Tivic Health Systems, Inc.

As used in this Report, unless the context otherwise requires, references to “we,” “us,” “our,” “Company,” “Tivic,” and “Tivic Health” refer to Tivic Health Systems, Inc, collectively with its subsidiary, on a consolidated basis.

Business Overview

Tivic™ Health Systems, Inc. is a late-stage biopharmaceutical company whose lead program is Entolimod™. Entolimod is a recombinant TLR5 agonist with an extensive preclinical and clinical data package supporting development as a medical countermeasure (MCM) for Acute Radiation Syndrome (ARS) and it subsyndromes, as well as for adjunct therapy for oncology indications, such as neutropenia.

During fiscal year 2025, Tivic executed a deliberate and material strategic transformation: pivoting from a diversified bioelectronic medical device company to a focused biopharmaceutical company built around the TLR5 agonist franchise. In addition to securing worldwide exclusive license rights and options to Entolimod and its second-generation compound, Entolasta, in February 2025, Tivic established Velocity Bioworks™ in December 2025 as subsidiary contract development and manufacturing organization (CDMO) that is expected to support both Tivic and select third-party customers. At the same time, Tivic exited the consumer healthtech business and suspended its prescription bioelectronic product development efforts in order to focus resources fully on Entolimod development.

The Company is now focused on (1) advancing Entolimod and its next generation compound Entolasta™ through regulatory approval for acute radiation syndrome and into government procurement and (2) expanding Entolimod’s designations into oncology-related conditions, including neutropenia, thrombocytopenia and general and specific mucositis.

Tivic’s common stock trades on The Nasdaq Capital Market under the symbol "TIVC." The Company has its headquarters in San Antonio, TX, maintains a purpose-built, Current Good Manufacturing Practice (CGMP)-compatible biomanufacturing facility in San Antonio, Texas through its subsidiary, Velocity Bioworks, and operates on a hybrid remote and on-site model.

Key milestones of the company transformation and strategic refocusing include:

Clinical Pipeline

Pipeline Summary

Entolimod™: Scientific Foundation and Mechanism of Action

Entolimod is a recombinant protein engineered deletion variant of bacterial flagellin, specifically designed as a selective agonist of Toll-like Receptor 5 (TLR5), a key receptor in the body’s innate immune system. When administered, Entolimod binds to TLR5 receptors on immune cells, triggering a rapid activation of the NF-κB signaling pathway. Activation of the NF-κB signaling pathway initiates a cascade of immune and protective responses, including the secretion of cytokines, chemokines, and growth factors, enhancing the body’s natural ability to resist and repair tissue damage.

Entolimod (formerly designated CBLB502) is a recombinant protein of 329 amino acids (approximately 35 kDa) derived from the Salmonella typhimurium flagellin protein FliC.[1,2] The molecule was engineered by deleting the hypervariable, immunogenic middle domain of the native flagellin polypeptide while retaining the N- and C-terminal TLR5-activating domains, connected by a flexible linker sequence [1,2]. This engineering approach preserved full TLR5 agonism while reducing immunogenicity relative to wild type flagellin. Entolimod is produced via plasmid expression in Escherichia coli.[1] The drug is formulated as a sterile, clear liquid for intramuscular (IM) or subcutaneous (SC) injection, supplied in single-use vials. Clinical-grade material has been produced and used in multiple human studies.

As announced on February 12, 2025, Tivic has acquired worldwide exclusive license rights from Statera Biopharma, Inc. (“Statera”) to the late-stage TLR5 agonist Entolimod for the treatment of acute radiation syndrome (“ARS”). In addition, we acquired an exclusive option to license five additional indications and clinical use cases for Entolimod and second-generation product candidate, Entolasta.

Entolimod has been the subject of more than forty animal and human trials and $140 million of prior investment, including $35.6 million from the Department of Defense, Defense Threats Reduction Agency (DTRA), NASA, NIH and the Department of Army. The FDA has granted Fast Track and Orphan Drug designation to Entolimod for the prevention and treatment of ARS and to mitigate the likelihood of death following a potential lethal dose of total body ionization during or after a radiation disaster.

Entolimod binding to the TLR5 receptor specifically activates downstream NF-κB-dependent pathways, triggering a coordinated multi-modal protective and regenerative response:

A critical safety feature of the Entolimod cytokine profile is the selective induction of hematopoietic and anti-inflammatory cytokines, with absent or minimal induction of TNF-α, IL-1α, IL-1β, IL-2, IL-4, IL-12, GM-CSF, and IFN, the cytokines primarily implicated in cytokine storm. This distinguishes Entolimod from compounds that broadly and indiscriminately stimulate the immune system and contribute to its favorable safety profile at therapeutic doses.

Market Opportunity: Oncology

Treatment-induced Neutropenia

Neutropenia, defined as an absolute neutrophil count (ANC) below 1,500/µL, is the most common and clinically consequential dose-limiting toxicity across both cytotoxic chemotherapy and high-dose radiotherapy. Febrile neutropenia (FN) occurs when ANC falls below 500/µL in the presence of fever (≥38.3°C once, or ≥38.0°C sustained).

Neutrophils are the body's primary defense against bacterial and fungal infection. When chemotherapy or radiation destroys bone marrow, neutrophil production collapses. With too few neutrophils circulating, the body cannot contain bacteria that would normally be harmless, including bacteria that naturally reside in the gut. When the GI mucosal barrier is simultaneously damaged by treatment (as it commonly is with chemotherapy), those gut bacteria can translocate into the bloodstream, triggering systemic infection. Fever is the body's alarm signal that this process is underway.

Chemotherapy-induced Neutropenia (CIN) affects 30–50% of standard-dose and up to 80% of high-dose regimen patients. Grade 3–4 neutropenia (ANC <500/μL) predisposes patients to life-threatening infections, hospitalization, dose reductions, treatment delays, and treatment discontinuation, all of which compromise cancer outcomes. Radiation-induced neutropenia most commonly arises via two distinct oncology pathways: large-field pelvic/thoracic radiation therapy irradiating active marrow (compounded by concurrent chemoradiotherapy) and total body irradiation conditioning prior to hematopoietic stem cell transplants. Entolimod’s nine ARS NHP studies constitute a rigorous nonclinical dataset for radiation-induced neutropenia, the same phenotype for which filgrastim and pegfilgrastim received Animal Rule ARS approvals in 2015.

Febrile neutropenia is the most dangerous form of neutropenia for those undergoing cancer treatment. FN carries a 5–10% case-fatality rate in solid tumors and up to 11% with bacteremia in hematologic malignancies. It drives ~60,000–80,000 U.S. hospitalizations annually at $20,000–$30,000 each, an economic burden exceeding $3 billion.

In addition, neutropenia-related dose reductions, delays, and treatment discontinuations directly compromise cancer outcomes. A landmark analysis in diffuse large B-cell lymphoma demonstrated that chemotherapy dose reductions of ≥15% due to neutropenia were associated with statistically significant decreases in overall survival. In breast cancer, delivered dose intensity in anthracycline-containing regimens directly correlates with disease-free survival.

Neutropenia management has been shown to be a determinant of cancer treatment outcomes. As a result, the global G-CSF market was valued at ~$8.3B in 2022–23 (~$4.5B U.S.).

However, no available treatment addresses febrile neutropenia's complete pathophysiology (depleted neutrophils plus a breached mucosal barrier). G-CSF drugs restore neutrophil counts but do not protect the mucosal barrier, leaving the translocation pathway open. Entolimod addresses both components simultaneously, stimulating multi-lineage hematopoietic recovery through TLR5-mediated G-CSF and IL-6 induction, while concurrently activating NF-κB-dependent anti-apoptotic pathways in GI mucosal crypt cells to preserve barrier integrity.

Entolimod activates the TLR5 pathway upstream of G-CSF and provides differentiated activity through:

Entolimod's recovery mechanism operates independently of the cause of bone marrow failure. The TLR5 → NF-κB → G-CSF induction → neutrophil mobilization → MMP-9 → HP stem cell recovery cascade is triggered by TLR5 activation whether marrow progenitors were destroyed by ionizing radiation, alkylating agents, antimetabolites, or any other cytotoxic mechanism.

Nine NHP ARS studies, culminating in the pivotal GLP Study Rs-23, constitute an extensive dataset in support of and with direct relevance to Entolimod's opportunity in radiation-induced neutropenia. In Rs-23, 160 rhesus macaques irradiated at 7.2 Gy TBI (LD70/60) and treated with a single Entolimod injection 25 hours post-radiation showed:

By direct comparison: filgrastim administered without supportive care in LD65/60 irradiated NHP showed**-5%** change in survival vs vehicle. Pegfilgrastim showed benefit only with intensive supportive care. The gap between approved agents and Entolimod in the radiation-induced neutropenia NHP model derives directly from Entolimod's ability to engage the full multi-lineage marrow recovery cascade. Supportive studies with TBI doses 5.2–7.25 Gy consistently replicated neutropenia and thrombocytopenia reduction across dose levels, with histopathological confirmation of bone marrow restoration and less GI hemorrhage in all Entolimod-treated groups. Human studies in 150 subjects confirmed a rise in absolute neutrophil count of 3–5-fold peaking at 8–24 hours, profiles nearly identical to NHP.

No single FDA-approved agent restores multi-lineage hematopoiesis (neutrophil + platelet + RBC), much less concurrently protects GI mucosal integrity.

Treatment-induced Thrombocytopenia

Thrombocytopenia, defined as a platelet count below 150,000/µL, is a near-universal consequence of myelosuppressive cancer treatment and a major driver of treatment-limiting toxicity across oncology. Severe thrombocytopenia (platelet count <50,000/µL) substantially increases the risk of spontaneous and procedure-related hemorrhage. Grade 4 thrombocytopenia (<25,000/µL) is a medical emergency requiring platelet transfusion. Among patients receiving standard chemotherapy, Grade 3–4 thrombocytopenia occurs in approximately 20–40% of cycles depending on regimen intensity and rates approach 60–80% with high-dose conditioning regimens used prior to hematopoietic stem cell transplantation (HSCT).

Thrombocytopenia management currently relies on platelet transfusion, a resource-intensive intervention. The U.S. blood supply transfuses approximately 2.2 million platelet units annually in cancer patients, at a cost of $500–800 per unit plus administration costs, representing a market impact of over $1.5 billion annually in the oncology setting alone.

Unlike neutropenia, where pharmacological management with G-CSF is well-established and guideline-recommended, thrombocytopenia has far fewer pharmacological options. The therapeutic landscape is characterized by reactive transfusion support rather than prevention or pharmacological recovery acceleration.

Across all published NHP studies, Entolimod demonstrated consistent and statistically significant effects on platelet recovery. At doses ≥10 μg/kg, Entolimod significantly reduced the duration and severity of thrombocytopenia. The mechanism involves both indirect effects (G-CSF and IL-6 stimulation of megakaryocyte progenitors) and direct promotion of the MEP (megakaryocyte/erythrocyte progenitor) lineage, which also drives red blood cell recovery. The combined effect on platelet and red blood cell recovery markedly diminished hemorrhagic anemia in treated animals. Entolimod’s single-dose activity on platelet recovery complements its neutrophil and GI effects, providing a comprehensive multi-lineage and multi-organ countermeasure profile unavailable from any single approved agent.

Radiation-Induced Mucositis in Head and Neck Cancer

Radiation-induced oral and GI mucositis is one of the most debilitating and dose-limiting complications of cancer radiotherapy. It affects up to 80–90% of head and neck cancer patients receiving radiotherapy, with Grade 3–4 severity in 30–60%, causing severe pain, dysphagia, weight loss, unplanned hospitalizations, treatment interruptions, and compromised tumor control. No FDA-approved pharmacological prevention exists for head and neck cancer patients. Palifermin (Kepivance®) is approved only for hematologic malignancy patients receiving TBI conditioning. Annual U.S. costs of mucositis-related complications exceed $2 billion.

Published preclinical data from key studies directly support Entolimod’s potential in radiation mucositis:

As noted earlier, mucositis carries a particularly severe penalty for cancer patients when paired with neutropenia.

Entolasta

In conjunction with Tivic's license agreement with Statera, the company received rights to Entolimod's second generation molecule, Entolasta. Entolasta is a pharmacologically optimized derivative of Entolimod developed to address a fundamental limitation of the parent compound, rapid neutralizing antibody formation. In human Phase 1 studies, Entolimod induced neutralizing antibodies in most patients within the second week of administration, reflecting immune memory against bacterial flagellin from prior environmental exposure. This tachyphylaxis-like immunogenic response effectively limits Entolimod to single-dose or very infrequent dosing regimens, which is well-suited to the ARS indication where a single post-exposure injection is the intended clinical use, but may be a significant constraint for oncology indications requiring repeated dosing across a multi-week treatment course.

Entolasta addresses this through structure-guided reengineering that eliminates key B-cell and T-cell epitopes responsible for the neutralizing antibody response while preserving full TLR5 agonist activity and NF-κB activation, resulting in substantially reduced immunogenicity and resistance to pre-existing flagellin-neutralizing antibodies. This deimmunized profile makes Entolasta potentially preferable to Entolimod in any indication requiring repeated administration, including multi-cycle chemotherapy supportive care, fractionated radiotherapy mucositis prevention, and chronic applications such as immunosenescence.

The company intends to begin advancing Entolasta through IND-enabling studies in 2026 and 2027.

Market Opportunity: Acute Radiation Syndrome

Acute Radiation Syndrome is a life-threatening systemic condition resulting from high-dose total body irradiation (TBI), as occurs in nuclear and radiological events. According to CoherntAI, "the global Acute Radiation Syndrome Market is estimated to be valued at USD 5.47 Bn in 2025 and is expected to reach USD 7.80 Bn by 2032, growing at a compound annual growth rate (CAGR) of 5.2% from 2025 to 2032."

The primary near-term commercial opportunities for Entolimod are U.S. government sponsored development activities leading to procurement for the Strategic National Stockpile (SNS) and purchases from allied countries. BARDA has historically funded the development and procurement of ARS countermeasures under Project BioShield and related programs. An approved Entolimod product would compete for SNS procurement against currently stockpiled G-CSF agents, with a potentially differentiated value proposition:

ARS develops following whole-body exposure to ionizing radiation exceeding approximately 0.7 Gy. The severity and type of ARS is dose-dependent:

Following radiation exposure, the clinical course follows four phases: a prodromal phase of nausea, vomiting, and fatigue within hours of exposure; a latent phase during which the patient may appear well despite ongoing bone marrow and GI damage; manifest illness phase where neutropenia, thrombocytopenia, and anemia emerge; and either recovery or death. The latent phase represents the critical intervention window. Radiomitigating agents administered within 24 to 48 hours of exposure can stimulate hematopoietic recovery and protect damaged tissues before marrow failure becomes irreversible. Without intervention, death from infection or hemorrhage typically occurs within 30 to 60 days.

Entolimod harnesses recombinant DNA techniques to optimize its immune-stimulating effects while minimizing unwanted inflammatory responses. Its engineered design selectively maintains potent TLR5 activation, making it particularly effective as a radioprotective agent. By boosting innate immune defenses and facilitating regeneration, Entolimod has been shown to provide critical protection against acute radiation injury when administered within the first 48 hours, demonstrating significant therapeutic potential for both civilian and military applications involving radiation exposure.

Competitive Landscape in ARS

Currently approved military countermeasures (MCMs) for ARS consist solely of G-CSF agents. Specific competition for Entolimod includes FDA-approved G-CSF agents filgrastim (Neupogen®), pegfilgrastim (Neulasta®), sargramostim (Leukine®), and romiplostim (Nplate® specifically for thrombocytopenia). Our ability to sell to the government may be influenced by the government's existing inventory of these drugs which were previously purchased by the U.S. government for the Strategic National Stockpile. In addition, we are aware of other companies also developing radiation countermeasures to treat the effects of ARS including Aeolus Pharmaceuticals, Cellerant Therapeutics, Cellphire, and Humanetics Corporation.

These agents address individual hematopoietic conditions, but none simultaneously addresses HP and GI ARS. The published NHP data on filgrastim/pegfilgrastim shows that single-agent G-CSF administered without intensive supportive care provides no improvement in survival following LD50/60 radiation in rhesus macaques. Entolimod provided a 47.5% absolute improvement in 60-day survival with a single IM injection 25 hours post-TBI without supportive care with a LD70 dose of ionizing radiation.

The U.S. government’s Strategic National Stockpile (SNS), managed by the Biomedical Advanced Research and Develo pment Authority (BARDA), requires a single countermeasure capable of being stockpiled and rapidly deployed with minimal supportive care infrastructure in a mass-casualty event. Entolimod’s single-dose subcutaneous or intramuscular administration, 25- to 48-hour post-exposure treatment window, and dual HP/GI activity profile directly address this need.

Clinical, Preclinical, and Nonclinical Evidence Base

Radiomitigation Studies in Mice

An initial series of non-GLP murine studies (multiple strains, LD20−100/30 radiation doses) established the radiomitigative activity of Entolimod. Administered as a single injection within 24 hours after TBI, Entolimod provided an approximate 20–40% absolute increase in 30-day survival, with a dose plateau reached at approximately 20 μg/kg for subcutaneous administration. These murine data established dose-response relationships and guided NHP study design.

Pivotal GLP Dose-Ranging Study in Irradiated NHP (Study Rs-23)

The pivotal evidence supporting Entolimod’s ARS program derives from Study Rs-23, a randomized, blinded, placebo-controlled, parallel-group, dose-ranging GLP study in rhesus macaques (N=159 evaluable animals) conducted at a TBI dose of 7.2 Gy (projected LD70/60). A single IM injection of Entolimod was administered 25 hours after irradiation across eight dose groups (vehicle and 0.3, 1.0, 3.0, 6.6, 10, 40, and 120 μg/kg).

The survival dose-response was sigmoidal. Maximal effect was first observed at 10 μg/kg and was maintained as a plateau at 40 and 120 μg/kg. At the optimal dose of 10 μg/kg:

Hematological Recovery

All groups experienced profound TBI-induced neutropenia, thrombocytopenia, and anemia (average neutrophil and platelet nadirs on Days 14–15, with many animals having undetectable counts; ~60 g/L average hemoglobin drop in controls).

Pharmacodynamic Biomarkers

Three biomarkers of Entolimod efficacy, validated for animal-to-human dose bridging, were analyzed. In Study Rs-23, all three biomarkers showed dose-dependent, statistically significant increases. Spearman rank correlations, an established method of bridging animal-to-human dosing, confirmed that biomarker responses are highly predictive of survival benefit.

Supportive Non-GLP Studies in Irradiated NHP

Eight additional supportive non-GLP studies in rhesus macaques (Studies Rs-03, Rs-05, Rs-06, Rs-09, Rs-10, Rs-11, Rs-14, Rs-17) evaluated Entolimod across a range of TBI doses (5.2–7.25 Gy), drug doses (0.3–40 μg/kg), and administration timing (1–48 hours post-TBI). Entolimod demonstrated a consistent survival benefit in every study:

Across all supportive studies, Entolimod consistently improved hematological parameters, reduced GI tract damage, accelerated immune organ recovery, and was not associated with any drug-related deaths.

Pivotal Pharmacodynamic Study in Non-Irradiated NHP (Study Rs-001)

Study Rs-001 was a randomized, blinded, placebo-controlled, parallel-group, dose-ranging GLP pharmacodynamic study in 160 non-irradiated rhesus macaques across the same eight dose levels as Rs-23. This study demonstrated that Entolimod produces quantitatively comparable dose-response effects on the three pharmacodynamic biomarkers (G-CSF AUC: Spearman ρ=1.0 vs. irradiated animals; IL-6 AUC: ρ=1.0; ANC24: ρ=0.83) in irradiated versus non-irradiated animals.

This finding is critical for the FDA Animal Rule pathway, as it allows dose selection and pharmacokinetic/pharmacodynamic bridging to humans to be performed in non-irradiated subjects, thereby enabling the human PK/PD studies required for BLA submission without exposing humans to radiation.

Safety Data in Humans

Entolimod’s human clinical database includes data from 150 healthy subjects across two dose-ranging radiomitigation studies (Studies HU-7014 and HU-9001), additional data from Phase 1/2 oncology studies in patients with advanced cancer (Studies I-196111-US and I-196111-Russia) and data from a neoadjuvant colorectal cancer study (Study BL612-CBLB502). A vaccine adjuvant study in healthy subjects has also been completed at Mayo Clinic. Collectively, the clinical program is believed to establish the human safety, pharmacokinetic, and pharmacodynamic profile required for Animal Rule BLA submission.

Two multi-center, randomized, dose-ranging studies enrolled 150 healthy subjects to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of Entolimod. The target human dose for ARS use has been identified as approximately 0.40–0.60 μg/kg (corresponding to approximately 25–35 μg for most adults).

The safety profile of Entolimod in healthy subjects is characterized by a predictable, self-limiting, flu-like symptom complex consistent with TLR agonism. All reported adverse events were resolved without long-term effects. Key safety findings include:

Pharmacokinetics in Humans

Following IM injection, Entolimod was detectable in serum at doses ≥6 μg, with peak concentrations reached at a median of 3–6 hours post dose. Elimination half-life ranged from approximately 2–7 hours. Pharmacokinetics were dose-proportional across the 25-fold dose range studied (2–50 μg). Between-subject variability in peak concentrations was high (CV 60–91%) but within-subject variability was limited. The pharmacokinetic profile was not meaningfully affected by IBP pretreatment.

Pharmacodynamics in Humans

Additionally, the three pharmacodynamic biomarkers used for animal-to-human dose bridging — plasma G-CSF, plasma IL-6, and ANC — were validated in human subjects in Studies HU-7014 and HU-9001. Dose-dependent increases in all three biomarkers were observed:

Velocity Bioworks, Inc.

Velocity Bioworks, Inc. ("VBI") is a wholly owned subsidiary of Tivic Health Systems, Inc., formed in December 2025 following our acquisition of the strategic manufacturing and development assets of Scorpius Holdings, Inc. Operating from a purpose-built, state-of-the-art facility in San Antonio, Texas, VBI is intended to function as a full-service contract development and manufacturing organization (CDMO) focused on rapidly advancing biologic programs to the clinic. The subsidiary offers a broad array of services, including analytical testing, process development, and manufacturing of cellular and biologic therapies. VBI serves a dual strategic purpose for Tivic: it secures a robust U.S.-based manufacturing site for the Company's lead drug candidate, Entolimod™, as we advance toward a Biologics License Application (BLA) with the U.S. Food and Drug Administration, while also underwriting the expense by creating new revenue opportunities by providing CDMO services to third-party biopharmaceutical and biotechnology companies. The formation of Velocity Bioworks is expected to reduce development costs, reduce delays historically associated with outsourcing, and accelerate Tivic's broader pipeline, including additional Entolimod and Entolasta indications such as neutropenia. The acquisition was supported by a financing package exceeding $90 million, led by 3i, LP, comprising $16 million in debt financing for asset purchases and facility improvements and up to $75 million in preferred convertible equity.

Intellectual Property / Barriers to Entry

Intellectual Property

Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates and other discoveries, inventions, trade secrets and know-how that are critical to our business operations. Our success also depends in part on our ability to operate without infringing the proprietary rights of others, and in part, on our ability to prevent others from infringing our proprietary rights. A comprehensive discussion on risks relating to intellectual property is provided under the section of this Report titled “Risk Factors—Risks Related to Our Intellectual Property.”

We rely primarily on a combination of patent, copyright, trademark, and trade secret laws, as well as contractual provisions with employees and third parties, to establish and protect our intellectual property rights. Our patent strategy is to pursue broad protection for key technologies, supplemented by additional patent filings covering conceptual methods, specific aspects of current and proposed products, and forward-looking applications and technological developments. We also engage in strategic analysis of our owned patent assets and pursue additional patent claims from our existing portfolio that may provide us with market advantages. We do not rely heavily on trade secret protection but do maintain a certain amount of in-house know-how that is not disclosed publicly.

As discussed elsewhere in this Report, in February 2025 Tivic entered into a License Agreement with Statera Biopharma, pursuant to which we acquired worldwide exclusive license rights to the late-stage TLR5 agonist Entolimod for the treatment of ARS. In addition, we acquired an exclusive option to license five additional indications and clinical use cases for Entolimod and its derivative, Entolasta. The TLR5 related intellectual property portfolio currently consists of over 60 active patents and patents pending. Subsequent to the licensing of TLR5 patents related to Entolimod and Entolasta, Tivic initiated its own patent filings to expand protection of additional indications.

In most jurisdictions in which we file, the patent term is 20 years from the earliest date of filing of a non-provisional patent application. However, the term of U.S. patents may be extended for delays incurred due to compliance with FDA requirements or by delays encountered during prosecution that are caused by the United States Patent and Trademark Office (“USPTO”). We intend to seek patent term extensions in any jurisdiction where these are available and where we also have a patent that may be eligible; however, there is no guarantee that the applicable authorities will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.

Other Barriers to Entry

In addition to the patents, Entolimod and Entolasta are eligible for biological exclusivity in the U.S. and Europe, which provides additional competitive protection and barriers to entry. Specifically, 12 years of exclusivity in the US and 10 years of exclusivity in the EU. In addition, the company is developing relationships with and seeking potential strategic partnerships with key government agencies that participate in the development and/or procurement of radiation countermeasures.

We believe that these assets, along with regulatory clearances and advancements in our second- generation drug, Entolasta TM, will create barriers to entry for competitors.

Government Regulation under Food and Drug Administration

Biopharmaceutical Regulations

In the United States, drug products are regulated under the FD&C Act and applicable implementing regulations and guidance. The failure of an applicant to comply with the applicable regulatory requirements at any time during the product development process, including non-clinical testing, clinical testing, the approval process or the post-approval process, may result in delays to the conduct of a study. In rare instances involving willful or exceptionally negligent conduct on the part of a company, it could result in civil or criminal penalties.

An applicant seeking approval to market and distribute a new drug in the United States generally must satisfactorily complete each of the following steps before the FDA will consider approving the product candidate:

Preclinical Studies

Before an applicant begins testing a product candidate with potential therapeutic value in humans, the product candidate enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as other studies to evaluate, among other things, the toxicity of the product candidate. The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND.

The IND and IRB Processes

An IND is an exemption from the FDCA that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer such investigational product to humans. IND authorization is required by the FDA before the commencement of any human or animal studies for phased development.

Following commencement of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that trial. A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation. A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND. For example, a partial clinical hold might state that a specific protocol or part of a protocol may not proceed, while other parts of a protocol or other protocols may do so.

A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND. When a foreign clinical study is conducted under an IND, all IND requirements must be met unless waived by the FDA. When a foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an IND or application for marketing approval. Foreign studies are expected to be conducted within the conditions laid out by FDA for GCPs.

In addition to the foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution. An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

Expanded Access to an Investigational Drug for Treatment Use

Expanded access, sometimes called “compassionate use,” is the use of investigational new drug 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. The rules and regulations related to expanded access are intended to improve access to investigational drugs for patients who may benefit from investigational therapies. FDA regulations allow access to investigational drugs under an IND by the company or the treating physician for treatment purposes on a case-by-case basis for: individual patients (single-patient IND applications for treatment in emergency settings and non-emergency settings), intermediate-size patient populations, and larger populations for use of the drug under a treatment protocol or Treatment IND Application.

On December 13, 2016, the 21st Century Cures Act established (and the 2017 Food and Drug Administration Reauthorization Act later amended) a requirement that sponsors of one or more investigational drugs for the treatment of a serious disease(s) or condition(s) make publicly available their policies for evaluating and responding to requests for expanded access for individual patients. Although these requirements were rolled out over time, they have now come into full effect. This provision requires drug and biologic companies to make publicly available their policies for expanded access for individual patient access to products intended for serious diseases. Sponsors are required to make such policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 study with respect to an investigational drug, or 15 days after the drug or biologic receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.

Human clinical trials are typically conducted in three sequential phases, but the phases may overlap or be combined. Additional studies may also be required after approval.

Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including adverse effects, dose tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics in healthy humans or in patients. During Phase 1 clinical trials, information about the product candidate’s pharmacokinetics and pharmacological effects may be obtained to permit the design of well-controlled and scientifically valid Phase 2 clinical trials.

Phase 2 clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, evaluate the efficacy of the product candidate for specific targeted indications and determine dose tolerance and optimal dosage. Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more costly Phase 3 clinical trials. Phase 2 clinical trials are well-controlled and closely monitored.

Phase 3 clinical trials proceed if the Phase 2 clinical trials demonstrate that a dose range of the product candidate is potentially effective and has an acceptable safety profile. Phase 3 clinical trials are undertaken within an expanded patient population to further evaluate dosage, provide substantial evidence of clinical efficacy and further test for safety in an expanded and diverse patient population at multiple geographically dispersed clinical trial sites. A well-controlled, statistically robust Phase 3 clinical trial may be designed to deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a drug. Such Phase 3 clinical trials are referred to as “pivotal” trials.

In some cases, the FDA may approve a BLA for a product candidate but require the sponsor to conduct additional clinical trials to further assess the product candidate’s safety and effectiveness after approval. Such post-approval trials are typically referred to as Phase 4 clinical trials. These trials are used to gain additional experience from the treatment of a larger number of patients in the intended treatment group and to further document a clinical benefit in the case of drugs approved under accelerated approval regulations. Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of FDA approval for products.

Review and Approval of a BLA

In order to obtain approval to market a biological drug product in the United States, a marketing application must be submitted to the FDA that provides sufficient data establishing the safety, purity and potency of the product candidate for its intended indication. The application must include all relevant data available from pertinent preclinical and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product candidate’s chemistry, manufacturing, controls and proposed labeling, among other things. Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of the use of a product candidate, or from a number of alternative sources, including studies initiated by independent investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety, purity and potency of the drug product to the satisfaction of the FDA.

The BLA is a vehicle through which applicants formally propose that the FDA approve a new product for marketing and sale in the United States for one or more indications. Every new drug product candidate must be the subject of an approved BLA before it may be commercialized in the United States. Under federal law, the submission of most BLAs is subject to an application user fee. The sponsor of an approved BLA is also subject to an annual program fee. Certain exceptions and waivers are available for some of these fees, such as a waiver for certain small businesses filing their first BLA.

Following submission of a BLA, the FDA conducts a preliminary review (otherwise known as an administrative review) of the application, generally within 60 calendar days of its receipt, and strives to inform the sponsor by the 74th day after the FDA’s receipt of the submission whether the application is sufficiently complete to permit substantive review. The FDA may request additional information rather than accept the application for filing. In this event, the application must be resubmitted with the requested additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

Before approving an application, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. These pre-approval inspections may cover all facilities associated with a BLA submission, including component manufacturing, finished product manufacturing and control testing laboratories. 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 ensure consistent production of the product within required specifications.

Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with Good Clinical Practices ("GCP"). Under the FDA Reauthorization Act of 2017, the FDA must implement a protocol to expedite review of responses to inspection reports pertaining to certain applications, including applications for products of which there is a shortage or those for which approval is dependent on remediation of conditions identified in the inspection report.

In addition, as a condition of approval, the FDA may require an applicant to develop a risk evaluation and mitigation strategy (“REMS”). REMS use risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks. To determine whether a REMS is needed, the FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment, seriousness of known or potential adverse events and whether the product is a new molecular entity.

Fast Track, Breakthrough Therapy, Priority Review and Regenerative Advanced Therapy Designations

The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs are referred to as Fast Track Designation, Breakthrough Therapy Designation, priority review designation and regenerative advanced therapy designation.

Specifically, the FDA may designate a product for Fast Track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition. For Fast Track products, sponsors may have greater interactions with the FDA, and the FDA may initiate review of sections of a Fast Track product’s application before the application is complete. This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. However, the FDA’s time period goal for reviewing a Fast Track application does not begin until the last section of the application is submitted. In addition, the Fast Track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

Second, a product may be designated as a Breakthrough Therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The FDA may take certain actions with respect to Breakthrough Therapies, including holding meetings with the sponsor throughout the development process; providing timely advice to the product sponsor regarding development and approval; involving more senior staff in the review process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the clinical trials in an efficient manner.

Third, the FDA may designate a product for priority review if it is a product that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA determines, on a case-by-case basis, whether the proposed product represents a significant improvement when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting product reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from 10 months to six months.

With passage of the 21st Century Cures Act (the “Cures Act”) in December 2016, Congress authorized the FDA to accelerate review and approval of products designated as regenerative advanced therapies. A product is eligible for this designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product has the potential to address unmet medical needs for such disease or condition. The benefits of a regenerative advanced therapy designation include early interactions with the FDA to expedite development and review, benefits available to breakthrough therapies and potential eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.

Accelerated Approval Pathway

The FDA may grant accelerated approval to a product for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval to a product for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality (“IMM”). The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints, but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a product.

The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the product’s clinical benefit. As a result, a product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect of the product on the relevant clinical endpoints. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to initiate expedited proceedings to withdraw approval of the product. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA.

The FDA’s Decision on a BLA

On the basis of the FDA’s evaluation of a BLA and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months, depending on the type of information included. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

If the FDA approves a new product, it may limit the approved indications for use of the product. The agency may also require testing and surveillance programs to monitor the product after the initiation of commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, such as REMS, to help ensure that the benefits of the product outweigh the potential risks. REMS can include medication guides, communication plans for health care 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-market studies or surveillance programs.

After approval, many 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.

Post-Approval Regulation

If regulatory approval for marketing of a product or a new indication for an existing product is obtained, the sponsor will be required to comply with all regular post-approval regulatory requirements, as well as any post-approval requirements that the FDA may have imposed as part of the approval process. The sponsor will be required to report, among other things, certain adverse reactions and manufacturing problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and promotional labeling requirements.

Manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP regulations, which impose certain procedural and documentation requirements upon manufacturers. Accordingly, the sponsor and its third-party manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with cGMP regulations and other regulatory requirements.

A product may also be subject to official lot release, meaning that the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official release, the manufacturer must submit samples of each lot, together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot, to the FDA. The FDA may perform certain confirmatory tests on lots of some products before releasing the lots for distribution. Finally, the FDA will conduct laboratory research related to the safety, purity, potency and effectiveness of pharmaceutical products.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements 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; imposition of post-market studies or clinical trials to assess safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

The FDA strictly regulates the marketing, labeling, advertising and promotion of prescription drug products placed on the market. This regulation includes, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities, and promotional activities involving the Internet and social media. Promotional claims about a drug’s safety or effectiveness are prohibited before the drug is approved. After approval, a drug product generally may not be promoted for uses that are not approved by the FDA, as reflected in the product’s prescribing information. In the United States, health care professionals are generally permitted to prescribe drugs for such uses not described in the drug’s labeling, known as off-label uses, because the FDA does not regulate the practice of medicine. However, FDA regulations impose rigorous restrictions on manufacturers’ communications, prohibiting the promotion of off-label uses. It may be permissible, under very specific, narrow conditions, for a manufacturer to engage in non-promotional, non-misleading communication regarding off-label information, such as distributing scientific or medical journal information.

If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion, and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act (“PDMA”) and its implementing regulations, as well as the Drug Supply Chain Security Act (“DSCA”), which regulate the distribution and tracing of prescription drug samples at the federal level, and set minimum standards for the regulation of distributors by the states. The PDMA, its implementing regulations and state laws limit the distribution of prescription pharmaceutical product samples, and the DSCA imposes requirements to ensure accountability in distribution and to identify and remove counterfeit and other illegitimate products from the market.

Animal Rule

In 2002, the FDA amended its requirements applicable to BLAs/NDAs to permit the approval of certain drugs and biologics that are intended to reduce or prevent serious or life-threatening conditions based on evidence of safety from clinical trial(s) in healthy subjects and effectiveness from appropriate animal studies when human efficacy studies are not ethical or feasible. These regulations, which are known as the “Animal Rule,” authorize the FDA to rely on animal studies to provide evidence of a product’s effectiveness under circumstances where there is a reasonably well-understood mechanism for the activity of the agent. Under these requirements, and with the FDA’s prior agreement, drugs used to reduce or prevent the toxicity of chemical, biological, radiological, or nuclear substances may be approved for use in humans based on evidence of effectiveness derived from appropriate animal studies and any additional supporting data. Products evaluated under this rule must demonstrate effectiveness through pivotal animal studies, which are generally equivalent in design and robustness to Phase 3 clinical studies.

We intend to utilize the Animal Rule in seeking marketing approval for Entolimod as a medical radiation countermeasure because we cannot ethically expose humans to lethal doses of radiation. Other countries may not at this time have established criteria for review and approval of these types of products outside their normal review process, i.e. there is no “Animal Rule” equivalent in countries other than the U.S., but some may have similar policy objectives in place for these product candidates.

Public Readiness and Emergency Preparedness Act

The Public Readiness and Emergency Preparedness Act (the “PREP Act”) provides immunity for manufacturers from all claims under state or federal law for “loss” arising out of the administration or use of a “covered countermeasure.” However, injured persons may still bring a suit for “willful misconduct” against the manufacturer under some circumstances. “Covered countermeasures” include security countermeasures and “qualified pandemic or epidemic products,” including products intended to diagnose or treat pandemic or epidemic disease, such as pandemic vaccines, as well as treatments intended to address conditions caused by such products.

Orphan Drug

Under the U.S. Orphan Drug Act, as amended by the FDA Reauthorization Act of 2017, the FDA may grant orphan drug designation to drugs or biologics intended to treat a “rare disease or condition,” which is defined as having a prevalence of less than 200,000 individuals in the United States. The FDA is currently implementing a modernization plan which may include new requirements or procedures that could impact the success of an orphan drug designation request. In certain circumstances, a sponsor may need to demonstrate that the product is clinically superior to a previously approved drug in order to obtain orphan drug status, and the FDA may issue regulations to implement this requirement. Orphan drug designation must be requested before submitting a BLA for the product. The FDA aims to respond to all orphan drug designation requests within 90 days of submission. Orphan drug designation does not shorten the regulatory review and approval process, nor does it provide any advantage in the regulatory review and approval process. However, if an orphan drug later receives approval for the indication for which it has designation, the relevant regulatory authority may not approve any other applications to market the same drug for the same indication, except in very limited circumstances, for seven years in the United States.

Fast Track Designation

Fast Track is an FDA process designed to facilitate the development and expedite the review of new drugs and vaccines intended to treat serious conditions and fill an unmet medical need.

Criteria for Designation

To receive Fast Track designation, a drug must show the potential to address an unmet medical need for a serious condition. This is defined as:

Key Strategic Benefits

For a company, obtaining Fast Track designation provides several significant advantages in the development timeline:

Hatch-Waxman Act Patent Certification and the 30-Month Stay

Upon approval of a BLA or a supplement thereto, BLA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product. Each of the patents listed by the BLA sponsor is published in the Orange Book. When a biosimilar applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book, except for patents covering methods of use for which the biosimilar applicant is not seeking approval. To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that a biosimilar applicant would. Specifically, the applicant must certify with respect to each patent that:

A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification. If the applicant does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the application will not be approved until all of the listed patents claiming the referenced product have expired (other than method of use patents involving indications for which the applicant is not seeking approval).

If the biosimilar applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the BLA and patent holders once the biosimilar has been accepted for filing by the FDA. The BLA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the biosimilar until the earliest of 30 months after the receipt of the Paragraph IV notice, expiration of the patent and a decision in the infringement case that is favorable to the biosimilar applicant.

To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that a biosimilar applicant would. As a result, approval of a biologic can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of an NCE, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent infringement suit, until the earliest of 30 months, settlement of the lawsuit and a decision in the infringement case that is favorable to the Section 505(b)(2) applicant.

Pediatric Studies and Exclusivity

Under the Pediatric Research Equity Act of 2003, a BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product 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. Sponsors must also submit pediatric study plans prior to submitting the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests and other information required by regulation. The applicant, the FDA and the FDA’s internal review committee must then review the information submitted, consult with each other and agree upon a final plan. The FDA or the applicant may request an amendment to the plan at any time. In addition, certain products that have received orphan drug designation are exempt from the requirements of the Pediatric Research Equity Act of 2003.

The FDA Reauthorization Act of 2017 established requirements governing certain molecularly targeted cancer indications. Any company that submits a BLA three years after the date of enactment of that statute must submit pediatric assessments with the BLA if the drug is intended for the treatment of an adult cancer and is directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer. The investigation must be designed to yield clinically meaningful pediatric study data regarding the dosing, safety and preliminary efficacy to inform pediatric labeling for the product.

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity. This six-month exclusivity may be granted if a BLA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

Government Regulation - Other

Privacy and security

The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their implementing regulations, imposes privacy, security and breach reporting obligations with respect to individually identifiable health information upon “covered entities” (health care providers, health plans and health care clearinghouses), and their respective business associates, individuals or entities that create, received, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity.

Even when HIPAA does not apply, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards.

In addition, certain states and non-U.S. laws, such as the General Data Protection Regulation (“GDPR”), govern the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. For example, California recently enacted the California Consumer Privacy Act (the “CCPA”), which took effect on January 1, 2020, and was amended and expanded by the California Privacy Rights Act (the “CPRA”), which took effect on January 1, 2023. The CCPA, as amended by the CPRA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information and the right to access information about how their data is being used.

Environmental Matters

Our operations, properties and products are subject to a variety of U.S. and foreign environmental laws and regulations governing, among other things, use of manufacturing components containing substances below established threshold, air emissions, wastewater discharges, management and disposal of hazardous and non-hazardous materials and waste and remediation of releases of hazardous materials. We believe, based on current information, that we are in material compliance with environmental laws and regulations applicable to us and rely heavily on our outsourced design and manufacturing partners to assist in maintaining compliance.

Facilities

Our principal executive office is located at 1305 E. Houston St., Building 1, Suite 311, San Antonio, Texas 78205.

On March 13, 2026, VBI entered into a Building Lease Agreement (the “Microbial Building Lease”) with TPB Merchants Ice LLC (“TPB”) to lease an approximately 8,024 square foot facility (the “Microbial Building”) located at 1305 E. Houston St., San Antonio, TX 78205 (the “Property”). The initial term of the Microbial Building Lease is eight years, unless earlier terminated by the parties pursuant to the terms thereof. VBI has (i) a one-time option to extend the lease term for an additional period of five years and (ii) the exclusive option to purchase the Microbial Building and the Property from TPB at any time during the first 24 months of the initial term for $12.5 million. In exchange for leasing the premises, VBI shall pay TPB a monthly base rent of approximately $22,605 for the first twelve months, or a total of $271,260, with annual dollar increases in later years of the lease term. The aggregate base rent over the eight-year lease term is approximately $5.34 million. The Microbial Building Lease provides that VBI will pay additional expenses to TPB related to VBI’s share of operating expenses, taxes and utilities related to the premises using ratable percentages set forth in the Microbial Building Lease.

On March 9, 2026, VBI entered into a Lease (the “Mammalian Building Lease”) with Merchants Ice II, LLC (“Merchants Ice II”) to lease an approximately 20,144 square foot facility located at the Property. The term of the Mammalian Building Lease is 102 months, effective January 1, 2026, unless earlier terminated by the parties pursuant to the terms thereof. In exchange for leasing the premises, VBI shall pay Merchants Ice II a monthly base rent of $55,030 for the first twelve months, or a total of $660,357, with annual increases of approximately 3.0%. The aggregate base rent over the lease term is approximately $6.29 million. The Mammalian Building Lease provides that VBI will pay additional expenses to TPB related to VBI’s share of operating expenses, taxes and utilities related to the premises using ratable percentages set forth in the Mammalian Building Lease.

On March 13, 2026, VBI entered into a Sublease (the “Office Sublease” and together with the Microbial Building Lease and the Mammalian Building Lease, the “Facility Leases”) with Texas Research and Technology Foundation (“TRTF”) to sublease approximately 8,122 square feet of office space located at the Property, which Office Sublease was consented to by TPB, as landlord of the leased premises, and is subject to the terms of that certain Office Lease Agreement, dated June 1, 2024, by and between TRTF and TPB. The term of the Office Sublease is 102 months, unless earlier terminated by the parties pursuant to the terms of the Office Sublease. This office will serve as the new principal executive office of the Company. In exchange for subleasing the premises, VBI shall pay TRTF a monthly base rent of $30,436, with annual increases of approximately 3.0%. The aggregate base rent over the lease term is approximately $3.9 million. The Office Sublease provides that VBI will pay additional expenses to TPB related to VBI’s share of operating expenses, taxes and utilities related to the premises using ratable percentages set forth in the Office Sublease.

Human Capital Resources

As of December 31, 2025, we had 52 full-time employees. None of our employees are represented by a labor union, and we consider our employee relations to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards.

We are not currently a party to any material legal proceedings. We may, however, in the ordinary course of business face various claims brought by third parties, and we may, from time to time, make claims or take legal actions to assert our rights, including intellectual property rights as well as claims relating to employment matters and the safety or efficacy of our products. Any of these claims could subject us to costly litigation. If this were to happen, the payment of any such awards could have a material adverse effect on our business, financial condition and results of operations. Additionally, any such claims, whether or not successful, could damage our reputation and business.

Corporate Information

The Company was incorporated in California in September 2016 and reincorporated as a Delaware corporation in June 2021. Our principal executive offices are located at 1305 E. Houston Street, Building 1, Suite 311, San Antonio, Texas 78205. Our telephone number is (888) 276-6888. Our website address is www.tivichealth.com. Information contained on, or that can be accessible through, our website is not a part of this Report and the inclusion of our website address in this Report is an inactive textual reference only.