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What changed in Coya Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Coya Therapeutics, Inc.'s 2023 and 2024 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 2024 report.

+370 added−371 removedSource: 10-K (2024-12-31) vs 10-K (2024-03-19)

Top changes in Coya Therapeutics, Inc.'s 2024 10-K

370 paragraphs added · 371 removed · 263 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

105 edited+68 added−44 removed262 unchanged
Biggest changeOther potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; • fines, warning letters or holds on post-approval clinical trials; • refusal of the FDA to approve applications or supplements to approved applications, or withdrawal of product approvals; • product seizure or detention, or refusal to permit the import or export of products; • injunctions or the imposition of civil or criminal penalties; and • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; or mandated modification of promotional materials and labeling and issuance of corrective information.
Biggest changeOther potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; • fines, warning letters or holds on post-approval clinical trials; • refusal of the FDA to approve applications or supplements to approved applications, or withdrawal of product approvals; • product seizure or detention, or refusal to permit the import or export of products; • injunctions or the imposition of civil or criminal penalties; and • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; or mandated modification of promotional materials and labeling and issuance of corrective information. 22 Other Regulatory Matters Manufacturing, sales, promotion and other activities of product candidates following product approval, where applicable, or commercialization are also subject to regulation by numerous regulatory authorities in the U.S. in addition to the FDA, which may include the Centers for Medicare & Medicaid Services, or CMS, other divisions of the Department of Health and Human Services, the Department of Justice, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments and governmental agencies.
We expect our expenses and capital requirements will increase significantly in connection with our ongoing activities as we: • continue our ongoing and planned research and development of our product candidates; 1 • initiate nonclinical studies and clinical trials for any additional product candidates that we may pursue; • continue to scale up external manufacturing capacity with the aim of securing sufficient quantities to meet our capacity requirements for clinical trials and potential commercialization; • establish a sales, marketing and distribution infrastructure to commercialize any approved product candidates and related additional commercial manufacturing costs; • develop, maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know-how; • acquire or in-license other product candidates and technologies; • add clinical, operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and • incur additional legal, accounting, investor relations and other expenses associated with operating as a public company.
We expect our expenses and capital requirements will increase significantly in connection with our ongoing activities as we: • continue our ongoing and planned research and development of our product candidates; • initiate nonclinical studies and clinical trials for any additional product candidates that we may pursue; 1 • continue to scale up external manufacturing capacity with the aim of securing sufficient quantities to meet our capacity requirements for clinical trials and potential commercialization; • establish a sales, marketing and distribution infrastructure to commercialize any approved product candidates and related additional commercial manufacturing costs; • develop, maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know-how; • acquire or in-license other product candidates and technologies; • add clinical, operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and • incur legal, accounting, investor relations and other expenses associated with operating as a public company.
Reddy's Laboratories, or DRL_AB) in patients with ALS and are preparing for an IND submission to the FDA in the first half of 2024. We intend to initiate a Phase 2 trial after the acceptance of our IND application by the FDA.
Reddy's Laboratories ("DRL"), or DRL_AB) in patients with ALS and are preparing for an IND submission to the FDA in the first half of 2024. We intend to initiate a Phase 2 trial after the acceptance of our IND application by the FDA.
Treg suppressive function at 24 weeks (79.9±9.6) and 48 weeks (89.5±4.1) were significantly higher compared to baseline (62.1±8.1) (p POC Study COYA 302: Increased Treg Suppressive Function In Vivo POC Study COYA 302: Increased Treg Number In Vivo 9 POC Study COYA 302: Lowered Lipid Peroxide Biomarkers (interim data) From the clinical safety perspective, the treatment used in the POC Study appeared to be well tolerated over the 48-week treatment period.
Treg suppressive function at 24 weeks (79.9±9.6) and 48 weeks (89.5±4.1) were significantly higher compared to baseline (62.1±8.1) (p POC Study COYA 302: Increased Treg Suppressive Function In Vivo POC Study COYA 302: Increased Treg Number In Vivo 8 POC Study COYA 302: Lowered Lipid Peroxide Biomarkers (interim data) From the clinical safety perspective, the treatment used in the POC Study appeared to be well tolerated over the 48-week treatment period.
We will then pay an aggregate of $5.9 million in developmental milestone payments for each Mono Product in each subsequent new indication, and an aggregate of $5.9 million if all developmental milestones are achieved for each new indication. We will also owe royalties on net sales of licensed products ranging from low to mid-single digit percentages.
We will then pay an aggregate of $5.9 million in developmental milestone payments for each Mono Product in each subsequent new indication, and we will owe an aggregate of $5.9 million if all developmental milestones are achieved for each new indication. We will also owe royalties on net sales of licensed products ranging from low to mid-single digit percentages.
If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, imprisonment, exclusion of drugs from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to 25 resolve allegations of non-compliance with these laws, any of which could adversely affect our ability to operate our business and our financial results.
If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, imprisonment, exclusion of drugs from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, any of which could adversely affect our ability to operate our business and our financial results.
Even if the FDA approves a product, depending on the specific risk(s) to be addressed it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase IV clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.
Even if the FDA approves a product, depending on the specific risk(s) to be addressed it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval 20 studies, including Phase IV clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.
Competitor companies developing Treg based cellular therapeutics include: Abata Therapeutics (CAR Treg for autoimmune diseases), Sonoma Biotherapeutics (CAR Treg for autoimmune diseases), Sangamo Therapeutics (SGMO) (CAR Treg for Renal Disease, IBD), TRex Bio (Treg cell therapy for Immunology/Inflammation), Mozart Therapeutics (CD8 Treg cell modulators for Celiac Disease/IBD), GentiBio (Treg cell therapy generated from T-effector cells for T1 Diabetes), Kyverna Therapeutics (Autologous and Allogeneic cell therapies for autoimmune diseases), Cellenkos (Allogeneic umbilical cord blood Tregs for multiple conditions), AZ Therapies (Allogeneic CAR Tregs for CNS Diseases), and Quell Therapeutics (Autologous CAR Tregs for liver transplantation, T1 Diabetes and ALS).
Competitor companies developing Treg based cellular therapeutics include: Abata Therapeutics (CAR Treg for autoimmune diseases), Sonoma Biotherapeutics (CAR Treg for autoimmune diseases), Sangamo Therapeutics (SGMO) (CAR Treg for Renal Disease, IBD), TRex Bio (Treg cell therapy for Immunology/Inflammation), Mozart Therapeutics (CD8 Treg cell modulators for Celiac Disease/IBD), GentiBio (Treg cell therapy generated from T-effector cells for T1 Diabetes), Kyverna Therapeutics (KYTX) (Autologous and Allogeneic cell therapies for autoimmune diseases), Cellenkos (Allogeneic umbilical cord blood Tregs for multiple conditions), AZ Therapies (Allogeneic CAR Tregs for CNS Diseases), and Quell Therapeutics (Autologous CAR Tregs for liver transplantation, T1 Diabetes and ALS).
Although these discounts represent a lower percentage of enrollees’ costs than the current discounts required below the out-of-pocket maximum (that is, in the “donut hole” phase of Part D coverage), the new manufacturer contribution required above the out-of-pocket maximum could be considerable for very high-cost patients and the total contributions by manufacturers to a Part D enrollee’s drug expenses may exceed those currently provided.
Although these discounts represent a lower percentage of enrollees’ costs than the current discounts required below the out-of-pocket maximum (that is, in the “donut hole” phase of Part D coverage), the new manufacturer contribution required above the out-of-pocket maximum could be considerable for very high-cost 23 patients and the total contributions by manufacturers to a Part D enrollee’s drug expenses may exceed those currently provided.
Additionally, products are eligible for Accelerated Approval if they can be shown to have an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or an effect on a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality which is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
Additionally, products are eligible for Accelerated Approval if they can be shown to have an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or an effect on a clinical endpoint that can be measured earlier than an effect on irreversible 21 morbidity or mortality which is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
Government Regulation 17 The FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs, including biologics.
Government Regulation The FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs, including biologics.
In addition, unless otherwise informed by the FDA, the FDA currently requires, as a condition for Accelerated Approval, that all advertising and promotional materials that are 21 intended for dissemination or publication within 120 days following marketing approval be submitted to the agency for review during the pre-approval review period, and that after 120 days following marketing approval, all advertising and promotional materials must be submitted at least 30 days prior to the intended time of initial dissemination or publication.
In addition, unless otherwise informed by the FDA, the FDA currently requires, as a condition for Accelerated Approval, that all advertising and promotional materials that are intended for dissemination or publication within 120 days following marketing approval be submitted to the agency for review during the pre-approval review period, and that after 120 days following marketing approval, all advertising and promotional materials must be submitted at least 30 days prior to the intended time of initial dissemination or publication.
The ten-year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new potential therapeutic 26 indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
The ten-year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new potential therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
The BPCIA includes, among other provisions: • A 12-year exclusivity period from the date of first licensure, or BLA approval, of the reference product, during which approval of a 351(k) application referencing that product may not be made effective; • A four-year exclusivity period from the date of first licensure of the reference product, during which a 351(k) application referencing that product may not be submitted; and • An exclusivity period for certain biological products that have been approved through the 351(k) pathway as interchangeable biosimilars.
The BPCIA includes, among other provisions: • A 12-year exclusivity period from the date of first licensure, or BLA approval, of the reference product, during which approval of a 351(k) application referencing that product may not be made effective; • A four-year exclusivity period from the date of first licensure of the reference product, during which a 351(k) application referencing that product may not be submitted; and 28 • An exclusivity period for certain biological products that have been approved through the 351(k) pathway as interchangeable biosimilars.
COYA 302 is intended 16 to, in-vivo , enhance the anti-inflammatory function of regulatory T cells (Tregs) and suppress the inflammation produced by activated monocytes and macrophages. COYA 302 is comprised of COYA 301 (proprietary low dose interleukin-2 (LD IL-2)) and CTLA4-Ig and is being developed for subcutaneous administration for the treatment of patients with ALS, FTD, AD and PD.
COYA 302 is intended to, in-vivo , enhance the anti-inflammatory function of regulatory T cells (Tregs) and suppress the inflammation produced by activated monocytes and macrophages. COYA 302 is comprised of COYA 301 (proprietary low dose interleukin-2 (LD IL-2)) and CTLA4-Ig and is being developed for subcutaneous administration for the treatment of patients with ALS, FTD, AD and PD.
Violations of the FCA can result in very significant monetary penalties, for each false claim and treble the amount of the government’s damages. Manufacturers can be held liable under the FCA 24 even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.
Violations of the FCA can result in very significant monetary penalties, for each false claim and treble the amount of the government’s damages. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.
Tregs suppress both innate and adaptive immune reactions detrimental to the host, downregulate pro- inflammatory cytokine ( a type of protein that is made by certain immune and non-immune cells and has an effect on the immune system ) production, and can suppress the activation/expansion of CD4+CD25- effector T lymphocytes (Teffs).
Tregs suppress both innate and adaptive immune reactions detrimental to the host, downregulate pro- inflammatory cytokine ( a type of protein that is made by certain immune and non-immune cells and has an effect on the immune system ) production, and can suppress the activation/expansion 4 of CD4+CD25- effector T lymphocytes (Teffs).
At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including restrictions or prohibitions on certain marketing practices, reporting of 23 specified categories of remuneration provided to health care practitioners, and reporting and justification of price increases greater than a specified level.
At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including restrictions or prohibitions on certain marketing practices, reporting of specified categories of remuneration provided to health care practitioners, and reporting and justification of price increases greater than a specified level.
Additionally, the degree of Treg dysfunction is associated 6 with the severity and progression of serious and life-threatening conditions, for which we believe new and effective therapies are urgently needed. Since the discovery of Tregs in 1995, we have continued the development and research of Tregs by leveraging the scientific discoveries of Dr.
Additionally, the degree of Treg dysfunction is associated with the severity and progression of serious and life-threatening conditions, for which we believe new and effective therapies are urgently needed. Since the discovery of Tregs in 1995, we have continued the development and research of Tregs by leveraging the scientific discoveries of Dr.
We believe the immunomodulatory fusion protein selectively inhibits the activation of pro-inflammatory effector T cells and macrophages, downregulating the secretion of pro-inflammatory cytokines, while COYA 301 enhances and expands Tregs in vivo . The combination of these two approaches is intended 7 to further shift the balance in favor of anti-inflammatory Tregs to pro-inflammatory cells in vivo .
We believe the immunomodulatory fusion protein selectively inhibits the activation of pro-inflammatory effector T cells and macrophages, downregulating the secretion of pro-inflammatory cytokines, while COYA 301 enhances and expands Tregs in vivo . The combination of these two approaches is intended to further shift the balance in favor of anti-inflammatory Tregs to pro-inflammatory cells in vivo .
While the Data Protection Directive did not apply to organizations based outside the EU, the GDPR has expanded its reach to include any business, regardless of its location, that provides goods or services to residents in the EU. This expansion would incorporate any clinical trial activities in EU members states.
While the Data Protection Directive did not apply to organizations based outside the EU, the GDPR has expanded its reach to 27 include any business, regardless of its location, that provides goods or services to residents in the EU. This expansion would incorporate any clinical trial activities in EU members states.
The BPCIA also establishes procedures for identifying and resolving patent disputes involving applications submitted under section 351(k) of the PHSA. 28 The BPCIA also created an abbreviated approval pathway for biological products shown to be highly similar to, or interchangeable with, an FDA-licensed reference biological product.
The BPCIA also establishes procedures for identifying and resolving patent disputes involving applications submitted under section 351(k) of the PHSA. The BPCIA also created an abbreviated approval pathway for biological products shown to be highly similar to, or interchangeable with, an FDA-licensed reference biological product.
Houston Methodist Agreements In September 2022, we entered into an Amended and Restated Patent Know How and License Agreement, effective as of October 2020 (the “Methodist License Agreement”), with The Methodist Hospital (“Methodist”) to make, sell and sublicense products and services using the intellectual property and know-how of Methodist.
Houston Methodist Agreements 31 In September 2022, we entered into an Amended and Restated Patent Know How and License Agreement, effective as of October 2020 (the “Methodist License Agreement”), with The Methodist Hospital (“Methodist”) to make, sell and sublicense products and services using the intellectual property and know-how of Methodist.
An increased ratio of pro-inflammatory T cells to functional Tregs leads to a disrupted immune homeostasis. See the below figure for a visual representation: When Tregs become dysfunctional, a cytokine-mediated inflammatory state can arise leading to neurodegenerative, autoimmune, and metabolic diseases.
An increased ratio of pro-inflammatory T cells to functional Tregs leads to a disrupted immune homeostasis. See the below figure for a visual representation: 5 When Tregs become dysfunctional, a cytokine-mediated inflammatory state can arise leading to neurodegenerative, autoimmune, and metabolic diseases.
The data exclusivity period prevents generic or biosimilar applicants from relying on the preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU during a period of eight years from the date on which the reference product was first authorized in the EU.
The data exclusivity 26 period prevents generic or biosimilar applicants from relying on the preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU during a period of eight years from the date on which the reference product was first authorized in the EU.
In such a case, the IND 18 sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Submission of an IND may result in the FDA not allowing clinical trials to commence or not allowing clinical trials to commence on the terms originally specified in the IND.
In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Submission of an IND may result in the FDA not allowing clinical trials to commence or not allowing clinical trials to commence on the terms originally specified in the IND.
The conduct of preclinical studies is subject to federal and state regulations and requirements, including GLP requirements for safety/toxicology studies. The results of the preclinical studies, together with manufacturing information and analytical data must be submitted to the FDA as part of an IND.
The conduct of preclinical studies is subject to federal and state regulations 18 and requirements, including GLP requirements for safety/toxicology studies. The results of the preclinical studies, together with manufacturing information and analytical data must be submitted to the FDA as part of an IND.
In addition, many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only government programs.
In addition, many states have 24 adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only government programs.
Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.
Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of 25 investigations, prosecutions, convictions and settlements in the healthcare industry.
Further, the GDPR imposes strict rules on the transfer of personal data out 27 of the European Union to the U.S. or other regions that have not been deemed to offer “adequate” privacy protections.
Further, the GDPR imposes strict rules on the transfer of personal data out of the European Union to the U.S. or other regions that have not been deemed to offer “adequate” privacy protections.
Additionally, appropriate 19 packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. U.S.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. U.S.
We aim to develop this combination in ALS and other neurodegenerative diseases including FTD, PD, and AD, and perhaps, in time, autoimmune diseases. 2. COYA 301 as the backbone for combination therapies.
We aim to develop this combination in ALS and other neurodegenerative diseases including FTD, PD, and AD, and perhaps, in time, autoimmune diseases. 2. Establish COYA 301 as the backbone for combination therapies.
These patent applications are directed to our Treg and exosome compositions and methods of use, methods of Treg and exosome manufacture, and methods of in vivo Treg expansion via combination therapies, among other things.
These patent applications are directed to our Treg and 29 exosome compositions and methods of use, methods of Treg and exosome manufacture, and methods of in vivo Treg expansion via combination therapies, among other things.
COYA 302 (our lead asset) is the combination of our proprietary low dose interleukin-2 (COYA 301, or LD IL-2) and the immunomodulatory drug CTLA4-Ig, and we believe this combination has the potential to provide a sustained and durable effect on our first series of indications (neurodegenerative disorders) through targeting of multiple pathways.
COYA 302 is the combination of our proprietary low dose interleukin-2 (COYA 301, or LD IL-2) and the immunomodulatory drug CTLA4-Ig, and we believe this combination has the potential to provide a sustained and durable effect on our first series of indications (neurodegenerative disorders) through targeting of multiple pathways.
The foregoing summary of the DRL Development Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the DRL Development Agreement, which is filed as an exhibit to this Annual Report on Form 10-K for the year ended December 31, 2023. Dr.
The foregoing summary of the DRL Development Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the DRL Development Agreement, which is filed as an exhibit to this Annual Report on Form 10-K for the year ended December 31, 2024. Dr.
See the below figure for a visual representation: Development Status We are conducting CMC activities and IND-enabling toxicology studies to support the filing of an IND and the initiation of an industry-sponsored clinical trial of COYA 302 for the treatment of ALS.
See the below figure for a visual representation: 6 Development Status of COYA 302 COYA 302 in ALS We are conducting CMC activities and IND-enabling toxicology studies to support the filing of an IND and the initiation of an industry-sponsored clinical trial of COYA 302 for the treatment of ALS.
We believe COYA 302 represents the most clinically advanced of what we hope will be a family of combination therapies that all feature our LD IL-2.
We believe COYA 302 is the most clinically advanced of what we hope will be a family of combination therapies that all feature our LD IL-2.
This expansion advances our approach of combination biologics with low dose IL-2 as a backbone which we believe may represent a new approach to target complex immune pathways in neurodegenerative diseases. FTD, AD and PD share a similar disease pathogenesis to ALS that is associated with a heightened proinflammatory cascade involving dysfunctional Tregs and proinflammatory microglia and macrophages.
This expansion advances our approach of combination biologics with LD IL-2 as a backbone which we believe may represent a new strategy to target complex immune pathways in neurodegenerative diseases. FTD, AD and PD share a similar disease pathogenesis to ALS that is associated with a heightened proinflammatory cascade involving dysfunctional Tregs and proinflammatory microglia and macrophages.
Schematic Representation of Functionalized Targeted Treg Exosomes We believe this proprietary technology sets the foundation to produce targeted Treg exosome potential therapeutics that are directed to epitopes, the part of an antigen molecule to which an antibody attaches itself, and proteins of interest, while delivering growth factors, drugs or other cargo, representing an innovative technology that could be advantageous relative to other Treg directed potential therapeutic modalities.
We believe this proprietary technology sets the foundation to produce targeted Treg exosome potential therapeutics that are directed to epitopes, the part of an antigen molecule to which an antibody attaches itself, and proteins of interest, while delivering growth factors, drugs or other cargo, representing an innovative technology that could be advantageous relative to other Treg directed potential therapeutic modalities.
Our goal is to utilize COYA 301 our low dose IL-2 as the backbone in combination with other appropriate mechanisms, including CTLA4-Ig (COYA 302), and possibly GM-CSF, and other potential combinations to address various diseases. 3. Leverage in-licensed technology to advance our Treg exosome therapies.
Our goal is to utilize COYA 301 our low dose IL-2 as the backbone in combination with other appropriate mechanisms, including CTLA4-Ig (COYA 302), GLP-1 RA (COYA 303) and possibly GM-CSF, and other potential combinations to address various diseases. 3. Leverage in-licensed technology to advance our Treg exosome therapies.
Intellectual Property and Protection As of March 8, 2024, our patent estate derived from our relationship with The Houston Methodist Hospital includes one U.S. non-provisional patent application, six foreign patent applications, and five pending Patent Cooperation Treaty (“PCT”) applications, each co-owned with or in-licensed from The Houston Methodist Hospital.
Intellectual Property and Protection As of March 1, 2025, our patent estate derived from our relationship with The Houston Methodist Hospital includes one U.S. non-provisional patent application, six foreign patent applications, and five pending Patent Cooperation Treaty (“PCT”) applications, each co-owned with or in-licensed from The Houston Methodist Hospital.
Competitor companies developing Biologic approaches to enhancing Tregs, leveraging IL-2 formulations, include: Amgen (AMGN) (IL-2 mutein for GVHD and autoimmune diseases), Nektar Therapeutics (NKTR) (Pegylated IL-2 for autoimmune diseases), Merck (MRK) (IL-2 mutein for autoimmune diseases), Xencor (XNCR) (IL-2 Fc Fusion Protein for autoimmune diseases), Selecta Biosciences (SELB) (recombinant IL-2 + ImmTOR for autoimmune diseases), Cue Biopharma (CUE) (IL-2 bispecific for GVHD and autoimmune diseases), and Moderna (MRNA) (LNP encapsulated mRNA based therapeutic encoding IL-2 for autoimmune diseases), and ILTOO Pharma (low dose IL-2 formulation).
Competitor companies developing Biologic approaches to enhancing Tregs, leveraging IL-2 formulations, include: Amgen (AMGN) (IL-2 mutein for GVHD and autoimmune diseases), Nektar Therapeutics (NKTR) (Pegylated IL-2 for autoimmune diseases), Merck (MRK) (IL-2 mutein for autoimmune diseases), Xencor (XNCR) (IL-2 Fc Fusion Protein for autoimmune diseases), Cue Biopharma (CUE) (IL-2 bispecific for GVHD and autoimmune diseases), and Moderna (MRNA) (LNP encapsulated mRNA based therapeutic encoding IL-2 for autoimmune diseases), and ILTOO Pharma (low dose IL-2 formulation).
Our research and clinical efforts have led us to believe that combination biologics using our LD IL-2 as a backbone modality could be the best way to treat neurodegenerative conditions that are inherently driven by a complexity of pathways.
Our research and clinical efforts have led us to believe that combination biologics using our LD IL-2 as a backbone modality could be an effective way to treat neurodegenerative conditions that are inherently driven by a complexity of pathways.
Further, the degree of Treg dysfunction is correlated with the severity and progression of serious and life-threatening conditions. These and other recent advances in the understanding of Treg biology, have made this subset of T-lymphocytes an important potential therapeutic target, which we believe may provide new treatments for serious diseases.
Further, the degree of Treg dysfunction is correlated with the severity and progression of serious and life-threatening conditions. These and other recent advances in the understanding of Treg biology, have made this subset of T-lymphocytes an important potential therapeutic target, which we believe may provide new treatments for serious diseases. Our core focus is developing therapies to target Treg dysfunction.
(the “Carnegie Mellon License Agreement”). The Carnegie Mellon License Agreement involves the intellectual property rights to the research, development, and manufacturing of exosome-polymer hybrids (“EPHs”), a tether-based exosome functionalization strategy that enables Treg exosomes to be homed to proteins of interest, while delivering select payloads into targeted cells.
The Carnegie Mellon License Agreement involves the intellectual property rights to the research, development, and manufacturing of exosome-polymer hybrids (“EPHs”), a tether-based exosome functionalization strategy that enables Treg exosomes to be homed to proteins of interest, while delivering select payloads into targeted cells. See the below image for a visual representation of a tethering exosome.
The patents, if granted, are expected to expire in 2041 and 2043, respectively, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.
The patents, if granted, are expected to expire in 2041 and 2043, respectively, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The ARScience Biotherapeutics, Inc. patents have composition, method, and utility claims.
We have funded our operations primarily through the private and public sale of our securities. Our net losses were $8.0 million and $12.2 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $25.9 million.
We have funded our operations primarily through the private and public sale of our securities. Our net losses were $14.9 million and $8.0 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $40.7 million.
See the below image for a visual representation of a tethering exosome. 14 Functionalized exosomes with an immunomodulatory protein, FasL, have demonstrated their biological activity both in vitro and in vivo. FasL-functionalized exosomes, when bioprinted on a collagen matrix, allows spatial induction of cell death in tumor cells and, when injected in mice, suppresses proliferation of pro-inflammatory T cells.
Functionalized exosomes with an immunomodulatory protein, FasL, have demonstrated their biological activity both in vitro and in vivo. FasL-functionalized exosomes, when bioprinted on a collagen matrix, allows spatial induction of cell death in tumor cells and, when injected in mice, suppresses proliferation of pro-inflammatory T cells.
We expect to begin a Phase 2 clinical trial in ALS in the first half of 2024 which will evaluate the safety, pharmacokinetics, biological activity, and efficacy of COYA 302. In vitro assays conducted by Dr.
Assuming approval of our IND by the FDA, we expect to begin a Phase 2 clinical trial in ALS which will evaluate the safety, pharmacokinetics, biological activity, and efficacy of COYA 302. In vitro assays conducted by Dr.
Moreover, given its growing list of indications, we can now refer to COYA 302 as a “Pipeline in a Product.” Our operations have consisted of developing our clinical and preclinical product candidates and 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.
Given the growing list of indications for which we are developing it, we can now refer to COYA 302 as a “Pipeline in a Product.” Our operations have consisted of developing our clinical and preclinical product candidates and we have devoted substantially all of our resources to developing product and technology rights, conducting research and development (which includes preclinical and non-clinical studies of our product candidates), organizing and staffing our company, ongoing business operations and raising capital.
Reddy’s Laboratories On December 5, 2023, we entered into a Development and License Agreement (the “DRL Development Agreement”) with Dr. Reddy’s Laboratories Ltd. (“DRL”) and its affiliate, Dr. Reddy’s Laboratories SA (collectively, “Dr. Reddy’s”), pursuant to which, among other things, we granted to Dr.
Reddy’s Laboratories In December 2023, we entered into a Development and License Agreement (the “DRL Development Agreement”) with DRL and its affiliate, Dr. Reddy's Laboratories SA (collectively, "Dr. Reddy's") , pursuant to which, among other things, we granted to Dr.
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 or other capital sources, which may include collaborations with other companies or other strategic transactions.
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 or other capital sources, which may include collaborations with other companies or other strategic transactions.
In addition, our patent estate derived from our relationship with the University of Nebraska includes two provisional patent applications. These patents, if granted, are expected to expire in 2044, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.
These patents, if granted, are expected to expire in 2044, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The University of Nebraska patents have use claims. Finally, our patent estate derived from our relationship with Carnegie Mellon includes one pending patent application.
The ALSFRS-R scoring range is 0 to 48, with higher scores representing a better functional status. 8 Study data showed no decline or minimal decline at 24 and 48 weeks, respectively, after initiation of treatment in this group of patients that were experiencing a mean decline of -1.1 points/month in their ALSFRS-R score prior to initiation of treatment with COYA 302.
Study data showed no decline or minimal decline at 24 and 48 weeks, respectively, after initiation of treatment in this group of patients that were experiencing a mean decline of -1.1 points/month in their ALSFRS-R score prior to initiation of treatment with COYA 7 302.
Treg exosomes contain different types of cargo, such as proteins, lipids, and nucleic acids, and have suppressive contact-mediated receptors and proteins that are typically present on the parent Tregs, allowing them to efficiently modulate the immune and inflammatory responses. 12 We have filed intellectual property claims on the contents of the exosomes, namely the micro RNAs that are reproducibly represented from batch to batch.
Treg exosomes contain different types of cargo, such as proteins, lipids, and nucleic acids, and have suppressive contact-mediated receptors and proteins that are typically present on the parent Tregs, allowing them to efficiently modulate the immune and inflammatory responses.
We will also pay to DRL a low-six figure milestone payment per additional 30 indication. Further, pursuant to the DRL Supply Agreement, we will pay to DRL single-digit royalties on Net Sales (as defined in the DRL Supply Agreement). ARScience License Agreement In August 2022, we entered into a License Agreement (the “ARS License Agreement”) with ARScience Biotherapeutics, Inc.
We will also pay to DRL a low-six figure milestone payment per additional indication. Further, pursuant to the DRL Supply Agreement, we will pay to DRL single-digit royalties on Net Sales (as defined in the DRL Supply Agreement).
Reddy’s Laboratories Ltd. an exclusive license to obtain regulatory approval and commercialize COYA 302 for ALS and certain other indications in all other countries (other than the New Territories, Japan, Mexico, and in each country in South America), pursuant to the License and Supply Agreement entered with Dr. Reddy’s Laboratories Ltd., effective as of April 1, 2023.
We previously granted DRL an exclusive license to obtain regulatory approval and commercialize the Product for ALS and certain other indications in all other countries (other than the New Territories, Japan, Mexico, and in each country in South America), pursuant to the DRL Agreement entered between us and DRL, effective as of April 1, 2023.
After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval. 20 Orphan Drug Designation and Exclusivity Under the Orphan Drug Act of 1983, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the U.S., or if it affects more than 200,000 individuals in the U.S., there is no reasonable expectation that the cost of developing and making the product available in the U.S. for the disease or condition will be recovered from sales of the product.
Orphan Drug Designation and Exclusivity Under the Orphan Drug Act of 1983, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the U.S., or if it affects more than 200,000 individuals in the U.S., there is no reasonable expectation that the cost of developing and making the product available in the U.S. for the disease or condition will be recovered from sales of the product.
While we maintain internal preclinical research and development activities in exosomes generally, we are simultaneously investigating alternative exosome technologies developed by academic institutions or commercial enterprises which we may be able to access, through external partnerships, licensing, and/or strategic collaborations. 13 COYA 201 Our allogeneic Treg exosome product candidate, COYA 201, is being developed following Treg conversion and expansion from healthy donors.
While we maintain internal preclinical research and development activities in exosomes generally, we are simultaneously investigating alternative exosome technologies developed by academic institutions or commercial enterprises which we may be able to access, through external partnerships, licensing, and/or strategic collaborations.
We believe the biological redundancies in molecular immune pathways in these complex diseases limit the efficacy of many single drug therapies, requiring the development of novel therapeutics that can address this pathophysiologic complexity. We intend to file an IND for COYA 302 for the treatment of FTD before the end of 2024.
We believe the biological redundancies in molecular immune pathways in these complex diseases limit the efficacy of many single drug therapies, requiring the development of novel therapeutics that can address this pathophysiologic complexity.
We believe an increased ratio of functional Tregs shifts the balance in vivo in favor of anti-inflammatory Tregs to pro-inflammatory cells. See the below figure for a visual representation: We are developing biologics and biologic combinations intended to ameliorate the inflammation and lack of self-tolerance that characterize certain neurodegenerative and autoimmune diseases, by increasing Treg suppressive and immunomodulatory functions.
See the below figure for a visual representation: 10 We are developing biologics and biologic combinations intended to ameliorate the inflammation and lack of self-tolerance that characterize certain neurodegenerative and autoimmune diseases, by increasing Treg suppressive and immunomodulatory functions.
The Methodist License Agreement provides that in the event we sublicense products and services covered by the Methodist License Agreement, then royalties owed to Houston Methodist would be computed as a percentage of payments received by us from the sublicensee.
Effective January 1, 2025, the minimum amount which will be owed by us once commercialization occurs is $0.1 million, annually. The Methodist License Agreement provides that in the event we sublicense products and services covered by the Methodist License Agreement, then royalties owed to Houston Methodist would be computed as a percentage of payments received by us from the sublicensee.
We intend to explore partnerships with other pharmaceutical and biotechnology companies that own strategic compounds that could potentially be suitable candidates for safe and effective new combination therapies with COYA 301.
Lower blood levels of the pro-inflammatory chemokine (C-C motif) ligand 2 (CCL2) (p We intend to explore partnerships with other pharmaceutical and biotechnology companies that own strategic compounds that could potentially be suitable candidates for safe and effective new combination therapies with COYA 301.
This patent, if granted, is expected to expire in 2039, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The Dr. Reddy’s patent has composition, method, and utility claims.
In addition, our patent estate derived from our relationship with Dr Reddy’s Laboratories includes one published patent application. This patent, if granted, is expected to expire in 2039, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The Dr.
Reddy’s will make development funding payments to us for development of COYA 302 as follows: (i) $4.2 million upon FDA acceptance of an Investigational New Drug (“IND”) application for COYA 302 for the treatment of ALS and (ii) an additional $4.2 million payment upon the dosing of the first patient in the first phase 2 clinical trial for COYA 302 for the treatment of ALS in the United States.
Additionally, we are entitled to receive (i) an additional $4.2 million upon acceptance by the FDA of an Investigational New Drug ("IND"), application for COYA 302 for the treatment of ALS and (ii) an additional $4.2 million payment upon the dosing of the first patient in the first phase 2 clinical trial for COYA 302 for the treatment of ALS in the United States.
COYA 301’s subcutaneous administration allows patients to be dosed in their homes, which we believe provides convenience and pharmacoeconomic advantages over existing products requiring administration in a hospital setting. 11 Development Status In the first half of 2023, we announced results from a POC study in support of COYA 301.
COYA 301’s subcutaneous administration allows patients to be dosed in their homes, which we believe provides convenience and pharmacoeconomic advantages over existing products requiring administration in a hospital setting.
We believe our data demonstrates the anti-inflammatory activity of Treg exosomes in in vitro assays and in vivo animal models of acute inflammation and ALS, following intravenous and intranasal administration. Further, we believe our research demonstrates that Treg exosomes exhibit greater anti-inflammatory potency than mesenchymal exosomes, as demonstrated in research recently published in the journal Frontiers of Immunology .
Further, we believe our research demonstrates that Treg exosomes exhibit greater anti-inflammatory potency than mesenchymal exosomes, as demonstrated in research recently published in the journal Frontiers of Immunology .
Key Milestones We will continue to conduct research and development activities for our various product candidates and indications over the course of 2024-2025. Our anticipated developmental milestones are provided below: The dates reflected in the foregoing are estimates only, and there can be no assurances that the events included will be completed on the anticipated timeline presented, or at all.
Our anticipated developmental milestones are provided below: The dates reflected in the foregoing are estimates only, and there can be no assurances that the events included will be completed on the anticipated timeline presented, or at all.
We anticipate that the IND filing will be made in the first half of 2024. The DRL Development Agreement also calls for up to an aggregate of $40.0 million in development milestones and up to an aggregate of $677.25 million in sales milestones, relating to the New Territories, should all such development and sales milestones be achieved.
The DRL Development Agreement also calls for up to an aggregate of approximately $40.0 million in development milestones and up to an aggregate of approximately $677.3 million in sales milestones, related to the New Territories, should all such development and sales milestones be achieved. We will also be owed royalties by Dr.
Competition We believe that our investigational and proprietary biologic combination therapy, COYA 302, with a dual immunomodulatory mechanism of action represents a next generation approach that has competitive advantages over monotherapy approaches that target a single pathway to treating inflammatory disorders, which are driven by complex and multi-factorial pathways.
Further, there can be no assurance that we will be successful in the development of any of our current product candidates or any other product candidate we may develop in the future, or that any of our current product candidates, or any other product candidate we may develop in the future, will receive FDA approval for any indication. 16 Competition We believe that our investigational and proprietary biologic combination therapy, COYA 302, with a dual immunomodulatory mechanism of action represents a next generation approach that has competitive advantages over monotherapy approaches that target a single pathway to treating inflammatory disorders, which are driven by complex and multi-factorial pathways.
We expect any product candidates that we develop and commercialize will compete on the basis of, among other things, efficacy, safety, convenience of administration and delivery, price and the availability of reimbursement from government and other third-party payors.
However, there exists other cell derived exosome competitors including: Evox Therapeutics (Mesenchymal Derived Exosomes), Capricor Therapeutics (CAPR) (Cardiosphere Derived Exosomes), and Exopharm (Platelet Derived Exosomes), and Rion (Platelet Derived Exosomes). 17 We expect any product candidates that we develop and commercialize will compete on the basis of, among other things, efficacy, safety, convenience of administration and delivery, price and the availability of reimbursement from government and other third-party payors.
We have filed intellectual property claims for compositions of matter that teach the reproducible micro RNA contents. To date, no patents have been issued. We have developed technology to collect large volumes of Treg exosomes from the tissue culture media that is utilized in the Treg conversion and expansion process.
We have developed technology to collect large volumes of Treg exosomes from the tissue culture media that is utilized in the Treg conversion and expansion process.
The clinical data from these initial studies has served as an important confirmation of the underlying immunomodulatory properties of Tregs and their potential therapeutic benefits.
Our autologous Treg cell therapy program has completed a Phase 1 and Phase 2a studies in amyotrophic lateral sclerosis, or ALS. The clinical data from these initial studies has served as an important confirmation of the underlying immunomodulatory properties of Tregs and their potential therapeutic benefits.
Reddy’s an exclusive, royalty-bearing right and license to commercialize COYA 302 solely for use in patients with amyotrophic lateral sclerosis (“ALS”) in the United States, Canada, the European Union and the United Kingdom (collectively, the “New Territories”). We previously granted Dr.
Reddy's an exclusive, royalty-bearing right and license (the "License") to commercialize COYA 302, a proprietary co-pack kit containing low dose IL-2 and CTLA4-Ig, (“COYA 302” or the “Product”) solely for use in patients with amyotrophic lateral sclerosis (“ALS" or the “Field”) in the United States, Canada, the European Union and the United Kingdom (collectively, the “New Territories”).
Pipeline Expansion In January of 2024, we announced that we are expanding our pipeline in neurodegenerative conditions for COYA 302 beyond ALS to include FTD and PD. Our updated pipeline can be viewed below. More recently, in February of 2024, we announced our expansion of COYA 302 to AD.
The final trial design is subject to change pending acceptance of our IND application by FDA: COYA 302 in FTD, PD, AD In January of 2024, we announced that we are expanding our pipeline in neurodegenerative conditions for COYA 302 beyond ALS to include FTD and PD. In February of 2024, we announced our expansion of COYA 302 to AD.
We observed a significant decrease (p COYA 206 As part of our Treg exosome development programs, we are developing our next generation of antigen directed Treg-derived exosome product candidates. In September of 2023 we licensed the exclusive, worldwide rights of a proprietary Exosome Engineering Technology from Carnegie Mellon University with potential applications across multiple indications, including neurodegeneration, autoimmune, and oncology.
In September of 2023 we licensed the exclusive, worldwide rights of a proprietary Exosome Engineering Technology from Carnegie Mellon University with potential applications across multiple indications, including neurodegeneration, autoimmune, and oncology (the “Carnegie Mellon License Agreement”).
Concurrent with clinical trials, companies usually complete additional non-clinical studies and must also develop additional information about the chemistry and physical characteristics of the product candidate and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
The sponsor must also notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction as soon as possible but in no case later than seven calendar days after the sponsor’s initial receipt of the information. 19 Concurrent with clinical trials, companies usually complete additional non-clinical studies and must also develop additional information about the chemistry and physical characteristics of the product candidate and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
In the event we sublicenses our rights under the ARS License Agreement, we will owe royalties on sublicense income within the range of 10% to 20%.
In the event we sublicense our rights under the ARS License Agreement, we will owe royalties on sublicense income within the range of 10% to 20%. To date, the $0.1 million option fee and the mid-six-figure up-front fee (upon exercise of the ARS Option) are the only payments made to ARS under the ARS License Agreement.
The final trial design is subject to change pending acceptance of our IND application by FDA: COYA 301 COYA 301, our low-dose interleukin 2 (IL-2) product candidate, is a biologic for subcutaneous administration intended to enhance Treg function and expand Treg numbers in vivo.
COYA 301 COYA 301, our low-dose interleukin 2 (IL-2) product candidate, is a biologic for subcutaneous administration intended to enhance Treg function and expand Treg numbers in vivo. We believe an increased ratio of functional Tregs shifts the balance in vivo in favor of anti-inflammatory Tregs to pro-inflammatory cells.
(“ARS”) pursuant to which ARS granted to us an option to acquire an exclusive, royalty-bearing license for two patents regarding certain formulations of IL-2, with the right to grant sublicenses through multiple tiers under these patents (the “ARS Option”). Under the ARS License Agreement, we may owe tiered payments to ARS based on our achievement of certain developmental milestones.
ARScience License Agreement In August 2022, we entered into a License Agreement (the "ARS License Agreement") with ARS pursuant to which ARS granted us an option to, if we choose to exercise such option, to acquire an exclusive, royalty-bearing license for two patents regarding certain formulations of IL-2 (the product that serves as the basis for COYA 301), with the right to grant sublicenses through multiple tiers under these patents.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may also, from time to time, seek to enforce our intellectual property rights against infringers when we determine that a successful outcome is probable and may lead to an increase in the value of the intellectual property. 63 If we choose to enforce our patent rights against a party, that party could counterclaim that our patent is invalid and/or unenforceable.
Biggest changeAny inability to meaningfully monitor unauthorized use of our intellectual property could result in competitors offering products that incorporate our product or service features, which could in turn reduce demand for our products. 63 We may also, from time to time, seek to enforce our intellectual property rights against infringers when we determine that a successful outcome is probable and may lead to an increase in the value of the intellectual property.
The degree of market acceptance of cell therapy products and, in particular, our product candidates, if approved for commercial sale, will depend on several factors, including: • the efficacy and safety of such product candidates as demonstrated in clinical trials; • the potential and perceived advantages of product candidates over alternative treatments; • the cost of treatment relative to alternative treatments; • the clinical indications for which the product candidate is approved by the FDA; • the willingness of physicians to prescribe new therapies; • the willingness of the target patient population to try new therapies; • the prevalence and severity of any side effects; • product labeling or product insert requirements imposed by the FDA or other regulatory authorities, including any limitations or warnings contained in a product approved labeling; • relative convenience and ease of administration; 50 • the timing of market introduction of competitive products; • adverse publicity concerning our product candidates or favorable publicity about competing products and treatments; • sufficient third-party payor coverage, any limitations in terms of center or personnel training requirement imposed by third parties and adequate reimbursement; • limitations or warnings contained in the FDA-approved labeling for our product candidates; • any FDA requirement to undertake a Risk Evaluation and Mitigation Strategy, or REMS; • the effectiveness of our sales, marketing and distribution efforts; and • potential product liability claims.
The degree of market acceptance of cell therapy products and, in particular, our product candidates, if approved for commercial sale, will depend on several factors, including: • the efficacy and safety of such product candidates as demonstrated in clinical trials; • the potential and perceived advantages of product candidates over alternative treatments; 50 • the cost of treatment relative to alternative treatments; • the clinical indications for which the product candidate is approved by the FDA; • the willingness of physicians to prescribe new therapies; • the willingness of the target patient population to try new therapies; • the prevalence and severity of any side effects; • product labeling or product insert requirements imposed by the FDA or other regulatory authorities, including any limitations or warnings contained in a product approved labeling; • relative convenience and ease of administration; • the timing of market introduction of competitive products; • adverse publicity concerning our product candidates or favorable publicity about competing products and treatments; • sufficient third-party payor coverage, any limitations in terms of center or personnel training requirement imposed by third parties and adequate reimbursement; • limitations or warnings contained in the FDA-approved labeling for our product candidates; • any FDA requirement to undertake a Risk Evaluation and Mitigation Strategy, or REMS; • the effectiveness of our sales, marketing and distribution efforts; and • potential product liability claims.
If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability.
If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability.
Events that may prevent successful initiation, timely completion, or positive outcomes of our clinical development include, but are not limited to: • delays in obtaining regulatory approval to commence a clinical trial; • delays in reaching agreement on acceptable terms with prospective clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different trial sites; • our ability to recruit sufficient patients for our clinical trials in a timely manner or at all; • delays in achieving a sufficient number of clinical trial sites or obtaining the required institutional review board, or IRB, approval at each clinical trial site; • imposition of a temporary or permanent clinical hold by us or by the FDA or other regulatory agencies based on emerging data; • clinical sites deviating from trial protocol or dropping out of a trial; • suspension or termination of a clinical trial by the IRBs of the institutions in which such trials are being conducted or by the Data Safety Monitoring Board, or DSMB (where applicable); • delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for advanced clinical trials; • delays in reaching a consensus with regulatory agencies on the design or implementation of our clinical trials; • changes in regulatory requirements or guidance that may require us to amend or submit new clinical protocols, or such requirements may not be as we anticipate; • changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; • insufficient or inadequate quality of our product candidates or other materials necessary to conduct preclinical studies or clinical trials of our product candidates; • clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon product development programs; 40 • failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, or additional administrative burdens associated with foreign regulatory schemes; or • failure of ourselves or any third-party manufacturers, contractors or suppliers to comply with regulatory requirements, maintain adequate quality controls, or be able to provide sufficient product supply to conduct and complete preclinical studies or clinical trials of our product candidates.
Events that may prevent successful initiation, timely completion, or positive outcomes of our clinical development include, but are not limited to: • delays in obtaining regulatory approval to commence a clinical trial; • delays in reaching agreement on acceptable terms with prospective clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different trial sites; • our ability to recruit sufficient patients for our clinical trials in a timely manner or at all; • delays in achieving a sufficient number of clinical trial sites or obtaining the required institutional review board, or IRB, approval at each clinical trial site; • imposition of a temporary or permanent clinical hold by us or by the FDA or other regulatory agencies based on emerging data; • clinical sites deviating from trial protocol or dropping out of a trial; • suspension or termination of a clinical trial by the IRBs of the institutions in which such trials are being conducted or by the Data Safety Monitoring Board, or DSMB (where applicable); • delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for advanced clinical trials; • delays in reaching a consensus with regulatory agencies on the design or implementation of our clinical trials; • changes in regulatory requirements or guidance that may require us to amend or submit new clinical protocols, or such requirements may not be as we anticipate; • changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; • insufficient or inadequate quality of our product candidates or other materials necessary to conduct preclinical studies or clinical trials of our product candidates; • clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon product development programs; • failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, or additional administrative burdens associated with foreign regulatory schemes; or • failure of ourselves or any third-party manufacturers, contractors or suppliers to comply with regulatory requirements, maintain adequate quality controls, or be able to provide sufficient product supply to conduct and complete preclinical studies or clinical trials of our product candidates.
These provisions include, but are not limited to: being permitted to have only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations disclosure; an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board, or PCAOB, regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, registration statements and proxy statements; and 67 exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
These provisions include, but are not limited to: being permitted to have only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations disclosure; an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board, or PCAOB, regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, registration statements and proxy statements; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including the following: • the research methodology or technology modality used may not be successful in identifying potential product candidates; • competitors may develop alternatives that render our product candidates obsolete or less attractive; • we may choose to cease development if we determine that clinical results do not show promise; • product candidates we develop may nevertheless be covered by third-party patents or other exclusive rights; • a product candidate may be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; and • a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.
Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including the following: • the research methodology or technology modality used may not be successful in identifying potential product candidates; • competitors may develop alternatives that render our product candidates obsolete or less attractive; 46 • we may choose to cease development if we determine that clinical results do not show promise; • product candidates we develop may nevertheless be covered by third-party patents or other exclusive rights; • a product candidate may be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; and • a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.
These initiatives recently culminated in the enactment of the Inflation Reduction Act (the “IRA”) in August 2022, which will, among other things, allow the HHS to negotiate the selling price of certain drugs and biologics that the Centers for Medicare & Medicaid Services (“CMS”) reimburses under Medicare Part B and Part D, although only 54 high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
These initiatives recently culminated in the enactment of the Inflation Reduction Act (the “IRA”) in August 2022, which will, among other things, allow the HHS to negotiate the selling price of certain drugs and biologics that the Centers for Medicare & Medicaid Services (“CMS”) reimburses under Medicare Part B and Part D, although only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
If such data are not ultimately comparable to that seen in the earlier trials or earlier in the same trial in terms of safety or efficacy, we may be required to make further changes to our process and/or undertake additional clinical testing, either of which could significantly delay the clinical development or commercialization of the associated product candidate, which would materially adversely affect our business, financial condition, results of operations and growth prospects.
If such data are not ultimately 57 comparable to that seen in the earlier trials or earlier in the same trial in terms of safety or efficacy, we may be required to make further changes to our process and/or undertake additional clinical testing, either of which could significantly delay the clinical development or commercialization of the associated product candidate, which would materially adversely affect our business, financial condition, results of operations and growth prospects.
Our reliance on third parties to conduct future clinical trials will also result in less direct control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff. Communicating with 47 outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.
Our reliance on third parties to conduct future clinical trials will also result in less direct control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff. Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.
We, the FDA, or other applicable regulatory authorities may suspend or terminate clinical trials of a product candidate at any time for various reasons, including, but not limited to, a belief that subjects participating in such trials are being exposed to unacceptable health risks or adverse side effects, or other adverse initial experiences or findings.
We, the FDA, or other applicable regulatory authorities may suspend or terminate clinical trials 39 of a product candidate at any time for various reasons, including, but not limited to, a belief that subjects participating in such trials are being exposed to unacceptable health risks or adverse side effects, or other adverse initial experiences or findings.
If any of the physicians or other providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and 53 imprisonment, which could affect our ability to operate our business.
If any of the physicians or other providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment, which could affect our ability to operate our business.
Based upon our analysis, we have determined that such an ownership change has occurred and a Section 382 limitation has been applied in the current year to limit the amount of tax attributes utilized. Risks Related to Development, Regulatory Approval and Commercialization Our business depends upon the success of our potential therapeutic modalities and product candidates.
Based upon our analysis, we have determined that such an ownership change has occurred and a Section 382 limitation has been applied in the current year to limit the amount of tax attributes utilized. Risks Related to Development and Regulatory Approval Our business depends upon the success of our potential therapeutic modalities and product candidates.
Even if clinical trials do begin for our preclinical programs, our clinical trials or development efforts may not be successful. 44 If any of our product candidates, or any competing product candidates, demonstrate serious adverse events, including the development of severe or fatal cytokine release syndrome, neurotoxicity or graft-versus-host disease, we may be required to halt or delay further clinical development.
Even if clinical trials do begin for our preclinical programs, our clinical trials or development efforts may not be successful. If any of our product candidates, or any competing product candidates, demonstrate serious adverse events, including the development of severe or fatal cytokine release syndrome, neurotoxicity or graft-versus-host disease, we may be required to halt or delay further clinical development.
In addition, our Amended Charter and Amended Bylaws provides that we will, to the fullest extent permitted by Delaware law, indemnify our directors and officers for costs or damages incurred by them in connection with any threatened, pending, or completed action, suit, or proceeding brought against them by reason of their positions as directors and officers.
In addition, our Amended Charter and Amended Bylaws provides that we will, to the fullest extent permitted by Delaware law, indemnify 69 our directors and officers for costs or damages incurred by them in connection with any threatened, pending, or completed action, suit, or proceeding brought against them by reason of their positions as directors and officers.
PRIME is a voluntary scheme launched by the EMA to strengthen support for the development of medicines 45 that target an unmet medical need through enhanced interaction and early dialogue with developers of promising medicines in order to optimize development plans and speed up evaluation to help such medicines reach patients earlier.
PRIME is a voluntary scheme launched by the EMA to strengthen support for the development of medicines that target an unmet medical need through enhanced interaction and early dialogue with developers of promising medicines in order to optimize development plans and speed up evaluation to help such medicines reach patients earlier.
Research programs to identify product candidates require substantial technical, financial and human resources, whether or not any product candidates are 46 ultimately identified. In addition, targets for different neurodegenerative and auto immune diseases may require changes to our cell manufacturing platform, which may slow down development or make it impossible to manufacture our product candidates.
Research programs to identify product candidates require substantial technical, financial and human resources, whether or not any product candidates are ultimately identified. In addition, targets for different neurodegenerative and auto immune diseases may require changes to our cell manufacturing platform, which may slow down development or make it impossible to manufacture our product candidates.
Therefore, the lowest tier is paid when there is only a single indication being addressed with a single product. There is only 59 one low double-digit tier with such tier bearing only on combination products where there are three or more indications being served. We are also required to pay a low single digit percentage for certain licensed services.
Therefore, the lowest tier is paid when there is only a single indication being addressed with a single product. There is only one low double-digit tier with such tier bearing only on combination products where there are three or more indications being served. We are also required to pay a low single digit percentage for certain licensed services.
The FDA and the EMA, as applicable, have broad discretion whether or not to grant any of these designations, so even if we believe a particular product candidate is eligible for one or more of these designations, we cannot assure you that the applicable regulatory authority would decide to grant it.
The FDA and the EMA, as applicable, have broad discretion whether or not to grant any of these designations, so even if we believe a particular product candidate is eligible for one or more of these designations, we cannot assure you that the applicable regulatory authority would decide 45 to grant it.
Under §204, these claims must be brought within 120 days from (A) the filing of the applicable 70 Certificate of Validation in the case of 2020 Corporate Acts and 2020 Issuances; (B) the date the stockholders ratify the Director Designations and Equity Plan Adoption in the case of the Director Designations and Equity Plan Adoption; and (C) the date the Board approved the 2021 Ratifications in the case of the Option Grants.
Under §204, these claims must be brought within 120 days from (A) the filing of the applicable Certificate of Validation in the case of 2020 Corporate Acts and 2020 Issuances; (B) the date the stockholders ratify the Director Designations and Equity Plan Adoption in the case of the Director Designations and Equity Plan Adoption; and (C) the date the Board approved the 2021 Ratifications in the case of the Option Grants.
Undesirable side effects that may be caused by any of our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label than anticipated or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities.
Undesirable side effects that may be caused by any of our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label than anticipated or the delay or denial of regulatory 44 approval by the FDA or comparable foreign regulatory authorities.
However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request.
However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and 61 may refuse to grant extensions to our patents, or may grant more limited extensions than we request.
We may not be able to attract and retain quality personnel on acceptable 55 terms, or at all. If we are unable to hire and retain the qualified personnel we need to operate our business, our business, financial condition, results of operations and growth prospects would be materially adversely affected.
We may not be able to attract and retain quality personnel on acceptable terms, or at all. If we are unable to hire and retain the qualified personnel we need to operate our business, our business, financial condition, results of operations and growth prospects would be materially adversely affected.
Preferred stock, which could be issued with the right to more than one vote per share, could have the effect of discouraging, delaying or preventing a change of control of us. The possible 68 impact on takeover attempts could adversely affect the price of our securities.
Preferred stock, which could be issued with the right to more than one vote per share, could have the effect of discouraging, delaying or preventing a change of control of us. The possible impact on takeover attempts could adversely affect the price of our securities.
We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. Our product candidates could be subject to regulatory limitations following approval, if and when such approval is granted.
We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. 49 Our product candidates could be subject to regulatory limitations following approval, if and when such approval is granted.
Thus, we cannot be certain that others have not filed patent applications or 62 made public disclosures relating to our technology or our contemplated technology. A third party may have filed, and may in the future file, patent applications directed to our products or technology similar to ours.
Thus, we cannot be certain that others have not filed patent applications or made public disclosures relating to our technology or our contemplated technology. A third party may have filed, and may in the future file, patent applications directed to our products or technology similar to ours.
Pursuant to the Methodist License Agreement, we are also required to pay Methodist, on a licensed product-by-licensed product and country-by-country basis, royalties (subject to customary reductions) ranging from 1% to 10% of annual worldwide net sales of such licensed product.
Pursuant to the Methodist License Agreement, we are also required to pay Methodist, on a licensed product-by-licensed product and country-by-country basis, royalties (subject to customary reductions) ranging from 1% to 10% of annual worldwide net 59 sales of such licensed product.
The declaration of dividends is subject to the discretion of our board of directors and limitations under applicable law, and will depend on various factors, including our operating results, financial condition, future prospects and any other factors deemed relevant by our board of directors.
The declaration of dividends is subject to the discretion of our board of directors and limitations under applicable law, and will depend on various factors, including our operating results, financial condition, future prospects and any other factors deemed relevant by our board 67 of directors.
If we or our licensors fail to maintain the patents and patent applications covering our product candidates and technologies, we may not be able 61 to prevent a competitor from marketing products that are the same as or similar to our product candidates.
If we or our licensors fail to maintain the patents and patent applications covering our product candidates and technologies, we may not be able to prevent a competitor from marketing products that are the same as or similar to our product candidates.
This novelty may lengthen the regulatory review process, including the time it takes for the FDA to review our IND applications if and when submitted, increase our development costs and delay or prevent commercialization of 39 our products.
This novelty may lengthen the regulatory review process, including the time it takes for the FDA to review our IND applications if and when submitted, increase our development costs and delay or prevent commercialization of our products.
More established biopharmaceutical companies may also develop and commercialize their product candidates at a faster rate, which could render our product candidates obsolete or non-competitive before they are fully developed or commercialized.
More established biopharmaceutical companies may also develop and commercialize their product candidates at a faster rate, which could render our product candidates obsolete or 48 non-competitive before they are fully developed or commercialized.
Other changes to our manufacturing process made before or after 57 commercialization could require us to show the comparability of the resulting product to the product candidate used in the clinical trials using earlier processes.
Other changes to our manufacturing process made before or after commercialization could require us to show the comparability of the resulting product to the product candidate used in the clinical trials using earlier processes.
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.
In particular, 53 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.
If any of the ratifications pursuant to §204 were not effective, then the 2020 Corporate Acts, the 2020 Issuances, the Director Designations, the Equity Plan Adoption, and the Option Grants, as applicable, would be invalid and, as applicable, we could have liability to holders of the common stock and/or the Series A preferred stock corresponding to the 2020 Issuances and the grantees under the Option Grants, as applicable, including being subject to monetary damages and rescission rights. 71 Item 1B.
If any of the ratifications pursuant to §204 were not effective, then the 2020 Corporate Acts, the 2020 Issuances, the Director Designations, the Equity Plan Adoption, and the Option Grants, as applicable, would be invalid and, as applicable, we could have liability to holders of the common stock and/or the Series A preferred stock corresponding to the 2020 Issuances and the grantees under the Option Grants, as applicable, including being subject to monetary damages and rescission rights. 70 Item 1B.
Accordingly, in markets outside the United States, the reimbursement for our 51 products may be reduced compared with the United States and may be insufficient to generate commercially reasonable product revenues.
Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable product revenues.
If any of our product candidates are approved for marketing and commercialization and we have not developed or secured third- party marketing, sales and distribution capabilities, we will be unable to successfully commercialize such products and may not be able to generate product revenue. We currently have no sales, marketing or distribution organizational experience or capabilities.
Risks Related to Commercialization If any of our product candidates are approved for marketing and commercialization and we have not developed or secured third- party marketing, sales and distribution capabilities, we will be unable to successfully commercialize such products and may not be able to generate product revenue. We currently have no sales, marketing or distribution organizational experience or capabilities.
If we issue common stock or securities convertible into common stock, our common stockholders and holders of our warrants could experience additional dilution and, as a result, our stock price may decline. 65 Our directors, executive officers and principal stockholders have substantial control over us and could delay or prevent a change of corporate control.
If we issue common stock or securities convertible into common stock, our common stockholders could experience additional dilution and, as a result, our stock price may decline. 65 Our directors, executive officers and principal stockholders have substantial control over us and could delay or prevent a change of corporate control.
If we market approved products outside the United States, we expect that we will be subject to additional risks in commercialization, including: • different regulatory requirements for approval of therapies in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters including earthquakes, typhoons, floods and fires, and other public health crises, illnesses, epidemics or pandemics, such as the potential impact of the COVID-19 outbreak We have no prior experience in these areas.
In some cases, the price that we intend to charge for our products is also subject to approval. 52 If we market approved products outside the United States, we expect that we will be subject to additional risks in commercialization, including: • different regulatory requirements for approval of therapies in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters including earthquakes, typhoons, floods and fires, and other public health crises, illnesses, epidemics or pandemics, such as the potential impact of the COVID-19 outbreak We have no prior experience in these areas.
We note that investors cannot waive compliance with the federal 69 securities laws and the rules and regulations thereunder.
We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Risks Related to Our Employees, Managing Our Growth and Our Operations We will need to increase the size of our organization, and we may experience difficulties in managing growth. As of March 1, 2024, we had eight full-time employees.
Risks Related to Our Employees, Managing Our Growth and Our Operations We will need to increase the size of our organization, and we may experience difficulties in managing growth. As of March 1, 2025, we had eight full-time employees.
We must be able to overcome these challenges in order for us to develop, commercialize and manufacture COYA 301, COYA 302, COYA 201, COYA 206 and COYA 101 and any of our other product candidates.
We must be able to overcome these challenges in order for us to develop, commercialize and manufacture COYA 301, COYA 302, COYA 303, COYA 201, COYA 206 and any of our other product candidates.
We face risks related to public health epidemics and pandemics, including COVID-19, which could significantly disrupt our preclinical studies and clinical trials. We are subject to risks associated with public health crises, such as pandemics and epidemics, which may have a material adverse effect on our business.
We face risks related to public health epidemics and pandemics, which could significantly disrupt our preclinical studies and clinical trials. We are subject to risks associated with public health crises, such as pandemics and epidemics, which may have a material adverse effect on our business.
Furthermore, if our suppliers fail to deliver the required commercial quantities of components and active pharmaceutical ingredients (“APIs”) on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, commercialization of our product candidates, and clinical trials of future potential product candidates, may be delayed or we could lose potential revenue and our business, financial condition, results of operation and reputation could be adversely affected.
Furthermore, if our suppliers fail to deliver the required commercial quantities of components and APIs on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, commercialization of our product candidates, and clinical trials of future potential product candidates, may be delayed or we could lose potential revenue and our business, financial condition, results of operation and reputation could be adversely affected.
As of the date of this Annual Report on Form 10-K, our patent estate derived from our relationship with The Houston Methodist Hospital included one U.S. non-provisional patent application, five foreign patent applications, and six pending Patent Cooperation Treaty (“PCT”) applications, each co-owned with or in-licensed from The Houston Methodist Hospital.
As of the date of this Annual Report on Form 10-K, our patent estate derived from our relationship with The Houston Methodist Hospital included six pending U.S. provisional patent applications, five U.S. non-provisional patent applications, 37 foreign patent applications, and two pending Patent Cooperation Treaty (“PCT”) applications, each co-owned with or in-licensed from The Houston Methodist Hospital.
Recent disruptions to the global economy since 2020 have impeded global supply chains, resulting in longer lead times and also increased critical component costs and freight expenses.
Disruptions to the global economy have impeded global supply chains, resulting in longer lead times and also increased critical component costs and freight expenses.
The rates of patient enrollment, a significant component in the timing of clinical trials, are affected by many factors, including: • our ability to open clinical trial sites; • the size and nature of the patient population; • the design and eligibility criteria of the clinical trial; • the proximity of subjects to clinical sites; • the patient referral practices of physicians; • changing medical practice patterns or guidelines related to the indications we are investigating; • competing clinical trials or approved therapies which present an attractive alternative to patients and their physicians; • perceived risks and benefits of the product candidate under study, including as a result of adverse effects observed in similar or competing therapies; • our ability to obtain and maintain patient consents due to various reasons, including but not limited to, patients unwillingness to participate due to the ongoing COVID-19 pandemic; • the risk that enrolled subjects will drop out or die before completion of the trial; • patients failing to complete a clinical trial or returning for post-treatment follow-up; and • our ability to manufacture the requisite materials for a patient and clinical trial.
The rates of patient enrollment, a significant component in the timing of clinical trials, are affected by many factors, including: • our ability to open clinical trial sites; • the size and nature of the patient population; • the design and eligibility criteria of the clinical trial; • the proximity of subjects to clinical sites; • the patient referral practices of physicians; • changing medical practice patterns or guidelines related to the indications we are investigating; • competing clinical trials or approved therapies which present an attractive alternative to patients and their physicians; • perceived risks and benefits of the product candidate under study, including as a result of adverse effects observed in similar or competing therapies; • the risk that enrolled subjects will drop out or die before completion of the trial; • patients failing to complete a clinical trial or returning for post-treatment follow-up; and • our ability to manufacture the requisite materials for a patient and clinical trial.
The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the ongoing conflict between Russia and Ukraine and Hamas' attack against Israel and the ensuing conflict, terrorism or other geopolitical events.
The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the ongoing conflict between Russia and Ukraine and Hamas and Israel, terrorism or other geopolitical events.
Since our inception in 2020, we have incurred significant operating losses. Our net loss was $8.0 million for the year ended December 31, 2023, and our accumulated deficit as of December 31, 2023 was $25.9 million. We expect to continue to incur increasing operating losses for the foreseeable future as we continue to develop our product candidates.
Since our inception in 2020, we have incurred significant operating losses. Our net loss was $14.9 million for the year ended December 31, 2024, and our accumulated deficit as of December 31, 2024 was $40.7 million. We expect to continue to incur increasing operating losses for the foreseeable future as we continue to develop our product candidates.
If the third parties that we engage to supply any materials or to manufacture any products for our preclinical tests and clinical trials should cease to continue to do so for any reason, including due to the effects of the COVID-19 pandemic and the actions undertaken by governments and private enterprises to contain COVID-19, we likely would experience delays in advancing these tests and trials while we identify and qualify replacement suppliers or manufacturers and we may be unable to obtain replacement supplies on terms that are favorable to us.
If the third parties that we engage to supply any materials or to manufacture any products for our preclinical tests and clinical trials should cease to continue to do so for any reason, we likely would experience delays in advancing these tests and trials while we identify and qualify replacement suppliers or manufacturers and we may be unable to obtain replacement supplies on terms that are favorable to us.
Under the Leahy-Smith America Invents Act, or the America Invents Act, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. 64 The America Invents Act also includes a number of significant changes that affect the way patent applications are prosecuted and also may affect patent litigation.
Under the Leahy-Smith 64 America Invents Act, or the America Invents Act, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention.
Individual states in the United States have also become increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
These provisions will take effect progressively starting in 2023, although they may be subject to legal challenges. 54 Individual states in the United States have also become increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
If third parties do not perform our clinical trials in a satisfactory manner, breach their obligations to us or fail to comply with regulatory requirements, we would be unable to rely on clinical data collected by these third parties and may be required to repeat, extend the duration of, or increase the size of any clinical trials we conduct, which could significantly delay commercialization and require significantly greater expenditures.
Outside parties may: • have staffing difficulties; • fail to comply with contractual obligations; • experience regulatory compliance issues; • undergo changes in priorities or become financially distressed; or • form relationships with other entities, some of which may be our competitors. 47 If third parties do not perform our clinical trials in a satisfactory manner, breach their obligations to us or fail to comply with regulatory requirements, we would be unable to rely on clinical data collected by these third parties and may be required to repeat, extend the duration of, or increase the size of any clinical trials we conduct, which could significantly delay commercialization and require significantly greater expenditures.
We have incurred significant losses since our inception and we expect to continue to incur significant losses for the foreseeable future. Under the Internal Revenue Code of 1986, or the Code, a corporation is generally allowed a deduction for net operating losses (“NOLs”), carried over from a prior taxable year. Any NOLs generated after 2017 have no expiration.
Under the Internal Revenue Code of 1986, or the Code, a corporation is generally allowed a deduction for net operating losses (“NOLs”), carried over from a prior taxable year. Any NOLs generated after 2017 have no expiration.
In addition, if we are not able to obtain adequate supplies of our product candidates or the substances used to manufacture them, it will be more difficult for us to develop our product candidates and compete effectively. For COYA 201, we rely on Terumo BCT to manufacture the Terumo Bioreactors to generate the appropriate number of expanded Treg cells.
In addition, if we are not able to obtain adequate supplies of our product candidates or the substances used to manufacture them, it will be more difficult for us to develop our product candidates and compete effectively.
Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any product candidate that we may develop. We face an inherent risk of product liability exposure related to the testing of our product candidates in clinical trials will face an even greater risk if we commercialize any product candidate that we may develop.
We face an inherent risk of product liability exposure related to the testing of our product candidates in clinical trials will face an even greater risk if we commercialize any product candidate that we may develop. If we cannot successfully defend ourselves against claims that any such product candidates caused injuries, we could incur substantial liabilities.
We may seek Orphan Drug Designation for our product candidates, and we may be unsuccessful or may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for market exclusivity. We have received Orphan Drug Designation for our COYA 101 product candidate for the active moiety or the principal molecular structural features.
We may seek Orphan Drug Designation for our product candidates, and we may be unsuccessful or may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for market exclusivity.
Interim data from clinical trials that we may conduct are subject to the risk 41 that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
Interim data from clinical trials that we may conduct are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. 41 Preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously announced.
We face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. Whether we reach a definitive agreement for other collaborations 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.
Whether we reach a definitive agreement for other collaborations 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.
Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay attempts to acquire us that you might consider favorable. Our Amended Charter, Amended and Restated Bylaws (the “Amended Bylaws”) and Delaware law contain provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors.
Our Amended Charter, Amended and Restated Bylaws (the “Amended Bylaws”) and Delaware law contain provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors.
Market volatility resulting from of the ongoing conflict between Russia and Ukraine, and Hamas' attack against Israel and the ensuing conflict, generally rising prices, increasing interest rates, effects of the COVID-19 pandemic or other factors could adversely impact our ability to access capital as and when needed.
Market volatility resulting from of the ongoing conflicts between Russia and Ukraine, and Hamas and Israel, the effect of tariffs and/or any resulting trade wars, generally rising prices, increasing interest rates, or other factors could adversely impact our ability to access capital as and when needed.
Following approval of a product candidate, if any, we must comply with comprehensive government regulations regarding the manufacture, labeling, marketing, distribution and promotion of biologic products. We must comply with the FDA’s regulations, which prohibit promoting off-label uses.
Following approval of a product candidate, if any, we must comply with comprehensive government regulations regarding the manufacture, labeling, marketing, distribution and promotion of biologic products. We must comply with the FDA’s regulations, which prohibit promoting off-label uses. We may not be able to obtain the labeling claims necessary or desirable to successfully commercialize our product candidates in development.
Outside the United States, international operations vary significantly by country and are subject to extensive government price controls and other market regulations, and increasing emphasis on cost-containment initiatives in the European Union, Canada and other countries could place pricing pressure on us.
It is difficult to predict what third-party payors will decide with respect to the coverage and reimbursement for our product candidates. 51 Outside the United States, international operations vary significantly by country and are subject to extensive government price controls and other market regulations, and increasing emphasis on cost-containment initiatives in the European Union, Canada and other countries could place pricing pressure on us.
We may not be able to obtain the labeling claims necessary or desirable to successfully commercialize our product candidates in development. 49 The FDA and foreign regulatory authorities could impose significant restrictions on the use of an approved product including potentially restricting its use to limited clinical centers as well as through the product label, and on advertising, promotional and distribution activities associated with such approved product.
The FDA and foreign regulatory authorities could impose significant restrictions on the use of an approved product including potentially restricting its use to limited clinical centers as well as through the product label, and on advertising, promotional and distribution activities associated with such approved product.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including but not limited to the identification of relevant patents, analysis of the scope of relevant patent claims or determination of the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and elsewhere that is relevant to or necessary for the development and commercialization of our product candidates in any jurisdiction.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including but not limited to the identification of relevant patents, analysis of the scope of relevant patent claims or determination of the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and elsewhere that is relevant to or necessary for the development and commercialization of our product candidates in any jurisdiction. 62 For example, patent applications in the United States and many international jurisdictions are typically not published until 18 months after the filing of certain priority documents (or, in some cases, are not published until they issue as patents) and publications in the scientific literature often lag behind actual discoveries.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 68 Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay attempts to acquire us that you might consider favorable.
In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output.
In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output. 55 Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any product candidate that we may develop.
If we are not able to compete effectively against our existing and potential competitors, our business, financial condition, results of operations and growth prospects may be materially adversely affected.
If we are not able to compete effectively against our existing and potential competitors, our business, financial condition, results of operations and growth prospects may be materially adversely affected. If we are not able to establish pharmaceutical or biotechnology collaborations on commercially reasonable terms, or at all, we may have to alter our development and commercialization plans.
Additionally, we may be required to reimburse our licensors for all of their expenses related to the prosecution, maintenance, enforcement and defense of patents and patent applications that we in-license from them. 60 Furthermore, our licensors may have relied on third-party consultants or collaborators or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents we in-licensed.
Additionally, we may be required to reimburse our licensors for all of their 60 expenses related to the prosecution, maintenance, enforcement and defense of patents and patent applications that we in-license from them.
In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.
In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction.
For COYA 302, which involves COYA 301 plus a fusion protein, we have entered into the DRL License Agreement with DRL whereby will in-license DRL’s proposed Abatacept biosimilar to be used in the development and commercialization of COYA 302 in the United States, Canada, Mexico, South America, the European Union, the United Kingdom, and Japan. 58 Identifying an appropriately qualified source of alternative supply for any one or more of the component substances for our product candidates could be time consuming, and we may not be able to do so without incurring material delays in the development and commercialization of our product candidates.
For COYA 302, which involves COYA 301 58 plus a fusion protein, we have entered into the DRL License Agreement with DRL whereby will in-license DRL’s proposed Abatacept biosimilar to be used in the development and commercialization of COYA 302 in the United States, Canada, Mexico, South America, the European Union, the United Kingdom, and Japan.
We cannot predict the impact of such changes and cannot be certain of our future compliance. We do not currently carry 56 biological or hazardous waste insurance coverage. Any contamination by such hazardous materials could therefore materially adversely affect our business, financial condition, results of operations and growth prospects.
We cannot predict the impact of such changes and cannot be certain of our future compliance. We do not currently carry biological or hazardous waste insurance coverage.
Third parties may also raise similar claims before the PTAB, even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution.
With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution.
Any delay in obtaining, or an inability to obtain, marketing approvals would prevent us from commercializing our product candidates, generating revenues, and achieving and sustaining profitability.
Any delay in obtaining, or an inability to obtain, marketing approvals would prevent us from commercializing our product candidates, generating revenues, and achieving and sustaining profitability. If any of these outcomes occur, we may be forced to abandon our development efforts for our product candidates, which could significantly harm our business.
If any of these outcomes occur, we may be forced to abandon our development efforts for our product candidates, which could significantly harm our business. 52 Obtaining and maintaining marketing approval or commercialization of our product candidates in one jurisdiction does not mean that we will be successful in obtaining marketing approval of our product candidates in other jurisdictions.
Obtaining and maintaining marketing approval or commercialization of our product candidates in one jurisdiction does not mean that we will be successful in obtaining marketing approval of our product candidates in other jurisdictions.
We cannot guarantee that any of our product candidates will be safe and effective, or will be approved for commercialization, on a timely basis or at all.
Once clinical testing is completed and a BLA or NDA is filed with the FDA, it may take more than a year to receive FDA approval. We cannot guarantee that any of our product candidates will be safe and effective, or will be approved for commercialization, on a timely basis or at all.
We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.
In addition, investors of our securities may experience losses, which may be material, if the price of our common stock declines or if such investors purchase shares of our common stock prior to any price decline. 66 We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.
For example, several immunotherapy drugs have been approved for reimbursement in the United States, whereas they have not been approved for reimbursement in certain European Union member states. It is difficult to predict what third-party payors will decide with respect to the coverage and reimbursement for our product candidates.
For example, several immunotherapy drugs have been approved for reimbursement in the United States, whereas they have not been approved for reimbursement in certain European Union member states.
Computer system interruptions, cyber-attacks or security breaches could significantly disrupt our product development programs and our ability to operate our business.
Any contamination by such hazardous materials could therefore materially adversely affect our business, financial condition, results of operations and growth prospects. 56 Computer system interruptions, cyber-attacks or security breaches could significantly disrupt our product development programs and our ability to operate our business.
Preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously announced. Negative differences between preliminary or interim data and final data could materially adversely affect the prospects of any product candidate that is impacted by such data updates.
Negative differences between preliminary or interim data and final data could materially adversely affect the prospects of any product candidate that is impacted by such data updates. Any positive results from studies of our product candidates may not necessarily be predictive of the results from later studies and clinical trials.
For some of our programs, we may seek to collaborate 48 with pharmaceutical and biotechnology companies to develop and commercialize such product candidates. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business.
Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business. We face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex.
Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs.
We have received Orphan Drug Designation for our COYA 101 product candidate for the active moiety or the principal molecular structural features, and we may seek Orphan Drug Designation for our present or future product candidates. Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Cybersecurity Risk Management and Strategy We have certain processes for assessing, identifying and managing cybersecurity risks, which are built into our overall information technology function and are designed to help protect our information assets and operations from internal and external cyber threats, and protect employee, collaborator and patient information from unauthorized access or attack, as well as secure our networks and systems.
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Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We, like other companies in our industry, face several cybersecurity risks in connection with our business. Our business strategy, results of operations, and financial condition have not, to date, been affected by risks from cybersecurity threats.
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Such processes include physical, procedural and technical safeguards and routine review of our policies and procedures to identify risks and refine our practices. We consider the internal risk oversight programs of third-party service providers before engaging them in order to help protect us from any related vulnerabilities.
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During the reporting period, we have not experienced any material cyber incidents, nor have we experienced a series of immaterial incidents, which would require disclosure. In the ordinary course of our business, we may produce, store and process sensitive data.
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Governance; Board Oversight The Audit Committee of our Board provides direct oversight over cybersecurity risk, and provides updates to the Board of Directors regarding such oversight, when and if appropriate. Management provides periodic updates to the Audit Committee regarding cybersecurity matters including significant new cybersecurity threats or incidents, when and if appropriate.
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To effectively prevent, detect, and respond to cybersecurity threats, we maintain a cyber risk management program which is comprised of data segregation, physical, procedural, and technical safeguards along with policies and procedures. We have substantially outsourced our IT environment and utilize expert third party software-as-a-service providers for our financial accounting, human resource management, payroll and benefits functions.
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We use technology-based tools that are designed to mitigate cybersecurity risks and to bolster our employee-based cybersecurity programs.
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We also substantially outsource the conduct of our clinical programs and the associated IT infrastructure to expert third party CROs. As a result, the primary means by which we avoid cyber risk is minimizing the sensitive data within our own enterprise.
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The cyber risk management program falls under the responsibility of our Chief Financial Officer (“CFO”) and the Chief Operations Officer (“COO”) who manages the overall security through routine communication and supervision of our third-party vendors .
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Under the guidance of our CFO, who reports to the Audit Committee, we try to minimize our data footprint to keep our cyber risk low. We have implemented a cybersecurity risk management program that is designed to limit and mitigate risks from cybersecurity threats.
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Our cybersecurity risk management program incorporates several components, including employee training, SOC 2 Type 1 controls, multifactor authentication, endpoint monitoring, and we maintain Business Associate Agreements where required.
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Governance; Board Oversight Under the ultimate direction of our CFO, with oversight from the Board, we maintain a security governance structure to evaluate and address cyber risk. Our Board is responsible for the oversight of cybersecurity risk management. The Board delegates oversight function of the cybersecurity risk management program to the Audit Committee.
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Our CFO reports to the Audit Committee on the program. The Audit Committee provides updates to the Board on our cybersecurity risk management program, including any critical cybersecurity risks, ongoing cybersecurity initiatives and strategies, and applicable regulatory requirements and industry standards on a regular and as-needed basis.
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The Audit Committee also notifies the Board of any cybersecurity incidents (suspected or actual) and provides updates on the incidents as well as cybersecurity risk mitigation activities as appropriate.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting our overall operations. Item 4. Mine Safety Disclosures. Not applicable. 72 PART II
Biggest changeRegardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting our overall operations. Item 4. Mine Safety Disclosures. Not applicable. 71 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe payment of cash dividends if any, on the common stock will rest solely within the discretion of our board of directors and will depend, among other things, upon our earnings, capital requirements, financial condition, and other relevant factors.
Biggest changeThe payment of cash dividends if any, on the common stock will rest solely within the discretion of our board of directors and will depend, among other things, upon our earnings, capital requirements, financial condition, and other relevant factors. Recent Sales of Unregistered Securities None.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Market Information Our common stock trades on Nasdaq under the symbol “COYA.” Holders As of March 1, 2024, there were approximately 76 holders of record of our common stock. This number does not include beneficial owners whose shares are held in street name.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Market Information Our common stock trades on Nasdaq under the symbol “COYA.” Holders As of March 1, 2025, there were approximately 26 holders of record of our common stock. This number does not include beneficial owners whose shares are held in street name.
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Recent Sales of Unregistered Securities In April 2022, we issued $10.5 million principal amount of convertible promissory notes, which bore interest at an annual rate of 6.0%, paid in kind, and had a maturity date of June 30, 2024 (the “2022 Promissory Notes”).
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The notes automatically converted into shares of common stock in connection with the closing of our initial public offering on January 3, 2023. The foregoing transaction did not involve any underwriters, underwriting discounts or commissions, or any public offering.
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We believe this transaction was exempt from registration under the Securities Act in reliance on Section 4(a)(2), and/or Rule 506 of Regulation D promulgated thereunder, as a transaction by an issuer not involving any public offering.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeResults of Operations For 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: Years Ended December 31, 2023 2022 Change Collaboration revenue $ 6,002,206 $ - $ 6,002,206 Operating expenses: Research and development 5,501,527 4,412,498 1,089,029 In-process research and development 543,186 525,000 18,186 General and administrative 7,833,481 4,847,080 2,986,401 Depreciation 27,361 27,361 - Total operating expenses 13,905,555 9,811,939 4,093,616 Loss from operations (7,903,349 ) (9,811,939 ) 1,908,590 Other income: Change in fair value of convertible promissory notes - (2,496,510 ) 2,496,510 Other income, net 639,365 63,673 575,692 Pre-tax loss (7,263,984 ) (12,244,776 ) 4,980,792 Income tax expense (723,852 ) - (723,852 ) Net loss $ (7,987,836 ) $ (12,244,776 ) $ 4,256,940 Collaboration Revenue Collaboration revenue was $6.0 million for the year ended December 31, 2023, related to the DRL Development Agreement we entered into with Dr.
Biggest changeAs such, we have a full valuation allowance against all NOLs and tax credits for all periods presented. 76 Results of Operations For the Years Ended December 31, 2024 and 2023 The following table sets forth our results of operations for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Change Collaboration revenue $ 3,554,061 $ 6,002,206 $ (2,448,145 ) Operating expenses: Research and development 11,865,654 5,501,527 6,364,127 In-process research and development 25,000 543,186 (518,186 ) General and administrative 8,885,757 7,833,481 1,052,276 Depreciation 27,361 27,361 - Total operating expenses 20,803,772 13,905,555 6,898,217 Loss from operations (17,249,711 ) (7,903,349 ) (9,346,362 ) Other income: Other income, net 1,648,637 639,365 1,009,272 Pre-tax loss (15,601,074 ) (7,263,984 ) (8,337,090 ) Income tax benefit (expense) 720,287 (723,852 ) 1,444,139 Net loss $ (14,880,787 ) $ (7,987,836 ) $ (6,892,951 ) Collaboration Revenue R&D Services revenue is calculated quarterly using the inputs approach, by applying actual COYA 302 expenses against budgeted COYA 302 expenses as the two inputs.
Financing Activities During the year ended December 31, 2023, financing activities provided $38.4 million of cash, which consisted of $24.1 million in proceeds from the 2023 Private Placement, net of offering costs, $14.3 million in proceeds from issuance of common stock in the IPO, net of offering costs, and $0.1 million in proceeds from the exercise of stock options.
During the year ended December 31, 2023, financing activities provided $38.4 million of cash, which consisted of $24.1 million in proceeds from the 2023 Private Placement, net of offering costs, $14.3 million in proceeds from issuance of common stock in the IPO, net of offering costs, and $0.1 million in proceeds from the exercise of stock options.
We previously granted DRL an exclusive license to obtain regulatory approval and commercialize COYA 302 for ALS and certain other indications in all other countries (other than the New Territories, Japan, Mexico, and in each country in South America), pursuant to the License and Supply Agreement entered between with DRL, or the DRL Supply Agreement, effective as of April 1, 2023.
We previously granted DRL an exclusive license to obtain regulatory approval and commercialize COYA 302 for ALS and certain other indications in all other countries (other than the New Territories, Japan, Mexico, and in each country in South America), pursuant to the License and Supply Agreement entered between with DRL, or the DRL Agreement, effective as of April 1, 2023.
Commitments and contingencies, including license and sponsored research agreements Patent Know How and License Agreement with The Methodist Hospital In September 2022, we entered into Methodist License Agreement with Methodist to make, sell and sublicense products and services using the intellectual property and know-how of Methodist.
Commitments and Contingencies, including License and Sponsored Research Agreements Patent Know How and License Agreement with The Methodist Hospital In September 2022, we entered into the Methodist License Agreement with Methodist to make, sell and sublicense products and services using the intellectual property and know-how of Methodist.
The highest tier is paid only on combination products where there are three or more indications being served. We are also required to pay a low single digit percentage for certain licensed services. We are required to pay royalties at between 10% to 20% of sublicense revenue.
The highest tier is paid only on combination products where there are three or more indications being served. We are also required to pay a low single digit percentage for certain licensed services. We are required to pay royalties at between 10%-20% of sublicense revenue.
In the event we sublicense our rights under the ARS License Agreement, we will owe royalties on sublicense income within the range of 10% to 20%. To date, the $0.1 million option fee and the mid-six-figure up-front fee (upon exercise of the ARS Option) are the only payments made to ARS under ARS License Agreement. Dr.
In the event we sublicense our rights under the ARS License Agreement, we will owe royalties on sublicense income within the range of 10% to 20%. To date, the $0.1 million option fee and the mid-six-figure up-front fee (upon exercise of the ARS Option) are the only payments made to ARS under the ARS License Agreement. Dr.
Reddy's License and Supply Agreement In March 2023, we entered into the DRL Supply Agreement with DRL. The DRL Supply Agreement became effective on April 1, 2023.
Reddy's License and Supply Agreement In March 2023, we entered into the DRL Agreement with DRL. The DRL Agreement became effective on April 1, 2023.
We expect our expenses and capital requirements will increase significantly in connection with our ongoing activities as we: • continue our ongoing and planned research and development of our product candidates; • initiate nonclinical studies and clinical trials for any additional product candidates that we may pursue; • continue to scale up external manufacturing capacity with the aim of securing sufficient quantities to meet our capacity requirements for clinical trials and potential commercialization; • establish a sales, marketing and distribution infrastructure to commercialize any approved product candidates and related additional commercial manufacturing costs; • develop, maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know-how; • acquire or in-license other product candidates and technologies; • add clinical, operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and • incur additional legal, accounting, investor relations and other expenses associated with operating as a public company.
We expect our expenses and capital requirements will increase significantly in connection with our ongoing activities as we: 73 • continue our ongoing and planned research and development of our product candidates; • initiate nonclinical studies and clinical trials for any additional product candidates that we may pursue; • continue to scale up external manufacturing capacity with the aim of securing sufficient quantities to meet our capacity requirements for clinical trials and potential commercialization; • establish a sales, marketing and distribution infrastructure to commercialize any approved product candidates and related additional commercial manufacturing costs; • develop, maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know-how; • acquire or in-license other product candidates and technologies; • add clinical, operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and • incur legal, accounting, investor relations and other expenses associated with operating as a public company.
If any of our current or future product candidates 77 obtains U.S. regulatory approval, we expect that we would incur significantly increased expenses associated with building a sales and marketing team. Depreciation Depreciation expense relates to the fixed assets which consist mainly of lab equipment. The lab equipment is depreciated over its estimated useful life of five years.
If any of our current or future product candidates obtains U.S. regulatory approval, we expect that we would incur significantly increased expenses associated with building a sales and marketing team. Depreciation Depreciation expense relates to the fixed assets which consist mainly of lab equipment. The lab equipment is depreciated over its estimated useful life of five years.
Pursuant to the terms of the DRL Supply Agreement, we will in-license DRL_AB to be used in the development and commercialization of COYA 302 in the U.S., Canada, Mexico, South America, the European Union, the United Kingdom, and Japan. In consideration for the license, we paid a one-time, non-refundable upfront fee of $0.4 million.
Pursuant to the terms of the DRL Agreement, we will in-license DRL_AB to be used in the development and commercialization of COYA 302 in the U.S., Canada, Mexico, South America, the European Union, the United Kingdom, and Japan. In consideration for the license, we paid a one-time, non-refundable upfront fee of $0.4 million.
The product candidates utilizing our Treg-enhancing biologics are collectively referred to as the “300 Series.” The product candidates utilizing our Treg-derived exosomes are collectively referred to as the “200 Series.” The product candidates utilizing our autologous Treg cell therapy are collectively referred to as the “100 Series.” Currently, our 300 Series product candidates include COYA 301 and COYA 302, our 200 Series product candidates include COYA 201 and COYA 206, and our 100 Series product candidate is COYA 101.
The product candidates utilizing our Treg-enhancing biologics are collectively referred to as the “300 Series.” The product candidates utilizing our Treg-derived exosomes are collectively referred to as the “200 Series.” The product candidates utilizing our autologous Treg cell therapy are collectively referred to as the “100 Series.” Currently, our 300 Series product candidates include COYA 301, COYA 302 and COYA 303, our 200 Series product candidates include COYA 201 and COYA 206, and our 100 Series product candidate is COYA 101.
We do not further classify or evaluate our internal research and development expenses by product candidate or by Series as these expenses primarily relate to compensation, materials and supplies, and other costs which are deployed across multiple potential therapeutic modalities, multiple product candidates, and multiple potential therapeutic areas under development.
We do not further classify or evaluate our internal research and development expenses by product candidate or by Series as these expenses primarily relate to compensation, materials and supplies, and other costs which are deployed across multiple therapeutic modalities, multiple product candidates, and multiple therapeutic areas under development.
The Methodist License Agreement provides that in the event we sublicense products and services covered by the Methodist License Agreement, then royalties owed to Houston Methodist would be computed as a percentage of payments received by us from the sublicensee.
The Methodist License Agreement provides that in the event we sublicense products and services covered by the Methodist License Agreement, then royalties owed to Houston Methodist would be computed as a percentage of payments received by us from the 82 sublicensee.
Pursuant to the terms of the ARS License Agreement, we paid to ARS a mid-six-figure up-front fee. 84 In addition, we may also owe tiered payments to ARS based on our achievement of certain developmental milestones.
Pursuant to the terms of the ARS License Agreement, we paid to ARS a mid-six-figure up-front fee. In addition, we may also owe tiered payments to ARS based on our achievement of certain developmental milestones.
We need significant additional funds to meet operational needs and capital requirements for clinical trials, other research and development expenditures, and business development activities. We currently have no credit facility or committed sources of capital.
We will need significant additional funds to meet operational needs and capital requirements for clinical trials, other research and development expenditures, and business development activities. We currently have no credit facility or committed sources of capital.
We will also pay to DRL a low-six figure milestone payment per additional indication. Further, pursuant to the DRL Supply Agreement, we will pay to DRL single-digit royalties on Net Sales (as defined in the DRL Supply Agreement).
We will also pay to DRL a low-six figure milestone payment per additional indication. Further, pursuant to the DRL Agreement, we will pay to DRL single-digit royalties on Net Sales (as defined in the DRL Agreement).
COYA 302 is comprised of two components, COYA 301 and DRL_AB. In accordance with the DRL Supply Agreement, we in-licensed DRL_AB for the development and commercialization of COYA 302. Further, under the DRL Development Agreement, Dr. Reddy’s is responsible for the development of DRL_AB.
COYA 302 is comprised of two components, COYA 301 and DRL_AB. In accordance with the DRL Agreement, we in-licensed DRL_AB for the development and commercialization of COYA 302. Further, under the DRL Development Agreement, Dr. Reddy’s is responsible for the development of DRL_AB.
Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
Product candidates in later stages of clinical 75 development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
Such changes will result in a change to the amount of collaboration revenue recognized and deferred revenue. 82 Significant estimates were used in the determination of the stand-alone selling prices.
Such changes will result in a change to the amount of collaboration revenue recognized and deferred revenue. Significant estimates were used in the determination of the stand-alone selling prices.
Our future operating capital 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 product candidates; • the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization; • the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates; • 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 any of our product candidates for which we receive marketing approval; and • revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing 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 product candidates; • the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization; • the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates; • 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; 78 • the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval; and • revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.
In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product 74 manufacturing, marketing, sales and distribution.
In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements.
The preparation of 80 these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements.
COYA 302, our lead asset, is the combination of our proprietary low dose interleukin-2 (COYA 301, or LD IL-2) and the immunomodulatory drug CTLA4-Ig, and we believe this combination has the potential to provide a sustained and durable effect on our first series of indications (neurodegenerative disorders) through targeting of multiple pathways.
COYA 302 is the combination of our proprietary low dose interleukin-2 (COYA 301, or LD IL-2) and the immunomodulatory drug CTLA4-Ig, and we believe this combination has the potential to provide a sustained and durable effect on our first series of indications (neurodegenerative disorders) through targeting of multiple pathways.
Overview We are a clinical-stage biotechnology company focused on developing proprietary new therapies to enhance the function of Tregs. Tregs are a subpopulation of T-lymphocytes consisting of CD4+CD25high hFOXP3+ cells that suppress inflammatory responses. Tregs were first discovered in 1995 by Dr.
Overview We are a clinical-stage biotechnology company focused on developing proprietary new therapies to enhance the function of regulatory T cells (“Tregs”). Tregs are a subpopulation of T-lymphocytes consisting of CD4+CD25high hFOXP3+ cells that suppress inflammatory responses. Tregs were first discovered in 1995 by Dr.
Item 6. [Reserved] 73 It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and operating results together with our financial statements and the related notes appearing at the end of this Annual Report on Form 10-K.
Item 6. [Reserved] 72 It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and operating results together with our financial statements and the related notes appearing at the end of this Annual Report on Form 10-K.
Recent Accounting Pronouncements See Note 2 to our financial statements found elsewhere in this Annual Report on Form 10-K for a description of recent accounting pronouncements applicable to our financial statements. 85 Ite m 7A. Quantitative and Qualitative Disclosures About Market Risk. Not Applicable.
Recent Accounting Pronouncements See Note 2 to our financial statements found elsewhere in this Annual Report on Form 10-K for a description of recent accounting pronouncements applicable to our financial statements. 83 Ite m 7A. Quantitative and Qualitative Disclosures About Market Risk. Not Applicable.
We expense research and development costs as incurred, including: • Expenses incurred to conduct discovery-stage laboratory work and preclinical studies including supplies, reagents, chemicals as well as external costs of funding research performed by third parties including consultants, academic and other institutions and clinical research organizations, or CROs that conduct our preclinical and nonclinical studies; • activities being performed under our sponsored research arrangement with Houston Methodist; • personnel expenses, including salaries, benefits and stock-based compensation expense for our employees engaged in research and development functions; • clinical trial expenses and related clinical expenses to obtain regulatory approval of our potential therapeutic candidates including costs of research performed by third parties, costs associated with CRO’s that conduct our clinical trials, costs to operate, manage, and monitor investigative sites and clinical, regulatory, manufacturing and other professional services; • clinical expenses incurred under agreements with contract manufacturing organizations, or CMOs, or incurred directly by us for manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical study and clinical trial materials; • fees paid to consultants who assist with research and development activities; • expenses related to regulatory activities, including filing fees paid to regulatory agencies; and • allocated expenses for facility costs, including rent, utilities, depreciation and maintenance. 76 We classify and evaluate our research and development expenses in two dimensions: clinical and preclinical, and external and internal.
We expense research and development costs as incurred, including: • Expenses incurred to conduct discovery-stage laboratory work and preclinical studies including supplies, reagents, chemicals as well as external costs of funding research performed by third parties including consultants, academic and other institutions and clinical research organizations, or CROs that conduct our preclinical and nonclinical studies; • activities being performed under our sponsored research arrangement with Houston Methodist; • personnel expenses, including salaries, benefits and stock-based compensation expense for our employees engaged in research and development functions; • clinical trial expenses and related clinical expenses to obtain regulatory approval of our therapeutic candidates including costs of research performed by third parties, costs associated with CRO’s that conduct our clinical trials, costs to operate, manage, and monitor investigative sites and clinical, regulatory, manufacturing and other professional services; • clinical expenses incurred under agreements with contract manufacturing organizations, or CMOs, or incurred directly by us for manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical study and clinical trial materials; • fees paid to consultants who assist with research and development activities; • expenses related to regulatory activities, including filing fees paid to regulatory agencies; and • allocated expenses for facility costs, including rent, utilities, depreciation and maintenance.
Cash used in operating activities reflected our net loss of $8.0 million, offset by a $4.6 million net decrease in our operating assets and liabilities and noncash charges of $1.4 million, which primarily consisted of $0.9 million in stock-based compensation and other charges of $0.5 million in acquired in-process research and development costs.
Cash used in operating activities reflected our net loss of $8.0 million and a $4.6 million change in our operating assets and liabilities, partially offset by noncash charges of $1.4 million, which primarily consisted of $0.9 million in stock-based compensation and other charges of $0.5 million in acquired in-process research and development costs.
We believe COYA 302 represents the most clinically advanced of what we hope will be a family of combination therapies that all feature our LD IL-2.
We believe COYA 302 is the most clinically advanced of what we hope will be a family of combination therapies that all feature our LD IL-2.
Additionally, we are entitled to receive (i) an additional $4.2 million upon FDA acceptance of an Investigational New Drug, or IND, application for COYA 302 for the treatment of ALS and (ii) an additional $4.2 million payment upon the dosing of the first patient in the first phase 2 clinical trial for COYA 302 for the treatment of ALS in the United States.
Additionally, we are entitled to receive (i) an additional $4.2 million upon FDA acceptance of an IND application for COYA 302 for the treatment of ALS and (ii) an additional $4.2 million payment upon the dosing of the first patient in the first phase 2 clinical trial for COYA 302 for the treatment of ALS in the United States.
Our research and clinical efforts have led us to believe that combination biologics using our LD IL-2 as a backbone modality could be the best way to treat neurodegenerative conditions that are inherently driven by a complexity of pathways.
Our research and clinical efforts have led us to believe that combination biologics using our LD IL-2 as a backbone modality could be an effective way to treat neurodegenerative conditions that are inherently driven by a complexity of pathways.
On an ongoing basis, we evaluate our estimates and judgments, including those related to prepaid/accrued research and development expenses and include fair value of the Company’s convertible promissory notes (see Notes 3 and 8 to our financial statements found elsewhere in this Annual Report on Form 10-K), equity and related inputs, including discount for lack of marketability and volatility, used to estimate the fair value of the grant date fair value of stock options (see Note 9 to our financial statements found elsewhere in this Annual Report on Form 10-K).
On an ongoing basis, we evaluate our estimates and judgments, including those related to prepaid/accrued research and development expenses, equity and related inputs, including discount for lack of marketability and volatility, used to estimate the fair value of the grant date fair value of stock options (see Note 9 to our financial statements found elsewhere in this Annual Report on Form 10-K).
We will pay to DRL up to an aggregate of approximately $2.9 million of pre-approval regulatory milestone payments for the first indication in the Field (as defined in the DRL Supply Agreement), of which an aggregate of $0.2 million has been paid to date, and an additional approximately $20.0 million if all other development, regulatory approval and sales milestones are incurred under the DRL Supply Agreement.
We will pay to DRL up to an aggregate of approximately $2.9 million of pre-approval regulatory milestone payments for the first indication in the Field (as defined in the DRL Agreement) and an additional approximately $20.0 million if all other development, regulatory approval and sales milestones are incurred under the DRL Agreement.
Commencing on January 1, 2025, the minimum amount which will be owed by us once commercialization occurs is $0.1 million annually.
Effective January 1, 2025, the minimum amount which will be owed by us once commercialization occurs is $0.1 million annually.
The primary use of cash was to fund our operations related to the development of our product candidates. Investing Activities During each of the years ended December 31, 2023 and 2022, we used $0.5 million of cash for the purchase of in-process research and development.
The primary use of cash was to fund our operations related to the development of our product candidates. 79 Investing Activities During the year ended December 31, 2023, we used $0.5 million of cash for the purchase of in-process research and development. During the year ended December 31, 2024, cash used related to investing activities was immaterial.
Income tax expense We recorded of $0.7 million income tax expense for the year ended December 31, 2023. We had no such income tax expense for the year ended December 31, 2022. Liquidity and Capital Resources Overview Since our inception, we have incurred operating losses and negative cash flows from our operations.
Income Tax Benefit (Expense) We recorded $0.7 million of income tax benefit for the year ended December 31, 2024, which offset the $0.7 million of income tax expense recorded for the year ended December 31, 2023. Liquidity and Capital Resources Overview Since our inception, we have incurred operating losses and incurred negative cash flows from our operations through 2024.
Moreover, given its growing list of indications, we can now refer to COYA 302 as a “Pipeline in a Product.” Our operations have consisted of developing our clinical and preclinical product candidates and 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.
Given the growing list of indications for which we are developing it, we can now refer to COYA 302 as a “Pipeline in a Product.” Our operations have consisted of developing our clinical and preclinical product candidates and we have devoted substantially all of our resources to developing product and technology rights, conducting research and development (which includes preclinical and non-clinical studies of our product candidates), organizing and staffing our company, ongoing business operations and raising capital.
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 or other capital sources, which may include collaborations with other companies or other strategic transactions.
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 or other capital sources, which may include collaborations with other companies or other strategic transactions.
We anticipate an IND filing will be made in the first half of 2024. The DRL Development Agreement also calls for up to an aggregate of $40.0 million in development milestones and up to an aggregate of $677.3 million in sales milestones, related to the New Territories, should all such development and sales milestones be achieved.
The DRL Development Agreement also calls for up to an aggregate of $40.0 million in development milestones and up to an aggregate of $677.3 million in sales milestones, related to the New Territories, should all such development and sales milestones be achieved. We will also be owed royalties by Dr.
Nonrefundable advance payments for goods and services, including fees for clinical trial expenses, process development or manufacturing and distribution of clinical supplies that will be used in future research and development activities, are deferred and recognized as expense in the period that the related goods are consumed or services are performed.
Nonrefundable advance payments for goods and services, including fees for clinical trial expenses, process development or manufacturing and distribution of clinical supplies that will be used in future research and development activities, are deferred and recognized as expense in the period that the related goods are consumed or services are performed. 81 Stock-Based Compensation We measure compensation expense for all stock-based awards based on the estimated fair value of the stock-based awards on the grant date.
If the JSC is unable to reach a consensus, and the parties’ executives are not able to resolve the dispute, then Dr. Reddy’s has final decision-making authority, subject to specified limitations (as set forth in the DRL Development Agreement).
If the JSC is unable to reach a consensus, and the parties’ executives are not able to resolve the dispute, then Dr. Reddy’s has final decision-making authority, subject to specified limitations (as set forth in the DRL Development Agreement). Pursuant to the DRL Development Agreement, we received an up-front, nonrefundable payment of $7.5 million in January 2024.
The increase was due to a $2.2 million increase in our preclinical expenses, a $0.5 million increase in internal research and development expenses, partially offset by a $1.4 million decrease in costs attributable to our sponsored 78 research agreement with Houston Methodist Hospital, and a $0.3 million decrease in costs for our clinical product candidate.
The increase was due to a $5.0 million increase in our preclinical expenses, a $1.1 million increase in internal research and development expenses, and a $0.3 million increase in costs attributable to our sponsored research agreement with Houston Methodist Hospital.
Components of Results of Operations Collaboration Revenue To date, we have not recognized any revenue from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future.
Such warrants have a term of four years from issuance, and are fully exercisable. 74 Components of Results of Operations Collaboration Revenue To date, we have not recognized any revenue from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future.
Other income, net Other income, net increased by $0.6 million from the year ended December 31, 2022 compared to the year ended December 31, 2023. The increase was due to interest and dividends earned on cash balances received from our IPO and the 2023 Private Placement.
Other Income, Net Other income, net increased by $1.0 million from the year ended December 31, 2023 compared to the year ended December 31, 2024. The increase was due to interest and dividend income earned on cash balances.
Stock-Based Compensation We measure compensation expense for all stock-based awards based on the estimated fair value of the stock-based awards on the grant date. We use the Black-Scholes option pricing model to value our stock option awards. We recognize compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period of the award.
We use the Black-Scholes option pricing model to value our stock option awards. We recognize compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period of the award. We have not issued awards for which vesting is subject to a market or performance conditions.
Reddy's, pursuant to which, among other things, the Company granted to Dr. Reddy's an exclusive, royalty-bearing right and license to commercialize COYA 302 solely for use in patients with ALS, in the United States, Canada, the European Union and the United Kingdom, or collectively, the New Territories.
Collaboration revenue represents revenue from the DRL Development Agreement, as amended in June 2024, pursuant to which we granted Dr. Reddy's an exclusive, royalty-bearing right and license to commercialize COYA 302, solely for use in patients with ALS in the United States, Canada, the European Union and the United Kingdom, or collectively, the New Territories.
Research and development expenses disaggregated and classified by clinical and preclinical, and external and internal expenses are summarized in the table below: Years Ended December 31, 2023 2022 External costs: Clinical product candidates: COYA 101 $ - $ 288,072 Preclinical product candidates: COYA 200 Series 7,684 882,945 COYA 300 Series 3,306,627 209,420 Sponsored research 256,571 1,635,712 Internal costs: Internal research and development expenses, including stock-based compensation 1,930,645 1,396,349 Total $ 5,501,527 $ 4,412,498 In-Process Research and Development Under the terms of our exclusive License and Supply Agreement, or DRL Agreement, with DRL, we paid license fees of $0.5 million which was expensed as in-process research and development expense during the year ended December 31, 2023.
Research and development expenses disaggregated and classified by preclinical, and external and internal expenses are summarized in the table below: Years Ended December 31, 2024 2023 External costs: Preclinical product candidates: COYA 200 Series $ - $ 7,684 COYA 300 Series 8,313,290 3,306,627 Sponsored research 556,265 256,571 Internal costs: Internal research and development expenses, including stock-based compensation 2,996,099 1,930,645 Total $ 11,865,654 $ 5,501,527 77 In-Process Research and Development Under the terms of our exclusive License and Supply Agreement, or DRL Agreement, with DRL, we paid a licenses fee of $0.5 million, which was expensed as in-process research and development expense during the year ended December 31, 2023.
In connection with the 2023 Private Placement, we issued to the placement agents and our financial advisor warrants to purchase up to an aggregate of 319,004 shares of common stock with an exercise price of $7.58 per share.
In connection with the 2023 Private Placement and as a form of payment for services provided by a co-placement agent and financial advisor, we issued warrants to purchase up to 319,004 shares of common stock at an exercise price of $7.58 per share.
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 future product candidates.
Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures and 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 future product candidates.
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, 2023 we have funded our operations through the sale of convertible promissory notes and convertible preferred stock, our IPO, and the 2023 Private Placement.
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, 2024 we have funded our operations through the public and private sale of our equity securities, and payments from DRL in accordance with the DRL Development Agreement.
Cash Flows The following table shows a summary of our cash flows for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Cash used in operating activities $ (11,188,811 ) $ (7,239,354 ) Cash used in investing activities (543,186 ) (525,000 ) Cash provided by financing activities 38,425,063 9,357,878 Net increase in cash and cash equivalents $ 26,693,066 $ 1,593,524 80 Operating Activities During the year ended December 31, 2023, we used $11.2 million of cash in operating activities.
Cash Flows The following table shows a summary of our cash flows for the periods indicated: Years Ended December 31, 2024 2023 Cash used in operating activities $ (10,288,822 ) $ (11,188,811 ) Cash used in investing activities (25,000 ) (543,186 ) Cash provided by financing activities 16,026,816 38,425,063 Net increase in cash and cash equivalents $ 5,712,994 $ 26,693,066 Operating Activities During the year ended December 31, 2024, we used $10.3 million of cash in operating activities.
The 2023 Private Placement resulted in gross proceeds of approximately $26.5 million, at a price of $6.06 per share of common stock, before deducting placement agent commissions and other offering expenses.
The offering resulted in net proceeds of $9.1 million, at a price of $7.25 per share of common stock, after deducting placement agent commissions and other offering expenses.
General and Administrative Expenses General and administrative expenses increased by $3.0 million from $4.8 million for year ended December 31, 2022 to $7.8 million for the year ended December 31, 2023.
In-process research and development expenses were immaterial for the year ended December 31, 2024. General and Administrative Expenses General and administrative expenses increased by $1.1 million from $7.8 million for year ended December 31, 2023 to $8.9 million for the year ended December 31, 2024.
These and other recent advances in the understanding of Treg biology, have made this subset of T-lymphocytes an important potential therapeutic target, which we believe may provide new treatments for serious diseases. We have built a diversified product candidate pipeline that includes both ex vivo and in vivo approaches intended to restore the suppressive and immunomodulatory functions of Tregs.
These and other recent advances in the understanding of Treg biology, have made this subset of T-lymphocytes an important potential therapeutic target, which we believe may provide new treatments for serious diseases. Our core focus is developing therapies to target Treg dysfunction.
Reddy's in December 2023. We had no such collaboration revenue in 2022. Research and Development Expenses Research and development expenses increased by $1.1 million from $4.4 million for the year ended December 31, 2022 to $5.5 million for the year ended December 31, 2023.
Research and Development Expenses Research and development expenses increased by $6.4 million from $5.5 million for the year ended December 31, 2023 to $11.9 million for the year ended December 31, 2024.
Reddy's on Net Sales (as defined in the DRL Development Agreement) of COYA 302 in the low to mid-teens (prior to paying royalties due pursuant to previously disclosed license agreements related to COYA 302). 81 Both parties shall discuss in good faith and agree in writing on the terms of a commercial supply agreement for the purpose of supply of COYA 302 to Dr.
Reddy's on Net Sales (as defined in the DRL Development Agreement) of COYA 302 in the low to mid-teens (prior to paying royalties due pursuant to previously disclosed license agreements related to COYA 302). In June 2024, we entered into the First Amendment to the DRL Development Agreement, or the First Amendment, with DRL and Dr.
We believe the clinical data from these initial studies served as an important confirmation of the underlying immunomodulatory properties of Tregs and their potential therapeutic benefits.
Our autologous Treg cell therapy program has completed a Phase 1 and Phase 2a studies in amyotrophic lateral sclerosis, or ALS. The clinical data from these initial studies has served as an important confirmation of the underlying immunomodulatory properties of Tregs and their potential therapeutic benefits.
The primary use of cash was to fund our operations related to the development of our product candidates. During the year ended December 31, 2022, we used $7.2 million of cash in operating activities.
The change in our operating assets was mainly related to the receipt of a $7.5 million payment from DRL pursuant to the DRL Development Agreement during the year ended December 31, 2024. During the year ended December 31, 2023, we used $11.2 million of cash in operating activities.
We have funded our operations primarily through private convertible preferred stock offerings, a convertible debt financing, the public offering of our securities that closed in January 2023, and a private placement offering. Our net losses were $8.0 million and $12.2 million for the years ended December 31, 2023 and 2022, respectively.
We have funded our operations primarily through the private and public sale of our securities. Our net losses were $14.9 million and $8.0 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $40.7 million.
As of December 31, 2023 we had $32.6 million in cash and cash equivalents and had an accumulated deficit of $25.9 million. We expect our existing cash and cash equivalents, together with the $7.5 million non-refundable upfront payment, or DRL Upfront Payment, to enable us to fund our operating expenses and capital expenditure requirements 79 into 2026.
As of December 31, 2024 we had $38.3 million in cash and cash equivalents and had an accumulated deficit of $40.7 million. We expect our existing cash and cash equivalents to enable us to fund our operating expenses and capital expenditure requirements for at least one year after the financial statements are issued.
Cash used in operating activities reflected our net loss of $12.2 million, offset by a $0.8 million net decrease in our operating assets and liabilities and noncash charges of $4.3 million, which primarily consisted of $2.5 million in the change in fair value of the convertible promissory notes, $1.0 million of debt issuance costs, and $0.5 million in acquired in-processing research and development costs.
Cash used in operating activities reflected our net loss of $14.9 million, partially offset by a $1.9 million change in operating assets and noncash charges of $2.7 million, which primarily consisted of stock-based compensation.
External research and development expenses include fees paid to CROs, CMOs and research laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities.
External research and development expenses include fees paid to CROs and CMOs and fees paid to regulatory, clinical trial and manufacturing professional service firms largely in connection with preclinical activities necessary to prepare COYA 302 for its initial IND filing and launch of a Phase 2 clinical trial.
Furthermore, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities. We will need to raise substantial additional capital to support our continuing operations and pursue our growth strategy.
The study will evaluate the safety and tolerability, biological activity, blood and cerebrospinal fluid biomarkers, neuroimaging, and changes in cognitive function of LD IL-2 compared to placebo at pre-specified timepoints over the course of the 21-week treatment period and at 9 weeks after the last dose of study treatment. 75 Financings On December 5, 2023, we entered into a Securities Purchase Agreement with certain accredited investors for the issuance and sale in a private placement of 4,370,382 shares of our common stock, or the 2023 Private Placement.
On December 5, 2023, we entered into a securities purchase agreement with certain accredited investors for the issuance and sale in a private placement of 4,370,382 shares of our common stock at a price of $6.06 per share of common stock (the "2023 Private Placement").
Sponsored Research Agreement with Houston Methodist Research Institute In February 2021, we executed the SRA with HMRI. Pursuant to the SRA, we agreed to fund $1.5 million in research in the area of neurodegenerative diseases through February 2022.
Sponsored Research Agreement with Houston Methodist Research Institute In May 2023, we executed a Sponsored Research Agreement, or SRA, with Houston Methodist Research Institute, or HMRI, in which we agreed to fund approximately $0.5 million through May 2024. We have subsequently amended the SRA to increase agreed funding and, at times, extend the term.
During the year ended December 31, 2022, financing activities provided $9.4 million of cash, which consisted of $10.5 million from the issuance of our convertible promissory notes, partially offset by the payment of issuance costs of $1.0 million. DRL Development Agreement In December 2023, we entered into the DRL Development Agreement, with Dr.
Financing Activities During the year ended December 31, 2024, financing activities provided $16.0 million of cash, which consisted of $14.0 million in net proceeds from issuance of common stock and $2.1 million in proceeds from the exercise of warrants, partially offset by $0.1 million in payments of offering costs related to the 2023 private placement.
Our core focus is developing these therapies to target Treg dysfunction, which has been identified to be an important pathophysiological component of neurodegenerative, autoimmune, and metabolic diseases, where new and effective therapies are urgently needed.
Treg disfunction has been identified as an important pathophysiological component of neurodegenerative, autoimmune, and metabolic diseases, all areas where we believe new and effective therapies are urgently needed. We believe we have expertise in three distinct potential therapeutic modalities: Treg-enhancing biologics, Treg-derived exosomes, and autologous Treg cell therapy.
Our lead assets are our Treg-enhancing biologics, which have been developed from key learnings established in our early work and discoveries of our autologous Treg cell therapy asset. Our autologous Treg cell therapy program has completed a Phase 1 and Phase 2a studies in amyotrophic lateral sclerosis, or ALS.
Our expertise includes both ex vivo and in vivo approaches intended to restore the suppressive and immunomodulatory functions of Tregs. Our lead asset, COYA 302, is a Treg-enhancing biologic, which was developed from key learnings established in our early work and discoveries of our autologous Treg cell therapy asset.
Changes in fair value attributable to changes in instruments specific credit risk are recorded in other comprehensive income to the extent they are material. Other Income (Expense), Net Other income (expense), net consists primarily of interest earned on our excess cash and federal tax credits.
Other Income, Net Other income, net consists primarily of interest earned on our excess cash.
Removed
Our product candidate pipeline is based on our three distinct potential therapeutic modalities: Treg-enhancing biologics, Treg-derived exosomes, and autologous Treg cell therapy.
Added
Financings On October 21, 2024, we entered into a Securities Purchase Agreement with certain accredited investors, majority of which were existing institutional stockholders of ours, for the issuance and sale in a private placement of 1,379,314 shares of our common stock, or the October 2024 Private Placement.
Removed
“Autologous” means the treatment of a patient with human cells derived from the patient itself, whereas “Allogeneic” means the treatment of a patient with human cells derived from a donor other than the patient, where such donor is genetically non-identical.
Added
We paid a cash fee equal to 7% of the gross proceeds from the sale of securities in the offering and we issued our strategic advisor in the October 2024 Private Placement warrants to purchase an aggregate of 150,000 shares of common stock with an exercise price of $7.00 per share and an expiration date of November 2029.
Removed
As of December 31, 2023, we had an accumulated deficit of $25.9 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures.
Added
On May 17, 2024, we entered into a Securities Purchase Agreement with the Alzheimer's Drug Discovery Foundation, or the ADDF, for the issuance and sale in a private placement of 603,136 shares of our common stock at a purchase price of $8.29 per share for net proceeds of $4.9 million, or the May 2024 Private Placement.
Removed
Product Developments During the first half of 2023, our combination product for neurodegenerative diseases, or COYA 302, and our low dose IL-2, or COYA 301, showed positive results in a proof of concept, or POC, open label study in amyotrophic lateral sclerosis, or ALS, patients and in Alzheimer’s Disease, or AD, patients, respectively.
Added
In connection with the May 2024 Private Placement, we entered into an Agreement to Accept Conditions for Biotechnology Funding agreement, with ADDF pursuant to which the proceeds received in connection with the May 2024 Private Placement will be used for a Phase 2 study of COYA 302 in FTD.
Removed
Both POC studies were conducted with commercially available products as investigator-initiated trials. The POC study in support of COYA 302, an open label study conducted in 4 ALS patients, evaluated the safety and tolerability, function of regulatory T-cells, biomarkers, and preliminary efficacy (as measured by the ALSFRS-R scale) utilizing commercially available IL-2 and abatacept.
Added
The offering resulted in net proceeds of $24.0 million after deducting placement agent commissions and other offering expenses.
Removed
Study data showed no decline or minimal decline at 24 and 48 weeks respectively after initiation of treatment and appeared to be well tolerated in all study patients as no serious adverse events were reported.

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Other COYA 10-K year-over-year comparisons