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
We
are dependent on our collaborative partners and service providers the loss of which would hurt our business.
Our
strategy is to enter into various arrangements with corporate and academic collaborators, licensors, licensees, service providers and
others for the research, development, clinical testing and commercialization of our products. We intend to or have entered into agreements
with academic, medical and commercial organizations to research, develop and test our products. In addition, we intend to enter into
corporate partnerships to commercialize the Company’s core products. There can be no assurance that such collaborations can be
established on favorable terms, if at all.
Should
any collaborative partner or service provider fail to appropriately research, develop, test or successfully commercialize any product
to which the Company has rights, our business may be adversely affected. Failure of a collaborative partner or service provider to successfully
conduct or complete their activities or to remain a viable collaborative partner or commercial enterprise for any particular program
could delay or halt the development or commercialization of any products arising out of such program. While management believes that
collaborative partners and service providers will have sufficient economic motivation to continue their activities, there can be no assurance
that any of these collaborations or provisions of required services will be continued or result in successfully commercialized products.
Notably,
we maintain an exclusive worldwide license to certain intellectual property owned by Yeda pursuant to the Yeda License Agreement, as
further discussed in the “Intellectual Property” section hereinafter. If we should default under the License Agreement, then
our rights to Yeda’s intellectual property would extinguish, and we would lose all rights to operate the licenses. In such event,
we would effectively cease to operate unless we re-obtained licensing with Yeda.
In
addition, there can be no assurance that the collaborative research or commercialization partners will not pursue alternative technologies
or develop alternative products either on their own or in collaboration with others, including our competitors, as a means for developing
treatments for the diseases or conditions targeted by our programs.
If
we are unable to keep up with rapid technological changes in our field or compete effectively, we will be unable to operate profitably.
We
are engaged in a rapidly changing field. Other products and therapies that will compete directly with the products that we are seeking
to develop and market currently exist or are being developed. Competition from fully integrated pharmaceutical companies and more established
biotechnology companies is intense and is expected to increase. Most of these companies have significantly greater financial resources
and expertise in discovery and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and marketing
than us. Smaller companies may also prove to be significant competitors, particularly through collaborative arrangements with large pharmaceutical
and established biopharmaceutical or biotechnology companies. Many of these competitors have significant products that have been approved
or are in development and operate large, well-funded discovery and development programs. Academic institutions, governmental agencies
and other public and private research organizations also conduct research, seek patent protection and establish collaborative arrangements
for therapeutic products and clinical development and marketing. These companies and institutions compete with us in recruiting and retaining
highly qualified scientific and management personnel. In addition to the above factors, we will face competition based on product efficacy
and safety, the timing and scope of regulatory approvals, availability of supply, marketing and sales capability, reimbursement coverage,
price and patent position. There is no assurance that our competitors will not develop more effective or more affordable products, or
achieve earlier patent protection or product commercialization, than our own.
Other
companies may succeed in developing products earlier than ourselves, obtaining Health Canada, European Medicines Agency (the “EMA”)
and FDA approvals for such products more rapidly than we will, or in developing products that are more effective than products we propose
to develop. While we will seek to expand our technological capabilities in order to remain competitive, there can be no assurance that
research and development by others will not render our technology or products obsolete or non-competitive or result in treatments or
cures superior to any therapy we develop, or that any therapy we develop will be preferred to any existing or newly developed technologies.
Our
ability and our collaborators’ ability to sell therapeutic products will depend to a large extent upon reimbursement from health
care insurance companies.
Our
success may depend, in part, on the extent to which reimbursement for the costs of therapeutic products and related treatments will be
available from third-party payers such as government health administration authorities, private health insurers, managed care programs,
and other organizations. Over the past decade, the cost of health care has risen significantly, and there have been numerous proposals
by legislators, regulators and third-party health care payers to curb these costs. Some of these proposals have involved limitations
on the amount of reimbursement for certain products. Similar federal or state health care legislation may be adopted in the future and
any products that we or our collaborators seek to commercialize may not be considered cost-effective. Adequate third-party levels that
are sufficient for realization of an appropriate return on investment in product development.
We
may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates
or indications that may be more profitable or for which there is a greater likelihood of success.
Because
we have limited financial and managerial resources, we focus on research programs, therapeutic platforms, and product candidates that
we identify for specific indications. Additionally, we have contractual commitments under our collaboration agreements to use commercially
reasonable efforts to develop certain programs and, thus, do not have unilateral discretion to vary from such agreed to efforts. In addition,
we have contractual commitments to conduct certain development plans, and thus may not have discretion to modify such development plans,
including clinical trial designs, without agreement from our collaboration partners. As a result, we may forego or delay pursuit of opportunities
with other therapeutic platforms or 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 current and future research and development programs, therapeutic platforms, and 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 collaboration, licensing, or other royalty arrangements
in cases in which it would have been more advantageous for us to retain sole development and commercialization rights.
Interim,
topline, or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data becomes
available or as we make changes to our manufacturing processes and are subject to audit and verification procedures that could result
in material changes in the final data.
From
time to time, we may publicly disclose interim, topline, or preliminary data from our preclinical studies and clinical trials, which
is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change
following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations,
and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate
all data. Further, modifications or improvements to our manufacturing processes for a therapy may result in changes to the characteristics
or behavior of the product candidate that could cause our product candidates to perform differently and affect the results of our ongoing
clinical trials. As a result, the topline results that we report may differ from future results of the same studies, or different conclusions
or considerations may qualify such results, once additional data have been received and fully evaluated. Topline data also remain subject
to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously
published. As a result, topline data should be viewed with caution until the final data are available.
From
time to time, we may also disclose preliminary or interim data from our preclinical studies and clinical trials. Preliminary or interim
data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment
continues and more patient data become available. Adverse differences between preliminary or interim data and final data could significantly
harm our business prospects. Additionally, disclosure of preliminary or interim data by us or by our competitors could result in volatility
in the price of our common stock.
Further,
others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses
or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability
or commercialization of the particular product candidate, and our company in general. If the interim, topline, or preliminary data that
we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability
to obtain approval for, and commercialize, any of our potential product candidates may be harmed, which could harm our business, operating
results, prospects, or financial condition.
We
rely on key personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow
effectively.
We
are dependent on our Chief Executive Officer, Itamar Shimrat, our Executive Chairman, Dennis Brown, and on scientific and drug development
consultants, the loss of services of one or more of whom could materially adversely affect us.
Other
than our Chief Executive Officer, we currently do not have full-time employees, but we retain the services of independent contractors/consultants
on a contract-employment basis. Our ability to manage growth effectively will require us to continue to implement and improve our management
systems and to recruit and train new employees. Although we have done so in the past and expect to do so in the future, there can be
no assurance that we will be able to successfully attract and retain skilled and experienced personnel.
We
may be subject to foreign exchange fluctuation.
We
maintain our accounts in both U.S. dollars and Israeli Shekels. A portion of our expenditures are in foreign currencies, most notably
in Israeli Shekels, and therefore we are subject to foreign currency fluctuations, which may, from time to time, impact our financial
position and results. We may enter into hedging arrangements under specific circumstances, typically through the use of forward or futures
currency contracts, to minimize the impact of increases in the value of the Israeli Shekel. In order to minimize our exposure to foreign
exchange fluctuations we may hold sufficient Israeli Shekels to cover our expected Israeli Shekel expenditures.
We
may be exposed to potential product and clinical trials liability.
Our
business exposes us to potential product liability risks, which are inherent in the testing, manufacturing, marketing and sale of therapeutic
products. Human therapeutic products involve an inherent risk of product liability claims and associated adverse publicity. While we
will continue to take precautions we deem appropriate, there can be no assurance that we will be able to avoid significant product liability
exposure. We do not currently maintain liability insurance coverage as such insurance is expensive and difficult to obtain. As we move
forward with our own clinical trials, we plan to obtain liability insurance coverage in the jurisdictions applicable to such clinical
trials. However, when we seek such insurance, it may not be available on acceptable terms, if at all. The inability to obtain sufficient
insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit our
ability to conduct clinical trials in certain jurisdiction or the commercialization of our current or potential products. A product liability
claim brought against us in a clinical trial or a product withdrawal could have a material adverse effect upon us and our financial condition.
Should the insurance coverage be insufficient in amount or scope to address multiple and diverse claims, liabilities not covered by insurance
could represent a significant financial liability for Cell Source. Since Yeda does not conduct human trials, there is no need for Cell
Source to have insurance for trials there. As Cell Source continues to contract facilities at hospitals to conduct human trials on its
behalf, it will ensure that full and proper insurance coverage will be in place with respect to such clinical facilities. Cell Source
plans to insure its direct participation in clinical trials, above and beyond whatever insurance coverage is already held by the institutions
and facilities providing services with respect to such clinical trials, as may be required.
We
may become subject to liabilities related to risks inherent in working with hazardous materials.
Our
discovery and development processes involve the controlled use of hazardous and radioactive materials. We are subject to federal, state,
provincial and local laws and regulations governing the use, manufacture, storage, handling and disposal of such materials and certain
waste products. Although we believe that our safety procedures for handling and disposing of such materials comply with the standards
prescribed by such laws and regulations, the risk of accidental contamination or injury from these materials cannot be completely eliminated.
In the event of such an accident, we could be held liable for any damages that result and any such liability could exceed our resources.
We are not specifically insured with respect to this liability. Although we believe that we are in compliance in all material respects
with applicable environmental laws and regulations and currently do not expect to make material capital expenditures for environmental
control facilities in the near-term, there can be no assurance that we will not be required to incur significant costs to comply with
environmental laws and regulations in the future, or that our operations, business or assets will not be materially adversely affected
by current or future environmental laws or regulations.
We
may in the future conduct clinical trials for our products or product candidates outside the United States and the FDA may not accept
data from such trials.
We
may in the future choose to conduct one or more of our clinical trials outside the United States. Although the FDA may accept data from
clinical trials conducted outside the United States, acceptance of such study data by the FDA is subject to certain conditions. For example,
the study must be well designed and conducted and performed by qualified investigators in accordance with ethical principles. The study
population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical
practice in ways that the FDA deems clinically meaningful. Generally, the patient population for any clinical studies conducted outside
of the United States must be representative of the population for whom we intend to label the product in the United States. In addition,
such studies would be subject to the applicable local laws and FDA acceptance of the data would be dependent upon its determination that
the studies also complied with all applicable U.S. laws and regulations. There can be no assurance the FDA will accept data from trials
conducted outside of the United States. If the FDA does not accept any such data, it would likely result in the need for additional trials,
which would be costly and time consuming and delay aspects of our business plan.
The
outbreak of the novel coronavirus disease, COVID-19, could materially and adversely affect our preclinical studies and development, any
clinical trials we subsequently commence, and our business, financial condition, and results of operations.
In
December 2019, the coronavirus disease, COVID-19, was identified in Wuhan, China. Since then, COVID-19 has spread globally. In March
2020, the World Health Organization declared COVID-19 a global pandemic and the United States declared a national emergency with respect
to COVID-19. In response to the COVID-19 pandemic, “shelter in place” orders and other public health guidance measures were
implemented across much of the United States, including in the locations of our offices and those of key vendors and partners. As a result
of the COVID-19 pandemic, or similar pandemics, and related “shelter in place” orders and other public health guidance measures,
we have and may in the future experience disruptions that could materially and adversely impact our preclinical studies and clinical
trials, and our business, financial condition, and results of operations. Potential disruptions to our preclinical development efforts
include, but are not limited to:
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delays
or disruptions in preclinical experiments and IND-enabling studies due to restrictions of on-site staff, limited or no access to
animal facilities, and unforeseen circumstances at contract research organizations (CROs) and vendors; |
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limitations
on employee or other resources that would otherwise be focused on the conduct of our preclinical work and any clinical trials we
subsequently commence, including because of sickness of employees or their families, the desire of employees to avoid travel or contact
with large groups of people, an increased reliance on working from home, school closures, or mass transit disruptions; |
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delays
in necessary interactions with regulators, ethics committees, and other important agencies and contractors due to limitations in
employee resources or forced furlough of government or contractor personnel; and |
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limitations
in maintaining our corporate culture that facilitates the transfer of institutional knowledge within our organization and fosters
innovation, teamwork, and a focus on execution. |
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interruption
of key clinical trial activities, such as clinical trial site data monitoring and efficacy, safety and translational data collection,
processing and analyses, due to limitations on travel imposed or recommended by federal, state, or local governments, employers and
others or interruption of clinical trial subject visits, which may impact the collection and integrity of subject data and clinical
study endpoints; |
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delays
or difficulties in initiating or expanding clinical trials, including delays or difficulties with clinical site initiation and recruiting
clinical site investigators and clinical site staff; |
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delays
or difficulties in enrolling and retaining patients in our clinical trials; |
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increased
rates of patients withdrawing from our clinical trials following enrollment as a result of contracting COVID-19 or other health conditions
or being forced to quarantine; |
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interruption
of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages,
production slowdowns, or stoppages and disruptions in materials and reagents; |
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diversion
of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial
sites and hospital staff supporting the conduct of our clinical trials; |
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interruption
or delays in the operations of the FDA and comparable foreign regulatory agencies; |
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changes
in regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials
are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; |
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delays
in receiving approval from local regulatory authorities to initiate our planned clinical trials; |
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limitations
on employee resources that would otherwise be focused on the conduct of our preclinical studies and clinical trials, including because
of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; |
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interruption
of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages,
production slowdowns or stoppages and disruptions in delivery systems; |
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refusal
of the FDA or comparable regulatory authorities to accept data from clinical trials in affected geographies; and |
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additional
delays, difficulties or interruptions as a result of current or future shutdowns due to the COVID-19 pandemic in countries where
we or our third-party service providers operate. |
The
COVID-19 global pandemic continues to rapidly evolve. Although many countries, including certain countries in Europe and the United States,
have re-opened, rises in new cases have caused certain countries to re-initiate restrictions. The extent to which the outbreak may affect
our preclinical studies, clinical trials, business, financial condition, and results of operations will depend on future developments,
which are highly uncertain and cannot be predicted at this time, such as the ultimate geographic spread of the disease, the duration
of the outbreak, travel restrictions, and actions to contain the outbreak or treat its impact, such as social distancing and quarantines
or lock-downs in the United States and other countries, business closures, or business disruptions and the effectiveness of actions taken
in the United States and other countries to contain and treat the disease. Additionally, we are unable to predict if a different pandemic
could have similar or different impacts on our business, financial condition, or share price. Future developments in these and other
areas present material uncertainty and risk with respect to our clinical trials, business, financial condition, and results of operations.
Risks
Related to Our Capital Resources and Impairments
We
have a limited operating history and a history of operating losses and expect to incur significant additional operating losses.
Our
planned principal operations are the development and commercialization of new cell therapy products focused on treatment of blood cancers,
certain non-malignant disorders and organ transplantations. We are currently conducting research and development activities in order
to facilitate the continued transition of the patented technology we license from the laboratory to clinical trials. We have a limited
operating history. Therefore, there is limited historical financial information upon which to base an evaluation of our performance.
Our prospects must be considered in light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies
in their early stages of operations. We have generated net losses since we began operations, including net losses of $5,472,435
and $4,560,165 for the years ended December 31, 2021 and 2020, respectively. We expect to incur substantial additional net expenses
over the next several years as our research, development, and commercial activities increase. The amount of future losses and when, if
ever, we will achieve profitability are uncertain. Our ability to generate revenue and achieve profitability will depend on, among other
things, successful completion of the preclinical and clinical development of our product candidates; obtaining necessary regulatory approvals
from the U.S. Food and Drug Administration (the “FDA”) and international regulatory agencies; successful manufacturing, sales,
and marketing arrangements; and raising sufficient funds to finance our activities. If we are unsuccessful at some or all of these undertakings,
our business, prospects, and results of operations may be materially adversely affected.
We
will need to secure additional financing.
We
anticipate that we will incur operating losses for the foreseeable future. Our historical cash burn rate was approximately $350,000 per
month. As of December 31, 2021, we had cash in the amount of $93,095. Based on our current resources, we will not be able to continue
to operate without additional immediate funding. If we are not successful in securing additional financing, we may be required to delay
significantly, reduce the scope of or eliminate one or more of our research or development programs, downsize our general and administrative
infrastructure, or seek alternative measures to avoid insolvency, including arrangements with collaborative partners or others that may
require us to relinquish rights to certain of our technologies, product candidates or products. Our future capital requirements will
depend on many factors, including:
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the
scope, timing, progress, costs, and results of discovery, preclinical development, and clinical trials for our current or future
product candidates; |
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the
number of clinical trials required for regulatory approval of our current or future product candidates; |
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the
costs, timing, and outcome of regulatory review of any of our current or future product candidates; |
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the
cost of manufacturing clinical and commercial supplies of our current or future product candidates; |
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the
costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any of
our product candidates for which we receive marketing approval; |
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the
costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights,
and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual
property rights; |
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our
ability to maintain existing, and establish new, strategic collaborations, licensing, or other arrangements and the financial terms
of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement; |
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the
revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; |
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expenses
to attract, hire, and retain skilled personnel; |
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the
costs of operating as a public company; |
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our
ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party
and government payers; |
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addressing
any potential interruptions or delays resulting from factors related to the COVID-19 pandemic; |
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the
effect of competing technological and market developments; and |
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the
extent to which we acquire or invest in businesses, products, and technologies. |
Our
ability to raise additional funds will depend on financial, economic, political and market conditions and other factors, over which we
may have no or limited control. Market volatility resulting from the COVID-19 pandemic or other factors could also adversely impact our
ability to access capital as and when needed. Additional funds may not be available when we need them, on terms that are acceptable to
us, or at all. If adequate funds are not available to us on a timely basis, we could be required to:
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delay,
limit, reduce, or terminate preclinical studies, clinical trials, or other research and development activities, or eliminate one
or more of our development programs altogether; and |
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delay,
limit, reduce, or terminate our efforts to access manufacturing capacity, establish sales and marketing capabilities or other activities
that may be necessary to commercialize our product candidates, or reduce our flexibility in developing or maintaining our sales and
marketing strategy. |
There
is substantial doubt about our ability to continue as a going concern.
As
of December 31, 2021, we had a working capital deficit and accumulated deficit of $9,826,135 and $31,178,428, respectively.
During the year ended December 31, 2021, we incurred a net loss of $5,472,435. We have historically incurred operating losses
and may continue to incur operating losses for the foreseeable future. We believe that these conditions raise substantial doubt about
our ability to continue as a going concern within one year from the date these financial statements are issued. This may hinder
our future ability to obtain financing or may force us to obtain financing on less favorable terms than would otherwise be available.
We have not generated revenues to-date. Our primary source of operating funds since inception has been equity and debt financings. Our
plans include continued efforts to raise additional capital through debt and equity financings. There is no assurance that these funds
will be sufficient to enable us to fully complete our development activities or attain profitable operations. If we are unable to obtain
such additional financing on a timely basis or, notwithstanding any request we may make, if our debt holders do not agree to convert
their notes into equity or extend the maturity dates of their notes, we may have to curtail our development, marketing and promotional
activities, which would have a material adverse effect on our business, financial condition and results of operations, and ultimately
we could be forced to discontinue our operations and liquidate. There can be no assurance that we will be able to continue as a going
concern.
We
are an early-stage company with an unproven business strategy and may never achieve commercialization of our candidate products or profitability.
We
are at an early stage of development and commercialization of our technologies and product candidates. We have not yet begun to market
any products and, accordingly, have not begun to generate revenues from the commercialization of our products. Our products will require
significant additional clinical testing and investment prior to commercialization. A commitment of substantial resources by ourselves
and, potentially, our partners to conduct time-consuming research and clinical trials will be required if we are to complete the development
of our product candidates. There can be no assurance that any of our product candidates will meet applicable regulatory standards, obtain
required regulatory approvals, be capable of being produced in commercial quantities at reasonable costs or be successfully marketed.
Most of our product candidates are not expected to be commercially available for several years, if at all.
We
are in default of payment obligations under certain promissory notes.
As of December 31, 2021 and through
the date of this filing, notes payable with principal amounts totaling $1,554,912 and $1,329,912, respectively, were past due. Although
only one holder of a note with the principal amount of $250,000 has elected to pursue remedies against us, no assurance can be given
that the other holders will not do so in the future. The institution of collection actions could have a material adverse effect on our
business and could force us to seek relief through insolvency or other proceedings.
Risks
Related to Our Common Stock
There
may be additional issuances of shares of preferred stock in the future.
Our
Articles of Incorporation permit us to issue up to 10,000,000 shares of preferred stock and our board of directors has authorized 1,335,000
shares of Series A Convertible Preferred and 500,000 shares of Series C Convertible Preferred Stock, for issuance. Our board of directors
could authorize the issuance of additional series of preferred stock in the future and such preferred stock could grant holders preferred
rights on parity with the Series A Preferred and Series C Preferred as to dividend payments and liquidation preference. The issuances
of other series of preferred stock could have the effect of reducing the amounts available to the holders Series A Preferred and Series
C Preferred in the event of our liquidation, winding-up or dissolution. It may also reduce cash dividend payments on the Series A Preferred
if we do not have sufficient funds to pay dividends on all Series A Preferred outstanding and outstanding parity preferred stock.
Our
articles of incorporation allow for our board to create a new series of preferred stock without further approval by our stockholders,
which could adversely affect the rights of the holders of our Common Stock.
Our
Board of Directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board of Directors
have the authority to issue up to 10,000,000 shares of our preferred stock terms of which may be determined by the Board without further
stockholder approval. As a result, our Board of Directors could authorize the issuance of a series of preferred stock that would grant
to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed
to the holders of Common Stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our
Common Stock. In addition, our Board of Directors could authorize the issuance of a series of preferred stock that has greater voting
power than our Common Stock or that is convertible into our Common Stock, which could decrease the relative voting power of our Common
Stock or result in dilution to our existing stockholders.
There
is not an active liquid trading market for the Company’s Common Stock.
The
Company is required to report under the Exchange Act and its Common Stock is eligible for quotation on the OTC Markets. However, there
is no regular active trading market in the Company’s Common Stock, and we cannot give an assurance that an active trading market
will develop. If an active market for the Company’s Common Stock develops, there is a significant risk that the Company’s
stock price may fluctuate dramatically in the future in response to any of the following factors, some of which are beyond our control:
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variations
in our quarterly operating results; |
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announcements
that our revenue or income are below analysts’ expectations; |
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general
economic slowdowns; |
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sales
of large blocks of the Company’s Common Stock; and |
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announcements
by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments. |
Our
Common Stock is subject to the “penny stock” rules of the Securities and Exchange Commission, which may make it more difficult
for stockholders to sell our Common Stock.
The
SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks, and the broker
or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock
to be purchased.
In
order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and
investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable
for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to
the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination,
and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Generally,
brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more
difficult for investors to dispose of the Company’s Common Stock if and when such shares are eligible for sale and may cause a
decline in the market value of its stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the limited market in penny stock.
We
may not be able to attract the attention of brokerage firms because we became a public company by means of a reverse acquisition.
Because
we became public through a “reverse acquisition,” securities analysts of brokerage firms may not provide coverage of us since
there is little incentive to brokerage firms to recommend the purchase of our Common Stock. No assurance can be given that brokerage
firms will want to conduct any secondary offerings on behalf of the Company in the future.
Voting
power of our shareholders is highly concentrated by insiders.
Our
officers, directors and affiliates currently own approximately 20% of our outstanding common stock. Such concentrated control of the
Company may adversely affect the value of our ordinary shares. If you acquire our ordinary shares, you may have no effective voice in
our management. Sales by our insiders or affiliates, along with any other market transactions, could affect the value of our ordinary
shares.
We
do not intend to pay dividends to holders of Common Stock for the foreseeable future.
We
have paid no dividends on our Common Stock to date and it is not anticipated that any dividends will be paid to holders of our Common
Stock in the foreseeable future. While our future dividend policy will be based on the operating results and capital needs of the business,
it is currently anticipated that any earnings will be retained to finance our future expansion and for the implementation of our business
plan. As an investor, you should take note of the fact that a lack of a dividend can further affect the market value of our stock and
could significantly affect the value of any investment in our Company.
Other
General Factors
Applicable
regulatory requirements, including those contained in and issued under the Sarbanes-Oxley Act of 2002, may make it difficult for the
Company to retain or attract qualified officers and directors, which could adversely affect the management of its business and its ability
to obtain or retain listing of its Common Stock.
The
Company may be unable to attract and retain those qualified officers, directors and members of board committees required to provide for
effective management because of the rules and regulations that govern publicly held companies, including, but not limited to, certifications
by principal executive officers. The enactment of the Sarbanes-Oxley Act has resulted in the issuance of a series of related rules and
regulations and the strengthening of existing rules and regulations by the SEC, as well as the adoption of new and more stringent rules
by the stock exchanges. The perceived increased personal risk associated with these changes may deter qualified individuals from accepting
roles as directors and executive officers.
Further,
some of these changes heighten the requirements for board or committee membership, particularly with respect to an individual’s
independence from the corporation and level of experience in finance and accounting matters. The Company may have difficulty attracting
and retaining directors with the requisite qualifications. If the Company is unable to attract and retain qualified officers and directors,
the management of its business and its ability to obtain or retain listing of our shares of Common Stock on any stock exchange (assuming
the Company elects to seek and are successful in obtaining such listing) could be adversely affected.
If
we fail to maintain effective internal controls over financial reporting, the price of our common stock may be adversely affected.
In
the past, our management identified weaknesses in our internal controls and although our management believes such weaknesses have been
remediated, our internal control over financial reporting may still or could in the future have weaknesses and conditions that could
require correction or remediation, the disclosure of which may have an adverse impact on the price of our common stock. We are required
to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure
of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition
or results of operations. In addition, management’s assessment of internal controls over financial reporting may identify weaknesses
and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for
investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting
or disclosure of management’s assessment of our internal controls over financial reporting may have an adverse impact on the price
of our common stock.
We
are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 and if we fail to comply in a timely
manner, our business could be harmed and our stock price could decline.
Rules
adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require an annual assessment of internal controls over financial
reporting, and for certain issuers an attestation of this assessment by the issuer’s independent registered public accounting firm.
The standards that must be met for management to assess the internal controls over financial reporting as effective are evolving and
complex, and require significant documentation, testing, and possible remediation to meet the detailed standards. We expect to incur
significant expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long
it will take or how costly it will be to complete the assessment of the effectiveness of our internal control over financial reporting
for each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may not be able to
complete the assessment and remediation process on a timely basis. In addition, although attestation requirements by our independent
registered public accounting firm are not presently applicable to us, we could become subject to these requirements in the future and
we may encounter problems or delays in completing the implementation of any resulting changes to internal controls over financial reporting.
In the event that our principal executive and financial officer determines that our internal control over financial reporting is not
effective as defined under Section 404, we cannot predict how regulators will react or how the market prices of our shares will be affected;
however, we believe that there is a risk that investor confidence and share value may be negatively affected.
As
an issuer of “penny stock,” the protection provided by the federal securities laws relating to forward looking statements
does not apply to us.
Although
federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal
securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe
harbor protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement
of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not
misleading. Such an action could hurt our financial condition.
Our
issuance of Common Stock upon exercise of warrants or options may depress the price of our Common Stock.
As
of December 31, 2021, we had 34,360,546 shares of Common Stock issued and outstanding and outstanding warrants to purchase 11,108,079
shares of Common Stock. The issuance of shares of Common Stock upon exercise of outstanding warrants or options could result in substantial
dilution to our stockholders, which may have a negative effect on the price of our Common Stock.
Our
stock price may be volatile or may decline regardless of our operating performance, resulting in substantial losses for investors.
The
market price of our common stock may be highly volatile and may fluctuate substantially as a result of a variety of factors, some of
which are related in complex ways. The market price of our common stock may fluctuate significantly in response to numerous factors,
many of which are beyond our control, including the factors listed below and other factors describe in this “Risk Factors”
section:
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the
commencement, enrollment, or results of current and future preclinical studies and clinical trials and trials we may conduct, or
changes in the development status of our product candidates; |
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any
delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect
to the applicable regulatory authority’s review of such filings, including, without limitation, the issuance by the FDA of
a “refusal to file” letter or a request for additional information; |
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adverse
results or delays in clinical trials; |
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our
decision to initiate a preclinical study or clinical trial, not to initiate a preclinical study or clinical trial or to terminate
an existing preclinical study or clinical trial; |
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adverse
actions taken by regulatory agencies with respect to our preclinical studies or clinical trials, manufacturing supply chain or sales
and marketing activities, including failure to receive regulatory approval of our product candidates; |
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changes
in laws or regulations, including, but not limited to, preclinical study or clinical trial requirements for approvals; |
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any
adverse changes to our relationship with manufacturers or suppliers; |
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manufacturing,
supply or distribution shortages; |
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our
failure to commercialize our product candidates; |
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changes
in the structure of healthcare payment systems; |
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additions
or departures of key scientific or management personnel; |
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unanticipated
serious safety concerns related to the use of our product candidates; |
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disputes
or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection
for our technologies; |
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variations
in our results of operations; |
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our
cash position; |
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our
failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; |
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publication
of research reports about us or our industry, or in vivo and ex vivo cell engineering products in particular, or positive
or negative recommendations or withdrawal of research coverage by securities analysts; |
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announcements
made by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, or capital
commitments; |
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our
inability to establish collaborations, if needed; |
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our
ability to effectively manage our growth; |
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the
size and growth of our initial target markets; |
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changes
in the market valuations of similar companies; |
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press
reports, whether or not true, about our business; |
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sales
or perceived potential sales of our common stock by us or our stockholders in the future; |
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overall
fluctuations in the equity markets; |
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ineffectiveness
of our internal controls; |
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changes
in accounting practices or principles; |
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changes
or developments in the global regulatory environment; |
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litigation
involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; |
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general
political and economic conditions; and |
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other
events or factors, many of which are beyond our control. |
In
addition, the stock market in general and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors
may negatively affect the market price of our common stock, regardless of our actual operating performance. If the market price of our
common stock after this offering does not exceed the initial public offering price, you may not realize any return on, and may lose some
or all of, your investment.
Our
quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each
of which may cause our stock price to fluctuate or decline.
We
expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous
factors, including:
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timing
and variations in the level of expense related to the current or future development of our programs; |
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timing
and status of enrollment for our clinical trials; |
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impacts
from the COVID-19 pandemic on us or third parties with which we engage; |
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results
of clinical trials, or the addition or termination of clinical trials or funding support by us or potential future partners; |
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our
execution of any collaboration, licensing or similar arrangements, and the timing of payments we may make or receive under potential
future arrangements or the termination or modification of any such potential future arrangements; |
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any
intellectual property infringement, misappropriation or violation lawsuit or opposition, interference or cancellation proceeding
in which we may become involved; |
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additions
and departures of key personnel; |
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strategic
decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes
in business strategy; |
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if
any product candidate we may develop receive regulatory approval, the timing and terms of such approval and market acceptance and
demand for such product candidates; |
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the
timing and cost to establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain
marketing approval and intend to commercialize on our own or jointly with current or future collaborators; |
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regulatory
developments affecting current or future product candidates or those of our competitors; |
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the
amount of expense or gain associated with the change in value of the success payments and contingent consideration; and |
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changes
in general market and economic conditions. |
If
our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could
decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to
fluctuate substantially. We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not
be relied upon as an indication of our future performance.
If
we take advantage of specified reduced disclosure requirements applicable to a “smaller reporting company”, the information
that we provide to stockholders may be different than they might receive from other public companies.
As
a company with less than $100 million in revenue during our last fiscal year and a public float of less than $250 million, we qualify
as a “smaller reporting company”. As a smaller reporting company, we may take advantage of specified reduced disclosure and
other requirements that are otherwise applicable generally to public companies. These provisions include:
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Only
two years of audited financial statements in addition to any required unaudited interim financial
statements with correspondingly
reduced “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” disclosure; |
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Reduced
disclosure about our executive compensation arrangements; |
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Exemption
from the auditor attestation requirement in the assessment of our internal control over financial reporting. |
As
a result of our status as a “smaller reporting company,” the information that we provide stockholders may be different than
you might get from other public companies in which you hold stock.
We
could be subject to securities class action litigation.
In
the past, securities class action litigation has often been instituted against companies following periods of volatility in the market
price of a company’s securities. This type of litigation, if instituted, could result in substantial costs and a diversion of management’s
attention and resources, which would harm our business, operating results, or financial condition. Additionally, the dramatic increase
in the cost of directors’ and officers’ liability insurance may cause us to opt for lower overall policy limits or to forgo
insurance that we may otherwise rely on to cover significant defense costs, settlements, and damages awarded to plaintiffs.
Our
ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
Under
the Tax Cuts and Jobs Act of 2017, as modified by the Coronavirus Aid, Relief, and Economic Stability Act, or CARES Act, our federal
net operating losses, or NOLs, generated in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the
deductibility of such federal NOLs in tax years beginning after December 31, 2020, is limited to 80% of taxable income. It is uncertain
if and to what extent various states will conform to the Tax Cuts and Jobs Act of 2017, or the CARES Act. In addition. under Sections
382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally
defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period,
the corporation’s ability to use its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes
(such as research and development tax credits) to offset its post-change income or taxes may be limited. Shifts in our stock ownership
(some of which are outside our control). As a result, our ability to use our pre-change NOLs and tax credits to offset post-change taxable
income, if any, could be subject to limitations. Similar provisions of state tax law may also apply. In addition, at the state level,
there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state
taxes owed.