PepGen Inc

PepGen Inc. (also referred to as “PepGen,” “we,” “our” or “us”) is a clinical-stage biotechnology company advancing the next generation of oligonucleotide therapeutics with the goal of transforming the treatment of severe neuromuscular and neurologic diseases. Our proprietary Enhanced Delivery Oligonucleotide, or EDO, platform is founded on over a decade of research and development and leverages cell-penetrating peptides to improve the uptake and activity of conjugated oligonucleotide therapeutics. Our EDO peptides are engineered to optimize tissue penetration, cellular uptake and nuclear delivery, and in preclinical studies we have observed their ability to transport oligonucleotides into a broad range of target tissues, including smooth, skeletal, and cardiac muscle. We have demonstrated robust delivery and activity of oligonucleotides to skeletal muscle in a clinical trial. Furthermore, the high levels of pharmacological activity observed in preclinical and clinical studies support our belief that our EDO platform technology has the potential to deliver therapeutic agents to the nucleus of the target cells. Using these EDO peptides, we are generating a pipeline of oligonucleotide product candidates that target the root cause of serious diseases.

We are initially focused on addressing the underlying cause of Duchenne muscular dystrophy, or DMD, and myotonic dystrophy type 1, or DM1, that have high unmet need. Our current pipeline depicted below consists of two clinical stage programs - PGN-EDO51 for DMD patients who are amenable to exon 51-skipping and PGN-EDODM1 for DM1 patients, and three additional preclinical stage programs. We anticipate expanding this pipeline over time to include other neuromuscular targets as well as potential opportunities in neurologic diseases.

PGN-EDO51

We completed a first-in-human Phase 1 clinical trial in healthy volunteers, or HVs, with our lead product candidate, PGN-EDO51, in the third quarter of 2022. We are developing PGN-EDO51 to treat DMD patients whose mutations are amenable to an exon 51-skipping approach. In the Phase 1 clinical trial in HVs, treatment with PGN-EDO51 resulted in the highest levels of mean exon skipping in humans following a single dose compared to publicly available data for a single dose of other DMD exon 51-skipping approaches that are approved or in clinical development.

Our clinical development program for PGN-EDO51 comprises two parallel Phase 2 studies of PGN-EDO51 in DMD patients whose mutations are amenable to an exon 51-skipping approach. The first study, CONNECT1-EDO51, or CONNECT1, is an ongoing open-label, multiple ascending dose, or MAD, Phase 2 study in boys and young men living with DMD being conducted in Canada. We initiated dosing patients in CONNECT1 in January 2024 and have fully enrolled the first cohort at the 5 mg/kg PGN-EDO51 dose level. We anticipate initial proof-of-concept data, that would include safety, exon skipping and dystrophin production for this cohort in mid-2024.

In February 2024, we received clearance from the Medicines and Healthcare products Regulatory Agency, or MHRA, to initiate the second study, CONNECT2-EDO51, or CONNECT2, a Phase 2, multinational, randomized, double-blind, placebo-controlled MAD study. The results from the initial cohorts of the CONNECT1 study will inform the conduct of the CONNECT2 study, which is designed to support a potential accelerated approval pathway for PGN-EDO51, subject to alignment with regulatory authorities. Building on the high levels of exon skipping of PGN-EDO51 observed in our preclinical studies and Phase 1 trial in HVs, we believe that repeat dosing of PGN-EDO51 may lead to therapeutically relevant accumulation of DMDexon 51-skipped transcript and an associated increase in dystrophin protein in patients, which may in turn drive meaningful clinical benefit for those who live with this devastating, progressive, life-shortening disease.

PGN-EDODM1

We are also developing PGN-EDODM1 for the treatment of DM1 and are utilizing what we believe to be a unique mechanism of action and a different delivery approach compared to other approaches in more advanced stages of clinical development. The therapeutic oligonucleotide component of PGN-EDODM1 is engineered to bind to the pathogenic cytosine-uracil-guanine, or CUG repeat expansion present in the myotonic dystrophy protein kinase, or DMPK, messenger RNA, or mRNA, of DM1 patients, thus reducing the ability of these expanded trinucleotide repeats to bind and sequester RNA binding proteins including MBNL1, a critical RNA splicing factor. The liberation of MBNL1 in turn leads to the correction of downstream mis-splicing events that drive the pathology of DM1. We believe this approach, which is not designed to knock down or degrade DMPK transcript, has the potential to selectively and directly address the underlying genetic defect central to this disease. In a DM1 mouse model, the HSALR mouse, following single and repeat dosing of PGN-EDODM1 every four weeks, we demonstrated robust correction of mis-splicing and resolution of myotonia.

These preclinical data with PGN-EDODM1 form the basis of our clinical development plan for PGN-EDODM1. In May 2023, we announced that we received a clinical hold notice from the U.S. Food and Drug Administration, or FDA, regarding our investigational new drug, or IND, application to initiate our first in-human Phase 1 FREEDOM-DM1, or FREEDOM, study in DMI patients. In September 2023, we announced that Health Canada had cleared our Clinical Trial Application, or CTA, for the FREEDOM study in Canada. In October 2023, we announced that the FDA lifted the clinical hold on the FREEDOM study, allowing this study to proceed in the U.S. In December 2023, we announced that the MHRA had cleared our CTA for the FREEDOM study in the United Kingdon, or the U.K. FREEDOM is a multinational, randomized, double-blind, placebo-controlled, single ascending dose, or SAD, study, designed to assess PGN-EDODM1's safety, splicing correction, and functional outcome measures in DM1 patients. We expect to report preliminary data from this study in the second half of 2024. In February 2024, we announced that PGN-EDODM1 received Fast Track designation from the FDA for the treatment of DM1. We also expect to open the FREEDOM2-DM1 Phase 2 randomized, double blind, placebo-controlled MAD study in DM1 patients in the second half of 2024.

Additional Development Programs

In addition to these lead clinical stage programs, we are developing EDO candidates for additional DMD sub-populations amenable to skipping of other exons, including exon 53, 45 and 44. We have previously reported robust exon 53-skipping levels following either a single dose or multiple doses in non-human primates, or NHPs, for our PGN-EDO53 program. We anticipate advancing PGN-EDO53, our DMD exon 53-skipping candidate, into CTA and/or IND-enabling preclinical studies in 2024. We have also initiated research efforts for additional indications, including neuromuscular diseases and neurologic disorders.

Our EDO Platform

Background on Oligonucleotide Therapeutics

Oligonucleotide therapeutics consist of small single or double stranded segments of deoxyribonucleic acid, or DNA, or ribonucleic acid, or RNA, molecules that are made up of nucleotides that bind to their targets via complementary Watson-Crick base pairing thereby modulating the expression of their target DNA or RNA sequence, thereby addressing the root cause of many diseases. Upon binding to their target sequence, oligonucleotides can modulate function through the modulation of RNA expression and processing. The mechanisms of action of these medicines include interference with gene expression; degradation of toxic RNA species; alteration of gene translation; interference with interactions between RNA and other nucleic acids or proteins; endogenous human adenosine deaminase acting on RNA, or ADAR; site-directed RNA editing; and modulation of the splicing of transcripts. Each of these approaches can lead to profound biological effects. The development of oligonucleotide therapeutics has enabled the targeting of a diverse set of diseases that have proven difficult to treat through other approaches due to their high degree of specificity to target pathogenic mutations, which is otherwise difficult using conventional drugs.

Oligonucleotide therapeutics have demonstrated clinical benefit and been approved for the treatment of multiple diseases, such as spinal muscular atrophy, DMD, familial hypercholesterolemia and hereditary transthyretin-mediated amyloidosis. These approved drugs span two classes – ASOs, which are short, synthetic, single-stranded oligonucleotides, and small interfering RNAs, or siRNAs, which are double-stranded oligonucleotides. ASOs and siRNAs both bind their target mRNAs or pre-mRNAs but differ in their respective modes of action. ASOs are designed to either (i) degrade target RNA species through an RNAse-H-mediated process, or (ii) modulate RNA-RNA and/or RNA-protein interactions through a steric blocking mechanism. In contrast, siRNAs are designed to silence or knockdown a particular mRNA through the RNA interference, or RNAi, pathway.

ASOs are typically synthetic molecules that may contain modified nucleotide bases, sugars and phosphate linkages designed to overcome the historical limitations of unmodified oligonucleotides, including instability, immunogenicity and a poor pharmacological profile. Many approved oligonucleotides incorporate a modified oligonucleotide backbone in which the phosphate and ribose sugars are replaced by phosphorodiamidate morpholino groups, or PMOs. The resulting PMOs are resistant to multiple hydrolases in serum, while their uncharged nature ensures that they do not interact strongly with proteins in a nonspecific way. PMOs have shown promising results in early-stage preclinical studies and have become marketed products for the treatment of a host of diseases. For example, EXONDYS 51®(eteplirsen), marketed by Sarepta Therapeutics, Inc., or Sarepta, is a PMO that was approved in 2016 for individuals with DMD who are amenable to exon 51-skipping but has left much room for improvement given its relatively low tissue and cell penetration and minimal induction of dystrophin production.

The Challenge of Oligonucleotide Delivery

In order for oligonucleotide therapeutics to exert their intended effect, they must first gain access to the nucleus where mRNAs are synthesized and processed. Historically, the delivery of oligonucleotides to the interior of the cell proved challenging due to their high molecular weight and the lack of a specific mechanism to facilitate their transport across the cell membrane and escape the endosome to enter the cytoplasm and nucleus. Several methods have been developed to increase the cellular uptake of oligonucleotides, the most clinically advanced of which is the covalent attachment of cell-penetrating peptides, or CPPs. CPPs are designed to facilitate the transport of oligonucleotides across the plasma membrane, thus allowing these cargo species to reach their eventual site of action in the nucleus. We believe that these capabilities are critical in enabling oligonucleotides to exert their intended therapeutic effect within the cell. Early research into CPPs showed that simple peptides consisting primarily of multiple arginine residues could increase the cellular uptake of oligonucleotides and increase their activity in modulating RNA splicing. However, a considerable number of these early CPPs were found to be highly toxic in animal models, and in many instances, there existed a direct correlation between toxicity and activity, which limited the clinical translation and development of these first-generation delivery vectors.

Our Approach: A Solution for the Oligonucleotide Delivery Challenge

Our EDO platform is based on novel CPP technology. We engineered our proprietary EDO technology to optimize tissue penetration, cellular uptake and nuclear delivery, which we believe may enhance therapeutic activity and improve the tolerability of oligonucleotide therapeutics. This technology is founded on over a decade of research and development conducted in the academic laboratories of our founders Michael Gait, Ph.D. at the Medical Research Council Laboratory of Molecular Biology in Cambridge, United Kingdom, or MRC, and Professor Matthew Wood, M.D., Ph.D. at the University of Oxford, United Kingdom. Drs. Gait and Wood developed a new generation of CPPs focused on oligonucleotide delivery, and optimized these peptides for tissue penetration, cellular uptake and nuclear delivery, along with improved tolerability in animal models.

Our EDO platform peptides possess the following key structural characteristics:

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Two positively charged, arginine-rich regions, one at the N-terminus and the other at the C-terminus interspersed with non-natural amino acids to confer greater peptide stability;

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A central core rich in hydrophobic residues that separates the arginine-rich regions and contributes to endosomal escape​; and

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A linear peptide sequence with a length of less than 20 amino acids designed to be non-immunogenic​.

Our EDO peptides were developed through an iterative optimization process that selected simultaneously for: biodistribution to key muscle targets, including cardiac tissue; high cellular uptake; endosomal escape, where the therapeutic agent is released from the endosomes, a sub-cellular organelle, in a functional form and delivered to the cell nucleus; and acceptable tolerability. We utilize PMOs in our approach, and these therapeutic cargos are conjugated to one of our optimized, proprietary, novel EDO peptides to generate our lead EDO product candidates - peptide conjugated PMOs, or PPMOs. We intend to continue to build and develop this platform technology to enable us to expand into new therapeutic areas.

We believe that our therapeutic candidates may offer the following advantages with the goal of enabling the safe and efficient delivery of oligonucleotide cargos:

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Enhanced delivery to skeletal muscle, diaphragm and cardiac muscle. We have observed in preclinical and clinical studies that our peptides delivered their cargo oligonucleotide therapeutics to different muscle tissues, allowing us to address multiple disease pathologies in multi-systemic indications such as DMD and DM1. This differentiating feature of our EDO platform has been observed in mice and NHPs across multiple tissue types, including those critical to neuromuscular indications – skeletal, smooth and cardiac muscle. Furthermore, we believe our EDO peptides support the ability to promote endosomal escape and facilitate the robust delivery of cargo oligonucleotides to the cell nucleus. We have now shown inin vitro and in NHP models that the EDO technology can mediate higher uptake of oligonucleotide in the nucleus.

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In vitro, EDO peptide conjugated to a PMO (EDO23) resulted in up to 25-fold higher cellular uptake and nuclear delivery of oligonucleotide into myotubes compared to naked PMO.

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In NHPs, EDO peptide conjugated to a PMO (PMO51) led to high levels of oligonucleotide in the muscle nuclei.

In murine myotubes, EDO23 resulted in up to 25-fold higher uptake of EDO23 compared to naked PMO23. In vitro staining image with 10µM conc. of EDO or naked PMO; green= actin, red= EDO or naked PMO and blue= nuclei.

In NHPs, IV dosing of EDO conjugated to PMO51 resulted in 72% of muscle cells with uptake of PMO in the nuclei. RNAScope was performed; red=PMO and blue (DAPI)=nuclei. Cells with PMO signal were quantified; n=3 (± SD)

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Improved activity in skeletal muscle and tolerable safety profile was observed in a Phase 1 clinical study, in NHPs and inmdx mice, with robust levels of activity observed in skeletal and other muscle types.

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In our Phase 1 clinical study of PGN-EDO51 in HVs, we observed the highest levels of mean exon skipping in humans following a single dose when compared to publicly available single dose data for other DMD exon 51-skipping approaches.

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In NHPs, a dose of 30 mg/kg of PGN-EDO51 achieved over 70% exon 51 skipping in skeletal muscle, including diaphragm, which we believe is the highest level of exon 51 skipping reported for any approved therapeutic or known development candidate at tolerable target dose levels based on cross-trial comparison of publicly available data.

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Inmdx mice, we observed the highest level of dystrophin production following a single dose when compared to “murine analogues” of other clinical-stage DMD therapeutic candidates.

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Enhanced balance between activity and tolerability, which is designed to afford our platform a wider therapeutic index. Our delivery peptides have been specifically engineered to achieve a wider therapeutic index, and we have observed robust activity and an improved tolerability profile in NHPs and humans when compared to data published on previous CPPs.

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In a Phase 1 clinical study in HVs, PGN-EDO51, our lead EDO candidate, was found to be generally well-tolerated at therapeutically relevant dose levels. We believe this characteristic is a promising step-change over the narrow therapeutic index observed for previous generations of CPPs.

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Robust, scalable and cost-efficient manufacturing that does not require cell-based processes. We have developed a modular manufacturing process that is highly scalable, easily characterizable, and utilizes readily available building blocks. This process is fully synthetic in nature and does not rely on microbial fermentation, thus substantially reducing the risk of introducing microbial DNA or protein into our product candidates.

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Accelerated and efficient development of pipeline therapeutic candidates enabled by use of a single EDO peptide across all our initial programs. We currently utilize the same EDO delivery peptide across all of our programs. We intend to apply our knowledge and learnings from our current lead programs in order to efficiently pursue our future programs, and we will additionally aim to take advantage of economies of scale in our manufacturing processes.

Comparison with Other Oligonucleotide Delivery Technologies in Development

Other CPP-PMO or PPMO Approaches

There are a number of other peptide-mediated approaches that are currently being developed for the delivery of oligonucleotide therapeutics. Of these, we have, through an extensive review of publicly available presentations and patent applications, hypothesized that the most clinically advanced peptide-based delivery approach for oligonucleotides utilizes the cell-penetrating properties of a hexa-arginine sequence with an additional glycine residue. We refer to this CPP as R 6 G herein and have conducted extensive head-to-head preclinical studies to compare the biodistribution and activity of our model of this moiety with our novel EDO peptides.

We have observed robustin vivo activity of our EDO technology in a number of animal models, with this activity being significantly higher when compared to our model of the competing R 6 G approach. In one such study, we compared our EDO-conjugated PMO to an R 6 G peptide which we believe is structurally equivalent to the peptide component of SRP-5051, conjugated to the same murine exon 23-skipping PMO. SRP-5051 is the most clinically advanced peptide-ASO conjugate in development by Sarepta. In this single dose study, we administered 10 mg/kg of PGN-EDO23 or R 6 G-PMO23 to wild type, or WT mice, intravenously followed by tissue collection one week after dosing. In the biceps, PGN-EDO23 resulted in 51.7% exon skipping versus 0.46% exon skipping with R 6 G-PMO23 as assessed by RT-PCR, demonstrating that PGN-EDO23 is more potent than R 6 G-PMO23. In line with high levels of exon skipping in biceps, we observed 62.5% exon skipping in quadriceps with PGN-EDO23 versus 2.0% exon skipping with R 6 G-PMO23.

Robust exon skipping was observed with single dose of PGN-EDO23 compared to R 6 G-PMO23 in WT mice. Graph plotted as mean ± SD; n = 5 for each group.

Our EDO technology has shown enhanced delivery of PMO to additional tissues that remain challenging to penetrate with existing technologies. In a repeat-dose preclinical study in WTmice, three 30 mg/kg intravenous doses of our EDO conjugate every two weeks resulted in exon skipping levels in the heart that were 7-fold higher than those of the R 6 G conjugate, when measured by RT-PCR seven days after the last dose. We believe the higher level of exon skipping achieved in this study supports the ability of our EDO technology to successfully deliver oligonucleotides to cardiac tissue furthering the potential of EDO technology to address cardio-respiratory failure, the primary cause of death in DMD patients.

Multiple doses of PGN-EDO23 in WTmice led to increased exon skipping in heart compared to R 6 G-PMO23. Graphs plotted as mean ± SEM; **** denotes extremely significant, p < 0.0001; n = 5 per group for single dose activity, n = 8 per group for repeat dose activity.

Antibody-oligonucleotide Approaches

In addition to the CPP-PMO approaches described above, a number of groups are developing antibody-oligonucleotide conjugates with the aim of enhancing the delivery and activity of their cargo therapeutics. These groups utilize both antigen-binding fragments, or Fabs, and monoclonal antibodies, or mAbs, as delivery vectors, to target specific cell surface receptors. We believe our EDO platform offers significant potential benefits over such approaches, including:

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More efficient tissue penetration due to the small size of our EDO delivery peptides relative to a mAb or Fab;

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Superior nuclear delivery with the combination of poly-Arg sequences and hydrophobic core;

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Limited immunogenicity or risk of complement activation due to the considerably lower protein load associated with our EDO peptides; and

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A scalable, facile, fully-synthetic manufacturing process with no cell-based steps that is supported by a readily-characterizable drug product.

We believe these benefits support further development and clinical translation of our suite of EDO product candidates and underpin the potential for our robust competitive position in the neuromuscular and neurologic disease space.

Our Strategy

Our goal is to become a leading biopharmaceutical company focused on the development and commercialization of oligonucleotide therapies to transform the lives of patients with severe neuromuscular and neurologic diseases. We aim to accomplish this goal by implementing the following strategies:

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Advance our lead product candidate, PGN-EDO51, through clinical trials and potential regulatory approval. We are developing PGN-EDO51, an EDO peptide conjugated to a PMO therapeutic cargo to treat DMD patients whose mutations are amenable to an exon 51-skipping approach. There is no cure for DMD and approved exon-skipping therapies or advanced stage exon-skipping investigational candidates for patients who are amenable to exon 51 skipping are thought to have limited impact on disease progression due to low levels (<5%) of dystrophin production. In a Phase 1 clinical trial of PGN-EDO51 in HVs, we observed the highest levels of mean exon skipping in humans following a single dose when compared to publicly available single dose data for other exon 51-skipping approaches. We began dosing patients in a Phase 2 clinical trial in January 2024 and have completed enrollment of the first cohort at the 5 mg/kg dose.

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Advance PGN-EDODM1 through clinical trials and potential regulatory approval. We are developing PGN-EDODM1 (which utilizes the same EDO peptide as PGN-EDO51) conjugated to a PMO therapeutic cargo to treat DM1 patients and have observed robust pharmacological activity in preclinical models with both long and short cytosine-thymine-guanine, or

CTG repeats. We began dosing patients in a Phase 1 clinical trial in December 2023 and announced Fast Track Designation for PGN-EDODM1 in February 2024.

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Advance and expand our pipeline of oligonucleotide therapeutic candidates for the treatment of additional DMD patient populations. We are expanding our portfolio by pursuing additional programs where our EDO technology could address areas of unmet need. We are employing the same EDO technology used in PGN-EDO51 and PGN-EDODM1 for PGN-EDO53, our exon-skipping product candidate for the treatment of individuals with DMD whose mutations are amenable to treatment with an exon 53-skipping approach. We have observed high levels of exon skipping in NHPs for PGN-EDO53 and we plan to progress this program into IND/CTA enabling studies in 2024.

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Leverage the full potential of our EDO technology to expand into other neuromuscular and neurological disease areas. Given the potential of the EDO technology to efficiently deliver nucleic acid payloads such as PMOs to skeletal muscle, cardiac tissue and diaphragm, we are looking to develop disease-modifying peptide-conjugated oligonucleotide candidates for the potential treatment of other neuromuscular and neurological indications.

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Utilize the modular nature of our EDO platform to evaluate new cargos and peptide technologies. We believe that our EDO technology has the potential to facilitate the delivery of multiple classes of nucleic acid payloads, including other oligonucleotide therapeutics, and we intend to expand the scope of the cargos that can be delivered by our EDO platform as part of our ongoing platform development work.

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Maximize the value of our pipeline and our EDO platform by selectively exploring strategic collaborations. We have a disciplined strategy to maximize the value of our pipeline and currently have worldwide development and commercial rights to all of our product candidates. Given the potential of our EDO platform, we may opportunistically enter into strategic collaborations around certain geographies, targets or programs. We may seek to build such relationships where we believe the resources and expertise of a third-party pharmaceutical or biotechnology company could be beneficial to the development or commercialization of our product candidates or to the expansion of our platform capabilities.

Our Portfolio

We are harnessing the power of our EDO platform to generate a pipeline of oligonucleotide therapeutic candidates. Our EDO conjugates have been engineered to successfully target the root cause of serious diseases while maintaining a tolerability profile that is acceptable for clinical use. We are initially focused on addressing neuromuscular indications and are building a portfolio of therapeutic candidates to address the underlying genetic mutations found in DMD and DM1, with our current pipeline being comprised of five programs, two clinical and three preclinical.

In the future, we anticipate expanding this pipeline to include other neuromuscular targets, along with potential opportunities in neurologic indications, and we will seek to leverage the modular, scalable nature of our EDO technology to support our expansion into these new therapeutic areas. We have worldwide development and commercialization rights to all our programs.

PGN-EDO51

Our initial product candidate is PGN-EDO51, an EDO peptide conjugated to a PMO, that we are developing for the treatment of DMD patients with mutations amenable to an exon 51-skipping approach. An exon is a segment of a gene that, together with other exons, contains the genetic code that is translated into a protein. Exon skipping is a therapeutic mechanism that enables mutations in the gene to be bypassed, thereby repairing this code or reading frame and enabling production of a truncated, yet functional version of the target protein. PGN-EDO51 is designed to splice out exon 51 and potentially additional exons depending on the mutation of the dystrophin pre-mRNA, resulting in the restoration of the open reading frame of the dystrophin transcript and production of an internally deleted, yet functional dystrophin protein. In a Phase 1 clinical trial of PGN-EDO51 in HVs, we observed the highest levels of mean exon skipping in humans following a single dose in a cross-trial comparison with publicly available Phase 1 HV data following a single dose of vesleteplirsen (SRP-5051 or R 6 G conjugated exon 51 PMO) and eteplirsen. In NHP studies, at tolerable doses, we have observed what we believe is the highest rate of exon 51 skipping in skeletal muscles, including diaphragm, based on cross-trial comparisons with publicly available data for any approved therapeutic or known developmental candidate for the exon-51 skipping amenable DMD patient population. Furthermore, in head-to-head studies conducted in NHPs, we found that PGN-EDO51 had greater activity than R 6 G-PMO at the same dose level, a comparator compound which we believe to be structurally equivalent to Sarepta’s SRP-5051, the most clinically advanced PPMO. Our Phase 1 clinical trial also indicated that PGN-EDO51 was generally well-tolerated at pharmacologically relevant dose levels. We opened CONNECT1, an open-label MAD study in DMD patients amenable to an exon 51-skipping approach in Canada and began dosing patients in January 2024. We have fully enrolled the 5 mg/kg dose cohort and expect to report preliminary safety, exon skipping and dystrophin production data from this cohort in mid-2024. In February 2024, we received clearance from the MHRA to initiate CONNECT2 in the U.K. CONNECT2 is a multinational, randomized, placebo-controlled MAD clinical trial designed to potentially support a future accelerated approval pathway, subject to alignment with regulatory authorities.

Disease Background and Prevalence

DMD is a debilitating X-linked recessive, progressive, muscle-wasting disease that predominantly affects boys. It is one of the most prevalent rare genetic diseases globally, with an incidence of up to 1 in 3,500 to 5,000 live male births, and it is invariably fatal by young adulthood. There are up to 15,000 DMD patients in the U.S., approximately 25,000 DMD patients in Europe and approximately 5,000 in Japan. DMD is caused by mutations in the gene encoding dystrophin, a protein necessary for normal muscle function. The primary role of dystrophin is as a shock absorber, and this protein allows muscle cells to retain their structural integrity while under mechanical stress. In the absence of dystrophin, muscle fibers are no longer protected from the mechanical forces of contraction, which leads to cell death, fibrotic tissue formation and muscle degeneration resulting in loss of ambulation.

Early symptoms of disease include difficulty walking or jumping, loss of balance, and increased fatigue when compared to healthy peers. By their mid-teenage years, most DMD patients will need to use a wheelchair on a regular basis. As the disease progresses, life-threatening heart and respiratory conditions become common. Dilated cardiomyopathy – a condition where the cardiac muscle becomes weakened and the chambers of the heart are enlarged – often arises, and heart failure is a leading cause of death in DMD patients. Pulmonary function also becomes progressively impaired as the dystrophic process affects respiratory muscles, including the diaphragm, leading to significant morbidity and mortality. DMD patients ultimately succumb to cardiac and respiratory failure in early adulthood, with a mean lifespan of approximately 25 years. Therefore, the restoration of dystrophin is a compelling therapeutic strategy, and a number of therapeutic modalities have been explored with this goal in mind. However, the nature of the DMDgene, the range of mutations implicated in DMD, and the large size of the dystrophin protein itself provide considerable obstacles to this approach.

The DMD gene, at 2.1 million base pairs and 79 exons, is one of the largest in the human genome. Over 6,000 mutations are known, and the gene has a relatively high natural mutation rate, with approximately 1 in 3 DMD cases arising due to ade novo mutation. There is no one mutation that is highly prevalent, and this factor provides a considerable challenge for therapeutics looking to target the root genetic cause of this debilitating disease.

That said, mutations in the dystrophin gene are not random, with hotspots of mutations existing between exons 45-53 and to a lesser extent between exons 2-20. It is thought that 13% of patients with DMD have mutations that are amenable to treatment with an exon 51-skipping approach, and thus the estimated exon 51 patient population is approximately 2,000 in the U.S., 3,200 in Europe and 700 in Japan.

Breakdown of DMD population by amenability to treatment with exon skipping therapeutics.

Current Approaches and Unmet Needs

There is no cure for DMD and approved exon-skipping therapies or advanced stage exon-skipping investigational candidates for patients who are amenable to exon 51 skipping are thought to have limited impact on disease progression due to low levels (<5%) of dystrophin production. Corticosteroids are the mainstay of pharmacologic treatment for DMD as they have been shown to temporarily improve muscle strength, prolong the period of ambulation and slow the progression of this disease. However, glucocorticoid use is associated with well-known adverse effects, such as weight gain, stunted growth, weakening of bone structure, high blood pressure, diabetes, psychological effects, skin thinning and an increased risk of infection.

Several approaches have been taken to address groups of mutations in the dystrophin gene, one of which is to alter the processing of the dystrophin mRNA. A number of DMD patients suffer from mutations that result in the disruption of the reading frame of the DMD transcript, which in turn leads to an absence of the dystrophin protein. Using an ASO, the mRNA splicing process in the nucleus can be altered to skip over a select exon, allowing the open reading frame to be restored. This exon skipping approach results in the subsequent generation of dystrophin protein isoform which, although internally deleted, retains much of its function and can thus protect muscle tissue against further contraction-induced damage.

Several unconjugated, or “naked” ASOs have been approved to treat DMD, including eteplirsen, marketed as EXONDYS 51 by Sarepta for the treatment of mutations amenable to an exon 51-skipping approach. This drug received accelerated approval from the FDA on the basis of an increase of less than 1% in the expression of dystrophin, with this readout being considered a valid surrogate endpoint under the accelerated approval regulatory pathway. Published observational studies of small numbers of patients on EXONDYS 51 appear to show somewhat slower disease progression than historical controls. However, at this level of dystrophin, this therapeutic has yet to formally establish evidence of clinical benefit through rigorously powered and adequately controlled clinical trials with functional endpoints. EXONDYS 51 has not been approved in Europe, or in Japan on the basis of this minimal degree of dystrophin restoration as a surrogate endpoint.

In addition, several companies are developing gene therapies to treat DMD, including Pfizer Inc. (PF-06939926), which is currently being assessed in a Phase 3 clinical trial, Sarepta (SRP-9001 and Galgt2 gene therapy program), the former of which was approved by the FDA in June 2023 for treatment of ambulatory pediatric patients aged 4 through 5 years with DMD with a confirmed mutation in the DMD gene and is marketed as ELEVIDYS. Sarepta has recently filed an efficacy supplement to its biologics license application, or BLA, to expand the indication for ELEVIDYS to encompass “treatment of DMD patients with a confirmed mutation in the DMD gene.” The FDA accepted the filing of the efficacy supplement and has given the application priority review with a review goal date of June 21, 2024. There are additional investigational gene therapy programs in different stages of development to treat DMD. It is important to note that adeno-associated virus, or AAV-based gene replacement approaches deliver a significantly truncated dystrophin (micro-dystrophin) which we believe has the potential to limit the therapeutic efficacy of the approved and clinical stage AAV-based pipeline candidates. In addition, there are gene editing treatments that are in preclinical development. Exon skipping does not face some of the inherent challenges associated with gene therapy modalities, including:

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Limited packaging size of AAV vectors, resulting in the need to employ truncated ‘micro-dystrophin’ genes with an unclear functional benefit, where >70% of the dystrophin gene is omitted, including regions that correspond to key structural and binding domains;

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Increased safety concerns with high-dose AAV-based gene therapies (e.g. complement activation);

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Immunogenicity of AAV, resulting in:

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Up to half of all patients possessing antibodies against the most commonly used recombinant AAV vector serotypes, precluding their eligibility for treatment;

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Production of anti-AAV antibodies in treated patients, resulting in an inability to re-dose; and

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Loss of gene copies over time as patients mature and their cells divide, reducing the durability of therapeutic effect;

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Complexity and challenges inherent to manufacturing of AAV-based therapies.

We are also aware of several companies targeting non-dystrophin mechanisms for the treatment of DMD, including Edgewise Therapeutics, Inc., or Edgewise, with EDG-5506, a muscle stabilizer that is currently in clinical development.

We believe that an exon skipping approach aimed at producing functional, truncated dystrophin will be a cornerstone approach to effectively treat patients with DMD.

Our Approach

We are developing a portfolio of product candidates for the treatment of DMD in which exon skipping PMOs are conjugated to our EDO peptide in order to enhance their delivery to muscle cells. Our initial product candidate is PGN-EDO51, an investigational EDO peptide-conjugated exon 51-skipping ASO with a proposed mechanism of action we believe to be identical to that of eteplirsen.

PGN-EDO51 is designed to facilitate the skipping of exon 51, allowing the synthesis of a shortened, but functional, dystrophin.

The key differentiator between PGN-EDO51 and other exon 51-skipping approaches is the greater exon skipping activity observed with PGN-EDO51 in HVs and in preclinical models. We believe the higher levels of exon skipping observed with PGN-EDO51 in HVs and in NHPs when compared to publicly available data and head-to-head data, respectively, from other therapies is directly related to the potential of our EDO platform to drive tissue penetration, cellular uptake and nuclear delivery of the PMO cargo therapeutic resulting in exon skipping of the defective dystrophin mRNA.

Our Preclinical Data

We have evaluated the pharmacology of PGN-EDO51 in a number ofin vitro andin vivo preclinical studies and have observed robust activity in every model system evaluated. In DMD patient cells, treatment with PGN-EDO51 resulted in high levels of exon 51 skipping and dystrophin production.

In themdx mouse, a well-characterized model of DMD, PGN-EDO23, a murine analogue of PGN-EDO51, resulted in high levels of exon skipping and dystrophin production. In the skeletal muscle, a single dose of PGN-EDO23 at 60 mg/kg resulted in 86.3% to 93.1% exon skipping and 90.4% to 99.7% dystrophin restoration. In the diaphragm, this dosing regimen afforded an exon skipping rate of 76.6% and dystrophin restoration levels of 80.6%, while in the heart it resulted in 62.3% exon skipping and 25.7% dystrophin restoration.

Robust dose-dependent increase in exon skipping and dystrophin protein production was observed following a single dose of PGN-EDO23 inmdx mice. Graphs plotted as mean ± SD. Dystrophin protein results are expressed as a percentage of WT dystrophin.

In accordance with the pharmacology, we observed significant reduction in creatine kinase, or CK, which is a critical biomarker of muscle damage, with this enzyme being elevated in DMD patients from birth. In the absence of dystrophin, the structural integrity of the sarcolemma, or muscle cell membrane, is disrupted, leading to the release of CK into the blood. Following intravenous administration of a single, generally well-tolerated dose of 30 mg/kg or 60 mg/kg of PGN-EDO23, we observed normalization of serum CK to WT levels inmdx mice seven days post-dose. The normalization of CK levels observed in this study suggest that PGN-EDO23 may restore muscle cell integrity and prevent further damage inmdx mice under a single dose regimen, and we believe that this outcome supports the potential therapeutic utility of PGN-EDO51 in the treatment of DMD patients.

A single dose of PGN-EDO23, the murine analogue of PGN-EDO51, was observed to normalize creatine kinase, a marker of muscle damage inmdx mice. Graph plotted as mean ± SEM; **** = p ≤ 0.0001, ns = p ≥ 0.05; n = 3 for control groups, n = 5 for treated group.

We subsequently conducted a repeat-dose study where we dosedmdx mice with 30 mg/kg of PGN-EDO23 every four weeks, with up to four doses, with tissue collection and analysis four weeks following the final dose. In the biceps, the level of exon skipping was observed to be 91.5% after four doses when measured by RT-PCR, a value that was 1.7 times higher than that observed following a single dose (52.5%). Dystrophin production was measured by western blot and was observed to reach a level of 82.2% in the same tissue after four doses in comparison to a level of 22.5% obtained after a single dose. We believe this marked increase of 3.7 times between the level of dystrophin obtained following one dose, and the level obtained following four doses supports the clinical potential of a once-every-four-week dosing regimen for PGN-EDO51 and serves to highlight our belief that dystrophin production is likely to increase with subsequent doses in DMD patients.

Robust exon skipping and dystrophin restoration was observed with repeat dosing of PGN-EDO23 inmdx mice. Graph plotted as mean ± SD; n = 4-5 for each group; grey band represents dystrophin LLOQ (2.5%).

In addition, in this repeat dosing study inmdx mice, dystrophin protein localization and the percent dystrophin positive fibers, or PDPF, were evaluated by immunofluorescence microscopy. Importantly, this orthogonal assessment of dystrophin demonstrated that dystrophin protein was uniformly distributed across the skeletal muscle sarcolemma and found 97.1% of biceps muscle fibers were dystrophin positive following four doses of PGN-EDO23 administered once every four weeks, which was close to WT dystrophin levels (>99%).

Dystrophin levels and distribution in skeletal muscle with repeat dosing of PGN-EDO23 inmdx mice. Dystrophin protein evaluation by western blot and immunofluorescence (IF). Graph is presented as mean ± SD; n = 4-5 per cohort; grey band is dystrophin LLOQ (2.5%).

We have also conducted a number of studies in NHPs and have observed the robustin vivo activity of PGN-EDO51 in this higher order animal model. There is complete homology of the oligonucleotide binding site between the DMD gene in humans and the

DMD gene in NHPs for an exon 51-skipping therapeutic, thus allowing the activity of our clinical candidate to be assessed in this species.

We observed that seven days following a single dose of PGN-EDO51 in NHPs, high rates of exon 51 skipping were observed in the tibialis anterior, or TA, diaphragm and heart. In the TA, diaphragm and heart, exon skipping levels of 57.6%, 70.7% and 18.6%, respectively, were observed by RT-PCR following single doses of 20mg/kg.

Single doses of PGN-EDO51 led to high rates of exon 51 skipping in a preclinical NHP study. Graph plotted as mean ± SEM; n = 2 per group.

In order to benchmark the ability of our lead EDO peptide to improve the tissue penetration, cellular uptake and nuclear delivery of oligonucleotide therapeutics, we carried out a study comparing our EDO-conjugated PMO to an R 6 G peptide conjugated to the same PMO. We have conducted a considerable number of benchmarking studies of PGN-EDO51 against this conjugate, and we believe, based on publicly available information, that R 6 G-PMO is structurally equivalent to SRP-5051, Sarepta’s CPP-PMO product candidate that is currently in clinical development for the treatment of DMD patients who are amenable to an exon 51-skipping approach. In this preclinical study, NHPs were dosed intravenously with either PGN-EDO51, R 6 G-PMO or a saline control three times with an interval of two weeks between doses. Biopsies of the biceps and quadriceps were collected seven days after the first and second dose, and tissues were harvested seven days after the final dose.

Through RT-PCR analysis of key skeletal muscles collected by biopsy seven days after the first dose, we observed markedly higher exon skipping levels for PGN-EDO51 when compared to R 6 G-PMO. At 30 mg/kg, a single dose of PGN-EDO51 afforded an exon 51-skipping level of 43.6% in the biceps, which was eight times higher than the level of 5.5% observed for R 6 G-PMO. In the quadriceps, this differential was 10 times, with 44.9% exon 51 skipping observed for PGN-EDO51, and just 4.5% for R 6 G-PMO.

Single dose administration of PGN-EDO51 in NHPs yielded considerably higher exon skipping levels than R 6 G-PMO. Graph plotted as mean ± SD; n = 3 per group; study was not powered for statistical significance.

Following three bi-weekly doses of 30 mg/kg, we observed robust exon skipping activity for PGN-EDO51, with levels of greater than 70% obtained in key skeletal muscles following analysis by RT-PCR seven days after the final dose. In biceps, an exon 51 skipping level of 77.5% was obtained; and in quadriceps, 73.4%. We observed exon 51 skipping levels of over 20% in the left ventricle for PGN-EDO51, and 75.9% in the diaphragm, and we believe that these results highlight the potential of our lead candidate to address the key cardio-respiratory morbidities affecting multiple organs observed in DMD.

Repeat dose administration of PGN-EDO51 in NHPs yielded high exon skipping rates in the key skeletal muscles, including the diaphragm, and in the cardiac left ventricle. Graph plotted as mean ± SD; n = 3 per group; study was not powered for statistical significance.

In order to understand the potential accumulation of exon 51-skipped transcripts under a four-weekly, or Q4W, repeat dose regimen, we assessed NHP tissue samples of the biceps collected seven days following a single administration of PGN-EDO51, and compared these with samples of the biceps collected seven days following four administrations of PGN-EDO51 once every four weeks. The levels of exon 51 skipping of the DMD transcript were assayed via a droplet digital PCR, or ddPCR, protocol. The results obtained showed a robust accumulation in the levels of the exon 51-skipped transcript between one dose and four doses. Following four doses of 20 and 30 mg/kg, exon 51 skipping levels were 34.9% and 37.6%, respectively, which were 14 times and 3.4 times higher than for a single dose. We believe this accumulative effect suggests that the activity of PGN-EDO51 is likely to increase with chronic dosing in DMD patients, which we believe further supports the clinical potential of our lead candidate in this devastating disease. Our ongoing CONNECT1 study will determine the level of exon skipping and dystrophin production in biceps in DMD patients following four monthly doses of PGN-EDO51.

Exon skipped transcripts in the biceps accumulated under a preclinical repeat-dose regimen of PGN-EDO51 when assessed by ddPCR. Graph plotted as mean ± SD; n = 3-8 per group; study was not powered for statistical significance.

In conclusion, we demonstrated 14 times higher levels of exon 51 skipping in NHPs following four doses of PGN-EDO51 compared to a single dose. This 14-fold increase in exon-skipped transcript can be ascribed to the accumulation of PGN-EDO51 oligonucleotide in the muscle and the accumulation of exon 51-skipped transcript with repeat dosing shown in NHP studies. In HVs, following a single 10 mg/kg dose of PGN-EDO51, we observed 1.4% exon skipping 28 days following dosing, and similar to our observations in NHPs, we anticipate seeing meaningfully higher levels of exon 51-skipped transcript following four doses. Higher levels of exon-skipped transcript have been shown to produce higher levels of dystrophin inmdx mice and in DMD patients.

PGN-EDO51 was generally well-tolerated in single-dose, 28-day Good Laboratory Practice, or GLP, toxicity studies in mice and NHPs; no treatment-related mortality and no serious adverse events were observed through the therapeutic dose range. There were no adverse microscopic observations and no adverse impacts on clinical chemistry markers at clinically relevant dose levels.

Anin vitro T cell stimulation assay conducted with peripheral blood mononuclear cells from healthy donors indicated that PGN-EDO51 has a very low immunotoxicity risk. This is further supported by data showing that the pharmacokinetic, or PK, profile of PGN-EDO51 was similar following the first and third dose, suggesting no significant neutralizing anti-drug antibody responses were present after a three-dose regimen in NHPs.

We have also conducted several repeat dose NHP studies to assess the safety and tolerability of PGN-EDO51. In one such study, we administered 11 doses of PGN-EDO51 intravenously to NHPs at 45 mg/kg over 60 minutes every 28 days over 39 weeks, and serum chemistry markers were assessed. Following the first administration, an elevation in serum creatinine was observed at day two; this elevation was completely resolved by day eight. Importantly, there were no adverse findings in the kidney even after 11 doses and there were no notable hematologic, cardiovascular or hepatic effects in this study. Additionally, following subsequent administrations, the day two elevations seen after the first dose were of lower magnitude. We believe these data support an acceptable tolerability profile for the ongoing CONNECT1 and planned CONNECT2 clinical studies since the planned therapeutic dose, as described below, is significantly under 45 mg/kg.

In NHPs, an amelioration of elevations in serum creatinine was observed with repeat dosing of PGN-EDO51 at 45 mg/kg. Graph plotted as mean ± SD; n = 12; grey bar shows normal range. * Samples were not collected for these time points. PD= Pre-dose

Clinical Development

Phase 1 HV Study

In 2022, we completed a first-in-human, Phase 1, single-center, randomized, double-blind, placebo-controlled, SAD clinical trial to assess the target engagement (exon skipping), pharmacokinetics (oligonucleotide tissue concentration), safety and tolerability of PGN-EDO51 administered intravenously to 32 healthy adult male volunteers. Following administration, safety data were evaluated by a safety review committee prior to progressing to the next dose level. Volunteers were dosed with either 1, 5, 10 or 15 mg/kg of PGN-EDO51 or placebo. Oligonucleotide tissue concentration and exon skipping were assessed from needle biopsies of biceps muscle taken on Days 10 and 28, with the latter being measured by a ddPCR assay.

A dose dependent increase in mean exon skipping was observed in biceps, with the levels obtained being the highest observed in humans following a single dose, based on cross-trial comparisons with publicly available data for other exon 51-skipping approaches.

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In the 10 mg/kg dose cohort, PGN-EDO51 exhibited mean exon skipping of 1.4% in biceps biopsies taken at Day 28 (n=6).

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In the 15 mg/kg dose cohort, PGN-EDO51 exhibited mean exon skipping of 2.0% in biceps biopsies taken at Day 28 (n=6).

We observed the highest levels of mean exon skipping in humans following a single dose based on cross-trial comparisons with publicly available data for other exon 51-skipping approaches. Data is shown as mean ± SD; n = 6 for PGN-EDO51 (n = 5 for D10 at 15 mg/kg), n = 8 for placebo. Asterisks indicate values that were under the lower level of quantification.

A dose-dependent increase in PGN-EDO51 tissue concentration was observed in biceps, with the levels obtained being the highest observed in humans for a DMD therapeutic following a single dose, based on cross-trial comparisons with publicly available data for other exon 51 skipping approaches.

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In the 10 mg/kg dose cohort, PGN-EDO51 exhibited mean oligonucleotide tissue concentrations of 11 nM in biceps biopsies taken at Day 28 (n=6).

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In the 15 mg/kg dose cohort, PGN-EDO51 exhibited mean oligonucleotide tissue concentrations of 50 nM in biceps biopsies taken at Day 28 (n=6).

High, persistent tissue concentrations of oligonucleotide were observed. Data is shown as mean ± SD; n = 6 for PGN-EDO51 (n = 5 for D10 at 15 mg/kg), n = 8 for placebo. Asterixis indicate values that were under the lower level of quantification.

In summary, we have demonstrated six times higher exon skipping after a single 10 mg/kg dose of PGN-EDO51 compared to SRP-5051 dosed at 20 mg/kg, based on cross-trial comparison of publicly available data from a Phase 1 HV study following a single dose of SRP-5051. We believe that the exon skipping data obtained from HVs in this clinical trial indicate the potential for clinically meaningful accumulation of exon 51-skipped transcripts and dystrophin in patient tissue with repeated doses of PGN-EDO51. Accumulation of exon skipped transcripts is further supported by the preclinical data from NHPs that demonstrated repeat dosing of PGN-EDO51 at 20 mg/kg resulted in 14 times greater exon skipping compared to a single dose. Thus, based on these data, we anticipate that the exon skipping rates afforded by PGN-EDO51 when administered to patients have the potential to exceed the rates observed when administered to HVs.

The Phase 1 trial met its primary endpoint, providing evidence that PGN-EDO51 was generally well tolerated at clinically relevant doses. By way of example, at a dose of 10 mg/kg:

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All participants completed the study with no discontinuations;

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All related treatment-emergent adverse events, or TEAEs, including transient, reversible changes in kidney biomarkers, were assessed as mild and resolved without any intervention;

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Serum cystatin C, the recommended biomarker to assess renal function in DMD, did not change; and

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There was no evidence of hypomagnesemia.

At 15 mg/kg there was one non-life threatening serious adverse event, or SAE, related to changes in kidney biomarkers that were transient and reversible. This HV was admitted to the hospital for less than 24 hours, received hydration and then was re-admitted to the Phase 1 unit and completed the study. There were no clinical symptoms of acute kidney injury in any of the subjects.

Based on the tissue concentration and exon skipping observed in this Phase 1 study, alongside PK and pharmacodynamic, or PD, prediction models informed by preclinical data frommdx mice and NHPs, we are expecting our target therapeutic dose in CONNECT1 and CONNECT2 studies to be lower than 15 mg/kg and at these doses, we expect a favorable safety profile. Additionally, in support of the expected tolerability profile for PGN-EDO51, as mentioned above, we have demonstrated in NHPs that 11 doses of PGN-EDO51 administered intravenously at 45 mg/kg every 28 days resulted in elevation in serum creatinine at day two post dose, but this elevation was completely resolved by day eight. At target therapeutic doses in our CONNECT1 study and CONNECT2 study, we may see changes in kidney biomarkers at 10 mg/kg or higher doses but expect these will be transient and reversible.

We also observed transient mild (Grade 1) hypomagnesemia in one participant and moderate (Grade 2) hypomagnesemia in one participant at the 15 mg/kg dose that did not require any intervention. We note that ≥ Grade 3 hypomagnesemia was a SAE observed with repeat dosing of SRP-5051 at the 20 mg/kg and 30 mg/kg doses in the MOMENTUM study and that Sarepta amended the protocol to include magnesium supplementation in the pivotal Phase 2 MOMENTUM, Part B study. The Phase 2 MOMENTUM Part A and Part B safety and tolerability data shows that the severity of hypomagnesemia is dose dependent. Based on the safety and tolerability data of PGN-EDO51 to date, and the expected higher potency of PGN-EDO51 compared to SRP-5051, we believe PGN-EDO51 has the potential for a wider therapeutic index enabling desirable efficacy at a lower dose without ≥ Grade 3 hypomagnesemia and without the need for prophylactic magnesium supplementation. It is possible that we may observe mild to moderate hypomagnesemia following repeat-dose administration of PGN-EDO51 in our clinical trials, and we are carefully monitoring serum magnesium levels in our ongoing CONNECT1 clinical trial.

Under the Phase 1 protocol for PGN-EDO51, any non-life-threatening SAE was considered a dose-limiting toxicity, or DLT, however the study was not halted by the safety review committee, nor was it put on hold by Health Canada. In light of higher than anticipated oligonucleotide levels and exon skipping levels in muscle observed at 5 mg/kg and 10 mg/kg, we determined that further dose escalation in the Phase 1 study was not necessary.

TEAEs were mild and resolved without intervention at clinically relevant doses. Asterisk denotes that no Grade 4 or 5 TEAEs were recorded.

CONNECT1 and CONNECT2 Phase 2 MAD Studies

The results from our Phase 1 HV clinical trial, together with the experience and expertise of our clinical development team and scientific advisory board, as well as learnings from previous clinical studies conducted in exon 51 skipping-amenable DMD patients, have guided the design, parameters and objectives of our planned Phase 2 clinical trials of PGN-EDO51 in DMD patients amenable to an exon 51-skipping approach.

The Phase 2 clinical development plan for PGN-EDO51 consists of two studies conducted in parallel; a smaller open label MAD study, CONNECT1, is being conducted in Canada. A larger, multinational, randomized, double-blind placebo-controlled MAD study, CONNECT2, was recently authorized by the MHRA for initiation in the U.K. In the CONNECT1 study, participants will be administered PGN-EDO51 once every four weeks at 5 mg/kg, 10 mg/kg or potentially a higher dose (if needed) for 12 weeks. Dose escalation is based on data review by the data safety monitoring board, or DSMB. We will conduct muscle biopsies at baseline and week 13. In addition to assessing safety and tolerability, we are measuring exon skipping and dystrophin expression in CONNECT1. We began dosing patients in our CONNECT1 study in early 2024 and have fully enrolled the 5 mg/kg dose cohort. We anticipate reporting preliminary data from this cohort in mid-2024, including safety, exon skipping and dystrophin production.

As noted above, in February 2024, we received clearance from the MHRA to initiate CONNECT2 in the U.K. The CONNECT2 will enroll approximately 20 ambulatory and non-ambulatory boys and young men living with DMD amenable to exon 51-skipping, who are at least six years of age. Participants will receive seven doses of either PGN-EDO51 or placebo at approximately four-week intervals for 24 weeks. The starting dose will escalate from 5 mg/kg to 10 mg/kg, and potentially higher (if needed); the same dose levels are being evaluated in the CONNECT1 trial. Dose escalation will be determined based on data review by the DSMB. We will conduct muscle biopsies at baseline and at week 25. We will assess safety, tolerability, exon skipping, dystrophin production and functional outcome measures in this study.

We believe that this clinical development plan may enable us to pursue an accelerated approval pathway for PGN-EDO51 with the FDA. In the DMD space, the FDA has approved four drugs under the accelerated approval pathway since 2016. If we receive positive results from our Phase 2 trials for PGN-EDO51 that show an acceptable emerging safety profile; a clinically meaningful increase in dystrophin levels, a surrogate endpoint in the biceps of DMD patients; and robust exon skipping levels in the same tissue; we intend to pursue discussions with the FDA for a potential accelerated approval pathway.

PGN-EDODM1

We are developing PGN-EDODM1, an EDO peptide-conjugated PMO, for the treatment of DM1, a debilitating genetic disease with no approved therapies. PGN-EDODM1 leverages the same EDO peptide as PGN-EDO51 to deliver a PMO into muscle cells that binds to the pathogenic CUG trinucleotide repeat expansion present in the DMPK mRNA, thus reducing the ability of these trinucleotide repeats to sequester RNA binding proteins like MBNL1, a critical RNA processing protein. This approach, which is not designed to knock down DMPK, directly addresses the underlying genetic defect of this disease, and we have observed robust levels of activity in preclinical models with both long and short CTG repeats. In DM1 patient cells, we observed that treatment with PGN-EDODM1 led to a reduction in toxic nuclear foci, and liberated bound MBNL1 which mediated robust correction of mis-splicing. In preclinical studies in the mouse HSALR DM1 model, a single dose of PGN-EDODM1 was observed to correct the molecular and functional deficits, including correcting >65% of transcript mis-splicing events and reversing >70% of myotonia. Multiple monthly doses of PGN-EDODM1 corrected 99% of transcript mis-splicing and myotonia. This correction of mis-splicing following a single dose of PGN-EDODM1 was observed to persist for up to six months. Furthermore, the muscle concentrations of PGN-EDODM1 oligonucleotide that mediated these effects in the HSALR mouse model were similar to those observed 28 days following a single dose of 10 mg/kg of PGN-EDO51 in human muscle in our Phase 1 HV clinical trial. Given the molecular overlaps of PGN-EDO51 and PGN-EDODM1, we believe this supports the potential of a single 10 mg/kg dose of PGN-EDODM1 to achieve therapeutic muscle levels of oligonucleotide in DM1 patients.

We opened our FREEDOM Phase 1, randomized, placebo-controlled SAD clinical trial of PGN-EDODM1 in DM1 patients in the second half of 2023 in Canada, followed by the U.S. and U.K. and began dosing patients in December 2023. We expect to report preliminary data from this study, including safety, splicing correction and functional outcome measures in the second half of 2024. We also expect to open the FREEDOM2-DM1 Phase 2 randomized, double blind, placebo-controlled MAD study in DM1 patients in the second half of 2024.

Disease Background and Prevalence

DM1 is a monogenic, autosomal dominant, progressive disorder that primarily affects skeletal, cardiac and smooth muscles, with central nervous system, or CNS, symptoms also being evident. Globally, the prevalence of DM1 is estimated to be 1 in 8,000 people, with approximately 40,000 patients in the U.S., 75,000 patients in Europe and 15,000 patients in Japan. However, under- and misdiagnosis is believed to be widespread, and genetic screening studies for DMPK triplet repeats have suggested that the prevalence of DM1 may be as high as 1 in 2,100 people.

DM1 patients can suffer from various manifestations of disease including myotonia, or a temporary rigidity due to the inability to relax muscles, muscle weakness, cardiac abnormalities, respiratory problems, fatigue, gastrointestinal complications, early cataracts, and cognitive and behavioral impairments. For patients with more severe forms of DM1, life expectancy is reduced due to increased mortality rates resulting from pulmonary and cardiac complications.

The broad spectrum of pathologies associated with DM1 arise due to genetic changes in the DMPK gene. Specifically, DM1 is caused by an expansion in the number of CTG triplet repeats that are present in the non-coding region of the DMPK gene, and following transcription this mutant DMPK gene yields an mRNA product with an expanded CUG repeat region. Healthy, asymptomatic individuals possess between 5 and 37 such repeats, but in DM1 patients the number of repeats can be in the thousands. These highly repetitive sequences form stable hairpin structures in the nucleus of cells and sequester critical RNA splicing proteins, such as MBNL1, leading to the formation of nuclear foci. The sequestration of MBNL1 prevents this key protein from performing its normal function of processing RNA molecules before they are exported from the nucleus, leading to downstream mis-splicing events in a number of other transcripts. The mis-splicing of these transcripts results in the dysregulation of a broad set of downstream proteins, which in turn leads to in the multi-systemic pathologies that are associated with DM1, which include:

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Musculoskeletal: Myotonia (a temporary inability to relax a muscle after contraction), muscle weakness & wasting.

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Cardiac: Conduction defects.

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Respiratory: Breathing difficulties, sleep apnea.

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Gastrointestinal: Dysphagia (difficulty swallowing), constipation, Irritable Bowel Syndrome.

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CNS: Cognitive impairments, behavioral / psychologic disorders, excessive daytime sleepiness.

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Vision: Early-onset cataracts, retinal damage.

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Endocrine: Thyroid dysfunction, diabetes.

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Other pathologies: Skin, immune system and reproductive pathologies, increased cancer risk.

There is a general correlation between the number of CTG repeats in the aberrant DMPK gene and the severity of disease. Individuals with 50 to 150 repeats are prone to development of mild myotonia and cataracts, but typically have a normal lifespan. Individuals with up to approximately 1,000 repeats typically have muscle weakness and cardiac arrhythmia, with an average lifespan of 48 to 55 years. The most serious cases of DM1 are generally observed in individuals with more than 1,000 repeats, and these patients are likely to also suffer from respiratory defects and intellectual disability, with a shortened lifespan of approximately 45 years. Genetic anticipation is also observed, whereby the age of onset decreases in subsequent generations due to expansion of the CTG repeat between generations.

Current Approaches and Limitations

There are no approved therapies to treat DM1, with current standards of care being medicines that are used off-label for symptom management. Previously, a phosphorothioate ASO designed to cause degradation of the DMPK transcript was clinically assessed as a therapeutic for DM1. However, this therapeutic approach was restricted by the inefficiency of ASO delivery into target tissues and cells, thus limiting the effective clinical translation of this product candidate.

There are several clinical-stage approaches leveraging antibody-oligonucleotide conjugate, or AOC, technologies, that are currently in development for the treatment of DM1. These approaches utilize mAbs and Fabs that target the transferrin receptor 1, or TfR1, in order to deliver cargo oligonucleotides that are designed to knockdown or degrade DMPK. Such knockdown or degradation approaches cannot differentiate between expanded and non-expanded transcripts. In contrast to knockdown or degradation of overall DMPK levels, our approach is more targeted as PGN-EDODM1 is designed to disrupt the binding of MBNL1 to the DMPK transcript. This approach maintains overall DMPK levels and thereby averts any potential for haploinsufficiency, a condition where a copy of the gene is deleted or mutated and the remaining copy is unable to produce sufficient protein for normal function. Furthermore, the correlation between the level of DMPK knockdown and the level of splicing correction required for therapeutic benefit is currently unclear, a consideration that may confound clinical development of these approaches. Therefore, we believe that PGN-EDODM1 is differentiated relative to the DMPK knockdown approaches in development for DM1 given its mechanism of action that is intended to bind DMPK, allowing release of MBNL1 to restore splicing and downstream functional effects. In addition, in preclinical studies, the EDO platform has shown successful delivery of therapeutic PMOs to the nucleus, which we believe is critical to drive the anticipated therapeutic benefit of PGN-EDODM1.

We are also aware of VX-670, another cell-penetrating peptide approach conjugated to a PMO that is designed to block the CUG repeats in the DMPK transcript that has recently entered clinical development for the treatment of DM1.

Our Approach

Our product candidate for the treatment of DM1, PGN-EDODM1, consists of our lead EDO CPP conjugated to an ASO that binds to the pathogenic CUG repeat expansion in the DMPK mRNA. We are employing the same EDO peptide in PGN-EDO51 and PGN-EDODM1. PGN-EDODM1 is designed to directly address the deleterious effects of genetic alteration in DM1, specifically the sequestration of MBNL1 due to the high number of CUG repeat expansion in the DMPK transcript.

We believe that this innovative therapeutic approach has considerable advantages over oligonucleotide modalities that rely on knockdown or degradation of the DMPK transcript. PGN-EDODM1 disrupts the binding between the CUG repeat expansion and MBNL1, an approach which we believe will allow the DMPK transcript to continue performing its normal function within the cell, while also liberating MBNL1 to correct downstream mis-splicing events. We believe that this therapeutic strategy positions us to potentially provide clinically meaningful benefits for DM1 patients while mitigating the risk of potential deleterious outcomes.

PGN-EDODM1 is designed to bind to the CUG repeats in DMPKRNA and liberate MBNL1 to restore physiological splicing, in contrast to modalities that indiscriminately target both normal and pathogenic DMPKfor degradation.

Preclinical Data

In anin vitro study utilizing DM1 patient cells with approximately 2,600 CTG repeats in the DMPK gene, we observed a robust reduction in nuclear foci, liberation of MBNL1 from foci and the correction of downstream transcript mis-splicing pathologies. In this study, immortalized myoblasts from a DM1 patient were differentiated for four days, and then treated for 24 hours with PGN-EDODM1 at a range of concentrations from 0 µM to 20 µM. Myoblasts from a healthy individual were utilized as a control, and the unconjugated PMO was also assessed at a concentration of 20 µM in this study in order to demonstrate the critical role that our EDO platform plays in driving efficient cell uptake of this therapeutic cargo.

A characteristic feature of DM1 is the accumulation of nuclear foci, or myonuclear aggregates of DMPK mRNA bearing the pathogenic CUG repeat expansion. These foci sequester MBNL1, a critical modulator of transcript splicing, and thus play a key role in the downstream spliceopathies that are observed in this multi-systemic disorder. We assessed the impact of PGN-EDODM1 treatment on the presence of nuclear foci in DM1 cells through visualization with fluorescencein situ hybridization, or FISH, and immunofluorescence co-staining, and we observed that treatment led to a robust reduction of 54% in the number of these toxic aggregates. In contrast, treatment with the unconjugated PMO cargo did not yield a reduction in nuclear foci, an observation which we believe supports the potential utility of our EDO platform in driving the successful delivery of therapeutic agents to their nuclear site of action.

In a preclinical study conducted in DM1 patient cells, PGN-EDODM1 treatment supported the reduction of pathogenic nuclear foci in a dose-dependent fashion. Graph plotted as mean ± SD; n = 3-4 per group.

In this samein vitro study, we also assessed the impact of PGN-EDODM1 treatment on the sequestration of MBNL1. Following treatment and visualization, we observed a reduction in the amount of foci-bound MBNL1, indicating that that this critical splicing factor is liberated upon treatment with our DM1 product candidate. We believe these results provide additional support for the proposed mechanism of action of PGN-EDODM1, suggesting that – once delivered to the cell nucleus – our therapeutic cargo may bind to the CUG repeat expansion present in the DMPK transcript, resulting in a reduction in the number of nuclear foci and the liberation of MBNL1.

PGN-EDODM1 treatment resulted in the liberation of MBNL1 from DPMK foci.

Treatment of DM1 patient cells with PGN-EDODM1 led to robust correction of downstream mis-spliced transcripts associated with key disease pathologies in a dose-dependent fashion. At the highest dose assessed, 20 µM, PGN-EDODM1 treatment resulted in robust mis-splicing correction, resulting in exon inclusion or exclusion rates of approximately 70% of healthy control levels in these transcripts. This observation supports our therapeutic hypothesis that treatment with PGN-EDODM1 may restore the altered global spliceopathy profiles seen in DM1 patients, thus ameliorating the key pathologies that are the hallmark of this devastating disease.

In anin vitro study, PGN-EDODM1 treatment resulted in correction of mis-splicing pathologies to around 70% of healthy control levels. Graph plotted as mean ± SD; n = 5 per group.

Building on the encouraging positive data from ourin vitro studies, we utilized the HSALR mouse model of DM1 to assess the activity of PGN-EDODM1. This transgenic mouse model contains between 220 and 250 CTG trinucleotide repeats in the inserted human skeletal actin, or HSA, gene, and exhibits molecular and functional pathologies that are very similar to those seen in human DM1 patients. The CUG repeat expansion present in the HSALR mouse model, and the subsequent sequestration of MBNL1, leads to downstream defects in the normal mRNA splicing patterns for a number of transcripts, resulting in aberrant inclusions or exclusions of exons.

Sequestration of MBNL1 in the HSALR mouse model causes mis-splicing of multiple RNAs including Clcn1 and Atp2a1, both of which are involved in the regulation of muscle movement. This mis-splicing causes the mice to exhibit myotonia, effectively recapitulating the classic symptom of disease that is observed in DM1 patients. Mis-splicing of Atp2a1 manifests as a lack of exon 22 inclusion in the Atp2a1 mRNA when compared to wild-type splicing patterns, while mis-splicing of Clcn1 manifests as an increase in exon 7a inclusion in the Clcn1 mRNA when compared to wild-type splicing patterns. Following a single intravenous administration of PGN-EDODM1, we observed dose-dependent normalization of the splicing of these genes in the quadriceps and gastrocnemius muscles two weeks after dosing. At a dose of 30 mg/kg, we achieved 91% correction of Atp2a1 mis-splicing and 68% correction of Clcn1 mis-splicing, highlighting the potential of our product candidate to address such downstream pathologies.

PGN-EDODM1 led to a dose-dependent normalization of the splicing of Atp2a1 and Clcn1 transcripts in preclinical study in quadriceps muscles in HSALR mice. Graph plotted as mean ± SEM; n = 8 for PGN-EDODM1 group, n = 16 for HSALR saline control, n = 8 for WT saline control; **** = p≤0.0001.

Consistent with the reversal of mis-splicing events, treatment with a single dose of PGN-EDODM1 also led to a complete reversal of myotonia phenotype in HSALR mice as assessed by electromyography, with a dose of 30 mg/kg showing complete normalization two weeks after administration. In observational studies we noted quantitative amelioration of myotonia, where treated mice were able to ambulate normally following the inducement of this functional phenotype of disease by hindlimb pinching. In contrast, untreated HSALR mice were unable to efficiently use their hind legs and dragged them behind following the same myotonic inducement event.

PGN-EDODM1 led to a complete amelioration of myotonia in a preclinical study after a single administration. Graph plotted as min to max; n = 8 for PGN-EDODM1 group, n = 16 for HSALR saline control, n = 8 for WT saline control; *** = p≤0.001.

Furthermore, the pharmacologic effects of PGN-EDODM1 were observed to be highly durable. In a duration of effect study, again in the HSALR mouse model, amelioration of the pathogenic splicing patterns of the Atp2a1 and Clcn1 transcripts in the gastrocnemius and quadriceps persisted for at least 24 weeks following a single 30 mg/kg intravenous administration of PGN-EDODM1.

PGN-EDODM1 led to durable improvements in mRNA splicing through 24 weeks post-dose in the HSALR mouse model. Graph plotted as mean ±SEM; n = 7 for 0 timepoint, 8 for 2- and 12-week timepoints; 5 for 24-week timepoint.

In another study in the HSALR mouse model, multiple doses of PGN-EDODM1 at 30 mg/kg given once every four weeks were evaluated. While a single dose corrected 68% of transcript mis-splicing and 76% of myotonia, as measured using the pinch test, four repeat doses produced 99% correction of mis-splicing and 99% correction of the myotonia.

PGN-EDODM1 led to a normalization of splicing and near complete correction of myotonia in a repeat dosing preclinical study in skeletal muscles in HSALR mice. Mis-splicing analysis considers multiple transcripts. Graph is presented as mean ± SD; n = 8-12 per cohort per transcript. Myotonia pinch test was performed four weeks post-final dose. Grade 3 = Clear sign of myotonia strong AND reproducible, Grade 2 = Clear sign of myotonia, strong OR reproducible, Grade 1 = Clear sign of myotonia but non reproducible, Grade 0 = No sign of myotonia. Graph is presented as mean ± SD; n = 12-43 per cohort.

In order to understand the PK/PD relationship for PGN-EDODM1 to inform the clinical development strategy for PGN-EDODM1, we also quantified the concentration of PGN-EDODM1 in the muscle tissue in HSALR mouse model. Following PGN-EDODM1 administration in HSALR mice, we observed mean tissue concentrations of 6 nM at 28 days post single dose and 13 nM at 28 days post four doses. Furthermore, the clinical PK/PD relationship for PGN-EDO51 demonstrated that PGN-EDO51 at 10 mg/kg resulted in exon skipping activity in HVs while achieving muscle PMO concentration in the range of concentration similar to PGN-EDODM1 in HSAlr mice, as indicated below. Therefore, given that the EDO delivery peptide is identical for both programs and based on PGN-EDODM1 HSALR mouse PK/PD relationship and PGN-EDO51 human PK/PD relationship, we believe that PGN-EDODM1 has the potential to demonstrate improvement in splicing with a single dose in our ongoing FREEDOM trial.

Tissue concentrations of PGN-EDODM1 28 days post dose in HSALR mice and tissue concentrations of PGN-EDO51 28 days post single dose (as shown in Phase 1 HV study results included above). Graph plotted as mean ± SEM; n = 8 for PGN-EDODM1 group, n = 8 for WT saline control; n = 6 for PGN-EDO51 data.

In summary, based on our preclinical data from the HSALR mouse model along with the expected PK/PD relationship from PGN-EDO51, we have designed a clinical development plan that we believe has the potential to translate the robust impact of PGN-EDODM1 on splicing and functional outcomes observed in the HSALR mouse model to patients.

Unlike several other approaches currently in clinical development, PGN-EDODM1’s mechanism of action does not target DMPK transcript for degradation. In both DM1 patient cells and in NHPs, mean DMPK transcript levels remained unchanged relative to an untreated control following exposure to PGN-EDODM1.

To elaborate on these studies, in anin vitro study, immortalized myoblasts from a DM1 patient with 2,600 CTG repeats were differentiated for four days to myotubes and treated for 24 hours with PGN-EDODM1 at a range of concentrations between 1 and 20 µM. DMPK transcript levels were evaluated by qPCR and normalized to ribosomal protein P0, or RPLP0. In NHPs, three doses of 10, 30 or 60 mg/kg of PGN-EDODM1 were administered every two weeks. One week following the final dose, DMPK transcript levels were evaluated by RT-PCR and normalized to RPLP0. Mean DMPK transcript levels remained unchanged relative to an untreated control following exposure to PGN-EDODM1.

No significant changes in mean DMPK transcript levels were observed in DM1 patient cells or in NHPs. Graphs plotted as mean ± SEM; n = 4 for patient cell data, n = 3-4 for NHP data.

Thus, we believe this unique mechanism of action design may offer a potential safety benefit, as we believe such an approach does not carry the risk of possible DMPK haploinsufficiency.

We have completed a number of GLP studies that support a generally well-tolerated safety profile for PGN-EDODM1. In a four dose, 12-week sub-chronic toxicology study in NHPs, PGN-EDODM1 was observed to be generally well-tolerated through 60 mg/kg. While we observed transient increases in serum creatinine that resolve within a week post dose​, importantly, we did not see any adverse findings in the kidney through 60 mg/kg. Furthermore, there were no noteworthy hematologic, cardiovascular or hepatic effects observed.

PGN-EDODM1 administration in NHPs led to a transient increase in serum creatinine followed by reduction in serum creatinine to baseline levels by day 8. NHPs were dosed intravenously four times once every 28 days at 60 mg/kg over 60 min (n=6 males; n=6 females). Data shown as mean ± SD.

We believe that the totality of the data obtained from the safety/toxicology studies that have enabled IND/CTA filings highlight a potentially favorable safety profile for PGN-EDODM1.

In summary, based on PGN-EDODM1’s improvement of mis-splicing and myotonia in HSALR mouse model, the favorable safety profile observed in toxicology studies, and the ability of the EDO technology to achieve pharmacologically active levels of

PMO in skeletal muscle, as seen in the PGN-EDO51 Phase 1 HV data, we believe that PGN-EDODM1 has the potential to be a meaningful therapy for patients with DM1.

Clinical Development

We are currently enrolling patients with DM1 in the FREEDOM study, a randomized, double-blind placebo-controlled Phase 1 study. In this study, we intend to enroll approximately 24 adult patients with DM1 in multiple geographies including the U.S., U.K. and Canada, to evaluate the safety and tolerability of PGN-EDODM1. Per the protocol, PGN-EDODM1 will be administered at the starting dose of 5 mg/kg and subsequently at 10 mg/kg and 20 mg/kg. Dose escalation to the higher dose will be determined based upon evaluation of safety data from the prior dose cohort(s). We will conduct muscle biopsies at baseline, at day 28 and at week 16. In addition to safety and tolerability, we plan to assess oligonucleotide muscle concentrations, splicing correction and functional outcome measures at day 28 and at week 16 following a single dose of PGN-EDODM1. We anticipate reporting preliminary data, including safety, correction of splicing and functional outcome measures, in the second half of 2024.

The safety data from the initial cohorts of the FREEDOM trial will inform the design of the planned FREEDOM2-DM1 trial, which will be a Phase 2 randomized, double blind, placebo-controlled MAD study in DM1 patients, which we anticipate opening in the second half of 2024.

Based on preclinical data, emerging safety profile and translatability of our EDO platform from preclinical species to humans as observed with PGN-EDO51, we believe that PGN-EDODM1 has the potential to be disease-modifying and could improve outcomes for patients living with DM1. Notably, the FDA has recently granted Fast Track designation to PGN-EDODM1.

PGN-EDO53

We are also developing EDO therapeutics for additional DMD patient population, including PGN-EDO53, for patients who are amenable to exon 53 skipping, representing approximately 8% of DMD patients. PGN-EDO53 utilizes the same EDO CPP as our exon 51-skipping product candidate, PGN-EDO51, which we believe will allow us to leverage our drug development experience in DMD to rapidly drive this candidate to the clinic. In a NHP study of PGN-EDO53, we observed single-dose exon skipping levels that were almost seven times higher than those observed for R 6 G-PMO53, a relevant comparator peptide-PMO conjugate approach. We intend to progress the selected candidate for PGN-EDO53 into IND/CTA enabling studies in 2024.

Current Approaches and Unmet Needs

Two unconjugated ASOs leveraging PMO chemistry have been approved for the treatment of individuals with DMD who are amenable to an exon 53-skipping approach – golodirsen, marketed as VYONDYS 53® by Sarepta and viltolarsen, marketed as VILTEPSO® by NS Pharma, Inc. in the U.S.. These drugs were approved in the U.S. through the accelerated approval regulatory pathway based on an increased expression of dystrophin, which is considered to be a surrogate endpoint for this indication. Both golodirsen and viltolarsen have yet to establish a clinical benefit for DMD patients through a confirmatory trial.

Our Approach for Preclinical Development

We are developing PGN-EDO53, a peptide-conjugated ASO designed to skip exon 53 of the dystrophin transcript in DMD patients who are amenable to such a therapeutic approach. We have completed a preclinicalin vitro screen of a number of candidate ASO sequences utilizing the established PMO chemistry. We synthesized several exon 53-skipping PMOs conjugated to our lead EDO peptide and assessed the activity of these in human-derived myoblasts carrying mutations that are amenable to treatment with an exon 53-skipping approach. Based on the data obtained from thisin vitro screen, we have subsequently assessed several development candidates in a repeat-dose NHP study, where these PPMOs were assessed alongside a relevant comparator, R 6 G-PMO53. Three doses of each PPMO were administered intravenously over 60 minutes every four weeks, with biopsies of the biceps collected five to seven days after the first and second administrations, and terminal samples collected seven days after the final dose. Exon 53 skipping was assessed by RT-PCR.

Notably, the single-dose exon skipping levels of 36.4% obtained for the selected PGN-EDO53 candidate were almost seven times higher than those observed for the R 6 G-PMO53 comparator at 5.4%. Furthermore, exon 53 skipped transcripts accumulated with repeat dosing of PGN-EDO53. Following the third and final dose of PGN-EDO53, mean exon skipping levels were observed to be 57.2%, a level that was nearly three times higher than the mean exon skipping levels of 20.8% that were observed for the R 6 G-PMO53 comparator. We believe that this accumulation in skipped transcript is indicative of the potential of the EDO platform to drive clinically meaningful levels of exon skipping, and ultimately dystrophin production, in DMD patients. We are initiating IND/CTA enabling studies for PGN-EDO53 in 2024.

Treatment with PGN-EDO53 afforded single-dose exon skipping levels almost seven times higher than for a comparator PPMO. Graphs plotted as mean ± SD; n = 3 per group; study was not powered for statistical significance.

Expanding the Application and Scope of Our EDO Platform

New Indications with PMO Therapeutics

In the future, we intend to apply our deep understanding of our EDO platform and PMO therapeutics to the development of additional product candidates in other indications. Based on extensive preclinical data we have generated, we believe that the ability of our EDO peptides to deliver exon skipping and RNA blocking therapeutics to muscle cells and other target tissues positions us to develop additional product candidates in other neuromuscular indications as well as in potentially neurologic indications.

New Cargos

We believe that our EDO technology has the potential to facilitate the delivery of multiple types of oligonucleotide therapeutics. To date, our efforts have primarily focused on the delivery of PMOs, but we also intend to pursue the expansion of our cargo scope to other nucleic acid species.

New Peptide Technologies

We intend to further establish our expertise and competitive position in the field of oligonucleotide delivery through the ongoing research and development of new peptides. In connection with these efforts, we intend to leverage our deep expertise in this field to design new peptides that target specific tissue types, and to seek to further optimize the tissue and cellular delivery of our EDO platform.

Manufacturing

Our manufacturing process is modular in nature. The peptide and oligonucleotide components are assembled using readily available building blocks and are subsequently conjugated using well-established methodologies. This process is fully synthetic and does not rely on microbial fermentation, thus substantially reducing the risk of introducing microbial DNA or protein into our product candidates. Furthermore, our manufacturing process is highly scalable and easily characterizable – attributes that we intend to leverage to support the rapid development and clinical translation of our EDO conjugate therapeutics. We have produced, manufactured and released multiple batches under current Good Manufacturing Practice, or cGMP, and have successfully utilized this material in a Phase 1 clinical trial.

We do not own or operate manufacturing facilities, and currently rely on third-party contract development manufacturing organizations, or CDMOs, and suppliers for the cell-penetrating peptide, linker and oligonucleotide components that comprise our EDOs, and for the conjugation of our product candidates as well as for the manufacturing of the finished dosage form (sterile injectable drug product). We anticipate that we will continue to utilize third-party CDMOs and suppliers to support our ongoing and future preclinical, clinical and commercial activities, and our intention is to build this network of organizations as we scale our manufacturing requirements. Long-term, we may also decide to establish internal manufacturing of our drugs or selected intermediates.

We believe that there are multiple sources for all raw materials employed in the manufacturing of our EDO therapeutics, and we believe that several CDMOs are able to assemble either the peptide intermediate, the linker, and the oligonucleotide as well as the final API.

There are extensive regulations that govern the manufacturing of biopharmaceutical products, and the third-party manufacturing organizations we work with are required to adhere to these regulations. Our CDMOs are required to manufacture our product candidates under cGMP requirements, alongside other applicable laws and regulations.

Competition

The biopharmaceutical industry is characterized by the rapid evolution and development of new technologies, leading to an environment that is intensely competitive in nature and thus supports the robust protection and defense of intellectual property. Any EDO product candidates that we successfully develop and commercialize will compete both with existing therapeutics, and with new approaches that may arise in the future. While we believe that our unique EDO platform and extensive expertise in oligonucleotide delivery may provide us with a differentiated position in the neuromuscular and neurologic spaces, such competing technologies may arise from many different sources, including large biopharmaceutical organizations, specialty pharmaceutical and biotechnology companies, academic institutions, government agencies, and public and private research organizations.

We expect to face competition from existing products and product candidates in development for each of our programs. Currently, patients with DMD are treated with corticosteroids to manage the inflammatory component of the disease. EMFLAZA (deflazacort) is an FDA-approved corticosteroid marketed by PTC Therapeutics, Inc., or PTC. Individuals with DMD also use prednisone or prednisolone off-label. In addition, there are several FDA-approved exon skipping drugs: EXONDYS 51 and VYONDYS 53, which are naked PMOs approved for the treatment of DMD patients amenable to exon 51 and exon 53 skipping, respectively, marketed by Sarepta; and VILTEPSO , a naked PMO approved for the treatment of DMD patients amenable to exon 53 skipping, which is marketed in the U.S. by NS Pharma, Inc. Companies focused on developing treatments for DMD that target increased dystrophin expression, as our DMD program does, include Sarepta with SRP-5051, a peptide-linked PMO currently being evaluated in a Phase 2b clinical trial for patients amenable to exon 51 skipping, Dyne Therapeutics, Inc., or Dyne, with DYNE-251, an antibody-conjugated PMO that targets exon 51 skipping in a Phase 1/2 clinical trial; BioMarin Pharmaceutical Inc., or BioMarin, with BMN-351,a phosphorothioate oligonucleotide that targets exon 51 skipping currently in preclinical development; and Wave Life Sciences Ltd., or Wave, with WVE-N531, a stereopure oligonucleotide in a Phase 1/2 clinical trial for patients amenable to exon 53 skipping.

In addition, several companies are developing gene therapies to treat DMD. These include Sarepta’s ELEVIDYS (SRP-9001) which was approved in June 2023 for treatment of ambulatory pediatric patients aged 4 through 5 years with DMD with a confirmed mutation in the DMD gene. In an interim readout of a recent Phase 3 EMBARK trial, which is still ongoing, patients with DMD between ages 4 through 7 years treated with ELEVIDYS did not show statistically significant benefit on the North Star Ambulatory Assessment, which was the primary endpoint. ELEVIDYS showed statistically significant results on all key pre-specified secondary endpoints, time to rise and 10-meter walk/run test. Based on the interim read out from EMBARK, Sarepta has filed an efficacy supplement to its BLA to encompass “treatment of DMD patients with a confirmed mutation in the DMD gene.” The FDA accepted the filing of the efficacy supplement and has given the application priority review with a review goal date of June 21, 2024. In addition, several other companies are developing investigational gene therapies to treat DMD, including Pfizer Inc.’s PF-06939926, fordadistrogene movaparvovec, which is currently being assessed in a Phase 3 clinical trial, and Sarepta’s Galgt2 gene therapy program, Solid Biosciences Inc.’s SGT-003 and REGENXBIO Inc.’s RGX-202, currently in clinical development. Gene editing treatments that are in preclinical development are also being pursued by Vertex Pharmaceuticals, Inc., or Vertex, and Sarepta.

We are also aware of several companies targeting non-dystrophin mechanisms for the treatment of DMD, including Edgewise with EDG-5506, a muscle stabilizer that is currently in clinical development andgivinostat, a histone deacetylase, or HDAC, inhibitor, that reduces fibrosis in patients with DMD and is currently under review by the FDA and EMA.

For DM1, there are currently no approved therapies to treat the underlying cause of the disease. Product candidates currently in clinical development to treat DM1 include several approaches that target DMPKRNA. These include AOC 1001, an antibody linked siRNA in Phase 1/2 clinical development with a global Phase 3 study planned for initiation in the second quarter of 2024 by Avidity Biosciences, Inc., or Avidity; DYNE-101, an antibody conjugated antisense oligonucleotide in clinical development by Dyne; and VX-670, a peptide conjugated PMO in Phase 1 by Entrada Therapeutics, Inc., or Entrada, and Vertex. There are additional approaches under development such as ATX-01, a micro RNA that modulates the expression of MBNL1 by Arthex Biotech S.L. that recently received IND clearance. Another small molecule, tideglusib, which is a GSK3-ß inhibitor is in clinical development by AMO Pharma Ltd. for the congenital phenotype of DM1, recently failed to meet primary endpoint in a pivotal study.

Several gene editing treatments are in preclinical development by Vertex; an artificial site-specific RNA endonuclease gene therapy is being developed by Enzerna Biosciences Inc., or Enzerna; Design Therapeutics, Inc. is developing an approach to prevent formation of CUG hairpins; Expansion Therapeutics, Inc. is developing an approach utilizing the interaction of small molecules with RNA in preclinical development; and therapeutics based on biomolecular condensate biology are in preclinical development by Dewpoint Therapeutics, Inc., or Dewpoint, and Pfizer.

We will also compete more generally with other companies developing alternative scientific and technological approaches, including companies working to develop conjugates with oligonucleotides for extra-hepatic delivery, including Alnylam Pharmaceuticals, Inc., or Alnylam, Aro Biotherapeutics Co., or Aro, Arrowhead Pharmaceuticals, Inc., or Arrowhead, Avidity, Dicerna Pharmaceuticals, Inc. (acquired by Novo Nordisk), or Dicerna, Dyne, Entrada, Ionis Pharmaceuticals, Inc., or Ionis. NeuBase Therapeutics, Inc., or NeuBase, PYC Therapeutics Limited, or PYC, and Sarepta, as well as gene therapy and gene editing approaches.

Many of the companies which we compete with or may compete with in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Accordingly, our competitors may be more successful than us in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining approval for treatments and achieving widespread market acceptance, rendering our treatments obsolete or non-competitive.

Additionally, mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

If we successfully obtain approval for any product candidate, we will face competition based on many different factors, including the safety and effectiveness of our products, the ease with which our products can be administered and the extent to which patients accept relatively new routes of administration, the timing and scope of regulatory approvals for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position. Competing products could present superior treatment alternatives, including by being more effective, safer, more convenient, less expensive or marketed and sold more effectively than any of our products, if approved. Competitive products or technological approaches may make any products we develop, or our EDO platform, obsolete or noncompetitive before we recover the expense of developing and commercializing our product candidates. If we are unable to compete effectively, our opportunity to generate revenue from the sale of our products, if approved, could be adversely affected.

Sales and Marketing

We currently do not have a commercial infrastructure in any geography. As we progress our programs through development, we may build a commercial infrastructure in the U.S. and selected other territories to support the commercialization of each of our product candidates when we believe a regulatory approval in a particular territory is likely. We intend to conduct market research in connection with designing our commercialization strategy for each of our product candidates, which strategy may depend on the size and geographic dispersion of the target patient population and the characteristics of the prescribing audience for our products, if approved. For example, with respect to certain of our product candidates that target diseases with a limited patient population, a concentrated prescribing audience and a small number of key opinion leaders who influence the treatments prescribed for the relevant patient population, we may address each such market using our own targeted, specialty sales and marketing organization supported by internal sales personnel, an internal marketing group and distribution support. For other product candidates, we may establish a larger and more dispersed sales force, or seek strategic collaborations to support our commercialization efforts.

We intend to evaluate our commercialization strategy as we advance each product candidate through clinical development. In any core markets outside of the U.S. that we may identify, where appropriate, we may utilize strategic partners, distributors or contract sales forces to expand the commercial availability of our product candidates.

Material Contracts

License of Technology Agreement with Oxford University Innovation Limited and Medical Research Council as Part of United Kingdom Research and Innovation

On March 26, 2018, we, through our wholly-owned subsidiary PepGen Limited, entered into a license agreement, or the OUI/MRC License, with Oxford University Innovation Limited, or OUI, and MRC. We amended the OUI/MRC License on December 21, 2018, and subsequently amended and restated it on November 23, 2020.

Pursuant to the OUI/MRC License, we obtained from OUI and MRC an exclusive, royalty-bearing, sublicensable with consent (through one tier) license under certain patent rights, or the OUI/MRC Patents, and data, or the OUI/MRC Licensed Technology, and a nonexclusive, royalty-bearing, sublicensable (through one tier) license under certain know-how, or the OUI/MRC Know-How, for certain biological and chemical compounds, including compounds that comprise amino acids and/or nucleic acids relating to our EDO peptides, proprietary linkers and the resulting EDO conjugates. The Licensed Technology is incorporated in our product candidates PGN-EDO51, PGN-EDODM1, PGN-EDO53, PGN-EDO45 and PGN-EDO44, and will likely be utilized in future discovery programs. Under such licenses, we have the right to make, have made, import, use, sell, offer for sale, market, research, develop, trial, register, modify, enhance, improve, manufacture, have manufactured, hold, keep, formulate, optimize, have used, export, transfer, distribute, promote, have sold, dispose of, offer to dispose of or otherwise exploit in all fields of use on a worldwide basis any products or services that incorporate or otherwise utilize the OUI/MRC Licensed Technology or, in each such case, an OUI/MRC Licensed Product. We granted OUI, and those persons who at any time work or have worked on the OUI/MRC Licensed Technology and OUI/MRC Know-How, and MRC an irrevocable, perpetual, royalty-free, sublicensable license under the OUI/MRC Licensed Technology and OUI/MRC Know-How to use the OUI/MRC Licensed Technology and OUI/MRC Know-How for non-commercial clinical, research, teaching, publication, or other scholarly purposes, or Non-Commercial Purposes. MRC also retained the right to grant sublicenses under our rights in the OUI/MRC Licensed Technology and OUI/MRC Know-How for Non-Commercial Purposes to any person at MRC or any academic or not-for-profit institutions who have worked or collaborated on, or otherwise funded, the OUI/MRC Licensed Technology or OUI/MRC Know-How. Further, OUI, MRC and the Chancellor, Masters and Scholars of the University of Oxford retained the right to freely use, publish (subject to certain obligations) or grant licenses under the OUI/MRC Know-How.

The OUI/MRC License requires us to use commercially reasonable efforts to exploit the OUI/MRC Licensed Technology and to achieve certain development milestones in accordance with a development plan and commercialize the OUI/MRC Licensed Products.

In consideration for the rights conveyed by OUI and MRC under the OUI/MRC License, we were obligated to pay, and have paid, to OUI certain up-front fees in an aggregate amount of approximately £80,000 in connection with the execution of each of the original OUI/MRC License and the amended and restated OUI/MRC License. In addition, we are obligated to pay to OUI sub-single to low, single-digit percentage royalties, or the Royalty Rate, on net sales of any OUI/MRC Licensed Products in excess of a threshold amount between £20 million and £30 million that are commercialized by us. The royalty rate for a given OUI/MRC Licensed Product will decrease a certain percentage following expiration or revocation of the last valid claim of the OUI/MRC Patents covering such OUI/MRC Licensed Product and where there is a product sold by a third party that competes with such OUI/MRC Licensed Product on a country-by-country basis. If we receive any non-royalty payments and royalties in connection with sublicenses or other contracts relating to the OUI/MRC Licensed Technology or OUI/MRC Know-How, we are obligated to pay to OUI, in each instance, a sublicense fee that is from mid-single digit to mid teen percentage depending on the license year in which we execute the sublicense or contract. We are also required to pay certain milestone payments to OUI upon the achievement by us or our sublicensees of specified commercial milestones in an aggregate amount of £100,000 for each OUI/MRC Licensed Product and specified patent procurement milestones in an aggregate amount of £10,000.

Upon completion of our initial public offering, or IPO, in May 2022, we paid an exit fee of $1.4 million to OUI during the second quarter of 2022.

Unless earlier terminated, the OUI/MRC License will terminate in its entirety upon the later of (a) the date on which all patents and patent applications licensed to us under the OUI/MRC License have been abandoned or allowed to lapse or expired or been rejected or revoked without a right of further appeal in a relevant country or territory or (b) March 26, 2038. The last-to-expire licensed patent under the OUI/MRC License is set to expire on February 11, 2042. We may terminate the OUI/MRC License in its entirety at any time for convenience upon providing OUI and MRC with written notice. Either party may terminate the OUI/MRC License in its entirety for the other party’s uncured material breach after an opportunity for the other party to cure such material breach. OUI and MRC may terminate the OUI/MRC License for our (a) insolvency or if we challenge the validity of the licensed patents, (b) breach our obligation to develop and exploit the technology in accordance with the development plan and subsequent failure to take remedial action reasonably requested by OUI and/or MRC or (c) failure to pay the Exit Fee or Exit Buy Out Fee. If the OUI/MRC License is terminated by either party for any reason, the OUI/MRC Licenses will terminate and all rights thereunder will revert to OUI and MRC, respectively.

Intellectual Property

We seek to protect the intellectual property, or IP, and proprietary technology that we consider important to our business, including by pursuing patent applications that cover our product candidates and methods of using the same, as well as any other relevant inventions and improvements that are considered commercially important to the development of our business. We likewise seek to protect the IP to which we obtain rights through licenses and sublicenses (e.g., from universities and research institutions) and work collaboratively with our licensors to ensure (and if possible be the driver of) patent prosecution and protection. We also rely on trade secrets, know-how and continuing technological innovation to develop and maintain our proprietary and IP positions. Our commercial success depends, in part, on our ability to obtain, maintain, enforce and protect our intellectual property and other proprietary rights for the technology, inventions and improvements we consider important to our business, and to defend any patents we may own or in-license in the future, prevent others from infringing any patents we may own or in-license in the future, preserve the confidentiality of our trade secrets, and operate without infringing, misappropriating or otherwise violating the valid and enforceable patents and proprietary rights of third parties.

As with other biotechnology and pharmaceutical companies, our ability to maintain and solidify our proprietary and intellectual property position(s) for our product candidates and technologies will depend on our success in obtaining effective patent claims and enforcing those claims if granted. However, our pending patent applications, and any patent applications that we may in the future file or license from third parties, may not result in the issuance of patents and any issued patents we may obtain do not guarantee us the right to protect our technology in relation to the commercialization of our products. We also cannot predict the breadth of claims that may be allowed or enforced in any patents we may own or in-license in the future. Notwithstanding the scope of the patent protection available to us, a competitor could develop competitive products that are not covered by our intellectual property, and we may be unable to stop such competitor from commercializing such products.

Any issued patents that we may own or in-license in the future may be challenged, invalidated, circumvented or have the scope of their claims narrowed. Because patent applications can take many years to issue, there may be applications unknown to us, which applications may later result in issued patents that our existing or future products or technologies may be alleged to infringe. Additionally, we cannot be certain of the priority of inventions covered by pending third-party patent applications. If third parties prepare and file patent applications in the U.S. that also claim technology or therapeutics to which we have rights, we may have to participate in interference proceedings in the U.S. Patent and Trademark Office, or USPTO, to determine priority of invention, which is highly unpredictable and which could result in substantial costs, even if the eventual outcome is favorable to us. We are aware of certain patents in the U.S. and other jurisdictions owned by third parties that claim subject matter that relates to our product candidates and the EDO platform. In addition, because of the extensive time required for clinical development and regulatory review of a product candidate we may develop, it is possible that, before any of our product candidates can be commercialized, any patent covering a certain product may expire or remain in force for only a short period following commercialization, thereby limiting the protection such patent would afford the respective product and any competitive advantage such patent may provide.

The term of individual patents depends upon the date of filing of the patent application, the date of patent issuance and the legal term of patents in the countries in which they are obtained. In most countries, including the U.S., the patent term is 20 years from the earliest filing date of a non-provisional patent application. In the U.S., a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in examining and granting a patent or may be shortened if a patent is terminally disclaimed over an earlier expiring patent.

The term of a patent claiming a new drug product may also be eligible for a limited patent term extension when FDA approval is granted, provided statutory and regulatory requirements are met. The restoration period granted on a patent covering a product is typically one-half the time between the effective date of a clinical investigation involving human beings is begun and the submission date of an application, plus the time between the submission date of an application and the ultimate approval date. The restoration period cannot be longer than five years and the total patent term, including the restoration period, must not exceed 14 years following FDA approval. Only one patent applicable to an approved product is eligible for the extension, and only those claims covering the approved product, a method for using it, or a method for manufacturing it may be extended. Additionally, the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers multiple products for which approval is sought can only be extended in connection with one of the approvals. The USPTO reviews and approves the application for any patent term extension or restoration in consultation with the FDA. In the future, if our product candidates receive approval by the FDA, we expect to apply for patent term extensions on any issued patents covering those products, depending upon the length of the clinical studies for each product and other factors.

There can be no assurance that our pending patent applications will issue or that we will benefit from any patent term extension or favorable adjustments to the terms of any patents we may own or in-license in the future. In addition, the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country, and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent. Patent term may be inadequate to protect our competitive position on our products for an adequate amount of time.

In the future, we may need to engage in litigation to enforce patents issued or licensed to us, to protect our trade secrets or know-how or to defend against claims of infringement of the rights of others. Litigation could be costly and could divert our attention from other functions and responsibilities. Furthermore, even if our patents are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead grant us monetary damages and/or ongoing royalties. Such monetary compensation may be insufficient to adequately offset the damage to our business caused by the infringer’s competition in the market. Adverse determinations in litigation could subject us to significant liabilities to third parties, could require us to seek licenses from third parties and pay significant royalties to such third parties and could prevent us from manufacturing, selling or using our product or techniques, any of which could severely harm our business.

As of December 31, 2023, we owned two pending U.S. patent applications and one pending Patent Cooperation Treaty, or PCT, international application, and exclusively licensed one issued patent (a European patent validated in France, Germany, Italy, Spain, and Great Britain) and 74 pending patent applications under our OUI/MRC License. For more information regarding our OUI/MRC License, see the section titled “Business—Material Contracts—License of Technology Agreement with Oxford University Innovation Limited and Medical Research Council as Part of United Kingdom Research and Innovation.”

The issued patent and patent applications that cover our product candidates and technology, as of December 31, 2023, include:

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With respect to PGN-EDO51, we owned applications pending in the U.S., Europe and Japan that cover methods of use and exclusively licensed 47 pending patent applications under the OUI/MRC License that cover compositions of matter and methods of use, including applications in Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, South Korea, Mexico, the Russian Federation, Saudi Arabia, and the U.S. Any patents issuing from the patent applications would have expiration dates ranging from 2039 to 2042, without accounting for any available patent term adjustments or extensions.

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With respect to PGN-EDODM1, we owned applications pending in the U.S., Canada, China, Europe and Japan that cover methods of use and exclusively licensed 45 pending patent applications under the OUI/MRC License that cover compositions of matter and methods of use, including applications in Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, South Korea, Mexico, the Russian Federation, Saudi Arabia, and the U.S. Any patents issuing from the patent applications would have expiration dates ranging from 2039 to 2042, without accounting for any available patent term adjustments or extensions.

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With respect to PGN-EDO53, PGN-EDO45 and PGN-EDO44, we exclusively licensed 30 pending patent applications under the OUI/MRC License that cover compositions of matter and methods of use, including applications in Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, South Korea, Mexico, the Russian Federation, Saudi Arabia, and the U.S. Any patents issuing from these patent applications would expire in 2039, without accounting for any available patent term adjustments or extensions.

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With respect to our EDO platform, we owned one pending PCT international patent application and exclusively licensed one issued European patent and 41 pending patent applications under the OUI/MRC License that cover compositions of matter and methods of use, including applications in Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, South Korea, Mexico, the Russian Federation, Saudi Arabia, and the U.S. The issued European patent is expected to expire in 2035, without accounting for any available patent term adjustments or extensions. The issued European patent was validated in France, Germany, Italy, Spain, and Great Britain, and it relates to certain compositions of matter and uses that may be utilized during future platform development activities. Any patents issuing from the patent applications would have expiration dates ranging from 2035 to 2043, without accounting for any available patent term adjustments or extensions.

Government Regulation

The FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose requirements upon companies involved in the clinical development, manufacture, marketing and distribution of drugs, such as those we are developing. These agencies and other federal, state and local entities regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of drugs.

U.S. Government Regulation of Drug Products

In the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending New Drug Applications, or NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before a drug may be marketed in the U.S. generally involves the following:

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Completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s GLP regulations;

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Submission to the FDA of an IND, which must become effective before human clinical trials may begin;

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Approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated;

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Performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practices, or GCP, requirements to establish the safety and efficacy of the proposed drug product for each proposed indication;

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Submission to the FDA of an NDA after completion of all pivotal trials, together with the payment of application user fees, as applicable;

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A determination by the FDA within 60 days of its receipt of an NDA to accept the marketing application for review;

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Satisfactory completion of an FDA advisory committee review, if applicable;

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Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;

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Satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data; and

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FDA review and approval of the NDA.

Preclinical Studies

Before testing any drug product candidate, including our product candidates, in humans, the product candidate must undergo rigorous preclinical testing. Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as in vitro and animal studies to assess potential safety and efficacy. The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies.

Prior to beginning the first clinical trial with a product candidate in the U.S., we must submit an IND to the FDA. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature and plans for clinical studies, among other things, to the FDA as part of an IND. An IND is a request for authorization from the FDA to administer an investigational product to humans and must become effective before human clinical trials may begin. Some preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may continue even after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to initiate. For example, in May 2023, we announced that we received a clinical hold notice from the FDA regarding our IND application to initiate our Phase 1 FREEDOM study, and in June 2023, we provided an update on our plans with respect to this program. In October 2023, we announced that the FDA lifted the clinical hold on our Phase 1 FREEDOM study, allowing this study to proceed in the U.S.

Clinical Trials

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it is initiated at that institution. An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also must review and approve the informed consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completion.

Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a DSMB, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.

Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their www.clinicaltrials.gov website. Information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Although sponsors are obligated to disclose the results of their clinical trials after completion, disclosure of the results can be delayed in some cases for some time. Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government.

Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined:

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Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness.

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Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

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Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA.

Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval on an NDA.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if SAEs occur. Written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies or animal or in vitro testing that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. The sponsor must submit an IND safety report within 15 calendar days after the sponsor determines that the information qualifies for reporting. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information.

NDA Submission and FDA Review and Approval

Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. Data may come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and effectiveness of the investigational drug product for the proposed indication to the satisfaction of the FDA. In most cases, the submission of an NDA is subject to a substantial application user fee; a waiver of such fees may be obtained under certain limited circumstances.

The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

Under the Prescription Drug User Fee Act, or PDUFA, guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA, for a new molecular entity to review and act on the submission, and six months from the filing date of a new molecular entity NDA with priority review. Accordingly, this review process typically takes 12 months and eight months, respectively from the date the NDA is submitted to the FDA. The FDA does not always meet its PDUFA goal dates for standard or priority NDAs, and the review process is often extended by FDA requests for additional information or clarification. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

In addition, under the Pediatric Research Equity Act of 2003, or PREA, as amended, certain NDAs or supplements to an NDA must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. A sponsor who is planning to submit a marketing application for a drug that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration must submit an initial Pediatric Study Plan, or PSP, within 60 days of an end-of-Phase 2 meeting or, if there is no such meeting, as early as practicable before initiation of the Phase 3 or Phase 2/3 study. The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information. The FDA and the sponsor must reach an agreement on the PSP. A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials and/or other clinical development programs.

The FDA may refer an application for a novel drug or a drug that presents difficult questions of safety or efficacy to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, which reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

The FDA also may require the submission of a Risk Evaluation and Mitigation Strategy, or REMS, if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the drug. A REMS may include one or more elements, including medication guides, physician communication plans, patient package insert and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools. The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS. The FDA will not approve the NDA without a REMS, if required.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements.

After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a Complete Response Letter. A Complete Response Letter indicates that the review cycle of the application is complete, and the application will not be approved in its present form. A Complete Response Letter generally outlines the deficiencies in the submission and contains a statement of specific conditions that must be met in order to secure final approval of the NDA; it may require additional clinical or preclinical testing in order for FDA to reconsider the application. If a Complete Response Letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Orphan Drug Designation and Exclusivity

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug product intended to treat a rare disease or condition, which is generally a disease or condition that affects either (i) fewer than 200,000 individuals in the U.S., or (ii) more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making the product available in the U.S. for this type of disease or condition will be recovered from sales of the product. A company must request orphan drug designation before submitting an NDA. If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

If a product with orphan status receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product is entitled to orphan product exclusivity. Orphan product exclusivity means that the FDA may not approve any other applications to market the same product for the same indication for seven years, except in certain limited circumstances. Orphan exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same active ingredient for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand. Further, the FDA may approve more than one product for the same orphan indication or disease as long as the products contain different active ingredients. Moreover, competitors may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan drug has exclusivity. Other benefits of orphan drug designation include tax credits for certain research and waiver from the NDA application fee.

A designated orphan drug many not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. In addition, orphan drug exclusive marketing rights in the U.S. may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if a second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

Expedited Development and Review Programs

The FDA maintains several programs intended to facilitate and expedite development and review of new drugs to address unmet medical needs in the treatment of serious or life-threatening diseases or conditions. These programs include Fast Track designation, Breakthrough Therapy designation, Priority Review and Accelerated Approval, and the purpose of these programs is to either expedite the development or review of important new drugs to get them to patients earlier than under standard FDA development and review procedures.

The FDA has a Fast Track designation program that is intended to expedite or facilitate the process for reviewing new drugs that meet certain criteria. Specifically, new drugs are eligible for Fast Track designation if they are intended to treat a serious or life threatening condition and preclinical or clinical data demonstrate the potential to address unmet medical needs for the condition. Fast Track designation applies to both the product and the specific indication for which it is being studied. The sponsor can request that the FDA grant the product Fast Track designation any time before receiving NDA approval, but ideally no later than the pre-NDA meeting. Fast Track designation provides increased opportunities for sponsor interactions with the FDA review team to expedite development and review of the product. The FDA may also review sections of the NDA for a Fast Track designated-product on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees to accept sections of the application and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application. Fast Track designation may be lost if the designation is no longer supported by data emerging in the clinical trial process.

Additionally, a drug may be eligible for designation as a breakthrough therapy if the product is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life- threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints. The benefits of Breakthrough Therapy designation include the same benefits as Fast Track designation, plus intensive guidance from the FDA to ensure an efficient drug development program. Breakthrough therapy designation comes with all of the benefits of Fast Track designation, which means that the sponsor may file sections of the NDA for review on a rolling basis if certain conditions are satisfied, including an agreement with the FDA on the proposed schedule for submission of portions of the application and the payment of applicable user fees before the FDA may initiate a review.

A product may also be eligible for priority review if it treats a serious or life-threatening condition and, if approved, would provide a significant improvement in safety and effectiveness compared to available therapies. The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether the proposed drug represents a significant improvement in treatment, prevention or diagnosis of disease when compared with other available therapies. A priority review designation is intended to direct overall attention and resources to the evaluation of such applications and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months for an NDA for a new molecular entity from the date of filing. If criteria are not met for priority review, the application for a new molecular entity is subject to the standard FDA review period of ten months after FDA accepts the application for filing. Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.

A product may also be eligible for accelerated approval if it treats a serious or life-threatening disease or condition, generally provides a meaningful advantage over available therapies and demonstrates an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. As a condition of accelerated approval, the FDA generally requires that a sponsor perform adequate and well-controlled post-marketing clinical trials to verify and describe the product’s clinical benefit. These confirmatory trials must be completed with due diligence, and, under the Food and Drug Omnibus Reform Act of 2022, or FDORA, the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval. Under FDORA, the FDA has increased authority for expedited procedures to withdraw the product from the market (and withdraw its approval). In addition, for products being considered for accelerated approval, the FDA generally requires, unless otherwise informed by the agency, pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. Fast Track designation, Breakthrough Therapy designation, priority review and accelerated approval do not change the standards for approval and may not ultimately expedite the development or approval process.

U.S. Non-Patent Exclusivity

Market exclusivity provisions under the FDCA can delay the submission or the approval of certain follow-on applications. The FDCA provides a five-year period of data exclusivity within the U.S. to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an Abbreviated New Drug Application, or ANDA, for a generic version of the drug or a 505(b)(2) NDA for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval. However, such a follow-on application may be submitted after four years if it contains a certification of patent invalidity or non-infringement to one of the patents listed with the FDA by the innovator NDA holder.

The FDCA also provides three years of market exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, new indications, dosages or strengths of an existing drug. This three-year exclusivity period covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving follow-on applications that do not reference the protected clinical data. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Pediatric exclusivity is another type of regulatory market exclusivity in the U.S. Pediatric exclusivity, if granted, adds six months to existing regulatory exclusivity periods for all formulations, dosage forms, and indications of the active moiety and listed patent terms. This six-month exclusivity may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA-issued “Written Request” for such a trial, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining. The issuance of a Written Request does not require the sponsor to undertake the described clinical trials.

Post-approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There are continuing, annual user fee requirements for any marketed products.

The FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

FDA regulations require that products be manufactured in specific facilities and in accordance with cGMP regulations which require, among other things, quality control and quality assurance, the maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP. In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs and those supplying products, ingredients, and components of them are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Manufacturers and other parties involved in the drug supply chain for prescription drug products must also comply with product tracking and tracing requirements and for notifying FDA of counterfeit, diverted, stolen and intentionally adulterated products or products that are otherwise unfit for distribution in the U.S. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. Manufacturers and other parties involved in the drug supply chain for prescription drug products must also comply with product tracking and tracing requirements and for notifying FDA of counterfeit, diverted, stolen and intentionally adulterated products or products that are otherwise unfit for distribution in the U.S.

Once an approval of a drug is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Other potential consequences include, among other things:

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Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

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Fines, warning letters or clinical holds on post-approval clinical trials;

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Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or withdrawal of product approvals;

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Product seizure or detention, or refusal to permit the import or export of products;

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Consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;

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Mandated modification of promotional materials and labeling and the issuance of corrective information;

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Issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; and

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Injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted by a manufacturer and any third parties acting on behalf of a manufacturer only for the approved indications and in a manner consistent with the approved label for the product. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. The FDA and other regulatory agencies have also required that companies enter into consent decrees and/or imposed permanent injunctions under which specified promotional conduct is changed or curtailed. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA-approved labeling.

Healthcare Regulation

Coverage and Reimbursement

Sales of any product depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement for such product by third-party payors. Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. These third-party payors are increasingly reducing coverage and reimbursement for medical products, drugs and services. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization.

The U.S. government, state legislatures and foreign governments have also continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product. Decreases in third-party reimbursement for any product or a decision by a third-party payor not to cover a product could reduce physician usage and patient demand for the product and also have a material adverse effect on sales.

Other Healthcare Laws

Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business that may constrain the financial arrangements and relationships through which we research, as well as sell, market and distribute any products for which we obtain marketing authorization. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, and transparency laws and regulations related to drug pricing and payments and other transfers of value made to physicians and other healthcare providers. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and responsible individuals may be subject to imprisonment.

Healthcare Reform and Legislative Updates

In the U.S., in 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, each as amended, collectively known as the ACA, was enacted, which substantially changed the way healthcare is financed by both governmental and private insurers, and significantly affected the pharmaceutical industry. The ACA contained a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement adjustments and changes to fraud and abuse laws. For example, the ACA:

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increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs;

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required collection of rebates for drugs paid by Medicaid managed care organizations;

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required manufacturers to participate in a coverage gap discount program, under which they must agree to offer 70 percent point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and

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imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell “branded prescription drugs” to specified federal government programs.

Since its enactment, there have also been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA. Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year to 2031, unless additional Congressional action is taken. The U.S. American Taxpayer Relief Act of 2012 further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024. Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021, and subsequent legislation, Medicare payments to providers will be further reduced starting in 2025 absent further legislation. These laws and regulations may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.

There has been increasing legislative and enforcement interest in the U.S. with respect to drug pricing practices. Specifically, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, and review the relationship between pricing and manufacturer patient programs. The Inflation Reduction Act of 2022 (IRA) includes several provisions that may impact our business to varying degrees, including provisions that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2025, thereby effectively eliminating the coverage gap; impose new manufacturer financial liability on certain drugs under Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition; require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation; and delay until January 1, 2032 the implementation of the HHS rebate rule that would have limited the fees that pharmacy benefit managers can charge. Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one orphan designation and for which the only approved indication is for that disease or condition. If a product receives multiple orphan designations or has multiple approved indications, it may not qualify for the orphan drug exemption. The implementation of the IRA is currently subject to ongoing litigation challenging the constitutionality of the IRA’s Medicare drug price negotiation program. The implementation of the IRA is currently subject to ongoing litigation challenging the constitutionality of the IRA’s Medicare drug price negotiation program. The effects of the IRA on our business and the healthcare industry in general is not yet known.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries, proposed and enacted legislation and executive orders designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. Individual states in the U.S. have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could impact the amounts that federal and state governments and other third-party payors will pay for healthcare products and services.

Data Privacy and Security

Numerous state, federal and foreign laws, regulations and standards govern the collection, use, access to, confidentiality and security of health-related and other personal information, and could apply now or in the future to our operations or the operations of our partners. In the U.S., numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws and consumer protection laws and regulations govern the collection, use, disclosure, and protection of health-related and other personal information. In addition, certain foreign laws govern the privacy and security of personal data, including health-related data. For example, European Union General Data Protection Regulation (EU) 2016/679, or the GDPR imposes strict requirements for processing the personal data of individuals within the European Economic Area, or EEA, including requirements relating to processing health-related and other sensitive data, establishing a legal basis for processing such as obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, imposing limitations on retention of personal data; maintaining a record of data processing, complying with the principal of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit and taking certain measures when engaging third-party processors. The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA to countries that the European Union, or EU does not consider to have in place adequate data protection legislation, including the U.S. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the non-compliant company, whichever is greater. Further, from January 1, 2021, companies have had to comply with the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in the U.K., or UK national law. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Regulation and Procedures Governing Approval of Medicinal Products Outside the United States

In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products. Whether or not it obtains FDA approval for a product, an applicant will need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions. For example, the process governing approval of medicinal products in the EU generally follows the same lines as in the United States. It entails satisfactory completion of preclinical studies and adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication. It also requires the submission to the relevant competent authorities of a marketing authorization application, and granting of a marketing authorization by these authorities before the product can be marketed and sold in the EU.

European Union Drug Development and Approval

Clinical Trial Approval

In April 2014, the EU adopted the Clinical Trials Regulation (EU) No 536/2014, or CTR, which repealed and replaced the previous Clinical Trials Directive (2001/20/EC) on January 31, 2022. The transitory provisions of the CTR provide that all ongoing clinical trials must have transitioned to the CTR by January 31, 2025. The CTR overhauls the previous system of approvals for clinical trials in the EU. Specifically, the CTR, which is directly applicable in all EU Member States (meaning no national implementing legislation in each Member State is required), aims at simplifying and streamlining the approval of clinical trials in the EU, simplifying adverse-event reporting procedures, improving the supervision of clinical trials and increasing their transparency. The main characteristics of the CTR include: a streamlined application procedure via a single-entry point through the Clinical Trials Information System, or CTIS; a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors; and a harmonized procedure for the assessment of applications for clinical trials. The role of the relevant ethics committees in the assessment procedure continues to be governed by the national law of the applicable Member State, however overall related timelines are defined by the CTR.

Marketing Authorization

To obtain a marketing authorization for a product in the EU, an applicant must submit a marketing authorization application, either under a centralized procedure administered by the EMA or one of the procedures administered by competent authorities in EU Member States (decentralized procedure, national procedure, or mutual recognition procedure). A marketing authorization may be granted only to an applicant established in the EU or the additional Member States of the European Economic Area (Norway, Iceland and Liechtenstein), or EEA.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU Member States, as well as the additional Member States of the EEA. Pursuant to Regulation (EC) No. 726/2004, the centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines) and products with a new active substance indicated for the treatment of cancer, HIV, AIDS, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions or viral diseases. The centralized procedure is optional for products containing a new active substance not yet authorized in the EU, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU.

Under the centralized procedure, the Committee for Medicinal Products for Human Use, or CHMP, established at the EMA is responsible for conducting an initial assessment of a product. The maximum timeframe for the evaluation of a marketing authorization application is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Clock stops may extend the timeframe of evaluation of an application considerably beyond 210 days. Where the CHMP gives a positive opinion, the EMA provides the opinion together with supporting documentation to the European Commission, who makes the final decision to grant a marketing authorization, which is issued within 67 days of receipt of the EMA’s recommendation. Accelerated evaluation may be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the viewpoint of public health and, in particular, therapeutic innovation. If the CHMP accepts such a request, the time limit of 210 days will be reduced to 150 days, but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that it is no longer appropriate to conduct an accelerated assessment.

National marketing authorizations, which are issued by the competent authorities of the Member States of the EU and only cover their respective territory, are available for products not falling within the mandatory scope of the centralized procedure. Where a product has already been authorized for marketing in a Member State of the EU, this national authorization can be recognized in other Member States through the mutual recognition procedure. If the product has not received a national authorization in any Member State at the time of application, it can be approved simultaneously in various Member States through the decentralized procedure.

Data and Market Exclusivity in the European Union

In the EU, new chemical entities (including both small molecules and biological medicinal products) approved on the basis of a complete and independent data package qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity. Data exclusivity, if granted, prevents generic or biosimilar applicants from referencing the innovator’s pre-clinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization, for a period of eight years from the date on which the reference product was first authorized in the EU. During the additional two-year period of market exclusivity, a generic or biosimilar marketing authorization application can be submitted, and the innovator’s data may be referenced, but no medicinal product can be marketed until the expiration of the market exclusivity. The overall ten-year period will be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to authorization, is held to bring a significant clinical benefit in comparison with currently approved therapies. There is no guarantee that a product will be considered by the EMA to be a new chemical entity, and products may not qualify for data exclusivity. Even if a product is considered to be a new chemical entity so that the innovator gains the prescribed period of data exclusivity, another company could nevertheless also market another version of the product if such company obtained marketing authorization based on a marketing authorization application with a complete and independent data package of pharmaceutical tests, preclinical tests and clinical trials.

Orphan Designation and Exclusivity

Regulation (EC) No 141/2000 and Regulation (EC) No. 847/2000 provide that a product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (1) the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition, (2) either (i) such condition affects no more than five in ten thousand persons in the EU when the application is made, or (ii) without the benefits derived from orphan status, it is unlikely that the marketing of the product in the EU would generate sufficient return to justify the necessary investment in its development; (3) there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the product would be of significant benefit to those affected by that condition.

An orphan designation provides a number of benefits, including fee reductions, regulatory assistance and the possibility to apply for a centralized EU marketing authorization. Marketing authorization for an orphan medicinal product leads to a ten-year period of market exclusivity being granted following marketing approval of the orphan product. During this market exclusivity period, the EMA, the European Commission or the competent authorities of the EU Member States may only grant marketing authorization to a “similar medicinal product” for the same therapeutic indication if: (i) a second applicant can establish that its product, although similar to the authorized product, is safer, more effective or otherwise clinically superior; (ii) the marketing authorization holder for the authorized product consents to a second orphan medicinal product application; or (iii) the marketing authorization holder for the authorized product cannot supply enough orphan medicinal product. A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. The market exclusivity period for the authorized therapeutic indication may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation because, for example, the product is sufficiently profitable not to justify market exclusivity. Orphan designation must be requested before submitting an application for marketing approval. Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

The aforementioned EU rules are generally applicable in the EEA.

Reform of the Regulatory Framework in the European Union

The European Commission introduced legislative proposals in April 2023 that, if implemented, will replace the current regulatory framework in the EU for all medicines (including those for rare diseases and for children). The European Commission has provided the legislative proposals to the European Parliament and the European Council for their review and approval. In October 2023, the European Parliament published draft reports proposing amendments to the legislative proposals, which will be debated by the European Parliament. Once the European Commission’s legislative proposals are approved (with or without amendment), they will be adopted into EU law.

Brexit and the Regulatory Framework in the United Kingdom

The U.K. formally left the EU on January 31, 2020, and the EU and the U.K. have concluded a trade and cooperation agreement, or TCA, which was provisionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021. The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of cGMP, inspections of manufacturing facilities for medicinal products and cGMP documents issued, but does not provide for wholesale mutual recognition of United Kingdom and EU pharmaceutical regulations. At present, EU laws which have been transposed into U.K. law through secondary legislation continue to be applicable as “retained EU law”. However, legislation such as the EU Clinical Trials Regulation or in relation to orphan medicinal products are not applicable. The U.K. government has passed the Medicines and Medical Devices Act 2021, which introduced delegated powers in favor of the Secretary of State (or for Northern Ireland, the Department of Health in Northern Ireland) to amend or supplement existing regulations in the area of medicinal products and medical devices. This allows new rules to be introduced in the future by way of secondary legislation, which aims to allow flexibility in addressing regulatory gaps and future changes in the fields of human medicines, clinical trials and medical devices.

As of January 1, 2021, the MHRA is the U.K.’s standalone medicines and medical devices regulator. As a result of the Northern Ireland protocol, different rules apply in Northern Ireland than in England, Wales, and Scotland (together, Great Britain, or GB); broadly, Northern Ireland currently continues to follow the EU regulatory regime, but its national competent authority will remain the MHRA. On February 27, 2023, the U.K. government and the European Commission announced a political agreement in principle to replace the Northern Ireland Protocol with a new set of arrangements, known as the “Windsor Framework”. This new framework fundamentally changes the existing system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the U.K.. In particular, the MHRA will be responsible for approving all medicinal products destined for the U.K. market (i.e., Great Britain and Northern Ireland), and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland. A single U.K.-wide marketing authorization will be granted by the MHRA for all medicinal products to be sold in the U.K., enabling products to be sold in a single pack and under a single authorization throughout the U.K.. The Windsor Framework was approved by the EU-U.K. Joint Committee on March 24, 2023, so the U.K. government and the EU will enact legislative measures to bring it into law. On June 9, 2023, the MHRA announced that the medicines aspects of the Windsor Framework will apply from January 1, 2025.

The MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit patients, including a 150-day assessment and a rolling review procedure. All existing EU marketing authorizations for centrally authorized products were automatically converted or grandfathered into U.K. marketing authorizations, effective in Great Britain (only), free of charge on January 1, 2021, unless the marketing authorization holder chose to opt-out. In order to use the centralized procedure to obtain a marketing authorization that will be valid throughout the EEA, companies must be established in the EEA. Therefore, since Brexit, companies established in the U.K. can no longer use the centralized procedure and instead an EEA entity must hold any centralized marketing authorizations. In order to obtain a U.K. marketing authorization to commercialize products in the U.K., an applicant must be established in the U.K. or EEA and must follow one of the U.K. national authorization procedures. On January 1, 2024, a new international recognition framework was put in place, which will have regard to decisions on the approval of marketing authorizations made by the European Medicines Agency and certain other regulators when determining an application for a GB authorization. The MHRA also has the power to have regard to marketing authorizations approved in EU Member States (or Iceland, Liechtenstein, Norway) through decentralized or mutual recognition procedures when determining an application for a GB authorization.

There is no longer pre-marketing authorization orphan designation in GB. Instead, the MHRA reviews applications for orphan designation in parallel to the corresponding marketing authorization application. The criteria are essentially the same, but have been tailored for the market, i.e., the prevalence of the condition in GB, rather than the EU, must not be more than five in 10,000. Should an orphan designation be granted, the period or market exclusivity will be set from the date of first approval of the product in GB.

Pricing Decisions for Approved Products

In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval. For example, EU Member States have the option to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU Member States may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other EU Member States allow companies to fix their own prices for products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the EU have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage health care expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the EU. The downward pressure on health care costs in general, particularly prescription products, has become intense.

As a result, increasingly high barriers are being erected to the entry of new products. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various EU Member States, and parallel trade, i.e., arbitrage between low-priced and high-priced EU Member States, can further reduce prices. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries.

Rest of the World Regulation

For other countries outside of Canada, the EU and the U.S., such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. Additionally, the clinical trials must be conducted in accordance with GCP requirements and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Employees and Human Capital Resources

As of December 31, 2023, we had 64 full-time employees, of whom 24 have Ph.D. degrees, and several part-time employees employed on a co-op or internship basis. Within our workforce, 52 employees are engaged in research and development and 12 are engaged in business development, finance, legal, and general management and administration. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

Facilities

In 2023, we primarily operated out of 31,668 square feet of office and laboratory space at 321 Harrison Street, Boston, Massachusetts 02118. The lease was signed on December 1, 2021 and the lease term commenced on December 29, 2022. The term of the lease is 110 months from the commencement date, expiring in May 2032, with an option to extend the lease for one successive five-year term.

We believe that our facilities are adequate for our current needs and for the foreseeable future. To meet the future needs of our business, we may lease additional or alternate space. We believe that suitable additional or substitute space at commercially reasonable terms will be available as needed to accommodate any future expansion of our operations.

Our Culture and Team

Our mission is to deliver transformative therapeutics to those in need, and we believe our innovative EDO technology is well-positioned to effect this change for patients, families and the broader healthcare community. As a company, we value:

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Research: We are a data-driven scientific company at heart, and we approach our work with an evidence-based mindset;

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Innovation: We are always exploring new ways to learn, build and improve across all facets of our company;

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Integrity: We act ethically and honestly in both our scientific and business conduct; and

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Responsibility: As a therapeutic company, we appreciate the impact our work has on patients and their families.

In support of our mission, we have assembled a leadership team with deep experience in research and development, clinical translation, regulatory affairs, corporate development and compliance. Our Chief Executive Officer, James McArthur, Ph.D., brings over 25 years of industry experience to the company, including senior leadership and Board roles at Imara Inc., Cydan LLC and Nightstar Therapeutics plc, with a specific focus on rare disease therapeutics. Dr. McArthur is ably supported by Noel Donnelly, M.B.A., our Chief Financial Officer, who has over 25 years of experience in financial planning and analysis, business analytics and portfolio management and has held roles at EIP Pharma Inc., Takeda Pharmaceuticals, Inc., and Shire HGT; Mary Beth DeLena, our General Counsel and Secretary, who has over 20 years of experience advising life sciences companies in a broad range of strategic, transactional, and corporate matters, spanning early research and development to commercial launch and execution, and has held roles at Alnylam Pharmaceuticals, Praecis Pharmaceuticals, Inc. and Skadden, Arps, Slate, Meagher & Flom LLP; Michelle L. Mellion, M.D., our Senior Vice President, Clinical Development, who is double Board-certified in neurology and clinical neurophysiology and has held roles at Fulcrum Therapeutics, Inc., Vertex Pharmaceuticals, Inc., and Biogen Inc; and Niels Svenstrup, Ph.D., our Senior Vice President of Chemistry, Manufacturing and Control, who has extensive experience in the manufacturing and release of peptide drugs for late-stage clinical programs and has held roles at Ascendis Pharma A/S, Cydan LLC, and Lundbeck A/S, amongst others. We have established a strong scientific advisory board, with members who bring a wealth of expertise from both the indication and therapeutic modality perspectives in their roles as academics, clinicians and drug developers.

We were founded in 2018 with technology spun out from the University of Oxford and MRC to further develop and commercialize this novel peptide delivery approach. This technology was created and refined over a decade by Michael Gait, Ph.D. and Professor Matthew Wood, M.D., Ph.D. We have exclusively licensed the patents, patent applications and know-how associated with this technology.