Cullinan Oncology Inc

We are a clinical-stage biopharmaceutical company focused on developing modality-agnostic targeted oncology therapies. Our mission is creating new standards of care for patients. Our strategy is to identify high-impact cancer targets, which we define as those that play key roles as either oncogenic drivers or immune system activators, and then select what we believe is the optimal therapeutic modality for those targets. We apply a rigorous and differentiated approach to drug development, which is guided by the following core elements:

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Rapidly advance only candidates that we believe have first- and/or best-in-class potential.

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Seek clear evidence of monotherapy activity early in preclinical and clinical development, which we believe will de-risk later stage drug development.

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Remain open to finding what we believe are the optimal modalities and drug candidates either through in-house discovery or through licensing and collaborations.

Using this strategy, we have built a broad and deep pipeline of targeted oncology programs that includes six distinct clinical-stage product candidates. Our current pipeline is summarized in the diagram and bullets below:

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Our lead unpartnered program, CLN-619, is a monoclonal antibody designed to stabilize expression of MICA/B on the tumor cell surface to promote tumor cell lysis mediated by both cytotoxic innate and adaptive immune cells. CLN-619 is being investigated as both monotherapy and in combination with checkpoint inhibitor therapy in an ongoing Phase 1 clinical trial in patients with advanced solid tumors. We intend to present initial data from the checkpoint inhibitor therapy combination dose escalation module of the clinical trial, as well as updated data from the monotherapy dose escalation module, in the second quarter of 2024. Initial data from the disease specific expansion cohorts are anticipated in the first half of 2025. Separately, in February 2024, the United States ("U.S.") Food and Drug Administration ("FDA") cleared our Investigational New Drug ("IND") application to evaluate CLN-619 in a Phase 1 clinical trial in relapsed/refractory multiple myeloma patients.

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CLN-978 is a CD19xCD3 T cell engager with extended serum half-life and, based on preclinical data, robust potency against target cells expressing low levels of CD19. In August 2023, we dosed the first patient in our Phase 1 clinical trial of CLN-978 in patients with relapsed/refractory B cell non-Hodgkin lymphoma (“B-NHL”). Recently, academic and industry groups have generated clinical data and case series demonstrating that CD19 targeted CAR T cell therapy could lead to sustained improvements in disease, including durable remission in some cases, in several B cell mediated autoimmune indications. Nonetheless, cell therapy has many limitations, including the need for lymphodepleting chemotherapy, which is associated with significant toxicities, an FDA-recognized risk of secondary malignancies, and extended manufacturing timelines due to complexity of production. Based on the emerging clinical data supporting the efficacy of CD19 directed therapy in multiple autoimmune diseases and our belief that CLN-978 may address these limitations of CAR T cell therapy, we are also exploring the development of CLN-978 in autoimmune diseases.

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Zipalertinib (CLN-081/TAS6417), which we are co-developing with an affiliate of Taiho Pharmaceutical Co., Ltd ("Taiho"), is an orally-available small-molecule, irreversible epidermal growth factor receptor ("EGFR") inhibitor that is designed to selectively target cells expressing EGFR exon 20 ("EGFRex20") insertion mutations with relative sparing of cells expressing wild-type EGFR. In collaboration with our partners at Taiho, we are evaluating zipalertinib in the pivotal Phase 2b portion of the REZILIENT1 clinical trial in patients with EGFRex20 non-small-cell lung cancer ("NSCLC") who progressed after prior systemic therapy, and in a global Phase 3 clinical trial (“REZILIENT3”) in combination with chemotherapy as a potential first-line treatment for EGFRex20 NSCLC adult patients. We expect to complete enrollment in the pivotal Phase 2b portion of the REZILIENT1 clinical trial by year-end 2024. Taiho and we will each receive 50% of any future pre-tax profits from potential U.S. sales of zipalertinib. The FDA has granted Breakthrough Therapy designation to zipalertinib.

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CLN-049 is a FLT3xCD3 T cell engaging bispecific antibody being investigated in patients with relapsed/refractory ("r/r") acute myeloid leukemia ("AML") or myelodysplastic syndrome ("MDS"). CLN-049 is currently in an ongoing Phase 1 clinical trial with updated clinical data expected in the second half of 2024. In December 2023, we initiated a second Phase 1 clinical trial designed to evaluate the safety of CLN-049 in minimal residual disease-positive AML.

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CLN-418 is a B7H4x4-1BB fully human bispecific immune activator designed to achieve conditional activation of 4-1BB by targeting B7H4, a tumor-associated antigen that is highly expressed across multiple cancers with minimal expression on normal tissues. CLN-418 is being investigated in an ongoing Phase 1 clinical trial in patients with advanced solid tumors with initial clinical data expected in the second half of 2024.

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CLN-617 is a fusion protein combining two potent antitumor cytokines, interleukin-2 ("IL-2"), and interleukin-12 ("IL-12"), with tumor retention domains for the treatment of solid tumors. In December 2023, we dosed the first patient in the CLN-617 first-in-human Phase 1 clinical trial.

In addition to the product candidates described above, we are actively developing several preclinical oncology programs, all in the discovery stage, including our collaboration with Icahn School of Medicine at Mount Sinai for the development of novel hematopoietic progenitor kinase 1 ("HPK1") degraders.

Our Strategy

Our strategy is to identify high-impact cancer targets, which we define as those that play key roles as either oncogenic drivers or immune system activators, and then select what we believe is the optimal therapeutic modality for those targets. The key objectives we aim to achieve with our strategy are as follows:

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Continue to pursue robust clinical development of our lead unpartnered program, CLN-619. Given MICA/B is expressed on a wide range of solid tumors and hematological malignancies, we believe CLN-619 has broad therapeutic potential. We have initiated multiple disease specific expansion cohorts and intend to evaluate opportunities for expansion into additional indications based on clinical and biomarker data from our ongoing Phase 1 clinical trial.

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Explore development of CLN-978 in autoimmune diseases. Recently, academic and industry groups have generated clinical data and case series demonstrating that CD19 targeted CAR T cell therapy could lead to sustained improvements in disease, including durable remission in some cases, in several B cell mediated autoimmune indications. Nonetheless, cell therapy has many limitations, including the need for lymphodepleting chemotherapy, which is associated with significant toxicities, an FDA-recognized risk of secondary malignancies, and extended manufacturing timelines due to complexity of production. CLN-978 was designed to address these limitations of current CD19 directed therapy via off-the-shelf subcutaneous administration and the ability to redirect T cells to lyse B cells expressing very low levels of CD19. We are therefore exploring the development of CLN-978 in autoimmune diseases.

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Advance zipalertinib, which we are co-developing with an affiliate of Taiho, toward potential regulatory approval. In collaboration with our partners at Taiho, we are pursuing a broad, parallel development plan designed to exploit the potential of zipalertinib in multiple patient populations. Our ongoing registration directed studies include patients who have progressed following treatment with chemotherapy with or without exon 20 insertion targeted therapy in the pivotal Phase 2b portion of the REZILIENT1 clinical trial, and previously untreated patients with advanced disease in the REZILIENT3 Phase 3 clinical trial. With our partners at Taiho, we also have a separate ongoing Phase 2 clinical trial, REZILIENT2, evaluating zipalertinib as a monotherapy in several parallel cohorts, including (1) EGFRex20 NSCLC patients who have not received prior treatment for advanced disease, (2) NSCLC patients with EGFRex20 or other uncommon EGFR mutations who have received prior standard systemic therapy, and (3) NSCLC patients with EGFRex20 or other uncommon EGFR mutations who have active brain metastases (including treatment naïve and treatment-experienced).

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Generate additional near-term clinical readouts from our pipeline. In addition to CLN-619, CLN-978, and zipalertinib, we have three additional product candidates in clinical trials. In the second half of 2024, we expect to present clinical data from two of these candidates, CLN-049 in r/r AML and MDS patients, and CLN-418 in patients with advanced solid tumors. We continuously assess each of our programs and use rigorous go / no-go decision criteria to justify ongoing investment. We initiated ongoing Phase 1 clinical trials for our remaining two clinical-stage programs, CLN-978 and CLN-617, in 2023. When certain programs do not meet our de-risking criteria for advancement, we terminate those programs and preserve our capital and resources to invest in programs with greater potential. As a result, our pipeline will continue to evolve.

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Evaluate internal and external opportunities to expand our pipeline. Our management team is comprised of leaders in oncology drug discovery, clinical development, and commercial operations. Their proven track records and longstanding relationships in the life sciences industry provide us with access to programs from around the world, including externally sourced programs such as CLN-619 and zipalertinib. In addition, their experiences and deep understanding of molecular oncology and cancer immunotherapy also enable us to translate novel concepts into internally designed product candidates, such as CLN-978, or those that contain both internal and externally sourced innovation, such as CLN-617. We balance pipeline expansion with the desire to maintain ample cash runway beyond key program milestones.

Our Structure

When we were a private company, we established development subsidiaries when we acquired or licensed exclusive worldwide rights to intellectual property, including for CLN-619, CLN-049, and CLN-617. The structure of our financing arrangements with each development subsidiary enables us to increase our economic ownership when we provide additional capital. We have not established development subsidiaries for our other current product candidates and programs. In June 2022, we sold our equity interest in our development subsidiary for zipalertinib to Taiho, and in connection with the sale and pursuant to a co-development agreement, we are co-developing zipalertinib with an affiliate of Taiho. We hold the intellectual property rights for CLN-978 and CLN-418, and we hold intellectual property rights or exclusive options for worldwide intellectual property for our earlier-stage programs. The following table shows our ownership interest as of December 31, 2023 in our development subsidiaries and their product candidates:

CLN-619

CLN-619 is a MICA/B-targeted, humanized immunoglobulin G1 (“IgG1”) monoclonal antibody that we are initially developing for the treatment of solid tumors and multiple myeloma. CLN-619 was designed to promote an antitumor response through multiple mechanisms of action, including inhibition of MICA/B shedding, mediation of antibody-dependent cell-mediated cytotoxicity (“ADCC”) and antibody-dependent cellular phagocytosis (“ADCP”). The MICA/B receptor, NKG2D, is expressed on both innate and adaptive immune cell populations. Although several companies have disclosed preclinical MICA/B targeting programs, we are unaware of any other clinical stage, antibody-based programs engaging this target, implying CLN-619 has first-in-class potential. In multiplein vivo preclinical tumor models, CLN-619 administration was associated with antitumor activity.

We believe CLN-619 has the potential to become a novel backbone agent for immuno-oncology therapy given the broad expression of MICA/B across tumor types and the biological rationale for combining CLN-619 with other agents. We are currently evaluating CLN-619 in an ongoing Phase 1 clinical trial for patients with advanced solid tumors. The clinical trial design includes parallel evaluation of CLN-619 as a monotherapy and in combination with checkpoint-inhibitor therapy.

Background on NKG2D and MICA/B

NKG2D is a key activating receptor on natural killer ("NK") cells responsible for cytolysis upon binding to ligands expressed on target cells. NKG2D is also expressed on other types of immune cells, including CD8+ ß T cells, natural killer T cells, andT cells, and can prime such cells for activation and enhance their antitumor activity as a co-activating receptor. Healthy cells do not normally express ligands of NKG2D, but will do so in response to cellular stress, such as oxygen or nutrient deprivation, radiation, viral infection, or oncogenic transformation.

MICA/B proteins are broadly recognized by NK cells, T cells, and CD8+ ß T cells via the NKG2D receptor. The engagement between the NKG2D receptor and MICA/B proteins triggers the effector cytolytic responses of NK cells andT cells against tumor cells expressing MICA/B. In the case of CD8+ ß T cells, effector responses mediated by the T cell receptor are enhanced by NKG2D-MICA/B interactions. NKG2D-mediated stimulation also results in the induction of cytokines, which further promotes the recruitment and the proliferation of immune cells and bolsters the immune response.

To evade potential cytotoxic destruction by NK cells and T cells, tumor cells expressing MICA/B have adopted shedding of MICA/B from their cell surface as a key evasion mechanism. The MICA/B alpha 3 domain contains a stretch of amino acids that allows for protease cleavage of an extracellular portion of MICA/B and subsequent release from the cell surface, thereby reducing the ability of MICA/B to interact with NKG2D and resulting in decreased NKG2D-mediated killing of tumor cells. This mechanism also concomitantly increases the amount of circulating serum MICA/B ("sMICA/B") in preclinical studies. The mechanisms underlying this biology are illustrated below. The top pathway shows the normal mechanism by which tumor-associated ligands of NKG2D, such as MICA/B, can induce the killing of stressed cells. The bottom pathway shows how tumor cells, through the proteolytic cleavage of MICA/B, can escape immune surveillance and immune cell-mediated killing.

MICA/B Serves as a Warning Signal to the Immune System to Eliminate Potentially Dangerous Cells

An analysis of the expression of the NKG2D ligands in The Cancer Genome Atlas, shows that MICA and MICB are the two ligands for NKG2D that are most frequently expressed across a wide range of tumor types. We believe the positive expression profile of MICA/B in many tumor types provides attractive development opportunities across a wide range of indications.

CLN-619 is a MICA/B-targeted humanized IgG1 monoclonal antibody with a competent Fc gamma 1 domain capable of mediating effector cell functions through binding to Fc gamma receptors on innate immune cells.

We believe CLN-619 may affect antitumor activity through a multi-pronged mechanism of action. First, we believe that CLN-619 may prevent the proteolytic cleavage of MICA and MICB on cancer cells by proteases commonly found in the tumor microenvironment (noted as “1” in the figure below). This mechanism would enable the accumulation of MICA/B on the surface of cancer cells. In preclinical studies, treatment with CLN-619 resulted in increased cell surface expression and reduced serum levels of MICA/B in various tumor cell lines, while CLN-619 treatmentin vivo led to reduced serum levels of MICA/B. Elevated expression of MICA/B on the surface of cancer cells is expected to enhance killing of cancer cells by NK cells via binding of their NKG2D receptor to MICA/B. MICA/B also interacts with NKG2D expressed ongd T cells and natural killer T cells, where NKG2D can play the role of a co-activating receptor, lowering the threshold for T cell-mediated cancer cell lysis. Second, CLN-619 has a human IgG1 backbone with a wild-type Fc gamma domain, which allows it to engage NK cells by binding to their Fc gamma receptor IIIa, leading to ADCC (noted as “2” in the figure below). In preclinical studies, treatment with CLN-619 was shown to induce ADCCin vitro. Third, the wild-type Fc gamma domain of CLN-619 enables it to mediate ADCP of target tumor cells via macrophage engagement (noted as “3” in the figure below). Finally, our preliminary preclinical data suggests that CLN-619 may have the potential to enhance the binding of MICA/B to NKG2D receptors on NK cells or other immune cells to provide for improved cancer cell lysis (noted as “4” in the figure below). We believe that all of these mechanisms may be acting in a coordinated manner to engage NK cells and other immune cells, which could result in the cancer cell lysis observed in the preclinical studies described below.

CLN-619 Modes of Action

Clinical Development

Phase 1 Clinical Trial

We are currently evaluating CLN-619 in a global Phase 1 clinical trial in patients with advanced solid tumors. We have completed enrollment in parallel dose-escalation modules evaluating CLN-619 as a monotherapy and in combination with checkpoint inhibitor therapy. The dose-escalation phase incorporated a standard 3+3 escalation format, as depicted below, and allowed dose-level cohort extensions based on safety criteria. CLN-619 was administered intravenously every three weeks.

Global Phase 1 Clinical Trial Design of CLN-619

Dose Escalation Module

We presented initial data from the monotherapy module at the American Society for Clinical Oncology annual meeting in June 2023 based on a data cut off as of March 31, 2023. The data set includes 37 patients treated with CLN-619 monotherapy across dose levels, ranging from 0.1 milligrams per kilogram "(mg/kg") to 10mg/kg. Patients were heavily pre-treated with a median of three prior systemic therapies (ranging from one to seven), and 54% had received prior immune checkpoint inhibitor therapy.

The Phase 1 monotherapy dose escalation demonstrates a favorable safety profile of CLN-619 across all tested doses in patients with solid tumors. No dose limiting toxicities were observed. Similar to other monoclonal antibodies, infusion-related reactions were limited to the first dose, and all Grade 1/2 adverse events were in patients receiving mandated corticosteroid pre-medication.

Adverse Events from CLN-619 Monotherapy in Phase 1 Study

In terms of efficacy, the initial clinical data demonstrate monotherapy anti-tumor activity of CLN-619 in the form of objective responses and prolonged stable disease across multiple tumors, including gynecological cancers:

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Objective responses were observed starting at doses of 3 mg/kg.

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One complete response ("CR") with greater than nine months duration (ongoing at data cut-off) was observed in a patient with parotid gland cancer whose cancer had progressed on prior checkpoint inhibitor therapy.

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Two partial responses ("PRs") (confirmed as of time of data presentation) were observed in patients with endometrial cancer, one whose cancer had progressed on prior checkpoint inhibitor therapy.

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Multiple instances of durable stable disease ("SD") were observed across a range of tumor types including cervical, ovarian, salivary gland, and breast cancers.

Time on Treatment and Clinical Activity from CLN-619 Monotherapy in Phase 1 Study

Summary of Clinical Activity from CLN-619 Monotherapy in Phase 1 Study

Details of Confirmed Objective Responses from CLN-619 Monotherapy in Phase 1 Study

At the 2023 Society for Immunotherapy of Cancer Annual Meeting, we presented initial biomarker data from the ongoing Phase 1 clinical trial, which showed that CLN-619 increases MICA/B expression on the tumor cell surface, consistent with previously reported preclinical data and supporting the proposed mechanism of action. Data from patients with available biopsy data demonstrate clinical benefit, including objective response, in patients with tumors with characteristics not typically responsive to checkpoint inhibitor therapy. Specifically, tumors from the two responding endometrial cancer patients were microsatellite stable, had low tumor mutational burden, and low neoantigen presentation index. Available biopsies from patients with prolonged stable disease showed similar low mutational burden and neoantigen presentation index characteristics, as well as increased surface MICA/B expression and NK cell activation.

Cullinan expects to report initial data from the combination dose escalation module as well as an update on the monotherapy dose escalation module at a medical conference in the second quarter of 2024.

Background on Endometrial Cancer

Uterine cancer is the most common cancer of the female reproductive organs. The American Cancer Society estimated that in 2024, there will be approximately 67,880 new cases of uterine cancer and approximately 13,250 deaths from uterine cancer in the U.S. Uterine cancer is one of the few cancers with increasing mortality, and its mortality rate has risen by approximately 1.7% per year for the past 20 years. The most common subtype of uterine cancer is endometrial cancer, which represents approximately 90% of all uterine cancers.

The treatment landscape for endometrial cancer in the U.S. is evolving. Most eligible patients requiring systemic therapy receive platinum-based chemotherapy in the frontline, with or without hormonal treatment. Currently, the only approved agents in the second line or later setting are anti-PD1 therapy plus or minus the tyrosine kinase inhibitor, lenvatinib. However, the anti-PD1 therapy, dostarlimab, was approved in 2023 for certain patient groups as first-line treatment in combination with chemotherapy; in February 2023, Merck announced that a Phase 3 clinical trial evaluating the anti-PD1 therapy, pembrolizumab, in combination with chemotherapy, met its primary endpoint of progression-free survival for the treatment of patients with endometrial cancer in the first-line setting. Based on dostarlimab’s approval, and pembrolizumab’s Phase 3 clinical trial results, we believe anti-PD1 therapy will shift to the frontline setting, which would leave a significant unmet need in the second line or later settings.

Ongoing Clinical Development

We have initiated disease-specific expansion cohorts in endometrial cancer (monotherapy and combination therapy), and cervical cancer (monotherapy), and we may announce additional disease specific expansion cohorts for monotherapy and/or combination therapy as our data analysis continues. We anticipate announcing initial data from the disease specific expansion cohorts in the first half of 2025. Separately, in February 2024, the FDA cleared our IND to evaluate CLN-619 in a Phase 1 clinical trial in relapsed/refractory multiple myeloma patients.

CLN-978

CLN-978 is a half-life extended, humanized, single-chain bispecific antibody designed to simultaneously engage CD19 on B cells and CD3 on T cells, triggering redirected T cells to lyse the malignant B cells. In addition, CLN-978 has a human serum albumin ("HSA") binding domain designed to prolong its serum half-life. CLN-978 mediated CD19-dependent cell lysis in vitro of target cell lines with a range of CD19 target expression levels. In preclinicalin vivo studies, treatment with CLN-978, at extremely low and infrequent doses, led to profound B cell depletion after a single dose in non-human primates.

Rationale for Targeting CD19 in B Cell Non-Hodgkin Lymphoma and Autoimmune Diseases

The American Cancer Society estimates that in 2024, there will be approximately 80,620 newly diagnosed patients with non-Hodgkin lymphomas and 20,140 deaths from non-Hodgkin lymphomas. The most common subtype of non-Hodgkin lymphoma is B-NHL, which represents approximately 85% of all non-Hodgkin lymphomas in the U.S. In B-NHL, CD19 is an attractive therapeutic target because it is constantly and strongly expressed in cancerous B cells, is highly disease-specific, and has a limited number of off-target effects. In the last decade, several cell therapies and antibodies have been approved for the treatment of B cell lymphomas and leukemias.

Non-malignant B cells also express the CD19 target and play a role in numerous autoimmune diseases which can affect multiple organ systems. Common to the pathophysiology of these disorders is the aberrant production of antibodies directed toward self-antigens, which are referred to as autoantibodies. Recently, academic and industry groups have generated clinical data and case series demonstrating that CD19 targeted CAR T cell therapy could lead to a sustained suppression of autoantibodies in treatment resistant lupus as well as other B cell mediated autoimmune indications. These case series show that the profound depletion of B cells by the CD19 targeted CAR T cell therapy, followed by the re-emergence of a naïve B cell repertoire, allows for a “reset” of the B cell compartment and a lasting elimination of the aberrant autoantibody producing plasmablasts. Nonetheless, there are challenges with cell therapies, which include the need for lymphodepleting chemotherapy, which is associated with significant toxicities, an FDA-recognized risk of secondary malignancies, and extended manufacturing timelines due to complexity of production.

We believe that our CD19xCD3 T cell engager, CLN-978, may address some of the limitations associated with cell therapies. CLN-978 is an off-the-shelf, subcutaneously administered molecule that has shown profound B cell depletion in the periphery and in tissues such as lymph nodes and spleen in preclinical non-human primate studies. In the U.S., there is only one FDA-approved CD19 T cell engager, which is indicated for ALL. Additionally, there is only one other CD19 T cell engager in clinical development that we are aware of, which is currently being developed only for oncology indications and is IV-administered. Other companies are developing T cell engagers for autoimmune diseases using a CD20xCD3 approach. We believe CD19 is a superior target due to its broader expression across the B cell lineage, including in the plasmablasts that produce the autoreactive antibodies.

We designed CLN-978 based on a bispecific T cell engager-like format using tandemly-arranged single-chain variable fragments (“scFvs”) for CD19 and CD3, similar to blinatumomab. In addition, we incorporated a third domain in the form of a single-domain antibody (VHH) for binding to HSA. We believe that binding of CLN-978 to albumin has the potential to extend its serum half-life. An illustration of the CLN-978 structure is shown in the following figure.

Design of CLN-978, a CD19xCD3-bispecific T Cell Engager with Extended Serum Half-life

We engaged with Adimab, LLC ("Adimab") to select antibody-derived binding domains specific for CD19, CD3, and HSA with optimized biophysical and biochemical properties, tailored binding affinities as well as other parameters that are key to developability, manufacturability, and preclinical testing of drug candidates. In preclinical studies, CLN-978 has demonstrated potent antitumor activity both in terms of redirecting T cells to lyse low-CD19 expressing cellsin vitro and significant tumor growth inhibitionin vivo. We believe these preclinical results support further evaluation of CLN-978 for its potential to improve upon the clinical efficacy of existing therapies. In addition, we believe the ability to target cells with low CD19 expression would potentially enable us to address patients that progress following CAR T cell therapy.

CLN-978 incorporates a CD19 binding domain that was engineered to achieve picomolar binding affinity to CD19 as measured using plasmon resonance, which we believe may contribute to cytolytic potency against low CD19-expressing cell lines inin vitro studies. As shown in the figure below, CLN-978 targets a range of CD19 expression levels in the engineered A20 cell lines as measured by both the picomolar drug concentration at which 50% of target cells are killed by redirected cell lysis (the “ EC50 value") and the maximum percentage of lysis. We believe this observation supports our hypothesis that CLN-978 may be active at relatively low doses, which could confer a wider therapeutic index, and have the potential to better address patient populations with lower levels of CD19 expression on B cells.

CLN-978 Redirects Cell Lysis of Low CD19-expressing Cell Lines In Vitro Cytotoxicity Assays

1. Lysis of target cells requires CD19 expression, as the A20 parental cell line, which lacks CD19 expression, was not susceptible to lysis even at high drug concentrations.

CLN-978 has also demonstrated the ability to deplete malignant B cell populationsin vivo in a humanized model, where the mice were implanted with a human Raji-luciferase lymphoma cell line (“Raji B.luc”) and human peripheral blood mononuclear cell ("PBMC"). As shown in the figure below, CLN-978 demonstrated significant tumor growth inhibition at every dose level tested. Furthermore, at the 3 microgram per kilogram dose level and above, CLN-978 treatment resulted in a complete response in 100% of treated mice.

Antitumor Activity of CLN-978 in a Raji-luciferase Human PBMC Mouse Model

Consistent with the tumor growth inhibition, we observed a statistically significant reduction in the number of normal human CD19+ B cells in all CLN-978 treated groups as shown in the figure below.

Reduction in Normal B Cells in Peripheral Blood after Treatment with CLN-978 in the huPBMC Raji B.luc Mouse Model

Studies in non-human primates have also shown robust and complete depletion of B cells for up to 30 days following a single administration by either the subcutaneous (“SC”) or intravenous (“IV") routes, as shown below left. In a study of four weekly SC doses, profound B cell depletion was also observed in tissues such as lymph nodes and spleen at four weeks following administration for the final dose in this study. While both SC and IV administration achieved similar areas under the curve, as shown below right, maximum serum concentration ("Cmax") of CLN-978 was reduced for the SC route.

Consistent with the reduced Cmax for SC administration, preclinical data from non-human primates have also demonstrated the ability of SC administration to attenuate cytokine release as compared to IV administration. As shown below, the increase in levels of interleukin-6 ("IL6"), tumor necrosis factor-alpha ("TNFα"), and interferon gamma ("IFNγ") were far lower across a range of doses for SC administration compared to IV administration.

In August 2023, we dosed the first patient in our Phase 1 clinical trial of CLN-978 in patients with r/r B-NHL. The clinical trial design includes initial evaluation of CLN-978 as a monotherapy in a dose-escalation cohort.

Recently, academic and industry groups have generated clinical data and case series demonstrating that CD19 targeted CAR T cell therapy could lead to sustained improvements in disease, including durable remission in some cases, in several B cell mediated autoimmune indications. Nonetheless, cell therapy has many limitations, including the need for lymphodepleting chemotherapy, which is associated with significant toxicities, an FDA-recognized risk of secondary malignancies, and extended manufacturing timelines due to complexity of production. Based on the emerging clinical data supporting the efficacy of CD19 directed therapy in multiple autoimmune diseases and our belief that CLN-978 may address these limitations of CAR T cell therapy, we are also exploring the development of CLN-978 in autoimmune diseases.

Zipalertinib

Zipalertinib is an orally bioavailable small molecule designed as a next generation, irreversible EGFR inhibitor being developed in collaboration with an affiliate of Taiho for the treatment of a genetically defined subset of patients with NSCLC. In January 2022, the FDA granted Breakthrough Therapy designation to zipalertinib, and in November 2022, in collaboration with our partners at Taiho, we initiated the pivotal Phase 2b portion of the REZILIENT1 clinical trial evaluating zipalertinib in adult NSCLC patients with EGFRex20ins mutations who progressed after prior systemic therapy. We have a co-development and co-commercialization agreement for zipalertinib with an affiliate of Taiho, pursuant to which we are collaborating to develop zipalertinib and have the option to co-commercialize zipalertinib in the U.S. Development costs for zipalertinib are shared equally between us and Taiho with each party receiving 50% of any future pre-tax profits from potential U.S. sales of zipalertinib.

In June 2022, we provided a clinical update at the American Society for Clinical Oncology meeting that included safety and efficacy data from 73 evaluable NSCLC patients with EGFRex20ins mutations enrolled in the Phase 1/2a portion of the REZILIENT1 clinical trial across five dose levels, ranging from 30 to 150 mg twice daily. At the 100 mg twice-daily dose, we observed the following efficacy and safety highlights, which we believe reflect zipalertinib’s differentiated clinical profile:

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16 of 39 (41%) response evaluable patients achieved a confirmed partial response.

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38 of 39 (97%) response evaluable patients achieved a best response of partial response or stable disease.

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The median progression-free survival ("PFS") was 12 months.

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No Grade 3 or greater treatment-related adverse events ("TRAEs") of rash or diarrhea, which are associated with EGFR tyrosine kinase inhibitor (“TKI”) therapies.

Background on NSCLC and EGFR mutations

Lung cancer is by far the leading cause of cancer deaths among both men and women, comprising approximately 20% of all cancer deaths. The American Cancer Society estimated that in 2024, there will be approximately 234,580 new cases of lung cancer and approximately 125,070 deaths from lung cancer in the U.S. The most common subtype of lung cancer is NSCLC, which represents approximately 80% to 85% of all lung cancers.

EGFR is a receptor tyrosine kinase ("RTK"), that normally functions to trigger cell division when growth factors bind to the receptor. Oncogenic mutations in the tyrosine kinase domain can induce growth factor-independent activation of EGFR, resulting in uncontrolled cell growth and proliferation. Ultimately, these aberrant signals can contribute to the development of NSCLC. EGFR mutations are present in approximately 15% to 25% of U.S. and Western European NSCLC patients and approximately 30% to 50% of Asian NSCLC patients. Given its important role and prevalence in cancer, mutant EGFR is a critical target in lung cancer therapy. Exon 19 deletion and exon 21 L858R substitution mutations, collectively referred to as classical EGFR mutations, are the most common and account for over 75% of EGFR mutations in NSCLC. Multiple EGFR inhibitors, including gefitinib, erlotinib, afatinib, and osimertinib, target these common mutations and have been approved as first-line therapies, thus validating mutant EGFR as a target for the treatment of NSCLC.

Exon 20 insertions, which account for 7% to 13% of all EGFR mutations in NSCLC patients, are the most prevalent after the classical EGFR mutations. We estimate an incidence of approximately 2,000 to 5,000 NSCLC patients in the U.S. and approximately 1,000 to 3,000 patients in France, Germany, Italy, Spain, and the United Kingdom (the "UK") with EGFRex20ins mutations. Preclinical studies have shown that exon 20 insertions, as well as classical EGFR mutations, have the characteristics of oncogenic driver mutations, which are responsible for both tumorigenesis and the progression of cancer. However, in contrast to classical EGFR mutations, exon 20 insertions do not sensitize the kinase domain to treatment with approved EGFR inhibitors.

Two targeted therapies have previously received accelerated approval for NSCLC patients with EGFRex20ins mutations whose disease has progressed on or after platinum-based chemotherapy: amivantamab-vmjw (Rybrevant) and mobocertinib (EXKIVITY). Both Rybrevant and EXKIVITY have completed their confirmatory studies in the frontline setting in NSCLC patients with EGFRex20ins mutations. In the case of Rybrevant, the clinical trial tested Rybrevant plus standard-of-care chemotherapy versus chemotherapy alone (the "PAPILLON clinical trial"). In July 2023, Janssen Biotech, Inc., one of the Janssen Pharmaceutical Companies of Johnson & Johnson ("Johnson & Johnson"), reported that the PAPILLON clinical trial met its primary endpoint of a significant improvement in PFS. In March 2024, Johnson & Johnson subsequently received full approval of Rybrevant in the frontline setting from the FDA. In the case of EXKIVITY, the confirmatory clinical trial tested EXKIVITY monotherapy against standard-of-care chemotherapy alone. Also in July 2023, Takeda Pharmaceuticals, Inc. ("Takeda") reported that EXKIVITY failed to meet its PFS primary endpoint and subsequently announced plans to voluntarily withdraw EXKIVITY from the market no later than March 2024.

Zipalertinib is a small molecule that was designed as an irreversible EGFR inhibitor with a novel pyrrolopyrimidine scaffold, which is unique among the therapies in development that are targeting EGFRex20ins mutations. Zipalertinib is designed to fit into the adenosine triphosphate-binding site of EGFR where it covalently modifies C797, thereby forming a durable drug-protein linkage that irreversibly inhibits the mutant receptor. In preclinical studies, zipalertinib demonstrated high selectivity and inhibition of EGFR in cells expressing mutant EGFR proteins, with substantially less inhibition in cells expressing wild-type EGFR.

Clinical Development

REZILIENT1: Phase 1/2a Module

We initiated our ongoing Phase 1/2a portion of the REZILIENT1 clinical trial in the fourth quarter of 2019. This first-in-human, open-label, multi-center clinical trial was designed to evaluate the safety and tolerability, pharmacokinetics, pharmacodynamics, and preliminary efficacy of zipalertinib in adult NSCLC patients with EGFRex20ins mutations who progressed after prior systemic therapy. The clinical trial included two major components: dose escalation and cohort expansion. Dose escalation began with a single patient accelerated titration design and transitioned to rolling six decision rules upon the first occurrence of a Grade 2 or greater TRAE, which occurred at the 100 mg twice-daily dose level. This clinical trial had a flexible, adaptive design that included 30, 45, 65, 100, and 150 mg twice-daily dose cohorts and allowed for expansion of any given cohort, gated by acceptable safety and pre-specified efficacy criteria. Per original protocol, cohorts could be expanded to six, then 13, then 36 patients, gated by these criteria. We expanded cohorts at the 65 mg, 100 mg, and the 150 mg twice-daily dose levels, although we subsequently discontinued enrollment at the 150 mg level after enrolling 11 patients, based on assessment of the overall clinical profile at this dose level. During the Phase 1/2a portion of the REZILIENT1 clinical trial we enrolled a total of 39 patients at the 100 mg twice-daily dose level, which includes the original protocol maximum of 36 patients plus an additional three patients that were reassigned following our decision to discontinue enrollment at the 150 mg twice-daily dose level. We enrolled patients across sites in the U.S., the Netherlands, Singapore, Hong Kong, and Taiwan.

The Phase 1/2a portion enrolled a total of 73 patients who received at least one dose of zipalertinib. The patient population was heavily pre-treated, with a median of two prior systemic therapies and 66% of patients having received two or more prior therapies at clinical trial entry (i.e., third line of therapy or greater). Further, 36% of patients received prior treatment with an EGFR inhibitor, including 4% that received prior treatment with poziotinib or EXKIVITY, TKIs that target exon 20 insertion mutations. Over half (55%) of the patients received prior treatment with immunotherapy.

Phase 1/2a Safety and Pharmacokinetic Data

The following table provides a summary of treatment-related safety and tolerability events, including rash and diarrhea, which are toxicities related to inhibition of wild-type EGFR, as well as laboratory abnormalities including anemia and transaminase elevations across all twice-daily dose levels for comparison, as well as the overall safety population in the Phase 1/2a portion of the REZILIENT1 clinical trial. We believe that this safety and tolerability profile compares favorably to other EGFRex20 inhibitors, in particular with respect to the incidence and severity of diarrhea.

Differentiated Safety and Tolerability Profile of Zipalertinib at 100mg Twice-Daily

1 Common Terminology Criteria for Adverse Events v5.0

In the 39 safety-evaluable patients in the Phase 1/2a portion treated at the 100 mg twice daily dose level, none experienced Grade 3 or greater treatment-related rash or diarrhea. At this dose level, 82% and 36% of patients experienced treatment-related rash and diarrhea, respectively, of either Grade 1 or 2 severity; however, the ratio of patients who experienced Grade 1 versus Grade 2 events is approximately 3:1 for both rash and diarrhea. Both events were manageable with conventional supportive care, and implementation of systematic gastrointestinal prophylaxis was not required for diarrhea management. As has been seen with other EGFR TKIs, a case of Grade 3 treatment-related pneumonitis was observed at this dose level, although the patient had recent treatment with checkpoint inhibitor therapy and the concurrent presence of a significant hydropneumothorax, not related to treatment, in the contralateral lung.

Key observations in 11 safety-evaluable patients at the 150 mg twice-daily dose level included treatment-related Grade 3 diarrhea in two patients, Grade 3 rash in one patient, and two patients with Grade 3 and Grade 4 transaminitis. In addition, one patient who was off treatment with zipalertinib for more than three weeks because of progressive disease was reported as having Grade 3 treatment-related pneumonitis; the patient had a concurrent Pneumocystis jirovecii infection. In addition, an increase in rates of dose reduction and dose discontinuation were observed among patients treated at the 150 mg twice-daily compared to the 100 mg twice-daily dose level. These observations informed our decision to discontinue further enrollment of patients at 150 mg twice-daily, after 11 patients.

Preliminary pharmacokinetic data demonstrated a near dose-dependent trend in exposure, as measured by unbound area under the curve ("AUC") and Cmax values. Furthermore, the target AUC required to achieve tumor regression in preclinical studies was reached starting at the initial dose of 30 mg twice daily. Notable features of the zipalertinib pharmacokinetic profile include sustained pharmacokinetic exposure over the concentration required for 50% growth inhibition ("GI50") for EGFRex20ins mutations for eight hours post dose, limited interpatient heterogeneity, and limited exposure above the GI50 for wild-type EGFR at doses at or below 100 mg twice daily. Consistent with the clinical safety profile at 100 mg twice-daily dose compared with the 150 mg twice-daily dose, at the 150 mg twice-daily dose we observed zipalertinib concentrations above wild-type EGFR GI50 ratios for approximately four hours.

Phase 1/2a Efficacy Data

The following table summarizes best response characteristics for response-evaluable patients treated at 65 mg or below (N=23), 100 mg (N=39), and 150 mg (N=11) twice-daily dose levels as well as the overall population across dose levels in aggregate (N=73) as of a May 9, 2022 data cutoff. Among patients treated at 100 mg twice daily, 16 patients achieved a confirmed partial response, indicating a 41% confirmed overall response rate ("ORR"). This confirmed ORR was higher than the 36% confirmed ORR among 11 patients at the 150 mg twice-daily dose cohort. At the 100 mg twice-daily dose cohort, median PFS was 12 months compared to a PFS of only 8 months at the 150 mg twice-daily dose. As discussed above, Grade 3 or higher rash and diarrhea as well as dose reductions and dose discontinuations all favored the 100 mg twice-daily dose cohort.

Zipalertinib: Superior Safety and Efficacy Observed at 100mg Twice-Daily Dose

Below are additional efficacy analyses for the 73 patients including a swimmer’s chart (A) and a waterfall chart with percentage best change from baseline (B). We have also included a Kaplan-Meier curve showing median PFS (C). Patients in the clinical trial have their initial tumor imaging performed after approximately six weeks of treatment, and then every nine weeks thereafter. Based on these analyses, we believe that zipalertinib has shown substantial antitumor activity with broad EGFRex20 variant coverage, a rapid onset of action, and encouraging response quality as measured by PFS.

(A) Preliminary Efficacy Results from Ongoing Phase 1/2a Clinical Trial of Zipalertinib

(B) Best Response % Change from Baseline (Target Lesion)

(C) Estimated Median Progression-Free Survival

Pivotal Phase 2b Clinical Trial

In November 2022, in collaboration with our partners at Taiho, we initiated the ongoing, pivotal Phase 2b portion of the REZILIENT1 clinical trial of 100 mg twice daily zipalertinib in adult NSCLC patients with EGFRex20ins mutations who progressed after prior systemic therapy. The clinical trial is evaluating zipalertinib 100 mg twice daily in adult NSCLC patients with EGFRex20ins mutations who have received prior treatment with chemotherapy with or without an exon 20 insertion targeted therapy.

Pivotal Phase 3 Clinical Trial

In August 2023, our collaboration partners at Taiho initiated a global Phase 3 clinical trial testing zipalertinib plus standard-of-care chemotherapy versus standard-of-care chemotherapy alone in frontline adult NSCLC patients with EGFRex20ins mutations (REZILENT3). Following a 6-12 patient safety run-in to assess the safety of the combination of zipalertinib with standard-of-care chemotherapy, the clinical trial will randomize up to 300 patients to receive either the combination of the two treatments or standard-of-care chemotherapy alone. The primary endpoint is PFS.

CLN-049

CLN-049 is a humanized bispecific antibody that we are developing for the treatment of AML and MDS. We are currently evaluating CLN-049 in a multi-ascending dose Phase 1 clinical trial in adult patients with r/r AML and MDS. CLN-049 is designed to simultaneously bind to FLT3 on the extracellular domain of target leukemic cells and to CD3 on T cells, triggering the T cells to kill the target cancer cells. FLT3 is a proto-oncogene and a validated target, and several kinase inhibitors targeting mutant FLT3 are approved for the treatment of r/r AML, but their use is limited to approximately 25% of the AML population with FLT3 mutations. By targeting the extracellular domain of FLT3, CLN-049 has the potential to address up to approximately 80% of AML patients that express mutant or wild-type FLT3.

Background on Acute Myeloid Leukemia, Myelodysplastic Syndrome, and FLT3

The American Cancer Society estimates that in 2024, there will be approximately 20,800 newly diagnosed patients with AML and approximately 11,220 deaths from AML in the U.S. AML is a complex hematologic malignancy characterized by uncontrolled proliferation of malignant immature myeloid blast cell populations. These blasts may completely infiltrate and replace the bone marrow, resulting in major disruption of normal hematopoiesis and pancytopenia, very high numbers of circulating blasts in the peripheral blood, and infiltration of visceral organs as well as the skin. In addition, patients with AML may be susceptible to bleeding complications due to thrombocytopenia and experience complications from treatment with cytotoxic chemotherapy. These patients may also be severely immuno-compromised secondary to their disease and experience prolonged periods of neutropenia and lymphopenia. As a result, these patients are often susceptible to life-threatening infections that also contribute to severe morbidity and mortality. Despite advancements in the treatment of AML, there continues to be a high unmet need in these patients.

MDS comprise a heterogeneous group of malignant hematopoietic stem cell disorders characterized by ineffective blood cell production and a risk of transformation to AML. The outcome of the disease is highly variable and dependent upon the underlying clinicopathologic features. There are several models for prediction of outcome that incorporate pathologic (bone marrow blast counts, cytogenetic abnormalities, and multilineage dysplasia), molecular, and clinical features (age, performance status, and type and severity of cytopenias). The management of high/very high risk MDS is dependent on patient fitness, pathologic features, and personal choices, and treatment options range from high dose chemotherapy with allogeneic stem cell transplantation to supportive care. Hypomethylating agents are a standard management approach with lower intensity regimens. The optimal agent and duration of therapy has not been defined. Either azacytidine or decitabine is typically given for at least four cycles to assess response.

FLT3 is a Class III RTK with a well-recognized and essential role in hematopoiesis. In healthy individuals, expression of FLT3 is restricted to a subpopulation of hematopoietic stem and progenitor cells ("HSPCs"), inducing their proliferation and differentiation into monocytes, dendritic cells, B cells, and T cells. FLT3 has been identified as a proto-oncogene and plays a key role in promoting leukemic cell proliferation and survival.

Studies using flow cytometry have shown that FLT3 is expressed on AML blasts in approximately 80% of AML patients, regardless of mutational status. This broad expression of FLT3 in AML patients suggests that targeting FLT3 with a biologic agent, namely a T cell engaging bispecific antibody that recruits T cells to kill tumor cells expressing FLT3 on the cell surface, could address a larger AML patient population than the small-molecule inhibitors targeting the mutated version of the intracellular signaling domain of FLT3 that are approved or in development. Additionally, compared to other tumor surface antigens identified in AML, such as CD33 and CD123, FLT3 expression is generally restricted to a subpopulation of bone marrow HSPCs and circulating dendritic cells. We believe that the expression of FLT3 on the surface of leukemic blasts in most AML patients and its role as a known oncogenic driver make it an attractive therapeutic target for a T cell engager approach.

As shown below, CLN-049 is a humanized bispecific antibody construct comprised of two FLT3-binding domains, an Fc-silenced humanized IgG1 backbone, and CD3-binding scFvs, fused to the C-terminus of the antibody’s heavy chain. In multiple preclinical studies, CLN-049 has demonstrated the ability to redirect T cells to lyse FLT3-expressing AML cellsin vitro and potent antitumor activityin vivo. By targeting extracellular FLT3, regardless of mutant or wild-type status, we believe CLN-049 has the potential to address up to approximately 80% of AML patients, a broader patient population than existing small-molecule FLT3 kinase inhibitors acting on the intracellular domain, which are limited to a subset of approximately 25% of AML patients with FLT3 mutations.

CLN-049 Mechanism Potentially Allows for Broad FLT3 Depended AML Blast Killing

Given the observed variability in FLT3 expression levels among patients, we characterized the killing potential of CLN-049 across multiple cell lines expressing differing levels of FLT3 on the cell surface. CLN-049 was observed to mediate robust target-dependent cell killingin vitro across all AML cell lines tested; the EC50 value did not seem to be dependent on the number of FLT3 receptor molecules found on AML target cells. As shown in the figure below, we also observed potent redirected lysis of AML cell lines with wild-type or mutant FLT3 expression. Based on these results, we believe CLN-049 may effectively kill AML target cells with even low levels of FLT3 expression, regardless of wild-type or mutant status, which could potentially translate into deeper and more durable responses in the clinic and may allow us to treat a larger subset of AML patients.

CLN-049 Demonstrated Killing of Target Cells Expressing Wild-Type and Mutant FLT3, In Vitro

CLN-049 has two CD3-binding arms that can potentially crosslink CD3 on T cells, which may result in target cell-independent T cell activation and systemic cytokine-related toxicities. In preclinical studies, we examined whether CLN-049 can lead to non-specific T cell activation in the absence of target cells. As shown below, incubation of purified human T cells with CLN-049 in the absence of target-expressing cells did not induce T cell activation markers CD25 and CD69 on either CD4+ or CD8+ T cells in contrast to positive control anti-CD3 antibodies OKT3 and UCHT1 (CLN-049 parental anti-CD3 antibody) that induced T cell activation.

No T Cell Activation by CLN-049 in the Absence of Target Cells

The potential efficacy of CLN-049 was evaluated in a humanized mouse model where a human AML cell line was implanted systemically. As shown in the figure below, CLN-049 controlled AML leukemic burden in mice engrafted with human peripheral blood mononuclear cells (“PBMC") and led to improved survival of the mice in a dose-dependent manner beginning at very low doses. We believe CLN-049 effected this result by redirecting the T cells in the human PBMC population to kill the target AML cells.

Increased Survival of Engrafted Mice Starting at Very Low Doses of CLN-049

Ongoing Clinical Development

In December 2021, we initiated a Phase 1 clinical trial evaluating CLN-049 in r/r AML patients and subsequently amended the eligible patient population to include refractory MDS patients. The clinical trial is designed to primarily evaluate the pharmacokinetics and safety of the administration of CLN-049. We completed the single ascending dose portion of the Phase 1 clinical trial testing IV administration of CLN-049 and initiated a multi-ascending dose portion of the clinical trial utilizing SC dosing in December 2022. Safety data from the single-ascending dose portion of the Phase 1 clinical trial was published at the 2023 European Hematology Association annual meeting in June. We expect to report data from the multi-ascending dose portion of the clinical trial in the second half of 2024. In December 2023, we initiated a second Phase 1 clinical trial designed to evaluate the safety of CLN-049 in minimal residual disease-positive AML.

CLN-418

CLN-418 is a fully human bispecific immune activator targeting B7H4 and 4-1BB. In February 2023, we licensed from Harbour BioMed US Inc. ("Harbour") the exclusive rights to develop and commercialize CLN-418 in the U.S. in exchange for an upfront license fee of $25 million, plus up to $148 million in development and regulatory milestone payments, up to $415 million in sales-based milestone payments, and tiered royalties up to high teens on potential U.S. commercial sales. We are currently evaluating CLN-418 in a Phase 1 clinical trial being conducted at U.S. and Australian sites in patients with advanced solid tumors.

Background on B7H4 and 4-1BB

We believe that B7H4 represents an attractive target for cancer immunotherapy. B7H4 is a member of the B7 family of immune regulatory proteins that includes important immune inhibitory ligands like PD-L1. B7H4 is expressed on the cell surface of tumor cells and has been shown to play an immunosuppressive role by inhibiting T cell proliferation and expansion. Expression of B7H4 in patient tumor samples has been correlated with advanced stages of disease, poor prognosis, and lower overall patient survival. While B7H4 is expressed at potentially clinically relevant levels across a range of solid tumors, including triple-negative breast cancer, NSCLC, and ovarian cancer, its expression is limited on normal tissues, indicating the potential for a wide therapeutic window. Finally, B7H4 often has minimal overlap with PD-L1 expression, which we believe creates the potential to address so-called “cold tumors” for which current immune checkpoint inhibitor therapy approaches have demonstrated limited efficacy. The panel below includes B7H4 expression data from various studies conducted by Harbour.

B7H4 Expression Across Solid Tumor Types B7H4 Relative to PD-L1 Expression Across Solid Tumor Cells

4-1BB is a key costimulatory molecule expressed on T cells and NK cells and has emerged as an attractive immunotherapy target. Mechanistically, 4-1BB activation induces T cell proliferation and survival, stimulates the secretion of inflammatory cytokines, and can promote anti-tumor immunity. Monoclonal agonistic antibodies targeting 4-1BB have been shown to have the ability to stimulate immune cells and generate antitumor responses in patients, but not without challenging toxicity issues often associated with non-specific 4-1BB immune cell activation, such as liver toxicity, which is thought to be caused by Fc-mediated cross-linking enabled by Fc gamma receptor expressing cells present in the liver.

CLN-418 is a fully human bispecific immune activator that contains human B7H4 and 4-1BB binding domains that were selected to have high binding affinity to B7H4 and designed to enable B7H4-crosslinking dependent 4-1BB activation. CLN-418 includes a silenced Fc domain designed to avoid cross-linking mediated by Fc gamma receptor-expressing cells. By targeting B7H4 on tumor cells, we believe CLN-418 represents a unique approach to enable the conditional activation of 4-1BB in the tumor microenvironment. Because of this mechanism and because CLN-418 lacks an active Fc domain, we believe CLN-418 has the potential to avoid toxicities associated with non-specific 4-1BB activation seen with Fc-functional monoclonal 4-1BB agonist antibodies. Also, CLN-418 may have the potential to synergize with other cancer therapies, particularly immunotherapy approaches, making it a strong candidate for combination therapy.

CLN-418 Structure

Preclinical studies in multiple tumor cell lines demonstrated that CLN-418-mediated T cell activation was contingent on the presence of B7H4, unlike monoclonal 4-1BB agonistic antibodies, such as urelumab and utomilumab.

Preclinically, CLN-418 showed the ability as a single agent to eradicate tumorsin vivo and drive a memory response that prevented tumor growth upon re-challenge in the mice. An example of these results is shown below in a syngeneic mouse tumor model, whereby CLN-418 demonstrates a dose-dependent inhibition of tumor growth, and mice with an initial complete response following treatment with CLN-418 are subsequently immune upon tumor re-challenge.

CLN-418 Clears Tumors in Mice and Drives a Memory Response that Prevents Tumor Growth Upon Re-challenge

We are currently evaluating CLN-418 in a Phase 1 clinical trial being conducted at U.S. and Australian sites in patients with advanced solid tumors. The part 1 dose escalation will test multiple dose levels of CLN-418, from 0.03 to 20 mg/kg, dosed once every three weeks. Once a proposed Phase 2 dose is determined, the part 2 dose expansion will evaluate up to 30 patients in each of three tumor specific expansion cohorts: one in NSCLC, one in breast cancer, and a third to be determined by the efficacy signals observed in part 1 of the clinical trial. Initial data from part 1 of the ongoing Phase 1 clinical trial is expected in the second half of 2024.

CLN-617

CLN-617 is a fusion protein uniquely combining, in a single agent, two potent antitumor cytokines, IL-2 and IL-12, with a collagen-binding domain for the treatment of solid tumors. The combination of IL-2 and IL-12 has previously been shown to synergistically enhance T and NK cell functionsin vitro and mediated pronounced therapeutic activity in preclinical tumor models, even in well-established mouse models with primary and/or metastatic tumors. For nearly five decades, clinical researchers have studied the powerful role cytokines play in stimulating an immune response to cancer. However, severe toxicities associated with systemic cytokine administration and a short serum half-life have hindered their clinical development and broader commercial uptake. Despite numerous advancements in protein engineering, delivery and targeting mechanisms, there are currently only two FDA-approved cytokine-based cancer therapies, with the most recent approval occurring over twenty years ago.

Background on IL-2 and IL-12

IL-2 and IL-12 are naturally occurring cytokines, or signaling molecules, of the immune system. They stimulate the immune response by enhancing the activity and proliferation of T cells and NK cells and the production of other pro-inflammatory cytokines, including IFNγ. IL-2 supports T cell expansion and IL-12 improves the quality of the T cell response. Furthermore, IL-2 signaling induces the upregulation of both subunits of the IL-12 receptor and downstream components of the IL-12 signaling pathway, and IL-12 signaling triggers the upregulation of CD25, the high affinity receptor subunit for IL-2, generating a positive feedback circuit. The combination of IL-2 and IL-12 synergistically enhances T cell and NK cell proliferation, functionality, and cytotoxicityin vitro and stimulates robust anti-tumor immunityin vivo.

We have included multiple differentiating features in CLN-617’s design in order to address the historical limitations of cytokine-based therapy. First, tumor retention following intratumoral injection is enabled by the collagen-binding domain LAIR2, due to the presence of collagen in all solid tumors, and by HSA, which increases the molecular weight to further reduce the rate of diffusion out of the tumor tissue. Retention may help minimize the systemic dissemination and associated toxicities of IL-2 and IL-12 and prolong their immunostimulatory antitumor activity in the tumor. Second, CLN-617 is the only product candidate that we are aware of that co-delivers a pre-specified dose of IL-2 and IL-12 proteins, functionally enabling synergistic T and NK cell activation. Third, CLN-617’s construct uses fully wild-type domains, which potentially reduces the immunogenicity risk associated with engineered cytokines. Finally, unlike other intratumoral cytokine-based therapies, CLN-617 does not rely on viral infection or nucleic acid transfection forin situ expression.

CLN-617 Design

Given the broad expression of collagen across multiple tumor types and the well-validated anti-tumor activity of cytokine-based therapies, we believe CLN-617 may have utility across a broad range of solid tumors. We believe that CLN-617 is a first-in-class opportunity given it is the only anti-cancer product candidate we are aware of that is designed to co-deliver IL-2 and IL-12 cytokines and retain them in the tumor microenvironment.

The collagen-binding retention technology used in CLN-617 is based on technology that originated in the laboratory of Professor Karl Dane Wittrup, Ph.D. at the Massachusetts Institute of Technology ("MIT"). We have further developed and refined this technology in the design of CLN-617. We believe this technology represents a novel approach with the potential to broaden the therapeutic window of cytokines and other immunostimulatory agents with substantially reduced systemic toxicity.

A murine surrogate incorporating the murine homologs of the constituent domains of CLN-617 was generated and named mCLN-617. Retention of mCLN-617 was demonstrated in mice bearing B16F10 tumors which were treated either intratumorally or intravenously with mCLN-617. Two hours after treatment, the concentration of IL-2 and IL-12 was assessed in serum, and we found that cytokine levels following intratumoral injection were on average <5% that of intravenously administered mCLN-617 (left panel below). These results suggest that mCLN-617 is efficiently retained in the tumor, thereby limiting systemic distribution. Intratumoral injection also enhanced the anti-tumor activity of mCLN-617. At each tested dose level, intratumorally administered mCLN-617 outperformed intravenously administered mCLN-617 as measured by tumor growth inhibition (right panel below).

Reduced Systemic Levels of mCLN-617 and Improved Efficacy Following Intratumoral Versus Intravenous Administration

We utilized the MC38 syngeneic tumor model to assess whether mCLN-617 treatment could generate long-term immune memory following primary tumor clearance. As shown in the left panel below, mCLN-617 led to 100% complete responses in treated animals, whereas no complete responses were observed in control or anti-PD1 treated groups. Subsequently, we re-injected tumors into animals that achieved a complete response. As shown in the right panel below, five out of ten mice previously treated with mCLN-617 rejected the newly injected tumors, and all tumors that grew out did so at a slower rate than tumors in age-matched naïve controls. Similar results were achieved in the CT26 syngeneic tumor model.

High Complete Response Rate and Memory Response Following mCLN-617 Treatment

We demonstrated that in addition to mediating long-term memory, mCLN-617 is capable of generating responses against established untreated distal tumors due to the induction of systemic immunity, also known as an abscopal effect. We utilized C57BL/6 mice bearing two MC38 tumors, only one of which was treated with mCLN-617, either alone or in combination with systemically delivered anti-PD1 antibody. mCLN-617 alone mediated significant regression, including complete responses, of both the treated and untreated tumors. The effect was more consistent and durable in the untreated tumor when combined with anti-PD1, despite no significant survival benefit with anti-PD1 treatment alone. These results demonstrate both an abscopal effect and synergy of mCLN-617 with systemically administered anti-PD1 antibody.

Intratumorally Delivered mCLN-617 Inhibits Tumor Growth in Both Treated and Untreated Tumors and Synergizes with Systemically Delivered Anti-PD1 Therapy

The fully human CLN-617 clinical candidate has been generated, and the bioactivity of both cytokines and the collagen-binding domain has been confirmedin vitro. Both a non-GLP pharmacokinetic study and a GLP toxicology study with CLN-617 have been conducted in non-human primates.

In December 2023, we dosed the first patient in the CLN-617 first-in-human Phase 1 clinical trial being conducted at U.S. sites in patients with advanced solid tumors. The part 1 dose escalation will test up to six dose levels of CLN-617 with CLN-617 administered as monotherapy in the first dose cycle and CLN-617 administered in combination with a checkpoint inhibitor therapy in each subsequent cycle. Based on the data from part 1, the part 2 dose optimization will be performed using two different dose levels at or close to the maximum tolerated dose or maximal biologically effective dose. Once a recommended Phase 2 dose is determined, the part 3 dose expansion will evaluate up to 15 patients in each of two tumor specific expansion cohorts: one in advanced or metastatic melanoma and one in advanced or metastatic head and neck squamous cell carcinoma.

Preclinical Programs

In addition to the product candidates described above, we are actively developing several preclinical oncology programs, all in the discovery stage, including our collaboration with Icahn School of Medicine at Mount Sinai for the development of novel hematopoietic progenitor kinase 1 ("HPK1") degraders.

Competition

The biotechnology and pharmaceutical industries are characterized by the rapid evolution of technologies and understanding of disease etiology, intense competition, and a strong emphasis on intellectual property. We believe that our differentiated business model, approach, scientific capabilities, know-how, and experience provide us with competitive advantages. However, we face, and will continue to face, competition from companies focused on more traditional therapeutic modalities, such as small-molecule inhibitors. We expect substantial competition from multiple sources, including major pharmaceutical, specialty pharmaceutical, and existing or emerging biotechnology companies, academic research institutions, governmental agencies, and public and private research institutions worldwide. Many of our competitors, either alone or through collaborations, 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. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These companies also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites, and recruiting patients in clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. As a result, our competitors may discover, develop, license, or commercialize products before or more successfully than we do.

We also face competition more broadly across the oncology market for cost-effective and reimbursable cancer treatments. The most common methods of treating patients with cancer are surgery, radiation, and drug therapy, including chemotherapy, hormone therapy, biologic therapy, such as monoclonal and bispecific antibodies, immunotherapy, cell-based therapy, and targeted therapy, or a combination of any such methods. There are a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While our product candidates, if approved, may compete with these existing drugs and other therapies, to the extent they are ultimately used in combination with or as an adjunct to these therapies, our product candidates may not be competitive with them. Some of these drugs are branded and subject to patent protection, and others are available on a generic basis. Insurers and other third-party payors may also encourage the use of generic products or specific branded products. As a result, we may face challenges in obtaining market acceptance of, and gaining significant share of the market for, any of our product candidates that we successfully introduce to the market. In addition, many companies are developing new oncology therapeutics, and we cannot predict what the standard of care will be as our product candidates progress through clinical development.

With respect to CLN-619, we are aware of several companies that are developing antibody-based therapies targeting MICA/B as a monotherapy and/or in combination with other agents, including: Bristol-Myers Squibb Company ("Bristol-Myers Squibb"), CanCure LLC, D2M Biotherapeutics, Inc., Genentech Inc. ("Genentech"), Novartis International AG ("Novartis"), and Xencor, Inc. To our knowledge, none of them has entered clinical development.

With respect to our CLN-978 program, we are aware of multiple companies developing product candidates that target CD19 or other tumor antigens relevant to B-NHL and B cell ALL using immune cells or other cytotoxic modalities. These mainly include immune cell redirecting therapeutics (e.g., T cell engagers), adoptive cellular therapies (e.g., CAR Ts), and antibody drug conjugates. Companies developing cell therapies or antibodies targeting CD19 include, but are not limited to, ADC Therapeutics, Allogene Therapeutics Inc., Amgen Inc. ("Amgen"), AstraZeneca plc ("AstraZeneca"), Autolus Therapeutics plc, Bristol-Myers Squibb, Century Therapeutics, Inc., Gilead Sciences Inc., Morphosys AG, Nkarta Inc., and Novartis.

With respect to zipalertinib, which we are co-developing with an affiliate of Taiho, we are aware of other EGFR inhibitors that have accelerated approval or are in clinical development for the treatment of NSCLC patients harboring EGFRex20ins mutations. In March 2024, Rybrevant (amivantamab), an EGFR/cMET bispecific antibody that was developed and is now marketed by Johnson & Johnson, obtained full approval from the FDA for adult patients with locally advanced or metastatic NSCLC with EGFRex20ins mutations whose disease has progressed on or after platinum-based chemotherapy. Additionally, in September 2021, EXKIVITY (mobocertinib), which was developed and marketed by Takeda, obtained accelerated approval from the FDA for adult patients with locally advanced or metastatic NSCLC with EGFRex20ins mutations whose disease has progressed on or after platinum-based chemotherapy. In July 2023, Takeda reported that EXKIVITY had not met its PFS primary endpoint and subsequently announced plans to voluntarily withdraw EXKIVITY from the market no later than March 2024. We believe that the most advanced clinical-stage programs for EGFRex20ins patients are furmonertinib from ArriVent BioPharma, Inc. and Allist Pharmaceuticals, Inc., sunvozertinib from Dizal Pharmaceutical Co. Ltd., and ORIC-114 from Oric Pharmaceuticals, Inc. (Voronoi, Inc., in mainland China, Hong Kong, Macau and Taiwan).

With respect to CLN-049, we are aware of several companies that are developing T cell engaging bispecifics for the treatment of AML, including those targeting CD33 (Amgen and Amphivena Therapeutics, Inc.), CD123 (Macrogenics, Inc.), and CCL1/CLEC12A (Genentech and Merus N.V.). In addition, Molecular Partners AG is a developing a DARPin T cell engager targeting CD33, CD123, and CD70, and Senti Biosciences, Inc. is developing a CD33xFLT3 chimeric antigen receptor natural killer (“CAR-NK”) cell therapy. There are also several targeted small-molecule therapies approved for the treatment of r/r or first-line AML, including for AML with FLT3 mutations, such as Astellas Pharma Inc.’s XOSPATA (gilteritinib), Daiichi Sanko Co. Ltd.’s VANFLYTA (quizartinib), and Novartis' RYDAPT (midostaurin).

With respect to CLN-418, we are aware of one other candidate by ABL Bio, Inc. in development that targets 4-1BB and B7H4 in a single bispecific molecule. Additionally, there are several candidates that target one or the other of these molecules. Several companies are developing monoclonal antibodies, antibody-drug conjugates or CD3 T cell engagers directed towards B7H4. These companies include Amgen, AstraZeneca, Genmab A/S ("Genmab"), GSK plc (Jiangsu Hansoh Pharmaceutical Group Co., Ltd. in mainland China, Hong Kong, Macau, and Taiwan), Mersana Therapeutics Inc., Nextcure, Inc., and Pfizer. Several companies are also developing 4-1BB agonists that target other tumor associated antigens rather than B7H4 (e.g., PD-L1, HER2, CLDN18.2, Nectin4, etc.) including Boehringer Ingelheim Pharma GmbH, Eli Lilly and Company, Genmab, Inhibrx, Inc., and Roche AG ("Roche").

With respect to CLN-617, we are not aware of any other drug candidates currently under development that integrate both IL-2 and IL-12 into a single multi-functional construct and stimulate the immune system in a tumor-specific manner. Krystal Biotech, Inc. is developing an IL-2 and IL-12 gene therapy delivered by intratumoral injection. We are aware of several companies actively developing clinical-stage programs as either individual IL-2 or IL-12 therapies, including: Alkermes plc, Ankyra Therapeutics, Inc., Apeiron Biologics AG, Dragonfly Therapeutics Inc., Philogen S.p.A., Roche, Sanofi S.A., Werewolf Therapeutics, Inc., and Xilio Therapeutics, Inc.

If our competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more convenient to administer, are less expensive, or have a more favorable label than our product candidates, we could see a reduction or elimination in our commercial opportunity. Our competitors also may obtain FDA or other regulatory approval for their drugs more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. The key competitive factors affecting the success of all our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the level of generic competition, and the availability of reimbursement from government and other third-party payors.

License and Collaboration Agreements

Adimab

We have a collaboration agreement (the "Adimab Collaboration Agreement"), with Adimab. Pursuant to the Adimab Collaboration Agreement, we selected a single-digit number of biological targets against which Adimab used its proprietary platform technology to discover and/or optimize antibodies based upon mutually agreed upon research plans. Under the Adimab Collaboration Agreement, we have the ability to select a specified low single-digit number of additional biological targets against which Adimab will provide additional antibody discovery and optimization services.

During the research term and evaluation term for a given research program with Adimab, we have a non-exclusive worldwide license under Adimab’s technology to perform certain research activities and to evaluate the program antibodies to determine whether we want to exercise our option to obtain a royalty-free, fully paid, non-exclusive license under Adimab’s background patent rights to exploit such antibodies sublicensable through multiple tiers (the "Adimab Option"). In the event we exercise the Adimab Option, we will pay an option fee for each target subject to certain adjustments.

Under the Adimab Collaboration Agreement, we paid a one-time, non-creditable, non-refundable technology access fee. We are also required to pay an annual access fee and research funding fees in connection with Adimab’s full-time employees’ compensation for performance of Adimab’s obligations under the Adimab Collaboration Agreement. We are also obligated to make certain research delivery, clinical and sales milestone payments to Adimab in an aggregate amount of up to $15.8 million for each product, on a product-by-product basis, subject to certain reductions and discounts. As of December 31, 2023, we have incurred a cumulative $0.5 million of milestone payments under the Adimab Collaboration Agreement.

Furthermore, we are obligated to pay certain royalty payments on a product-by-product basis at a low single-digit percentage of annual aggregate worldwide net sales. Such royalty obligations will expire on a country-by-country and product-by-product basis upon the later of (a) a certain low double-digit number of years after the first commercial sale of such product in such country and (b) the expiration of the last issued and not expired, permanently revoked, or invalid claim within a program patent covering such product as defined in the agreement.

We may terminate the Adimab Collaboration Agreement at any time, for any reason, upon a specified period of advance written notice. The term of the Adimab Collaboration Agreement expires upon the last research program’s evaluation term in the event no Adimab Option is exercised or, in the event an Adimab Option is exercised, after the royalty term thereof expires at the later of a specified period or invalid patent coverage of the relevant product. Refer to Note 7 of our notes to the consolidated financial statements included in this Annual Report on Form 10-K for further detail regarding the Adimab Collaboration Agreement.

Taiho

In June 2022, we sold our equity interest in our zipalertinib development subsidiary, Cullinan Pearl Corp. ("Cullinan Pearl"), to Taiho. Pursuant to the sale agreement, we are eligible to receive up to an additional $130.0 million tied to EGFRex20 NSCLC regulatory milestones. None of these milestones have been achieved to date. Concurrently with the closing of the sale of our equity interest in Cullinan Pearl, we entered into a co-development agreement with an affiliate of Taiho, pursuant to which we are collaborating to develop zipalertinib and have retained the option to co-commercialize zipalertinib in the U.S. Development costs for zipalertinib incurred after the sale of our equity interest in Cullinan Pearl are shared equally between Taiho and us with each party receiving 50% of any future pre-tax profits from potential U.S. sales of zipalertinib.

We concluded that the co-development agreement with Taiho is a collaborative arrangement because we are an active participant in the development of zipalertinib. Payments made to or received from Taiho for zipalertinib development activities after the execution of the co-development agreement are recorded within research and development expenses. Refer to Note 7 of our notes to the consolidated financial statements included in this Annual Report on Form 10-K for further detail regarding the co-development agreement with Taiho.

DKFZ/Tübingen

Our development subsidiary, Cullinan Florentine Corp. ("Cullinan Florentine") is party to an exclusive license agreement (the "DKFZ/Tübingen License Agreement"), with Deutsches Krebsforschungszentrum ("DKFZ"), Eberhard Karls University of Tübingen, Faculty of Medicine ("University of Tübingen"), and Universitätsmedizin Gesellschaft für Forschung und Entwicklung mbH, Tübingen ("UFE"). Pursuant to the DKFZ/Tübingen License Agreement, DKFZ and University of Tübingen, collectively referred to as the Licensor, granted Cullinan Florentine an exclusive (even as to Licensor, UFE and its and their affiliates), worldwide, milestone- and royalty-bearing, license under certain licensed patent rights, applications, technical information and know-how, with the right to grant sublicenses through multiple tiers to research, develop, commercialize or otherwise exploit licensed products, itself and through its affiliates and third parties, within the field. Cullinan Florentine has the sole right, but not the obligation, to prosecute and maintain all licensed patent rights worldwide, provided that Licensor may take over or continue such prosecution and maintenance if Cullinan Florentine elects to cease the prosecution or maintenance of a licensed patent right.

Under the DKFZ/Tübingen License Agreement, Cullinan Florentine is obligated to achieve certain regulatory and research and development performance benchmarks (collectively, the "Performance Benchmarks"), by certain specified dates (collectively, the "Performance Dates"). If a Performance Benchmark is not achievable by the applicable Performance Date, Cullinan Florentine may extend the Performance Date for any single Performance Benchmark by a mid-single digit amount of months by providing written notice to Licensor and paying a non-refundable, non-creditable extension fee per each such extension. Cullinan Florentine may extend the Performance Date for any single Performance Benchmark up to a low single digit amount of times, provided that Cullinan Florentine may only request an extension a mid-single digit amount of times. If Cullinan Florentine is unable to seek a further extension per the preceding sentence, then Cullinan Florentine may seek a further extension by providing written notice to Licensor and any such extension shall be subject to the prior written approval of the Licensor, such approval not to be unreasonably withheld or delayed. As of December 31, 2023, Cullinan Florentine is in compliance with the performance benchmark requirements of the DKFZ/Tübingen License Agreement.

Additionally, Cullinan Florentine shall pay certain non-refundable, non-creditable milestone payments to Licensor upon the occurrence of certain clinical and regulatory events by a licensed product, whether triggered by Cullinan Florentine, its affiliates or sublicensees. Each milestone payment is paid one time only up to an aggregate of $28.0 million. No milestones have been achieved to date under the DKFZ/Tübingen License Agreement.

Furthermore, Cullinan Florentine is required to pay a running low to mid-single digit royalty percentage on net sales of each licensed product on a country-by-country and product-by-product basis during the royalty term, subject to certain offsets or reductions. The aggregate, worldwide royalties due to Licensor for net sales of any licensed product in a calendar year shall not be reduced to an amount less than low to mid-single digit percentages. Such royalty obligations will expire on a country-by-country and product-by-product basis upon the later of (a) the expiration of the last valid claim of a patent which covers a product in such country and (b) a low double-digit anniversary following the first commercial sale of a product in such country. Under certain conditions upon a first change in control, Cullinan Florentine shall pay a non-refundable, non-creditable mid-single digit percent of sale proceeds, provided, however, that such payment shall not be required following consummation of an initial public offering of Cullinan Florentine.

Either party may terminate the agreement upon a material breach by the other party or insolvency of the other party. Cullinan Florentine may terminate the DKFZ/Tübingen License Agreement for any or no reason after the first filing of an IND or clinical trial agreement, by providing prior written notice. Licensor may terminate the agreement by providing prior written notice, if we or any of our affiliates challenges the validity of certain patent rights. Unless earlier terminated, the DKFZ/Tübingen License Agreement continues on a perpetual basis. Refer to Note 7 of our notes to the consolidated financial statements included in this Annual Report on Form 10-K for further detail regarding the DKFZ/Tübingen License Agreement.

Harbour

In February 2023, we entered into a License and Collaboration Agreement (the “Harbour License Agreement”) with Harbour BioMed US Inc. (“Harbour”), pursuant to which Harbour granted us an exclusive license for the development, manufacturing, and commercialization of HBM7008, which we now refer to as CLN-418, in the U.S.

Under the terms of the Harbour License Agreement, we paid Harbour an upfront license fee of $25 million upon entry into the agreement. Additionally, pursuant to the agreement, Harbour is eligible to receive (i) up to $148 million in milestone payments based on the achievement of pre-specified development and regulatory milestones and (ii) up to an additional $415 million in sales-based milestones as well as tiered royalties up to high teens on a licensed product-by-licensed product basis, as a percentage of U.S. commercial sales. Harbour has granted us certain intellectual property rights to enable us to perform our obligations and exercise our rights under the Harbour License Agreement. No milestones have been achieved to date under the Harbour License Agreement.

Unless earlier terminated, the Harbour License Agreement will continue in effect until the expiration of our royalty obligations. The Harbour License Agreement may be terminated by either party for a material breach by the other party, subject to notice and cure provisions, or in the event of the other party’s insolvency. We may terminate the Harbour License Agreement for convenience by providing 90 days’ written notice to Harbour. Refer to Note 7 of our notes to the consolidated financial statements included in this Annual Report on Form 10-K for further detail regarding the Harbour License Agreement.

MIT

Our development subsidiary, Cullinan Amber Corp. ("Cullinan Amber") is party to an exclusive patent license agreement (the "MIT License Agreement") with MIT. Pursuant to the MIT License Agreement, MIT granted to Cullinan Amber an exclusive, worldwide, milestone-, equity- and royalty-bearing license under certain licensed patent rights and applications, with the right to grant sublicenses through three tiers (so long as Cullinan Amber remains an exclusive licensee of the patent rights in the field worldwide) to develop, make, have made, use, sell, have sold, offer to sell, lease, and import licensed products containing specific fusion proteins in the field of diagnosis, prognosis, prophylaxis or treatment of cancer in humans or other animals. MIT shall prepare, file, prosecute, and maintain all of the patent rights, and Cullinan Amber shall cooperate with the prosecution, provide comments on patent prosecution documents, and pay all fees and costs relating to such prosecution and maintenance.

Cullinan Amber shall reimburse MIT for certain documented, out-of-pocket expenses incurred by MIT in connection with the preparation, filing, prosecution, maintenance and defense of the patent rights. The MIT License Agreement also provides for anti-dilution adjustments, requiring Cullinan Amber to issue MIT additional shares to ensure the shares issued to MIT do not equal less than the mid-single digit percentage amount until a financing threshold representing the aggregate investment Cullinan Amber is reached. MIT was also granted participation rights, up to a low double-digit percentage of the securities issued, in any proposed financings of Cullinan Amber. Cullinan Amber is also responsible for paying non-refundable, creditable annual license maintenance fees in an increasing amount over a certain number of years of the license and a fixed amount subsequent to this period of time. In addition, MIT granted Cullinan Amber an exclusive option to amend the definition of field to include expansion fields, and each such amendment would trigger the payment to MIT of an amendment fee and cause an amendment, to be negotiated upon exercise of the option, to Cullinan Amber's financial obligations with respect to the licensed products to reflect the additional rights and value being added.

Additionally, Cullinan Amber shall pay certain non-refundable, non-creditable milestone payments to MIT upon the achievement by itself or its sublicensees of certain clinical and regulatory milestones in an aggregate amount up to $7.0 million for each distinct licensed product. Each milestone payment is paid one time only up to a certain payment amount, except there are separate milestone payments payable for a second and third indication of a licensed product in an aggregate amount up to $5.5 million per product. Cullinan Amber shall also pay to MIT certain one-time milestone payments for the achievement of certain commercial milestones based on the calculation of net sales across all licensed products in all indications in an aggregate amount up to $12.5 million. As of December 31, 2023, Cullinan Amber has incurred $0.7 million of milestone payments under the MIT License Agreement.

Under certain conditions upon a change in control, Cullinan Amber is required to pay a specified change in control fee, and Cullinan Amber's clinical and regulatory milestone payments shall be increased by a certain low three-digit percentage amount.

Furthermore, Cullinan Amber is required to pay a running mid-single digit royalty percentage on net sales of all licensed products for each reporting period, subject to certain offsets or reductions. The royalties due to MIT for net sales of all licensed products shall not be reduced by more than 50%. Cullinan Amber is also required to share any income from sublicensing the licensed products, with the percentage to be determined by the clinical phase of the licensed product, no greater than low-to-mid double-digit percentages. Such royalty obligations will expire on a country-by-country and product-by-product basis upon the expiration or abandonment of all issued patents and filed patent applications within the patent rights.

Under the MIT License Agreement, MIT must notify Cullinan Amber of certain patentable inventions conceived and reduced to practice during a certain period of time ("Improvements") and Cullinan Amber has the option to acquire rights to those Improvements upon MIT’s approval of a business and development plan, not to be unreasonably withheld, for a specified fee. In addition to this specified fee, Cullinan Amber's financial obligations with respect to the Improvements may be amended to reflect the value being added, such as by adding an upfront fee, maintenance fees, and milestone payments.

Cullinan Amber may voluntarily terminate the MIT License Agreement for any reason after providing written notice within a specified period of time in advance, provided that all amounts due to MIT have been paid. MIT has the right to terminate the MIT License Agreement upon written notice to Cullinan Amber if Cullinan Amber ceases to carry out its business related to the MIT License Agreement. Either party may terminate the MIT License Agreement upon a material breach by the other party. Unless earlier terminated, the MIT License Agreement shall remain in effect until the expiration or abandonment of all issued patents and the filed patent application within the patent rights. Refer to Note 7 of our notes to the consolidated financial statements included in this Annual Report on Form 10-K for further detail regarding the MIT License Agreement.

Intellectual Property

Our intellectual property is critical to our business, and we strive to protect it, including by obtaining, maintaining, defending, and enforcing patents and other intellectual property, in the U.S. and internationally, for our proprietary therapeutic molecules, technology, improvements, platforms, product candidates and components thereof, novel biological discoveries, new therapeutic approaches and potential indications, and other inventions that are important to our business. For our product candidates, generally we initially pursue patent protection covering compositions of matter, methods of use, and methods of production. Throughout the development of our product candidates, we will seek to identify additional means of obtaining patent protection that would potentially enhance commercial success, including improvement to pharmaceutical formulations, methods of use, and production.

As of February 16, 2024, our patent portfolio includes 27 patent families, including both patent applications we own, and patent applications exclusively in-licensed from external technology originators in a respective field. Specifically, we have exclusively in-licensed at least 31 patent applications pending worldwide. Patents that may issue from our pending patent applications, are expected to expire between 2034 and 2044, excluding any patent term adjustments or extensions, if applicable, that may be available. As to the patent term extension to restore patent term effectively lost following patent grant but during the FDA regulatory review process, 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.

We own four patent families related to our CLN-619 product candidate, including patent families directed to compositions, and methods of using such compositions therapeutically. The family of patent applications with claims directed to CLN-619 compositions, if issued, are expected to expire in 2039, excluding any patent term adjustments or extensions, if applicable. A further patent family that also is expected to expire in 2039, excluding any patent term adjustments or extensions, if applicable, contains claims directed to additional antibody compositions. For the first of these patent families, patent applications have so far been filed in Australia, Brazil, Canada, mainland China, the European Patent Office (the "EPO"), India, Indonesia, Israel, Japan, Korea, Malaysia, Mexico, New Zealand, the Philippines, Russia, Singapore, South Africa, Thailand, the U.S., and Vietnam. A third patent family with claims directed to additional anti-MICA antibody compositions and methods of use, if issued, is expected to expire in 2043, excluding any patent term adjustments or extensions, if applicable. The fourth family is comprised of a series of provisional applications that cover methods of treatment. Any patents issuing from an application claiming priority to these provisional applications will expire in 2044, excluding any patent term adjustments or extensions, if applicable.

Our portfolio related to our CLN-978 product candidate includes six patent families, directed to compositions, and methods of using such compositions therapeutically. The first two families of patent applications contain claims directed to CLN-978 compositions, which, if issued, are expected to expire in 2040, excluding any patent term adjustments or extensions, if applicable. Patent applications for both families have been filed in Australia, Canada, mainland China, the EPO, Israel, Japan, and the U.S. The third family of patent applications contains claims directed to alternative formats of compositions related to CLN-978, which, if issued, are expected to expire in 2039. Patent applications have been filed for this family in Australia, Canada, mainland China, the EPO, Hong Kong, Israel, Japan, South Africa, and the U.S. There are three additional patent families claiming methods of use. Two of these families, if issued, are expected to expire in 2044, and the third is expected to expire in 2045, excluding any patent term adjustments or extensions, if applicable. Each of these three families currently is comprised of a U.S. provisional application.

Zipalertinib is covered by a portfolio comprised of six patent families that are in-licensed from our collaboration partner Taiho Pharmaceutical Co. This portfolio includes a first family claiming specific EGFR-inhibiting compositions of matter which expires in 2034, excluding any patent term adjustments or extensions. This family includes granted patents or pending applications Australia, Brazil, Canada, mainland China, the EPO, India, Indonesia, Japan, Korea, Malaysia, Mexico, Philippines, the Russian Federation, Singapore, Taiwan, Thailand, the U.S, and Vietnam. There are five additional families that are directed to methods of use in conditions comprising exon-20 insertion mutations, exon 18 mutations, and/or exon 21 mutations, as well as treatment regimens that are expected to expire between 2037 and 2044, excluding any patent term adjustments or extensions.

Our portfolio related to our CLN-049 product candidate includes two patent families, in-licensed from the University of Tubingen, directed to compositions, and methods of using such compositions therapeutically. This family of patent applications contain claims directed to CLN-049 compositions, which, if issued, are expected to expire in 2039, excluding any patent term adjustments or extensions, if applicable. Patent applications have so far been filed for this family in Australia, Brazil, Canada, mainland China, the EPO, Hong Kong, India, Indonesia, Israel, Japan, Korea, Malaysia, Mexico, New Zealand, the Philippines, Singapore, South Africa, Thailand, the U.S., and Vietnam. A second patent family with claims directed to methods of use, if issued, is expected to expire in 2044, excluding any patent term adjustments or extensions, if applicable. A U.S. provisional application has been filed under this family.

Our portfolio related to our CLN-418 product candidate includes six U.S. patent applications that have been in-licensed from Harbour and are expected to expire between 2041 and 2042, excluding patent term adjustments or extensions.

Our portfolio related to our CLN-617 product candidate and related preclinical program includes three patent families. The first family was in-licensed from MIT, directed to compositions, and methods of using such compositions therapeutically. This family of patent applications contain claims covering CLN-617 related compositions, which, if issued, are expected to expire in 2039, excluding any patent term adjustments or extensions, if applicable. Patent applications have so far been filed for this family in Australia, Brazil, Canada, mainland China, the EPO, Israel, Japan, Korea, Singapore, and the U.S. The second family is a PCT application owned by us, which is directed to certain compositions, and methods of using such compositions therapeutically. This family contains claims covering additional CLN-617 related compositions, which, if issued, are expected to expire in 2041, excluding any patent term adjustments or extensions, if applicable. A third patent family with claims directed to methods of use, if issued, is expected to expire in 2044, excluding any patent term adjustments or extensions, if applicable. A U.S. provisional application has been filed under this family.

Our portfolio related to compositions comprising compounds which degrade HPK1 and methods of using such compounds therapeutically, includes one patent family that is jointly owned with Icahn School of Medicine at Mount Sinai. This patent family contains claims directed to compositions comprising HPK1 degraders and methods of using such compounds. A PCT application has been filed for this patent family. Applications claiming priority to the PCT application, if issued, are expected to expire in 2042, excluding any patent term adjustments or extensions. Individual patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the U.S. are granted a term of 20 years from the earliest effective non-provisional filing date. In addition, in certain instances, a patent term can be extended to recapture a portion of the U.S. Patent and Trademark Office (the "USPTO") review period in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period.

Manufacturing

We do not own or operate, and currently have no plans to establish, any good manufacturing practice ("GMP"), manufacturing facilities. We rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing, as well as for commercial manufacture if any of our product candidates obtain marketing approval. We also rely, and expect to continue to rely, on third parties to package, label, store, and distribute our investigational product candidates and, if marketing approval is obtained, our commercial products. We believe this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment, and personnel while also enabling us to focus our expertise and resources on the development of new product candidates.

We receive material from our contract manufacturing organizations ("CMOs") for preclinical testing. We receive clinical supply material manufactured in compliance with current GMP requirements ("cGMPs"), and we conduct appropriate quality assurance oversight before and during the clinical trial, in cooperation with our CMOs, to ensure compliance with the mutually agreed-upon process descriptions and cGMP regulations.

Zipalertinib, which we are co-developing with an affiliate of Taiho, is a small molecule that is manufactured in synthetic processes from available starting materials. The chemistry appears amenable to scale-up and does not currently require unusual equipment in the manufacturing process. We generally expect to rely on third parties for the manufacture of companion diagnostics, which are assays or tests that identify an appropriate patient population for zipalertinib. Depending on the technology solutions we select, we may rely on multiple third parties to manufacture and sell a single test.

We utilize a global network of manufacturers for our programs in development, with vendors located in the U.S., Europe, and Asia. Certain nodes in the drug substance and drug product supply chains may rely on single source, third-party CMOs, which is typical for this stage of development. Any reduction or halt in supply of drug substance or drug product from these contract manufacturers could limit our ability to develop our product candidates until we find a qualified replacement contract manufacturer. However, we have procured or have plans to procure sufficient drug substance to supply the planned initial clinical studies for our programs. At the appropriate time in development, we intend to put in place agreements under which our third-party contract manufacturers will generally provide us with necessary quantities of drug substance and drug product on a project-by-project basis, based on our projected development and commercial supply needs.

CLN-619, CLN-978, CLN-049, CLN-418, and CLN-617 are manufactured from a vial of a master cell bank ("MCB"), from the respective production cell lines. We have one MCB for each program that was produced and tested in accordance with cGMPs and applicable regulations. We either already have in place or intend to produce working cell banks for each product candidate later in product development. It is possible that we could lose multiple cell banks from multiple locations and have our manufacturing severely impacted by the need to replace the cell banks. However, we believe we have adequate backup should any particular cell bank be lost in a catastrophic event.

Governmental Regulation

U.S. Food and Drug Administration Regulation

The FDA and other U.S. regulatory authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, safety, efficacy, import, export, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of drugs and biologics such as those we are developing. We, along with our vendors, collaboration partners, clinical research organizations ("CROs"), clinical trial investigators, and CMOs will be required to navigate the various preclinical, clinical, manufacturing, and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval of our product candidates. The process of obtaining regulatory approvals of drugs and ensuring subsequent compliance with appropriate U.S. federal, state, local, and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable regulatory requirements at any time during the product development process or post-approval may subject an applicant to delays in development or approval, as well as administrative and judicial sanctions.

In the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (as amended, the “FDCA"), and biologics under the FDCA and the Public Health Service Act (as amended, the "PHSA"), and their implementing regulations. Both drugs and biologics are also subject to other federal, state, and local statutes and regulations. Our product candidates are early-stage and have not been approved by the FDA for marketing in the U.S.

Our product candidates must be approved for therapeutic indications by the FDA before they may be marketed in the U.S. For our drug product candidates regulated under the FDCA, such as zipalertinib, the FDA must approve a New Drug Application ("NDA"). For our biologic product candidates regulated under the FDCA and PHSA, such as CLN-619, CLN-978, CLN-049, CLN-418, and CLN-617, the FDA must approve a Biologics License Application ("BLA"). The process is similar and generally involves the following:

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completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice ("GLP") requirements;

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

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approval by an institutional review board ("IRB") or independent ethics committee ("EC") at each clinical trial site before each clinical trial may be initiated;

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performance of adequate and well-controlled clinical trials in accordance with good clinical practice ("GCP") requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication;

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preparation and submission to the FDA of an NDA or BLA;

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payment of user fees for FDA review of the NDA or BLA, unless waived;

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a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review;

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satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the product will be produced to assess compliance with cGMPs to assure that the facilities, methods, and controls are adequate to ensure and preserve the drug or biological product’s identity, strength, quality and purity;

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satisfactory completion of any FDA audits of the clinical trial sites that generated the data in support of the NDA or BLA; and

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FDA review and approval of the NDA or BLA, including, where applicable, consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug or biologic in the U.S.

Before testing any drug or biologic in humans, the product candidate must undergo rigorous preclinical testing. Preclinical studies includein vitro and animal studies to assess preliminary safety and, in some cases, to establish the rationale for therapeutic use. The conduct of preclinical studies is subject to federal and state regulations and requirements, including GLP requirements for safety and toxicology studies. In the U.S., the results of the preclinical studies, together with manufacturing information and analytical data must be submitted 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 clinical trials may begin. The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. The IND will become effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions about the supportive data, or the study design, particularly regarding potential safety issues with conducting the clinical trial as described in the protocol. In this situation, the trials are placed on clinical hold, and the IND sponsor must resolve any outstanding FDA concerns before clinical trials can proceed.

Clinical trials involve the administration of the product candidate to healthy volunteers or patient participants under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirements that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters and criteria to be used in monitoring safety and evaluating effectiveness, including stopping rules that assure a clinical study will be stopped if certain adverse events should occur. Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND. Furthermore, each clinical trial must be reviewed and approved by an IRB or EC, either centrally or at each institution at which the clinical trial will be conducted, to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable related to the anticipated benefits. The IRB also approves 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 completed.

The FDA may, at any time during the initial 30-day IND review period or while clinical trials are ongoing under the IND, impose a partial or complete clinical hold based on concerns for patient safety and/or noncompliance with regulatory requirements. This order issued by the FDA would delay a proposed clinical study or cause suspension of an ongoing study until all outstanding concerns have been adequately addressed, and the FDA has notified us that investigations may proceed. Imposition of a clinical hold could cause significant delays or difficulties in completing planned clinical studies in a timely manner. In addition, the IRB or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, 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. There also are requirements governing the reporting of ongoing clinical trials and completed clinical trials to public registries. In the U.S., information about applicable clinical trials, including clinical trials results, must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website.

A sponsor who wishes to conduct a clinical trial outside of the U.S. may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. When a foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements, including GCP requirements, of the FDA in order to use the study as support for an IND or application for marketing approval. The GCP requirements encompass both ethical and data integrity standards for clinical studies. The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the quality and integrity of the resulting data. They further help ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies.

Clinical trials to evaluate therapeutic indications to support NDAs and BLAs for marketing approval are typically conducted in three sequential phases, which may overlap or be combined.

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Phase 1—Phase 1 clinical trials involve initial introduction of the investigational product in a limited population of healthy human volunteers or patients with the target disease or condition in the case of some products for severe or life-threatening diseases. These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism, and distribution of the investigational product in humans, evaluate the side effects associated with increasing doses, and, if possible, to gain early evidence of effectiveness.

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Phase 2—Phase 2 clinical trials typically involve administration of the investigational product to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

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Phase 3—Phase 3 clinical trials typically involve administration of the investigational product to an expanded patient population to further evaluate dosage, to provide substantial evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA or BLA.

Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These clinical trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication and are commonly intended to generate additional safety data regarding use of the product in a clinical setting. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or BLA. The mandatory studies are used to confirm clinical benefit in the case of drugs approved under the accelerated approval regulations or to provide additional clinical safety or efficacy data for “full” approvals. Failure to exhibit due diligence with regard to conducting required Phase 4 clinical trials could result in withdrawal of approval for products approved under accelerated approval regulations.

Progress reports detailing the results of clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other studies or animal orin vitro testing that suggest a significant risk in humans exposed to the product; and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2, and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the drug or biological characteristics of the product candidate and finalize a process for manufacturing the drug product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and manufacturers must develop, among other things, methods for testing the identity, strength, quality, and purity of the final drug product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life and to identify appropriate storage conditions for the product candidates.

Expanded Access

Expanded access, also known as compassionate use, is the use of investigational products outside of clinical trials to treat patients with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options. FDA regulations allow access to investigational products on a case-by-case basis for the following groups: individual patients (single-patient INDs for treatment in emergency settings and non-emergency settings); intermediate-size patient populations; and larger populations for use of the investigational product under a treatment protocol or treatment IND.

Under the FDCA, sponsors of one or more investigational products for the treatment of a serious disease or condition must make publicly available their policy for evaluating and responding to requests for expanded access for individual patients. Sponsors are required to make such policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 clinical trial, or 15 days after the investigational drug or biologic receives designation as a Breakthrough Therapy, Fast Track product, or regenerative medicine advanced therapy.

In the U.S., the Right to Try Act, among other things, provides an additional mechanism for patients with a life-threatening condition who have exhausted approved treatments and are unable to participate in clinical trials to access certain investigational products that have completed a Phase 1 clinical trial, are the subject of an active IND, and are undergoing investigation for FDA approval. Unlike the expanded access framework described above, the Right to Try Act does not require the FDA to review or approve requests for use of the investigational product. There is no obligation for a sponsor to make its investigational products available to eligible patients as a result of the Right to Try Act, but the sponsor must develop an internal policy and respond to patient requests according to that policy.

FDA Marketing Application Review and Approval Process

A company seeking marketing approval for a new drug or biologic in the U.S. must submit the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things including payment of a user fee for review of the application, are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one or more indications. An NDA is a request for approval to market a new drug for one or more specified indications, and a BLA is a request for approval to market a new biologic for one or more specified indications. The NDA or BLA must include all relevant data available from pertinent preclinical studies and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use 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 efficacy of the investigational drug, or the safety, purity and potency of the investigational biologic, to the satisfaction of the FDA. FDA approval of an NDA or BLA must be obtained before a drug or biologic may be marketed in the U.S.

In addition, under the Pediatric Research Equity Act ("PREA"), certain NDAs and BLAs and certain supplements to an NDA or BLA must contain data to assess the safety and effectiveness of the drug or biological product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The Food and Drug Administration Safety and Innovation Act requires that a sponsor who is planning to submit a marketing application or supplement to an application for a drug or biological product that includes a new active ingredient or clinically active component, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan within 60 days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and the FDA. Unless otherwise required by regulation, PREA does not apply to a drug or biological product for an indication for which orphan designation has been granted.

In the U.S., the FDA reviews all submitted NDAs and BLAs to ensure they are sufficiently complete to permit substantive review before it accepts them for filing and may request additional information rather than accepting the application for filing. The FDA may refuse to file any NDA or BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the NDA or BLA must be resubmitted with additional information. Once the submission is accepted for filing, the FDA begins an in-depth review of the marketing application. Applications receive either standard or priority review. Under the current goals mandated under the Prescription Drug User Fee Act (the “PDUFA”), the FDA has ten months in which to complete its initial review of a standard marketing application and respond to the applicant, and six months for a priority marketing application. The FDA does not always meet its PDUFA goal dates for standard or priority marketing applications. The review process and the PDUFA goal date may be extended by three months if the FDA requests or the marketing application sponsor otherwise provides additional substantial information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date. The FDA may further refer an application to an advisory committee for review, evaluation, and recommendation as to whether the application should be approved. Though the FDA is not bound by such recommendations, it considers them carefully when making decisions. If the FDA’s evaluations of the marketing application and the clinical and manufacturing procedures and facilities are favorable, the FDA may issue an approval letter. If the FDA finds deficiencies in the marketing application, it may issue a complete response letter, which defines the conditions that must be met in order to secure final approval of the marketing application. If and when those conditions have been met to the FDA’s satisfaction, the FDA will issue an approval letter, authorizing commercial marketing of the drug. Sponsors that receive a complete response letter may submit to the FDA information that represents a complete response to the issues identified by the FDA. Resubmissions by the marketing application sponsor in response to a complete response letter trigger new review periods of varying length (typically two to six months) based on the content of the resubmission. Before approving an NDA or BLA, 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 or BLA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP and other requirements and the integrity of the clinical data submitted to the FDA. To assure GMP and GCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production, and quality control. If the FDA’s evaluation of the marketing application and the commercial manufacturing procedures and facilities is not favorable, the FDA may not approve the marketing application.

Even if the FDA approves a product, depending on the specific risk(s) to be addressed, the FDA 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 product’s safety or efficacy 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 risk evaluation and mitigation strategy ("REMS"), which can materially affect the potential market and profitability of the product. REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use ("ETASU"). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patent registries. 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 drug designation ("ODD") to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with either a patient population of fewer than 200,000 individuals in the U.S., or a patient population of greater than 200,000 individuals in the U.S. when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the U.S. will be recovered from sales in the U.S. of that drug or biologic. ODD must be requested before submitting an NDA or BLA. After the FDA grants ODD, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. The granting of ODD does not convey any advantage in or shorten the duration of the regulatory review and approval process.

If a product that has received ODD and subsequently receives the first FDA approval for that drug for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA or BLA, to market the same drug or biologic for the same indication for seven years from the approval of the NDA or BLA, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of ODD are tax credits for certain research and a waiver of the NDA or BLA application user fee.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received ODD. 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 if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. The FDA has historically taken the position that the scope of orphan exclusivity aligns with the approved indication or uses of a product, rather than the disease or condition for which the product received orphan designation. However, on September 30, 2021, the U.S. Court of Appeals for the Eleventh Circuit issued a decision in Catalyst Pharms., Inc. v. Becerra holding that the scope of orphan drug exclusivity must align with the disease or condition for which the product received orphan designation, even if the product’s approval was for a narrower use or indication. The FDA announced on January 24, 2023 that, despite the Catalyst decision, it will continue to apply its longstanding regulations, which tie the scope of orphan exclusivity to the uses or indications for which the drug is approved, rather than to the designation. The FDA’s application of its orphan drug regulations post-Catalyst could be the subject of future legislation or to further challenges in court.

Expedited Development and Review Programs

The FDA maintains several programs intended to facilitate and expedite development and review of new drugs and biologics 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. Fast Track designation, Breakthrough Therapy designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process.

A new drug or biologic is eligible for Fast Track designation if it is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address unmet medical needs for such disease or condition. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. Fast Track designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing application is filed, meaning that the FDA may initiate review of sections of a Fast Track product’s application before the application is complete upon satisfaction of certain conditions.

In addition, a new drug or biological product may be eligible for Breakthrough Therapy designation if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug or biologic, alone or in combination with or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Breakthrough Therapy designation provides all the features of Fast Track designation in addition to intensive guidance on an efficient development program beginning as early as Phase 1, and FDA organizational commitment to expedited development, including involvement of senior managers and experienced review staff in a cross-disciplinary review, where appropriate.

Any product submitted to the FDA for approval, including a product with Fast Track or Breakthrough Therapy designation, may also be eligible for priority review. A product is eligible for priority review if it is intended to treat a serious or life-threatening disease or condition, and if approved, would provide a significant improvement in safety or effectiveness. For original NDAs and BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (compared with ten months under standard review).

The FDA may grant accelerated approval to a product intended to treat a serious or life-threatening disease or condition that generally provides a meaningful therapeutic advantage to patients over available treatments, 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 ("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.

For drugs granted accelerated approval, the FDA generally requires sponsors to conduct, in a diligent manner, adequate and well-controlled post-approval confirmatory studies to verify and describe the product’s clinical benefit. Failure to conduct required post-approval studies with due diligence, failure to confirm a clinical benefit during the post-approval studies, or dissemination of false or misleading promotional materials would allow the FDA to withdraw the product approval on an expedited basis. The Food and Drug Omnibus Reform Act of 2022 (“FDORA”), enacted on December 29, 2022, as part of the Consolidated Appropriations Act, 2023, includes numerous reforms to the accelerated approval process for drugs and biologics and enables the FDA to require, as appropriate, that a post-approval study be underway prior to granting accelerated approval. FDORA also expands the expedited withdrawal procedures available to the FDA to allow the agency to use expedited procedures if a sponsor fails to conduct any required post-approval study of the product with due diligence. FDORA also adds the failure of a sponsor of a product approved under accelerated approval to conduct with due diligence any required post-approval study with respect to such product or to submit timely reports with respect to such product to the list of prohibited acts in the FDCA. All promotional materials for product candidates approved under accelerated approval are subject to prior review by the FDA unless the FDA informs the applicant otherwise.

FDA Approval or Clearance of Companion Diagnostics

In August 2014, the FDA issued final guidance clarifying the requirements that will apply to the development and approval of therapeutic products intended for use within vitro companion diagnostics. According to the guidance, for novel drugs and biologics, a companion diagnostic device and its corresponding therapeutic should be approved or cleared contemporaneously by the FDA for the use indicated in the therapeutic product’s labeling. Approval or clearance of the companion diagnostic device will ensure that the device has been adequately evaluated and has adequate performance characteristics in the intended population. In July 2016, the FDA issued a draft guidance intended to assist sponsors of the therapeutic products andin vitro companion diagnostic devices on issues related to co-development of the products. In April 2020, the FDA issued a final guidance on the development and labeling ofin vitro companion diagnostic devices for oncology therapeutics products.

Under the FDCA, in vitro diagnostics, including companion diagnostics, are regulated as medical devices. In the U.S., the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance. Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution.

The FDA previously has requiredin vitro companion diagnostics intended to select the patients who will respond to a product candidate to obtain premarket approval ("PMA"), simultaneously with approval of the therapeutic product candidate. The PMA process, including the gathering of clinical and preclinical data and the submission to and review by the FDA, can take several years or longer. It involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. PMA applications are subject to an application fee.

A clinical trial is typically required for a PMA application and, in a small percentage of cases, the FDA may require a clinical study in support of a Premarket Notification under Section 510(k) of the FDCA. A manufacturer that wishes to conduct a clinical study involving the device is subject to the FDA’s investigational device exemption ("IDE") regulations. The IDE regulations distinguish between significant and non-significant risk device studies and the procedures for obtaining approval to begin the study differ accordingly. Also, some types of studies are exempt from the IDE regulations. A significant risk device presents a potential for serious risk to the health, safety, or welfare of a subject. Significant risk devices are devices that are substantially important in diagnosing, curing, mitigating, or treating disease or in preventing impairment to human health. Studies of devices that pose a significant risk require both FDA and an IRB approval prior to initiation of a clinical study. Many companion diagnostics are considered significant risk devices due to their role in diagnosing a disease or condition. Non-significant risk devices are devices that do not pose a significant risk to the human subjects. A non-significant risk device study requires only IRB approval prior to initiation of a clinical study.

After a device is placed on the market, it remains subject to significant regulatory requirements. Medical devices may be marketed only for the uses and indications for which they are cleared or approved. Device manufacturers must also establish registration and device listings with the FDA.

In the U.S., device manufacturers are also subject to the FDA’s medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur, and the FDA’s correction and removal reporting regulations, which require that manufacturers report to the FDA corrections or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health. A medical device manufacturer’s manufacturing processes and those of its suppliers are required to comply with the applicable portions of the FDA's Quality System Regulation, which covers the methods and documentation of the design, testing, production, processes, controls, quality assurance, labeling, packaging and shipping of medical devices. Domestic facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA. The FDA also may inspect foreign facilities that export products to the U.S.

Post-Approval Requirements for Drugs and Biologics in the U.S.

In the U.S., drugs and biologics 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, reporting of adverse experiences with the product, complying with promotion and advertising requirements, which include restrictions on promoting products for unapproved uses or patient populations (known as “off-label use”) and limitations on industry-sponsored scientific and educational activities. Although physicians may prescribe approved products for off-label uses, manufacturers may not market or promote such uses. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, including not only by Company employees but also by agents of the Company or those speaking on the Company’s behalf, 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, including liabilities under the False Claims Act where products carry reimbursement under federal health care programs. Promotional materials for approved drugs and biologics must be submitted to the FDA in conjunction with their first use or first publication. Further, if there are any modifications to the product, including proposed changes to the indication, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new or supplemental NDA or BLA, which may require the development of additional data or preclinical studies and clinical trials.

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

The FDA periodically inspects the sponsor’s records related to safety reporting and/or manufacturing; the latter including assessment of compliance with cGMP through periodic unannounced inspections. Accordingly, manufacturers and their subcontractors involved in the manufacture and distribution of approved products are required to register their establishments with the FDA and to maintain compliance with ongoing regulatory requirements, including cGMP, requiring continual expenditure of time, money and effort in the area of production and quality control to maintain compliance. Failure to comply with statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory action, such as warning letters, suspension of manufacturing, product seizures, injunctions, civil penalties or criminal prosecution. There is also a continuing, annual program fee for any marketed product.

The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, requirements for post-market studies or clinical trials to assess new safety risks, or imposition of distribution or other restrictions under a REMS. 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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safety alerts, Dear Health Care Provider letters, press releases or other communications containing warnings or other safety information about the product;

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mandated modification of promotional materials and labeling and issuance of corrective information;

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fines, warning letters, or untitled letters;

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holds on clinical trials;

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refusal of the FDA to approve applications or supplements to approved applications, or suspension or revocation of product approvals;

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

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injunctions or the imposition of civil or criminal penalties; and

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consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs.

U.S. Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of FDA approval of our current and future product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit restoration of the patent term of up to five years as compensation for patent term lost during the FDA regulatory review process. Patent-term restoration, however, cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date and only those claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended. The patent-term restoration period is generally one-half the time between the effective date of an IND and the submission date of a marketing application plus the time between the submission date and the approval of that application, except that the review period is reduced by any time during which the applicant failed to exercise due diligence. Only one patent applicable to an approved drug is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent. The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we may apply for restoration of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant marketing application.

Regulatory exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the U.S. to the first applicant to gain approval of an NDA for 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 (“ANDA"), or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement.

The FDCA also provides three years of 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 covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent for other conditions of use. 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.

In addition, both drugs and biologics can also obtain pediatric exclusivity in the U.S. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued Written Request for such a study.

U.S. Biosimilars and Exclusivity

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the "ACA"), includes a subtitle called the Biologics Price Competition and Innovation Act (the "BPCIA"), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars in the U.S. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical study or studies. Interchangeability requires that a product is biosimilar to the reference product, and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

Under the BPCIA, a reference biological product is granted 12 years of data exclusivity from the time of first licensure of the product, and an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

The BPCIA is complex and continues to be interpreted and implemented by the FDA. In addition, government proposals have sought to reduce the 12-year reference product exclusivity period. Other aspects of the ACA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. As a result, the ultimate impact, implementation, and regulatory interpretation of the BPCIA remain subject to significant uncertainty.

Other U.S. Regulatory Matters

Manufacturing, sales, promotion, and other activities of product candidates following product approval, where applicable, or commercialization are also subject to regulation by numerous regulatory authorities in the U.S. in addition to the FDA, which may include the Centers for Medicare & Medicaid Services ("CMS"), other divisions of the Department of Health and Human Services ("HHS"), the Department of Justice, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency, and state and local governments and governmental agencies.

Other Healthcare Laws in the U.S.

In the U.S., pharmaceutical manufacturers and their products are subject to extensive regulation, including laws intended to prevent fraud and abuse in the healthcare industry. These laws subject pharmaceutical manufacturers and their products to regulation by national, state and local agencies, including, but not limited to the DOJ, the Office of Inspector General of the U.S. Department of Health and Human Services (“OIG”), and other regulatory bodies. These laws, some of which apply to pharmaceutical manufacturers only after the manufacturers have marketed products, include:

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the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; a person or entity need not have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it in order to have committed a violation;

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the federal civil and criminal false claims laws, including the civil False Claims Act (the "FCA"), which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval that are false, fictitious or fraudulent; knowingly making, using, or causing to be made or used, a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government;

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manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. In addition, the government may assert that a claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery;

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the federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies;

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the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), which imposes criminal and civil liability for knowingly and willfully executing a scheme, or attempting to execute a scheme, to defraud any healthcare benefit program, including private payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, or falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity need not have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 ("HITECH"), and their respective implementing regulations, which imposes, among other things, specified requirements on covered entities and their business associates relating to the privacy and security of individually identifiable health information including mandatory contractual terms and required implementation of technical safeguards of such information;

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federal laws, such as the Medicaid Drug Rebate Program, that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs;

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the so-called “federal sunshine law” or Open Payments, which requires manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, to monitor and report annually certain transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and

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analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, and restrict marketing practices or require disclosure of marketing expenditures and pricing information; state and local laws that require the registration of pharmaceutical sales representatives; state and foreign laws that govern the privacy and security of health information in some circumstances. These data privacy and security laws may differ from each other in significant ways and often are not pre-empted by HIPAA, which may complicate compliance efforts.

In addition, pharmaceutical manufacturers may also be subject to U.S. federal and state consumer protection and unfair competition laws and regulations, which broadly regulate marketplace activities and activities that potentially harm consumers.

The distribution of drugs and biological products is subject to additional regulation, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.

The full scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform. Federal and state enforcement bodies have continued to increase their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other related governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight and reporting obligations if we become subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to similar actions, penalties and sanctions. Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from its business.

U.S. Coverage and Reimbursement

The ability of a pharmaceutical manufacturer to successfully commercialize and achieve market acceptance of a product depends in significant part on adequate coverage and reimbursement from third-party payors, including government healthcare programs, such as Medicare and Medicaid programs, and private entities, such as managed care organizations and private health insurers. In the U.S., no uniform policy of coverage and reimbursement for drug products exists among third-party payors. Therefore, coverage and reimbursement for drug products can differ significantly from payor to payor. The process for determining whether a third-party payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved.

Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. To obtain or maintain coverage and reimbursement for any approved drug product, a pharmaceutical manufacturer may need to conduct expensive pharmacoeconomic studies or otherwise provide evidence to demonstrate to demonstrate the medical necessity and cost-effectiveness of our product. These studies will be in addition to the studies required to obtain or maintain regulatory approvals. If third-party payors do not consider a product to be cost-effective compared to other available therapies, they may not cover the product or, if they do, the level of payment may not be sufficient to allow sale of a product at a profit.

Even if third-party payors provide some coverage, the third-party payors may impose limits on the coverage or controls to manage utilization of products. Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication and can exclude drugs from their formularies in favor of competitor drugs or alternative treatments. Payors may also impose step edits that require patients to try alternative, including generic, treatments before authorizing payment for our products, limit the types of diagnoses for which coverage will be provided, require pre-approval (known as “prior authorization”) for coverage of a prescription for each patient (to allow the payor to assess medical necessity) or impose a moratorium on coverage for products while the payor makes a coverage decision.

Moreover, a third-party payor’s decision to provide coverage for a product does not mean that an adequate reimbursement rate will be approved. We may be required to provide discounts or rebates to certain purchasers to obtain coverage under federal healthcare programs, or to sell products to government purchasers. A pharmaceutical manufacturer may have to offer discounts or rebates to private third-party payors to obtain favorable coverage. Adequate third-party reimbursement may not be available to enable us to maintain net price levels sufficient to realize an appropriate return on our investment in product development.

The containment of healthcare costs has become a priority of federal and state governments, and the prices of products have been a focus in this effort. Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption or enhancement of price controls and cost-containment measures could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party payor reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Healthcare Reform

In the U.S. and some foreign jurisdictions, there have been, and likely will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system directed at broadening the availability of healthcare, improving the quality of healthcare, and containing or lowering the cost of healthcare. For example, in 2010, the U.S. enacted the ACA, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars; addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; extended the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; subjected manufacturers to new annual fees and taxes for certain branded prescription drugs; created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% 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. More generally, the ACA expanded health care coverage through Medicaid expansion and the implementation of the “individual mandate” for health insurance coverage.

Beyond the ACA, there have been ongoing health care reform efforts. Drug pricing and payment reform was a focus of the Trump Administration and has been a focus of the Biden Administration. For example, federal legislation enacted in 2021 eliminated the statutory cap on Medicaid drug rebate program rebates (currently set at 100% of a drug’s “average manufacturer price”) effective January 1, 2024. As another example, the Inflation Reduction Act of 2022 (“IRA”) includes a number of changes intended to address rising prescription drug prices in Medicare Parts B and D. These changes, which have varying implementation dates, include caps on Medicare Part D out-of-pocket costs, Medicare Part B and Part D drug price inflation rebates, a new Medicare Part D manufacturer discount drug program (replacing the ACA Medicare Part D coverage gap discount program) and a drug price negotiation program for certain high spend Medicare Part B and D drugs. The focus on health care reform, including reform of drug pricing and payment, has continued in the wake of the IRA. For example, in 2022, subsequent to the enactment of the IRA, the Biden administration released an executive order directing the HHS to report on how the Center for Medicare and Medicaid Innovation (CMMI) could be leveraged to test new models for lowering drug costs for Medicare and Medicaid beneficiaries, which report proposed various models that CMMI is currently developing.

Healthcare reform efforts have been and may continue to be subject to scrutiny and legal challenge. For example, with respect to the ACA, tax reform legislation was enacted that eliminated the tax penalty established for individuals who do not maintain mandated health insurance coverage beginning in 2019 and, in 2021, the U.S. Supreme Court dismissed the latest judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. As another example, revisions to regulations under the federal anti-kickback statute would remove protection for traditional Medicare Part D discounts offered by pharmaceutical manufacturers to pharmacy benefit managers and health plans. Pursuant to court order, the removal was delayed, and subsequent legislation imposed a moratorium on implementation of the rule until January 2032. As another example, the IRA drug price negotiation program has been challenged in litigation filed by various pharmaceutical manufacturers and industry groups.

There have also been efforts by federal and state government officials or legislators to implement measures to regulate prices or payment for pharmaceutical products, including legislation on drug importation. Recently, there has been considerable public and government scrutiny of pharmaceutical pricing and proposals to address the perceived high cost of pharmaceuticals. There have also been recent state legislative efforts to address drug costs, which generally have focused on increasing transparency around drug costs or limiting drug prices.

General legislative cost control measures may also affect reimbursement for our product candidates. The Budget Control Act, as amended, resulted in the imposition of reductions in Medicare (but not Medicaid) payments to providers in 2013 and will remain in effect into 2032 (except May 1, 2020 to March 31, 2022) unless additional Congressional action is taken. Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented and/or any significant taxes or fees that may be imposed on us could have an adverse impact on our results of operations.

Adoption of new legislation at the federal or state level could affect demand for, or pricing of, any future products if approved for sale. We cannot, however, predict the ultimate content, timing or effect of any federal and state reform efforts. There is no assurance that federal or state health care reform will not adversely affect our future business and financial results.

Outside the U.S., ensuring coverage and adequate payment for a product also involves challenges. Pricing of prescription pharmaceuticals is subject to government control in many countries. Pricing negotiations with government authorities can extend well beyond the receipt of regulatory approval for a product and may require a clinical trial that compares the cost-effectiveness of a product to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in commercialization.

In the European Union (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, the EU provides options for its member states 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. An EU member state 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 member states allow companies to fix their own prices for products but monitor and control prescription volumes and issue guidance on prescribing criteria to physicians, having an effect on restricting prescriptions or usage. 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 healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the EU. The downward pressure on healthcare 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 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.

Compliance with Other Federal and State Laws or Requirements; Changing Legal Requirements

If any products that we may develop are made available in the U.S. to authorized users of the Federal Supply Schedule of the U.S. General Services Administration, additional laws and requirements apply. Products must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act. Manufacturing, labeling, packaging, distribution, sales, promotion, and other activities also are potentially subject to federal and state consumer protection and unfair competition laws, among other requirements to we may be subject.

The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage, and security requirements intended to prevent the unauthorized sale of pharmaceutical products.

The failure to comply with any of these laws or regulatory requirements subjects firms to possible legal or regulatory action. Depending on the circumstances, failure to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, exclusion from federal healthcare programs, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product approvals, relabeling or repackaging, or refusal to allow a firm to enter into supply contracts, including government contracts. Any claim or action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. Prohibitions or restrictions on marketing, sales or withdrawal of future products marketed by us could materially affect our business in an adverse way.

Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling or packaging; (iii) the recall or discontinuation of our products; or (iv) additional record-keeping requirements. If any such changes were to be imposed, they could adversely affect the operation of our business.

European Drug Development

In addition to regulations in the U.S., our business is subject to a variety of foreign regulations governing clinical trials, marketing, and distribution of our products. Irrespective of whether it concerns an FDA approved or investigational drug, the commencement of clinical trials and the subsequent marketing of a drug product in foreign countries are subject to preliminary approvals from the corresponding regulatory authorities of such countries. For example, the conduct of clinical trials in the European Union is governed by the Clinical Trials Regulation (EU) No 536/2014 and the principles and guidelines on GCP.

Similar to the U.S., the various phases of preclinical and clinical research in the EU are subject to significant regulatory controls. The currently applicable Regulation (EU) No 536/2014 (the “CTR”) requires a clinical trial sponsor to obtain approval from the national competent authority (“NCA”) of each European Union member state in which the clinical trial is to be conducted. Furthermore, the sponsor can only start a clinical trial at a specific clinical trial site after the local research ethics committee (“REC”) has issued a favorable opinion.

Pursuant to the CTR, a sponsor can submit a single application for a clinical trial authorization (“CTA”) through a centralized EU clinical trials portal called the Clinical Trials Information System (“CTIS”). One NCA (the reporting EU member state selected by the sponsor) takes the lead in validating and evaluating the application, as well as consulting and coordinating with the other concerned member states in which the clinical trial is to be conducted. If an application is rejected, it may be amended and resubmitted through CTIS. A concerned member state may in limited circumstances declare an “opt-out” from an approval and prevent the clinical trial from being conducted in that member state.

The CTR foresees a three-year transition period: from January 31, 2023, the submission of initial CTA applications for a new clinical trial under the CTR via CTIS became mandatory, and by January 31, 2025, all ongoing clinical trials approved under the old regime must comply with the CTR and information relating to such clinical trials must be transitioned to CTIS. All suspected unexpected serious adverse reactions to the investigated drug that occurred during the clinical trial must be reported to the NCA and ECs of the EU member state where they occurred.

In the UK, clinical trials of medicinal products for human use are primarily governed by the Medicines for Human Use (Clinical Trials) Regulations 2004 (as amended). Similar to the EU, before a clinical trial can be initiated in the UK, a CTA must be obtained from the Medicines and Healthcare products Regulatory Agency (“MHRA”), as well as a positive opinion from a REC.

European Drug Marketing

Much like the Anti-Kickback Statue prohibition in the U.S., the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the EU. The provision of benefits or advantages to induce or reward improper performance generally is governed by the national anti-bribery laws of EU member states, and the Bribery Act 2010 in the UK infringement of these laws could result in substantial fines and imprisonment. EU Directive 2001/83/EC, which governs medicinal products for human use, further provides that, where medicinal products are being promoted to persons qualified to prescribe or supply them, no gifts, pecuniary advantages or benefits in kind may be supplied, offered or promised to such persons unless they are inexpensive and relevant to the practice of medicine or pharmacy. This provision is reflected in the UK Human Medicines Regulations 2012.

In the EU and UK, the statutory regimes applicable to the advertising of medicinal products are supplemented by self-regulatory regimes set out in the relevant country’s industry code of practice; these codes of practice are developed by domestic trade organizations and are only binding on companies which are members of the relevant trade organization. However, since they represent the best practice, many non-members choose to abide by these codes of practices as well. These codes of practice require payments made to physicians to be publicly disclosed. In addition, as a matter of law, payments made to physicians in certain EU member states, such as France, must be publicly disclosed. Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual EU member states. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

European Drug Review and Approval

In the European Economic Area (the "EEA"), which is comprised of the member states of the EU together with Norway, Iceland and Liechtenstein, medicinal products can only be commercialized after obtaining a marketing authorization ("MA").

In order to obtain a marketing authorization for a medicinal product in the EU, an applicant is required to submit a marketing authorization application ("MAA") to either (a) the national competent authorities (albeit through the decentralized, mutual recognition, or national procedures) or (b) the EMA (through the centralized authorization procedure). Applicants are required to demonstrate the quality, safety and efficacy of the medicinal product in the application for marketing authorization. In order to support the benefit/risk assessment, an applicant is required to conduct human clinical trials to generate the necessary clinical data. Regulation (EC) No 726/2004 of the European Parliament and of the Council lays down the rules applicable to the centralized procedure for the authorization of medicinal products. Article 3 of Regulation (EC) No 726/2004 defines in which cases the centralized application procedure must (mandatory scope) or may (optional scope) be followed. The centralized procedure is mandatory for medicinal products derived from biotechnological and other high-tech processes, orphan medicinal products, advanced therapy medicinal products and products indicated for the treatment of HIV/AIDS, cancer, diabetes, auto-immune and other immune dysfunctions, viral diseases, and neurodegenerative diseases. For medicinal products that do not fall under any of the aforementioned categories, a submission via the centralized procedure is possible, provided that it concerns (i) a new active substance or (ii) product that can demonstrate a significant therapeutic, scientific, or technical innovation and for which approval would be in the interest of public health. Given the foregoing, our portfolio of innovative orphan products for neurodegenerative diseases is subject to the mandatory centralized procedure.

The centralized procedure allows pharmaceutical companies to submit a single application to the EMA, which is followed by a single evaluation, resulting in a single approval to market the medicinal product throughout the EEA. Approval via the centralized procedure is a two-step process whereby the Committee for Medicinal Products for Human Use (the "CHMP") first evaluates the MAA and issues an opinion on whether the medicinal product may be authorized or not (step 1). The CHMP opinion is subsequently sent to the EC, which takes a legally binding decision to grant a marketing authorization (step 2). The marketing authorization is valid throughout the EU and is automatically recognized in the EEA states. This allows the marketing authorization holder to market the medicine and make it available throughout the EEA. The timeframe for the first step of the centralized procedure (evaluation by the CHMP) opinion is 210 days from receipt of a valid application. However, the actual time needed to complete this first step is generally longer than the 210 days, since procedural clock stops are required in order for the applicant to respond to additional requests for information by the CHMP. Following a positive CHMP opinion, the EC ordinarily issues its implementing decision within 67 days to grant the marketing authorization. National MAs, which are issued by the NCAs of the EEA member states 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 EEA, this national MA can be recognized in other EEA member states through the mutual recognition procedure. If the product has not received a national MA in any EEA member state at the time of application, it can be approved simultaneously in various EEA member states through the decentralized procedure.

Under the procedures described above, before granting the MA, the EMA or the NCAs of the EEA member states assess of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy. Now that the UK (which comprises Great Britain and Northern Ireland) has left the EU, Great Britain will no longer be covered by centralized MAs (under the Northern Ireland Protocol, centralized MAs will continue to be recognized in Northern Ireland).

Accelerated evaluation of the MAA under the centralized procedure is possible in exceptional cases, following a justified request from the applicant, when a medicinal product is of a major public health interest, particularly from the point of view of therapeutic innovation. The CHMP determines what constitutes a major public interest on a case-by-case basis. Justifications must include the major benefits expected and present the arguments to support the claim that the medicinal product introduces new methods of therapy or improves on existing methods, thereby addressing, to a significant extent, the greater unmet needs for maintaining and improving public health. If the applicant provides sufficient justification for an accelerated assessment, the CHMP can reduce the timeframe for review of a MAA to 150 days. The timeframe for the EC to issue its decision remains unaltered.

Similar to the U.S., marketing authorization holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA and/or the national competent authorities of the EU member states. This oversight applies both before and after the granting of manufacturing and marketing authorizations. It includes compliance with EU GMP and GDP rules in relation to such activities as distribution, importing and exporting of medicinal products, rules governing conduct of pharmacovigilance (including good pharmacovigilance practices (“GVP”)) and requirements governing advertising, promotion and sale of medicinal products.

Regulatory approval processes outside of the U.S. and EU vary from country to country and the time may be longer or shorter than timelines for approval outlined above. In addition, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement for market access vary greatly from country to country. In all cases, clinical trials are to be conducted in accordance with GCP, applicable regulatory requirements, and the ethical principles that have their origin in the Declaration of Helsinki.

In relation to the UK, until the end of 2024, under the Northern Ireland Protocol which is contained in the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, centralized MAs continue to provide a valid basis for commercializing medicinal products in Northern Ireland. However, centralized MAs no longer provide a valid basis for the commercialization of medicinal products in Great Britain. Pursuant to the Windsor Framework, from January 1, 2025, all new medicinal products for the UK market will be authorized by the MHRA. In this regard, the MHRA will grant a single UK-wide MA for all medicinal products intended for sale in the UK, enabling medicinal products to be sold in a single pack and under a single authorization throughout the UK.

Since leaving the EU, the MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit patients, an accelerated assessment procedure, and new routes of evaluation for novel products and biotechnological products. Notwithstanding that there is no wholesale recognition of EU pharmaceutical legislation between the jurisdictions, and that EU Mas do not automatically provide a valid basis for the commercialization of medicinal products in Great Britain. From January 1, 2024, sponsors will be able to request the MHRA to recognize MAs granted by acceptable Reference Regulators in foreign jurisdictions (including the EU) under a new International Recognition Procedure.

European Data and Marketing Exclusivity

In the EEA, innovative medicinal products (including both small molecules and biological medicinal products) approved on the basis of a complete independent data package consisting of quality, preclinical testing results, and clinical trial data benefit from eight years of data exclusivity upon grant of an MA and an additional two years of market exclusivity. The data exclusivity prevents generic or biosimilar applicants from cross-referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference medicinal product when applying for a generic or biosimilar MA until the data exclusivity period has expired. During the additional two-year period of market exclusivity, a generic or biosimilar MA can be submitted, and the innovator’s pre-clinical and clinical data can be cross-referenced, but no generic or biosimilar product can be marketed until the expiration of the market exclusivity period. The overall ten-year period will be extended to a maximum of 11 years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are determined to bring a significant clinical benefit in comparison with currently approved therapies. The UK domestic law follows the same formula of regulatory data and market exclusivity.

European Orphan Designation and Exclusivity

Regulation (EC) No 141/2000 provides that a product can be designated as an orphan medicinal product by the European Commission, upon satisfactory scientific assessment by the EMA’s Committee for Orphan Medicinal Products (“COMP”), if the sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition which either affects not more than five in 10,000 persons in the EU, or where it is unlikely that the development of the medicine would generate sufficient return to justify the necessary investment in its development. In each case, no satisfactory method of diagnosis, prevention or treatment must have been authorized (or, if such a method exists, the product in question would be of significant benefit to those affected by the condition). In the UK, the MHRA conducts an equivalent assessment, against criteria which have been tailored for the UK population.

In the EEA, orphan drug designation must be requested before submitting an application for MA. The COMP is required to re-assess the granted orphan designation at the time of MA grant to ensure that it continues to meet the criteria for the designation to be maintained. Otherwise, the orphan designation can be revoked. In relation to the UK, the MHRA does not grant orphan designations during the development of the medicinal product. Instead, the MHRA will decide whether the criteria are satisfied at the point of grant of an MA.

In the EEA and the UK, orphan drug designation/status (as applicable) entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity following MA grant for the orphan product. This period may be reduced to six years if, at the end of the fifth year, it is established that the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity. During the period of market exclusivity, MA may only be granted 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 MA holder for the authorized product consents to a second orphan medicinal product application; or (iii) the MA 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. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

European Pediatric Investigation Plan

In the EEA, companies developing a new medicinal product must agree upon a pediatric investigation plan ("PIP"), with the EMA’s Pediatric Committee (the "PDCO") and must conduct pediatric clinical trials in accordance with that PIP, unless a waiver applies. The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which MA is being sought. The PDCO can grant a deferral of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults. Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when this data is not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients. Products that are granted a MA with the results of the pediatric clinical trials conducted in accordance with the PIP (even where such results are negative) are eligible for six months’ supplementary protection certificate extension (if any is in effect at the time of approval). In the case of orphan medicinal products, a two-year extension of the orphan market exclusivity may be available. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.

The UK domestic law follows the same formula for the incentivization of the development of medicinal products for the pediatric population, which is overseen by the MHRA.

Brexit and the Regulatory Framework in the United Kingdom

In June 2016, the electorate in the UK voted in favor of leaving the EU (commonly referred to as “Brexit”). Thereafter, in March 2017, the country formally notified the EU of its intention to withdraw pursuant to Article 50 of the Lisbon Treaty, and the UK formally left the EU on January 31, 2020. A transition period began on February 1, 2020, during which EU pharmaceutical legislation remained applicable to the UK. When the transition period expired on December 31, 2020, the UK became a “third country” for the purposes of EU law. Since the UK had already implemented the EU pharmaceutical legislation into its domestic legislation through the Human Medicines Regulations 2012 (as amended), immediate changes were made to this legislation to reflect the UK’s new status. Article 5(4) of Annex 2 to the Northern Ireland Protocol contained in the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community requires certain aspects of EU pharmaceutical law to be applied in Northern Ireland following the UK’s withdrawal from the EU. As mentioned above, from January 1, 2025, the Windsor Protocol will operate to disapply EU pharmaceutical law in Northern Ireland.

On May 1, 2021, the EU and UK trade and cooperation agreement (“TCA”) entered into application. The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of the outcomes of GMP inspections. Applicants and MA holders may submit GMP certificates issued by the MHRA for sites located outside the EU/EEA as supporting information for EU regulatory submissions. However, the TCA does not foresee wholesale mutual recognition of UK and EU pharmaceutical regulations. The regulatory regime in Great Britain currently broadly aligns with EU regulations. However, it is possible that these regimes may diverge in the future, especially in light of the European Commission’s proposals for the entire overhaul of the pharmaceutical regulatory regime.

European Data Collection

The collection and use of personal health data in the EEA is governed by the General Data Protection Regulation (the "GDPR"), which became effective May 25, 2018. The GDPR applies to any company established in the EEA and to companies established outside the EEA that process personal data in connection with the offering of goods or services to data subjects in the EU or the monitoring of the behavior of data subjects in the EU. The GDPR enhances data protection obligations for data controllers of personal data, including stringent requirements relating to the consent of data subjects, expanded disclosures about how personal data is used, requirements to conduct privacy impact assessments for “high risk” processing, limitations on retention of personal data, special provisions for “sensitive information” including health and genetic information of data subjects, mandatory data breach notification and “privacy by design” requirements, and direct obligations on service providers acting as data processors. The GDPR also imposes strict rules on the transfer of personal data outside of the EEA to countries that do not ensure an adequate level of protection, like the U.S. Failure to comply with the requirements of the GDPR and the related national data protection laws of the EEA member states may result in fines up to 20 million euros or 4% of a company’s global annual revenues for the preceding financial year, whichever is higher. Moreover, the GDPR grants data subjects the right to request deletion of personal information in certain circumstances and to claim material and non-material damages resulting from infringement of the GDPR. Given the breadth and depth of changes in data protection obligations, maintaining compliance with the GDPR will require significant time, resources and expense, and we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules. This may be onerous and adversely affect our business, financial condition, results of operations, and prospects.

Human Capital Resources

As of December 31, 2023, we had 85 full-time employees. 27 of our employees have M.D. or Ph.D. degrees. Within our workforce, 53 employees are engaged in research and development and 32 are engaged in business development, finance, legal, and general management and administration. Four of the nine members of our management executive team are women. Across our broader population, approximately 65% of full-time employees are women. Our management executive team places significant focus and attention on matters concerning our human capital assets - particularly the diversity of our workforce and their capability development.

Our office space is in Greater Boston, which we believe provides access to a vibrant biotech and pharmaceutical talent pool. We believe that employee compensation should be both competitive and equitable. We have programs in place to attract and retain talent, including stock-based compensation and cash performance awards. We also have a performance management and talent development process in which managers provide regular feedback and coaching to develop employees. We believe that open and honest communication among team members, managers, and leadership fosters a work environment where everyone can participate, develop, and thrive. 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.

Corporate Information

We were incorporated under the laws of the State of Delaware in September 2016. Our principal executive offices are located at One Main Street, Suite 1350, Cambridge, MA 02142 and our telephone number is (617) 410-4650.

We use various trademarks and trade names in our business, including, without limitation, our corporate name and logo. All other trademarks or trade names referred to in this Annual Report on Form 10-K are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Annual Report on Form 10-K may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012. We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (ii) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period.

Available Information

Our corporate website address is https://www.cullinanoncology.com. Information contained on or accessible through our website is not a part of this Annual Report on Form 10-K, and the inclusion of our website address in this Annual Report on Form 10-K is as an inactive textual reference only.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934 (as amended, the "Exchange Act"), are available through the “Investors” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information on our website is not part of this Annual Report on Form 10-K or any of our other securities filings unless specifically incorporated herein by reference. In addition, our filings with the SEC may be accessed through the SEC’s Electronic Data Gathering, Analysis and Retrieval system athttps://www.sec.gov. All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.