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

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Paragraph-level year-over-year comparison of Context 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.

+270 added−277 removedSource: 10-K (2024-03-21) vs 10-K (2023-03-22)

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

270 paragraphs added · 277 removed · 200 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

57 edited+20 added−15 removed108 unchanged
Biggest changeThe Integral License Agreement shall continue in full force and effect, until either (a) royalty payments for all products in all territories have expired or (b)(i) we provide written notice of termination, (ii) during three successive quarters we do not use commercially reasonable efforts to develop a product, (iii) if the agreement is breached or (iv) if a party goes bankrupt.
Biggest changeThe Integral License Agreement shall continue in full force and effect, until either (a) royalty payments for all products in all territories have expired or (b)(i) we provide written notice of termination, (ii) during three successive quarters we do not use commercially reasonable efforts to develop a product, (iii) if the agreement is breached or (iv) if a party goes bankrupt. 6 Table of Contents On March 20, 2023, we amended the Integral License Agreement to remove the previously agreed to second milestone payment and to change the amount of the third milestone payment to increase such payment by the amount of the prior second milestone payment and to add payment for third-party research funding obtained and used by Integral in connection with the development of CTIM-76.
One third-party payor’s decision to cover a particular product or procedure using the product does not ensure that other payors will also provide coverage for the product. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate revenue levels.
One third-party payor’s decision to cover a particular product or procedure using the product does not ensure that other payors will also provide coverage for the product. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate revenue level.
These include: • the FDA’s quality system regulation, or QSR, which requires manufacturers, including third party manufacturers, to follow stringent design, testing, production, control, supplier/contractor selection, complaint handling, documentation and other quality assurance procedures during all aspects of the manufacturing process; • labeling and marketing regulations which require that promotion is truthful, not misleading, fairly balanced and provide adequate directions for use and that all claims are substantiated; • advertising and promotion requirements, including FDA prohibitions against the promotion of products for uncleared, unapproved or off-label uses and FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; 11 Table of Conten ts • restrictions on sale, distribution or use; • product establishment, registration and listing requirements and reporting requirements; • recall requirements, including a mandatory recall if there is a reasonable probability that a product would cause serious adverse health consequences or death; • an order of repair, replacement or refund; and • post-market surveillance activities and regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data.
These include: • the FDA’s quality system regulation, or QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, production, control, supplier/contractor selection, complaint handling, documentation and other quality assurance procedures during all aspects of the manufacturing process; • labeling and marketing regulations which require that promotion is truthful, not misleading, fairly balanced and provide adequate directions for use and that all claims are substantiated; 11 Table of Contents • advertising and promotion requirements, including FDA prohibitions against the promotion of products for uncleared, unapproved or off-label uses and FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; • restrictions on sale, distribution or use; • product establishment, registration and listing requirements and reporting requirements; • recall requirements, including a mandatory recall if there is a reasonable probability that a product would cause serious adverse health consequences or death; • an order of repair, replacement or refund; and • post-market surveillance activities and regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data.
As a part of the Integral License Agreement, Integral will be eligible to receive remaining development and regulatory milestone payments totaling approximately $55 million (of which a $0.5 development milestone was achieved in the second quarter of 2022 and subsequently paid), sales milestone payments totaling up to $130.0 million, and tiered royalties of up to 12% of net sales of certain products developed under the Integral License Agreement.
As a part of the Integral License Agreement, Integral was eligible to receive remaining development and regulatory milestone payments totaling approximately $55 million (of which a $0.5 development milestone was achieved in the second quarter of 2022 and subsequently paid), sales milestone payments totaling up to $130.0 million, and tiered royalties of up to 12% of net sales of certain products developed under the Integral License Agreement.
Upon completion of specific performance-based milestones, we and Tyligand entered into a license agreement (the “Tyligand License Agreement”) whereby Tyligand was granted the exclusive right to ONA-XR and is solely responsible for the development and commercialization of ONA-XR in China, Hong Kong and Macau (the “Territory”). We retain rights in the rest of the world to commercialize ONA-XR.
Upon completion of specific performance-based milestones, we and Tyligand entered into a license agreement (the “Tyligand License Agreement”) whereby Tyligand was granted the exclusive right to ONA-XR and is solely responsible for the development and commercialization of ONA-XR in China, Hong Kong and Macau (the “Territory”). We retained rights in the rest of the world to commercialize ONA-XR.
The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring us to maintain books and records, which in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the corporation, including international subsidiaries, if any, and to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the 15 Table of Conten ts preparation of financial statements.
The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring us to maintain books and records, 15 Table of Contents which in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the corporation, including international subsidiaries, if any, and to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements.
We make available free of charge under the “Investors & News” — “Financials” — “SEC Filings” section of our website all of our filings with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to such documents, each of which is provided on our website as soon as reasonably practicable after we electronically file or furnish, as applicable, the information with the SEC. 16 Table of Conten ts
We make available free of charge under the “Investors & News” — “Financials” — “SEC Filings” section of our website all of our filings with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to such documents, each of which is provided on our website as soon as reasonably practicable after we electronically file or furnish, as applicable, the information with the SEC. 16 Table of Contents
As shown below, CTIM-76 exhibits excellent selectivity and specificity for CLDN6. Preclinical studies of CTIM-76 show it effectively maintains a strong tumor binding property and anti-tumor activity attributable to a synergistic effect of both Claudin 6 antibody and CD3 antibody while avoiding systemic immunotoxicity commonly seen with CD3 antibodies as a drug class.
As shown below, CTIM-76 exhibits excellent selectivity and specificity for CLDN6. Preclinical studies of CTIM-76 show it effectively maintains a strong tumor binding property and anti-tumor activity attributable to a synergistic effect of both CLDN6 binding and CD3 binding while avoiding systemic immunotoxicity commonly seen with CD3 antibodies as a drug class.
In addition, $2.0 million will be payable upon the completion of scale-up of the first cumulative 100 kilograms of the Good Manufacturing Practices (“GMP”)-grade compound and $3.0 million upon our completion of scale-up of the first cumulative 300 kilograms of the GMP-grade compound.
In addition, $2.0 million would be payable upon the completion of scale-up of the first cumulative 100 kilograms of the Good Manufacturing Practices (“GMP”)-grade compound and $3.0 million upon our completion of scale-up of the first cumulative 300 kilograms of the GMP-grade compound.
The patent positions of companies like ours are generally uncertain and involve complex legal and factual questions. No consistent policy regarding the scope of claims allowable in patents in the field of oncology has emerged in the United States. The relevant patent laws and their interpretation outside of the United States is also uncertain.
The patent positions of companies like ours are generally uncertain and involve complex legal and factual questions. No consistent policy regarding the scope of claims allowable in patents in the field of oncology has emerged in the United States. The relevant patent laws and their interpretation outside of the United States is also 10 Table of Contents uncertain.
Violations of this law are punishable by up to five years in prison, criminal fines, administrative civil money penalties, and exclusion from participation in federal healthcare programs. In addition, many states have adopted laws similar to the Anti-Kickback Statute.
Violations of this law are punishable by up to five years in prison, criminal fines, administrative civil money penalties, and 14 Table of Contents exclusion from participation in federal healthcare programs. In addition, many states have adopted laws similar to the Anti-Kickback Statute.
Recently, a class of bispecific antibodies (TSAxCD3) with a native immunoglobulin format has emerged that can efficiently trigger T cell–mediated killing of tumor cells by linking a T cell to a tumor cell and activating the CD3/t cell receptor complex, as shown above. 3 Table of Conten ts CLDN6 expression in cancer versus normal tissue Source: Cancer RNAseq data from The Cancer Genome Atlas (TCGA); normal tissue RNAseq data from the Genotype-Tissue Expression (GTEx) project.
Recently, a class of bispecific antibodies (TSAxCD3) with a native immunoglobulin format has emerged that can efficiently trigger T-cell-mediated killing of tumor cells by linking a T cell to a tumor cell and activating the CD3/T cell receptor complex, as shown above. 2 Table of Contents CLDN6 expression in cancer versus normal tissue Source: Cancer RNAseq data from The Cancer Genome Atlas (TCGA); normal tissue RNAseq data from the Genotype-Tissue Expression (GTEx) project.
Due to the breadth of these federal and state anti-kickback laws and the potential for additional legal or regulatory change in this area, it 14 Table of Conten ts is possible that our sales and marketing practices and/or our relationships with physicians might be challenged under anti-kickback laws, which could harm us.
Due to the breadth of these federal and state anti-kickback laws and the potential for additional legal or regulatory change in this area, it is possible that our sales and marketing practices and/or our relationships with physicians might be challenged under anti-kickback laws, which could harm us.
The legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.
The legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than 13 Table of Contents the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.
Our granted U.S. patents, referenced above, have claims directed to our ONA-XR product candidate as pharmaceutical compositions, formulations, related methods of use, and methods of making. These U.S. patents are expected to expire between 2034 and 2036, subject to any extensions or disclaimers.
Our granted U.S. patents, referenced above, have claims directed to our ONA-XR product candidate as pharmaceutical compositions, formulations, related methods of use, and methods of making. These U.S. patents are expected to expire between 2035 and 2037, subject to any extensions or disclaimers.
Our preclinical program, CTIM-76, is an anti-CD3 x anti-Claudin 6 (“CLDN6”) antigen bispecific monoclonal antibody (“bsAb”) that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6. CLDN6 is a tight junction membrane protein target expressed in multiple solid tumors, including ovarian, lung, and testicular, and absent from or expressed at low levels in healthy adult tissues.
Our preclinical program, CTIM-76, is an anti-Claudin 6 (“CLDN6”) x anti-CD3 bispecific antibody (“bsAb”) that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6. CLDN6 is a tight junction membrane protein target expressed in multiple solid tumors and absent from or expressed at low levels in healthy adult tissues.
Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our technology or product candidates and could affect the value of such intellectual 10 Table of Conten ts property.
Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our technology or product candidates and could affect the value of such intellectual property.
We shall continue to pay royalties on a country-by-country and licensed-by-licensed product basis, until the later of: (i) the expiration of the patent covering such product in such territory, (ii) the expiration of any regulatory exclusivity granted with respect to a product in such territory and (iii) 10 years from the first commercial sale of such product in such country.
We were also required to pay royalties on a country-by-country and licensed-by-licensed product basis, until the later of: (i) the expiration of the patent covering such product in such territory, (ii) the expiration of any regulatory exclusivity granted with respect to a product in such territory and (iii) 10 years from the first commercial sale of such product in such country.
There is high sequence homology (~95%) between CLDN6 and CLDN9 in the extracellular loops, making the isolation of a CLDN6-specific antibody challenging. As shown below, CTIM-76 preferentially targets CLDN6, 4 Table of Conten ts with minimal activity against CLDN9-expressing cells.
There is high sequence homology (~95%) between CLDN6 and CLDN9 in the extracellular loops, making the isolation of a CLDN6-specific antibody challenging. As shown below, CTIM-76 preferentially targets CLDN6, 3 Table of Contents with minimal activity against CLDN9-expressing cells.
Preclinical data CTIM-76 is a Claudin 6 and CD3 bispecific antibody capable of binding to tumor cells expressing Claudin 6 and stimulating intra-tumoral T cells by the CD3 arm that is designed to be activated only upon tumor engagement while silent elsewhere. Claudin 6 is expressed on multiple solid tumors such as ovarian, lung and testicular.
Preclinical data CTIM-76 is a CLDN6xCD3 bsAb capable of binding to tumor cells expressing CLDN6 and stimulating intra-tumoral T cells by the CD3 arm that is designed to be activated only upon tumor engagement while silent elsewhere. CLDN6 is expressed on multiple solid tumors such as ovarian, endometrial, lung and testicular.
For CTIM-76, our CLDN6xCD3 bispecific antibody, we are aware of several companies developing antibodies against this target, including Abbvie Inc., Amgen, Astellas Pharma Inc., AstraZeneca plc, BioNTech, Chugai Pharmaceutical Co., Ltd., Daiichi Sankyo Company, Limited (“Daiichi Sankyo”), I-Mab, NovaRock Biotherapeutics Inc., and Xencor. These companies are developing CDLN6 products in naked antibody, bispecific, CAR-T, and mRNA vaccine formats.
For CTIM-76, our CLDN6xCD3 bispecific antibody, we are aware of several companies developing antibodies against this target, including Abbvie Inc., Amgen, Astellas Pharma Inc., AstraZeneca plc, BioNTech, Chugai Pharmaceutical Co., Ltd., Daiichi Sankyo Company, Limited (“Daiichi Sankyo”), I-Mab, NovaRock Biotherapeutics Inc., TORL, and Xencor.
As of March 13, 2023, our patent portfolio with respect to our ONA-XR product candidate consisted of four issued U.S. patents, four pending U.S. patent applications, three unpublished PCT applications, ten granted foreign patents (including one granted Canadian patent, two granted Chinese patents, one granted Japanese patent, four granted Australian patents, one granted Hong Kong patent, and one granted Mexican patent), and 16 pending foreign patent applications (including one Australian application, three Canadian applications, two Chinese applications, three European regional patent applications, three Hong Kong applications,two Japanese applications, and two Korean applications).
As of March 1, 2024, our patent portfolio with respect to our ONA-XR product candidate consisted of four issued U.S. patents, three published PCT applications, four granted foreign patents (including one granted Australian patent, one granted Canadian patent, one granted Chinese patent, and one granted Hong Kong patent), eight pending foreign patent applications (including two Chinese applications, two Hong Kong applications, two Japanese applications, one Korean application, and one European regional patent application), and one pending U.S. application.
Item 1. Business Overview We are a biopharmaceutical company dedicated to improving the lives of patients living with solid tumors. Profound advancements in oncology drug development have expanded the treatment options available to cancer patients, yet the need for additional treatment options exists.
Item 1. Business Overview We are a biopharmaceutical company advancing medicines for solid tumors. Profound advancements in oncology drug development have expanded the treatment options available to cancer patients, yet the need for additional treatment options exists.
Government Regulation Regulatory Pathway We expect that CTIM-76 will be classified and regulated by the FDA as a biologic. We expect that ONA-XR will be classified and regulated by the FDA as a drug. A new drug application (“NDA”) is required to introduce a drug into interstate commerce.
Government Regulation Regulatory Pathway We expect that CTIM-76 will be classified and regulated by the FDA as a biologic. We expect that any small molecule product that we may develop will be classified and regulated by the FDA as a drug. A new drug application (“NDA”) is required to introduce a drug into interstate commerce.
Per the Tyligand License Agreement, Tyligand shall pay us a non-refundable, non-creditable royalty at a rate in the mid-single digits of the net sales of each product in the Territory in each calendar quarter commencing with the first commercial sale of such product in the field in the Territory and ending upon the latest of (i) the sale of a generic product in the Territory and (ii) 15 years after the date of the first commercial sale of product in the Territory. 6 Table of Conten ts Collaboration and Licensing Agreement with Integral Molecular In April 2021, we entered into a collaboration and licensing agreement with Integral Molecular, Inc.
Per the Tyligand License Agreement, Tyligand shall pay us a non-refundable, non-creditable royalty at a rate in the mid-single digits of the net sales of each product in the Territory in each calendar quarter commencing with the first commercial sale of such product in the field in the Territory and ending upon the latest of (i) the sale of a generic product in the Territory and (ii) 15 years after the date of the first commercial sale of product in the Territory.
In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar products. Furthermore, our competitors may independently develop similar products that are outside the scope of the rights granted under any issued patents. For these reasons, we may face competition with respect to our product candidates.
Furthermore, our competitors may independently develop similar products that are outside the scope of the rights granted under any issued patents. For these reasons, we may face competition with respect to our product candidates.
To our knowledge, Amgen, BioNTech, and Daiichi Sankyo have the only CLDN6 products in clinical trials. Intellectual property 9 Table of Conten ts We strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to our business, including seeking, maintaining and defending our patent rights.
Multiple products are in clinical development, including those from Amgen, BioNTech, Daiichi Sankyo, and TORL. 9 Table of Contents Intellectual property We strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to our business, including seeking, maintaining and defending our patent rights.
For further information and to understand these material differences, you should read the relevant reports. We believe it is useful to compare the in vitro results achieved by BioNTech and Xencor’s product candidates and approaches as a proxy to understand the estimated selectivity differences of these therapies.
We believe it is useful to compare the in vitro results achieved by Amgen, BioNTech, TORL, and Xencor’s product candidates and approaches as a proxy to understand the estimated selectivity differences of these therapies.
In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA covered entities and their business associates for compliance. Many states have laws that protect the privacy and security of sensitive and personal information, including health information, to which we are subject. These laws may be similar to or even more protective than HIPAA and other federal privacy laws.
In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA covered entities and their business associates for compliance. 12 Table of Contents Many states have laws that protect the privacy and security of sensitive and personal information, including health information, to which we are subject.
As a consequence, broad T cell activation can lead to significant and sometimes lethal side effects. Therefore, to harness the potential of cytotoxic T cells, therapeutic strategies seek to pair T cell activation with drug targets that are restricted to cancer tissue so as to avoid unwanted toxicity.
Therefore, to harness the potential of cytotoxic T cells, therapeutic strategies seek to pair T cell activation with drug targets that are restricted to cancer tissue so as to avoid unwanted toxicity.
We rely, and expect to continue to rely, on third parties for the manufacture of our current and any future product candidates for preclinical and clinical testing, as well as for commercial manufacture if any product candidate obtains marketing approval.
Manufacturing We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We rely, and expect to continue to rely, on third parties for the manufacture of our current and any future product candidates for preclinical and clinical testing, as well as for commercial manufacture if any product candidate obtains marketing approval.
The effect of the IRA on our business and the healthcare industry in general is not yet known. 13 Table of Conten ts There will continue to be proposals by legislators at both the federal and state levels, regulators and third-party payors to reduce costs while expanding individual healthcare benefits.
The legislation also caps Medicare beneficiaries’ annual out-of-pocket drug expenses at $2,000. The effect of the IRA on our business and the healthcare industry in general is not yet known. There will continue to be proposals by legislators at both the federal and state levels, regulators and third-party payors to reduce costs while expanding individual healthcare benefits.
These trials are intended to establish safety, pharmacokinetics, pharmacodynamics, and anti-tumor activity at the recommended Phase 2 dose of ONA-XR to guide potential advancement in Phase 3 development. We are exploring strategic options for ONA-XR.
These trials were intended to establish safety, pharmacokinetics, pharmacodynamics, and anti-tumor activity at the recommended Phase 2 dose of ONA-XR to guide potential advancement in Phase 3 development. We wound down our ONA-XR clinical trials and development by the end of 2023.
The scope of the FCPA includes interactions with certain healthcare professionals in many countries. Human Capital As of March 1, 2023, we had nine full-time employees, no part-time employees and one consultant who serves as an executive officer of the Company. None of these employees are represented by labor unions or covered by collective bargaining agreements.
The scope of the FCPA includes interactions with certain healthcare professionals in many countries. Human Capital As of March 1, 2024, we had five full-time employees and no part-time employees. None of these employees are represented by labor unions or covered by collective bargaining agreements. We believe that our employee relations are good.
We retain full worldwide development and commercialization rights to certain CTIM-76 patents in the field of bispecific antibodies and we retain worldwide development and commercialization rights for ONA-XR outside of Greater China. 1 Table of Conten ts Our product candidates are shown in the table below: (1) Tyligand Biosciences Ltd licensed rights to ONA-XR in China, HK, Macau Our Product Pipeline and Development CLDN6xCD3 bispecific antibody program: CTIM-76 Our preclinical program, CTIM-76, is an anti-Claudin 6 x anti-CD3 (“CLDN6xCD3”) bsAb that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6.
We retain full worldwide development and commercialization rights to certain CTIM-76 patents in the field of bispecific antibodies. Our Product Pipeline and Development CLDN6xCD3 bispecific antibody program: CTIM-76 Our preclinical product candidate, CTIM-76, is an anti-Claudin 6 x anti-CD3 (“CLDN6xCD3”) bispecific antibody that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6.
We shall pay certain royalties and annual payments in respect of the manufacturing and sale of Product, which amounts shall be determined by the party manufacturing the Product and ranges from a potential annual payment of 8 Table of Conten ts up to less than $500,000 and a royalty on net sales from 0% up to a low single digit percentage.
Under the terms of the Lonza License Agreement, to the extent incorporated into the Product, Lonza granted us a non-exclusive license to use certain proprietary Lonza intellectual property and systems for us to develop, manufacture and commercially exploit the Product. 8 Table of Contents We shall pay certain royalties and annual payments in respect of the manufacturing and sale of Product, which amounts shall be determined by the party manufacturing the Product and ranges from a potential annual payment of up to less than $500,000 and a royalty on net sales from 0% up to a low single digit percentage.
CLDN6 is a tight junction membrane protein target that has high prevalence across many cancers, including ovarian, lung and testicular, and absent from or expressed at low levels in healthy adult tissues. Due to this prevalence, we, along with several other pharmaceutical companies, including BioNTech SE (“BioNTech”) and Amgen Inc. (“Amgen”), are developing anti-CLDN6 antibodies and/or bispecific antibodies.
CLDN6 is a tight junction membrane protein target that has high prevalence across many solid tumors and is absent from or expressed at low levels in healthy adult tissues. Due to the broad prevalence of CLDN6 in solid tumors, we, along with other pharmaceutical companies, including but not limited, TORL Biotherapeutics (“TORL”), BioNTech SE (“BioNTech”), Xencor, Inc.
We believe that our employee relations are good. Culture is a critical element in the management of our organization. Our talented employees are focused on driving our business with the foundation for all our efforts being to advance medicines for solid tumors.
Culture is a critical element in the management of our organization. Our talented employees are focused on driving our business with the foundation for all our efforts being to advance medicines for solid tumors. Our goal is that each colleague feels a deep connection to what they do, loves coming to work, and is aligned to our mission.
Menarini Clinical Trial Collaboration and Supply Agreement On August 1, 2022, we entered into a Clinical Trial Collaboration and Supply Agreement (the “Menarini Agreement”) with Berlin-Chemie AG - Menarini Group - (“Menarini”).
The amended commercial milestones now also reflect a payment due upon the achievement of annual net sales of $500 million and annual net sales of $1 billion. Menarini Clinical Trial Collaboration and Supply Agreement On August 1, 2022, we entered into a Clinical Trial Collaboration and Supply Agreement (the “Menarini Agreement”) with Berlin-Chemie AG - Menarini Group - (“Menarini”).
Our goal is that each colleague feels a deep connection to what they do, loves coming to work, and is aligned to our mission. Culture begins with our hiring process and continues throughout an employee’s time with Context. We support our colleagues with a comprehensive offering of competitive pay and benefits.
Culture begins with our hiring process and continues throughout an employee’s time with Context. We support our colleagues with a comprehensive offering of competitive pay and benefits.
Our commercial plans and strategy for any of our programs may change as programs advance, markets change, and we receive more clinical data, and will depend on availability of current and future capital. 7 Table of Conten ts Sales and marketing We currently have no sales, marketing, or commercial product distribution capabilities, and we may explore partnerships with larger pharmaceutical organizations that already have these capabilities.
Our commercial plans and strategy for 7 Table of Contents any of our programs may change as programs advance, markets change, and we receive more clinical data, and will depend on availability of current and future capital.
For example, California enacted the California Consumer Privacy Act (the “CCPA”), 12 Table of Conten ts which creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data.
These laws may be similar to or even more protective than HIPAA and other federal privacy laws. For example, California enacted the California Consumer Privacy Act (the “CCPA”), which creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data.
This agreement terminated in August of 2021, subject to certain surviving and ongoing obligations.
This agreement terminated in August 2021, subject to certain surviving and ongoing obligations, including the scale up payments and the 1% net sales payment obligations.
We intend to build the necessary infrastructure and capabilities over time for the United States, and potentially other regions, following further advancement of a product candidate. Manufacturing We do not own or operate, and currently have no plans to establish, any manufacturing facilities.
Sales and marketing We currently have no sales, marketing, or commercial product distribution capabilities, and we may explore partnerships with larger pharmaceutical organizations that already have these capabilities. We intend to build the necessary infrastructure and capabilities over time for the United States, and potentially other regions, following further advancement of a product candidate.
We will conduct preclinical and all clinical development, as well as regulatory and commercial activities through exclusive worldwide rights to develop and commercialize the novel CLDN6 candidates. We paid an upfront license fee of $0.3 million and granted 418,559 shares of Series A Stock with a fair market value of approximately $2.8 million.
We paid an upfront license fee of $0.3 million and granted 418,559 shares of Series A Stock with a fair market value of approximately $2.8 million.
As of March 13, 2023, the Integral patent portfolio for CTIM-76 that we exclusively licensed pursuant to the Integral License Agreement includes one granted U.S. patent, two pending U.S. applications (including one provisional application), and 27 pending foreign applications. The U.S. patent is expected to expire between in 2040, subject to any extensions or disclaimers.
As of March 1, 2024, the Integral patent portfolio for CTIM-76 that we exclusively licensed pursuant to the Integral License Agreement included one granted U.S. patent, two pending U.S. non-provisional applications, one pending International Patent Cooperation Treaty (“PCT”) application, four pending U.S. provisional applications, and 31 pending foreign applications.
Antibodies for BioNTech and comparative data for Xencor were derived from publicly available reports published independent of us and may differ in material ways from the actual antibody that is in development. The results presented in the below table have been derived from publicly available reports of preclinical studies run independently of our preclinical results.
Comparisons and results may differ in material ways from the actual antibody that is in development. The results presented in the below table have been derived from internal studies and publicly available reports of preclinical studies run independently of our preclinical results. We have not performed any head-to-head clinical trials comparing any of these other therapies with CTIM-76.
We believe our team and capabilities position us to be a leader in developing novel therapies targeting solid tumors.
As a result, we no longer primarily focus on female cancers. Beyond these product candidates, we continue to evaluate opportunities to expand our pipeline. We believe our team and capabilities position us to be a leader in developing novel therapies targeting solid tumors.
We have not performed any head-to-head clinical trials comparing any of these other therapies with CTIM-76. As such, the results of these other product candidates may not be comparable to clinical results for CTIM-76. The design of these other studies vary in material ways from the design of the 5 Table of Conten ts preclinical studies for CTIM-76.
As such, the results of these other product candidates may not be comparable to clinical results for CTIM-76. The design of these other studies vary in material ways from the design of the preclinical studies for CTIM-76. For further information and to understand these material differences, you should read the relevant publicly available reports.
The structural complexity of CLDN6 and its similarity to proteins expressed on healthy tissue, particularly Claudin 3 (“CLDN3”), Claudin 4 (“CLDN4”), and Claudin 9 (“CLDN9”), make selectivity a key development challenge that must be addressed. CTIM-76 investigational new drug (“IND”)-enabling studies are ongoing, with an IND filing to support human clinical trials expected in the first quarter of 2024.
(“Xencor”) and Amgen Inc. (“Amgen”), are developing anti-CLDN6 antibody-drug conjugates, cell therapies, or bispecific antibodies. The structural complexity of CLDN6 and its similarity to other Claudin proteins expressed on healthy tissue, particularly Claudin 3 (“CLDN3”), Claudin 4 (“CLDN4”), and Claudin 9 (“CLDN9”), make selectivity a key development challenge that must be addressed by CLDN6-targeting assets in development.
PR antagonist program: ONA-XR Prior to the portfolio prioritization and capital allocation strategy announced on March 22, 2023, we were primarily focused on developing treatments for female cancers. Currently, there are no approved therapies that selectively target progesterone receptor positive (“PR+”) cancers.
PR antagonist program: ONA-XR Prior to the portfolio prioritization and capital allocation strategy announced on March 22, 2023, we were primarily focused on developing treatments for female cancers. ONA-XR was being evaluated in two Phase 2 trials, and one Phase 1b/2 trial in women with metastatic breast and endometrial cancers.
Study design: K562 cells stably over-expressing CLDN6 and luciferase were co-cultured with human T cells at an E:T ratio of 10:1 for 48 hours. Cytotoxicity was determined by luminescence imaging. Comparison of CLDN6 development programs We have performed head-to-head in vitro studies comparing internally developed CLDN6 monoclonal and bispecific antibodies and those from BioNTech and Xencor, Inc. (“Xencor”).
Study design: K562 cells stably over-expressing CLDN6 and luciferase were co-cultured with human T cells at an E:T ratio of 10:1 for 48 hours. Cytotoxicity was determined by luminescence imaging. To test whether CTIM-76 had sufficiently strong efficacy and safety to support first-in-human clinical trials, we conducted a series of in vivo experiments.
(“Integral”) (the “Integral License Agreement”) for the development of a CLDN6 BsAb for cancer therapy. Under the terms of the Integral License Agreement, we and Integral will develop CLDN6 bispecific antibodies that trigger the activation of T cells and eliminate cancer cells displaying CLND6.
Under the terms of the Integral License Agreement, we and Integral will develop CLDN6 bispecific antibodies that trigger the activation of T cells and eliminate cancer cells displaying CLDN6. We will conduct preclinical and all clinical development, as well as regulatory and commercial activities through exclusive worldwide rights to develop and commercialize the novel CLDN6 candidates.
Other preclinical programs In addition to our product candidates, we are leveraging our knowledge in solid tumors and female cancers to pursue discovery stage research programs. We continue to evaluate new opportunities to expand our pipeline.
Other preclinical programs In addition to CTIM-76, we are leveraging our knowledge in solid tumors to pursue discovery stage research programs. We continue to evaluate new opportunities to expand our pipeline. 1 Table of Contents CLDN6xCD3 bispecific antibody program: CTIM-76 Background CLDN6 CLDN6 is an oncofetal tight junction protein involved in the cell-to-cell adhesion of epithelial and endothelial cell sheets.
Monoclonal antibody (MAb) discovery against CLDN6 has been encumbered by the high homology of endogenously expressed CLDN9, which varies from CLDN6 by only three amino acids in the extracellular domain. Proposed mechanism of action Rationale for bispecific antibody Cytotoxic T cells are considered to be the most potent effector cells of the immune system.
Although epigenetically silenced in healthy adult human tissues, CLDN6 expression has been found across a broad range of cancer tissues and can lead to a poor prognosis. Monoclonal antibody (MAb) discovery against CLDN6 has been encumbered by the high homology of endogenously expressed CLDN9, which varies from CLDN6 by only three amino acids in the extracellular domain.
Facilities Our principal office is located in Philadelphia, Pennsylvania, where we lease approximately 3,500 square feet of office space pursuant to a sublease that expires in July 2023.
Facilities Our principal office is located in Philadelphia, Pennsylvania, where we lease approximately 3,500 square feet of office space pursuant to a lease that expires on November 30, 2024, which lease automatically renews for successive three-month periods unless we or the landlord provides the other with a termination notice at least 90 days before any such successive renewal.
Our collaboration and license agreements Collaboration Agreement with Tyligand Bioscience In March 2020, we entered into a process development agreement (the “Tyligand Process Development Agreement”) with Tyligand Bioscience (Shanghai) Limited (“Tyligand”) for the development, manufacturing, registration and future commercialization of ONA-XR.
Context Amgen TORL Xencor BioNTech Program CTIM-76 AMG794 TORL-1-23 XmAb541 BNT211 Antibody Format Bispecific CLDN6xCD3 HLE BiTE CLDN6xCD3 MMAE ADC 2 x 1 Bispecific CLDN6xCD3 CLDN6 CAR-T Stage Preclinical Phase 1 Phase 1 IND Phase 1 Status Active Active Active Active Active Selectivity CLDN6:9 >1000x >1000x >1000x 10x 7x Tolerability Well Tolerated Poor Moderate Well Tolerated Well Tolerated Our collaboration and license agreements Collaboration Agreement with Tyligand Bioscience 5 Table of Contents In March 2020, we entered into a process development agreement (the “Tyligand Process Development Agreement”) with Tyligand Bioscience (Shanghai) Limited (“Tyligand”) for the development, manufacturing, registration and future commercialization of ONA-XR.
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As a result, we will no longer primarily focus on female cancers. Recent advances in the treatment of metastatic breast cancer point toward a more competitive environment in the coming years, such as promising Phase 3 clinical data for emerging product candidates, including Enhertu and capivasertib.
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CTIM-76 investigational new drug (“IND”)-enabling studies are ongoing, with an IND filing to support human clinical trials expected by the end of March 2024. We plan to initiate a Phase 1 trial to focus on CLDN6-positive gynecologic and testicular cancers upon receiving IND clearance from the FDA.
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Additionally, in the ongoing Phase 2 OATH trial evaluating ONA-XR in combination with anastrozole, elevated liver function tests (“LFTs”) were identified in three patients, including in one patient who discontinued treatment, although none of the elevated LFTs were considered serious adverse events.
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We expect to have sufficient cash and cash equivalents to fund our operations into late 2024. We will require additional funding for our planned Phase 1 trial, other research and development expenditures, and general and administrative expenses.
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We determined that significant incremental program costs and delays were likely to be required to analyze and potentially mitigate future LFT abnormalities. By ceasing development of ONA-XR, we expect to have sufficient cash and cash equivalents to fund our operations into late 2024. Beyond these product candidates, we continue to evaluate opportunities to expand our pipeline.
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Proposed mechanism of action Rationale for bispecific antibody Cytotoxic T cells are considered to be the most potent effector cells of the immune system. As a consequence, broad T cell activation can lead to significant and sometimes lethal side effects.
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Collectively, our management team has experience identifying and characterizing the mechanisms that drive cancer initiation and subsequent relapse in various cancer indications and who have been associated with the development of products such as Kisqali (ribociclib), Arimidex (anastrozole), and Afinitor (everolimus) to treat such cancers.
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CTIM-76 was evaluated in NSG (NOD/SCID/IL2Rgamma-knockout) Beta-2 microglobulin (B2M) knockout mice engrafted with OVCAR3 ovarian cancer cells. Based on internal data, OVCAR3 is a moderate CLDN6 expressing cell line with approximately 96,000 copies of CLDN6 per cell. Dosing began once tumors grew to 150 mm3 and there was sufficient engraftment of Human peripheral blood mononuclear cells (“PBMC”).
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Preclinical and clinical data suggest that ONA-XR has anticancer activity by inhibiting PR binding to chromatin, downregulating cancer stem cell mobilization and blocking immune evasion. ONA-XR was most recently being evaluated in two key Phase 2 trials (OATH and SMILE), and one Phase 1b/2 trial (ELONA) in women with metastatic breast and endometrial cancers.
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In this xenograft model, almost 100% efficacy was obtained with twice weekly dosing of 0.1 or 1 mg/kg CTIM-76.
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Below is a description of the clinical trials to evaluate ONA-XR, which we expect to wind down promptly on an orderly basis: • OATH trial: Phase 2 IST in collaboration with Jefferson Health to evaluate ONA-XR in combination with Arimidex (anastrozole) in PR+ endometrial cancer. • ELONA trial: Phase 1b/2 trial in partnership with The Menarini Group ("Menarini”) to evaluate ONA-XR in combination with ORSERDU TM ( elacestrant), Menarini’s selective estrogen receptor degrader, in patients with locally advanced or metastatic breast cancer who have received prior treatment with a cyclin-dependent kinase 4/6 (“CDK4/6”) inhibitor. • SMILE trial: Phase 2 IST in collaboration with Wisconsin Oncology Network (WON) to evaluate ONA-XR in combination with Faslodex (fulvestrant) in second line (“2L”) or third line (3L) metastatic breast cancer.
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Based on allometric scaling of the cynomolgus monkey pharmacokinetics to human, a similar level of clinical exposure to the 0.1 mg/kg dose in the mouse model (i.e., maintaining a C min ≥ ~ 100 ng/mL) should be achievable with once weekly dosing of 400 µg to 11,000 µg CTIM-76.
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This trial is intended to evaluate potential ONA-XR plus Faslodex drug synergy after treatment failure of CDK4/6 and/or PIK3α inhibitors.
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In preclinical toxicology studies, cynomolgus monkeys received CTIM-76 once weekly, which supports once weekly dosing in the clinic. 4 Table of Contents Study design: NSG-b2m knockout mice (n=14/arm) engrafted with human PBMCs and bearing advanced subcutaneous OVCAR3 tumor xenografts were treated twice per week with vehicle or CTIM-76.
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As part of the trial, a pharmacokinetic and pharmacodynamic 2 Table of Conten ts (PK/PD) sub-study is also intended to evaluate the uptake of radiolabeled progesterone (F-FFNP) via positron emission tomography (PET) imaging in breast tumors to determine target engagement. • Additional ISTs : Two other academic initiated trials are also ongoing, including a Phase 2 IST initiated by Memorial Sloan Kettering Cancer Center (“MSK”) to evaluate ONA-XR in combination with Arimidex in recurrent granulosa cell tumors (“GCT”) of the ovary.
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Comparison of CLDN6 development programs We have performed head-to-head in vitro studies comparing internally developed CLDN6 monoclonal and bispecific antibodies and those from Amgen, BioNTech, TORL, and Xencor. Clones of antibodies for Amgen, BioNTech and TORL CLDN6 products were developed internally for benchmarking purposes. Comparative data for Xencor was derived from publicly available reports published independent of us.
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CLDN6xCD3 bispecific antibody program: CTIM-76 Background CLDN6 CLDN6 is an oncofetal tight junction protein involved in the cell-to-cell adhesion of epithelial and endothelial cell sheets. Although epigenetically silenced in healthy adult human tissues, CLDN6 expression has been found in ovarian, gastric, pediatric, and other cancer tissues and can lead to a poor prognosis.
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The Tyligand License Agreement provides for termination in the event of (a) insolvency, (b) a material breach of the agreement, and (c) in the event that Tyligand does not meet certain regulatory milestones.
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Context Xencor BioNTech Program CTIM-76 XmAb541 BNT211 and BNT142 Antibody Format Bispecific CLDN6xCD3 Bispecific CLDN6xCD3 CLDN6 CAR-T, and CLDN6xCD3 (bi(sFc)) Stage Preclinical Preclinical Phase 1, Phase 1 Status Active Active Active Selectivity CLDN6:9 >1000x 10x 7x Other preclinical programs In addition to our product candidates, we previously leveraged our knowledge in hormone-dependent cancer to pursue discovery stage research programs.
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For example, we have the ability to terminate the Tyligand License Agreement if Tyligand fails to file and receive acceptance of an investigational new drug for an ONA-XR related product in the People’s Republic of China by August 23, 2024.
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In November 2015, we entered into a patent license agreement, as amended, (the “Drexel License Agreement”) with Drexel University for license rights to patents for certain intellectual property and know-how related to certain Sigma1 technology. As part of a strategic review of our pipeline, we terminated the Drexel License Agreement, effective as of April 27, 2022.
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Collaboration and Licensing Agreement with Integral Molecular In April 2021, we entered into a collaboration and licensing agreement with Integral Molecular, Inc. (“Integral”) (the “Integral License Agreement”) for the development of a CLDN6 BsAb for cancer therapy.
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On March 20, 2023, we amended the Integral License Agreement to remove the previously agreed to second milestone payment and to change the amount of the third milestone payment to increase such payment by the amount of the prior second milestone payment and to add payment for third party research funding obtained and used by Integral in connection with the development of CTIM-76.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur ability to obtain and maintain patent protection for CTIM-76, ONA-XR and any future product candidates is uncertain due to a number of factors, including the following factors: • we may not have been the first to invent the technology covered by our pending patent applications or issued patents; • we may not be the first to file patent applications covering product candidates, including their compositions or methods of use, as patent applications in the United States and most other countries are confidential for a period of time after filing; • our compositions and methods may not be patentable; 40 Table of Conten ts • our disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability; • any or all of our pending patent applications may not result in issued patents; • others may independently develop identical, similar or alternative technologies, products or compositions, or methods of use thereof; • others may design around our patent claims to produce competitive technologies or products that fall outside of the scope of our patents; • we may fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection; • we may not seek or obtain patent protection in countries and jurisdictions that may eventually provide us a significant business opportunity; • we may decide not to maintain or pursue patents and patent applications that, at some point in time, may cover our products, potential products, or product candidates; • any patents issued to us may not provide a basis for commercially viable products, may not provide any competitive advantages or may be successfully challenged by third parties; • others may identify prior art or other bases upon which to challenge and ultimately invalidate our patents or otherwise render them unenforceable; • our representatives or their agents may fail to apply for patents in a timely fashion; and • despite our efforts to enter into agreements with employees, consultants, collaborators, and advisors to confirm ownership and chain of title in patents and patent applications, an inventorship or ownership dispute could arise that may permit one or more third parties to practice our technologies or enforce our patent rights, including possible efforts to enforce patent rights against us.
Biggest changeOur ability to obtain and maintain patent protection for CTIM-76, ONA-XR and any future product candidates is uncertain due to a number of factors, including the following factors: • we may not have been the first to invent the technology covered by our pending patent applications or issued patents; • we may not be the first to file patent applications covering product candidates, including their compositions or methods of use, as patent applications in the United States and most other countries are confidential for a period of time after filing; • others may identify prior art or other bases upon which to challenge and ultimately invalidate our patents or otherwise render them unenforceable; • our compositions and methods may not be patentable; • our disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability; • any or all of our pending patent applications may not result in issued patents; • others may independently develop identical, similar or alternative technologies, products or compositions, or methods of use thereof; • others may design around our patent claims to produce competitive technologies or products that fall outside of the scope of our patents; • we may fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection; • we may not seek or obtain patent protection in countries and jurisdictions that may eventually provide us a significant business opportunity; • we may decide not to maintain or pursue patents and patent applications that, at some point in time, may cover our products, potential products, or product candidates; • any patents issued to us may not provide a basis for commercially viable products, may not provide any competitive advantages or may be successfully challenged by third parties; • our representatives or their agents may fail to apply for patents in a timely fashion; and • despite our efforts to enter into agreements with employees, consultants, collaborators, and advisors to confirm ownership and chain of title in patents and patent applications, an inventorship or ownership dispute could arise that may permit one or more third parties to practice our technologies or enforce our patent rights, including possible efforts to enforce patent rights against us.
On January 24, 2023 we received a letter from Nasdaq stating that the we were not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”) because our common stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days.
On January 24, 2023 we received a letter from Nasdaq stating that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”) because our common stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days.
Among the provisions of PPACA of importance to the pharmaceutical and biotechnology industries, which includes biologics, are the following: • manufacturers and importers of certain biologics with annual sales of more than $5 million made to or covered by specified federal healthcare programs are required to pay an annual, nondeductible fee according to their market share of all such sales; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% of the average manufacturer price for most branded drugs, biologics, and biosimilars and to 13.0% for generic drugs, and a cap of the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics, including our product candidates, that are inhaled, infused, instilled, implanted, or injected; • extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; • expansion of the entities eligible for discounts under the Public Health program, commonly referred to as the “340B Program;” • a new requirement to annually report drug samples that manufacturers and distributors provide to physicians, also known as the “Physician Payments Sunshine Act;” • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for smuch research; • establishment of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending; and • a licensure framework for follow-on biologic products.
Among the provisions of PPACA of importance to the pharmaceutical and biotechnology industries, which includes biologics, are the following: • manufacturers and importers of certain biologics with annual sales of more than $5 million made to or covered by specified federal healthcare programs are required to pay an annual, nondeductible fee according to their market share of all such sales; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% of the average manufacturer price for most branded drugs, biologics, and biosimilars and to 13.0% for generic drugs, and a cap of the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics, including our product candidates, that are inhaled, infused, instilled, implanted, or injected; • extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; • expansion of the entities eligible for discounts under the Public Health program, commonly referred to as the “340B Program;” • a new requirement to annually report drug samples that manufacturers and distributors provide to physicians, also known as the “Physician Payments Sunshine Act;” • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; • establishment of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending; and • a licensure framework for follow-on biologic products.
The clinical and commercial success of our current and any future product candidates will depend on a number of factors, including the following: • our ability to raise any additional required capital on acceptable terms, or at all; • our ability to complete IND and BLA-enabling studies and successfully submit an IND and BLA; • timely completion of our preclinical studies and clinical trials, which may be slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors; • whether we are required by the FDA or similar foreign regulatory agencies to conduct additional clinical trials or other studies beyond those planned to support approval of our product candidates; • acceptance of our proposed indications and primary endpoint assessments relating to the proposed indications of our product candidates by the FDA and similar foreign regulatory authorities; • our ability to consistently provide for manufacturing of our product candidates on a timely basis; • our ability, and the ability of any third parties with whom we contract, to remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices (“cGMPs”); • our ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities the safety, efficacy and acceptable risk-benefit profile of our product candidates; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future approved products, if any; • the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities; • achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our contractual obligations and with all regulatory requirements applicable to our lead product candidate or any future product candidates or approved products, if any; 21 Table of Conten ts • the willingness of physicians, operators of hospitals and clinics and patients to utilize or adopt our product candidate or any future product candidates; • our ability to successfully develop a commercial strategy and thereafter commercialize our current or any future product candidates in the United States and internationally, if approved for marketing, sale and distribution in such countries and territories, whether alone or in collaboration with others, including through the potential out-licensing of our product candidates; • the availability of coverage and adequate reimbursement from managed care plans, private insurers, government payors (such as Medicare and Medicaid) and other third-party payors for any of our product candidates that may be approved; • the convenience of our treatment or dosing regimen; • acceptance by physicians, payors and patients of the benefits, safety and efficacy of our current or any future product candidates, if approved, including relative to alternative and competing treatments; • patient demand for our current or future product candidates, if approved; • our ability to establish and enforce intellectual property rights in and to our product candidates; and • our ability to avoid third-party patent interference, intellectual property challenges or intellectual property infringement claims.
The clinical and commercial success of our current and any future product candidates will depend on a number of factors, including the following: • our ability to raise any additional required capital on acceptable terms, or at all; • our ability to complete IND and BLA-enabling studies and successfully submit an IND and BLA; • timely completion of our preclinical studies and clinical trials, which may be slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors; • whether we are required by the FDA or similar foreign regulatory agencies to conduct additional clinical trials or other studies beyond those planned to support approval of our product candidates; • acceptance of our proposed indications and primary endpoint assessments relating to the proposed indications of our product candidates by the FDA and similar foreign regulatory authorities; • our ability to consistently provide for manufacturing of our product candidates on a timely basis; • our ability, and the ability of any third parties with whom we contract, to remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices (“cGMPs”); • our ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities the safety, efficacy and acceptable risk-benefit profile of our product candidates; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future approved products, if any; • the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities; • achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our contractual obligations and with all regulatory requirements applicable to our lead product candidate or any future product candidates or approved products, if any; 21 Table of Contents • the willingness of physicians, operators of hospitals and clinics and patients to utilize or adopt our product candidate or any future product candidates; • our ability to successfully develop a commercial strategy and thereafter commercialize our current or any future product candidates in the United States and internationally, if approved for marketing, sale and distribution in such countries and territories, whether alone or in collaboration with others, including through the potential out-licensing of our product candidates; • the availability of coverage and adequate reimbursement from managed care plans, private insurers, government payors (such as Medicare and Medicaid) and other third-party payors for any of our product candidates that may be approved; • the convenience of our treatment or dosing regimen; • acceptance by physicians, payors and patients of the benefits, safety and efficacy of our current or any future product candidates, if approved, including relative to alternative and competing treatments; • patient demand for our current or future product candidates, if approved; • our ability to establish and enforce intellectual property rights in and to our product candidates; and • our ability to avoid third-party patent interference, intellectual property challenges or intellectual property infringement claims.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: • initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for CTIM-76 or any other future product candidates; • clinical development plans we establish for CTIM-76 and any other future product candidates; • obligation to make milestone, royalty and non-royalty sublicense receipt payments to third-party licensors, if any, under our licensing agreements; • number and characteristics of product candidates that we discover or in-license and develop; • outcome, timing and cost of regulatory review by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; • costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property rights; • effects of competing technological and market developments; • costs and timing of the implementation of commercial-scale manufacturing activities; and • costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: • initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for CTIM-76 or any other future product candidates; • clinical development plans we establish for CTIM-76 and any other future product candidates; • obligation to make milestone, royalty and non-royalty sublicense receipt payments to third-party licensors, if any, under our licensing agreements; • number and characteristics of product candidates that we discover or in-license and develop; 18 Table of Contents • outcome, timing and cost of regulatory review by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; • costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property rights; • effects of competing technological and market developments; • costs and timing of the implementation of commercial-scale manufacturing activities; and • costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval.
As a public company it may be more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
As a public company it is more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
Additionally, if any product candidate receives marketing approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw approvals of such product; • regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; 23 Table of Conten ts • additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; • we may be required to implement a Risk Evaluation and Mitigation Strategy (“REMS”), or create a medication guide outlining the risks of such side effects for distribution to patients; • we could be sued and held liable for harm caused to patients; • the product may become less competitive; and • our reputation may suffer.
Additionally, if any product candidate receives marketing approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw approvals of such product; • regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; 23 Table of Contents • additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; • we may be required to implement a Risk Evaluation and Mitigation Strategy (“REMS”), or create a medication guide outlining the risks of such side effects for distribution to patients; • we could be sued and held liable for harm caused to patients; • the product may become less competitive; and • our reputation may suffer.
We may also experience delays in completing planned clinical trials for a variety of reasons, including delays related to: • obtaining regulatory authorization to begin a trial, if applicable; • the availability of financial resources to commence and complete the planned trials; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • obtaining approval at each clinical trial site by an independent IRB; • recruiting suitable patients to participate in a trial; • having patients complete a trial, including having patients enrolled in clinical trials dropping out of the trial before the product candidate is manufactured and returned to the site, or return for post-treatment follow-up; • clinical trial sites deviating from trial protocol or dropping out of a trial; • addressing any patient safety concerns that arise during the course of a trial; • adding new clinical trial sites; or 32 Table of Conten ts • manufacturing sufficient quantities of qualified materials under cGMPs and applying them on a patient by patient basis for use in clinical trials.
We may also experience delays in completing planned clinical trials for a variety of reasons, including delays related to: • obtaining regulatory authorization to begin a trial, if applicable; • the availability of financial resources to commence and complete the planned trials; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • obtaining approval at each clinical trial site by an independent IRB; • recruiting suitable patients to participate in a trial; • having patients complete a trial, including having patients enrolled in clinical trials dropping out of the trial before the product candidate is manufactured and returned to the site, or return for post-treatment follow-up; • clinical trial sites deviating from trial protocol or dropping out of a trial; • addressing any patient safety concerns that arise during the course of a trial; • adding new clinical trial sites; or • manufacturing sufficient quantities of qualified materials under cGMPs and applying them on a patient by patient basis for use in clinical trials.
Our future success depends on our ability to retain our Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, Chief Medical Officer, and other key executives and to attract, retain and motivate qualified personnel.
Our future success depends on our ability to retain our Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, and other key executives and to attract, retain and motivate qualified personnel.
Volatility in the market price of our common stock may prevent investors from being able to sell their shares at or above their purchase price. As a result, you may suffer a loss on your investment. We may not be able to regain and maintain compliance with the continued listing requirements of The Nasdaq Stock Market.
Volatility in the market price of our common stock may prevent investors from being able to sell their shares at or above their purchase price. As a result, you may suffer a loss on your investment. We may not be able to maintain compliance with the continued listing requirements of The Nasdaq Stock Market.
We anticipate that our expenses will increase substantially if and as we: • continue our current research and development programs, including conducting laboratory, preclinical and clinical studies for product candidates; • initiate clinical trials for product candidates; • seek to identify, assess, acquire or develop additional research programs or product candidates; • maintain, expand and protect our intellectual property portfolio; • seek marketing approvals for any product candidates that may successfully complete development; • establish a sales, marketing and distribution infrastructure to commercialize any products that may obtain marketing approval; • further develop and refine the manufacturing process for our current and any future product candidates; • change or add additional manufacturers or suppliers of pharmaceutical or biological materials or product candidates; • further develop our anti-hormonal resistance therapies; • acquire or in-license other technologies; • seek to attract and retain new and existing personnel; and • expand our facilities.
We anticipate that our expenses will increase substantially if and as we: • continue our current research and development programs, including conducting laboratory, preclinical and clinical studies for product candidates; • initiate clinical trials for product candidates; • seek to identify, assess, acquire or develop additional research programs or product candidates; • maintain, expand and protect our intellectual property portfolio; • seek marketing approvals for any product candidates that may successfully complete development; • establish a sales, marketing and distribution infrastructure to commercialize any products that may obtain marketing approval; • further develop and refine the manufacturing process for our current and any future product candidates; • change or add additional manufacturers or suppliers of pharmaceutical or biological materials or product candidates; • acquire or in-license other technologies; • seek to attract and retain new and existing personnel; and • expand our facilities.
We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business, and such an event could disrupt our operations, cause us to incur remediation costs, damage our reputation and cause a loss of 50 Table of Conten ts confidence in us and our or third parties’ ability to conduct clinical trials, which could adversely affect our reputation and delay our research and development programs.
We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business, and such an event could disrupt our operations, cause us to incur remediation costs, damage our reputation and cause a loss of 50 Table of Contents confidence in us and our or third parties’ ability to conduct clinical trials, which could adversely affect our reputation and delay our research and development programs.
As well, in 2022 the Oncology Center of Excellence (OCE) of the FDA implemented Project Optimus to reform the dose optimization and dose selection paradigm in oncology drug development, which could impact our ongoing or future clinical trials and significantly delay our development timelines and require substantially more resources.
As well, in 2022 the Oncology Center of Excellence (OCE) of the FDA implemented Project Optimus to reform the dose optimization and dose selection paradigm in oncology drug development, which could impact our future clinical trials and significantly delay our development timelines and require substantially more resources.
For example, in 2017, Congress enacted the Tax Cuts and Jobs Act, which repealed the tax-based shared responsibility payment imposed by PPACA on certain individuals who fail to maintain qualifying health coverage that is commonly referred to as the “individual mandate.” 38 Table of Conten ts In addition, other legislative changes have been proposed and adopted in the United States since PPACA was enacted which, among other things, have reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers.
For example, in 2017, Congress enacted the Tax Cuts and Jobs Act, which repealed the tax-based shared responsibility payment imposed by PPACA on certain individuals who fail to maintain qualifying health coverage that is commonly referred to as the “individual mandate.” In addition, other legislative changes have been proposed and adopted in the United States since PPACA was enacted which, among other things, have reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers.
Even if we obtain regulatory approval, the approval may be for targets, disease indications, lines of therapy or patient populations that are not as broad as we intended or desired or may require labeling that includes significant use or distribution restrictions or safety warnings. 22 Table of Conten ts Results of preclinical studies, early clinical trials or analyses may not be indicative of results obtained in later trials.
Even if we obtain regulatory approval, the approval may be for targets, disease indications, lines of therapy or patient populations that are not as broad as we intended or desired or may require labeling that includes significant use or distribution restrictions or safety warnings. 22 Table of Contents Results of preclinical studies, early clinical trials or analyses may not be indicative of results obtained in later trials.
If our collaborators or ourselves fail to achieve announced milestones in the expected timeframes, the commercialization of the affected product candidate may be delayed, our credibility may be undermined, our business and results of operations may be harmed, and the price of our common stock may decline.
If we or our collaborators fail to achieve announced milestones in the expected timeframes, the commercialization of the affected product candidate may be delayed, our credibility may be undermined, our business and results of operations may be harmed, and the price of our common stock may decline.
If we do not receive the funding or expected deliverables or services from our collaborators we expect under these agreements, our development of product candidates could be delayed and we may need additional resources to develop such product candidates.
If we do not receive the funding or deliverables or services from our collaborators that we expect under these agreements, our development of product candidates could be delayed and we may need additional resources to develop such product candidates.
If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect on the market for and price of our common stock.
If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our common stock, which may limit the ability of our 47 Table of Contents stockholders to buy and sell our common stock and could have an adverse effect on the market for and price of our common stock.
In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, in March 2010, PPACA was enacted, which substantially changed the way healthcare is financed by both governmental and private payors.
In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, in March 2010, PPACA was enacted, which substantially changed the way healthcare is financed by both governmental and private 37 Table of Contents payors.
Reimbursement by a third-party payor may depend upon a number of factors, including, but not limited to, the third-party payor’s determination that use of a product is: • a covered benefit under its health plan; • safe, effective and medically necessary; • appropriate for the specific patient; • cost-effective; and • neither experimental nor investigational.
Reimbursement by a third-party payor may depend upon a number of factors, including, but not limited to, the third-party payor’s determination that use of a product is: • a covered benefit under its health plan; • safe, effective and medically necessary; • appropriate for the specific patient; 36 Table of Contents • cost-effective; and • neither experimental nor investigational.
We believe that our tax positions are reasonable, and our tax provisions and reserves are adequate to cover any potential liability. We are also currently not subject to any tax audits. 49 Table of Conten ts However, various items cannot be accurately forecasted and future events may be treated as discrete to the period in which they occur.
We believe that our tax positions are reasonable, and our tax provisions and reserves are adequate to cover any potential liability. We are also currently not subject to any tax audits. 49 Table of Contents However, various items cannot be accurately forecasted and future events may be treated as discrete to the period in which they occur.
All of these milestones are based on a variety of assumptions, including assumptions regarding capital resources, constraints and priorities, progress 24 Table of Conten ts of and results from development activities and the receipt of key regulatory approvals or actions, any of which may cause the timing of achievement of the milestones to vary considerably from our estimates.
All of these milestones are based on a variety of assumptions, including assumptions regarding capital resources, constraints and priorities, progress 24 Table of Contents of and results from development activities and the receipt of key regulatory approvals or actions, any of which may cause the timing of achievement of the milestones to vary considerably from our estimates.
Our business and operations would suffer in the event of system failures or security breaches. Despite the implementation of security measures, our computer systems, as well as those of third parties with which we have relationships, are vulnerable to damage from computer viruses, unauthorized access, natural and manmade disasters, terrorism, war and telecommunication and electrical failures.
Our business and operations would suffer in the event of system failures or security breaches. Our computer systems, as well as those of third parties with which we have relationships, are vulnerable to damage from computer viruses, unauthorized access, natural and manmade disasters, terrorism, war and telecommunication and electrical failures.
If we are unable to enter into additional collaboration agreements, we may have to curtail the research and development of the product candidate for which we are seeking to collaborate, reduce or delay research and development programs, delay potential commercialization timelines, reduce the scope of any sales or marketing activities or undertake research, development or commercialization activities at our own expense.
If we are unable to enter into additional collaboration agreements, we may have to curtail the research and development of the product candidate for which we are seeking to collaborate, reduce or 31 Table of Contents delay research and development programs, delay potential commercialization timelines, reduce the scope of any sales or marketing activities or undertake research, development or commercialization activities at our own expense.
It will be several years, if ever, before we obtain regulatory approval for a therapeutic product candidate, at which time any revenues for such product candidate will depend upon many factors, including market conditions, costs and effectiveness of manufacturing, sales, marketing and distribution operations related to such product candidate, and the terms of any collaboration or other strategic arrangement we may have with respect to such product candidate and levels of reimbursement from third-party payors. 17 Table of Conten ts If we are unable to develop and commercialize one or more product candidates either alone or with collaborators, including through the potential out-licensing of our product candidates, or if revenues from any product candidate that receives marketing approval or is commercialized are insufficient, we may not achieve profitability or sustain profitability, which would have an adverse effect on the value of our common stock, which would be materially adversely affected.
It will be several years, if ever, before we obtain regulatory approval for a therapeutic product candidate, at which time any revenues for such product candidate will depend upon many factors, including market conditions, costs and effectiveness of manufacturing, sales, marketing and distribution operations related to such product candidate, the scope of intellectual property protection for such product candidate, and the terms of any collaboration or other strategic arrangement we may have with respect to such product candidate and levels of reimbursement from third-party payors. 17 Table of Contents If we are unable to develop and commercialize one or more product candidates either alone or with collaborators, including through the potential out-licensing of our product candidates, or if revenues from any product candidate that receives marketing approval or is commercialized are insufficient, we may not achieve profitability or sustain profitability, which would have an adverse effect on the value of our common stock, which would be materially adversely affected.
Moreover, the FDA requires us to comply with regulations, commonly referred to as good clinical practices (“GCPs”), for conducting, monitoring, 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 us to comply with regulations, commonly referred to as good clinical practices (“GCPs”), for conducting, monitoring, recording and reporting the 29 Table of Contents 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.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.
To the extent that we raise additional capital or pay expenses through the sale or issuance of equity or convertible debt securities, your ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.
We have commenced Phase 2 human clinical trials for ONA-XR, but we plan to cease development of this product candidate and have not demonstrated an ability to initiate clinical trials for our other product candidate or successfully complete any clinical trials, obtain any required marketing approvals, manufacture products, conduct sales, marketing and distribution activities, or arrange for a third party to do any of the foregoing on our behalf.
We had commenced Phase 2 human clinical trials for ONA-XR, but we ceased development of this product candidate and have not demonstrated an ability to initiate clinical trials for our other product candidate or successfully complete any clinical trials, obtain any required marketing approvals, manufacture products, conduct sales, marketing and distribution activities, or arrange for a third party to do any of the foregoing on our behalf.
Any supplier or collaboration partner bankruptcy or insolvency, or the failure of any collaboration partner to make payments when due, or any breach or default by a supplier or collaboration partner, or the loss of any significant supplier or collaboration partner relationships, could result in material losses to us and may have a material adverse impact on our business.
Any supplier or collaboration partner bankruptcy or insolvency, or the failure of any collaboration partner to make payments when due, or any breach or default by a supplier or collaboration partner, or 27 Table of Contents the loss of any significant supplier or collaboration partner relationships, could result in material losses to us and may have a material adverse impact on our business.
Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such program.
Department of Treasury, FDIC and Federal Reserve Board announced a program in March 2023 to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such a program.
Additionally, if we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other strategic arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
Additionally, if we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other 19 Table of Contents strategic arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
Furthermore, any capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to advance research programs, product development activities or product candidates. General Risk Factors We incur increased costs as a result of becoming a public company and in the administration of our organizational structure.
Furthermore, any capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to advance research programs, product development activities or current or future product candidates. General Risk Factors We incur increased costs as a result of being a public company and in the administration of our organizational structure.
Risks Related to Our Organization, Structure and Operations Our reliance on a central team consisting of a limited number of employees and consultants who provide various administrative, research and development, and other services across our organization presents operational challenges that may adversely affect our business. As of March 1, 2023, we had nine full-time employees.
Risks Related to Our Organization, Structure and Operations Our reliance on a central team consisting of a limited number of employees and consultants who provide various administrative, research and development, and other services across our organization presents operational challenges that may adversely affect our business. As of March 1, 2024, we had five full-time employees.
In addition, because our product candidates represent new approaches to the treatment of cancer, we cannot accurately estimate the potential revenue from our product candidates. 36 Table of Conten ts Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment.
In addition, because our product candidates represent new approaches to the treatment of cancer, we cannot accurately estimate the potential revenue from our product candidates. Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. 51 Table of Conten ts Item 1B. Unresolved Staff Comments None.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. 51 Table of Contents Item 1B. Unresolved Staff Comments None.
The 30 Table of Conten ts supply of these materials could be reduced or interrupted at any time. In such case, identifying and engaging an alternative supplier or manufacturer could result in delay, and we may not be able to find other acceptable suppliers or manufacturers on acceptable terms, or at all.
The supply of these materials could be reduced or interrupted at any time. In such case, identifying and engaging an alternative supplier or manufacturer could result in delay, and we may not be able to find other acceptable suppliers or manufacturers on acceptable terms, or at all.
Our commercial success depends upon obtaining and maintaining proprietary rights to our intellectual property estate, including rights relating to CTIM-76, ONA-XR and any future product candidates, as well as successfully defending these rights against third-party challenges and successfully enforcing these rights to prevent third-party infringement.
Our commercial success depends upon obtaining and maintaining proprietary rights to our intellectual property estate, including 41 Table of Contents rights relating to CTIM-76, ONA-XR and any future product candidates, as well as successfully defending these rights against third-party challenges and successfully enforcing these rights to prevent third-party infringement.
We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we do enter into additional collaboration agreements, including out-licensing ONA-XR, the negotiated terms may force us to relinquish rights that diminish our potential profitability from development and commercialization of the subject product candidate or others.
We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we do enter into additional collaboration agreements, the negotiated terms may force us to relinquish rights that diminish our potential profitability from development and commercialization of the subject product candidate or others.
Fluctuating foreign exchange rates could increase our operating expenses and adversely affect our results of operations. In November 2022, we entered into the Lonza Development Agreement, pursuant to which Lonza will provide services relating to the development and manufacture of CTIM-76.
Fluctuating foreign exchange rates could increase our operating expenses and adversely affect our results of operations. In November 2022, we entered into the Lonza Development Agreement, pursuant to which Lonza has provided services relating to the development and manufacture of CTIM-76.
However, we do not have any agreement or guidance from the FDA that our regulatory development 33 Table of Conten ts plans will be sufficient for submission of a BLA or NDA, as applicable for the relevant product candidate.
However, we do not have any agreement or guidance from the FDA that our regulatory development plans will be sufficient for submission of a BLA or NDA, as applicable for the relevant product candidate.
If such licensor fails to obtain and maintain patent or other protection for the proprietary intellectual property we license from such licensor, we could lose our rights to such intellectual property or the exclusivity of such rights, and our competitors 42 Table of Conten ts could market competing products using such intellectual property.
If such licensor fails to obtain and maintain patent or other protection for the proprietary intellectual property we license from such licensor, we could lose our rights to such intellectual property or the exclusivity of such rights, and our competitors could market competing products using such intellectual property.
In addition to increasing uncertainty with regard to our 45 Table of Conten ts ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S.
In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S.
Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of 31 Table of Conten ts factors.
Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.
Further, coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more 37 Table of Conten ts products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
Further, coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
If we are unable to enter into a license on acceptable terms, we or our collaborators could be prevented from commercializing one or more product candidates, or forced to modify such product candidates, or to cease some aspect of our business operations, which could harm our business significantly. 44 Table of Conten ts We or our collaborators might also be forced to redesign or modify our technology or product candidates so that we no longer infringe the third-party intellectual property rights, which may result in significant cost or delay to us, or which redesign or modification could be impossible or technically infeasible.
If we are unable to enter into a license on acceptable terms, we or our collaborators could be prevented from commercializing one or more product candidates, forced to modify such product candidates, forced to cease some aspect of our business operations, or be required to pay substantial damages to a third party, which could harm our business significantly. 40 Table of Contents We or our collaborators might also be forced to redesign or modify our technology or product candidates so that we no longer infringe the third-party intellectual property rights, which may result in significant cost or delay to us, or which redesign or modification could be impossible or technically infeasible.
If we are unable to 26 Table of Conten ts continue to attract and retain high-quality personnel and consultants, the rate and success at which we can identify and develop product candidates, enter into collaborative arrangements and otherwise operate our business will be limited.
If we are unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can identify and develop product candidates, enter into collaborative arrangements and otherwise operate our business will be limited.
Filing, prosecuting and defending patents on our current and any future product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries 43 Table of Conten ts outside the United States can be less extensive than those in the United States.
Filing, prosecuting and defending patents on our current and any future product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product 34 Table of Conten ts candidate in those countries.
For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries.
These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets.
These 43 Table of Contents agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets.
The FDA’s review of our data of our ongoing clinical trials may, depending on the data, also result in the delay, suspension or termination of one or more clinical trials, which would also delay or prevent the initiation of our other planned clinical trials.
The FDA’s review of our data of our clinical trials may, depending on the data, also result in the delay, suspension or termination of one or more clinical trials, which would also delay or prevent the initiation of our other planned 32 Table of Contents clinical trials.
As a result, we expect to have more significant foreign currency risks related to our operating expenses denominated in currencies other than the U.S. dollar beginning in the first quarter of 2023. A weakening U.S. dollar could increase our operating expenses, which would adversely impact our results of operations and financial position.
As a result, we have had and expect to continue to have more significant foreign currency risks related to our operating expenses denominated in currencies other than the U.S. dollar. A weakening U.S. dollar could increase our operating expenses, which would adversely impact our results of operations and financial position.
Working with collaborators poses several significant risks, including the following: • limited availability of resource allocation and other developmental decisions made by our collaborators about the product candidates that we seek to develop with them may result in the delay or termination of research programs, studies or trials, repetition of or initiation of new studies or trials or provision of insufficient funding or resources for the completion of studies or trials or the successful marketing and distribution of any product candidates that may receive approval; • collaborators could independently develop, or develop with third parties, product candidates that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators may not properly obtain, maintain, enforce or defend our intellectual property or proprietary rights or may use our proprietary information in such a way that could jeopardize or invalidate our proprietary information or expose us to potential litigation; and • disputes may arise between us and our collaborators that result in the delay or termination of the research, development or commercialization activities or that result in costly litigation or arbitration that diverts management attention and resources. 28 Table of Conten ts Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.
Working with collaborators poses several significant risks, including the following: • limited availability of resource allocation and other developmental decisions made by our collaborators about the product candidates that we seek to develop with them may result in the delay or termination of research programs, studies or trials, repetition of or initiation of new studies or trials or provision of insufficient funding or resources for the completion of studies or trials or the successful marketing and distribution of any product candidates that may receive approval; • collaborators could independently develop, or develop with third parties, product candidates that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators may not properly obtain, maintain, enforce or defend our intellectual property or proprietary rights or may use our proprietary information in such a way that could jeopardize or invalidate our proprietary information or expose us to potential litigation; and • disputes may arise between us and our collaborators that result in the delay or termination of the research, development or commercialization activities or that result in costly litigation or arbitration that diverts management attention and resources.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe intellectual property of the licensor or a third party that is not subject to the licensing agreement; • the extent to which the licensed intellectual property may infringe the intellectual property of a third party that is not subject to the licensing agreement, as well as the licensor’s potential breach of its related warranties or obligations in a licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and 44 Table of Contents • the priority of invention of patented technology.
For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver.
For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. Subsequently, in March 2023, First Citizens BancShares acquired SVB.
We have entered into various agreements and licenses with licensees, licensors and other counterparties related to the development and/or commercialization of ONA-XR. These agreements and licenses impose a variety of obligations on us and the counterparties to such agreements and licenses.
We have entered into various agreements and licenses with licensees, licensors and other counterparties related to the development and/or commercialization of our current and past product candidates. These agreements and licenses impose a variety of obligations on us and the counterparties to such agreements and licenses.
The use of protein inhibitors as potential cancer treatments is a recent development and may not become broadly accepted by physicians, patients, hospitals, cancer treatment centers and others in the medical community and we may not be able to convince them to use a product candidate for many reasons.
The use of T cell engaging bispecific antibodies as potential cancer treatments is a recent development and may not become broadly accepted by physicians, patients, hospitals, cancer treatment centers and others in the medical 35 Table of Contents community and we may not be able to convince them to use a product candidate for many reasons.
In that event, we may be required to expend significant time and resources to develop or license replacement technology. If we are unable to do so, we or our collaborators may be unable to develop or commercialize the affected product candidates, which could harm our business significantly. In other cases, we control the prosecution of patents resulting from licensed technology.
If we are unable to develop or license replacement technology, we or our collaborators may be unable to develop or commercialize the affected product candidates, which could harm our business significantly. In other cases, we control the prosecution of patents resulting from licensed technology.
Results of any clinical trial we conduct could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Patients treated with ONA-XR to date have experienced adverse events that include, but are not limited to, fatigue, liver enzyme elevations and nausea.
Results of any clinical trial we conduct could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. For example, certain patients treated with ONA-XR, our former product candidate, experienced adverse events that included, but were not limited to, fatigue, liver enzyme elevations and nausea.
There is significant risk that any product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, obtain any required regulatory approvals or become commercially viable. Our product candidates and the therapeutic approach we are using are new and unproven.
Investment in biopharmaceutical product development is a highly speculative endeavor and entails substantial upfront capital expenditures. There is significant risk that any product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, obtain any required regulatory approvals or become commercially viable. Our product candidates and the therapeutic approach we are using are new and unproven.
To obtain reimbursement or pricing approval in some European Union member states, we may be required to conduct studies that compare the cost-effectiveness of a product candidate to other therapies that are considered the local standard of care. It is also possible that additional governmental action is taken in response to the COVID-19 pandemic.
To obtain reimbursement or pricing approval in some European Union member states, we may be required to conduct studies that compare the cost-effectiveness of a product candidate to other therapies that are considered the local standard of care.
In addition, the standard of care may change with the approval of new products in the same indications that we are studying. This may result in the FDA or other regulatory agencies requesting additional studies to show that our product candidate is superior to the new products. Our clinical trial results may also not support approval.
This may result in the FDA or other regulatory agencies requesting additional studies to show that our product candidate is superior to the new products. Our clinical trial results may also not support approval.
Termination of one of these agreements or licenses for any reason could prevent us from completing a transaction to sell or out-license ONA-XR. 29 Table of Conten ts We have relied on and we expect to continue to rely on third parties to conduct, supervise and monitor our clinical trials and some aspects of our research and preclinical testing, and if those third parties do not successfully carry out their contractual duties, comply with regulatory requirements, or otherwise perform in a satisfactory manner, we may not be able to obtain regulatory approval or commercialize product candidates, or such approval or commercialization may be delayed, and our business may be substantially harmed.
We have relied on and we expect to continue to rely on third parties to conduct, supervise and monitor our clinical trials and some aspects of our research and preclinical testing, and if those third parties do not successfully carry out their contractual duties, comply with regulatory requirements, or otherwise perform in a satisfactory manner, we may not be able to obtain regulatory approval or commercialize product candidates, or such approval or commercialization may be delayed, and our business may be substantially harmed.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the shares and trading volume could decline. The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
The success of our business, including our ability to finance our company and generate any revenue in the future, will primarily depend on the successful development, regulatory approval and commercialization of CTIM-76, which may never occur. 20 Table of Conten ts In the future, we may also become dependent on other product candidates that we may develop or acquire; however, not all of our product candidates have been tested in humans and given our early stage of development, it may be many years, if at all, before we have demonstrated the safety and efficacy of a cancer treatment sufficient to warrant approval for commercialization.
In the future, we may also become dependent on other product candidates that we may develop or acquire; however, not all of our product candidates have been tested in humans and given our early stage of development, it 20 Table of Contents may be many years, if at all, before we have demonstrated the safety and efficacy of a cancer treatment sufficient to warrant approval for commercialization.
In addition, defending such claims may cause us to incur substantial expenses and, if successful, could cause us to pay substantial damages if we are found to be infringing a third party’s patent rights. These damages potentially include increased damages and attorneys’ fees if we are found to have infringed such rights willfully.
In addition, defending such claims may cause us to incur substantial expenses and, if successful, could cause us to pay substantial damages if we are found to be infringing a third-party’s patent rights. We may not have sufficient resources to bring these actions to a successful conclusion.
Any such outcome could have a material adverse effect on our business. Our ability to compete effectively in our markets may decline if we do not adequately protect our proprietary rights, and our proprietary rights do not necessarily address all potential threats to our competitive advantages.
Our ability to compete effectively in our markets may decline if we do not adequately protect our proprietary rights, and our proprietary rights do not necessarily address all potential threats to our competitive advantages.
We are subject to the reporting requirements of the Exchange Act, as well as the Sarbanes-Oxley Act and the rules and regulations of the stock market on which our common stock is listed. The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting.
We are subject to the reporting requirements of the Exchange Act, as well as the Sarbanes-Oxley Act and the rules and regulations of the stock market on which our common stock is listed.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity and/or debt financings, partnerships and collaborations, licensing agreements or other strategic arrangements.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity and/or debt financings, partnerships and collaborations, licensing agreements or other strategic arrangements.
Additionally, individual states in the United States have passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing and costs. Similar developments have occurred outside of the United States, including in the European Union where healthcare budgetary constraints have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers.
Similar developments have occurred outside of the United States, including in the European Union where healthcare budgetary constraints have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers.
Clinical development does not always fully characterize the safety and efficacy profile of a new medicine, and it is always possible that a drug or biologic, even after regulatory approval, may exhibit unforeseen side effects.
Clinical development does not always fully characterize the safety and efficacy profile of a new medicine, and it is always possible that a drug or biologic, even after regulatory approval, may exhibit unforeseen side effects. If any product candidate were to cause adverse side effects during clinical trials or after approval, we may be exposed to substantial liabilities.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of a product candidate, 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 a product candidate; and • injunctions or the imposition of civil or criminal penalties. 35 Table of Conten ts The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our current and any future product candidates.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of a product candidate, 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 a product candidate; and • injunctions or the imposition of civil or criminal penalties.
Accordingly, rights under any issued patents may not provide us with sufficient protection against competitive products or processes. 39 Table of Conten ts Furthermore, even if not challenged, our patents and patent applications may not adequately protect our technology and product candidates or products that we develop alone or with collaborators or prevent others from designing their products to avoid being covered by our claims.
Furthermore, even if not challenged, our patents and patent applications may not adequately protect our technology and product candidates or products that we develop alone or with collaborators or prevent others from designing their products to avoid being covered by our claims.
We anticipate that we will need to increase our insurance coverage when we expand our clinical trials and if our collaborators or ourselves successfully commercialize any products.
Product liability insurance coverage may not be adequate to cover all liabilities that we may incur. We anticipate that we will need to increase our insurance coverage when we expand our clinical trials and if we or our collaborators successfully commercialize any products.
Disagreements and disputes between us and certain counterparties may arise related to such wind-down efforts regarding each parties’ obligations under the respective agreement or license relating to ONA-XR. Any such disagreement or dispute could become time consuming, costly and could harm our efforts to pursue strategic options for ONA-XR.
Disagreements and disputes between us and certain counterparties may arise, such as regarding each parties’ obligations under the respective agreement or license. Any such disagreement or dispute could become time consuming, costly and could harm our efforts to develop current or future product candidates.
If we fail to regain and maintain compliance with the Minimum Bid Price Rule or we fail to continue to meet all other applicable continued listing requirements for The Nasdaq Stock Market, our common stock may be delisted, which would adversely affect the market liquidity of our common stock and our ability to obtain financing to fund our operations. 46 Table of Conten ts If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the shares and trading volume could decline.
If we fail to maintain compliance with the Minimum Bid Price Rule or we fail to continue to meet all other applicable continued listing requirements for The Nasdaq Stock Market, our common stock may be delisted, which would adversely affect the market liquidity of our common stock and our ability to obtain financing to fund our operations.
We may in the future be subject to third-party claims and similar adversarial proceedings or litigation in other jurisdictions regarding our infringement of the patent rights of third parties.
In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us. We may in the future be subject to third-party claims and similar adversarial proceedings or litigation in other jurisdictions regarding our infringement of the patent rights of third parties.
Numerous United States, EU and other internationally issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we and our collaborators are developing product candidates, and as the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our current and any future product candidates may be subject to claims of infringement of the intellectual property rights of third parties.
As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our current and any future product candidates may be subject to claims of infringement of the intellectual property rights of third parties.
If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our current and any future product candidates will be harmed.
If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our current and any future product candidates will be harmed. 34 Table of Contents We will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with a product candidate.
Any disagreements or disputes with such parties that lead to litigation, arbitration or similar proceedings will result in us incurring significant legal expenses, as well as potential significant legal liability.
Any disagreements or disputes with such parties that lead to litigation, arbitration or similar proceedings will result in us incurring significant legal expenses and potential significant legal liability and could jeopardize our ability to continue development of the related product candidate.
We were founded in 2015 and spent the first three years of our company’s history developing and refining our therapeutic approach, and only since then have we focused our efforts on advancing the development of product candidates. 18 Table of Conten ts Investment in biopharmaceutical product development is a highly speculative endeavor and entails substantial upfront capital expenditures.
We are a biopharmaceutical company with a limited operating history. We were founded in 2015 and spent the first three years of our company’s history developing and refining our therapeutic approach, and only since then have we focused our efforts on advancing the development of product candidates.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters are located at 2001 Market Street, Suite 3915, Unit #15, Philadelphia, PA 19103, where we occupy approximately 3,500 square feet of office space pursuant to a sublease entered into in January 2022. Our sublease for this space began on February 1, 2022 and is set to expire on July 30, 2023.
Biggest changeItem 2. Properties Our corporate headquarters are located at 2001 Market Street, Suite 3915, Unit #15, Philadelphia, PA 19103, where we occupy approximately 3,500 square feet of office space pursuant to a lease that was set to expire on August 31, 2024 if we did not renew the lease for an additional year.
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Additionally, in March 2023, we entered into a direct lease for this same office space that begins on August 1, 2023 and is set to expire on August 31, 2024, pursuant to which we retain the right to renew the lease for an additional one-year term subject to notice to the landlord by December 31, 2023.
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In March 2024, we amended the lease, which now expires on November 30, 2024 and will automatically renew for successive three-month periods unless we or the landlord provides the other with a termination notice at least 90 days before any such successive renewal.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStockholders As of March 17, 2023, we had 15,966,053 shares of common stock outstanding held by 56 holders of record. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Biggest changeStockholders As of March 15, 2024, we had 15,966,053 shares of common stock outstanding held by 52 holders of record. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.

Item 7. Management's Discussion & Analysis

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

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Biggest changeOther Income Other income is primarily due to the recognition of a gain on extinguishment of debt as a result of the forgiveness of our outstanding Paycheck Protection Program loan in July 2021. 57 Table of Conten ts Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following table sets forth our results of operations for the years ended December 31, 2022 and 2021: Year ended December 31, 2022 2021 $ Change % Change Operating expenses: Acquired in-process research and development $ 500,000 $ 3,087,832 (2,587,832) (84) % Research and development 7,091,163 3,805,067 3,286,096 86 % General and administrative 7,790,040 3,632,920 4,157,120 114 % Loss from operations (15,381,203) (10,525,819) (4,855,384) 46 % Interest income (expense), net 547,268 (64,240) 611,508 (952) % Change in fair value of convertible promissory notes — 9,317 (9,317) (100) % Other (expense) income (2,004) 123,872 (125,876) (102) % Net loss $ (14,835,939) $ (10,456,870) $ (4,379,069) 42 % Acquired In-Process Research and Development Expenses Acquired in-process research and development expense of $0.5 million for the year ended December 31, 2022 reflects the expense recognized related to the development milestone achieved in 2022 under the collaboration and licensing agreement with Integral for the development of CTIM-76.
Biggest changeResults of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table sets forth our results of operations for the years ended December 31, 2023 and 2022: Year ended December 31, 2023 2022 $ Change % Change Operating expenses: Acquired in-process research and development $ — $ 500,000 $ (500,000) (100) % Research and development 17,782,731 7,091,163 10,691,568 151 % General and administrative 7,289,885 7,790,040 (500,155) (6) % Loss from operations (25,072,616) (15,381,203) (9,691,413) 63 % Interest income 1,163,975 547,268 616,707 113 % Other expense (55,570) (2,004) (53,566) 2673 % Net loss $ (23,964,211) $ (14,835,939) $ (9,128,272) 62 % Acquired In-Process Research and Development Expenses Acquired in-process research and development expense ("IPR&D") of $0.5 million for the year ended December 31, 2022 reflects the expense recognized related to a development milestone achieved in 2022 under the Integral License Agreement for the development of our CLDN6 bsAb for solid tumors.
Our future funding requirements will depend on many factors, including, but not limited to: • the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our current and for any additional product candidates that we may pursue; • the costs of manufacturing our current and any future product candidates for clinical trials and in preparation for regulatory approval and commercialization; • the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our current and any future product candidates that we may pursue; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; • the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies; • expenses needed to attract and retain skilled personnel; • costs associated with being a public company; • the costs required to scale up our clinical, regulatory and manufacturing capabilities; • the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for our current and any future product candidates for which we receive regulatory approval; and • revenue, if any, received from commercial sales of our current and any future product candidates, should any of our product candidates receive regulatory approval.
Our future funding requirements will depend on many factors, including, but not limited to: • the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our current and any future product candidates that we may pursue; • the costs of manufacturing our current and any future product candidates for clinical trials and in preparation for regulatory approval and commercialization; • the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our current and any future product candidates that we may pursue; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; • the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies; • expenses needed to attract and retain skilled personnel; • costs associated with being a public company; • the costs required to scale up our clinical, regulatory and manufacturing capabilities; • the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for our current and any future product candidates for which we receive regulatory approval; and • revenue, if any, received from commercial sales of our current and any future product candidates, should any of our product candidates receive regulatory approval.
Other exemptions and reduced reporting requirements under the JOBS Act include, without limitation, the requirements for providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements.
Other exemptions and reduced reporting requirements under the JOBS Act include, without limitation, the requirements for providing an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements.
Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the development of our product candidates. We expense research and development costs as incurred. We accrue an expense for preclinical studies and clinical trial activities performed by our vendors based upon estimates of the proportion of work completed.
Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the development of our current and former product candidates. We expense research and development costs as incurred. We accrue an expense for preclinical studies and clinical trial activities performed by our vendors based upon estimates of the proportion of work completed.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and/or marketing, distribution or licensing arrangements.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic transactions and/or marketing, distribution or licensing arrangements.
Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial 63 Table of Conten ts statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
In addition, if we obtain regulatory approval for any product candidate, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. Furthermore, we have incurred and continue to incur significant costs associated with operating as a public company, including legal, accounting, investor relations and other expenses that we did not incur as a private company.
In addition, if we obtain regulatory approval for any product candidate, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. Furthermore, we have incurred and continue to incur significant costs associated with operating as a public company, including legal, accounting, investor relations and other expenses.
Investing Activities During the year ended December 31, 2022, cash used in investing activities was primarily attributable to the payment of a development milestone of $0.5 million under the collaboration and licensing agreement with Integral for the development of CTIM-76. In addition, we used approximately $37,000 of cash to purchase property and equipment.
During the year ended December 31, 2022, cash used in investing activities was primarily attributable to the payment of a development milestone of $0.5 million under the Integral License Agreement for the development of CTIM-76. In addition, we used approximately $37,000 of cash to purchase property and equipment.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.
If we raise additional funds through collaborations, strategic transactions or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may 60 Table of Contents not be favorable to us.
Our preclinical program, CTIM-76, is an anti-CLDN6 bsAb that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6. CLDN6 is a tight junction membrane protein target expressed in multiple solid tumors, including ovarian, lung and testicular, and absent from or expressed at low levels in healthy adult tissues.
Our preclinical program, CTIM-76, is a CLDN6 x anti-CD3 bsAb that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6. CLDN6 is a tight junction membrane protein target expressed in multiple solid tumors and absent from or expressed at low levels in healthy adult tissues.
Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, and the potential impacts of the ongoing COVID-19 pandemic, contains forward-looking statements that involve risks and uncertainties.
Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, contains forward-looking statements that involve risks and uncertainties.
Financing Activities During the year ended December 31, 2022, cash used in financing activities was $0.1 million, consisting of the payment of offering costs related to our December 2021 private placement.
Financing Activities We did not have cash flows from financing activities during the year ended December 31, 2023. During the year ended December 31, 2022, cash used in financing activities was $0.1 million, consisting of the payment of offering costs related to our December 2021 private placement.
Cash used in operating activities reflected our net loss of $14.8 million, partially offset by non-cash share-based compensation of $1.0 million, in-process research and development charges of $0.5 million, and a net change in our operating assets and liabilities of $0.3 million.
During the year ended December 31, 2022, we used $13.5 million of cash in operating activities. Cash used in operating activities reflected our net loss of $14.8 million, partially offset by non-cash share-based compensation of $1.0 million, in-process research and development charges of $0.5 million, and a net change in our operating assets and liabilities of $0.3 million.
Interest Income (Expense), net Interest income (expense), net, increased by approximately $0.6 million for the year ended December 31, 2022 as compared to the year ended December 31, 2021 primarily due to higher interest income earned as a result of higher cash and cash equivalent balances and higher interest rates.
Interest Income Interest income increased by approximately $0.6 million for the year ended December 31, 2023 as compared to 2022, primarily due to higher interest income earned on cash and cash equivalent balances.
See Note 8 to our audited consolidated financial statements included elsewhere in this Form 10-K for information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our awards granted. 62 Table of Conten ts Recent Accounting Pronouncements See Note 3 to our audited consolidated financial statements found elsewhere in this Form 10-K for a description of recent accounting pronouncements applicable to our consolidated financial statements.
See Note 7 to our audited consolidated financial statements included elsewhere in this Form 10-K for information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our awards granted.
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenses on other research and development activities. Our net loss was $14.8 million for the year ended December 31, 2022.
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenses on other research and development activities.
As of December 31, 2022, we had an accumulated deficit of $44.1 million.We expect to continue to incur net operating losses for at least the next several years, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase.
We expect to continue to incur net operating losses for at least the next several years, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase.
We will need to raise substantial additional capital to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we plan to finance our operations through the sale of equity, debt financings and/or other capital sources, which may include collaborations with other companies or other strategic transactions.
We will need to raise substantial additional capital to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we plan to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic transactions and/or 56 Table of Contents marketing, distribution or licensing arrangements.
Currently, our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, as well as general and administrative expenditures. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or any future product candidates.
Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or any future product candidates.
You should review the section titled “Risk Factors” in this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described below.
You should review the section titled “Risk Factors” in this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described below. Please also see the section entitled “Note Regarding Forward-Looking Statements.” Overview We are a biopharmaceutical company advancing medicines for solid tumors.
If we are unable to secure adequate additional funding, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more product candidates or delay our pursuit of potential in-licenses or acquisitions. 55 Table of Conten ts The COVID-19 Pandemic and its Impacts on Our Business The spread of COVID-19 has caused worldwide economic instability and significant volatility in the financial markets.
If we are unable to secure adequate additional funding, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more product candidates or delay our pursuit of potential in-licenses or acquisitions.
We expect our research and 56 Table of Conten ts development expenses to increase significantly over the next several years as we increase personnel costs, including share-based compensation, conduct our clinical trials, including later-stage clinical trials, for current and any future product candidates and prepare regulatory filings for our current and any future product candidates.
We expect our research and development expenses to increase significantly over the next several years as we increase personnel costs, including share-based compensation, conduct our clinical trials, including later-stage clinical trials, for current and any future product candidates and prepare regulatory filings for our current and any future product candidates. 57 Table of Contents General and Administrative Expenses General and administrative expenses have consisted primarily of personnel expenses, including salaries, benefits and share-based compensation expense, for employees and consultants in executive, finance and accounting, legal, operations support, information technology and business development functions.
Since inception, we have devoted substantially all of our resources to developing product and technology rights, conducting research and development, organizing and staffing our company, business planning and raising capital. We operate as one business segment and have incurred recurring losses, the majority of which are attributable to research and development activities, and negative cash flows from operations.
Since inception, we have devoted substantially all of our resources to developing product and technology rights, conducting research and development, organizing and staffing our company, business planning and raising capital.
Research and Development Expenses Research and development expenses increased by approximately $3.3 million for the year ended December 31, 2022 as compared to the same period in 2021.
There was no IPR&D expense recognized for the year ended December 31, 2023. 58 Table of Contents Research and Development Expenses Research and development expenses increased by approximately $10.7 million for the year ended December 31, 2023 as compared to the same period in 2022.
Critical Accounting Policies and Estimates This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
We therefore believe that we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships. 61 Table of Contents Critical Accounting Policies and Estimates This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses. 59 Table of Conten ts Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.
As of December 31, 2022, we had cash and cash equivalents of $35.5 million, which we expect will be sufficient to fund our operations into late 2024 as a result of our portfolio prioritization and capital allocation strategy, which includes discontinuing the development of ONA-XR.
As of December 31, 2023, we had cash and cash equivalents of $14.4 million, which we expect will be sufficient to fund our operations into late 2024.
The primary uses of cash were to fund our operations related to the development of our product candidates, ONA-XR and CTIM-76. During the year ended December 31, 2021, we used $8.8 million of cash in operating activities.
The primary uses of cash were to fund our operations related to the development of our current and former product candidates. Investing Activities We did not have cash flows from investing activities during the year ended December 31, 2023.
We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. Since our inception through December 31, 2022, we have funded our operations through the sale of convertible debt, convertible preferred stock, common stock and warrants.
Liquidity and Capital Resources Overview Since our inception, we have not recognized any revenue and have incurred operating losses and negative cash flows from our operations. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all.
On March 22, 2023, we announced a portfolio prioritization and capital allocation strategy, including discontinuing the development of ONA-XR and focusing on the development of CTIM-76. Based upon the challenging market conditions for emerging companies, the increasingly competitive landscape for breast cancer treatments, recent study findings, and other factors, we decided to cease development and explore strategic options for ONA-XR.
Based upon the challenging market conditions for emerging companies, the increasingly competitive landscape for breast cancer treatments, recent study findings, and other factors, we decided to cease development and explore strategic options for ONA-XR. As a result, we no longer primarily focus on female cancers. We were incorporated in April 2015 under the laws of the State of Delaware.
Personnel-related costs, which include salaries, benefits and stock-based compensation expense, increased by approximately $0.5 million, primarily due to higher headcount over the prior year period. 58 Table of Conten ts General and Administrative Expenses General and administrative expenses increased by $4.2 million from $3.6 million for the year ended December 31, 2021 to $7.8 million for the year ended December 31, 2022.
CTIM-76 expenditures increased by $13.6 million, primarily due to an increase of $7.7 million in contract manufacturing costs and $5.4 million in preclinical costs as a result of ongoing IND-enabling studies. Personnel-related costs, which include salaries, benefits and stock-based compensation expense, decreased by approximately $0.2 million, primarily due to lower headcount over the prior year period.
The following table summarizes our research and development expenses for the year ended December 31, 2022 as compared to the same period in 2021: Year ended December 31, 2022 2021 $ Change % Change ONA-XR $ 4,641,936 $ 2,242,146 $ 2,399,790 107 % CTIM-76 948,716 642,030 306,686 48 % Personnel-related costs 1,372,376 916,371 456,005 50 % Other research and development 128,135 4,520 123,615 2735 % $ 7,091,163 $ 3,805,067 $ 3,286,096 86 % The increase in ONA-XR expenses of $2.4 million was primarily due to an increase of $1.0 million in contract manufacturing costs and an increase of $1.1 million in clinical trial costs, mostly as a result of initiating our Phase 1b/2 ELONA trial.
The following table summarizes our research and development expenses for the year ended December 31, 2023 as compared to the same period in 2022: Year ended December 31, 2023 2022 $ Change % Change ONA-XR $ 1,889,220 $ 4,641,936 $ (2,752,716) (59) % CTIM-76 14,593,973 948,716 13,645,257 1438 % Personnel-related costs 1,218,914 1,372,376 (153,462) (11) % Other research and development 80,624 128,135 (47,511) (37) % $ 17,782,731 $ 7,091,163 $ 10,691,568 151 % The decrease in ONA-XR expenses of $2.8 million was primarily due to a decrease of $1.4 million in contract manufacturing costs and $1.1 million in clinical costs largely due to the decision in March 2023 to discontinue development of ONA-XR.
This was primarily offset by non-cash in-process research and development charges of $3.1 million, the non-cash fair value measurement of warrants for services of $0.4 million and share-based compensation of $0.5 million. The primary uses of cash were to fund our operations related to the development of our product candidates, ONA-XR and CTIM-76.
Cash used in operating activities reflected our net loss of $24.0 million, partially offset by non-cash share-based compensation of $1.1 million and a net change in our operating assets and liabilities of $1.8 million. The primary uses of cash were to fund our operations related to the development of our current and former product candidates.
If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. 60 Table of Conten ts Cash Flows The following table shows a summary of our cash flows for the periods indicated: Year ended December 31, 2022 2021 Cash used in operating activities $ (13,549,234) $ (8,799,487) Cash used in investing activities (536,836) (250,000) Cash (used in) provided by financing activities (102,071) 58,394,036 Net (decrease) increase in cash and cash equivalents $ (14,188,141) $ 49,344,549 Comparison of the Years Ended December 31, 2022 and 2021 Operating Activities During the year ended December 31, 2022, we used $13.5 million of cash in operating activities.
If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
We do not engage in off-balance sheet financing arrangements. In addition, we do not 61 Table of Conten ts engage in trading activities involving non-exchange traded contracts. We therefore believe that we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.
We do not engage in off-balance sheet financing arrangements. In addition, we do not engage in trading activities involving non-exchange traded contracts.
As of December 31, 2022, we had cash and cash equivalents of $35.5 million, which we expect will be sufficient to fund our operations into late 2024. If the Company is unable to obtain additional financing, the lack of liquidity could have a material adverse effect on the Company’s future prospects.
We have concluded that there is substantial doubt about our ability to continue as a going concern for a period of at least 12 months from the issuance date of these consolidated financial statements. If the Company is unable to obtain additional financing, the lack of liquidity could have a material adverse effect on the Company’s future prospects.
In November 2022, we entered into the Lonza Development Agreement with Lonza, a global development and manufacturing partner to the pharma, biotech, and nutrition industries, to manufacture CTIM-76. IND-enabling studies on CTIM-76 have been initiated, and we expect to submit an IND application to support human clinical trials to the FDA in the first quarter of 2024.
IND-enabling studies on CTIM-76 are in process, and we expect to submit an IND application to support human clinical trials to the FDA by the end of March 2024. We plan to initiate a Phase 1 trial to focus on CLDN6-positive gynecologic and testicular cancers upon receiving IND clearance from the FDA.
We do not believe inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2022 and 2021. Emerging Growth Company and Smaller Reporting Company Status In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted.
Recent Accounting Pronouncements See Note 3 to our audited consolidated financial statements found elsewhere in this Form 10-K for a description of recent accounting pronouncements applicable to our consolidated financial statements. 62 Table of Contents Emerging Growth Company and Smaller Reporting Company Status In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted.
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Please also see the section entitled “Note Regarding Forward-Looking Statements.” On April 23, 2021, we completed a reverse triangular merger, resulting in Context Therapeutics Inc. becoming the sole holder of 100% of the membership interests in Context Therapeutics LLC.
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We expect to have sufficient cash and cash equivalents to fund our operations into late 2024. We will require additional funding for our planned Phase 1 trial, other research and development expenditures, and general and administrative expenses. On February 29, 2024, we amended the Integral License Agreement to reflect updated financial terms.
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In connection with the merger, all of the common units, preferred units and all options, warrants or other rights to purchase common or preferred units of Context Therapeutics LLC converted into common stock, preferred stock and all options, warrants or other rights to purchase common or preferred stock of Context Therapeutics Inc.
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In the course of our further due diligence review of CTIM-76, we determined that certain of the licensed rights under the Integral License Agreement may incorporate intellectual property rights currently held by a third party.
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Prior to the reorganization we operated as Context Therapeutics LLC. Based on this being a transaction between entities under common control, the carryover basis of accounting was used to record the assets, liabilities, and equity of Context Therapeutics LLC.
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Specifically, we are aware of issued patents in the United States and certain foreign jurisdictions expiring in January 2034 that potentially cover certain of the intellectual property included in CTIM-76.
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Further, as a common control transaction, the consolidated financial statements of the Company reflect the merger transaction as if it had occurred as of the earliest period presented herein. Overview We are a biopharmaceutical company dedicated to improving the lives of patients living with solid tumors.
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While we believe we will have reasonable defenses against any potential claim of infringement, we may not be successful in such efforts, and we also may not be able to obtain a license to such patent on commercially reasonable terms, or at all.
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As a result, we will no longer primarily focus on female cancers. Recent advances in the treatment of metastatic breast cancer point toward a more competitive environment in the coming years, such as promising Phase 3 clinical data for emerging product candidates, including Enhertu and capivasertib.
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As part of the Second Amendment, Integral’s right to receive certain future payments will be reduced as follows: aggregate development and regulatory milestone payments will be reduced from $55 million to $15 million, aggregate sales milestone payments will be reduced from $130 million to $12.5 million, and a tiered royalty of 8-12% that commenced at first commercial sale will be reduced to a flat royalty rate of 6% on net sales beginning no sooner than February 1, 2034.
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Additionally, in the ongoing Phase 2 OATH trial evaluating ONA-XR in combination with anastrozole, elevated LFTs were identified in three patients, including in one patient who discontinued treatment, although none of the elevated LFTs were considered serious adverse events.
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The Second Amendment also narrows the license grant from Integral to us to only cover CTIM-76, removes any further obligation of us to reimburse Integral for any independently obtained research funding Integral applied against CTIM-76 research, and includes mutual releases by the parties.
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We determined that significant incremental program costs and delays were likely to be required to analyze and potentially mitigate future LFT abnormalities. By ceasing development of ONA-XR, we expect to have sufficient cash and cash equivalents to fund our operations into late 2024. We were incorporated in April 2015 under the laws of the State of Delaware.
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The reduced development and regulatory milestones now reflect a payment due at each of: first patient’s first screening visit in a Phase 1b/2 or Phase 2 clinical trial for CTIM-76, first patient’s first screening visit in a Phase 3 clinical trial for CTIM-76, United States marketing approval for CTIM-76, European Union marketing approval for CTIM-76, United Kingdom marketing approval for CTIM-76, and Japan marketing approval for CTIM-76.
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We have funded our operations primarily through the sale of convertible debt, convertible preferred stock, common stock and warrants. In October 2021, we closed an initial public offering (“IPO”) on The Nasdaq Stock Market, in which we issued and sold 5,750,000 shares at a public offering price of $5.00 per share.
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The amended commercial milestones now also reflect a payment due upon the achievement of annual net sales of $500 million and annual net sales of $1 billion. On March 22, 2023, we announced a portfolio prioritization and capital allocation strategy, including discontinuing the development of ONA-XR and focusing on the development of CTIM-76.
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We received gross proceeds of approximately $28.8 million as a result of the offering. In December 2021, we sold 5,000,000 shares of common stock together with warrants to purchase 5,000,000 shares of common stock in a private placement for gross proceeds of 54 Table of Conten ts approximately $31.3 million.
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We operate as one business segment and 55 Table of Contents have incurred recurring losses, the majority of which are attributable to research and development activities, and negative cash flows from operations. We have funded our operations primarily through the sale of convertible debt, convertible preferred stock, common stock and warrants.
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There is significant uncertainty as to the likely effects of this disease should novel variants emerge, which may, among other things, materially impact our ongoing or planned clinical trials. This pandemic and/or periodic outbreaks could result in difficulty securing clinical trial site locations, CROs, and/or trial monitors and other critical vendors and consultants supporting the trial.
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Our net loss was $24.0 million for the year ended December 31, 2023. As of December 31, 2023, we had an accumulated deficit of $68.1 million. Currently, our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, as well as general and administrative expenditures.
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In addition, outbreaks or the perception of an outbreak near a clinical trial site location could impact our ability to enroll patients. These situations, or others associated with COVID-19, could cause delays in our clinical trial plans and could increase expected costs, all of which could have a material adverse effect on our business and financial condition.
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Other Income Other income is primarily due to the recognition of foreign currency gains or losses as a result of exchange rate fluctuations on transactions denominated in a currency other than our functional currency.
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At the current time, we are unable to quantify the potential effects of this pandemic on our future consolidated financial statements.
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General and Administrative Expenses General and administrative expenses decreased by $0.5 million from $7.8 million for the year ended December 31, 2022 to $7.3 million for the year ended December 31, 2023.
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General and Administrative Expenses General and administrative expenses have consisted primarily of personnel expenses, including salaries, benefits and share-based compensation expense, for employees and consultants in executive, finance and accounting, legal, operations support, information technology and business development functions.
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The decrease was primarily driven by a decrease in insurance expense of $0.7 million and other administrative costs of $0.1 million, partially offset by an increase in spending on professional fees of $0.3 million.
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Interest Expense Interest expense has consisted primarily of interest related to our convertible promissory notes that converted to Series A stock in 2021. All of our previously outstanding convertible promissory notes were converted as of February 2021.
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Other Expense Other expense increased by approximately $54,000 for the year ended December 31, 2023 as compared to 2022 primarily due to higher foreign currency losses as a result of exchange rate fluctuations on transactions denominated in a currency other than our functional currency.
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Acquired in-process research and development expense of $3.1 million for the year ended December 31, 2021 reflects the fair value of the consideration paid/equity issued under the collaboration and licensing agreement with Integral for the development of CTIM-76.
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Since our inception through December 31, 2023, we have funded our operations through the sale of convertible debt, convertible preferred stock, common stock and warrants. As of December 31, 2023, we had $14.4 million in cash and cash equivalents and an accumulated deficit of $68.1 million.
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CTIM-76 expenditures increased by $0.3 million primarily as a result of completing additional IND-enabling studies and higher contract manufacturing costs.
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While we expect our existing cash and cash equivalents will be sufficient to fund our operations into late 2024, we have concluded that there is substantial doubt about our ability to continue as a going concern for a period of at 59 Table of Contents least 12 months from the issuance date of these consolidated financial statements.
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The increase was mainly due to an increase of $2.0 million in compensation and share-based compensation as a result of an increase in our general and administrative headcount and changes to compensation arrangements. Additionally, expenses increased due to higher insurance costs of $1.2 million and $1.0 million of other costs associated with operating as a public company.
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Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.
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In addition, interest expense was lower for the year ended December 31, 2022 due to the conversion of all convertible promissory notes during 2021. Change in Fair Value of Convertible Promissory Notes The change in fair value of convertible promissory notes was $9,317 for the year ended December 31, 2021.
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Cash Flows The following table shows a summary of our cash flows for the periods indicated: Year ended December 31, 2023 2022 Cash used in operating activities $ (21,047,618) $ (13,549,234) Cash used in investing activities — (536,836) Cash used in financing activities — (102,071) Net decrease in cash and cash equivalents $ (21,047,618) $ (14,188,141) Comparison of the Years Ended December 31, 2023 and 2022 Operating Activities During the year ended December 31, 2023, we used $21.0 million of cash in operating activities.
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This change was attributable to a decrease in the fair value of our common stock. Other Income (Expense) Other income (expense) of $0.1 million for the year ended December 31, 2021 was primarily due to the recognition of a gain on extinguishment of debt as a result of the forgiveness of our outstanding Paycheck Protection Program loan in July 2021.
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Liquidity and Capital Resources Overview We have incurred losses and negative cash flows from operations since inception and have an accumulated deficit of $44.1 million as of December 31, 2022. Since our inception, we have not recognized any revenue and have incurred operating losses and negative cash flows from our operations.
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In October 2021, we closed an IPO on The Nasdaq Stock Market and received gross proceeds of approximately $28.8 million as a result of the offering.
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Additionally, in December 2021, we sold 5,000,000 shares of our common stock together with warrants to purchase 5,000,000 shares of our common stock in a private placement and received gross proceeds of approximately $31.3 million.
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Cash used in operating activities reflected our net loss of $10.5 million, a gain of $0.1 million from the extinguishment of debt and a net change in our operating assets and liabilities of $2.2 million.
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During the year ended December 31, 2021, cash used in investing activities was attributable to the initial upfront license fee of $0.3 million related to our acquired in-process research and development..

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