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What changed in C4 Therapeutics, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of C4 Therapeutics, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+598 added−656 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-23)

Top changes in C4 Therapeutics, Inc.'s 2023 10-K

598 paragraphs added · 656 removed · 451 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

207 edited+74 added−110 removed240 unchanged
Biggest changeHITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates in some cases, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; • The Physician Payments Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, imposed new annual reporting requirements for certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, for certain payments and “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members.
Biggest changeHITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates in some cases, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; • The Physician Payments Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, imposed new annual reporting requirements for certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, for certain payments and “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members; and • Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party-payors, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to drug pricing and payments and other transfers of value to physicians and other healthcare providers and restrict marketing practices or require disclosure of marketing expenditures and pricing information; state and local laws that require the registration of 31 Table of Contents pharmaceutical sales representatives; state and foreign laws that govern the privacy and security of health information in some circumstances.
Due to their central role in biological function, protein interactions control the mechanisms leading to healthy and diseased states. Diseases are often caused by mutations that alter the normal function of proteins and in turn lead to protein dysfunction and then disease. Recent scientific advances continue to implicate the role of specific proteins in multiple disease states.
Due to their central role in biological function, protein interactions control mechanisms leading to healthy and diseased states. Diseases are often caused by mutations that alter the normal function of proteins and in turn lead to protein dysfunction and then disease. Recent scientific advances continue to implicate the role of specific proteins in multiple disease states.
As a result, even if a degrader were to bind to a non-target protein, the resulting ternary complex may not have a conformation that is appropriate to facilitate ubiquitination and subsequent degradation. We are able to leverage these intrinsic properties of the ubiquitin-proteasome protein degradation pathway to design degraders to be highly selective for disease-causing target proteins.
As a result, even if a degrader were to bind to a non-target protein, the resulting ternary complex may not have a conformation that is appropriate to facilitate ubiquitination and subsequent degradation. We are able to leverage these intrinsic properties of the ubiquitin-proteasome protein degradation pathway to design degraders to be highly selective for disease-causing proteins.
The application of our experimental data to our proprietary models then 6 Table of Contents allows us to predict protein degradation kinetics and allows us to rapidly iterate and improve on degrader candidates and design for properties that optimize catalytic degradation turnover. ◦ We have also established an enzymology framework that assesses and balances the relationship between degrader concentration, time, and target protein degradation to identify the key kinetic parameters of degrader induced protein degradation.
The application of our experimental data to our proprietary models 6 Table of Contents then allows us to predict protein degradation kinetics and allows us to rapidly iterate and improve on degrader candidates and design for properties that optimize catalytic degradation turnover. ◦ We have also established an enzymology framework that assesses and balances the relationship between degrader concentration, time, and target protein degradation to identify the key kinetic parameters of degrader induced protein degradation.
Our First-in-Human Phase 1/2 Clinical Trial In January 2023, we initiated a first-in-human Phase 1/2 clinical trial for CFT1946 and continue to enroll patients in this ongoing clinical trial. The Phase 1/2 clinical trial will primarily investigate safety, tolerability, and anti-tumor activity, with secondary and exploratory objectives to characterize the PK and PD profile of CFT1946.
Our First-in-Human Phase 1/2 Clinical Trial In January 2023, we initiated a first-in-human Phase 1/2 clinical trial for CFT1946 and we continue to enroll patients in this ongoing clinical trial. The Phase 1/2 clinical trial will primarily investigate safety, tolerability, and anti-tumor activity, with secondary and exploratory objectives to characterize the PK and PD profile of CFT1946.
However, we have the option to co-develop products directed to certain targets, in which case we would be responsible for a portion of the development costs associated with such co-developed products and eligible to receive increased royalties on sales of such co-developed products. We also have an option to co-detail products for which have exercised our co-development option.
However, we have the option to co-develop products directed to certain targets, in which case we would be responsible for a portion of the development costs associated with such co-developed products and eligible to receive increased royalties on sales of such co-developed products. We also have an option to co-detail products for which we have exercised our co-development option.
While we believe that our technology, expertise, scientific knowledge, and intellectual property estate provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical, and biotechnology companies, academic institutions, governmental agencies, and public and private research institutions that conduct research, seek patent protection, and establish collaborative arrangements for research, development, manufacturing, and commercialization.
While we believe that our technology, expertise, scientific knowledge, and intellectual property estate provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical, biotechnology companies, academic institutions, governmental agencies, and public and private research institutions that conduct research, seek patent protection, and establish collaborative arrangements for research, development, manufacturing, and commercialization.
Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expansive Phase 3 clinical trials. • Phase 3—These clinical trials are generally undertaken in larger subject populations to provide statistically significant evidence of clinical efficacy and to further test for safety in an expanded subject population at multiple clinical trial sites.
Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expansive Phase 3 clinical trials. • Phase 3—These clinical trials are generally undertaken in larger subject populations to provide statistically significant evidence of efficacy and to further test for safety in an expanded subject population at multiple clinical trial sites.
An active moiety is the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt, including a salt with hydrogen or coordination bonds or other noncovalent bonds not involving the sharing of electron pairs between atoms, derivatives, such as a complex (i.e., formed by the chemical interaction of two compounds), chelate (i.e., a chemical compound) or clathrate (i.e., a polymer framework that traps molecules) of the molecule, responsible for the therapeutic activity of the drug substance.
An active moiety is the molecule or ion responsible for the therapeutic activity of the drug substance, excluding those appended portions of the molecule that cause the drug to be an ester, salt, including a salt with hydrogen or coordination bonds or other noncovalent bonds not involving the sharing of electron pairs between atoms, derivatives, such as a complex (i.e., formed by the chemical interaction of two compounds), chelate (i.e., a chemical compound) or clathrate (i.e., a polymer framework that traps molecules) of the molecule.
In the EU, the Pediatric Committee, or PDCO of the EMA must approve the pediatric investigation plan, or PIP, prior to filing a Marketing Authorization Application, or MAA, 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.
In the EU, the Pediatric Committee, or PDCO of the EMA must approve the pediatric investigation plan, or PIP, prior to the filing of a marketing authorization application, or MAA, 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.
A pediatric-use marketing authorization, or PUMA, is available for medicines that are already authorized, no longer covered by an SPC or patent that qualifies as an SPC and to be exclusively development for use in children.
A pediatric-use marketing authorization, or PUMA, is available for medicines that are already authorized, no longer covered by an SPC or patent that qualifies as an SPC and are to be exclusively development for use in children.
Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one rare disease designation and for which the only approved indication is for that disease or condition. If a product receives multiple rare disease designations or has multiple approved indications, it will not qualify for the orphan drug exemption.
Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one orphan disease designation and for which the only approved indication is for that disease or condition. If a product receives multiple rare disease designations or has multiple approved indications, it will not qualify for the orphan drug exemption.
These include a variety of administrative or judicial sanctions, such as refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, modification of promotional materials or labeling, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, debarment, injunctions, fines, consent decrees, corporate integrity agreements, refusals of government contracts and new orders under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement or civil or criminal penalties, including fines and imprisonment.
These may include a variety of administrative or judicial sanctions, such as refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, modification of promotional materials or labeling, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, debarment, injunctions, fines, consent decrees, corporate integrity agreements, refusals of government contracts and new orders under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement or civil or criminal penalties, including fines and imprisonment.
In addition, under the Pediatric Research Equity Act, or PREA, an NDA or supplement to an NDA for a new active ingredient, indication, dosage form, dosage regimen or route of administration must contain data that are adequate to assess the safety and efficacy of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Under the Pediatric Research Equity Act, or PREA, an NDA or supplement to an NDA for a new active ingredient, indication, dosage form, dosage regimen or route of administration must contain data that are adequate to assess the safety and efficacy of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
This is reflected in the graphic below. Intracranial activity of CFT8919 was evaluated in the H1975-LUC brain metastasis model. Female BALB/c nude mice were inoculated by intracarotid artery injection with H1975 (EGFR L858R-T790M) luciferase expressing cells. Bioluminescence imaging (BLI) was conducted to follow the tumor growth in brain.
This is reflected in the graphic below. Intracranial activity of CFT8919 was evaluated in the H1975-LUC brain metastasis model. Female BALB/c nude mice were inoculated by intracarotid artery injection with H1975 (EGFR L858R-T790M) luciferase expressing cells. Bioluminescence imaging, or BLI, was conducted to follow the tumor growth in brain.
For those target proteins where a binding site exists, we can develop BiDAC degraders leveraging our Cereblon toolkit. For target proteins where a binding site is not present or lacks sufficient specificity, such as transcription factors, we can leverage our proprietary MonoDAC library of over 7,000 compounds to screen for hits against the target.
For those target proteins where a ligandable binding site exists, we can develop BiDAC degraders leveraging our Cereblon toolkit. For target proteins where a ligandable binding site is not present or lacks sufficient specificity, such as transcription factors, we can leverage our proprietary MonoDAC library of over 7,000 compounds to screen for hits against the target.
CFT8919: Potent, Oral, Allosteric, Mutant-selective Degrader of EGFR L858R We are developing CFT8919, an orally bioavailable allosteric degrader of EGFR L858R for the treatment of NSCLC. We have chosen EGFR because of its well-defined biology and the limitations that EGFR kinase inhibitors face that we believe our degrader approach may be able to overcome.
CFT8919: Potent, Oral, Allosteric, Mutant-selective Degrader of EGFR L858R We are developing CFT8919, an orally bioavailable allosteric degrader of EGFR L858R for the treatment of NSCLC. We have chosen to target EGFR because of its well-defined biology and the limitations that EGFR kinase inhibitors face that we believe our degrader approach may be able to overcome.
One basis for a waiver of the application user fee is if the applicant employs fewer than 500 employees, including employees of affiliates, the applicant does not have an approved marketing application for a product that has been introduced or delivered for introduction into interstate commerce and the applicant, including its affiliates, is submitting its first marketing application.
One basis for a waiver of the application fee is if the applicant employs fewer than 500 employees, including employees of affiliates, the applicant does not have an approved marketing application for a product that has been introduced or delivered for introduction into interstate commerce and the applicant, including its affiliates, is submitting its first marketing application.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses and a company that is found to have improperly promoted off-label uses may be subject to significant liability. Failure to comply with any of the FDA’s requirements could result in significant adverse enforcement actions.
The FDA and other agencies enforce the laws and regulations prohibiting the promotion of off-label uses and a company that is found to have improperly promoted off-label uses may be subject to significant liability. Failure to comply with any of the FDA’s requirements could result in significant adverse enforcement actions.
A company must request orphan product designation before submitting an NDA. If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use. Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
A company must request orphan drug designation before submitting an NDA. If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use. Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
The process required by the FDA before product candidates may be marketed in the United States generally involves the following: • nonclinical laboratory and animal tests that must be conducted in accordance with GLP; • submission to the FDA of an investigational new drug, or IND, application, which must become effective before clinical trials may begin; • approval by an independent institutional review board, or IRB, for each clinical site or centrally before each trial may be initiated; • adequate and well controlled human clinical trials to establish the safety and efficacy of the proposed product candidate for its intended use, performed in accordance with good clinical practices, or GCP; • submission to the FDA of an NDA and payment of user fees; • satisfactory completion of an FDA advisory committee review, if applicable; • pre-approval inspection of manufacturing facilities and selected clinical investigators for their compliance with current good manufacturing practices, or cGMP, and GCP; • satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCP and the integrity of the clinical data; and • FDA review and approval of an NDA to permit commercial marketing for particular indications for use.
The process required by the FDA before product candidates may be marketed in the United States generally involves the following: • nonclinical laboratory and animal tests that must be conducted in accordance with GLP; • submission to the FDA of an investigational new drug, or IND, application, which must become effective before clinical trials may begin; • approval by an independent institutional review board, or IRB, for each clinical site or centrally before each trial may be initiated; • adequate and well controlled human clinical trials to establish the safety and efficacy of the proposed product candidate for its intended use, performed in accordance with good clinical practices, or GCP; • submission to the FDA of an NDA and payment of user fees; • satisfactory completion of an FDA advisory committee review, if applicable; • pre-approval inspection of manufacturing facilities and selected clinical investigators for their compliance with current good manufacturing practices, or cGMP, and GCP; 22 Table of Contents • satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCP and the integrity of the clinical data; and • FDA review and approval of an NDA to permit commercial marketing for particular indications for use.
This patent portfolio covers a variety of our toolbox ligands that bind to the Cereblon E3 ubiquitin ligase, or CRBN, either alone, as part of a MonoDAC molecule, or as part of a BiDAC molecule that includes a protein ligand to a disease-modifying protein target.
This patent portfolio covers a variety of our ligands that bind to the Cereblon E3 ubiquitin ligase, or CRBN, either alone, as part of a MonoDAC molecule, or as part of a BiDAC molecule that includes a protein ligand to a disease-modifying protein target.
Under the FDA’s accelerated approval regulations, the FDA may approve a drug for a serious or life threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
Under the FDA’s accelerated approval pathway, the FDA may approve a drug for a serious or life threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
In the United States, these laws include, without limitation, state and federal anti-kickback, false claims, physician transparency and patient data privacy and security laws and regulations, including but not limited to those described below. • The federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing any remuneration (including any kickback, bride or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward or in return for, either the referral of an individual for, or the purchase order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid.
In the United States, these laws include, without limitation, state and federal anti-kickback, false claims, physician transparency and patient data privacy and security laws and regulations, including but not limited to those described below. • The federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing any remuneration (including any kickback, bride or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward or in return for, either the referral of an individual for, or the purchase order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as 30 Table of Contents Medicare and Medicaid.
For example, in March 2010, the United States Congress enacted the ACA, which, among other things, included changes to the coverage and payment for products under government health care programs.
For example, in 2010, the United States Congress enacted the ACA, which, among other things, included changes to the coverage and payment for products under government health care programs.
Additionally, we are developing CFT8919, an orally bioavailable, allosteric, mutant-selective BiDAC degrader of epidermal growth factor receptor, or EGFR, with an L858R mutation in NSCLC. In preclinical studies, CFT8919 demonstrated equipotent activity against EGFR mutations resistant to EGFR inhibition, including L858R-C797S, L858R-T790M, and L858R-T790M-C797S compared to L858R single mutation in Ba/F3 cell models in vitro .
Additionally, we are developing CFT8919, an orally bioavailable, allosteric, mutant-selective BiDAC degrader of epidermal growth factor receptor, or EGFR, with an L858R mutation in NSCLC. In preclinical studies, CFT8919 demonstrated equipotent anti-proliferation activity against EGFR mutations resistant to EGFR inhibition, including L858R-C797S, L858R-T790M, and L858R-T790M-C797S compared to L858R single mutation in Ba/F3 cell models in vitro .
In line with our strategy, we assess on a target-by-target basis whether our degraders would provide a compelling and differentiated approach over standard of care or other approaches to the same disease and are consistent with our focus on minimizing biology and toxicity risk, and focusing on high unmet medical need, including rare diseases.
In line with our strategy, we assess on a target-by-target basis whether the degraders we might develop would provide a compelling and differentiated approach over standard of care or other approaches to the same disease and are consistent with our focus on minimizing biology and toxicity risk, and focusing on high unmet medical need, including rare diseases.
The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; 34 Table of Contents • The federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies.
The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; • The federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies.
If an applicant obtains a marketing authorization in all EU Member States, or a marketing authorization granted in the centralized procedure by the EC, and the study results for the pediatric population are included in the product information, even when negative, the medicine is then eligible for an additional six-month period of qualifying patent protection through extension of the term of any supplementary protection certificate, or SPC, so long as an application for this extension is made at the same time as filing the SPC application for the product, or at any point up to two years before the SPC expires.
If an applicant obtains a marketing authorization in all EU Member States, or a marketing authorization granted in the centralized procedure by the EC, and the study results for the pediatric population are included in the product information, even when negative, the medicine is then eligible for an additional six- 28 Table of Contents month period of qualifying patent protection through extension of the term of any supplementary protection certificate, or SPC, so long as an application for this extension is made at the same time as filing the SPC application for the product, or at any point up to two years before the SPC expires.
This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or that we will not have 23 Table of Contents the quantities we desire or require at an acceptable cost or quality or at the right time, which could delay, prevent or impair our development or commercialization efforts. ” All of our drug candidates are organic compounds of low molecular weight, which are often referred to in the biopharmaceutical community as small molecules, but our BiDAC degraders tend to be larger than traditional small molecule therapeutics.
This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or that we will not have the quantities we desire or require at an acceptable cost or quality or at the right time, which could delay, prevent or impair our development or commercialization efforts. ” All of our drug candidates are organic compounds of low molecular weight, which are often referred to in the biopharmaceutical community as small molecules, but our BiDAC degraders tend to be larger than traditional small molecule therapeutics.
If our operations are found to be in violation of any of these laws or any other related governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, 35 Table of Contents damages, fines, imprisonment, disgorgement, exclusion from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight and reporting obligations if we become subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations.
If our operations are found to be in violation of any of these laws or any other related governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight and reporting obligations if we become subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations.
CFT7455: A IKZF1/3 Degrader for Multiple Myeloma and non-Hodgkin's Lymphoma, We are developing CFT7455, an orally bioavailable degrader designed to target IKZF1/3, for the treatment of MM and NHLs. We have chosen IKZF1 and IZKF3 as our initial targets for degradation because of their strong mechanistic rationale and well-defined biology.
CFT7455: A IKZF1/3 Degrader for Multiple Myeloma and non-Hodgkin's Lymphoma, We are developing CFT7455, an orally bioavailable degrader designed to target IKZF1/3, for the treatment of MM and NHL. We have chosen IKZF1 and IZKF3 as our initial targets for degradation because of their strong mechanistic rationale and well-defined biology.
Changes to the manufacturing process are strictly regulated and often require prior FDA approval or notification before being implemented. FDA regulations also require investigation and correction of any deviations from cGMPs and specifications, and impose reporting and documentation requirements upon the sponsor, and any third-party manufacturers that the sponsor may decide to use.
Changes to the manufacturing process are strictly regulated and often require prior FDA approval or notification before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and specifications, and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use.
Failure to comply with the applicable United States requirements at any time during the product development process, approval process or after approval may subject an applicant to a variety of administrative or judicial sanctions, such as the 26 Table of Contents FDA’s refusal to approve a pending NDA, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.
Failure to comply with the applicable United States requirements at any time during the product development process, approval process or after approval may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve a pending NDA, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.
BRAF V600 is a Common and Well Understood Oncogenic Mutation BRAF is one of several protein kinases involved in a signaling cascade to initiate cell proliferation, known as the mitogen-activated protein kinase, or MAPK, pathway. The MAPK pathway conducts extracellular proliferative signals to the nucleus of cells, signaling them to proliferate.
BRAF V600X is a Common and Well Understood Oncogenic Mutation BRAF is one of several protein kinases involved in a signaling cascade to initiate cell proliferation, known as the mitogen-activated protein kinase, or MAPK, pathway. The MAPK pathway conducts extracellular proliferative signals to the nucleus of cells, signaling them to proliferate.
After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing, annual program fee requirements for approved products, as well as new application fees for supplemental applications with clinical data.
After approval, many changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing, annual program fee requirements for approved products, as well as new application fees for supplemental applications with clinical data.
Unless otherwise required by regulation, PREA does not apply to a drug for an indication for which orphan drug designation has been granted, except that PREA will apply to an original NDA for a new active ingredient that is orphan-designated if the drug is a molecularly targeted cancer product intended for the treatment of an adult cancer and is directed at a molecular target that FDA determines to be substantially relevant to the growth or progression of a pediatric cancer.
Unless otherwise required by regulation, PREA does not apply to a drug for an indication for which orphan drug designation has been granted, except that PREA will apply to an original NDA for a new active ingredient that is orphan-designated if the drug is a molecularly 25 Table of Contents targeted cancer product intended for the treatment of an adult cancer and is directed at a molecular target that FDA determines to be substantially relevant to the growth or progression of a pediatric cancer.
Two of these patent families include claims directed to compositions of matter generally and specifically covering CFT1946, our lead BRAF product candidate, and associated methods of use, and United States and foreign patents claiming priority to these patent 25 Table of Contents applications, if granted and maintained through payment of all required fees, will expire in 2042 and 2043, respectively, without regard to any possible patent term extensions or adjustments.
Two of these patent families include claims directed to compositions of matter generally and specifically covering CFT1946, our lead BRAF product candidate, and associated methods of use, and United States and foreign patents claiming priority to these patent applications, if granted and maintained through payment of all required fees, will expire in 2042 and 2043, respectively, without regard to any possible patent term extensions or adjustments.
Single base substitutions for the amino acid valine at codon 600 in the BRAF gene, referred to as V600, are known as Class I mutations and when those V600 mutations result in substitution of glutamic acid for valine (the most common such mutation), they are referred to as V600E mutations.
Single base substitutions for the amino acid valine at codon 600 in the BRAF gene, referred to as V600X, are known as Class I mutations and, when those V600X mutations result in substitution of glutamic acid for valine (the most common such mutation), they are referred to as V600E mutations.
As depicted in the table below, 17 Table of Contents CFT8919 demonstrated equipotent anti-proliferation activity against a large panel of EGFR secondary mutations that cause acquired resistance to the approved EGFR inhibitors such as osimertinib and erlotinib, compared to L858R single mutation.
As depicted in the table below, CFT8919 demonstrated equipotent anti-proliferation activity against a large panel of EGFR secondary mutations that cause acquired resistance to the approved EGFR inhibitors such as osimertinib and erlotinib, compared to L858R single mutation.
We and Biogen are also responsible for research activities designed to inform Biogen’s target selection process, for which Biogen will pay for its own costs and will reimburse our costs up to a certain amount. The research term under the Biogen Agreement will end in June 2023.
We and Biogen are also responsible for research activities designed to inform Biogen’s target selection process, for which Biogen will pay for its own costs and will reimburse our costs up to a certain amount. The research term under the Biogen Agreement ended in June 2023.
A CRL generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing or other information or analyses in order for the FDA to reconsider the application in the future.
A CRL generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing or other information or analyses in order for the FDA to reconsider the application in a resubmitted NDA.
United States and foreign patents claiming priority to these patent applications, if granted and maintained through the payment of all required fees, will expire in 2041 and 2042, without regard to any possible patent term extensions or adjustments.
United States and foreign patents claiming priority to these patent applications, if granted and maintained through the payment of all required fees, will expire in 2041, 2042, and 2044, respectively, without regard to any possible patent term extensions or adjustments.
None of our employees is represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good. We believe that our future success depends upon our continued ability to attract and retain highly skilled employees.
None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good. We believe that our future success depends upon our continued ability to attract and retain highly skilled employees.
Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the Biden administration may reverse or otherwise change these measures, both the Biden administration and Congress have indicated that they will continue to seek new legislative measures to control drug costs. In August 2022, the IRA was signed into law.
Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the Biden administration may reverse or otherwise change these measures, both the Biden administration and Congress have indicated that they will continue to seek new legislative measures to control drug costs. 33 Table of Contents In August 2022, the IRA was signed into law.
We believe that CCND1 protein loss was induced by the biological effect of EGFR suppression rather than direct degradation since this change was also observed in osimertinib EGFR inhibitor treatment. 18 Table of Contents In vivo activity of CFT8919 was assessed in H1975 EGFR-L858R-T790M xenograft (1 st generation TKI resistant) and BaF3 EGFR-L858R-T790M-C797S (osimertinib resistant) allograft models.
We believe that CCND1 protein loss was induced by the biological effect of EGFR suppression rather than direct degradation since this change was also observed in osimertinib EGFR inhibitor treatment. In vivo activity of CFT8919 was assessed in H1975 EGFR-L858R-T790M xenograft (1 st generation TKI resistant) and BaF3 EGFR-L858R-T790M-C797S (osimertinib resistant) allograft models.
If possible, Phase 1 clinical trials may also be used to gain an initial indication of product effectiveness. 27 Table of Contents • Phase 2—Controlled studies are conducted with groups of subjects with a specified disease or condition to provide enough data to evaluate the preliminary efficacy, optimal dosages and dosing schedule, and expanded evidence of safety.
If possible, Phase 1 clinical trials may also be used to gain an initial indication of product effectiveness. • Phase 2—Controlled studies are conducted with groups of subjects with a specified disease or condition to provide enough data to evaluate the preliminary efficacy, optimal dosages and dosing schedule, and expanded evidence of safety.
Fast track designation provides additional opportunities for interaction with the FDA’s review team and may allow for rolling review of NDA components before the completed application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable and the sponsor pays any required user fees upon submission of the first section of the NDA.
Fast track designation provides additional opportunities for interaction with the FDA’s review team and may allow for rolling review of NDA 24 Table of Contents components before the completed application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable and the sponsor pays any required user fees upon submission of the first section of the NDA.
Orphan exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same active ingredient for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand.
Orphan exclusivity also will not block approval of another product under certain circumstances, including if a subsequent product with the same active ingredient for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand.
The proteasome degrades poly-ubiquitinated proteins into their component amino acids, and these amino acids can then be recycled to form new proteins or can be excreted by the cell. This process is illustrated in the following graphic. 3 Table of Contents Approximately five percent of all human genes are dedicated to encoding components of the ubiquitin-proteasome system.
The proteasome degrades poly-ubiquitinated proteins into their component amino acids, and these amino acids can then be recycled to form new proteins or can be excreted by the cell. This process is illustrated in the following graphic. Approximately five percent of all human genes are dedicated to encoding components of the ubiquitin-proteasome system.
We plan to initially pursue development of CFT1946 in three types of cancers: melanoma, in which BRAF V600 mutations occur in approximately 35% of late-stage patients; colorectal, in which BRAF V600 mutations occur in approximately 5 to 10% of patients; and NSCLC, in which BRAF V600 mutations occur in approximately 1-2% of patients.
We plan to initially pursue development of CFT1946 in three types of cancers: melanoma, in which BRAF V600X mutations occur in approximately 35% of late-stage patients; colorectal, in which BRAF V600X mutations occur in approximately 5 to 10% of patients; and NSCLC, in which BRAF V600X mutations occur in approximately 1-2% of patients.
Further, patients with angioimmunoblastic, natural killer/T-cell lymphoma, adult T-cell leukemia/lymphoma, hepatosplenic, enteropathy type or ALK-peripheral T-cell lymphoma all have a median five-year overall survival of less than 50%. Although initial 8 Table of Contents overall response rates for chemotherapy are approximately 40% to 75%, most patients ultimately relapse.
Further, patients with angioimmunoblastic, natural killer/T-cell lymphoma, adult T-cell leukemia/lymphoma, hepatosplenic, enteropathy type or ALK-peripheral T-cell lymphoma all have a median five-year overall survival of less than 50%. Although initial overall response rates for chemotherapy are approximately 40% to 75%, most patients ultimately relapse.
Many cancers are characterized by activating mutations in components of this MAPK pathway, including BRAF V600 mutations, which confer constitutive activation of the MAPK pathway and promote oncogenic transformation and can cause tumor growth.
Many cancers are characterized by activating mutations in components of this MAPK pathway, including BRAF V600X mutations, which confer constitutive activation of the MAPK pathway and promote oncogenic transformation and can cause tumor growth.
Special FDA Expedited Review and Approval Programs The FDA has various programs, including fast track designation, breakthrough therapy designation, orphan drug designation, accelerated approval, and priority review, which are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs.
FDA Expedited Review and Approval Programs The FDA has various programs, including fast track designation, breakthrough therapy designation, accelerated approval, and priority review, which are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs.
If new patent applications relating to ongoing collaboration activities are filed in the future, our rights to any such future patent applications will be governed by the Roche Agreement, which is described above. Target Platform Collaborations We work with three strategic partners to expand our platform potential: Roche, Calico, and Biogen.
If new patent applications relating to ongoing collaboration activities are filed in the future, our rights to any such future patent applications will be governed by the Roche Agreement, which is described above. Target Platform Collaborations We work with strategic partners to expand our platform potential, including Roche, Calico, Biogen, and Merck.
We and Biogen each may terminate the Biogen Agreement (a) with respect to one or more development candidates, products or collaboration targets or, only in the case of Biogen, the entire agreement, for the other party’s uncured material breach of its obligations and (b) in its entirety upon the other party’s bankruptcy, insolvency or similar proceedings.
We and Biogen each may terminate the Biogen Agreement (a) with respect to one or more development candidates, products or collaboration targets or, only in the case of Biogen, the entire agreement, for the other party’s uncured material breach of its obligations and (b) in its entirety 16 Table of Contents upon the other party’s bankruptcy, insolvency or similar proceedings.
Median progression free survival, or PFS, following chemotherapy is 12 to 14 months, with a median five-year survival rate of approximately 20% to 30%. Lenalidomide has been tested clinically in PTCL in a Phase 2 clinical trial and shown to have an overall response rate of 22% to 26%.
Median progression free survival, or PFS, following chemotherapy is 12 to 14 months, with a median five-year survival rate of approximately 20% to 30%. Lenalidomide has been evaluated in PTCL in a Phase 2 clinical trial and shown to have an overall response rate of 22% to 26%.
These early-stage 19 Table of Contents discovery programs include compounds that have already shown the ability to cross the blood-brain barrier in preclinical models, where appropriate. Our discovery programs are a combination of internal programs, over which we have full control and ownership, and programs in collaboration with our partners.
These early-stage discovery programs include compounds that have already shown the ability to cross the blood-brain barrier in preclinical models, where appropriate. Our discovery programs are a combination of internal programs, over which we have full control and ownership, and programs in collaboration with our partners.
Pricing negotiations with government authorities can extend well beyond the receipt of regulatory approval for a product and may require a clinical trial that compares the cost-effectiveness 38 Table of Contents of a product to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in commercialization.
Pricing negotiations with government authorities can extend well beyond the receipt of regulatory approval for a product and may require a clinical trial that compares the cost-effectiveness of a product to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in commercialization.
Kinome profiling and global proteomics evaluation were conducted to evaluate binding and degradation selectivity of CFT8919, and no significant off-target activity of CFT8919 was identified. Kinome selectivity was determined using the DiscoveryX KINOMEscan assay testing 468 kinases, as shown below in the graph on the left.
Kinome profiling and global proteomics evaluation were conducted to evaluate binding and degradation selectivity of CFT8919, and no significant off-target activity of CFT8919 was identified. Kinome selectivity was determined using the 13 Table of Contents DiscoveryX KINOMEscan assay testing 468 kinases, as shown below in the graph on the left.
Under the agreements we enter into with our employees and consultants who are identified on any company-owned patent applications assign any rights they may have in any such patent application to us. We also rely on confidentiality or other agreements with our employees, consultants, and other advisors to protect our proprietary information.
Under the agreements we enter into with them, any of our employees and consultants who are identified on any company-owned patent applications assign any rights they may have in any such patent applications to us. We also rely on confidentiality or other agreements with our employees, consultants, and other advisors to protect our proprietary information.
Among the benefits of PRIME are the appointment of a rapporteur to provide continuous support and help build knowledge ahead of an MAA, early dialogue and scientific advice at key development milestones, and the potential to qualify products for accelerated review earlier in the application process.
Among the benefits of PRIME are the appointment of a rapporteur from the EMA’s scientific committees to provide continuous support and help build knowledge ahead of an MAA, early dialogue and scientific advice at key development milestones, and the potential to qualify products for accelerated review earlier in the application process.
Our patent portfolio is generally organized into two categories: platform patent filings designed to cover inventions generated through our proprietary TORPEDO platform and protein target-specific degrader filings, each of which categories is described in more detail below. TORPEDO Platform Portfolio We solely own our platform patent estate, which has been designed using our proprietary TORPEDO platform.
Our patent portfolio is generally organized into two categories: platform patent filings designed to cover inventions relating to our proprietary TORPEDO platform and protein target-specific degrader patent filings, each of which categories is described in more detail below. TORPEDO Platform Portfolio We solely own our platform patent estate, which has been designed using our proprietary TORPEDO platform.
All these factors mean that degraders may help to achieve a more durable biological effect and better clinical outcomes. High Selectivity One of the primary challenges of protein inhibition is attempting to identify and develop molecules that only target cancerous cells or mutant proteins without having deleterious effects on normal cells or proteins, commonly referred to as off-target effects.
All these factors mean that degraders may help to achieve a more durable biological effect and better clinical outcomes. High Selectivity One of the primary challenges of protein inhibition is attempting to identify and develop molecules that only target cancerous cells or disease-causing proteins without having deleterious effects on normal cells or other proteins, commonly referred to as off-target effects.
Therefore, in contrast to a typical reversible inhibitor, the effect of a degrader can persist well after it has been cleared from the body. The ability of a degrader to eliminate its target completely is another mechanism for improved potency relative to a traditional inhibitor.
Therefore, 4 Table of Contents in contrast to a typical reversible inhibitor, the effect of a degrader can persist well after it has been cleared from the body. The ability of a degrader to eliminate its target completely is another mechanism for improved potency relative to a traditional inhibitor.
We intend to use press releases, our company website, including our Investor Relations website, and our LinkedIn, Twitter, and Instagram accounts, which are listed below, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. www.linkedin.com/company/c4-therapeutics-inc. twitter.com/c4therapeutics www.instagram.com/c4therapeutics 39 Table of Contents
We intend to use press releases, our company website, including our Investor Relations website, and our LinkedIn, and Twitter accounts, which are listed below, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. www.linkedin.com/company/c4-therapeutics-inc . https://twitter.com/C4Therapeutics 35 Table of Contents
BRAF V600 mutants activate the MAPK pathway constitutively, meaning that cell proliferation is activated without receiving the extracellular proliferative signals necessary to activate the pathway normally.
BRAF V600X mutants activate the MAPK pathway constitutively, meaning that cell proliferation is activated without receiving the extracellular proliferative signals necessary to activate the pathway normally.
Due to the rapid optimization allowed by our TORPEDO platform and the ability of our platform to predict degrader effects in vivo , we are able to quickly and efficiently advance programs from target identification to the candidate development stage.
Due to the rapid optimization allowed by our TORPEDO platform and the ability of our 5 Table of Contents platform to predict degrader effects in vivo , we are able to quickly and efficiently advance programs from target identification to the candidate development stage.
Roche is also required to pay us up to $150 million per target in one-time sales-based milestone payments upon the achievement of specified levels of net sales of a product directed to such target.
Roche is also required to pay us up to $150 million per target in one-time sales-based milestone payments upon 17 Table of Contents the achievement of specified levels of net sales of a product directed to such target.
These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling.
These clinical trials are intended to establish the overall risk/benefit profile of the product and provide an adequate basis for product labeling.
A PUMA is a 33 Table of Contents dedicated MA covering the indication and formulation of a medicinal product developed exclusively for use in the pediatric population, where such development has been in accordance with an approved PIP.
A PUMA is a dedicated MA covering the indication and formulation of a medicinal product developed exclusively for use in the pediatric population, where such development has been in accordance with an approved PIP.
A drug candidate approved on this basis is subject to rigorous post marketing compliance requirements, 29 Table of Contents including the completion of Phase 4 or post approval clinical trials to confirm the effect on the clinical endpoint.
A drug candidate approved on this basis is subject to rigorous post marketing compliance requirements, including the completion of Phase 4 or post approval clinical trials to confirm the effect on the clinical endpoint.
Constitutive activation occurs because BRAF V600 mutants are able to signal as a single protein, or a monomer, while wild type BRAF proteins must form a complex of two proteins, or a dimer, before downstream signaling can occur. This constitutive activation leads to overactivation of the MAPK cell proliferation pathway, causing oncogenic cell proliferation and tumor growth.
Constitutive activation occurs because BRAF V600X mutants are able to signal as a single protein, or a monomer, while wild-type RAF proteins including BRAF and CRAF must form a complex of two proteins, or a dimer, before downstream signaling can occur. This constitutive activation leads to overactivation of the MAPK cell proliferation pathway, causing oncogenic cell proliferation and tumor growth.
We have engineered degraders that have successfully achieved blood-brain barrier penetration in preclinical studies, which is a key step in developing medicines with the potential to treat 2 Table of Contents brain metastases in oncology, as well as in therapeutic areas such neurodegenerative diseases.
We have engineered degraders that have successfully achieved blood-brain barrier penetration in preclinical studies, which is a key step in developing medicines with the potential to treat brain metastases in oncology, as well as in therapeutic areas such neurodegenerative diseases.
The recommended first-line treatment for patients with BRAF V600E-mutated unresectable or metastatic melanoma is anti-PD-1 monotherapy, such as pembrolizumab or nivolumab, or combination therapy with a BRAF inhibitor, such as dabrafenib, vemurafenib or encorafenib, and a MEK inhibitor, such as astrametinib, cobimetinib or binimetinib.
The recommended first-line treatment for patients with BRAF V600X mutated unresectable or metastatic melanoma is anti-PD-1 monotherapy, such as pembrolizumab or nivolumab, or combination therapy with a BRAF inhibitor, such as dabrafenib, vemurafenib or encorafenib, and a MEK inhibitor, such as as trametinib, cobimetinib or binimetinib.
The manufacturing process 28 Table of Contents must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality, and purity of the final product.
The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality, and purity of the final product.
United States and foreign patents claiming priority to these patent applications, if granted and maintained through the payment of all required fees, will expire in between 2040 and 2043, without regard to any possible patent term extensions or adjustments.
United States and foreign patents claiming priority to these patent applications, if granted and maintained through the payment of all required fees, will expire in 2040 and 2042, respectively, without regard to any possible patent term extensions or adjustments.
This amendment further provides that 21 Table of Contents Biogen licenses to us rights to use these Biogen target binding moieties and any related intellectual property as needed in order to conduct the research and development activities contemplated under the Biogen Agreement.
This amendment further provides that Biogen licenses to us rights to use these Biogen target binding moieties and any related intellectual property as needed in order to conduct the research and development activities contemplated under the Biogen Agreement.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, and establishing clinical trial sites, and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
These competitors also compete with us in 18 Table of Contents recruiting and retaining qualified scientific and management personnel, and establishing clinical trial sites, and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
As a result, Roche is now free to pursue the target EGFR in the Roche Field and we are free to pursue the target EGFR in the C4T Field, and all rights in and responsibility for know-how and intellectual property related to EGFR in the Roche Field reverted to the Roche parties, and all rights in and responsibility for know-how and intellectual property related to EGFR in the C4T Field reverted to us, with Roche assigning the patents in the C4T Field to us.
As a result, Roche is now free to pursue these targets in the Roche Field and we are free to pursue these targets in the C4T Field, and all rights in and responsibility for know-how and intellectual property related to these targets in the Roche Field reverted to the Roche parties, and all rights in and responsibility for know-how and intellectual property related to these targets in the C4T Field reverted to us, with Roche assigning the patents in the C4T Field to us.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changePreviously, we entered into the following collaborations, which involve our research programs: • a collaboration agreement with Roche in December 2015, which we amended and restated in December 2018 and further amended in November 2020 and updated as to included targets in November 2021; • a collaboration agreement with Calico in March 2017, which was extended in respect of one program in September 2021 and which will expire as to the research term in March 2023; and • a collaboration agreement with Biogen in December 2018, which was amended in February 2020 and will expire as to the research term in June 2023.
Biggest changeAs of December 31, 2023, we have four ongoing collaborations involving our research programs: • a collaboration agreement with Roche that we entered into in December 2015, which we amended and restated in December 2018 and further amended periodically thereafter, with collaboration activities ongoing as to two targets; • a collaboration agreement with Calico that we entered into in March 2017, which was extended in respect of one program in September 2021 and the research term of which expired in March 2023; • a collaboration agreement with Biogen that we entered into in December 2018, which was amended in February 2020, with certain research activities on the nominated targets continuing for a period of time beyond the end of the research term in June 2023, as contemplated by the Biogen Agreement; and • a collaboration agreement with Merck that we entered into in December 2023, for the development and commercialization of degrader-antibody conjugates, or DACs, with respect to one initial target, with the option for Merck to add up to three additional targets over a stated period of time.
The results of the dose escalation portion of our ongoing and planned first-in-human Phase 1/2 clinical trials of our product candidates may not be predictive of the results of further clinical trials of these product candidates or any of our other product candidates and may not be sufficient to enable us to progress to the Phase 2 portion of a Phase 1/2 clinical trial.
The results of the dose escalation portion of our ongoing and planned first-in-human Phase 1/2 clinical trials of our product candidates may not be predictive of the results of further clinical trials of these product candidates or any other product candidates and may not be sufficient to enable us to progress to the Phase 2 portion of a Phase 1/2 clinical trial.
Further, all interim data that we provide remains subject to audit and verification procedures that could result in material changes in the final data. From time to time, we may publish interim top-line or preliminary data from our clinical trials.
Further, all interim data that we provide remains subject to audit and verification procedures that could result in material changes in the final data. From time to time, we may publish interim or top-line preliminary data from our clinical trials.
In the United States, no uniform policy for coverage and reimbursement for products exists among third-party payors. Therefore, coverage and reimbursement for our products can differ significantly from payor to payor.
In the United States., no uniform policy for coverage and reimbursement for products exists among third-party payors. Therefore, coverage and reimbursement for our products can differ significantly from payor to payor.
The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the reimbursement rate that the payor will pay for the product. One payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product.
The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the reimbursement rate that the payor will pay for the product. One payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product.
Further, the GDPR provides a broad right for EEA Member States to create supplemental national laws, such as laws relating to the processing of health, genetic, and biometric data, which could further limit our ability to use and share such data or could cause our costs to increase, and harm our business and financial condition.
Further, the GDPR provides a broad right for EEA Member States to create supplemental national laws, as laws relating to the processing of health, genetic, and biometric data, which could further limit our ability to use and share such data or could cause our costs to increase, and harm our business and financial condition.
If this situation were to arise, we would not receive this additional six-month regulatory exclusivity extension. Our relationships with customers, healthcare providers, and third-party payors are or will be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations.
If this situation were to arise, we would not receive this additional six-month regulatory exclusivity extension. Our relationships with customers, healthcare providers, and third-party payors are or will be subject, directly or indirectly, to foreign, federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations.
Before obtaining regulatory approval for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex and expensive preclinical studies and clinical trials that our product candidates are both safe and effective for use in each target indication. Preclinical and clinical testing is expensive and can take many years to complete.
Before obtaining regulatory approval for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex, and expensive preclinical studies and clinical trials that our product candidates are both safe and effective for use in each target indication. This testing is expensive and can take many years to complete.
Many companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy, insufficient durability of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials. Most product candidates that commence preclinical studies and clinical trials are never approved as products.
Many companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy, insufficient durability of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials. Most product candidates that commence preclinical studies and clinical trials are never approved as marketable products.
A potential risk with product candidates developed through our TORPEDO platform, or in any protein degradation product candidate, is that healthy proteins or proteins not targeted for degradation will be degraded or that the degradation of the targeted protein in and of itself could cause adverse events, undesirable side effects or unexpected characteristics.
A potential risk with product candidates developed through our TORPEDO platform, or in any protein degradation product candidate, is that healthy proteins or proteins not targeted for degradation will be degraded or that the degradation of the targeted protein in and of itself could cause adverse events, undesirable side effects or unexpected characteristics or results.
We have obtained Orphan Drug Designation for CFT7455 and CFT8634, and if we decide to seek Orphan Drug Designation for any other current or future product candidates, we may be unsuccessful or may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for supplemental market exclusivity.
We have obtained Orphan Drug Designation for CFT7455, and if we decide to seek Orphan Drug Designation for any other current or future product candidates, we may be unsuccessful or may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for supplemental market exclusivity.
If we identify one or more material weaknesses in the future, it could result in an adverse reaction in the financial markets and restrict our future access to the capital markets due to a loss of confidence in the reliability of our consolidated financial statements.
If we identify one or more material weaknesses in the future, it could result in an adverse reaction in the financial markets and restrict our future access to the capital markets due to a loss of confidence in the reliability of our condensed consolidated financial statements.
If serious adverse events, undesirable side effects or unexpected characteristics are identified during the development of any product candidates we may develop, we may need to modify, abandon or limit our further clinical development of those product candidates.
If serious adverse events, undesirable side effects or unexpected characteristics or results are identified during the development of any product candidates we may develop, we may need to modify, abandon, or limit our further clinical development of those product candidates.
Our inability to enroll a sufficient number of patients for our planned clinical trials, or our inability to do so on a timely basis, would result in significant delays and could require us to abandon one or more clinical trials altogether.
Our inability to enroll a sufficient number of patients for our clinical trials, or our inability to do so on a timely basis, would result in significant delays and could require us to abandon one or more clinical trials altogether.
Despite our efforts, there is a risk will be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404.
Despite our efforts, there is a risk we will be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404.
Our product candidates could fail to receive marketing approval for many reasons, including the following: • the FDA or foreign regulatory authority, each referred to here as a health authority, may disagree with the design or implementation of our clinical trials; • we may be unable to demonstrate to the satisfaction of the health authority that a product candidate is safe and effective for its proposed indication, or that it is of sufficient strength, identity, or quality in accordance with the health authority's standards; • results of clinical trials may not meet the level of statistical significance required by the health authority for approval; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • the health authority may disagree with our interpretation of data from preclinical studies or clinical trials; • data collected from clinical trials of our product candidates may not be sufficient valid or of sufficient quality to support the submission of an NDA to the FDA or other submission to a foreign regulatory authority or to obtain marketing approval in the United States or any other country or jurisdiction; • the health authority may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and • the approval standards, policies, or regulations of a health authority may significantly change in a manner rendering our clinical data insufficient for approval.
Our product candidates could fail to receive or retain marketing approval for many reasons, including the following: • the FDA or foreign regulatory authority, each referred to here as a health authority, may disagree with the design or implementation of our clinical trials; 61 Table of Contents • we may be unable to demonstrate to the satisfaction of the health authority that a product candidate is safe and effective for its proposed indication, or that it is of sufficient strength, identity, or quality in accordance with the health authority's standards; • results of clinical trials may not meet the level of statistical significance required by the health authority for approval; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • the health authority may disagree with our interpretation of data from preclinical studies or clinical trials; • data collected from clinical trials of our product candidates may not be sufficient valid or of sufficient quality to support the submission of an NDA to the FDA or other submission to a foreign regulatory authority or to obtain marketing approval in the United States or any other country or jurisdiction; • the health authority may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and • the approval standards, policies, or regulations of a health authority may significantly change in a manner rendering our clinical data insufficient for approval.
The market price for our common stock may be influenced by many factors, including: • the degree of success of competitive products or technologies or changes in standard of care regimens; • results of preclinical studies and clinical trials of our product candidates or those of our competitors; • the timing and progress of our clinical development activities; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs and the value of the cash, cash equivalents, and marketable securities we hold; • the results of our efforts to discover, develop, acquire or in-license additional technologies or product candidates; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • effects of public health crises, pandemics and epidemics, such as COVID-19; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, including: • the degree of success of competitive products or technologies or changes in standard of care regimens; • results of preclinical studies and clinical trials of our product candidates or those of our competitors; • the timing and progress of our clinical development activities and the timing of our release of data from our clinical trials; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents, or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs and the value of the cash, cash equivalents, and marketable securities we hold; • the results of our efforts to discover, develop, acquire, or in-license additional technologies or product candidates; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • effects of public health crises, pandemics and epidemics, such as the recent COVID-19 pandemic; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
Although we believe our product candidates may have the ability to degrade the specific mutations that confer resistance to currently marketed inhibitors of disease-causing enzymes, any inherent primary or acquired secondary resistance to our product candidates in patients, or if the scientific research that forms the basis of our efforts proves to be contradicted, would prevent or diminish their clinical benefit.
Although we believe our product candidates may have the ability to degrade the specific mutations that confer resistance to currently marketed inhibitors of disease-causing enzymes, any inherent primary or acquired secondary resistance to our product candidates in patients would prevent or diminish their clinical benefit, as would be the case if the scientific research that forms the basis of our efforts proves to be contradicted.
Our agreements with these CROs and sites might terminate for a variety of reasons, including a failure to perform by the third parties.
Our agreements with these CROs, sites, and other third parties might terminate for a variety of reasons, including a failure to perform by the third parties.
In particular, the small number of patients in our planned early clinical trials or the designs of these trials may make the results of these trials less predictive of the outcome of later clinical trials.
In particular, the small number of patients in our planned early clinical trials of the designs of these trials may make the results of these trials less predictive of the outcome of later clinical trials.
Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or could allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm our business, results of operations, financial condition and prospects.
Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or could allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm our business, results of operations, financial condition and prospects.
In addition, if one of our collaborators terminates its agreement with us generally, which they are permitted to do for convenience with between 90 and 270 days’ notice, or with respect to a specific target or in connection with a material breach of the 55 Table of Contents agreement by us that remains uncured for a specified period of time, we may find it more difficult to attract new collaborators and our development programs may be delayed or the perception of us in the business and financial communities could be adversely affected.
In addition, if one of our collaborators terminates its agreement with us generally, which they are permitted to do for convenience with between 90 and 270 days’ notice, or with respect to a specific target or in connection with a material breach of the agreement by us that remains uncured for a specified period of time, we may find it more difficult to attract new collaborators and our development programs may be delayed or the perception of us in the business and financial communities could be adversely affected.
While we have several ongoing clinical trials, at this time, we have not yet completed a clinical trial of any product candidate. As a result, we are only starting to assess the safety of our lead product candidates in patients and we have not yet assessed the safety of any of our other product candidates in humans.
While we have several ongoing clinical trials, at this time, we have not yet completed a clinical trial of any product candidate. As a result, we are only starting to assess the safety of our lead product candidates in patients and we have not yet assessed the safety of any of our other earlier-stage product candidates in humans.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product recalls; • fines, warning letters or holds on clinical trials; 68 Table of Contents • refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; • product seizure or detention or refusal to permit the import or export of our product candidates; and • injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product recalls; • fines, warning letters, or holds on clinical trials; • refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; • product seizure or detention or refusal to permit the import or export of our product candidates; and • injunctions or the imposition of civil or criminal penalties.
If any product candidates we develop are associated with serious adverse events or undesirable side effects or have other characteristics that are unexpected, we may need to abandon their development, modify our development plans as to dose level and/or dose schedule of otherwise, or limit development to certain uses or subpopulations in which the adverse events, undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
If any product candidates we develop are associated with serious adverse events or undesirable side effects or have other characteristics or results that are unexpected, we may choose or need to abandon their development, modify our development plans as to dose level and/or dose schedule or otherwise, or limit development to certain uses or subpopulations in which the adverse events, undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
We may experience numerous unforeseen events during or as a result of clinical trials, which could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • delays in reaching, or the failure to reach, a consensus with regulators on clinical trial design or the inability to produce acceptable preclinical results to enable entry into human clinical trials; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate, including as a result of delays in the testing, validation, manufacturing and delivery of product candidates to the clinical sites by us or by third parties with whom we have contracted to perform certain of those functions; • delays in reaching, or the failure to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites or CROs; • the failure of regulators or IRBs to authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • difficulty in designing clinical trials and in selecting endpoints for diseases that have not been well studied and for which the natural history and course of the disease is poorly understood; • the selection of certain clinical endpoints that may require prolonged periods of clinical observation or analysis of the resulting data; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or fail to return for post-treatment follow-up or we may be unable to recruit suitable patients to participate in our clinical trials; • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs to suspend or terminate our clinical trials; • we may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks; • the third parties with whom we contract may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • the requirement from regulators or IRBs that we or our investigators suspend or terminate clinical trials for various reasons, including noncompliance with regulatory requirements or unacceptable safety risks; • clinical trials of our product candidates may produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional clinical trials, modify our development plans as to dose level and/pr dose schedule or otherwise, or abandon product development programs; 48 Table of Contents • the cost of clinical trials of our product candidates may be greater than we anticipate; • staffing shortages, including but not limited to the lack of appropriately trained or experienced clinical research associates or medical staff at the institutions where we conduct our clinical trials or the lack of sufficient support personnel at these institutions involved in site contracting and activation, may cause delays or create other challenges to the timely and efficient conduct of our clinical trials; • imposition of a clinical hold by regulatory authorities as a result of a serious adverse event, concerns with a class of product candidates or after an inspection of our clinical trial operations, trial sites or manufacturing facilities; • occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits; and • disruptions caused by the continuing spread and effects of the ongoing COVID-19 pandemic may increase the likelihood that we encounter these types of difficulties or cause other delays in initiating, enrolling, conducting or completing our planned clinical trials.
We may experience numerous unforeseen events during or as a result of clinical trials, which could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • delays in reaching, or the failure to reach, a consensus with regulators on clinical trial design or the inability to produce acceptable preclinical results to enable entry into human clinical trials; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate, including as a result of delays in the testing, validation, manufacturing and delivery of product candidates to the clinical sites by us or by third parties with whom we have contracted to perform certain of those functions; • delays in reaching, or the failure to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites or CROs; • the failure of regulators or institutional review boards, or IRBs, to authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • difficulty in designing clinical trials and in selecting endpoints for diseases that have not been well studied and for which the natural history and course of the disease is poorly understood; • the selection of certain clinical endpoints that may require prolonged periods of clinical observation or analysis of the resulting data; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or fail to return for post-treatment follow-up or we may be unable to recruit suitable patients to participate in our clinical trials; • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs to suspend or terminate our clinical trials; • we may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks; • the third parties with whom we contract may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • the requirement from regulators or IRBs that we or our investigators suspend or terminate clinical trials for various reasons, including noncompliance with regulatory requirements or unacceptable safety risks; 42 Table of Contents • clinical trials of our product candidates may produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional clinical trials, modify our development plans as to dose level and/or dose schedule or otherwise, or abandon product development programs; • the cost of clinical trials of our product candidates may be greater than we anticipate; • staffing shortages, including but not limited to the lack of appropriately trained or experienced clinical research associates or medical staff at the institutions where we conduct our clinical trials or the lack of sufficient support personnel at these institutions involved in site contracting and activation, may cause delays or create other challenges to the timely and efficient conduct of our clinical trials; • imposition of a clinical hold by regulatory authorities as a result of a serious adverse event, concerns with a class of product candidates or after an inspection of our clinical trial operations, trial sites or manufacturing facilities; • occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits; and • disruptions caused by any global health epidemics, such as the recent COVID-19 pandemic, which may increase the likelihood that we encounter these types of difficulties or cause other delays in initiating, enrolling, conducting, or completing our planned clinical trials.
In addition, some of our competitors have ongoing clinical trials for product candidates that treat the same indications as our product candidates and, as a result, patients who would be eligible for our clinical trials 51 Table of Contents may instead elect to enroll in clinical trials of our competitors’ product candidates.
In addition, some of our competitors have ongoing clinical trials for product candidates that treat the same indications as our product candidates and, as a result, patients who would be eligible for our clinical trials may instead elect to enroll in 45 Table of Contents clinical trials of our competitors’ product candidates.
The GDPR imposes more stringent data protection compliance requirements on controllers and processors of personal data, including special protections for “special category data,” which includes health, biometric, and genetic information of data subjects located in the EEA and UK and provides for more significant penalties for noncompliance.
The GDPR imposes more stringent data protection compliance requirements on controllers and processors of personal data of subjects located in the EEA and UK, including special protections for "special category data," which includes health, biometric, and genetic information and provides for significant penalties for noncompliance.
Moreover, the FDA requires compliance with standards, commonly referred to as GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
Moreover, the FDA requires compliance with standards, commonly referred to as GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, safety and confidentiality of trial participants are protected.
However, as a “smaller reporting company.” we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm until we are no longer a smaller reporting company.
However, as a "smaller reporting company," we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm until we are no longer a smaller reporting company.
These anti-takeover provisions and other provisions in our amended and restated certificate of incorporation and amended and restated by-laws could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer, or proxy contest involving our company.
These anti-takeover provisions and other provisions in our amended and restated certificate of 75 Table of Contents incorporation and amended and restated by-laws could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer, or proxy contest involving our company.
Although some of our earlier-stage product 44 Table of Contents candidates have produced observable results in animal studies, there is a limited safety data set for their effects in animals. In addition, these product candidates may not demonstrate the same chemical and pharmacological properties in humans and may interact with human biological systems in unforeseen, ineffective or harmful ways.
Although some of our earlier-stage product candidates have produced observable results in animal studies, there is a limited safety data set for their effects in animals. In addition, these product candidates may not demonstrate the same chemical and pharmacological properties in humans and may interact with human biological systems in unforeseen, ineffective or harmful ways.
Under the Hatch-Waxman Act, we will list patents that cover our drug products or their respective methods of use in the FDA’s compendium of “Approved Drug Products with Therapeutic Equivalence Evaluation,” sometimes referred to as the FDA’s Orange Book. 62 Table of Contents There are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the Orange Book.
Under the Hatch-Waxman Act, we will list patents that cover our drug products or their respective methods of use in the FDA’s compendium of “Approved Drug Products with Therapeutic Equivalence Evaluation,” sometimes referred to as the Orange Book. There are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the Orange Book.
For example, Roche, Biogen and Calico have the first right to enforce, and Roche also has the first right to defend, certain intellectual property rights under the applicable collaboration arrangement with respect to particular licensed programs and, although we may have the right to assume the enforcement and defense of these intellectual property rights if our collaborator does not, our ability to do so may be compromised by their actions.
For example, Roche, Biogen, Calico, and Merck have the first right to enforce and defend certain intellectual property rights under the applicable collaboration arrangement with respect to particular licensed programs and, although we may have the right to assume the enforcement and defense of these intellectual property rights if our collaborator does not, our ability to do so may be compromised by their actions.
Although we have obtained analyst coverage, if any of the analysts who cover us 79 Table of Contents were to issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, or if our preclinical studies and future clinical trials and results of operations fail to meet the expectations of any of these analysts, our stock price would likely decline.
Although we have obtained analyst coverage, if any of the analysts who cover us were to issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, or if our preclinical studies and future clinical trials and results of operations fail to meet the expectations of any of these analysts, our stock price would likely decline.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue operations.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or 36 Table of Contents annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue operations.
Under applicable law, the standard of review for these 60 Table of Contents types of adversarial actions at the USPTO are conducted without the presumption of validity afforded to U.S. patents, which is the standard that applies if a third party were to seek to invalidate a patent through a lawsuit filed in the federal courts of the United States.
Under applicable law, the standard of review for these types of adversarial actions at the USPTO are conducted without the presumption of validity afforded to U.S. patents, which is the standard that applies if a third party were to seek to invalidate a patent through a lawsuit filed in the federal courts of the United States.
Even if resolved in our favor, litigation or other legal proceedings relating to healthcare laws and regulations may cause us to incur significant expenses and could distract our technical and management personnel 71 Table of Contents from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
Even if resolved in our favor, litigation or other legal proceedings relating to healthcare laws and regulations may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
Our projections of both the number of people who have the cancers we are targeting, who may have their tumors genetically sequenced, as well as the subset of people with these cancers in a position to receive a particular line of therapy 57 Table of Contents and who have the potential to benefit from treatment with our product candidates, are based on our reasonable beliefs and estimates.
Our projections of both the number of people who have the cancers we are targeting, who may have their tumors genetically sequenced, as well as the subset of people with these cancers in a position to receive a particular line of therapy and who have the potential to benefit from treatment with our product candidates, are based on our reasonable beliefs and estimates.
Third-party payors may also limit coverage to specific products on an approved list, or formulary, which might not include all of the FDA-approved 58 Table of Contents products for a particular indication. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies.
Third-party payors may also limit coverage to specific products on an approved list, or formulary, which might not include all of the FDA-approved products for a particular indication. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies.
Further, whether a reverse payment is justified depends upon its size, scale in relation to the patentee’s anticipated future litigation costs, and independence from other services for which it might represent payment (as was the case in Actavis ), as well as the lack of any other convincing 63 Table of Contents justification.
Further, whether a reverse payment is justified depends upon its size, scale in relation to the patentee’s anticipated future litigation costs, and independence from other services for which it might represent payment (as was the case in Actavis ), as well as the lack of any other convincing justification.
However, even if we received a written request for pediatric studies from the FDA for one or more of our drug products, we may determine not to or be unable to carry out pediatric studies that comply with Section 505(A) of the FDC Act, or we may carry out studies that are not accepted by the FDA for this purpose.
However, even if we received a written request for pediatric studies from the FDA for one or more of our drug products, we may determine not to or be unable to carry out pediatric studies that comply with Section 505(A) of the FDC Act, or we may carry out studies 65 Table of Contents that are not accepted by the FDA for this purpose.
The Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Stock Market LLC and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective 81 Table of Contents disclosure and financial controls and corporate governance practices.
The Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Stock Market LLC and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
If our efforts to comply with GDPR or other applicable EU and UK laws and regulations are not successful, or are perceived to be unsuccessful, it could adversely affect our business in the EU and/or the UK.
If our efforts to comply with GDPR or other applicable EEA and UK laws and regulations are not successful, or are perceived to be unsuccessful, it could adversely affect our business in the EEA and/or the UK.
Any inability to transfer personal data from the EU to the United States in compliance with data protection laws may impede our ability to conduct trials and may adversely affect our business and financial position.
Any inability to transfer personal data from the EEA to the United States in compliance with data protection laws may impede our ability to conduct trials and may adversely affect our business and financial position.
While this issue did not ultimately delay the timing of submission of our IND for CFT7455, in the future, we could experience a manufacturing issue that would have a material impact on development of our product candidates and the occurrence of an event of this nature would largely be outside of our control.
While this issue 48 Table of Contents did not ultimately delay the timing of submission of our IND for CFT7455, in the future, we could experience a manufacturing issue that would have a material impact on development of our product candidates and the occurrence of an event of this nature would largely be outside of our control.
If so, uncertainties resulting from the initiation and continuation of such proceedings 64 Table of Contents could have an adverse effect on our ability to compete in the marketplace. The cost of foreign adversarial proceedings can also be substantial, and in many foreign jurisdictions, the losing party must pay the attorney fees of the winning party.
If so, uncertainties resulting from the initiation and continuation of such proceedings could have an adverse effect on our ability to compete in the marketplace. The cost of foreign adversarial proceedings can also be substantial, and in many foreign jurisdictions, the losing party must pay the attorney fees of the winning party.
Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates. 67 Table of Contents Even if we obtain FDA approval for any of our product candidates in the United States, we may never obtain approval for or commercialize any of them in any other jurisdiction, which would limit our ability to realize their full market potential.
Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates. Even if we obtain FDA approval for any of our product candidates in the United States, we may never obtain approval for or commercialize any of them in any other jurisdiction, which would limit our ability to realize their full market potential.
In order to secure coverage and 72 Table of Contents 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 our products, in addition to the costs required to obtain FDA or comparable regulatory approvals.
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 our products, in addition to the costs required to obtain FDA or comparable regulatory approvals.
If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving such matters. The Federal Forum Provision may also impose additional litigation costs on 82 Table of Contents stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware and the U.S.
If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving such matters. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware and the U.S.
The data underlying the feasibility of developing these types of therapeutic products is both preliminary and limited. If any adverse learnings are made by other developers of targeted protein degraders, there is a risk that development of our product candidates could be materially impacted.
The data underlying the feasibility of developing these types of therapeutic products is both preliminary 38 Table of Contents and limited. If any adverse learnings are made by other developers of targeted protein degraders, there is a risk that development of our product candidates could be materially impacted.
Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. 59 Table of Contents The patent position of the biopharmaceutical industry generally is highly uncertain, involves complex legal and factual questions and has been the subject of much litigation.
Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. The patent position of the biopharmaceutical industry generally is highly uncertain, involves complex legal and factual questions and has been the subject of much litigation.
Because patent 61 Table of Contents applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that our product candidates or use of our technologies infringes upon these patents.
Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that our product candidates or use of our technologies infringes upon these patents.
To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications or the inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed, and the further development and commercialization of our product candidates could be delayed.
To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications or 72 Table of Contents the inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed, and the further development and commercialization of our product candidates could be delayed.
Product candidates in later stages of clinical trials may fail to show the desired safety and 46 Table of Contents efficacy profile despite having progressed successfully through preclinical studies and/or initial clinical trials. Likewise, early, smaller-scale clinical trials may not be predictive of eventual safety or effectiveness in large-scale pivotal clinical trials.
Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed successfully through preclinical studies and/or initial clinical trials. Likewise, early, smaller-scale clinical trials may not be predictive of eventual safety or effectiveness in large-scale pivotal clinical trials.
Even if we do receive a Fast Track designation, and even though Fast 69 Table of Contents Track designation is designed to expedite the development and review of drugs that receive such designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures, and receiving a Fast Track designation does not provide assurance of ultimate FDA approval.
Even if we do receive a Fast Track designation, and even though Fast Track designation is designed to expedite the development and review of drugs that receive such designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures, and receiving a Fast Track designation does not provide assurance of ultimate FDA approval.
Any preclinical studies or clinical trials that we may conduct may not demonstrate the safety and efficacy necessary to obtain regulatory approval to market our product candidates.
Any preclinical studies or clinical trials that we may conduct or have conducted may not demonstrate the safety and efficacy necessary to obtain regulatory approval to market our product candidates.
Our ongoing and planned early-stage clinical trials will be with patients who have received one or more prior treatments and we expect that we would initially seek regulatory approval of our lead product candidates as second-line or third-line therapy.
Our ongoing and planned early-stage clinical trials will be with patients who have received one or more prior treatments and we expect that we would initially seek regulatory approval of our lead product candidates as second-line or 43 Table of Contents third-line therapy.
As a result, we cannot provide any assurance that a third party practicing in the general area of our technology will not present or has not presented a patent claim that covers one or more of our product candidates or products or their methods of use or manufacture.
As a result, we cannot provide any 56 Table of Contents assurance that a third party practicing in the general area of our technology will not present or has not presented a patent claim that covers one or more of our product candidates or products or their methods of use or manufacture.
In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial 59 Table of Contents adverse effect on the price of our common stock.
For product candidates that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.
For product candidates that have been 63 Table of Contents designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.
Any of these occurrences may significantly harm our business, financial condition, and prospects. The conclusions and analysis drawn from announced or published interim top-line and preliminary data from our clinical trials from time to time may change as more patient data become available.
Any of these occurrences may significantly harm our business, financial condition, and prospects. 41 Table of Contents The conclusions and analysis drawn from announced or published interim top-line and preliminary data from our clinical trials from time to time may change as more patient data become available.
We may be unable to obtain patents covering our product candidates that contain one or more claims that satisfy the requirements for listing in the Orange Book. Even if we submit a patent for listing in the Orange Book, the FDA may decline to list the patent or a generic drug manufacturer may challenge the listing.
We may be unable to obtain patents covering our product candidates that contain one or more claims that satisfy the requirements for listing in the Orange Book. Even if we submit a patent for listing in the Orange Book, the FDA may decline to list the patent or a generic drug manufacturer, the U.S.
In addition to such fines, we may be the subject of litigation and/or adverse publicity, which could have a material adverse effect on our reputation and business.
In addition to such fines, we may be subject to litigation and/or adverse publicity, which could have a material adverse effect on our reputation and business.
In the future, we may engage third parties for clinical trials outside of the United States, to sell our products abroad once we enter a commercialization phase and/or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals.
In the future, we may engage third parties for clinical trials outside of the United 71 Table of Contents States, to sell our products abroad once we enter a commercialization phase and/or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals.
We may also determine that it is necessary to settle these types of lawsuits in a manner that allows the generic company to enter our market prior to the expiration of our patent or otherwise in a manner that adversely affects the strength, validity or enforceability of our patents.
We may also determine that it is necessary to settle these types of lawsuits in a manner that allows the generic company to enter our 57 Table of Contents market prior to the expiration of our patent or otherwise in a manner that adversely affects the strength, validity or enforceability of our patents.
If the CROs or sites with whom we work do not successfully carry out their contractual duties, meet expected deadlines or 53 Table of Contents conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
If the CROs or sites with whom we work do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
We are subject to United States and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability 76 Table of Contents to compete in domestic and international markets. We can face criminal liability and other serious consequences for violations, which can harm our business.
We are subject to United States and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We can face criminal liability and other serious consequences for violations, which can harm our business.
The effects of the CCPA and the CPRA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.
The effects of the CCPA, as amended, are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.
The existence of comprehensive privacy laws in different states in the country will make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance.
The existence of comprehensive privacy laws in different states within the United States will make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance.
FDORA also gives the FDA increased authority to withdraw accelerated approval on an expedited basis if the sponsor fails to conduct such studies in a timely manner, send the necessary updates to the FDA, or if such post-approval studies fail to verify the drug’s predicted clinical benefit; and to take action, such as issuing fines, 70 Table of Contents against companies that fail to conduct with due diligence any post-approval confirmatory study or submit timely reports to the agency on their progress.
FDORA also gives the FDA increased authority to withdraw accelerated approval on an expedited basis if the sponsor fails to conduct such activities in a timely manner, send the necessary updates to the FDA, or if such post-approval studies fail to verify the drug's predicted clinical benefit; and to take action, such as issuing fines, against companies that fail to conduct with due diligence any post-approval confirmatory study or submit timely reports to the agency on their progress.
The first-to-file provision of the Leahy-Smith Act requires us to act promptly during the period from invention to filing of a patent application, as there is always a risk that a third party could file a patent application that could be blocking to our patent filings.
The first-to-file 54 Table of Contents provision of the Leahy-Smith Act requires us to act promptly during the period from invention to filing of a patent application, as there is always a risk that a third party could file a patent application that could be blocking to our patent filings.
Patient enrollment in clinical trials is also affected by other factors including: • the severity of the disease under investigation; • the eligibility criteria for the trial in question; • the perceived risks and benefits of the product candidates offered in the clinical trials; • the efforts to facilitate timely enrollment in clinical trials; • the patient referral practices of physicians; • the availability of suitable and sufficient staffing at clinical trial sites; • the burden on patients due to the scope and invasiveness of required procedures under clinical trial protocols, some of which may be inconvenient and/or uncomfortable; • the ability to monitor patients adequately during and after treatment; • the proximity and availability of clinical trial sites for prospective patients; and • the impact of the ongoing COVID-19 pandemic, which may affect the conduct of a clinical trial, including by slowing potential enrollment or reducing the number of eligible patients for clinical trials or by interfering with patients’ ability to return to the clinical trial site for required monitoring, procedures or follow-up.
Patient enrollment in clinical trials is also affected by other factors including: • the severity of the disease under investigation; • the eligibility criteria for the trial in question; • the perceived risks and benefits of the product candidates offered in the clinical trials; • the efforts to facilitate timely enrollment in clinical trials; • the patient referral practices of physicians; • the availability of suitable and sufficient staffing at clinical trial sites; • the burden on patients due to the scope and invasiveness of required procedures under clinical trial protocols, some of which may be inconvenient and/or uncomfortable; • the ability to monitor patients adequately during and after treatment; • the proximity and availability of clinical trial sites for prospective patients; and • the impact of any global health epidemics, such as the recent COVID-19 pandemic, which may affect the conduct of a clinical trial, including by slowing potential enrollment or reducing the number of eligible patients for clinical trials or by interfering with patients’ ability to return to the clinical trial site for required monitoring, procedures, or follow-up.
We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have 65 Table of Contents access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors, and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants.
We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors, and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants.
Whenever first-line therapy – usually chemotherapy, antibody drugs, tumor-targeted small molecules, immunotherapy, hormone therapy, radiation therapy, surgery, other targeted therapies, or a combination of these therapies – proves unsuccessful, second-line therapy may be administered. Second-line therapies often consist of more chemotherapy, radiation, antibody drugs, tumor-targeted small molecules, or a combination of these.
Whenever first-line therapy – usually chemotherapy, antibody drugs, tumor-targeted small molecules, immunotherapy, hormone therapy, radiation therapy, surgery, other targeted therapies, or a combination of these therapies – proves unsuccessful, second-line therapy may be administered. Second-line therapies often consist of more 51 Table of Contents chemotherapy, radiation, antibody drugs, tumor-targeted small molecules, or a combination of these.
Preclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.
Preclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that have believed their product candidates performed satisfactorily in 40 Table of Contents preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.
Accordingly, our efforts to protect our 66 Table of Contents intellectual property rights in these countries may be inadequate, which may have an adverse effect on our ability to successfully commercialize our product candidates in all of our expected significant foreign markets.
Accordingly, our efforts to protect our intellectual property rights in these countries may be inadequate, which may have an adverse effect on our ability to successfully commercialize our product candidates in all of our expected significant foreign markets.
In addition, we may be subject to state laws requiring notification of affected 73 Table of Contents individuals and state regulators in the event of a breach of personal information, which is a broader class of information than the health information protected by HIPAA.
In addition, we may be subject to state laws requiring notification of affected individuals and state regulators in the event of a breach of personal information, which is a broader class of information than the health information protected by HIPAA.
Our product candidates may target cancer, but cancer therapies are sometimes characterized as first-line, second-line, third-line, or subsequent line and the FDA often approves new therapies initially only for a particular line of use. When cancer is detected early enough, first-line therapy is sometimes adequate to cure the cancer or prolong life without a cure.
We are developing product candidates to target cancer, but cancer therapies are sometimes characterized as first-line, second-line, third-line, or subsequent line and the FDA often approves new therapies initially only for a particular line of use. When cancer is detected early enough, first-line therapy is sometimes adequate to cure the cancer or prolong life without a cure.
Competitors may use our and our licensors’ technologies in jurisdictions where we have not obtained patent protection or licensed patents to develop their own products and, further, may export otherwise infringing products to territories where we and our licensors have patent protection, but enforcement is not as strong as that in the United States or the European Union.
Competitors may use our and our licensors’ technologies in jurisdictions where we have not obtained patent protection or licensed patents to develop their own products and, further, may export otherwise infringing products to territories where we and our licensors have patent protection, but enforcement is not as strong as that in the United States or 60 Table of Contents the European Union.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. We currently lease approximately 111,611 square feet of office and laboratory space in Watertown, Massachusetts under a lease that expires in 2032. In June 2022, we entered into a sublease agreement for approximately 30,067 square feet of our office and laboratory space in Watertown, Massachusetts, which expires in 2025.
Biggest changeItem 2. Properties. We currently lease approximately 111,611 square feet of office and laboratory space in Watertown, Massachusetts under a lease that expires in 2032. We sublease approximately 31,039 square feet of our office and laboratory space in Watertown, Massachusetts, under a sublease arrangement that expires in 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of the outcome, litigation can have a material adverse effect on us because of defense and settlement costs, diversion of management resources, and other factors. 83 Table of Contents Item 4. Mine Safety Disclosures. Not applicable. 84 Table of Contents PART II
Biggest changeRegardless of the outcome, litigation can have a material adverse effect on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures. Not applicable. 79 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of equity securities by the issuer or affiliated purchasers Neither we nor any affiliated purchaser or anyone acting on our behalf or on behalf of an affiliated purchaser made any purchases of shares of our common stock during the year ended December 31, 2022. Item 6. [Reserved] Not applicable.
Biggest changePurchases of equity securities by the issuer or affiliated purchasers Neither we nor any affiliated purchaser or anyone acting on our behalf or on behalf of an affiliated purchaser made any purchases of shares of our common stock during the year ended December 31, 2023. Item 6. [Reserved] Not applicable.
Removed
Use of proceeds from registered securities In October 2020, our Registration Statement on Form S-1 (No. 333-248719) was declared effective by the SEC pursuant to which we issued and sold an aggregate of 11,040,000 shares of common stock, including 1,440,000 shares sold pursuant to the underwriters’ exercise of their over-allotment option, at a public offering price of $19.00 per share for aggregate net cash proceeds of $191.2 million, after deducting underwriting discounts, commissions, and offering costs.
Removed
No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates. The sale and issuance of 11,040,000 shares closed on October 6, 2020.
Removed
Jefferies LLC, Evercore Group L.L.C., BMO Capital Markets Corp., and UBS Securities LLC acted as joint book-running managers for the offering. Upon commencement, the offering did not terminate until the sale of all the shares offered.
Removed
Our use of the net offering proceeds through the date of the filing of this Annual Report on Form 10-K, is consistent with the use of proceeds described in our prospectus filed with the SEC pursuant to Rule 424(b)(4) in October 2020 , and there has been no material change in our planned use of the balance of the net proceeds from the offering described in the prospectus.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeGeneral and Administrative Expenses The following table summarizes our general and administrative expenses (in thousands): Years Ended December 31, 2022 2021 General and administrative expenses: Personnel expenses $ 30,546 $ 23,013 Professional fees 8,576 8,781 Facilities and supplies 2,371 548 Other expenses 1,296 912 Total general and administrative expenses $ 42,789 $ 33,254 The $9.5 million increase in general and administrative expense in the year ended December 31, 2022 as compared to the year ended December 31, 2021 is primarily driven by: • a $7.5 million increase in personnel expenses, representing salary and benefit costs, including a $4.3 million increase in salaries and wages, mainly driven by the full-year 2022 impact of the build-out of our general and administrative team, including our executive team and Business Development function, and a $2.9 million increase in stock-based compensation; and • a $1.8 million increase in facilities and supplies, which is primarily driven by our additional leased space.
Biggest changeThese were partially offset by: • a $8.6 million increase in clinical expenses as a result of the ongoing Phase 1/2 clinical trials of CFT7455 and CFT1946, as well as the Phase 1 clinical trial of CFT8634; • a $2.0 million increase in intellectual property and other corporate expenses; • a $1.7 million increase in personnel expenses representing salary and benefit costs, resulting from an increase in headcount to support our clinical programs; and • a $1.6 million increase in professional fees. 83 Table of Contents General and Administrative Expenses The following table summarizes our general and administrative expenses (in thousands): Years Ended December 31, 2023 2022 General and administrative expenses: Personnel expenses $ 30,244 $ 30,546 Professional fees 7,365 8,576 Facilities and supplies 2,076 2,371 Other expenses 2,396 1,296 Total general and administrative expenses $ 42,081 $ 42,789 The $0.7 million decrease in general and administrative expense in the year ended December 31, 2023 as compared to the year ended December 31, 2022 is primarily driven by a $1.2 million decrease in professional fees and a $0.6 million decrease in personnel and facilities costs, partially offset by a $1.1 million increase in other expenses.
Investing activities The $58.4 million of net cash provided by investing activities for the year ended December 31, 2022 was attributable to $63.9 million for the proceeds from maturities of marketable securities, net of purchases, and was offset by $5.5 million for the purchases of property and equipment.
The $58.4 million of net cash provided by investing activities for the year ended December 31, 2022 was attributable to $63.9 million for the proceeds from marketable securities, net of purchases, and was offset by $5.5 million for the purchases of property and equipment.
Although we do not expect our estimates of the incremental borrowing rates to generate material differences within a reasonable range of sensitivities, judgement is involved in selecting an appropriate rate, and the rate selected for our leases will have an impact on the value of the lease liability and corresponding right-of-use asset in the consolidated balance sheets. 93 Table of Contents Stock options We account for all stock-based awards granted to employees and non-employees as stock-based compensation expense at fair value.
Although we do not expect our estimates of the incremental borrowing rates to generate material differences within a reasonable range of sensitivities, judgement is involved in selecting an appropriate rate, and the rate selected for our leases will have an impact on the value of the lease liability and corresponding right-of-use asset in the consolidated balance sheets. 88 Table of Contents Stock options We account for all stock-based awards granted to employees and non-employees as stock-based compensation expense at fair value.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps at inception of the agreement or upon material modification of the agreement: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the 92 Table of Contents transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps at inception of the agreement or upon material modification of the agreement: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the 87 Table of Contents transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Additionally, we are developing CFT8919, an orally bioavailable, allosteric, mutant-selective BiDAC degrader of epidermal growth factor receptor, or EGFR, with an L858R mutation in NSCLC. In preclinical studies, CFT8919 demonstrated equipotent activity against EGFR mutations resistant to EGFR inhibition, including L858R-C797S, L858R-T790M, and L858R-T790M-C797S compared to L858R single mutation in Ba/F3 cell models in vitro .
Additionally, we are developing CFT8919, an orally bioavailable, allosteric, mutant-selective BiDAC degrader of epidermal growth factor receptor, or EGFR, with an L858R mutation in NSCLC. In preclinical studies, CFT8919 demonstrated equipotent anti-proliferation activity against EGFR mutations resistant to EGFR inhibition, including L858R-C797S, L858R-T790M, and L858R-T790M-C797S compared to L858R single mutation in Ba/F3 cell models in vitro.
Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include: • salaries, benefits, and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions; • expenses incurred under agreements with third parties, including contract research organizations and other third parties that conduct research, preclinical, and clinical activities on our behalf as well as third parties that manufacture our product candidates for use in our preclinical and clinical trials; • costs of outside consultants, including their fees, and related travel expenses; • the costs of laboratory supplies and acquiring materials for preclinical studies and clinical trials; • facility-related expenses, which include direct depreciation costs of equipment and allocated expenses for rent and maintenance of facilities and other operating costs; and • third-party licensing fees.
Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include: • salaries, benefits, and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions; • expenses incurred under agreements with third parties, including contract research organizations and other third parties that conduct research, preclinical, and clinical activities on our behalf as well as third parties that manufacture our product candidates for use in our preclinical and clinical trials; • costs of outside consultants, including their fees, and related travel expenses; • the costs of laboratory supplies and acquiring materials for preclinical studies and clinical trials; • the costs associated with wind down activities for CFT8634; • facility-related expenses, which include direct depreciation costs of equipment and allocated expenses for rent and maintenance of facilities and other operating costs; and • third-party licensing fees.
We simultaneously entered into an equity distribution agreement with Cowen and Company, LLC, as sales agent, to provide for the issuance and sale by us of up to $200.0 million of common stock from time to time in “at-the-market” offerings under the Registration Statement and related 89 Table of Contents prospectus filed with the Registration Statement, or the ATM Program.
We simultaneously entered into an equity distribution agreement with Cowen and Company, LLC, as sales agent, to provide for the issuance and sale by us of up to $200.0 million of common stock from time to time in “at-the-market” offerings under the Registration Statement and related prospectus filed with the Registration Statement, or the ATM Program.
Our revenues to date have been generated through research collaboration and license agreements. We recognize revenue over the expected performance period under each agreement. We expect that our revenue for the next several years will be derived primarily from our current collaboration agreements and any additional collaborations that we may enter into in the future.
Our revenues to date have been generated through research collaboration and license agreements. We recognize revenue over the expected performance period under each agreement. We expect that our 81 Table of Contents revenue for the next several years will be derived primarily from our current collaboration agreements and any additional collaborations that we may enter into in the future.
Although we may receive potential future milestone and royalty payments under our collaborations with Roche, Biogen, and Calico, we do not have any committed external source of funds as of December 31, 2022. Adequate additional funds may not be available to us on acceptable terms, or at all.
Although we may receive potential future milestone and royalty payments under our collaborations with Roche, Biogen, Calico, Betta Pharma, and Merck we do not have any committed external source of funds as of December 31, 2023. Adequate additional funds may not be available to us on acceptable terms, or at all.
To date, we have financed our operations primarily through the sale of preferred stock, public offerings of our common stock, and payments from collaboration partners. As of December 31, 2022 , we had cash, cash equivalents and marketable securities of approximately $337.1 million.
To date, we have financed our operations primarily through the sale of preferred stock, public offerings of our common stock, and payments from collaboration partners. As of December 31, 2023 , we had cash, cash equivalents and marketable securities of approximately $281.7 million.
Our future capital requirements will depend on many factors, including: • the progress, costs and results of ongoing and planned first-in-human Phase 1/2 trials for our lead product candidates, and any future clinical development of those lead product candidates; • the scope, progress, costs and results of preclinical and clinical development for our other product candidates, and development programs; • the number and development requirements of other product candidates that we pursue; • the progress and success of our collaborations with Roche, Biogen, and Calico, including whether or not we receive additional research support or milestone payments from our collaboration partners upon the achievement of milestones; • the costs, timing and outcome of regulatory review of our product candidates; • the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • our willingness and ability to establish additional collaboration arrangements with other biotechnology or pharmaceutical companies on favorable terms, if at all, for the development or commercialization of current or additional future product candidates; • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; and • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval. 91 Table of Contents As a result of the anticipated expenditures described above, we will need to obtain substantial additional financing to support our continuing operations and pursue our long-term business plan.
Our future capital requirements will depend on many factors, including: • the progress, costs, and results of ongoing and planned first-in-human Phase 1/2 trials for our lead product candidates and any future clinical development of those lead product candidates; • the scope, progress, costs, and results of preclinical and clinical development for our other product candidates and development programs; • the number and development requirements of other product candidates that we pursue; • the progress and success of our existing and any future collaborations with third party partners, including whether or not we receive additional research support or milestone payments from our collaboration partners upon the achievement of milestones; • the costs, timing, and outcome of regulatory review of our product candidates; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • our willingness and ability to establish additional collaboration arrangements with other biotechnology or pharmaceutical companies on favorable terms, if at all, for the development or commercialization of current or additional future product candidates; • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; and 86 Table of Contents • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval.
We completed IND-enabling activities for this program in December 2022. Beyond these initial product candidates, we are further diversifying our pipeline by developing new degraders against both clinically validated and currently undruggable targets for our own proprietary pipeline and for the pipeline we are developing in collaboration with Roche, Biogen and Calico.
Beyond these initial product candidates, we are further diversifying our pipeline by developing new degraders against both clinically validated and currently undruggable targets for our own proprietary pipeline and for the pipeline we are developing in collaboration with Merck, Biogen and Roche.
Other Income (Expenses) The following table summarizes our other income (expense) (in thousands): Years Ended December 31, 2022 2021 Other income (expense), net Interest expense and amortization of long-term debt—related party $ (2,216) $ (2,145) Interest and other income, net 3,575 387 Total other income (expense), net $ 1,359 $ (1,758) The $3.1 million increase in other income (expense) for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was driven by a $3.2 million increase in interest and other income resulting from higher interest earned on our investments during 2022.
Other Income (Expense) The following table summarizes our other income (expense) (in thousands): Years Ended December 31, 2023 2022 Other income (expense), net Interest and other income, net $ 9,812 $ 3,575 Interest expense and amortization of long-term debt—related party (1,373) (2,216) Loss on extinguishment of long term debt (621) — Total other income (expense), net $ 7,818 $ 1,359 The $6.5 million increase in other income (expense) for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was driven by a $6.2 million increase in interest and other income resulting from higher interest earned on our investments during 2023.
In January 2023, we initiated a first-in-human Phase 1/2 clinical trial of CFT1946 for the treatment of BRAF V600 mutant solid tumors including NSCLC, colorectal cancer and melanoma, and continue to enroll patients in the Phase 1 dose escalation portion of the trial.
In January 2023, we initiated a first-in-human Phase 1/2 clinical trial of CFT1946 for the treatment of BRAF V600X mutant solid tumors including NSCLC, CRC and melanoma.
Net cash used in operating activities for the year ended December 31, 2021 was driven primarily by: • our net loss of $83.9 million; • a $25.1 million change in deferred revenue due to the recognition of revenue under our collaboration agreements; • a $6.1 million change in prepaid expenses and other current assets; • a $1.2 million change in accounts receivable; and • a $1.2 million change in accounts payable.
Net cash used in operating activities for the year ended December 31, 2022 was driven primarily by: • our net loss of $128.2 million; • a $22.7 million decrease in deferred revenue due to the recognition of revenue under our collaboration agreements; and • a $3.3 million decrease in accounts payable.
Contractual obligations The following is a summary of our significant contractual obligations as of December 31, 2022 (in thousands): Total Less than 1 Year 1 to 3 Years 4 to 5 Years More than 5 Years Contractual obligations: Operating lease commitments (see Note 6) $ 97,617 $ 8,571 $ 17,921 $ 19,012 $ 52,113 Long-term debt (see Note 9) 12,500 3,000 9,500 — — Total contractual obligations $ 110,117 $ 11,571 $ 27,421 $ 19,012 $ 52,113 We enter into contracts in the normal course of business with third-party CROs for clinical trials, preclinical studies, manufacturing and other services, and products for operating purposes.
Contractual obligations The following is a summary of our significant contractual obligations as of December 31, 2023 (in thousands): Total Less than 1 Year 1 to 3 Years 4 to 5 Years More than 5 Years Operating lease commitments (see Note 6) $ 89,046 $ 8,828 $ 18,459 $ 21,008 $ 40,751 We enter into contracts in the normal course of business with third-party CROs for clinical trials, preclinical studies, manufacturing and other services, and products for operating purposes.
Specifically, we anticipate that our expenses will increase substantially in the future, if and as we: • continue our ongoing first-in-human Phase 1/2 trials and initiate and conduct planned first-in-human Phase 1/2 trials for our other lead product candidates; • advance additional product candidates into preclinical and clinical development; • continue to invest in our proprietary TORPEDO platform; • advance, expand, maintain, and protect our intellectual property portfolio; • hire additional clinical, regulatory, quality, and scientific personnel; • add operational, financial and management information systems and personnel to support our ongoing research, product development, potential future commercialization efforts, operations as a public company, and general and administrative roles; • seek marketing approvals for any product candidates that successfully complete clinical trials; and • ultimately establish a sales, marketing and distribution infrastructure, and scale up external manufacturing capabilities to commercialize any products for which we may obtain marketing approval.
Specifically, we anticipate that our expenses will increase in the future, if and as we: • continue our ongoing first-in-human Phase 1/2 trials; • advance additional product candidates into preclinical and clinical development; • continue to invest in our proprietary TORPEDO platform; • advance, expand, maintain, and protect our intellectual property portfolio; • manage staffing needs to meet the changing needs of the business as we advance additional product candidates or continue to develop existing product candidates. • seek marketing approvals for any product candidates that successfully complete clinical trials; and • ultimately establish a sales, marketing, and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we may obtain marketing approval.
In our preclinical studies, CFT7455 has demonstrated potent and selective protein degradation with favorable pharmacological properties. We initiated a first-in-human Phase 1/2 clinical trial for this product candidate in June 2021. In August 2021, the FDA, granted orphan drug designation to CFT7455 for the treatment of MM.
We initiated a first-in-human Phase 1/2 clinical trial for this product candidate in June 2021. In August 2021, the United States Food and Drug Administration, or FDA, granted orphan drug designation to CFT7455 for the treatment of MM.
For information on new accounting standards, see Note 2, Summary of significant accounting policies , to our consolidated financial statements in this Annual Report on Form 10-K.
As a result, if a different volatility had been used, stock-based compensation cost could have been materially impacted. New accounting pronouncements For information on new accounting standards, see Note 2, Summary of significant accounting policies , to our consolidated financial statements in this Annual Report on Form 10-K.
These amounts were offset by: • a $37.6 million of non-cash expense related to stock compensation expense, depreciation and amortization, and reduction in carrying amount of our right-of-use asset; • a $5.1 million change in accrued expenses and other current liabilities; and • a $4.2 million change in accounts receivable.
These amounts were partially offset by: • $35.3 million of non-cash expense related to stock compensation expense, depreciation and amortization, and reduction in carrying amount of our right-of-use asset; • a $2.7 million decrease in prepaid expenses and current and long term assets; • a $3.8 million increase in deferred revenue due to our new collaboration agreements; and • a $1.3 million increase in accrued expenses and other current liabilities.
Cash flows The following table summarizes our sources and uses of cash for the period presented (in thousands): Years Ended December 31, 2022 2021 Net change in cash, cash equivalents and restricted cash: Net used in operating activities $ (105,939) $ (86,965) Net cash provided by (used in) investing activities 58,422 (189,336) Net cash provided by financing activities 1,147 171,400 Net change in cash, cash equivalents and restricted cash $ (46,370) $ (104,901) Operating activities Net cash used in operating activities for the year ended December 31, 2022 was driven primarily by: • our net loss of $128.2 million; • a $22.7 million change in deferred revenue due to the recognition of revenue under our collaboration agreements; and • a $3.3 million change in accounts payable.
Cash flows The following table summarizes our sources and uses of cash for the period presented (in thousands): Years Ended December 31, 2023 2022 Net change in cash, cash equivalents and restricted cash: Net used in operating activities $ (106,838) $ (105,939) Net cash provided by (used in) investing activities 158,349 58,422 Net cash provided by financing activities 45,489 1,147 Net change in cash, cash equivalents and restricted cash $ 97,000 $ (46,370) Operating activities Net cash used in operating activities for the year ended December 31, 2023 was driven primarily by: • our net loss of $132.5 million; • a $10.3 million increase in accounts receivable; and • a $4.7 million decrease in the operating lease liability.
Hoffman-La Roche Ltd and Hoffman-La Roche Inc., or Roche, Biogen MA, Inc., or Biogen, and Calico Life Sciences LLC, or Calico, please see Note 8, Collaboration and license agreements , to the consolidated financial statements in this Annual Report on Form 10-K.
To date, we have not received any royalties under any of our existing collaboration agreements. For a description of our collaboration agreements with Merck, Betta Pharma, Roche, Biogen, and Calico Life Sciences LLC, or Calico, please see Note 8, Collaboration and license agreements , to the consolidated financial statements in this Annual Report on Form 10-K.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under Item 1A, Risk factors, in this Annual Report on Form 10-K. 85 Table of Contents Overview We are a clinical-stage biopharmaceutical company dedicated to advancing targeted protein degradation science to develop a new generation of small-molecule medicines to transform how disease is treated.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under Item 1A, Risk factors, in this Annual Report on Form 10-K.
The $171.4 million of net cash provided by financing activities for the year ended December 31, 2021 is primarily driven by: • $169.5 million of proceeds from our follow-on offering, net of issuance costs paid; and • $2.3 million of proceeds from exercises of stock options.
The $1.1 million of net cash provided by financing activities for the year ended December 31, 2022 is primarily driven by $0.8 million of proceeds from exercises of stock options.
Research and Development Expenses The following table summarizes our research and development expenses (in thousands): Years Ended December 31, 2022 2021 Research and development expenses: Preclinical and development expenses $ 42,033 $ 46,012 Personnel expenses 41,068 29,142 Facilities and supplies 13,978 8,805 Clinical expenses 10,643 2,661 Professional fees 7,047 5,625 Intellectual property 2,493 2,108 Other expenses 579 312 Total research and development expenses $ 117,841 $ 94,665 The $23.2 million increase in research and development expense in the year ended December 31, 2022 from the year ended December 31, 2021 is primarily driven by: • a $11.9 million increase in personnel expenses, representing salary and benefit costs, including a $5.6 million increase in stock-based compensation expense, driven primarily by the build-out of our clinical development team to support a greater number of clinical-stage programs; • a $8.0 million increase in clinical costs resulting from the ongoing Phase 1/2 clinical trials of CFT7455 and CFT8634, and start up activities related to our clinical trial of CFT1946; • a $5.2 million increase in facilities and supplies costs, primarily driven by our additional leased space; and • a $1.4 million increase in professional fees, which primarily consists of consulting costs for our development activities. 88 Table of Contents These were offset by a $4.0 million decrease in preclinical and development costs related to additional programs progressing to clinical stages.
Research and Development Expenses The following table summarizes our research and development expenses (in thousands): Years Ended December 31, 2023 2022 Research and development expenses: Personnel expenses $ 42,706 $ 41,068 Preclinical and development expenses 28,496 42,033 Clinical expenses 19,238 10,643 Facilities and supplies 13,594 13,978 Professional fees 8,605 7,047 Intellectual property and other expenses 5,067 3,072 Total research and development expenses $ 117,706 $ 117,841 The $0.1 million decrease in research and development expense in the year ended December 31, 2023 from the year ended December 31, 2022 is primarily driven by a $13.5 million decrease in preclinical and development costs related to additional programs progressing to clinical stages.
In May 2022, we initiated the first-in-human Phase 1/2 clinical trial of this product candidate. In January 2023, we shared initial PK and PD data from the initial dose escalation cohorts of the Phase 1/2 trial that demonstrate dose proportional exposure, strong oral bioavailability and deep BRD9 degradation.
In January 2024, we shared PK and PD data from the first two dose escalation cohorts of the ongoing Phase 1/2 trial demonstrating dose proportional exposure and oral bioavailability, which are associated with deep BRAF degradation. We continue to progress the ongoing Phase 1/2 clinical trial in BRAF V600X cancers, including melanoma, NSCLC, and CRC.
Other income (expense) Other income (expense), net primarily consists of the following: • interest expense and amortization of our long-term debt; and • interest and other income earned on our cash, cash equivalents, and marketable securities and accretion of discount on marketable securities. 87 Table of Contents Results of operations Comparison of years ended December 31, 2022 and 2021 Revenue Revenue from our collaboration and license agreements consisted of the following (in thousands): Years Ended December 31, 2022 2021 Revenue from collaboration agreements: Biogen Agreement $ 19,214 $ 15,720 Calico Agreement 6,943 10,686 Roche Agreement 4,939 19,379 Total revenue from collaboration agreements $ 31,096 $ 45,785 The $14.7 million decrease in revenue in the year ended December 31, 2022 as compared to the year ended December 31, 2021 is primarily driven by: • a $14.4 million decrease in revenue recognized under the Roche Agreement primarily as a result of the termination of the Roche Agreement as to the BRAF target; and • a $3.7 million decrease in revenue recognized under the Calico Agreement, primarily driven by a decrease in full-time equivalent, or FTE, reimbursements and the impact of the one-year extension of the term of the Calico Agreement’s with respect to one of the research programs in that collaboration.
Results of operations Comparison of years ended December 31, 2023 and 2022 Revenue 82 Table of Contents Revenue from our collaboration and license agreements consisted of the following (in thousands): Years Ended December 31, 2023 2022 Revenue from collaboration agreements: Biogen Agreement $ 10,623 $ 19,214 Roche Agreement 9,063 4,939 Calico Agreement 1,070 6,943 Total revenue from collaboration agreements $ 20,756 $ 31,096 The $10.3 million decrease in revenue in the year ended December 31, 2023 as compared to the year ended December 31, 2022 is primarily driven by: • a $8.6 million decrease in revenue recognized under the Biogen Agreement primarily as a result of the research term of the Biogen Agreement ending in June 2023, with additional research activities being performed on the nominated targets for a period of time period following the end of the research term, all as contemplated by the Biogen Agreement; and • a $5.9 million decrease in revenue recognized under the Calico Agreement, as a result of the performance obligation and transaction price becoming fully satisfied as of March 31, 2023.
These amounts were offset by: • a $26.3 million of non-cash expense related to stock compensation expense, depreciation, accretion of discount on investments, and reduction in carrying amount of our right-of-use asset; and • a $4.4 million change in accrued expenses and other liabilities.
These amounts were partially offset by: • a $37.6 million of non-cash expense related to stock compensation expense, depreciation, and reduction in carrying amount of our right-of-use asset; • a $5.1 million increase in accrued expenses and other liabilities; and • a $4.2 million decrease in accounts receivable. 85 Table of Contents Investing activities The $158.3 million of net cash provided by investing activities for the year ended December 31, 2023 was attributable to $160.1 million for the proceeds from maturities of marketable securities, net of purchases, and was offset by $1.7 million for the purchases of property and equipment.
We continue to enroll patients in the Phase 1 dose escalation portion of the ongoing clinical trial. We are also developing CFT1946, an orally bioavailable BiDAC degrader specifically to be potent and selective against BRAF V600 mutant targets to treat melanoma, NSCLC, CRC, and other malignancies that harbor this mutation.
Our next most advanced product candidate, CFT1946, is an orally bioavailable BiDAC degrader designed to be potent and selective against BRAF V600X mutant proteins to treat melanoma, non-small cell lung cancer, or NSCLC, colorectal cancer, or CRC, and other malignancies that harbor this mutation.
Our most advanced product candidate, CFT7455, is an orally bioavailable MonoDAC degrader of protein targets called IKZF1 and IKZF3, currently in clinical development for MM, and NHLs. We have selected IKZF1 and IZKF3 as our initial targets because they have a strong mechanistic rationale, a well-defined biology, and targeting them with a novel degrader may address a significant unmet need.
There is a strong mechanistic rationale and well-defined biology to target IKZF1 and IKZF3 and targeting them with a novel degrader has the potential to address a significant unmet need. In our preclinical studies, this product candidate has demonstrated potent and selective protein degradation with favorable pharmacological properties.
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Historically, the focus in our industry has been on discovering and developing small molecule medicines that inhibit the activity of disease-causing proteins. However, that approach has been limited to only those proteins where chemistry can be used to bind to active sites on the protein and effectively inhibit its activity, which accounts for less than 15% of the human proteome.
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Overview We are a clinical-stage biopharmaceutical company dedicated to delivering on the promise of TPD science to create a new generation of small-molecule medicines that transform patients’ lives.
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Furthermore, for those targets where inhibitors have been approved, resistance mechanisms emerge that ultimately render inhibitor approaches ineffective over time.
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By leveraging our proprietary TORPEDO platform, we have the capability to efficiently design and optimize small molecule protein degraders that are highly active against their desired targets by harnessing the body’s natural process for destroying unwanted proteins.
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We leverage our proprietary technology platform, which we call TORPEDO, to efficiently design and optimize small-molecule medicines that harness the body’s natural protein recycling system to rapidly degrade disease-causing protein, offering the potential to overcome resistance mechanisms, target the 85% of the human proteome deemed undruggable, and improve patient outcomes.
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We believe our novel oral product candidates have the potential to overcome drug resistance often seen with inhibitors, target currently “undruggable” targets and improve patient outcomes. Our preclinical and clinical pipeline includes MonoDAC and BiDAC degraders that have the potential to target disease causing proteins for various cancers and other indications in areas of unmet patient need.
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We are using our TORPEDO platform to advance multiple targeted oncology programs to the clinic while expanding the platform to deliver the next wave of medicines for difficult-to-treat diseases and ultimately improve treatment options for patients.
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Our wholly owned pipeline is focused on oncology and our partnership strategy allows us to explore other indications. Our most advanced product candidate, CFT7455, is an orally bioavailable MonoDAC degrader of protein targets called IKZF1 and IKZF3, currently in clinical development for multiple myeloma, or MM, and non-Hodgkin lymphoma, or NHL.
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We presented initial clinical data from Arm A at the American Association for Cancer Research Annual Meeting in April 2022. These data showed that single agent CFT7455 resulted in deep and durable degradation of IKZF1/3, as quantified by mass spectrometry, and meaningful decreases in serum free light chain.
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In December 2023, we 80 Table of Contents presented positive clinical data from the dose escalation portion of the CFT7455 Phase 1/2 trial as a monotherapy and in combination with dexamethasone in MM. We continue to progress the ongoing Phase 1/2 clinical trial in MM and NHL.
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Neutropenia, a known on-target toxicity associated with IKZF1/3 degraders, was dose-limiting at the 50 μg starting dose on a dosing schedule with a seven-day drug holiday over a a 28-day cycle. As a result, the dosing schedule was modified to include a 14-day drug holiday over a 28-day cycle.
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In preclinical studies, CFT1946 is more efficacious than the standard of care therapies in CRC and NSCLC BRAF V600X xenograft models and in a melanoma patient-derived xenograft, or PDX, BRAF inhibitor resistance model. Additionally, CFT1946 is active in a preclinical metastatic melanoma central-nervous system, or CNS, model.
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We continue to enroll patients in the Phase 1 dose escalation portion of the ongoing Phase 1/2 clinical trial at the modified schedule. Our next most advanced product candidate, CFT8634, is an orally bioavailable BiDAC degrader of a protein target called BRD9, currently in clinical development for synovial sarcoma and SMARCB1-null solid tumors.
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In May 2023, we entered into a license and collaboration agreement with Betta Pharma to collaborate on the development and commercialization of CFT8919 in mainland China, Hong Kong SAR, Macau SAR and Taiwan, with us retaining rights to develop and commercialize CFT8919 in the rest of the world.
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Historically, BRD9 has been considered an “undruggable” target due to the inability of bromodomain inhibitors to effectively treat cancers dependent on BRD9. Unlike BRD9 inhibition, BRD9 degradation has been shown to be efficacious in preclinical models of synovial sarcoma.
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Additionally in June 2023, the FDA cleared the investigational new drug, or IND, application for CFT8919 and in December 2023, Betta Pharma received clinical trial application, or CTA, clearance for CFT8919 from China's National Medical Product Administration.
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In preclinical studies, CFT8634 has shown potent anti-tumor activity in synovial sarcoma cell lines but does not appear to affect normal cells. Further, CFT8634 has shown in vivo activity in synovial sarcoma xenograft models when dosed orally. In March 2022, the FDA granted orphan drug designation to CFT8634 for the treatment of soft tissue sarcoma.
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We also believe there are many therapeutic areas and indications where leveraging our TORPEDO platform to develop novel degraders may be advantageous. Recent Developments On January 9, 2024, we announced 2024 business priorities to execute against our strategic plan. As a result of these revised priorities, we restructured our operations and reduced our workforce by approximately 30%.
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In preclinical studies, CFT1946 is active in vivo and in vitro in models with BRAF V600E-driven disease and in models resistant to BRAF inhibitors.
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Additionally, we announced the sale of 13,686,743 shares of our common stock at an average purchase price of $5.42 through the company's at-the-market (or ATM) facility, resulting in net proceeds of $71.8 million. On January 4, 2024, we announced the closing of the transaction contemplated under the previously announced stock purchase agreement with a wholly-owned subsidiary of Betta Pharma.
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We also believe there are many other therapeutic areas and indications where leveraging our TORPEDO platform to develop novel degraders may be advantageous. 86 Table of Contents Financial operations overview Revenues To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future.
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At the closing, we sold an affiliate of Betta Pharma 5,567,928 shares of our common stock at a purchase price of $4.49 per share, for an aggregate investment of $25 million.
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To date, we have not received any royalties under any of our existing collaboration agreements. For a description of our collaboration agreements with F.
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The purchase price represented a 25% premium over the 60-trading-day volume weighted average through the date that was two business days prior to the entry into the stock purchase agreement on May 29, 2023.
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These were offset by a $3.5 million increase in revenue recognized under the Biogen Agreement, primarily driven by continued progress against the nominated targets and the achievement of an additional Biogen Agreement milestone in 2022.
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On December 12, 2023, we presented positive clinical data from the dose escalation portion of our Phase 1/2 trial of CFT7455 as a monotherapy and in combination with dexamethasone in MM. We continue to progress the ongoing Phase 1/2 clinical trial in MM and NHL.
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In June 2021, we completed a follow-on public offering, at which time we sold 4,887,500 shares of our common stock, which number includes 637,500 shares of common stock that were issued to the underwriters when they exercised in full their overallotment option.
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On December 12, 2023, we announced that we entered into an exclusive license and collaboration agreement with Merck to develop degrader-antibody conjugates, or DACs, an emerging modality designed to selectively target and neutralize disease-causing proteins in cancer cells. On November 20, 2023, we announced the appointment of Owen Hughes to our board of directors.
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Net proceeds from the follow-on offering, including the exercise in full of the underwriters’ option to purchase additional shares, were $169.5 million, after deducting underwriting discounts and commissions, and expenses of $11.3 million.
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On November 1, 2023, we announced a portfolio prioritization decision not to advance CFT8634 beyond the Phase 1 dose escalation portion of the clinical trial. Components of Operating Results Revenues To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future.
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As of December 31, 2022, we have not made any sales under the ATM Program.
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Other income (expense) Other income (expense), net primarily consists of the following: • interest expense and amortization of our long-term debt; • loss on extinguishment of debt; and • interest and other income earned on our cash, cash equivalents, and marketable securities and accretion of discount on marketable securities.
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The $189.3 million of net cash used in investing activities for the year ended December 31, 2021 was attributable to: • $188.1 million for the purchases of marketable securities, net of maturities; and • $1.3 million for the purchases of property and equipment. 90 Table of Contents Financing activities The $1.1 million of net cash provided by financing activities for the year ended December 31, 2022 is primarily driven by proceeds from exercises of stock options.
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These were partially offset by a $4.1 million increase in revenue recognized under the Roche Agreement, resulting from our 2023 completion of research activities for a nominated target.
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As a result, if a different volatility had been used, stock-based compensation cost could have been materially impacted. New accounting pronouncements We became a smaller reporting company on December 31, 2022 based on the market value of our common stock held by non-affiliates as of the last day of the second quarter in 2022.
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Income tax expense For the year ended December 31, 2023, income tax expense was $1.3 million, compared to no income tax expense in the year ended December 31, 2022.
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Prior to that, we were a large accelerated filer as of December 31, 2021. We gained the ability to delay adoption of new or revised accounting pronouncements when we became a smaller reporting company as of December 31, 2022.
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This was primarily the result of the $1.0 million withholding tax paid to the Chinese tax authority related to the upfront payment received under the Betta License Agreement and the $0.2 million tax withholding accrued related to the Betta milestone payment received in January (see Note 8 and Note 12).
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The Company has sold a total of 13,686,743 shares of its common stock at an average price of $5.42 per share for proceeds, net of commissions and fees, of $71.8 million. For the year ended December 31, 2023, 11,186,142 shares of common stock, for net proceeds of $57.7 million, settled under the ATM Program.
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In January 2024, 2,500,601 shares were settled for net proceeds of $14.1 million.
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(see Note 10). 84 Table of Contents In connection with the execution of the Betta Pharma License Agreement, the Company, Betta Pharma, and an affiliate of Betta Pharma, (Betta Investment (Hong Kong) Limited, or Betta Investment), entered into a stock purchase agreement dated May 29, 2023 , or the Betta Stock Purchase Agreement pursuant to which Betta Investment agreed to purchase 5,567,928 shares of the Company's common stock, or the Shares, for an aggregate purchase price of approximately $25.0 million, or $4.49 per share, which represented a 25% premium over the 60-trading-day volume weighted average closing price as of two trading days prior to the effective date of the Betta Stock Purchase Agreement.
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The Betta Stock Purchase Agreement has certain restrictions customary to agreements of this nature. Closing under the Betta Stock Purchase Agreement occurred in January 2024 (see Note 8) .
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Financing activities The $45.5 million of net cash provided by financing activities for the year ended December 31, 2023 is primarily driven by proceeds from our at-the-market offering of $57.7 million, offset by the prepayment of the remaining principal balance on the Term Loan with Perceptive Credit Holdings III, LP, an affiliate of Perceptive Advisors LLC, of $12.5 million.
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As a result of the anticipated expenditures described above, we will need to obtain substantial additional financing to support our continuing operations and pursue our long-term business plan.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2022, we had marketable securities of $307.4 million. Our marketable securities are short-term in nature with a weighted-average maturity date of 0.6 years. As such, while these interest-earning instruments carry a degree of interest rate risk, historical fluctuations in interest income have not been significant for us.
Biggest changeAs of December 31, 2023, we had marketable securities of $155.1 million. Our marketable securities are short-term in nature with a weighted-average maturity date of 0.6 years. As such, while these interest-earning instruments carry a degree of interest rate risk, historical fluctuations in interest income have not been significant for us.

Other CCCC 10-K year-over-year comparisons