ACTUATE THERAPEUTICS INC

Overview

We are a clinical stage biopharmaceutical company focused on developing therapies for the treatment of high impact, difficult to treat cancers through the inhibition of glycogen synthase kinase-3 (GSK-3). We are developing elraglusib (formerly 9-ING-41), an ATP-competitive small molecule that is designed to enter cancer cells and block the function of the enzyme glycogen synthase kinase-3 beta (“GSK-3β”), a master regulator of complex biological signaling cascades, including those mediated by oncogenes, that lead to tumor cell survival, growth, migration, and invasion. We believe that the blockade of GSK-3β signaling ultimately results in the death of the cancer cells and the regulation of anti-tumor immunity.

We have exclusively licensed a portfolio of GSK-3 inhibitors developed in a collaboration between The Board of Trustees of the University of Illinois-Chicago (“UIC”) and Northwestern University (“NU”). Elraglusib is the lead drug in our portfolio and is being evaluated in a randomized Phase 2 trial in patients with metastatic pancreatic ductal adenocarcinoma (“mPDAC”), our most advanced clinical indication to date. We are also advancing a Phase 1/2 clinical trial in refractory pediatric malignancies, including Ewing sarcoma (“EWS”).

Elraglusib represents a broad opportunity for us to potentially initiate and advance multiple drug development programs around our lead asset based on data emerging from completed or ongoing Phase 1/2 trials and non-clinical biological, cellular, and animal data. Animal tumor model data, Phase 1/2 clinical data and AI-based computational approaches have identified a number of areas of unmet clinical need in cancer treatment where elraglusib may play an interventional role, including pancreatic, metastatic melanoma, lung, colon, breast, renal, and ovarian cancer, leukemias and lymphomas, as well as some pediatric cancers including Ewing sarcoma, neuroblastoma and pediatric leukemias.

Elraglusib Injection

Our lead clinical program, referred to as Actuate-1801, is an intravenous (“IV”) injection solution of elraglusib (“Elraglusib Injection”) that we are evaluating for the treatment of first-line mPDAC.

To date, we have treated over 500 patients with Elraglusib Injection in Phase 1 and Phase 2 studies. Elraglusib Injection is currently being evaluated in a Phase 2 study (as part 3B of our Actuate 1801 protocol) as a weekly IV infusion in combination with gemcitabine/nab-paclitaxel (“GnP”). Overall survival (“OS”) has been summarized throughout the study by following and reporting 1 year survival rate. The primary endpoint at the end of the study will be summarized as median overall survival (“mOS”). The study completed enrollment in January 2024, and top-line results are expected to be presented in the second quarter of 2025. As further described below, we conducted a preliminary analysis of interim data in the pre-specified safety population as of November 15, 2024, at the point when >70% of death events occurred in the GnP control arm. Log-rank analysis will be used to determine statistical significance when comparing the elraglusib/GnP and GnP arms of the study.

The analysis of interim data demonstrated that treatment with elraglusib in combination with GnP resulted in statistically significant increases in 1-year survival rate (p-value of 0.002) and mOS (hazard ratio of 0.63, p-value of 0.016) versus treatment with GnP alone. The combination treatment also resulted in increased Objective Response Rates (“ORR”) and Disease Control Rates (“DCR”) in the elraglusib/GnP combination arm versus the GnP control arm. As depicted in Figure 1 and below, interim data highlights from the predefined safety population as of the November 15, 2024 cutoff date include:

***Figure 1:***Actuate-1801 Part 3B: Draft unaudited Phase 2 data of elraglusib in mPDAC (as of November 15, 2024).

As with all preliminary analyses of interim data, this data should not be relied upon as a final analysis and is subject to change once full data analysis is complete.

At the completion of this Phase 2 study, we plan to meet with the U.S. Food and Drug Administration (the “FDA”) and discuss the design and execution of a Phase 3 registration study. In addition, we plan to discuss the use of the Phase 2 data to support potential registration.

As discussed in more detail below under “History of Elraglusib Clinical Development,” the Phase 2 trial followed the evaluation of Elraglusib Injection in a Phase 1 dose escalation study (Actuate-1801 Part 1) in 238 adult patients with refractory advanced cancers when given as a single agent (n=67) or in combination with chemotherapy (n=171). The objective of this study was to establish the safety profile of elraglusib when used alone or in combination with chemotherapy and to identify either a maximum tolerated dose (“MTD”) or recommended Phase 2 dose (“RP2D”) to then inform the design of exploratory efficacy studies in Phase 2. Subjects in this study were diagnosed with a variety of cancer types and most patients had received two or more previous lines of chemotherapy prior to enrollment in the study. Objective responses and durable disease control were observed in both the single agent and combination treatment arms of the study. The most common TEAEs attributed to elraglusib were transient visual disturbance (patients described lights as brighter and skin tones as darker, which resolved spontaneously) and fatigue across both study parts. The majority (>99%) of TEAEs that occurred in ≥ 20% of patients were reported as Grade 1 or 2 (mild or moderate). In combination with chemotherapy, no new safety signals were observed. While the elraglusib/GnP combination appears to be well-tolerated and well-managed in the clinic, we do not yet know whether any increase in the number or severity of toxicities will be attributable to elraglusib and thus the elraglusib/GnP combination will have its own safety profile that will need to be evaluated and discussed with regulators.

Based on the results of the Phase 1 study, we initiated a single arm Phase 2 study (“Actuate-1801 Part 3A” or “Part 3A”) in patients with previously untreated mPDAC. This study was originally designed as a single arm exploratory Simon two-stage trial (and therefore not designed or powered to demonstrate statistical significance). The elraglusib dose was started at the RP2D evaluated in the latter part of the Phase 1 trial (15 milligrams of drug per kilogram of body weight (mg/kg) administered twice weekly). No new safety signals were observed with the elraglusib/GnP combination, but investigators observed that GnP toxicities may have occurred earlier and may have been more intense in some patients than would be anticipated for GnP alone. For these reasons, the dose of elraglusib was proactively reduced near the end of the Part 3A study to 9.3 mg/kg administered twice weekly. After an analysis conducted following the completion of Part 3A, which showed an mOS of 15.3 months in the efficacy evaluable (n=29) patient population, we amended and expanded the second stage of the study to a randomized, controlled trial now powered for statistical significance (“Actuate-1801 Part 3B” or “Part 3B”) that would allow a comparison of the safety and efficacy of the combination of Elraglusib Injection plus GnP versus GnP alone in 286 patients.

In addition, Elraglusib Injection is also being evaluated in pediatric cancer patients with recurrent/refractory solid cancers. This study, Actuate-1902, is a Phase 1/2 study that evaluated escalating doses of elraglusib as a single agent as well as in combination with irinotecan or cyclophosphamide/topotecan in the Phase 1 portion. This study was based off the RP2D from the Actuate-1801 adult cancer study using twice weekly dosing of elraglusib. Patients in this Actuate-1902 study also experienced a number of objective responses in the combination chemotherapy arms, and based on this data, we identified Ewing sarcoma as a potential second indication for further development of Elraglusib Injection. Currently, the Actuate-1902 study is open but only accruing patients with refractory Ewing sarcoma into the Phase 1 portion of the study. Subject to future funding, we plan to further investigate the activity of elraglusib in the Ewing sarcoma patient population.

Elraglusib Oral Tablet Development Plans

We have developed several oral dosage forms of elraglusib, which we believe will allow us to expand the number of cancer indications that we are able to target and allow us to further explore more convenient dose delivery options for patients. A clinical candidate tablet, the Elraglusib Oral Tablet, has been selected for further development and we are planning a Phase 1 study (Actuate-2401) to identify the MTD and RP2D for Elraglusib Oral Tablet in adult patients with advanced, refractory cancers, subject to future funding. Subject to additional funding, several Phase 2 studies have been identified for further clinical development of Elraglusib Oral Tablet based on data from the Actuate-1801 study in indications, including but not limited to, refractory, metastatic melanoma and refractory, metastatic colorectal cancer.

Our Market Opportunity

Treatment of Metastatic Pancreatic Ductal Adenocarcinoma (“mPDAC”)

According to the American Cancer Society, the annual incidence of pancreatic cancer is expected to exceed 67,000 patients in the United States in 2025 and approximately 70% of these patients will present with metastatic disease. A recent review of clinical trials inFuture Oncology1 showed that the mOS in patients with mPDAC treated with GnP ranged from approximately 3.6 to 9.8 months with an unweighted mOS of 6.9 months. Therefore, we believe the ability to extend survival by even a few months would be considered meaningful in this patient population.

We are developing elraglusib for patients with mPDAC who have not previously received systemic treatment for their metastatic disease. Due to lack of early symptoms, approximately 80-90% of all patients with pancreatic cancer are unresectable, and present with advanced or metastatic disease. In addition, 80-90% of PDAC cases do not have a high tumor mutational burden in general, and are unlikely to respond to checkpoint inhibitors such as pembrolizumab. Pembrolizumab has been approved for patients with metastatic solid cancer with high tumor burden but is rarely used in metastatic pancreatic cancer for this reason. However, frequent mutations in KRAS and TP53 oncogenes drive pancreatic tumor growth and treatment resistance, often making PDAC refractory to chemotherapy.

Current first-line therapies for mPDAC consist of GnP, FOLFIRINOX, or irinotecan liposomal injection given with oxaliplatin, fluorouracil, and leucovorin (“NALIRIFOX”). NALIRIFOX was recently approved (February 2024) and may provide an alternative to FOLFIRINOX with a somewhat improved safety profile.

The mOS in mPDAC patients is 11.1 months with NALIRIFOX, 11.2 months with FOLFIRINOX and 7 to 10 months with GnP, respectively, in the first-line setting. NALIRIFOX demonstrated superiority to GnP in the NAPOLI-3 trial (mOS 11.1 vs 9.2 months). However, safety profiles between these three chemotherapy backbones are quite different: FOLFIRINOX leads to higher rates of neutropenia and nausea, NALIRIFOX has more gastrointestinal and constitutional toxicity such as nausea, diarrhea and fatigue, and GnP treatment leads to increased myelosuppression and neurotoxicity. An analysis of an insurance claims database indicated that first-line treatment from 2014-2018 was split between FOLFIRINOX and GnP. We believe it is too early to predict how NALIRIFOX will fit into clinical use in patients with mPDAC.

Our management believes elraglusib may improve outcomes in first-line mPDAC regardless of the chemotherapy backbone used. Patients with mPDAC are often resistant or become resistant to the first-line chemotherapy backbones currently used to treat them. Part of elraglusib’s mechanism of action is the ability to enhance chemotherapy activity even in resistant tumors and we believe this has been demonstrated in multiple animal tumor models. In addition, elraglusib has shown the ability to enhance the activity of several chemotherapy drugs that comprise the current first-line backbones in mPDAC including gemcitabine, nab-paclitaxel and irinotecan, suggesting the potential for elraglusib to be used in combination with multiple first-line mPDAC treatments. In addition to the activity observed in our 1801 Part 3B study evaluating the activity of elraglusib/GnP combination in mPDAC, an additional exploratory Phase 2 study is ongoing through an investigator initiated trial (“IIT”) in patients with mPDAC evaluating the combination of elraglusib/FOLFIRINOX/losartan combination in up to 65 patients. Early evidence of increased clinical activity in patients receiving this combination was recently presented at the AACR Special Conference on Advances in Pancreatic Cancer Research. This trial is being led by Dr. Colin Weekes at Massachusetts General Hospital (“MGH”) and is supported by the Lustgarten Foundation as well as Actuate. Additional sites participating in the study include The University of Colorado and the University of Washington’s Fred Hutchinson Cancer Center. Thus, our plan, subject to available funding, is to develop elraglusib in combination with the present first-line chemotherapy regimens used in the treatment of mPDAC, as exemplified by our lead program of elraglusib/GnP combination and later moving to combinations with either FOLFIRINOX or NALIRIFOX pending results of the FOLFIRINOX combination trial. If shown to be clinically active, elraglusib/chemotherapy combinations could eventually be used to treat a large segment of mPDAC patients.

Elraglusib has been granted Fast Track and Orphan Drug Designations from the FDA for pancreatic cancer in the United States and Orphan Drug Designation for soft tissue sarcomas in the United States. Elraglusib received Orphan Medicinal Product Designation (“OMPD”) for both pancreatic cancer and sarcoma from the European Medicines Agency (“EMA”). Actuate is planning a Type D meeting with the FDA to discuss Phase 3 design and an End of Phase 2 (Type B) meeting to discuss future development plans in 2025.

1 Cockrum P, Dennen S, Brown A, Briggs J, Paluri R. Real-world clinical outcomes and economic burden of metastatic pancreatic ductal adenocarcinoma: a systematic review. Future Oncol. 2025; 21: 241-260. doi: 10.1080/14796694.2024.2435253. Epub 2024 Dec 8.

Treatment of Ewing Sarcoma

An estimated 9,550 children (ages 0-14 years) and 5,140 adolescents (ages 15-19 years) are expected to be diagnosed with cancer in the United States in 2025. It was also estimated that 1,050 children and 600 adolescents will die from the disease in the United States in 2025. While death rates for pediatric and adolescent cancers have declined by more than 50% over the last five decades due to improved treatment options, there is still room for improvement. Despite the improved survival offered by current therapies, approximately 40% of childhood cancer survivors have severe, life-threatening or fatal complications within 30 years of diagnosis and up to 90% of survivors will have a chronic health condition by the age of 45. These long-term effects are related to the type of treatment used such as chemotherapy and radiation which can have a material adverse impact on developing organs. Work is ongoing to determine how to more effectively identify underlying mechanisms of pediatric cancers in an effort to develop and administer more targeted, more effective and less toxic treatments.

Based on extensive preclinical work in pediatric malignancies showing excellent synergy between elraglusib and standard of care chemotherapy in neuroblastoma, sarcoma, glioma and others, we initiated the Actuate-1902 Phase 1 study to evaluate the safety of elraglusib +/- chemotherapy in pediatric patients with refractory malignancies in 2020. The dose escalation part of the study assigned patients to elraglusib alone, elraglusib/irinotecan or elraglusib/cyclophosphamide and topotecan (“CT”). As of December 31, 2024, 40 patients had been enrolled and received at least one dose of elraglusib. No SAEs were observed with elraglusib monotherapy at the first two dose levels and positive results were observed for some patients as discussed under “Our Solution – Current Elraglusib Development - Developing Elraglusib IV for the Treatment of Ewing Sarcoma – Actuate 1902” below. Upon determination of RP2D for monotherapy and combination therapy, we had originally intended to initiate a Phase 2 study in neuroblastoma. However, recently approved anti-GD2 antibodies have shown considerable improvement of response rate, progression-free survival (“PFS”), and survival, making development in this population much more challenging.

Based on the positive response from a Ewing sarcoma patient further discussed below under “Developing Elraglusib Injection for the Treatment of Ewing Sarcoma – Phase 1 and Phase 2 Plans – Actuate-1902,” six additional patients with metastatic, refractory Ewing and Ewing-like sarcoma were enrolled in the elraglusib/CT combination arm. There are currently no known treatment regimens that meaningfully extend life in Ewing sarcoma patients with metastatic, refractory disease. The five-year survival rate for patients who have recurrent (relapsed) disease is <30%. Patients who are refractory and have metastases and disease progression despite two or more chemotherapy regimens generally have a very short survival of 3-8 months. Twelve patients including ten Ewing sarcoma patients, one patient with desmoplastic small round cell tumors (“DSRCT”) and one patient with CIC rearranged sarcoma were enrolled in our Actuate-1902 trial. All twelve patients appear to have metastatic disease and had disease progression prior to joining the study despite undergoing previous treatment combinations including chemotherapy, radiation, and/or surgical procedures. Eight patients received two or more previous chemotherapy regimens, prior to entering the 1902 study. All patients received the combination of elraglusib and cyclophosphamide/topotecan. We believe this exploratory Ewing sarcoma data, discussed further under “Developing Elraglusib IV for the Treatment of Ewing Sarcoma – Actuate 1902” below, is sufficiently positive in this orphan pediatric cancer indication to consider additional development in Ewing sarcoma. The Actuate-1902 Phase 1 arm of the study is open to enrollment, focusing on recruitment of patients with refractory Ewing sarcoma.

The FDA has granted Rare Pediatric Disease Designation (“RPDD”) to elraglusib for our treatment of EWS. Rare Pediatric Disease Designation is granted by the FDA for serious or life-threatening diseases that affect fewer than 200,000 people in the United States and in which the serious or life-threatening manifestations primarily affect individuals less than 18 years of age. If, in the future, a New Drug Application (“NDA”) for elraglusib for the treatment of Ewing sarcoma is approved by the FDA, we may be eligible to receive a Priority Review Voucher (“PRV”) that could be utilized by us or potentially sold to another company for its use.

Our Pipeline and Development Timeline

Our initial focus is on the development of GSK-3 inhibitors for the treatment of cancers with ineffective treatment options and poor overall survival. Given our ability to formulate elraglusib in both the Elraglusib Injection and Elraglusib Oral Tablet forms, if adequate funding is secured, and given the potential to use it in different ways depending on the cancer type, we believe that elraglusib represents a pipeline in a molecule, as shown in the Figure 2 below. We are currently focused on advancing our trials in mPDAC with Elraglusib Injection. Our ability to advance our ongoing and planned clinical trials listed in Figure 2 will depend on whether we have or raise sufficient capital to support those trials.

***Figure 2:***Ongoing and planned clinical trials.

Our Strengths

We believe that we have several strengths that support our vision of developing therapies for the treatment of high impact, difficult to treat cancers through the inhibition of GSK-3, including:

Our Business Strategies

Subject to available financing, we intend to develop elraglusib in a broad list of advanced cancer indications, initially in patients with refractory disease and with an initial focus on metastatic pancreatic cancer. We believe that our two product candidates, Elraglusib Injection and Elraglusib Oral Tablet, will provide us with two different dosage forms of drug product with different attributes that will allow us to tailor each dosage form to a specific cancer type to potentially improve outcomes and compliance. Key elements of our strategy to accomplish this objective include:

About Elraglusib (9-ING-41)

There are no approved high-affinity inhibitors of GSK-3β and we believe elraglusib is one of the most advanced GSK-3β inhibitors in clinical development. Elraglusib was originally known as 9-ING-41 but was granted the elraglusib International Nonproprietary Names (“INN”) and United States Adopted Names (“USAN”) generic name in 2021. The known major mechanisms of action of elraglusib are summarized in Figure 4 and emphasize the therapeutic potential of this drug in multiple cancer types. For these reasons, elraglusib represents a “pipeline in a molecule” depending on the dosage form and how it is used in a particular cancer type. Our lead development program is seeking to treat mPDAC in combination with GnP. Our clinical data to date and the development plan are also further discussed below.

Elraglusib may exert anticancer activity through a variety of mechanisms that may be context and cancer type specific. For example, GSK-3β mediates signaling of oncogenic PI-3K but if this oncogene is not expressed in a particular tumor, this would not be a pathway that could be targeted by elraglusib in that tumor. Potential antitumor activity through GSK-3β inhibition may occur through the following six mechanisms of action (see Figure 3 below):

**Figure 3: **Elraglusib mechanisms of action.

GSK-3β plays an important role in immune cell function, as inhibition of GSK-3β can facilitate immune cell expansion, differentiation and activation including T and natural killer (“NK”) cells. GSK-3β inhibition increases the ability of effector T cells to kill tumors in vivo through the induction of effector proteins granzyme B and FasL in gastric cancer models. Additionally, inhibition of GSK-3β, with both small molecules and small interfering RNA (“siRNA”), downregulates programmed cell death protein 1 (“PD-1”) expression in CD8 and cytolytic T cells and enhances their function. GSK-3β inhibition also lowers PD-1 expression and promotes long-term survival and generation of memory CAR-T cells in vivo. These memory T cells enabled 100% clearance of cancer cells after rechallenging during tumor remission. Recently, inhibition of GSK-3β with small molecules was shown to reduce the expression of T cell immunoreceptor with immunoglobulin and ITIM domain (“TIGIT”) and lymphocyte activation gene-3 (“LAG-3”), additional immune system suppressing molecules that work in concert with PD-L1 (Programmed Death-Ligand 1) to reduce anti-tumor surveillance by the system. Combining GSK-3β inhibition and LAG-3 blockade significantly enhanced clearance of melanoma tumors compared to either treatment alone. LAG-3 was recently validated as a cancer therapeutic target when the first anti-LAG-3 antibody, relatlimab, was approved in March 2022 by the FDA for treatment of patients with unresectable or metastatic melanoma.

Blocking GSK-3 in NK cells leads to enrichment of mature NK cells and primes them for enhanced cytokine production and anti-tumor function in vivo. GSK-3β expression was increased in the NK cells of patients with acute myeloid leukemia (“AML”) and inhibition of GSK-3β led to increased cell directed cytotoxicity in these patient-derived samples. Inhibition of GSK-3 also decreased LAG-3 expression on NK cells.

GSK-3β activity has also been tied to transforming growth factor β (“TGF-β”) expression. TGF-β released by cancer cells, stromal fibroblasts and other cells in the tumor microenvironment further promotes cancer progression by shaping the architecture of the tumor and by suppressing the anti-tumor activities of immune cells, thus generating an immunosuppressive environment that prevents or attenuates the efficacy of anticancer immunotherapies. Therefore, blocking GSK-3β may reduce TGF-β-mediated immunosuppression.

Elraglusib has now been demonstrated to decrease expression of PD-1, TIGIT and LAG-3 and to enhance the anti-tumor effects of anti-PD-1 checkpoint inhibition in animal tumor models. Thus, elraglusib blockade of GSK-3β activity may improve immune response to tumors by augmenting the responsiveness of a patient’s immune system in addition to the direct anti-tumor effects of elraglusib within the cancer cells themselves.

Inhibition of GSK-3β leads to inhibition of tumor cell proliferation. This has been shown in multiple tumor model systems using elraglusib. A number of pathways have been implicated in the inhibition of cell proliferation mediated by GSK-3 inhibitors including MYC, Cyclin D1, TGFα, epidermal growth factor receptor, Ras, PI3K/Akt, and NF-κB. Given GSK-3’s role as an adapter of multiple signaling pathways, elraglusib may exert its antiproliferative effects through the inhibition of one or more of these pathways.

A chronic inflammatory microenvironment is conducive to tumorigenesis (e.g., pancreatitis patients are known to have increased risk of pancreatic cancer) and tumors can undergo EMT, leading to increased metastasis, under inflammatory conditions. Moreover, several profibrotic cytokines (e.g., TGF-β, TNF-α and IL-1) are secreted by inflammatory cells and tumor cells and converge to activate pathways that regulate EMT. Further, GSK-3β has also been demonstrated to be a mediator of EMTs. Therefore, the inflammatory response designed to fight tumor progression also ends up promoting metastasis and tumor-associated fibrosis. Tumor fibrosis presents multiple challenges to drug delivery and tumor immune recognition and contributes to drug resistance by presenting physical barriers in the tumor microenvironment to drug and immune cell access. Elraglusib has been shown to reduce the inflammation and signaling that contribute to immune system evasion in multiple animal models, including lung and liver, suggesting another mechanism through which elraglusib may interfere in cancer growth.

GSK-3 inhibits apoptosis pathways. A number of studies have suggested that the primary mechanism of GSK-3-mediated apoptosis is through the NF-κB pathway. Apoptosis is a mechanism of cell death that is often suppressed in cancer cells leading to cancer cell survival and resistance even after treatment with chemotherapeutic drugs or radiation. Studies have shown that eliminating or inhibiting GSK-3β in cancer cells is able to restore apoptosis to cells, leading to tumor cell death. These findings support GSK-3β as a potential therapeutic target to potentiate apoptosis in cancer cells.

In addition to GSK-3β’s role in regulating NF-κB activity, it has also been shown to modulate DNA damage repair (“DDR”) pathways. DDR pathways are integral in both normal and cancer cells to maintain genomic integrity by sensing and responding to DNA damage. In normal cells, DDR helps to identify and repair mutations or breaks in DNA and restore the normal, intact sequence. If the cell is unable to repair a DNA lesion, these DDR pathways can then initiate cell death signaling to prevent neoplastic growth. In cancer, DNA repair has been subverted to protect tumor cells from repairing DNA damage that would otherwise lead to spontaneous apoptosis. Cancers will often have mutations in at least one DNA repair pathways leading to dysregulated cell growth and replication. Our collaborators have shown that elraglusib inhibition of GSK-3β sensitizes pancreatic cancer cells to gemcitabine by disrupting TopBP1/ATR mediated cell-cycle arrest and DNA repair. GSK-3β’s emerging role in regulating DDR pathways supports its use in combination with DNA damaging chemotherapy.

Inhibition of DDR pathways have also been shown to enhance tumor immune recognition by immune checkpoint inhibitors such as anti-PD-1, creating neoantigens in tumors that lead to recruitment of tumor infiltrating immune cells, decreased immune evasion and increased anti-tumor immune response. This provides the link that couples the various elraglusib-related mechanisms of action through the targeting of GSK-3.

GSK-3β has been shown to be a mediator of a number of signaling pathways that regulate the transition of tumor cells from an epithelial to mesenchymal phenotype potentially contributing to tumor progression, a process known as EMT. Signaling through Wnt, Notch, TGF-β and Snail are known mediators of EMT and their signaling is regulated through GSK-3β. Several toolkit GSK-3β inhibitors have been shown to inhibit EMT in tumor models suggesting that this is a class effect and highlighting a similar mechanism for elraglusib.

Our Solution – Current Elraglusib Development

Elraglusib represents a broad opportunity for us to potentially initiate and advance multiple drug development programs around our lead asset based on data emerging from completed or ongoing Phase 1/2 trials. Our lead program is developing Elraglusib Injection for the first-line treatment of mPDAC. mPDAC remains one of the highest unmet needs in oncology as the 5-year survival rate for PDAC (<10%) is one of the lowest of any cancer type.

Developing Elraglusib Injection for the Treatment of mPDAC – Phase 2 Studies

Actuate-1801 Part 3B

We are currently evaluating elraglusib through the second part of a Phase 2 study, referred to as Actuate-1801 Part 3B, which was initiated under the Actuate-1801 Master Protocol in patients with mPDAC who had not previously received systemic treatment for their metastatic disease.

This study was designed as a randomized, controlled study with a run-in to explore two different dosing schedules of elraglusib/GnP (once weekly vs. twice weekly) in the hope of potentially providing clinical support for moving to a more convenient, commercially viable elraglusib schedule. Pharmacokinetics were also included in this study to address the potential for drug-drug interactions (“DDI”) between elraglusib and gemcitabine or nab-paclitaxel. Management believes that confirmation of the Actuate-1801 Part 3A result discussed below in an adequately powered, randomized study, would compare favorably with the recently approved irinotecan liposomal injection and would complement the other first-line regimens currently used to treat mPDAC and provide a basis for approval for use in patients with mPDAC who had not previously received systemic treatment for their metastatic disease.

Actuate-1801 Part 3B enrolled its first patients in October 2021 and the run-in part of the trial demonstrated the weekly dosing of elraglusib was equivalent to twice weekly dosing of elraglusib. All patients randomized to the elraglusib/GnP arm now receive weekly elraglusib in addition to GnP. The trial accrued more readily than projected and enrollment was completed in January 2024. Below are the key inclusion criteria and clinical endpoints in the study:

Inclusion Criteria:

Endpoints:

We conducted a preliminary analysis of interim data in the pre-specified safety population as of November 15, 2024. As with all preliminary analyses of interim data, this data should not be relied upon as a final analysis and is subject to change once full data analysis is complete. For this preliminary analysis, we used data based on a cut-off date corresponding to the date when >70% of death events occurred in the GnP control arm.

The analysis of interim data demonstrated treatment with elraglusib in combination with GnP resulted in statistically significant increases in 1-year survival rate (p-value of 0.002) and mOS (hazard ratio of 0.63, p-value of 0.016) versus treatment with GnP alone. The combination treatment also resulted in increased ORR and DCR in the elraglusib/GnP combination arm versus the GnP control arm. Interim data highlights include the following:

Figure 4 provides additional details regarding the demographics and disease history of the enrolled patient population (draft unaudited data as of November 15, 2024).

**Figure 4: **Actuate-1801 Part 3B: Demographics for patients in study (as of November 15, 2024).

Additional data from the preliminary analysis of interim data as of November 15, 2024 are shown in Figures 5 – 11. These figures represent draft unaudited data as of November 15, 2024 and the final data and results may change as the study continues through completion. As with all interim data, this data should not be relied upon as a final analysis and is subject to change once full data analysis is complete.

Figure 5 summarizes primary and secondary endpoints and patients remaining on study for each treatment arm as well as landmark OS endpoints of 18- and 24-months. A large number of patients are still on treatment with 38% still remaining on the elraglusib/GnP combination arm versus 19% still remaining on the GnP only arm as of November 15, 2024. This is also shown at the patient level for each treatment cohort in the swim plots in Figure 9 that show patients still on treatment, patients with a response including stable disease, and patients still on study as well as those that have reached an event. Interim safety data is shown in Figure 11.

Figure 5:* Actuate-1801 Part 3B: Primary and secondary study endpoints (as of November 15, 2024).*

Figure 6 below represents interim Kaplan-Meier estimate for mOS. The administrative analysis of interim data indicates that >80% of the patients in the GnP control arm progressed and were no longer receiving GnP.

***Figure 6:***Actuate-1801 Part 3B: Interim Kaplan-Meier Estimate for mOS (as of November 15, 2024).

Figure 7 below depicts the best overall response (“BOR”) of patients enrolled in the Phase 2 study (Actuate-1801 Part 3B) in the GnP control arm who received at least one radiographic scan.

***Figure 7:***Actuate-1801 Part 3B: GnP Best Overall Response (as of November 15, 2024).

Figure 8 below depicts the BOR of patients enrolled in the Phase 2 study (Actuate-1801 Part 3B) in the elraglusib/GnP combination arm who received at least one radiographic scan.

***Figure 8:**Actuate-*1801 Part 3B: GnP/Elraglusib combination Best Overall Response (as of November 15, 2024).

Figure 9 below is a graphical representation of survival (“mOS Swim Plot’”) of patients enrolled in the Phase 2 study (Actuate-1801 Part 3B) in the elraglusib/GnP combination arm compared to the GnP control arm.

Figure 9:* Actuate-1801 Part 3B: Administrative Analysis of mOS Swim Plot (as of November 15, 2024).*

This is an open-label study and therefore, the study could not be used to support accelerated approval which would be based on evaluation of surrogate endpoints.

Management expects top-line data will be presented in the second quarter of 2025 based on the completion of enrollment in January 2024.

At the conclusion of Phase 2 trial (Actuate-1801 Part 3B), we expect to have survival data on the elraglusib/GnP combination arm and GnP arm in patients with mPDAC who had not previously received systemic treatment for their metastatic disease. At the completion of this study, we plan to meet with the FDA and discuss the design and execution of a Phase 3 registration study, if justified by the results this study. In addition, we plan to discuss the use of the Actuate-1801 Part 3B data for regulatory support and to support possible registration if the study achieves its primary endpoint of showing improved survival over GnP alone. Moreover, while the elraglusib/GnP combination appears to be well-tolerated and well-managed in the clinic, we do not yet know whether any increase in the number or severity of toxicities will be attributable to elraglusib and thus the elraglusib/GnP combination will have its own safety profile that will need to be evaluated and discussed with regulators. Figure 11 is a summary of the safety events reported as of November 15, 2024.

Actuate-1801 Part 3A

Actuate-1801 Part 3A is a single arm Phase 2 trial that was initiated in patients with mPDAC who had not previously been treated with any systemic chemotherapy including GnP (first-line study) and which built on the results of Actuate-1801 Part 2 described below, allowing a comparison of the safety and efficacy of the combination of Elraglusib Injection plus GnP as compared to GnP alone. By moving our development into the first line setting, we increased our ability to deliver the elraglusib/GnP combination to many more patients since more than 70% of patients with mPDAC never go on to a second-line treatment once they have progression on first-line treatment. In addition, we believe that the safety profile of elraglusib/GnP provides a strong basis for testing this combination in first-line patients. We also received a number of commercialization incentives (e.g. ODD, FTD) through registration for pancreatic cancer including mPDAC. Results from the Actuate-1801 Part 3A study formed the basis for the initiation of Actuate-1801 Part 3B trial.

In Part 3A of the Phase 2 study under the Actuate-1801 Master Protocol, the efficacy evaluable (“EE”) patient population was pre-defined as the efficacy analysis population and the modified intent to treat (“mITT”) was the safety population. The elraglusib dose was started at the RP2D evaluated in Part 2 (15 mg/kg dosed twice weekly).

The original study design proposed to enroll 23 consecutively evaluable patients who met the definition for the EE. These patients could be replaced at the discretion of the independent data monitoring committee (“IDMC”). Consequently, six patients were replaced such that there were 29 EE patients in the study. No new safety signals were observed with the elraglusib/GnP combination, but investigators observed that GnP toxicities may have occurred earlier and may have been more intense in some patients than would be anticipated for GnP alone. For these reasons, the dose of elraglusib was proactively reduced near the end of the study to 9.3 mg/kg dosed twice weekly, with the final four patients enrolled being treated at this dose.

Figure 10 below is a summary of the response of patients with mPDAC treated with the elraglusib/GnP combination in Part 3A (data cutoff as of March 2023) in the 29 EE patients.

Figure 10: Response of EE patients with mPDAC treated with elraglusib/GnP combination in Part 3A (data cutoff as of March 2023).

The mOS for the EE and ITT were 15.3 months and 11.9 months, respectively. These compare favorably with the mOS for GnP alone of 8.5 months in the MPACT trial or more recently 9.2 months in NAPOLI-3 trial, which evaluated irinotecan liposomal injection (Onivyde®) in combination compared to GnP, in the first-line mPDAC setting.

Elraglusib Injection was initially evaluated in Actuate-1801 Part 1/2, a dose escalation study in adult patients with refractory advanced cancers when given as a single agent or in combination with chemotherapy. The objective of this study was to establish the safety profile of elraglusib when used alone or in combination with chemotherapy and to identify either an MTD or RP2D to then inform the design of exploratory efficacy studies in Phase 2. Figure 14, which shows the study design process, and additional information regarding Actuate 1801 Master Protocol and potential future development opportunities (for which funding would need to be raised) identified through Actuate 1801 Parts 1 and 2 are set forth under “History of Elraglusib Clinical Development” below.

Overview of Interim Safety Profile from Phase 2 Trial (Actuate-1801 Part 3B)

Figure 11 provides safety data as of November 15, 2024 from the Actuate-1801 Part 3B trial. TEAEs broadly encompass all adverse events observed while a patient is on study and could be due to the drug or drugs (if used in combination), the disease or something specific to a particular patient such as other diseases or illness. It is then up to individual clinical investigator to decide which toxicities are due to elraglusib. The most common TEAEs attributed to elraglusib were transient visual disturbance and fatigue across both study parts, and the majority of TEAEs that occurred in ≥ 20% of patients were reported as Grade 1 or 2 (Figure 11). Visual disturbance affected 66.5% of patients (n=103/155) receiving elraglusib plus GnP and 9.0% of patients (n=7/78) receiving GnP alone. Commonly reported symptoms were darkened vision, where patients described lights as brighter and skin tones darker. Greater than 99% of visual disturbance cases were reported as mild or moderate (Grade 1 or 2). These visual disturbances were considered dose-dependent, occurring more frequently and lasting longer at higher doses. All cases of visual disturbance were transient, resolved completely, and lacked any associated retinal, ocular, or systemic toxicity. Fatigue, while also observed in ≥ 20% of patients, was also reported as mild or moderate (Grade 1 or 2) and did not interfere with daily life.

Some of the key findings from the interim safety analysis as of November 15, 2024 include:

Figure 11 below is a summary of TEAEs of any grade reported in >20% of patients treated with elraglusib as of November 15, 2024 in Actuate 1801 Part 3B (trial ongoing).

Figure 11: Actuate 1801 Part 3B: TEAEs of Any Grade Reported in >20% of Patients Treated with Elraglusib.

Investigator-Initiated Trial – PDAC

Elraglusib is also currently being evaluated in an IIT focusing on adults with untreated metastatic pancreatic adenocarcinoma. IND 157435, a Phase 2 study of FOLFIRINOX combined with elraglusib and the TGF-β inhibitor losartan in patients with untreated metastatic adenocarcinoma is being conducted by Dr. Colin Weekes (the “Weekes IIT”). This study administers elraglusib by intravenous infusion twice weekly in combination with FOLFIRINOX administered once every 14 days and daily losartan in adults with pancreatic cancer who have not received any prior systemic therapy for advanced disease. As of December 31, 2024, 57 patients have been enrolled in the Weekes IIT and the study is ongoing.

We will receive all final data from this study, which is considered exploratory and may inform future development of elraglusib. For additional information regarding other IITs involving elraglusib, see additional information below.

Developing Elraglusib Injection for the Treatment of Ewing Sarcoma – Phase 1 and Phase 2 Plans – Actuate-1902

As discussed under “Our Market Opportunity” above, based on extensive preclinical work in pediatric malignancies showing excellent synergy between elraglusib and standard of care chemotherapy in neuroblastoma, sarcoma, glioma and others, we initiated the Actuate-1902 Phase 1 study to determine the safety of elraglusib +/- chemotherapy in pediatric patients with refractory malignancies in 2020. Based on the response from the Ewing sarcoma patient, additional patients with metastatic, refractory Ewing and Ewing-like sarcoma were enrolled in the elraglusib/CT arm of the 1902 Phase 1 study.

Twelve patients including ten Ewing sarcoma patients, one DSRCT patient and one CIC rearranged sarcoma patient have been treated in the Actuate-1902 Phase 1 trial with a combination of elraglusib and cyclophosphamide/topotecan. All twelve patients appeared to have metastatic disease and had disease progression prior to joining the study despite undergoing previous treatment combinations including chemotherapy, radiation, and/or surgical procedures. Eight patients received two or more previous chemotherapy regimens, prior to entering the 1902 study. The following represents the status of Actuate-1902 Phase 1 trial as of December 31, 2024:

We believe that this exploratory Ewing sarcoma data is sufficiently positive in this orphan pediatric cancer indication to consider additional development and treatment options in Ewing sarcoma. The Actuate-1902 Phase 1 arm of the study is open to accrual.

With future funding, and pending 1902 data review at the end of Phase 1, we plan to evaluate additional treatment options focusing on patients with Ewing sarcoma.

Given that Ewing sarcoma is a very rare pediatric cancer, an international consortium of investigators and sites will be needed to advance this program to registration. In addition, we plan to pursue a number of development incentives in the United States and parallel programs in the EU. In July 2024, we received ODD from the FDA for elraglusib for the treatment of soft tissue sarcomas in the United States and Orphan Medical Product Designation from the EMA for the treatment of sarcoma. In October 2024, we received RPDD from the FDA for the treatment of Ewings sarcoma. The ability to engage in further development in pediatric cancers will depend on our ability to raise sufficient additional capital to support this path. We believe that pursuing this development could be an efficient and rapid path to registration in the United States and Marketing Authorization in the EU.

Elraglusib Oral Tablet Development - Actuate-2203 and Actuate-2401

We have been developing several oral dosage forms of elraglusib in addition to Elraglusib Injection that will potentially allow for further dose exploration and potentially allow us to evaluate elraglusib as a single agent and in combination with additional chemotherapy backbones. We believe that we will be able to administer the Elraglusib Oral Tablet daily, which may allow the drug to achieve steady state levels in plasma in patients resulting in continuous inhibition of the target GSK-3 in tumor and tumor-associated cells.

Preclinical studies have shown that persistent exposure of tumor cells (>12 hours but longer exposures work better) is required to observe induction of apoptosis in these tumor cell line models. Both the liquid and solid oral dosage forms of elraglusib are highly bioavailable. However, we have chosen to advance the Elraglusib Oral Tablet into clinical development based on an assessment of potential compliance, convenience of use and taste that favor the Oral Tablet. Investigational product has already been manufactured under Good Manufacturing Practice (“GMP”) standards, and we are planning a First in Human (“FIH”) Phase 1 clinical trial (Actuate-2401). Subject to additional funding, we plan to initiate a dose escalation Phase 1 trial in patients with advanced solid cancer to identify the MTD/RP2D for the Elraglusib Oral Tablet. Our development plan would then be to pursue Phase 2 indications such as metastatic melanoma, metastatic colorectal cancer and/or non-small cell lung cancer (“NSCLC”) using the oral tablet. We would require additional funds to initiate and complete these Phase 2 studies.

An oral liquid was evaluated for bioavailability in a Phase 1 healthy volunteer study (Actuate-2203) at a single dose using a cross-over design such that each subject on the study received IV, oral liquid after fasting and oral liquid with food. Elraglusib oral liquid was approximately 50% bioavailable when given with food and was very well tolerated by healthy volunteers, as depicted in Figure 12.

***Figure 12:***Bioavailability of Elraglusib Oral Liquid in Phase 1 Human Healthy Volunteer Study.

The oral liquid and several oral tablets formulations were also evaluated for bioavailability in dogs and an oral tablet candidate was identified that was greater than 95% orally bioavailable when given with food. For the first time, an MTD was identified with any formulation or dosing schedule of elraglusib. In the past, elraglusib had been given up to 3 times a week in animal toxicology studies to cover twice weekly and once weekly dosing of Elraglusib Injection in the Actuate-1801 and Actuate-1902 studies, but never daily. In the study, the oral drug had an AUC24 (Area Under the serum Concentration vs. time curve for 0-24 hours) of 77,000 ng•h/mL (nanograms times hours per milliliter) after a single 250 mg oral tablet and 137,000 ng•h/mL after oral administration of 500 mg (2 x 250 mg tablets) as shown in Figure 13. The 500 mg dose demonstrated toxicity and was not tolerated by dogs but the 250 mg dose was well-tolerated when given daily for 28 days in this exploratory study. This simulated the expected daily dosing that we would plan to use in our FIH Phase 1 study. The 25 mg/kg daily dose in dogs corresponds to approximately the 9.3 mg/kg weekly dose currently being used in the Actuate-1801 Part 3B study when scaled from dog to humans. Our management expects that steady state exposures of 77,000 ng•h/mL or greater will be possible with the Elraglusib Oral Tablet at well-tolerated doses in humans. Based on these observations, we would expect to also reach MTD in the Elraglusib Oral Tablet Phase 1 study in patients with refractory advanced cancer.

We believe this will allow for additional opportunities to explore the anti-tumor activity of elraglusib with the oral tablet that could not be achieved with Elraglusib Injection. While the weekly dosing of the Elraglusib Injection pairs well with GnP since both are given once per week, the oral tablet may be more amenable to use with other, less convenient chemotherapies, as well as a single agent.

***Figure 13:***Bioavailability of Elraglusib Injection compared to Oral Tablet in Dogs.

History of Elraglusib Clinical Development

Figure 14 is a graphical depiction of the Actuate-1801 Master Protocol and study design process, followed by a discussion of the history of elraglusib clinical development that led to finding that elraglusib plus GnP was well-tolerated in pre-treated cancer patients and selecting previously untreated mPDAC as our lead indication.

***Figure 14:***1801 Master Protocol Study Design

Actuate-1801 Phase 1/2 Clinical Study

We developed an innovative Phase 1/2 adaptive design “basket” clinical study to efficiently evaluate elraglusib safety and initial anti-tumor activity across multiple tumor types. This trial design facilitated the rapid advancement of elraglusib through dose escalation and safety cohorts while later establishing a process for transition into Phase 2 efficacy studies in patient populations that showed evidence of anti-tumor activity during the safety portion of the study. Elraglusib has been dosed in over 500 patients to date both as a single agent and in combination.

The study design consists of three parts. Part 1 and Part 2 consist of the evaluation of the safety and tolerability of elraglusib to determine the MTD and RP2D as both a monotherapy and in combination with various chemotherapy regimens. Part 1 and 2 involve dose escalation of elraglusib to identify either the MTD or RP2D if an MTD cannot be achieved. These were run in tandem and interdigitated. Initial dose escalation was performed using single agent elraglusib (Part 1), but once Part 1 opened the fourth dose level, Part 2 was allowed to open at the third dose level in combination with the chemotherapy backbones evaluated. Dose escalation was then continued for Part 1 and 2 in tandem until MTD or RP2D were identified, with Part 2 always being one dose level behind Part 1. A key design element of Part 2 is that all subjects enrolled in a chemotherapy basket must have previously failed that chemotherapy such that each patient was re-challenged by a drug to which they are resistant. Thus, each patient acts as their own control since any disease control must be due to the combination. In Part 2, six dose levels of elraglusib were evaluated across eight different chemotherapy baskets. Part 3 is designed to assess the clinical benefit of elraglusib at the RP2D from Part 2 in combination with chemotherapy in specific cancer populations.

Between January 2019 and August 2021, patients participating in the Actuate-1801 Part 1 and Part 2 study received at least one dose of elraglusib as monotherapy (n=67; Part 1) or in combination with chemotherapy (n=171; Part 2). Twenty-one different cancer types were enrolled in Part 1. On average, patients had received and failed at least three previous lines of chemotherapy regimens. No dose-limiting toxicities (“DLTs”) related to elraglusib occurred in either Part 1 or Part 2. Since the MTD was not reached in either part of the study, 15 mg/kg, the pre-specified highest dose evaluated in both Actuate-1801 Part 1 and 2, was named the RP2D. The chemotherapy backbone and cancer types involved in the study included:

Parts 1 and 2 comprised the Phase 1 portion of the Actuate-1801 trial and the results of this study were recently published inClinical Cancer Research (Carneiro et. al 2024).

Despite the fact that the patients enrolled on the Actuate-1801 study had previously received and failed multiple chemotherapy regimens, the mOS was 7.7 months (95% CI, 5.1-9.7) for elraglusib monotherapy (Part 1) and 6.9 months (95% CI, 5.7-8.9) for the combination of elraglusib and chemotherapy (Part 2) across all the different chemotherapy baskets. The mOS of 7.7 months in Part 1 benchmarks favorably with mOS 8-10 months for other active single agents evaluated in Phase 1. CR, PR and stable disease (“SD”) were determined using RECIST 1.1. Only evaluable patients as defined per the Actuate-1801 Master Protocol experiencing stable disease ≥4 cycles of treatment are counted as “stable.” Our management believes that 51.6% of patients in Actuate-1801 Part 1 and 49.3% in Actuate-1801 Part 2 with a response or stable disease who are able to stay on for at least four cycles of treatment is encouraging given the advanced and treatment-refractory nature of their cancers.

Figure 15 below is a summary of the best overall response of elraglusib as monotherapy (Part 1) and in combination with chemotherapy (Part 2).

Figure 15:* Best overall response of elraglusib as monotherapy (Part 1) and in combination with chemotherapy (Part 2)*

To further demonstrate that elraglusib shows single agent anti-tumor activity, an analysis was conducted regarding tumor size reduction and tumor tissue for the expression (presence) of GSK-3β (as the target for elraglusib) using a validated immunohistochemical method.

Of the patients evaluated for a tumor size reduction response, 15 out of 51 demonstrated tumor size reduction even if they did not reach a level of reduction associated with a RECIST response. Our management believes that the reason for this response is the administration of elraglusib since it is the only anticancer drug given in this part of the trial. Of the enrolled patients in Part 1, 16 patients had rapid clinical deterioration related to their disease. These patients were unable to stay on treatment long enough to reach their first tumor assessment and are therefore not included in the Part 1 analyses as per the protocol. Several tumor types are represented with clinical data in Part 1 including melanoma, colorectal, appendix, and lung, providing initial rationale for future studies in these cancer types.

Tumor tissues from both Actuate-1801 Part 1 and Part 2 were analyzed for the expression (presence) of GSK-3β using a validated immunohistochemical method. Archival and fresh pre-dose samples of tumor tissue were analyzed with 59.4% of tumor samples in Part 1 and >80% of samples in Part 2 immunostaining positive for GSK-3β, demonstrating that the target for elraglusib is present in a large portion of tumors across all the cancer types enrolled in this study. Our management believes that this broad expression of GSK-3β supports the development of elraglusib in several different cancer types.

As the Actuate-1801 study was ongoing, studies in preclinical tumor models from several collaborating laboratories that were evaluating elraglusib reported that elraglusib was also able to regulate expression of immune checkpoints such as PD-1/PD-L1, LAG-3 and TIGIT. The data further credentialed GSK-3β as a novel target for mediating anti-tumor immunity, which had been reported by a number of groups over the past decade, and demonstrated the potential for immune checkpoint modulatory activity for elraglusib. These were novel observations for elraglusib in addition to previously described roles in attenuating anti-apoptotic activity, NF-κB and DDR mediated drug resistance and enhancing chemotherapy and suggested that elraglusib may inhibit tumor progression through multiple mechanisms of action.

Circulating tumor cells isolated from a patient with adult T cell leukemia/lymphoma (“ATLL”) in the Actuate-1801 study (Part 1) who experienced a durable PR (406 days) while on single agent elraglusib also exhibited robust cytokine changes when treated with elraglusibex vivo. Further,Huntington et al2 showed that plasma from elraglusib-treated patients in the Actuate-1801 Part 1 clinical study demonstrated reduced VEGF and BAFF and elevated IL-1β, CCL22, and CCL4 concentrations that correlated with longer survival. Using paired tumor biopsies from patients in the Actuate-1801 study,Huntington et al also showed that tumor-infiltrating immune cells had reduced expression of inhibitory immune checkpoints (VISTA, PD-1, PD-L2) and elevated expression of T cell activation markers (CTLA-4, OX40L) after elraglusib treatment.

Taken together, our management believes that these early studies further support elraglusib’s multimodal mechanism of action including immune modulation and inhibition of immune evasion. Given that a number of recent reports have highlighted that drugs that modulate anti-tumor immune response may improve mOS with little or no effect on ORR, we re-analyzed all the Actuate-1801 Part 1 and 2 data with respect to OS.

Support for planned Phase 2 indications is provided by data extracted from Actuate-1801 Part 1 in patients with metastatic melanoma. Actuate-1801 Part 1 enrolled 11 patients with metastatic melanoma who received only single agent elraglusib and demonstrated an mOS of 9.1 months, which compares favorably to the mOS of 6.9 months for salvage chemotherapy in a similar patient population. Our management believes that we have potentially identified a method for enriching patients diagnosed with metastatic melanoma who are refractory to checkpoint inhibitors but may benefit from elraglusib. Patient selection and enrichment could improve the probability of success in a future Phase 2 trial in melanoma. These 11 Actuate-1801 Part 1 patients were refractory to several lines of treatment including immune checkpoint inhibitors and would typically be candidates for chemotherapy salvage with an expected mOS of 6.9 months based on a meta-analysis of many different chemotherapy regimens tested in the salvage setting in this patient population. In Actuate-1801 Part 1, one metastatic melanoma patient with widely metastatic disease to the brain, lungs, bones, muscles, stomach, lymph nodes, pancreas and adrenal glands received Elraglusib Injection as a single agent. This patient was refractory to all FDA-approved standard therapies, including several checkpoint inhibitors and a BRAF/MEK inhibitor. This patient reported a partial response at 6 weeks and after 12 weeks on elraglusib, the patient’s brain MRI showed a CR by RANO criteria and a PET scan showed CMR for other lesions. This patient continues to have a durable CMR ongoing (>5.5 years as of November 15, 2024) and continues to receive the investigational drug elraglusib. A second melanoma patient who received single agent elraglusib has ongoing stable disease and was still alive for 3.1 years as of last documented alive date. This patient also failed all FDA-approved standard therapies including immune checkpoint inhibitors and several experimental treatments. These are extraordinary results and should not be considered representative of all patients or all outcomes.

Similarly, Actuate-1801 Part 2 data in the irinotecan chemotherapy basket identified metastatic colorectal (in combination with irinotecan) as another potential Phase 2 indication for elraglusib based on mOS of 6.9 months for patients who were heavily pre-treated and refractory to chemotherapy. This compares favorably with expected mOS of less than 3 months for this same patient population treated with salvage chemotherapy or best supportive care.

Safety in Actuate-1801 Part 1 and 2

In both Parts 1 and 2, all patients experienced TEAEs. TEAEs broadly encompass all adverse events observed while a patient is on study and could be due to the drug or drugs (if used in combination), the disease or something specific to a particular patient such as other diseases or illness. It is then up to the individual clinical investigator to decide which toxicities are due to elraglusib. The most common TEAEs attributed to elraglusib were transient visual disturbance and fatigue across both study parts, and the majority of TEAEs that occurred in ≥ 20% of patients were reported as Grade 1 or 2. Visual disturbance affected 50.7% of patients (n=34/67) receiving elraglusib monotherapy and 60.8% of patients (n=104/171) receiving elraglusib with chemotherapy. Commonly reported symptoms were darkened vision, where patients described lights as brighter and skin tones appearing darker. Greater than 99% of visual disturbance cases were reported as mild or moderate (Grade 1 or 2). These visual disturbances were considered dose-dependent, occurring more frequently and lasting longer at higher doses. All cases of visual disturbance were transient, resolved completely, and lacked any associated retinal, ocular, or systemic toxicity. Fatigue, while also observed in ≥ 20% of patients, was also reported as mild or moderate (Grade 1 or 2) and did not interfere with daily life.

2 Huntington KE, Louie AD, Srinivasan PR, Schorl C, Lu S, Silverberg D, Newhouse D, Wu Z, Zhou L, Borden BA, Giles FJ, Dooner M, Carneiro BA, El-Deiry WS. GSK-3 Inhibitor Elraglusib Enhances Tumor-Infiltrating Immune Cell Activation in Tumor Biopsies and Synergizes with Anti-PD-L1 in a Murine Model of Colorectal Cancer. Int J Mol Sci. 2023 Jun 29;24(13):10870.

Other IIT

In addition to the company sponsored trials and the Weekes IIT referenced above, elraglusib is currently being evaluated in an additional IIT. We track patient accrual and SAEs in these trials and report these to our IND.

IND 156280 is a Phase 2 study of elraglusib plus carboplatin in patients with advanced, metastatic salivary gland carcinoma being conducted by Dr. Glenn J. Hanna. This study administered elraglusib by intravenous infusion twice weekly in combination with carboplatin administered once every 21 days in adults with incurable, recurrent or metastatic salivary gland carcinomas. A total of 32 patients were enrolled and this study is now completed. Final data analysis is ongoing and the study has been submitted for presentation at the AACR Annual Meeting 2025 with a final data report anticipated by the end of 2025. The elraglusib dose used in this study is lower than the levels recommended by our studies.

License Agreements

Northwestern University License Agreement

We licensed the exclusive worldwide rights to materials and non-exclusive rights to certain know-how relating to the use for therapeutic, diagnostic and commercial research purposes of elraglusib and related compounds in cancer and combination therapies from NU pursuant to that certain royalty-free license agreement between us and NU dated March 31, 2015, as amended on April 29, 2019 (as amended, the “NU License Agreement”).

Pursuant to the NU License Agreement, NU granted us (i) a nonexclusive license to certain technical information developed in the laboratory of Dr. Mazar, and (ii) an exclusive license to all results obtained by Dr. Mazar and his collaborators at NU on the use of the GSK-3β inhibitor 9-ING-41 and related compounds used for the treatment of cancer and combination therapies. The term of the NU License Agreement continues in effect until the expiration of the last to expire of patent rights covering 9-ING-41 and related GSK-3 inhibitors (see the discussion under “Intellectual Property” below for a discussion of our expected patent terms), unless earlier terminated by NU due to our making a general assignment for the benefit of creditors, initiation of bankruptcy proceedings by or against us or the appointment of a receiver or trustee to take possession of our property, or by either party following 90 days’ notice of a material breach of the NU License Agreement that is not then cured. The NU License Agreement terms are subject to the provisions of the Bayh-Dole Act, including requiring us to substantially manufacture products related to the license in the United States, unless waived. While the drug substance (“DS”) for elraglusib is manufactured by a supplier in China, the end drug product is substantially manufactured in the United States.

In consideration of the license granted by NU, we issued 27,778 shares of our common stock to NU, which represented 5% of our then-outstanding fully-diluted shares and agreed to customary confidentiality and progress update obligations and to indemnify NU for any claims arising from our use of the licensed rights under the NU License Agreement.

UIC Exclusive License Agreement with Equity

The exclusive rights to Patent Rights (as defined in the UIC License Agreement and described further below) and Technical Information (as defined in the UIC License Agreement) surrounding GSK-3 inhibitors for Neurodegenerative Disorders were licensed through an Exclusive License Agreement with Equity between us and UIC, dated April 6, 2015, as amended on April 24, 2019 (as amended, the “UIC License Agreement”). Under the UIC License Agreement, the Patent Rights relate to certain patents relating to 3-Benzofuranyl-4-Indolyl Maleimides, the last of which is scheduled to expire on March 16, 2028, not including any Patent Term Extension (“PTE”), which we may apply for under Title II of the Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman”), 35 U.S.C. §156. The following summarizes the key terms set forth in the UIC License Agreement.

Pursuant to the UIC License Agreement, UIC granted us (i) an exclusive, nontransferable license, with the right to sublicense under UIC’s rights in the Patent Rights, and (ii) a non-exclusive, non-transferable license, with the right to sublicense, to use UIC’s rights in the Technical Information within the specified territory (which is where the Patent Rights exist for such rights and worldwide for the Technical Information) for all uses other than rights reserved by UIC for non-commercial purposes, including teaching, research and public service and publishing information included in the Patent Rights and the Technical Information. The term of the UIC License Agreement continues in effect until the later of (x) expiration of the last to expire of the Patent Rights, (y) notice from us that the use of the Technical Information has ceased, and (z) the expiration of the last form of market exclusivity for products using the licensed technology. The UIC License Agreement may also be earlier terminated by UIC in the event of certain breaches of its terms that are not cured following a notice period or initiation of bankruptcy proceedings by or against us or the imposition of any lien or encumbrance on the licensed technology. We may also terminate the UIC License Agreement for any reason following 90 days’ notice.

In consideration of the license granted under the UIC License Agreement, we issued 46,528 shares of our common stock to UIC, which represented 5% of our capital stock on a fully diluted basis as defined in the UIC License Agreement, and agreed to pay UIC (i) development milestones of up to $1.25 million, of which, up to $0.25 million is due upon the progress of clinical trials and $1.0 million is due upon the initiation of commercial sales (ii) annual minimum royalty payments of $5,000 beginning on the three-year anniversary of the UIC License Agreement and increasing to $15,000 in year four, $35,000 in year five, and $50,000 in year six and thereafter, (iii) royalty on net sales for product covered under the Patent Rights in the low single digits with a 50% reduction in royalties for products solely utilizing Technical Information, (iv) a declining percentage of sublicensing revenue based on the escalating stage of development upon a sublicensing event, and (v) the reimbursement of all patent and related expenses incurred by UIC covering the Patent Rights. We also agreed to customary confidentiality and progress update obligations, to indemnify UIC for any claims arising from our use of the licensed rights under the UIC License Agreement.

The UIC License Agreement obligates us or a sublicensee to commercialize the licensed technology, including to achieve the development events specified in the agreement, including progress through clinical trials and achieving commercialization. UIC may also identify feasible uses of the licensed technology and, unless we demonstrate that we are pursuing such development or such development is not feasible within a specified period, UIC may terminate the UIC License Agreement or the exclusivity of the licensed rights. As of the date hereof, we have met all existing milestones as provided for in the UIC License Agreement. We are also responsible for the prosecution and maintenance of the licensed patents, at our expense and using commercially reasonable efforts. We have the sole right to enforce the licensed patents, at our expense. The UIC License Agreement terms are subject to the provisions of the Bayh-Dole Act, including requiring us to substantially manufacture products related to the license in the United States, unless waived. While the DS for elraglusib is manufactured by a supplier in China, the end drug product is substantially manufactured in the United States.

In addition, we entered into a sublicense and collaboration agreement dated August 28, 2017 with an unrelated entity that was covered under the UIC License Agreement, which sublicense agreement was later terminated on January 31, 2018. Under the UIC License Agreement, the Company owed UIC a certain percentage of amounts received under the sublicense agreement in the amount of $449,990. The Company paid UIC 10% of the sublicense fees in the amount of $44,999 and the remaining unpaid balance of $404,991 (“Deferred Amount”) was originally due and payable to UIC in two installments: 50% due and payable on the one-year anniversary from the first commercial sale and 50% due on the second-year anniversary from the first commercial sale. The Deferred Amount is treated as debt and continues to accrue interest at a rate of five percent (5%) per annum, representing the prime rate as of the date of the agreement plus 1%. On July 16, 2024, the Company and UIC entered an amendment to the UIC License Agreement (“UIC Amendment”). Pursuant to the UIC Amendment, accrued interest is due and payable in two installments: (i) 50% was due within 30 days following the closing of the Company’s IPO; and (ii) 50% is due within 30 days following the first anniversary of the closing of the IPO. Thereafter, interest will be paid annually within 30 days following the second anniversary of the closing of the IPO and annually thereafter. In addition, the UIC Amendment provides for payment of the Deferred Amount and any accrued interest thereon upon the sooner of (i) termination of the UIC License Agreement by the Company, (ii) the Company ceases development of the licensed UIC technology, (iii) the Company consummates a Change in Control (as defined in the UIC License Agreement), (iv) the Company sublicenses the licensed technology or the developed product, (v) the one-year anniversary following approval of a NDA of a licensed product, or (vii) the Company executes a partnership agreement with any entity resulting in the payment to us above a specified milestone amount or the Company secures cumulative financing equal to or exceeding $200 million. In addition, the UIC Amendment provides that to the extent the Company secures equity financing equal to or exceeding $85 million through its IPO or otherwise, 50% of the Deferred Amount is due and payable within 30 days. The remaining 50% of the Deferred Amount shall be due and payable upon the first to occur of any of the events noted above in clauses (i) through (vii). Finally, the UIC Amendment provides that for as long as the Company or a sublicensee is selling the licensed product, the Company will pay all consideration provided for in the original UIC License Agreement and described above until the last to expire market exclusivity date, the period of which for all products in a jurisdiction will not exceed a total of seven (7) years beginning with the date regulatory approval is granted for the first licensed product in the jurisdiction, and such obligation will survive termination of the UIC License Agreement.

Interest payable to UIC was $77,725 as of December 31, 2024, of which $70,957 is classified as current and $6,768 is classified as non-current, and are included in the accompanying consolidated balance sheet. At December 31, 2023, accrued interest to UIC was $130,041, which is included in the accompanying consolidated balance sheet.

Collaboration Agreement

We entered into a Collaboration Agreement with Lantern Pharma in 2021 under which the parties are collaborating on utilization of Lantern Pharma’s platform to develop novel biomarker derived signatures for use with our product candidates. As part of the collaboration, Lantern Pharma received 13,889 restricted shares of our common stock, which vested upon meeting certain conditions of the collaboration, as well as the potential to receive additional shares if results from the collaboration are utilized in future development efforts. Our former director, Les Kreis, Jr., was a director of Lantern Pharma until June 8, 2022. Certain affiliates of the Bios Equity Affiliated Funds (as defined below), which is our largest stockholder, beneficially owned greater than 10% of Lantern Pharma’s common stock as of December 31, 2024. Through December 31, 2024, no revenue has been recognized by either party under this agreement. Mr. Kreis was not involved in the negotiation of this agreement and the negotiations were conducted at arm’s length.

Intellectual Property

The proprietary nature of, and protection for, our product candidates and their methods of use and compositions of matter are an important part of our strategy to develop and commercialize novel medicines, as described in more detail below. Our policy is to file patent applications to protect technology, inventions and improvements to inventions that are commercially important to the development of our product candidates and our business. We seek U.S. and foreign patent protection for a variety of technologies. We also intend to seek patent protection or rely upon trade secret rights to protect other technologies that may be used to discover and validate targets and identify and develop novel products. We seek protection, in part, through confidentiality and proprietary information agreements. We are a party to various other license agreements that give us rights to use specific technologies in our research and development.

As of December 31, 2024, we own or have licensed 88 issued patents and pending patent applications worldwide, including two pending international Patent Cooperation Treaty (“PCT”) patent applications and four U.S. provisional patent applications, which are material to the programs described in this Report. Three of these issued worldwide patents are owned by UIC, which has granted us exclusive license rights to the technology.

With respect to our elraglusib program, as of December 31, 2024, we own or exclusively in-license one patent family focused on the elraglusib molecule and/or related compounds. The exclusively in-licensed patent family for elraglusib and related compounds (the original patent in-licensed from UIC) includes one granted U.S. patent, one granted European patent (with validation in 5 countries) and one granted Canadian patent, which are directed to 3-Benzofuranyl-4-Indolyl Maleimides compounds. The U.S. patent is expected to expire in 2028.

Actuate subsequently discovered that elraglusib exists as one of only two polymorphs and filed composition of matter patents covering both polymorphs. The patent family covering “Polymorph I” is based on PCT/US2018/046203 9-ING-41 Polymorph I Composition of Matter and includes two granted patents in the U.S. (US 11,136,334 and 12,145,943) and Mexico, one granted patent in each of Australia, China, Europe (with validation in 18 countries), Japan, Israel, and South Korea, and pending patent applications in Australia, Brazil, Canada, China, Hong Kong, Israel, Japan, Macao, South Korea, South Africa and the U.S., which are directed to a polymorph of a GSK-3β inhibitor, compounds, pharmaceutical compositions, methods of preparing and uses for treating cancers. The U.S. patent is expected to expire in 2038.

The patent family we own that covers elraglusib “Polymorph II” is based on PCT/US2018/056083 9-ING-41 Polymorph II Composition of Matter and includes two granted U.S. patents (US 11,407,759 and 12,116,374), one granted patent in each of Australia, China, Mexico and Macao, and pending patent applications in Brazil, Canada, the European Patent Office, Israel, Japan, South Korea, South Africa and the U.S., which are directed to a polymorph of a GSK-3β inhibitor, compounds, pharmaceutical compositions, methods of preparing and uses for treating cancers. The U.S. patent is expected to expire in 2038.

We intend to file additional patent applications for the liquid and solid formulations of these elraglusib compositions covering the liquid and solid oral dosage forms of elraglusib that we expect to develop.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In the United States, the patent term is 20 years from the earliest date of filing a non-provisional patent application. In the United States, a patent’s term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee, and a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in granting a patent. Patent term may also be extended up to five years due to regulatory delay (Patent Term Extension or “PTE”). We may apply for PTE under Title II of the Hatch-Waxman Act for any one of the U.S. Patents, however there is no guarantee that PTE would be granted for any patent.

We intend to continue to regularly assess opportunities for seeking patent protection for those aspects of our discoveries that we believe provide a meaningful competitive advantage. However, because patent filings can be time-consuming and expensive, our ability to do so may be limited until such time as we are able to generate cash flow from operations or otherwise raise sufficient capital to continue to invest in our intellectual property. For example, maintaining patents in the United States and other countries requires the payment of maintenance fees which, if we are unable to pay, may result in loss of our patent rights. If we are unable to do so, our ability to protect our intellectual property or prevent others from infringing our proprietary rights may be impaired.

Commercial Plan

We intend to retain significant development and commercialization rights to our product candidates and, if marketing approval is obtained, to commercialize our product candidates on our own, or potentially with a partner, in the United States and other regions. We currently have no sales, marketing and commercial product distribution capabilities. We intend to build the necessary infrastructure and capabilities over time for the United States, and potentially other regions, in connection with the advancement of our product candidates. Clinical data, the size of the addressable patient population, the size of the commercial infrastructure and manufacturing needs, the status of our pipeline and other factors, may all influence or alter our commercialization plans.

Manufacturing

We work with third-party suppliers and manufacturers to support the manufacturing of elraglusib for clinical studies and our research activities and, if we receive regulatory approval, we intend to rely on such third parties for commercial manufacture. We do not own or operate, and currently have no plans to establish any manufacturing facilities. We currently obtain our investigational product from these third-party manufacturers on a purchase order basis and do not have any long-term supply agreements in place. In order to de-risk our supply chain, and as we advance toward potential commercialization, we may enter into long-term supply agreements as well as evaluate additional product manufacturing sources.

Competition

The biotechnology and pharmaceutical industries, and the oncology sector in particular, are characterized by rapid evolution of technologies, fierce competition and strong defense of intellectual property rights. While we believe that our development programs, technology, knowledge, experience and scientific resources provide us with competitive advantages, we face competition from major pharmaceutical and biotechnology companies, academic institutions, government agencies and public and private research institutions, among others.

Any product candidates that we successfully develop and potentially commercialize will compete with currently approved therapies and new therapies that may become available in the future. Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy, safety and convenience of our products.

Our most advanced clinical program is being evaluated in a Phase 2 clinical trial as a first line treatment for mPDAC. The current standard first-line chemotherapies for mPDAC include GnP, FOLFIRINOX (5-fluorouracil, leucovorin, irinotecan, and oxaliplatin) or NALIRIFOX (liposomal irinotecan, 5-fluorouracil, leucovorin and oxaliplatin), and are associated with modest overall survival benefit.

We are presently developing elraglusib in combination with GnP as a first-line treatment for mPDAC. In addition, we are also supporting an ongoing IIT that may provide exploratory data on the combination of elraglusib and FOLFIRINOX as a first-line treatment for mPDAC. This may provide a rationale for developing elraglusib in combination with FOLFIRINOX or NALIRIFOX as another first-line treatment for mPDAC. Patients with mPDAC either have primary resistance to these chemotherapy backbones (e.g., do not respond at all when treated) or develop resistance quickly (responses with GnP, FOLFIRINOX and NALIRIFOX are transient and not very durable). Our management believes that elraglusib may improve outcomes in first-line mPDAC regardless of the chemotherapy backbone used, although the clinical data does not yet support this hypothesis. Nevertheless, since either GnP or FOLFIRINOX are used to treat >90% of patients with mPDAC and there is potential for combining elraglusib with either of these chemotherapy backbones based on our ongoing clinical studies, our management believes that elraglusib has the potential to treat a large segment of patients diagnosed with mPDAC. Thus, our plan is to develop elraglusib in combination with the present first-line chemotherapy regimens used in the treatment of mPDAC, as exemplified by its lead program of elraglusib/GnP and later moving to combinations with either FOLFIRINOX or NALIRIFOX pending results of the IIT. If shown to be clinically meaningful, elraglusib chemotherapy combinations could eventually be used to treat a large segment of patients with mPDAC.

Several other targeted therapies are also being evaluated in Phase 3 in mPDAC. The panRAS inhibitor daraxonrasib (RMC-6236, Revolution Medicines, Inc.) is being evaluated as a single agent in a Phase 3 trial (RASolute) in patients with previously untreated mPDAC. Arcus Biosciences, Inc. is also evaluating their small molecule inhibitor of CD73 (quemliclustat), in combination with GnP in a Phase 3 trial (PRISM-1) also in patients with previously untreated mPDAC. Both of these studies have only recently been initiated. There are other studies combining immune checkpoint inhibitors, PARP inhibitors, various chemotherapies and other RAS inhibitors in patients with mPDAC including second-line studies. However, many of the targeted agents besides elraglusib are only able to target a small percentage of mPDAC patients based on the presence of the target or other genomic information. Ongoing studies with many of these agents in mPDAC are generally non-randomized at one or a limited number of sites, are too early to assess for commercial potential and would not be considered as a competitor to elraglusib because of their lack of broad suitability for most mPDAC patients. For example, the PARP inhibitor Lynparza (olaparib) was recently approved as a maintenance therapy as it has been shown to significantly improve PFS and duration of response in patients with BRCA-mutated mPDAC who have not progressed following first-line platinum-based chemotherapy. However, BRCA mutations are only present in 4-7% of all PDAC patients. Olaparib is currently being evaluated as a therapeutic intervention in combination with a checkpoint inhibitor, pembrolizumab, in patients with mPDAC in BRCA1 mutated patients. Similarly, many of the RAS mutations targeted by clinical RAS inhibitors are only present in a low percentage of all PDAC and thus, of the current PDAC inhibitors available in the clinic, few PDAC patients would be expected to benefit from their treatment.

Thus, the vast majority of mPDAC patients still do not have an approved targeted therapy that can treat their tumor. If successful, we believe the elraglusib/chemotherapy combination would introduce the first broadly targeted agent, elraglusib, as a treatment option for patients with mPDAC and would have the potential to treat the majority (80-90%) of patients with mPDAC. A review of clinicaltrials.gov reveals that there are only a few randomized studies for any novel drug or drug combination (not just targeted) in patients with mPDAC previously untreated for metastatic disease:

There are several treatments in development for locally advanced or mPDAC. The information cited above focuses only on select first-line treatments that are in clinical trials in mPDAC. Quite a few of these are very early stage and therefore little information is available on clinical activity to date. With the initial success of biomarker driven and targeted therapies, there is an effort to test additional targeted agents in mPDAC patients to determine if there is any synergy with standard chemotherapy regimens in the first-line setting. For instance, KRAS is mutated in over 90% of pancreatic cancer patients and there are several KRAS targeted agents in development; however, several agents are specifically targeting the G12C mutation which only accounts for 1-2% of KRAS mutations in pancreatic cancer. Other agents are being tested in KRAS mutant cancers more broadly by targeting other MAPK pathway members such as MEK and ERK1/2, though treatment-related toxicity has been reported with these agents. Additionally, these MAPK targeted agents are currently being evaluated in second-line and later settings. In the future, targeted/ immunotherapy agents may be able to be combined or used in series to provide a more flexible and tailored therapeutic approach for each individual patient. Additionally, the multifaceted and differentiated mechanism of action of elraglusib is likely to be synergistic with both cytotoxic and immunomodulatory therapeutics that may be approved in the future. Our management believes that this potential for combining elraglusib with future multi-therapy regimens is also feasible given favorable safety profile of elraglusib as a single agent. Mechanistically, some of the targets inhibited by competitors (e.g., KRAS) intersect with the GSK-3 pathways and provide a rationale for potentially prioritizing these combinations with elraglusib in the future.

The above information includes corporate competitors that we are currently aware of and are currently conducting clinical trials or marketing in geographies where we currently anticipate conducting clinical trials for our product candidate. However, companies operating in other geographies and smaller and other early-stage companies may also prove to be significant competitors. In addition, academic research departments and public and private research institutions may be conducting research on compounds that could prove to be competitive.

Finally, many of the companies against which we may compete 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 competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Government Regulation and Product Approval

Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we are developing. The pharmaceutical product candidates that we develop must be approved by the FDA before they may be legally marketed in the United States. See “Risk Factors — Risks Related to Clinical Development and Regulatory Approval.”

U.S. Pharmaceutical Product Development Process

In the United States, the FDA regulates pharmaceutical products under the Federal Food, Drug and Cosmetic Act (“FDCA”) and implementing regulations. Pharmaceutical products are also subject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial enforcement. Any regulatory enforcement action could have a material adverse effect on us. The process required by the FDA before a non-biological pharmaceutical product may be marketed in the United States generally involves the following:

The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources and approvals are inherently uncertain.

Before testing any pharmaceutical product with potential therapeutic value in humans, the pharmaceutical product candidate enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the pharmaceutical product candidate. These early studies are conducted using sound scientific procedures and require thorough documentation. The conduct of a single and repeat dose toxicology and toxicokinetic studies in animals must comply with federal regulations and requirements including GLP. The pharmaceutical product sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. The IND becomes effective 30 days after receipt by the FDA, unless the FDA has concerns and notifies the sponsor. In such a case, the IND sponsor must resolve any outstanding concerns before the clinical study can begin. If resolution cannot be reached within the 30-day review period, the FDA can place the IND on clinical hold or the sponsor may withdraw the application. The FDA may also impose clinical holds on a pharmaceutical product candidate at any time before or during clinical studies due to safety concerns or regulatory non-compliance. Accordingly, it is not certain that submission of an IND will result in the FDA allowing clinical studies to begin, or that, once begun, issues will not arise that can lead to suspension or termination of such clinical studies.

During the development of a new drug, sponsors are given opportunities to meet with the FDA to discuss progress. These meetings may occur prior to submission of an IND, at the end of Phase 2 clinical development, and before an NDA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the sponsor to ask specific questions of the FDA, for the FDA to provide advice, and for the sponsor and FDA to reach agreement on the next phase of development. Sponsors typically use the end of Phase 2 meeting to discuss their Phase 2 clinical results and present their plans for the pivotal Phase 3 clinical (registration) trial(s) that they believe will support approval of the new drug. A sponsor may be able to request a Special Protocol Assessment (“SPA”), the purpose of which is to reach agreement with the FDA on the Phase 3 clinical trial protocol design and analyses that will form the primary basis of an efficacy claim.

Conducting Clinical Studies

Clinical studies are voluntary research studies involving the administration of the pharmaceutical product candidate to healthy volunteers or patients under the supervision of qualified investigators, typically physicians independent of the clinical study sponsor’s control. Clinical studies are conducted according to protocols detailing, among other things, the objectives of the clinical study, dosing procedures, subject selection and exclusion criteria, how the results will be analyzed and presented and the parameters to be used to monitor subject safety. Each protocol must be submitted to the FDA as part of the IND. Clinical studies must be conducted in accordance with GCP requirements. Further, each clinical study must be reviewed and approved by an independent institutional review board (“IRB”), at, or servicing, each institution at which the clinical study will be conducted. An IRB is charged with protecting the welfare and rights of study participants and is tasked with considering such items as whether the safety risks to individuals participating in the clinical studies are minimized and are reasonable in relation to anticipated benefits. The IRB approves the informed consent that must be provided to each clinical study subject or his or her legal representative and will also monitor the clinical study to ensure patient safety until completed.

Human clinical studies are typically conducted in three sequential phases that may overlap or be combined:

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

U.S. Review and Approval Processes

The results of product development, preclinical studies and clinical studies, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the pharmaceutical product, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product. The submission of an NDA is subject to the payment of substantial user fees; a waiver of such fees may be obtained under certain limited circumstances.

In addition, under the Pediatric Research Equity Act (“PREA”), an NDA or a supplement thereof must contain data to assess the safety and effectiveness of the pharmaceutical 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. The FDA may grant deferrals for submission of data or full or partial waivers. Unless otherwise required by regulation, PREA does not apply to any pharmaceutical product for an indication for which orphan designation has been granted. The FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA for filing. Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA has 10 months in which to complete its initial review of a standard NDA and respond to the applicant, and six months for a priority NDA. The FDA does not always meet its PDUFA goal dates for standard and priority NDAs. The review process and the PDUFA goal date may be extended by three months if the FDA requests or if the NDA sponsor otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date.

After the NDA submission is accepted for filing, the FDA reviews the NDA application to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality and purity. The FDA may refer applications for novel pharmaceutical products or pharmaceutical products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. During the pharmaceutical product approval process, the FDA also will determine whether a risk evaluation and mitigation strategy (“REMS”), is necessary to assure the safe use of the pharmaceutical product. If the FDA concludes that a REMS is needed, the sponsor of the NDA must submit a proposed REMS; the FDA will not approve the NDA without a REMS, if required.

Before approving an NDA, the FDA will inspect the facilities at which the product is manufactured. The FDA will not approve the product 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 an NDA, the FDA will typically inspect one or more clinical study sites to assure compliance with GCPs. If the FDA determines the application, manufacturing process or manufacturing facilities, or clinical study sites are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information. In addition, the FDA will require the review and approval of product labeling.

The NDA review and approval process is lengthy and involved and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied or may require additional clinical data or other data and information. Even if such data and information are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical studies are not always conclusive and the FDA may interpret data differently than the sponsor interprets the same data. The FDA will issue a complete response letter if the agency decides not to approve the NDA. The complete response letter usually describes all of the specific deficiencies in the NDA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical studies.

Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may require Phase 4 testing which involves clinical studies designed to further assess pharmaceutical product safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized.

Expedited Development and Review Programs; Breakthrough Therapy Designation

The FDA has a Fast Track program that is intended to expedite or facilitate the process for reviewing new pharmaceutical products that meet certain criteria. Specifically, new pharmaceutical products are eligible for Fast Track designation if they are intended to treat a serious or life-threatening condition and demonstrate the potential to address unmet medical needs for the condition. The Fast Track designation must be requested by the sponsor. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. With a Fast Track designated product, the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, if the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable and if the sponsor pays any required user fees upon submission of the first section of the NDA.

Any product submitted to the FDA for marketing approval, including a Fast Track program, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval. Any product is eligible for priority review if it has the potential to provide safe and effective therapy where no satisfactory alternative therapy exists or a significant improvement in the treatment, diagnosis or prevention of a disease compared to marketed products. The FDA will attempt to direct additional resources to the evaluation of an application for a new pharmaceutical product designated for priority review in an effort to facilitate the review. Additionally, a product may be eligible for accelerated approval. Pharmaceutical products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval, which means that the products may be approved on the basis of adequate and well-controlled clinical studies establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity. As a condition of approval, the FDA may require that a sponsor of a pharmaceutical product receiving accelerated approval perform adequate and well-controlled post-marketing clinical studies. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. Fast Track designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process.

The FDA is also required to expedite the development and review of the application for approval of drugs that are intended to treat a serious or life-threatening disease or condition where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. Under the breakthrough therapy program, the sponsor of a new product candidate may request that the FDA designate the product candidate for a specific indication as a breakthrough therapy concurrent with, or after, the filing of the IND for the product candidate. The FDA must determine if the product candidate qualifies for breakthrough therapy designation within 60 days of receipt of the sponsor’s request. Elraglusib IV and elraglusib oral dosage forms may all be eligible for breakthrough therapy designation depending on the indication and pending additional data.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition affecting fewer than 200,000 individuals in the United States, or in other limited cases. ODD provides for seven years of market exclusivity, independent of patent protection, to the company with ODD that brings a particular product to market. In addition, companies developing orphan drugs are eligible for certain incentives, including tax credits for qualified clinical testing.

To gain exclusivity, if a product that has ODD subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to the orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same active moiety for the same indication for seven years, except in limited circumstances, such as another drug’s showing of clinical superiority over the drug with orphan exclusivity. In addition, doctors may prescribe products for off-label uses and undermine our exclusivity. Orphan drug exclusivity could block the approval of one of our product candidates for seven years if a competitor obtains approval for the same active moiety for the same indication before we do, unless we are able to demonstrate that our product is clinically superior.

A sponsor may request ODD of a previously unapproved product or new orphan indication for an already marketed product. In addition, a sponsor of a product that is otherwise the same product as an already approved orphan drug may seek and obtain ODD for the subsequent product for the same rare disease or condition if it can present a plausible hypothesis that its product may be clinically superior to the first, approved product. More than one sponsor may receive ODD for the same product for the same rare disease or condition, but each sponsor seeking ODD must file a complete request for designation, and only the first sponsor that obtains approval for that drug for the orphan indication will obtain market exclusivity, effectively preventing the FDA from approving products under development by competitors for the same drug and same indication, unless the competitor is able to demonstrate that the product under development is clinically superior to the approved product or the approved product is not available in sufficient quantities. To permit the FDA to end another manufacturer’s orphan exclusivity period, the FDA must determine that the manufacturer has demonstrated clinical superiority by showing the later drug is safer, more effective, or otherwise makes a major contribution to patient care.

We may plan to pursue ODD and exclusivity for some of our product candidates in the United States, the EU, and other geographies of interest for specific products. ODD neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. We cannot guarantee that we will obtain ODD for any products in any jurisdiction. Even if we are able to acquire ODD for a product, we cannot be sure that such product will be approved, that we will be able to obtain orphan drug exclusivity upon approval, if ever, or that we will be able to maintain any exclusivity that is granted.

Regulation Outside the United States

In order to market a pharmaceutical product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy that govern, among other things, clinical trials, marketing authorization, commercial sales and distribution. Whether or not we obtain FDA approval for a pharmaceutical product, we would need to obtain the necessary approvals by the comparable non-U.S. regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions. The approval process ultimately varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

Regulation and Marketing Authorization in the EU

The EMA is the scientific agency of the EU that coordinates the evaluation and monitoring of new and approved medicinal products such as drugs and biologics. It is responsible for the scientific evaluation of applications for EU marketing authorizations, as well as the development of technical guidance and the provision of scientific advice to sponsors.

The process regarding approval of medicinal products in the EU follows roughly the same lines as in the United States and likewise generally involves satisfactorily completing each of the following:

Preclinical Studies

Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate the potential efficacy and toxicity in animals. The conduct of the preclinical tests and formulation of the compounds for testing must comply with the relevant EU regulations and requirements. The results of the preclinical tests, together with relevant manufacturing information and analytical data, are submitted as part of the CTA when seeking approval to start a clinical trial, and with the MAA when seeking marketing authorization.

Clinical Trial Approval

Requirements for the conduct of clinical trials in the EU including GCP, are implemented in the current Clinical Trials Directive 2001/20/EC and the GCP Directive 2005/28/EC. Pursuant to Directive 2001/20/EC and Directive 2005/28/EC, as amended, a system for the approval of clinical trials in the EU has been implemented through national legislation of the EU member states. Under this system, approval must be obtained from the competent national authority in which a trial is planned to be conducted, or in multiple member states if the clinical trial is to be conducted in a number of member states. To this end, a CTA is submitted, which must be supported by an investigational medicinal product dossier (IMPD) and further supporting information prescribed by Directive 2001/20/EC and Directive 2005/28/EC and other applicable guidance documents. Furthermore, a clinical trial may only be started after a competent ethics committee has issued a favorable opinion on the clinical trial application in that country.

On January 31, 2022, the Clinical Trials Regulation (EU) No. 536/2014 repealed the Clinical Trials Directive 2001/20/EC. To ensure that the rules for clinical trials are identical throughout the EU, the Clinical Trials Regulation (EU) No. 536/2014 was passed as a regulation which is directly applicable in all EU member states. The Clinical Trials Directive 2001/20/EC will, however, still apply three years from the date of entry into application of the Clinical Trials Regulation to (i) clinical trials applications submitted before the entry into application and (ii) clinical trials applications submitted within one year after the entry into application if the sponsor opts for the old system.

Regulation (EU) No 536/2014 aims to simplify and streamline the approval of clinical trial in the EU. The main characteristics of the regulation include:

Marketing Authorization

Authorization to market a product in the member states of the EU proceeds under one of four procedures: a centralized procedure, a mutual recognition procedure, a decentralized procedure or a national procedure.

Centralized Procedure

The centralized procedure enables applicants to obtain a marketing authorization that is valid in all EU member states based on a single application. Certain medicinal products, including products developed by means of biotechnological processes, must undergo the centralized authorization procedure for marketing authorization, which, if granted by the European Commission, based on the opinion of the EMA, is automatically valid in all EU member states. Sponsors may elect to file an MAA through the centralized procedures for other classes of products.

The centralized procedure is mandatory for certain types of products such as medicines derived from biotechnology processes (e.g., genetic engineering), advanced-therapy medicines (e.g., gene-therapy, tissue engineered medicine), orphan medicines, and medicinal products containing a new active substance indicated for the treatment of HIV, AIDS, cancer, diabetes, neurodegenerative disorders, autoimmune and other immune dysfunctions, and viral diseases.

The centralized authorization procedure is optional for other medicinal products if they contain a new active substance, if the applicant shows that the medicinal product concerned constitutes a significant therapeutic, scientific or technical innovation, or that the granting of authorization is in the public interest of the EU.

Administration Procedure

Under the centralized procedure, the EMA’s Committee for Human Medicinal Products (“CHMP”) serves as the scientific committee that renders opinions about the safety, efficacy and quality of medicinal products for human use on behalf of the EMA. The CHMP is composed of experts nominated by each member state’s national authority for medicinal products, with one of them appointed to act as Rapporteur for the coordination of the evaluation with the possible assistance of a further member of the Committee acting as a Co-Rapporteur. After approval, the Rapporteur(s) continue to monitor the product throughout its life cycle. The CHMP has 210 active days, to adopt an opinion as to whether a marketing authorization should be granted. The process usually takes longer in case additional information is requested, which triggers clock-stops in the procedural timelines. The process is complex and involves extensive consultation with the regulatory authorities of member states and a number of experts. When an application is submitted for a marketing authorization in respect of a drug which is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation, the applicant may, pursuant to Article 14(9) Regulation (EC) No 726/2004, request an accelerated assessment procedure. If the CHMP accepts such request, the time-limit of 210 days will be reduced to 150 days, but it is possible that the CHMP can revert to the standard time-limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment. Once the procedure is completed, a European Public Assessment Report (“EPAR”) is produced. If the opinion is negative, information is given as to the grounds on which this conclusion was reached. After the adoption of the CHMP opinion, a decision on the MAA must be adopted by the European Commission, after consulting the EU member states, which in total can take more than 60 days. After a drug has been authorized and launched, it is a condition of maintaining the marketing authorization that all aspects relating to its quality, safety and efficacy must be kept under review.

Conditional Approval

In specific circumstances, EU legislation (Article 14(7) Regulation (EC) No. 726/2004 and Regulation (EC) No. 507/2006 on Conditional Marketing Authorizations for Medicinal Products for Human Use) enables applicants to obtain a conditional marketing authorization prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization. Such conditional approvals may be granted for products (including medicines designated as orphan medicinal products), if (1) the risk-benefit balance of the product is positive, (2) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data, (3) the product fulfills unmet medical needs, and (4) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required. A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder, including obligations with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data. Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions and/or specific obligations. The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization.

Marketing Authorization Under Exceptional Circumstances

As per Article 14(8) Regulation (EC) No 726/2004, products for which the applicant can demonstrate that comprehensive data (in line with the requirements laid down in Annex I of Directive 2001/83/EC, as amended) cannot be provided (due to specific reasons foreseen in the legislation) might be eligible for marketing authorization under exceptional circumstances. This type of authorization is reviewed annually to reassess the risk-benefit balance. The fulfillment of any specific procedures/obligations imposed as part of the marketing authorization under exceptional circumstances is aimed at the provision of information on the safe and effective use of the product and will normally not lead to the completion of a full dossier/approval.

Pediatric Studies

Prior to obtaining a marketing authorization in the EU, applicants have to demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan (“PIP”) covering all subsets of the pediatric population, unless the EMA has granted (1) a product-specific waiver, (2) a class waiver, or (3) a deferral for one or more of the measures included in the PIP. The respective requirements for all marketing authorization procedures are laid down in Regulation (EC) No 1901/2006, the so-called Pediatric Regulation. This requirement also applies when a company wants to add a new indication, pharmaceutical form or route of administration for a medicine that is already authorized. The Pediatric Committee of the EMA (“PDCO”) may grant deferrals for some medicines, allowing a company to delay development of the medicine in children until there is enough information to demonstrate its effectiveness and safety in adults. The PDCO may also grant waivers when development of a medicine in children is not needed or is not appropriate, such as for diseases that only affect the elderly population.

Before a marketing authorization application can be filed, or an existing marketing authorization can be amended, the EMA determines that companies actually comply with the agreed studies and measures listed in each relevant PIP.

Period of Authorization and Renewals

A marketing authorization will be valid for five years in principle, and the marketing authorization may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by a national authority. To this end, the marketing authorization holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least nine months before the marketing authorization ceases to be valid. Once renewed, the marketing authorization will be valid for an unlimited period, unless the European Commission or the national authority decides on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. Any authorization that is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization will cease to be valid, the so-called “sunset clause.”

Orphan Medicinal Product Designation and Exclusivity

The European Commission can grant OMPD to products for which the sponsor can establish that it is intended for the diagnosis, prevention, or treatment of (1) a life-threatening or chronically debilitating condition affecting not more than five in 10,000 people in the EU, or (2) a life threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that sales of the drug in the EU would generate a sufficient return to justify the necessary investment. In addition, the sponsor must establish that there is no other satisfactory method approved in the EU of diagnosing, preventing or treating the condition, or if such a method exists, the proposed orphan drug will be of significant benefit to patients.

OMPD provides a number of benefits, including fee reductions, regulatory assistance, and the possibility to apply for a centralized EU marketing authorization, as well as 10 years of market exclusivity following a marketing authorization. During this market exclusivity period, neither the EMA, nor the European Commission nor the Member States can accept an application or grant a marketing authorization for a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. The market exclusivity period for the authorized therapeutic indication may be reduced to six years if, at the end of the fifth year, it is established that the OMPD criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity. In addition, a competing similar medicinal product may be authorized prior to the expiration of the market exclusivity period, including if it is shown to be safer, more effective or otherwise clinically superior to the already approved orphan drug or if the holder of the marketing authorization for the already approved orphan drug is unable to supply sufficient quantities of the product.

If the MAA of a medicinal product designated as an orphan drug includes the results of all studies conducted in compliance with an agreed PIP, and a corresponding statement is subsequently included in the marketing authorization granted, the 10-year period of market exclusivity will be extended to 12 years.

Regulatory Data Protection

EU legislation also provides for a system of regulatory data and market exclusivity. Upon receiving marketing authorization, new chemical entities approved on the basis of complete independent data package benefit from eight years of data exclusivity and an additional two years of market exclusivity. Data exclusivity prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic or biosimilar (abbreviated) application. During the additional two-year period of market exclusivity, a generic or biosimilar marketing authorization can be submitted, and the innovator’s data may be referenced, but no generic or biosimilar medicinal product can be marketed until the expiration of the market exclusivity. The overall 10-year period will be extended to a maximum of 11 years if, during the first 8 years of those 10 years, the marketing authorization holder (“MAH”) obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. Even if a compound is considered to be a new chemical entity and the innovator is able to gain the period of data exclusivity, another company nevertheless could also market another version of the drug if such company obtained marketing authorization based on an MAA with a complete independent data package of pharmaceutical test, preclinical tests and clinical trials. However, products designated as orphan medicinal products enjoy, upon receiving marketing authorization, a period of 10 years of orphan market exclusivity. Depending upon the timing and duration of the EU marketing authorization process, products may be eligible for up to five years’ supplementary protection certificates (“SPCs”). Such SPCs extend the rights under the basic patent for the drug.

Regulatory Requirements After a Marketing Authorization Has Been Obtained

If we obtain authorization for a medicinal product in the EU, we will be required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products.

We will, for example, have to comply with the EU’s stringent pharmacovigilance or safety reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed.

Other requirements relate to, for example, the manufacturing of products and active pharmaceutical ingredients in accordance with good manufacturing practice standards. EU regulators may conduct inspections to verify our compliance with applicable requirements, and we will have to continue to expend time, money and effort to remain compliant. Non-compliance with EU requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties in the EU. Similarly, failure to comply with the EU’s requirements regarding the protection of individual personal data can also lead to significant penalties and sanctions. Individual EU member states may also impose various sanctions and penalties in case we do not comply with locally applicable requirements.

The manufacturing of authorized drugs, for which a separate manufacturer’s license is mandatory, must be conducted in compliance with the EMA’s cGMP requirements and comparable requirements of other national authorities, which mandate the methods, facilities and controls used in manufacturing, processing and packing of drugs to assure their safety and identity. The EMA enforces its cGMP requirements through mandatory registration of facilities and inspections of those facilities. The EMA may have a coordinating role for these inspections while the responsibility for carrying them out rests with the member states competent authority under whose responsibility the manufacturer falls. Failure to comply with these requirements could interrupt supply and result in delays, unanticipated costs and lost revenues, and could subject the applicant to potential legal or regulatory action, including but not limited to warning letters, suspension of manufacturing, seizure of product, injunctive action or possible civil and criminal penalties.

The marketing and promotion of authorized drugs, including industry-sponsored continuing medical education and advertising directed toward the prescribers of drugs and/or the general public, are strictly regulated in the EU. The applicable regulations aim to ensure that information provided by holders of marketing authorizations regarding their products is truthful, balanced and accurately reflects the safety and efficacy claims authorized by the EMA or by the national authority of the authorizing member state. Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

Other Healthcare Laws

In addition to FDA restrictions on marketing of pharmaceutical products, several other types of state and federal laws have been applied to restrict certain business practices in the biopharmaceutical industry. Applicable federal and state healthcare laws and regulations include the following:

Coverage and Reimbursement

Sales of our product candidates in the United States may depend, in part, on the extent to which the costs of the product candidates may be covered by third-party payers, such as government health programs, commercial insurance and managed health care organizations. These third-party payers are increasingly challenging the prices charged for medical products and services. Additionally, the containment of health care costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort. The United States government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. If these third-party payers do not consider our product candidates to be cost-effective compared to other available therapies, they may not cover our product candidates after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our product candidates on a profitable basis.

In order to secure coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA, EMA or other comparable regulatory approvals. Our product candidates may not be considered medically necessary or cost-effective. A payer’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Third-party reimbursement may not be sufficient to enable us to maintain price levels high enough to realize an appropriate return on our investment in product development.

Pricing and reimbursement schemes vary widely from country to country. Some countries provide that drug 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. The conduct of such studies could be expensive and result in delays in our commercializing efforts. There can be no assurance that any country that has price controls or reimbursement limitations for drug products will allow favorable reimbursement and pricing arrangements for any of our products.

The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and we expect will continue to increase the pressure on drug pricing. Coverage policies, third-party reimbursement rates and drug pricing regulation may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

U.S. Healthcare Reform

In the United States, there have been and continue to be a number of significant legislative initiatives to contain healthcare costs. The PPACA contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for drugs subject to the Medicaid Drug Rebate Program, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs.

Since its enactment, there have been executive, judicial and Congressional challenges to certain aspects of the PPACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the PPACA brought by several states without specifically ruling on the constitutionality of the PPACA.

In addition, other legislative changes have been proposed and adopted since PPACA was enacted. On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, for single source and innovator multiple source drugs, beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s average manufacturer price. Additionally, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. Such scrutiny has resulted in several recent Congressional inquiries, presidential executive orders and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. Additional changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year, effective April 1, 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2027, unless additional Congressional action is taken; however, pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and subsequent legislation. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our drugs, if approved, and, accordingly, our financial operations.

Moreover, recently there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their commercial products. There have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement methodologies for drugs. The FDA published a final rule on October 1, 2020, effective November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada. Further, on November 20, 2020, the U.S. Department of Health and Human Service (“HHS”) finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Most recently, on August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law. Among other things, the IRA directs the HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare. The negotiated prices, which will first become effective in 2026, will be capped at a statutory ceiling price representing a significant discount from average prices to wholesalers and direct purchasers. The law will also, beginning in 2023, penalize drug manufacturers that increase prices of Medicare Part B and Part D drugs at a rate greater than the rate of inflation. Further, the IRA eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. The IRA permits the Secretary of the HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented, although the IRA may be subject to legal challenges. It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry. In addition, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid Innovation which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future.

Although a number of these and other proposed measures may require authorization through additional legislation to become effective, Congress has indicated that it will continue to seek new legislative measures to control drug costs.

CMS issued a final rule, effective on July 9, 2019, that requires direct-to-consumer advertisements of prescription drugs and biological products, for which payment is available through or under Medicare or Medicaid, to include in the advertisement the Wholesale Acquisition Cost, or list price, of that drug or biological product if it is equal to or greater than $35 for a monthly supply or usual course of treatment. Prescription drugs and biological products that are in violation of these requirements will be included on a public list.

Any adopted health reform measure could reduce the ultimate demand for our products, if approved, or put pressure on our product pricing. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. We expect that additional state and federal healthcare reform measures will be adopted in the future.

We expect that additional state and federal healthcare reform measures, as well as legal changes by foreign governments, will be adopted in the future, any of which could limit the amounts that governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

Employees and Human Capital Resources

As of December 31, 2024, we had 10 full-time employees plus a number of contract workers, who manage and oversee all aspects of our operations, including nonclinical development, manufacturing, clinical development, and general and administrative functions. Seven employees were engaged in research and development activities. In addition, we currently work with numerous highly experienced consultants and contractors who provide management and oversight in manufacturing, analytical, clinical supply chain, regulatory, pharmacovigilance and safety, clinical operations, data management, statistics, non-clinical toxicology, nonclinical and clinical pharmacology, and medical affairs. Thus, we currently operate as a semi-virtual pharmaceutical company with expertise in numerous aspects of preclinical and clinical development. Many of our consultants and contractors have extensive experience specifically in the development of cancer drugs.

None of our employees are represented by a labor union or covered under a collective bargaining agreement. We consider our relationship with our employees to be good.

Corporate Information

We are a Delaware corporation formed on January 16, 2015 as Apotheca Therapeutics, Inc. and changed our name to Actuate Therapeutics, Inc. on October 1, 2015. Our principal executive offices are located at 1751 River Run, Suite 400, Fort Worth, Texas 76107, and our telephone number is (817) 887-8455.

Our Internet address for corporate and investor information is www.actuatetherapeutics.com. The information contained on our website or connected to our website is not incorporated by reference into this annual report on Form 10-K and should not be considered part of this Report.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act are available free of charge on or through our website at www.actuatetherapeutics.com under the "SEC Filings" heading on the "Investors" page as soon as reasonably practicable after such reports have been filed with or furnished to the SEC. They are also available for free on the SEC’s website at www.sec.gov.