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What changed in Rafael Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Rafael Holdings, 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.

+737 added−659 removedSource: 10-K (2024-11-07) vs 10-K (2023-10-30)

Top changes in Rafael Holdings, Inc.'s 2024 10-K

737 paragraphs added · 659 removed · 534 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

178 edited+55 added−42 removed135 unchanged
Biggest changeRestrictions under applicable federal and state and analogous foreign healthcare laws and regulations include the following: ● the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs; ● the federal False Claims Act, which prohibits any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; 22 ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable protected health information, including breach notification regulations; ● analogous state data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information, such as social security numbers, medical and financial information, and other information, including data breach laws that require timely notification to individuals, and at times regulators, the media or credit reporting agencies, if a company has experienced the unauthorized access or acquisition of personal information, as well as the California Consumer Privacy Act or CCPA, which, among other things, contains new disclosure obligations for businesses that collect personal information about California residents and affords those individuals numerous rights relating to their personal information that may affect companies’ ability to use personal information or share it with business partners, and the California Privacy Rights Act, or CPRA, which expands the scope of the CCPA, imposes new restrictions on behavioral advertising and establishes a new California Privacy Protection Agency that will enforce the law and issue regulations, and is scheduled to become “operative” on January 1, 2023, with a 12-month “lookback provision,” and the various state laws and regulations may be more restrictive and not preempted by United States federal laws; ● analogous foreign data protection laws, including among others the EU General Data Protection Regulation, or the GDPR, and EU member states’ implementing legislation, which imposes data protection requirements that include strict obligations and restrictions on the ability to collect, analyze, and transfer EU personal data, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations (including possible fines for certain violations of up to the greater of 20 million Euros or 4% of total worldwide annual turnover of the preceding financial year), with legal requirements in foreign countries relating to the collection, storage, processing, and transfer of personal data continuing to evolve; ● the United States civil monetary penalties statute, which imposes penalties against any person who is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent; ● the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to the Centers for Medicare & Medicaid Services information related to payments and other transfers of value made by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers; and ● state laws requiring pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government.
Biggest changeRestrictions under applicable federal and state and analogous foreign healthcare laws and regulations include the following: ● the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs; ● the federal False Claims Act, which prohibits any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable protected health information, including breach notification regulations; ● new regulations adopted by the Securities and Exchange Commission, or SEC, effective December 18, 2023, that require greater disclosure regarding cybersecurity risk management, strategy and governance, as well as disclosure of material cybersecurity incidents, which may require reporting of a cybersecurity incident before its impact has been fully assessed or the underlying issue has been remediated, which could divert management’s attention from incident response and could potentially reveal system vulnerabilities to threat actors, and for which failure to timely report such incidents under these or other similar rules could also result in monetary fines, sanctions or other forms of liability. ● analogous state data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information, such as social security numbers, medical and financial information, and other information, including data breach laws that require timely notification to individuals, and at times regulators, the media or credit reporting agencies, if a company has experienced the unauthorized access or acquisition of personal information, as well as the California Consumer Privacy Act or CCPA, which, among other things, contains new disclosure obligations for businesses that collect personal information about California residents and affords those individuals numerous rights relating to their personal information that may affect companies’ ability to use personal information or share it with business partners, and the California Privacy Rights Act, or CPRA, which expands the scope of the CCPA, imposes new restrictions on behavioral advertising, and establishes a new California Privacy Protection Agency that will enforce the law and issue regulations, and became “operative” on January 1, 2023, with a 12-month “lookback provision” applicable to personal data collected on or after January 1, 2022, and the various state laws and regulations may be more restrictive and not preempted by United States federal laws; ● analogous foreign data protection laws, including among others the EU General Data Protection Regulation, or the GDPR, and EU member states’ implementing legislation, which imposes data protection requirements that include strict obligations and restrictions on the ability to collect, analyze, and transfer EU personal data, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations (including possible fines for certain violations of up to the greater of 20 million Euros or 4% of total worldwide annual turnover of the preceding financial year), with legal requirements in foreign countries relating to the collection, storage, processing, and transfer of personal data continuing to evolve and varying widely across jurisdictions; ● the United States civil monetary penalties statute, which imposes penalties against any person who is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent; ● the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to the Centers for Medicare & Medicaid Services information related to payments and other transfers of value made by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; 21 ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers; and ● state laws requiring pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government.
The NDA or BLA is the vehicle through which drug applicants formally propose that the FDA approve a new drug or biologic for marketing and sale in the United States for one or more indications.
The NDA or BLA is the vehicle through which applicants formally propose that the FDA approve a new drug or biologic for marketing and sale in the United States for one or more indications.
After the NDA or BLA submission is accepted for filing, the FDA reviews the NDA or BLA to determine, among other things, whether the proposed product is safe and effective for its intended use, whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality, and purity, and whether the product has appropriate labeling for its intended use.
After the NDA or BLA submission is accepted for filing, the FDA reviews the NDA or BLA to determine, among other things, whether the proposed product is safe and effective for its intended use, whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality, and purity, and whether the product has appropriate labeling for its proposed intended use.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of manufacturing or distribution or other restrictions.
Real Estate Our current commercial real estate holdings consist of a portion of a building in Israel. Prior to its sale in August 2022, we also owned the 520 Property. On August 22, 2022, the Company completed the sale of 520 Property for a purchase price of $49.4 million.
Real Estate Our current commercial real estate holdings consist of a portion of a building in Israel. Prior to its sale in August 2022, we also owned the 520 Property. On August 22, 2022, the Company completed the sale of the 520 Property for a purchase price of $49.4 million.
These include, among other things: ● establishment registration and device listing with the FDA; ● continued adherence to the QSR requirements; ● marketing, labeling, advertising, and promotion regulations, which require that promotion is truthful, not misleading, fairly balance and provides adequate directions for use, and that all claims are substantiated and in accordance with the provisions of the approved label, and which also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling, in accordance with FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; ● clearance or approval of product modifications to 510(k)-cleared, De Novo classified or PMA-approved devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of a cleared device; ● medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury if the malfunction were to occur; ● correction, removal, and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FFDCA that may present a risk to health; ● complying with requirements governing Unique Device Identifiers on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database; ● the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and/or regulations; and ● post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
These include, among other things: ● establishment registration and device listing with the FDA; ● continued adherence to the QSR requirements; ● marketing, labeling, advertising, and promotion regulations, which require that promotion is truthful, not misleading, fairly balanced and provides adequate directions for use, and that all claims are substantiated and in accordance with the provisions of the approved label, and which also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling, in accordance with FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; ● clearance or approval of product modifications to 510(k)-cleared, De Novo classified or PMA-approved devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of a cleared device; 17 ● medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury if the malfunction were to occur; ● correction, removal, and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FFDCA that may present a risk to health; ● complying with requirements governing Unique Device Identifiers on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database; ● the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and/or regulations; and ● post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
The drug is initially introduced into a small number of healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition (e.g., cancer) and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage. Phase 2.
The drug candidate is initially introduced into a small number of healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition (e.g., cancer) and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage. Phase 2.
FDARA requires that any original NDA or BLA submitted on or after August 18, 2020, for a new active ingredient, must contain studies of molecularly targeted pediatric cancers, unless a deferral or a waiver is granted, if the drug that is the subject of the application is intended for the treatment of an adult cancer and directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer. 15 Orphan drug designation and exclusivity Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition, generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product.
FDARA requires that any original NDA or BLA submitted on or after August 18, 2020, for a new active ingredient, must contain studies of molecularly targeted pediatric cancers, unless a deferral or a waiver is granted, if the drug that is the subject of the application is intended for the treatment of an adult cancer and directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer. 14 Orphan drug designation and exclusivity Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition, generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product.
Promitil ® was stable in plasma with a half-life of approximately 20 hours (vs 40-50 minutes for naked MMC). 5 Next Steps for Clinical Development: Homologous recombination (HR) is an evolutionarily conserved process for repairing DNA double-strand breaks with high fidelity, and the BRCA1 and BRCA2 proteins play essential roles in this process.
Promitil® was stable in plasma with a half-life of approximately 20 hours (vs 40-50 minutes for naked MMC). Next Steps for Clinical Development: Homologous recombination (HR) is an evolutionarily conserved process for repairing DNA double-strand breaks with high fidelity, and the BRCA1 and BRCA2 proteins play essential roles in this process.
The FDA has enacted extensive regulations that control all aspects of the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, postmarket surveillance, and import and export of drugs, biological products, and medical devices.
The FDA has enacted extensive regulations that control all aspects of the development, design, performance, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, postmarket surveillance, and import and export of drugs, biological products, and medical devices.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCP.
The FDA will not approve an application unless it determines that the manufacturing processes and all facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCP.
The drug is administered to an expanded number of patients in the target patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
The investigational drug is administered to an expanded number of patients in the target patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Barer’s majority owned subsidiary, Farber Partners, LLC (“Farber”), was formed around one such agreement with Princeton University’s Office of Technology Licensing for technology from the laboratory of Professor Joshua Rabinowitz, in the Department of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program.
Barer’s majority owned subsidiary, Farber Partners, LLC (“Farber”), was formed around one such agreement with Princeton University’s Office of Technology Licensing (“Princeton”) for technology from the laboratory of Professor Joshua Rabinowitz, in the Department of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program.
The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. Human clinical trials are typically conducted in four sequential phases, which may overlap or be combined under certain limited circumstances when authorized by FDA: Phase 1.
The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. Human clinical trials are typically conducted in four sequential phases, which may overlap or be combined under certain limited circumstances when authorized in advance by FDA: Phase 1 .
Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers, packagers or distributors that the sponsor may decide to use.
Changes to the manufacturing process are strictly regulated and often require prior FDA review and approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers, packagers or distributors that the sponsor may decide to use.
Cornerstone has obtained U.S. orphan drug designation for CPI-613 ® (devimistat) in the treatment of pancreatic cancer, AML, MDS, Burkitt’s Lymphoma, Peripheral T-cell Lymphoma (PTCL), soft tissue sarcoma, and biliary cancer. Cornerstone maintains U.S. and international trademarks covering its lead development compounds (CPI-613 ® (devimistat) and Telaglenastat (CB-839)).
Cornerstone also has obtained U.S. orphan drug designation for CPI-613® (devimistat) in the treatment of pancreatic cancer, AML, MDS, Burkitt’s Lymphoma, Peripheral T-cell Lymphoma (PTCL), soft tissue sarcoma, and biliary cancer. Cornerstone maintains U.S. and international trademarks covering its lead development compounds (CPI-613® (devimistat) and Telaglenastat (CB-839)).
We plan to continue to invest in pre-clinical and clinical stage healthcare opportunities, including those in which we already own interests, when determined to be consistent with our goals, and move toward clinical stage programs as research and development results warrant, while being ready to exploit other opportunities that may arise.
We plan to continue to selectively invest in pre-clinical and clinical stage healthcare opportunities, including those in which we already own interests, when determined to be consistent with our goals, and move toward clinical stage programs as research and development results warrant, while being ready to exploit other opportunities that may arise.
Patent term restoration and extension A patent claiming a new drug product or its method of use may be eligible for a limited patent term extension, also known as patent term restoration, under the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review process.
Patent term restoration and extension A patent claiming a new drug product or its method of use or its method of manufacturing may be eligible for a limited patent term extension, also known as patent term restoration, under the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review process.
In addition, the FDA collects user fees for certain medical device submissions and annual fees for medical device establishments. Before the sponsor can market a new device that is the subject of a 510(k) premarket notification, the sponsor must receive an order from the FDA finding substantial equivalence and clearing the new device for commercial distribution in the US.
In addition, the FDA collects user fees for certain medical device submissions and annual fees for medical device establishments. Before the sponsor can market a proposed device that is the subject of a 510(k) premarket notification, the sponsor must receive an order from the FDA finding substantial equivalence and clearing the new device for commercial distribution in the US.
If a product receives regulatory approval, the approval may be limited to a specific disease(s) and dosage(s) or the indication(s) for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling.
If a product receives regulatory approval, the approval may be limited to a specific disease(s) and dosage(s) or the indication(s) for use or other product labeling may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling.
The sponsor must submit information that supports its substantial equivalency claims. The FDA’s 510(k) clearance process usually takes from three to twelve months, but often takes longer. FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence.
The sponsor must submit data and information that supports its substantial equivalency claims. The FDA’s 510(k) clearance process usually takes from three to twelve months, but often takes longer. FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence.
LipoMedix does not currently have arrangements in place for commercial supply or redundant supply for bulk drug substance or drug product. 25 Rafael Medical Devices optimizes supply chains and manufacturing on a device per device basis focusing on quality, time, and cost. At present Rafael Medical Devices does not own or operate manufacturing facilities.
LipoMedix does not currently have arrangements in place for commercial supply or redundant supply for bulk drug substance or drug product. Rafael Medical Devices optimizes supply chains and manufacturing on a device per device basis focusing on quality, time, and cost. At present, Rafael Medical Devices does not own or operate manufacturing facilities.
Concurrent with clinical trials, companies often complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Concurrent with clinical trials, companies often complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug as well as finalize a process for manufacturing and packaging the product in commercial quantities in accordance with cGMP requirements.
The drug is administered to a limited number of patients in the target patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for a specific targeted disease and to determine dosage tolerance and optimal dosage. Phase 3.
The drug candidate is administered to a limited number of patients in the target patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for a specific targeted disease, and to determine dosage tolerance and optimal dosage. Phase 3 .
Additional requirements and procedures relating to waiver requests, deferral requests and requests for extension of deferrals are contained in FDASIA. Unless and until FDA promulgates a regulation stating otherwise, the pediatric data requirements do not apply to products with orphan designation.
Additional requirements and procedures relating to waiver requests, deferral requests and requests for extension of deferrals are contained in FDASIA. Unless and until FDA promulgates a regulation stating otherwise, the pediatric data requirements generally do not apply to products with orphan designation.
These clinical trials are commonly referred to as “pivotal” studies, which denotes a study or studies that present the pivotal data (but not the only data) that the FDA or other relevant regulatory agency will use to determine whether or not to approve a drug.
These clinical trials are commonly referred to as “pivotal” studies, which denotes a study or studies that present the pivotal data (but not the only data) that the FDA or other relevant regulatory agency will use to determine whether or not to approve a drug candidate.
In addition, the study must be approved by, and conducted under the oversight of, an Institutional Review Board, or IRB, for each clinical site. The IRB is responsible for the initial and continuing review of the IDE, and the IRB may impose additional requirements for the conduct of the clinical trial.
In addition, the study must be approved in advance by, and conducted under the oversight of, an Institutional Review Board, or IRB, for each clinical site. The IRB is responsible for the initial and continuing review of the IDE, and the IRB may impose additional requirements for the conduct of the clinical trial.
Results : ● Using the Clinician’s Global Impression of Improvement scale, five of seven patients who completed the trial improved, and the other 2 patients stabilized . ● five of seven improved in at least one of these features: walking, speaking, swallowing, fine motor and cognition.
Results : ● Using the Clinician’s Global Impression of Improvement scale, five of seven patients who completed the trial improved, and the other 2 patients stabilized . ● Five of seven improved in at least one of these features: walking, speaking, swallowing, fine motor or cognition.
While most Class I devices are exempt from the 510(k) premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket notification under Section 510(k) of the FFDCA requesting permission to commercially distribute the device.
While most Class I devices are exempt from the 510(k) premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket notification under Section 510(k) of the FFDCA requesting permission to commercially distribute the proposed device.
In the event of either of these occurrences, Rafael Medical Devices could be instructed to recall any products that it is marketing, cease distribution, and/or be subject to civil or criminal penalties.
In the event of either of these occurrences, Rafael Medical Devices could be instructed to recall any products that it is marketing, cease manufacturing and/or distribution, and/or be subject to civil or criminal penalties.
Additionally, in February 2020, Cyclo had a face-to-face “Type C” meeting with the FDA with respect to the initiation of a pivotal Phase III clinical trial of Trappsol ® Cyclo™ based on the clinical data obtained to date.
In February 2020, Cyclo had a face-to-face “Type C” meeting with the FDA with respect to the initiation of a pivotal Phase III clinical trial of Trappsol® Cyclo™ based on the clinical data obtained to date.
Cyclo’s core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin-based biopharmaceuticals for the treatment of disease. 7 Global Phase III Clinical Study (TransportNPC) Cyclo’s ongoing Phase III clinical trial (CTD-TCNPC-301), TransportNPC, is a prospective, randomized, double-blind, placebo controlled therapeutic study for up to 93 patients age three and older with confirmed diagnosis of NPC1.
Cyclo’s core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin-based biopharmaceuticals for the potential treatment of disease. Global Phase III Clinical Study (TransportNPC) Cyclo’s ongoing Phase III clinical trial (CTD-TCNPC-301), TransportNPC, is a prospective, randomized, double-blind, placebo controlled therapeutic study for up to 93 patients age three and older with confirmed diagnosis of NPC1.
In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer. The decision was taken to reduce spending as the Company focuses on exploring strategic opportunities. The Company’s primary focus is to expand our investment portfolio through opportunistic and strategic investments including therapeutics which address high unmet medical needs.
In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer. The decision was taken to reduce spending as the Company focuses on exploring strategic opportunities. The Company’s primary focus is to expand our investment portfolio through opportunistic and strategic investments including therapeutics, which address high unmet medical needs. Cyclo Therapeutics Inc.
On January 12, 2017, Cyclo received Fast Track Designation from the FDA, and on December 1, 2017, the FDA designated NPC a Rare Pediatric Disease. Cyclo also continues to operate its legacy fine chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs.
On January 12, 2017, Cyclo received Fast Track Designation from the FDA, and on December 1, 2017, the FDA designated NPC1 a Rare Pediatric Disease. Cyclo also continues to operate its legacy fine chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs.
Most new products that we and the Investment Companies would introduce must compete with other products already on the market or products that are later developed by competitors. The principal methods of competition for our and the Investment Companies’ products include quality, efficacy, market acceptance, price, and marketing and promotional efforts, patient access programs and product insurance coverage and reimbursement.
Most new products that we and the Portfolio Companies would introduce must compete with other products already on the market or products that are later developed by competitors. The principal methods of competition for our and the Portfolio Companies’ products include quality, efficacy, market acceptance, price, and marketing and promotional efforts, patient access programs and product insurance coverage and reimbursement.
In April 2015, Cyclo also obtained Orphan Drug Designation for Trappsol ® Cyclo™ in Europe, which will provide Cyclo with 10 years of market exclusivity following regulatory approval, which period will be extended to 12 years upon acceptance by the EMA’s Pediatric Committee of our pediatric investigation plan (PIP) demonstrating that Trappsol ® Cyclo™ addresses the pediatric population.
In April 2015, Cyclo also obtained Orphan Drug Designation for Trappsol® Cyclo™ in Europe, which will provide Cyclo with 10 years of market exclusivity in Europe following regulatory approval, which period will be extended to 12 years upon acceptance by the EMA’s Pediatric Committee of Cyclo’s pediatric investigation plan (PIP) demonstrating that Trappsol® Cyclo™ addresses the pediatric population.
The Phase I study evaluated the safety of Trappsol ® Cyclo™ along with markers of cholesterol metabolism and markers of NPC during a 14-week treatment period of intravenous administration of Trappsol ® Cyclo™ every two weeks to participants 18 years of age and older in two dose groups (1500 mg/kg and 2500 mg/kg).
The Phase I study evaluated the safety of Trappsol® Cyclo™ along with markers of cholesterol metabolism and markers of NPC1 during a 14-week treatment period of intravenous administration of Trappsol® Cyclo™ every two weeks to participants 18 years of age and older in two dose groups (1500 mg/kg and 2500 mg/kg).
We and the Investment Companies face competition from many different sources, including commercial pharmaceutical and biotechnology and medical device enterprises, academic institutions, government agencies, and private and public research institutions. Many of our and the Investment Companies’ competitors have significantly greater financial, product development, manufacturing and marketing resources than we and the Investment Companies possess.
We and the Portfolio Companies face competition from many different sources, including commercial pharmaceutical and biotechnology and medical device enterprises, academic institutions, government agencies, and private and public research institutions. Many of our and the Portfolio Companies’ competitors have significantly greater financial, product development, manufacturing and marketing resources than we and the Portfolio Companies possess.
Consistent with the 12-week phase 1 study (single US site), the European/Israel study administered Trappsol ® Cyclo™ intravenously to NPC patients every two weeks in a double-blind, randomized trial, but differs in that the study period was for 48 weeks (24 doses).
Consistent with the 12-week phase 1 study (single US site), the European/Israel study administered Trappsol® Cyclo™ intravenously to NPC1 patients every two weeks in a double-blind, randomized trial, but differs in that the study period was for 48 weeks (24 doses).
Our global operations are also subject to foreign anti-corruption laws, such as the United Kingdom Bribery Act, among others. As part of our global compliance program, we seek to address anti-corruption risks proactively. COMPETITION We and the Investment Companies operate in highly competitive segments.
Our global operations are also subject to foreign anti-corruption laws, such as the United Kingdom Bribery Act, among others. As part of our global compliance program, we seek to address anti-corruption risks proactively. COMPETITION We and the Portfolio Companies operate in highly competitive segments.
In March of 2021, Cyclo announced that 100% of patients who completed the trial (9 out of 12) improved or remained stable, and 89% met the efficacy outcome measure of improvement in at least two domains of the 17-domain NPC severity scale.
In March of 2021, Cyclo announced that 100% of patients who completed the trial (9 out of 12) improved or remained stable, and 89% met the efficacy outcome measure of improvement in at least two domains of the 17-domain NPC1 severity scale.
This study evaluated the safety, tolerability and efficacy of Trappsol ® Cyclo™ through a range of clinical outcomes, including neurologic, and respiratory, in addition to measurements of cholesterol metabolism and markers of NPC, in three dose groups (1500 mg/kg, 2000 mg/kg and 2500 mg/kg).
This study evaluated the safety, tolerability and efficacy of Trappsol ® Cyclo™ through a range of clinical outcomes, including neurologic, and respiratory, in addition to measurements of cholesterol metabolism and markers of NPC1, in three dose groups (1500 mg/kg, 2000 mg/kg and 2500 mg/kg).
The Phase I study evaluated the safety and pharmacokinetics of Trappsol ® Cyclo™ along with markers of cholesterol metabolism and markers of NPC during a 12-week treatment period of intravenous administration of Trappsol ® Cyclo™ every two weeks to participants 18 years of age and older.
The Phase I study evaluated the safety and pharmacokinetics of Trappsol® Cyclo™ along with markers of cholesterol metabolism and markers of NPC1 during a 12-week treatment period of intravenous administration of Trappsol® Cyclo™ every two weeks to participants 18 years of age and older.
In October 2020, Cyclo received a “Study May Proceed” notification from the FDA with respect to the proposed Phase III clinical trial, and in June of 2021, Cyclo commenced enrollment in TransportNPC, a pivotal Phase III study of Trappsol ® Cyclo™ for the treatment of NPC.
In October 2020, Cyclo received a “Study May Proceed” notification from the FDA with respect to the proposed Phase III clinical trial, and in June of 2021, Cyclo commenced enrollment in TransportNPC, a pivotal Phase III study of Trappsol® Cyclo™ for the treatment of NPC1.
These laws have been subject to increased enforcement activities with respect to medical products manufacturers in recent years. Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, fines, imprisonment and, within the US, exclusion from participation in government healthcare programs, including Medicare, Medicaid, Department of Defense, and Veterans Administration health programs.
These laws have been subject to increased enforcement activities with respect to medical product manufacturers and distributors in recent years. Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, fines, imprisonment and, within the US, exclusion from participation in government healthcare programs, including Medicare, Medicaid, Department of Defense, and Veterans Administration health programs.
As of September 16, 2023, Rafael Medical Devices had filed the following patent application related to its devices filed with the USPTO and PCT: Patent application entitled, Devices, Instruments, Implants and Methods of Assembly and Use, and patent application entitled Videoscopic Arthroscopic Instruments, Devices, and Systems and Methods of Use and Assembly.
As of September 16, 2023, Rafael Medical Devices had filed the following patent application related to its devices with the USPTO and PCT: Patent application entitled, Compression Anchor Systems, Devices, Instruments, Implants and Methods of Assembly and Use; and patent application entitled Videoscopic Arthroscopic Instruments, Devices, and Systems and Methods of Use and Assembly.
If competitors introduce new products, delivery systems or processes with therapeutic or cost advantages, our and the Investment Companies’ products can be subject to progressive price reductions or decreased volume of sales, or both.
If competitors introduce new products, delivery systems or processes with therapeutic or cost advantages, our and the Portfolio Companies’ products can be subject to progressive price reductions or decreased volume of sales, or both.
There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.
There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications containing clinical data.
LipoMedix maintains an exclusive license agreement with Yissum Research and Development Company, the technology transfer arm of the Hebrew University of Jerusalem granting LipoMedix the exclusive right to make, use and sell products covered under specified patents relating to the mitomycin lipophilic prodrug and its liposomal formulation (Promitil ® ) with the right to grant sublicenses.
INTELLECTUAL PROPERTY Licenses LipoMedix maintains an exclusive license agreement with Yissum Research and Development Company, the technology transfer arm of the Hebrew University of Jerusalem granting LipoMedix the exclusive right to make, use and sell products covered under specified patents relating to the mitomycin lipophilic prodrug and its liposomal formulation (Promitil ® ) with the right to grant sublicenses.
In addition, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at each institution, and the IRB must conduct continuing review and reapprove the study at least annually.
In addition, an IRB representing each study site participating in the clinical trial must review and approve the plan for any clinical trial before it commences at each site, and the IRB must conduct continuing review and reapprove the study at least annually.
The restoration period granted is typically one-half the time between the effective date of an IND and the submission date of an NDA, plus the time between the submission date of an NDA and the ultimate approval date, up to a maximum of five years.
The restoration period granted is typically one-half the time between the effective date of an IND and the submission date of an NDA or BLA, plus the time between the submission date of an NDA or BLA and the ultimate approval date, up to a maximum of five years.
NPC is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In 2015, Cyclo launched an International Clinical Program for Trappsol ® Cyclo™ as a treatment for NPC.
NPC1 is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In 2015, Cyclo launched an International Clinical Program for Trappsol® Cyclo™ as a potential treatment for NPC1.
Additional patent applications may be filed as development progresses across the Investment Companies as deemed to be in its best interest. MANUFACTURING The Investment Companies do not own or operate, and currently have no plans to establish, any manufacturing facilities or fill-and-finish facilities.
Additional patent applications may be filed as development progresses across the Portfolio Companies as deemed to be in its best interest. 23 MANUFACTURING The Portfolio Companies do not own or operate, and currently have no plans to establish, any manufacturing facilities or fill-and-finish facilities.
Enrollment in this study was completed in October 2019, and in May 2020 Cyclo announced Top Line data showing a favorable safety and tolerability profile for Trappsol ® Cyclo™ in this study.
Enrollment in this study was completed in October 2019, and in May 2020 Cyclo announced Top Line data showing favorable tolerability profile for Trappsol® Cyclo™ in this study.
Post-Approval Requirements Any drug that receives FDA approval is subject to continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences with the product.
Post-Approval Requirements Any drug that receives FDA approval is subject to continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, continued adherence to cGMP, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences with the product.
Large pharmaceutical companies and medical device companies have extensive experience in clinical testing and obtaining regulatory approval for drugs and devices. In addition, many universities and private and public research institutes are active in research in direct competition with us and the Investment Companies.
Large pharmaceutical companies and medical device companies have extensive experience in development, clinical testing and obtaining regulatory approval for drugs and devices. In addition, many universities and private and public research institutes are active in research in direct competition with us and the Portfolio Companies.
Day Three Labs Day Three Labs is a technology company focused on creating solutions for increased bioavailability of hydrophobic compounds, with a specific focus on compounds used as active ingredients in pharmaceutical and food supplement products. Day Three Labs maintains its manufacturing, sales and marketing activities in the United States, and research and development activities in Israel.
Day Three Labs Day Three Labs is a technology company focused on creating solutions for increased bioavailability of other third-party manufacturers’ hydrophobic compounds, with a specific focus on compounds used as active ingredients in pharmaceutical and food supplement products. Day Three Labs maintains its manufacturing, sales and marketing activities in the United States, and research and development activities in Israel.
The FDA may then approve the new product candidate for all, or some, of the label indication(s) for which the RLD has been approved, as well as for any new indication(s) for which approval is sought by the 505(b)(2) applicant.
The FDA may then approve the new product candidate for all, or some, of the label indication(s) for which the RLD has been approved, and/or for any new indication(s) for which approval is sought by the 505(b)(2) applicant.
These preapproval inspections may cover all facilities associated with an NDA or BLA submission, including drug component manufacturing (e.g., active pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories.
These preapproval inspections may cover all facilities associated with an NDA or BLA submission, including drug component manufacturing (e.g., active pharmaceutical ingredients), finished drug product manufacturing, labeling and packaging operations, and control testing laboratories.
These five features are determined by NPC patients and their caregivers to be the most important for quality of life.
These five features are determined by NPC1 patients and their caregivers to be the most important for quality of life.
Both before and after a medical device is commercially released, the sponsor has ongoing responsibilities under FDA regulations. The FDA reviews design and manufacturing practices, labeling and record keeping, and manufacturers’ required reports of adverse experiences and other information to identify potential problems with marketed medical devices.
Both before and after a medical device is commercially released, the sponsor has ongoing responsibilities under the FFDCA and FDA regulations. The FDA reviews design and manufacturing practices, labeling and recordkeeping, and manufacturers’ required reports of adverse experiences and other information to identify potential problems with marketed medical devices.
Products granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval. If post-marketing clinical studies fail to verify clinical benefit, FDA may withdraw approval.
Products granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted non-accelerated approval. If post-marketing clinical studies fail to verify the anticipated clinical benefit, FDA may withdraw approval.
Cyclo is a clinical stage biotechnology company that develops cyclodextrin-based products for the treatment of neurodegenerative diseases. Cyclo filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) in 2014 for its lead drug candidate, Trappsol ® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Type C disease (“NPC”).
Cyclo is a clinical -stage biotechnology company that develops cyclodextrin-based products for the potential treatment of neurodegenerative diseases. Cyclo filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) in 2014 for its lead drug candidate, Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Disease, Type C1 (“NPC1”).
Pediatric studies and exclusivity Under the Pediatric Research Equity Act, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the drug product for the claimed indication(s) in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Pediatric studies and exclusivity Under the Pediatric Research Equity Act, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the drug candidate for the proposed indication(s) in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is determined to be safe and effective.
At that meeting, Cyclo also discussed with the FDA submitting a New Drug Application (NDA) under Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act for the treatment of NPC in pediatric and adult patients with Trappsol ® Cyclo™.
At that meeting, Cyclo also discussed with the FDA submitting a New Drug Application (“NDA”) under Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act for the treatment of NPC1 in pediatric and adult patients with Trappsol® Cyclo™.
Cornerstone is in the process of a comprehensive restructuring transaction including, the conversion of the debt under a line of credit agreement and the promissory note held by the Company, the conversion and modification of other Cornerstone debt obligations, the extension of the Cornerstone debt held by RP Finance, a reverse stock split, the conversion of all outstanding preferred stock of Cornerstone into common stock and the adoption of certain governance measures.
In March of 2024, Cornerstone completed a comprehensive restructuring transaction including, the conversion of the debt under a line of credit agreement and the promissory note held by the Company, the conversion and modification of other Cornerstone debt obligations, the extension of the Cornerstone debt held by RP Finance, a reverse stock split, the conversion of all outstanding preferred stock of Cornerstone into common stock and the adoption of certain governance measures.
GOVERNMENT REGULATION AND COMPLIANCE Our operations, products, and potential future customers are subject to extensive government regulation by the FDA and other federal and state authorities in the United States, as well as comparable authorities in foreign jurisdictions. The global regulatory environment is increasingly stringent, unpredictable, and complex.
GOVERNMENT REGULATION AND COMPLIANCE Our operations, products, services, and potential future customers and those of our Portfolio Companies are subject to extensive government regulation by the FDA and other federal and state authorities in the United States, as well as comparable authorities in foreign jurisdictions. The global regulatory environment is increasingly stringent, unpredictable, and complex.
Certain novel devices of low to moderate risk, for which the FDA can make a risk-based classification of the device into Class I or II, can receive marketing authorization in response to a De Novo request. 16 To obtain 510(k) clearance, a manufacturer must submit a 510(k) premarket notification demonstrating to the FDA’s satisfaction that the proposed device is at least as safe and effective as, that is, “substantially equivalent” to, another legally marketed device that itself does not require PMA approval, or a predicate device.
Certain novel devices of low to moderate risk, for which the FDA can make a risk-based classification of the device into Class I or II, can receive marketing authorization in response to a De Novo request. 15 To obtain 510(k) clearance, a manufacturer must pay the appropriate device user fee, unless eligible for a waiver or exemption, and submit a 510(k) premarket notification demonstrating to the FDA’s satisfaction that the proposed device is at least as safe and effective as, that is, “substantially equivalent” to, another legally marketed device that itself does not require PMA approval, or a predicate device.
Under a corrigendum to the MDR finalized in December 2019, some low-risk medical devices being up-classified as a result of the MDR, including low-risk instruments, may receive a transitional period to comply by May 2024.
Under a corrigendum to the MDR finalized in December 2019, some low-risk medical devices being up-classified as a result of the MDR, including low-risk instruments, were potentially eligible to receive a transitional period to comply by May 2024 under certain conditions.
The obligations for registration in EUDAMED and other mandatory uses of the system will start when the entire EUDAMED system (including all six modules) has been declared fully functional following an independent audit and an EU Commission notice to be published in the Official Journal and in accordance with the transitional provisions set out in the medical devices regulations.
The obligations for registration in EUDAMED and other mandatory uses of the system will start six months after the entire EUDAMED system (including all six modules) has been declared fully functional following an independent audit and an EU Commission notice to be published in the Official Journal and in accordance with the transitional provisions set out in the MDR.
The MDR, among other things: ● strengthens the rules on placing devices on the market (e.g., reclassification of certain devices and wider scope than the MDD) and reinforces surveillance once the devices are commercially available; ● establishes explicit provisions on manufacturers’ responsibilities for follow-up on the quality, performance, and safety of devices placed on the market; ● establishes explicit provisions on importers’ and distributors’ obligations and responsibilities; ● imposes an obligation to identify a responsible person who is ultimately responsible for all aspects of compliance with the requirements of the new regulation; ● improves the traceability of medical devices throughout the supply chain to the end-user or patient through the introduction of a unique identification number, to increase the ability of manufacturers and regulatory authorities to trace specific devices through the supply chain and to facilitate the prompt and efficient recall of medical devices that have been found to present a safety risk; ● sets up a central database (MDR EUDAMED or EUDAMED), which is collaborative and interoperable and functions as a registration system, and a collaborative and a dissemination system (partially open to the public) that can, among other things, provide patients, healthcare professionals, and the public with information on products available in the EU; and ● strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo a clinical evaluation consultation procedure by experts before they are placed on the market. 20 Devices lawfully placed on the market pursuant to the MDD prior to May 26, 2021 may generally continue to be made available on the market or put into service until May 26, 2025, provided that the requirements of the MDR’s transitional provisions are fulfilled.
The MDR, among other things: ● strengthens the rules on placing devices on the market (e.g., reclassification of certain devices and wider scope than the MDD) and reinforces surveillance once the devices are commercially available; ● establishes explicit provisions on manufacturers’ responsibilities for follow-up on the quality, performance, and safety of devices placed on the market; ● establishes explicit provisions on importers’ and distributors’ obligations and responsibilities; ● imposes an obligation to identify a responsible person who is ultimately responsible for all aspects of compliance with the requirements of the MDR; ● improves the traceability of medical devices throughout the supply chain to the end-user or patient through the introduction of a unique identification number, to increase the ability of manufacturers and regulatory authorities to trace specific devices through the supply chain and to facilitate the prompt and efficient recall of medical devices that have been found to present a safety risk; ● sets up a central database (MDR EUDAMED or EUDAMED), which is collaborative and interoperable and functions as a registration system, and a collaborative and a dissemination system (partially open to the public) that can, among other things, provide patients, healthcare professionals, and the public with information on medical devices available in the EU; and ● strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo a clinical evaluation consultation procedure by experts before they are placed on the market.
We also further seek to expand our investment portfolio through opportunistic investments including therapeutics which address high unmet medical needs. Historically, the Company owned real estate assets. In 2020, the Company sold an office building located in Piscataway, New Jersey and following the end of Fiscal 2022, the Company sold the 520 Property.
We also further seek to expand our portfolio through opportunistic and strategic investments including therapeutics which address high unmet medical needs. Historically, the Company owned real estate assets. In 2020, the Company sold an office building located in Piscataway, New Jersey and in August 2022, the Company sold the 520 Property.
Historically, the Company owned multiple real estate assets. In 2020, the Company sold an office building located in Piscataway, New Jersey and, on August 22, 2022, the Company sold the building at 520 Broad Street in Newark, New Jersey that serves as headquarters for the Company and several tenants and an associated public garage (the “520 Property”).
In 2020, the Company sold an office building located in Piscataway, New Jersey and, on August 22, 2022, the Company sold the building at 520 Broad Street in Newark, New Jersey that serves as headquarters for the Company and several tenants and an associated public garage (the “520 Property”).
An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following: ● completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations; ● submission to the FDA of an Investigational New Drug, or IND, application, which must take effect before human clinical trials may begin; ● approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated ● performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each indication; ● preparation and submission to the FDA of an NDA requesting marketing for one or more proposed indications; ● review by an FDA advisory committee, where appropriate if applicable; ● satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; ● satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCP and the integrity of the clinical data; ● payment of user fees and securing FDA approval of the NDA; and ● compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.
An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following: ● completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations; ● submission to the FDA of an Investigational New Drug, or IND, application, which must take effect before human clinical trials may begin; ● approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated at each site; ● performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each indication; ● submission of pediatric study plans and generation of data, unless inapplicable or otherwise deferred or waived, that are adequate to assess the safety and effectiveness of the drug candidate for the proposed indication(s) in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is determined to be safe and effective; ● preparation and submission to the FDA of an NDA requesting marketing for one or more proposed indications; ● review by an FDA advisory committee, where appropriate if applicable; ● satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced and packaged to assess compliance with current Good Manufacturing Practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; ● satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCP and the integrity of the clinical data; ● payment of user fees and securing FDA approval of the NDA; and ● compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.
Therefore CPI-613 ® is believed to have anti-cancer activity. Combining CPI-613 ® with generalized metabolic stressors like chemotherapy holds the potential to result in the effective killing of even the most intractable tumors like pancreatic cancer. These effects were observed in Cornerstone Pharmaceuticals’ Phase 1/2 trials to date (Alistar, et al., 2017; Pardee et al., 2018).
These suggest that CPI-613® holds the potential to have anti-cancer activity. Combining CPI-613® with generalized metabolic stressors like chemotherapy holds the potential to result in the effective killing of even the most intractable tumors like pancreatic cancer. These effects were observed in Cornerstone’s Phase 1/2 trials to date (Alistar, et al., 2017; Pardee et al., 2018).
The efficacy outcome measures and results from this study are as follows: Efficacy Outcome Measure 1 : At least a one-point reduction (or improvement) in two or more of the 17 domains measured under the NPC Clinical Severity Scale.
The efficacy outcome measures and results from this study are as follows: Efficacy Outcome Measure 1 : At least a one-point reduction (or improvement) in two or more of the 17 domains measured under the Niemann-Pick Disease Type C (“NPC”) Clinical Severity Scale.
Thus, a clinical trial is planned to evaluate the safety, tolerability, and effects of Promitil in cancer patients who have deleterious germline mutation in BRCA1, BRCA2, or PALB2.
Thus, a clinical trial is ongoing to evaluate the safety, tolerability, and effects of Promitil® in cancer patients who have deleterious germline mutation in BRCA1, BRCA2, or PALB2 across six hospitals in Israel.
There is a global trend toward increased regulatory activity related to medical products.
There is a global trend toward increased regulatory and enforcement activity related to all medical products.
When a foreign clinical study is conducted under an IND, all FDA IND requirements must be met unless waived. When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain FDA regulatory requirements to use the study as support for an IND or application for regulatory approval.
When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain FDA regulatory requirements to use the study as support for an IND or subsequent application for regulatory approval.
The PDMA, its implementing regulations, and state laws limit the distribution of prescription pharmaceutical product samples, and the DSCA imposes requirements to ensure accountability in distribution and to identify and remove counterfeit and other illegitimate products from the market.
The PDMA, its implementing regulations, and state laws limit the distribution of prescription pharmaceutical product samples, and the DSCA and its implementing regulations impose requirements to ensure accountability in distribution and to identify, trace and remove counterfeit and other illegitimate or harmful drugs from the market.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result of the COVID-19 pandemic, we may experience further disruptions that could severely impact our business, preclinical studies, and clinical trials, including: ● delays in receiving approval from local regulatory authorities to initiate our planned clinical trials; ● delays or difficulties in enrolling patients in our clinical trials; ● delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ● diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; ● risk that participants enrolled in our clinical trials or related staff will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events; 67 ● interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures (such as endoscopies that are deemed non-essential), which may impact the integrity of subject data and clinical study endpoints; ● interruption or delays in the operations of the FDA, which may impact approval timelines; ● interruption of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing or supply shortages, production slowdowns, global shipping delays or stoppages and disruptions in delivery systems; ● limitations on employee resources that would otherwise be focused on the conduct of our preclinical studies and clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; ● refusal of the FDA to accept data from clinical trials in affected geographies; ● impacts from prolonged remote work arrangements, such as increased cybersecurity risks and strains on our business continuity plans; and ● delays or difficulties with equity offerings due to disruptions and uncertainties in the securities market.
Biggest changeAs a result of the COVID-19 pandemic, subsequent variants or comparable public health emergencies, we and the Pharmaceutical Companies and Rafael Medical Devices may experience further disruptions that could severely impact our or their business, preclinical studies, and clinical trials, including: ● difficulties or delays in initiating, enrolling, conducting or completing any planned and ongoing nonclinical and preclinical studies and clinical trials; ● delays in receiving approval from regulatory authorities to initiate the Pharmaceutical Companies’ and Rafael Medical Devices’ planned clinical trials; ● delays or difficulties in enrolling patients in the Pharmaceutical Companies’ and Rafael Medical Devices’ clinical trials; ● limits or halts imposed on clinical trials and clinical trial sites, including hospitals and medical centers, among others; ● delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ● diversion of healthcare resources away from the conduct of the Pharmaceutical Companies’ and Rafael Medical Devices’ clinical trials, including the diversion of hospitals serving as clinical trial sites and hospital staff supporting the conduct of clinical trials; ● risk that participants enrolled in clinical trials or staff involved in or related to clinical trials will acquire COVID-19 or subsequent variants while the clinical trial is ongoing, which could impact the duration and results of the clinical trial, including by increasing the number of observed adverse events; 84 ● interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures (such as endoscopies that are deemed non-essential), which may impact the integrity of subject data and clinical study endpoints; ● prolonged government shutdowns or global health concerns preventing the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities; ● interruption or delays in the operations of the FDA, which may impact review and approval timelines; ● interruption of, or delays in receiving, supplies of the Pharmaceutical Companies’ product candidates and Rafael Medical Devices’ device candidates from their contract manufacturing organizations due to staffing or supply shortages, production slowdowns, global shipping delays or stoppages and disruptions in delivery systems; ● limitations on employee resources that would otherwise be focused on the conduct of the Pharmaceutical Companies’ and Rafael Medical Devices’ preclinical studies and clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; ● refusal of the FDA or comparable foreign regulatory authorities to accept data from clinical trials in affected geographies; ● impacts from prolonged remote work arrangements, such as increased cybersecurity risks and strains on our, the Pharmaceutical Companies’ and Rafael Medical Devices’ business continuity plans; and ● delays or difficulties with equity offerings due to disruptions and uncertainties in the securities market.
Further, even if the Pharmaceutical Companies obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active ingredients be approved for the same condition, and competitors also potentially could secure approval of the same drug for different non-orphan conditions.
Further, even if the Pharmaceutical Companies obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active ingredients may be approved for the same condition, and competitors also potentially could secure approval of the same drug for different non-orphan conditions.
Moreover, if third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct clinical trials in accordance with regulatory requirements or applicable protocols, the Pharmaceutical Companies’ product candidates may not be approved for marketing and commercialization or such approval may be delayed.
Moreover, if third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct clinical trials in accordance with regulatory requirements or applicable protocols, the Pharmaceutical Companies’ product candidates may not be approved for marketing or such approval and commercialization may be delayed.
As a result, the coverage determination process is often a time-consuming and costly process that will require us and the Pharmaceutical Companies to provide scientific and clinical support for the use of their products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
As a result, the coverage determination process is often a time-consuming and costly process that will require us or the Pharmaceutical Companies to provide scientific and clinical support for the use of their products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
In addition, the information we or they choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.
In addition, the information we or they choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.
The FDA’s 510(k) clearance process usually takes from three to twelve months, but can last longer, and the De Novo classification generally can be comparable.
The FDA’s 510(k) clearance process usually takes from three to twelve months, but can last longer, and the De Novo classification process generally can be comparable.
Even if we diligently search third-party patents for potential infringement by our products or product candidates, or devices or device candidates, we may not successfully find patents that our products or product candidates devices or device candidates may infringe.
Even if we diligently search third-party patents for potential infringement by our products or product candidates, or devices or device candidates, we may not successfully find patents that our products or product candidates or devices or device candidates may infringe.
Among the provisions of the ACA of potential importance to the Pharmaceutical Companies’ business and the Pharmaceutical Companies’ product candidates are the following: ● an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, or MDRP; ● a new methodology by which rebates owed by manufacturers under the MDRP are calculated for drugs that are inhaled, infused, instilled, implanted or injected; ● expansion of healthcare fraud and abuse laws, including the civil False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for noncompliance; ● a new Medicare Part D coverage gap discount program, in which manufacturers must agree to now offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; ● extension of manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs; ● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; ● new requirements to report certain financial arrangements with physicians and teaching hospitals for eventual publication; ● a new requirement to annually report drug samples that manufacturers and distributors provide to physicians for eventual publication; ● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and ● a Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models.
Among the provisions of the ACA of potential importance to the Pharmaceutical Companies’ business and the Pharmaceutical Companies’ product candidates are the following: ● an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, or MDRP; ● a new methodology by which rebates owed by manufacturers under the MDRP are calculated for drugs that are inhaled, infused, instilled, implanted or injected; ● expansion of healthcare fraud and abuse laws, including the civil False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for noncompliance; 51 ● a new Medicare Part D coverage gap discount program, in which manufacturers must agree to now offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; ● extension of manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs; ● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; ● new requirements to report certain financial arrangements with physicians and teaching hospitals for eventual publication; ● a new requirement to annually report drug samples that manufacturers and distributors provide to physicians for eventual publication; ● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and ● a Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models.
In addition, a person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation; 54 ● federal civil and criminal false claims laws, including the federal civil False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other federal government programs that are false or fraudulent or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government, including federal healthcare programs.
In addition, a person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation; ● federal civil and criminal false claims laws, including the federal civil False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other federal government programs that are false or fraudulent or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government, including federal healthcare programs.
If there is any delay or failure in obtaining required clearances or approvals or if the FDA requires Rafael Medical Devices to go through a lengthier, more rigorous examination for future device candidates or modifications to existing devices, if any, than Rafael Medical Devices had expected, Rafael Medical Devices’ ability to introduce new or enhanced devices in a timely manner would be adversely affected, which in turn would result in delayed or no realization of revenue from such device enhancements or new devices and could also result in substantial additional costs which could decrease our profitability.
If there is any delay or failure in obtaining required clearances or approvals or if the FDA requires Rafael Medical Devices to go through a lengthier, more rigorous examination for future device candidates or modifications to existing devices, if any, than Rafael Medical Devices had expected, Rafael Medical Devices’ ability to introduce new or enhanced devices in a timely manner would be adversely affected, which in turn would result in delayed or no realization of revenue from such device enhancements or new devices and could also result in substantial additional costs which could decrease Rafael Medical Devices’ profitability.
For example: ● others may be able to develop products that are similar to, or better than, ours in a way that is not covered by the claims of our patents; ● might not have been the first to conceive or reduce to practice the inventions covered by our patents or pending patent applications; ● we might not have been the first to file patent applications for our inventions; ● any patents that we obtain may not provide us with any competitive advantages or may ultimately be found invalid or unenforceable; and/or ● we may not develop additional proprietary technologies that are patentable.
For example: ● others may be able to develop products that are similar to, or better than, ours in a way that is not covered by the claims of our patents; ● we might not have been the first to conceive or reduce to practice the inventions covered by our patents or pending patent applications; ● we might not have been the first to file patent applications for our inventions; ● any patents that we obtain may not provide us or them with any competitive advantages or may ultimately be found invalid or unenforceable; and/or ● we may not develop additional proprietary technologies that are patentable.
We may also need to hire additional employees or engage outside consultants to comply with these requirements, which will increase our costs and expenses. 66 In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming.
We may also need to hire additional employees or engage outside consultants to comply with these requirements, which will increase our costs and expenses. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming.
For example, we may be subject to the following: state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state laws that require drug and device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures, or drug pricing; state and local laws requiring the registration of pharmaceutical and device sales and medical representatives; and state and foreign laws, such as the GDPR governing the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
For example, they may be subject to the following: state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state laws that require drug and device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures, or drug pricing; state and local laws requiring the registration of pharmaceutical and device sales and medical representatives; and state and foreign laws, such as the GDPR governing the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Furthermore, the submission of these reports has been and could be used by competitors against Rafael Medical Devices in competitive situations and cause customers to delay purchase decisions or cancel orders, which would harm our reputation and business. The FDA, state, and foreign regulatory authorities have broad enforcement powers.
Furthermore, the submission of these reports has been and could be used by competitors against Rafael Medical Devices in competitive situations and cause customers to delay purchase decisions or cancel orders, which would harm their and our reputation and business. The FDA, state, and foreign regulatory authorities have broad enforcement powers.
Moreover, we may face claims from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect. In addition, many of our product candidates have a complex structure that makes it difficult to conduct a thorough search and review of all potentially relevant third-party patents.
Moreover, we may face claims from non-practicing entities that have no relevant product revenue and against whom our patent portfolio may thus have no deterrent effect. In addition, many of our product candidates have a complex structure that makes it difficult to conduct a thorough search and review of all potentially relevant third-party patents.
If any of these additional shares are sold, or if it is perceived that they will be sold, in the public market, the market price of our common stock could decline. 71 We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.
If any of these additional shares are sold, or if it is perceived that they will be sold, in the public market, the market price of our common stock could decline. We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.
From time to time, we and/or Rafael Medical Devices may publicly disclose preliminary or top-line data from preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.
From time to time, we and/or Rafael Medical Devices may publicly disclose preliminary or top-line data from preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following study completion and a more comprehensive review of the data related to the particular study or trial.
If the Pharmaceutical Companies or Rafael Medical Devices or their respective employees, independent contractors, consultants, commercial partners, and vendors violate these laws, we may be subject to investigations, enforcement actions and/or significant penalties, including the imposition of significant civil, criminal, and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of the Pharmaceutical Companies’ and Rafael Medical Devices’ operations, any of which could adversely affect their ability to operate their business and their results of operations.
If the Pharmaceutical Companies or Rafael Medical Devices or their respective employees, independent contractors, consultants, commercial partners, and vendors violate these laws, they and we may be subject to investigations, enforcement actions and/or significant penalties, including the imposition of significant civil, criminal, and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if they or we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of the Pharmaceutical Companies’ and Rafael Medical Devices’ operations, any of which could adversely affect their ability to operate their business and their and our results of operations.
From time to time, we and/or the Pharmaceutical Companies may publicly disclose preliminary or top-line data from preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.
From time to time, we and/or the Pharmaceutical Companies may publicly disclose preliminary or top-line data from preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following study completion and a more comprehensive review of the data related to the particular study or trial.
As a result, top-line data should be viewed with caution until the final data are available, and then, until the full study results have been completely evaluated by the FDA. 46 From time to time, we and/or Rafael Medical Devices may also disclose interim data from preclinical studies or clinical trials.
As a result, top-line data should be viewed with caution until the final data are available, and then, until the full study results have been completely evaluated by the FDA. From time to time, we and/or Rafael Medical Devices may also disclose interim data from preclinical studies or clinical trials.
Rafael Medical Devices may not maintain adequate insurance for environmental liability or toxic tort claims that may be asserted against them in connection with their storage or disposal of hazardous materials. In addition, Rafael Medical Devices may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.
Rafael Medical Devices may not maintain adequate insurance for environmental liability or toxic tort claims that may be asserted against them in connection with their storage or disposal of hazardous materials. 63 In addition, Rafael Medical Devices may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.
We may not be able to detect or prevent misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a license on commercially reasonable terms.
We may not be able to detect or prevent misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us or them a license on commercially reasonable terms.
As a result, top-line data should be viewed with caution until the final data are available, and then, until the full study results have been completely evaluated by the FDA. From time to time, we and/or the Pharmaceutical Companies may also disclose interim data from preclinical studies and clinical trials.
As a result, top-line data should be viewed with caution until the final data are available, and then, until the full study results have been completely evaluated by the FDA. 35 From time to time, we and/or the Pharmaceutical Companies may also disclose interim data from preclinical studies and clinical trials.
We may be subject to product liability claims if Rafael Medical Devices’ device candidates or devices cause, or merely appear to have caused, patient injury or death, even if such injury or death was as a result of supplies or components that are produced by third-party suppliers.
We and Rafael Medical Devices may be subject to product liability claims if Rafael Medical Devices’ device candidates or devices cause, or merely appear to have caused, patient injury or death, even if such injury or death was as a result of supplies or components that are produced by third-party suppliers.
The entities in which we hold interests or in which we may invest may not make necessary payments or take other actions to protect intellectual property or other rights that they license or have acquired from third parties, which could result in the loss or impairment of those rights and the reduction of the value of our interests.
The entities in which we hold interests or in which we may invest may not make necessary payments or take other actions to protect intellectual property or other rights that they own, license or have acquired from third parties, which could result in the loss or impairment of those rights and the reduction of the value of our interests.
As a result, the top-line or preliminary results reported may differ significantly from future results of the same studies, or different conclusions or considerations may qualify such results and/or limit the clinical conclusions that can be drawn from them, once additional data have been received and fully evaluated.
As a result, the top-line or preliminary results reported may differ significantly from future results of the same studies, or different conclusions or considerations may qualify such results and/or limit the clinical significance and clinical conclusions that can be drawn from them, once additional data have been received and fully evaluated.
As a result, the top-line or preliminary results reported may differ significantly from future results of the same studies, or different conclusions or considerations may qualify such results and/or limit the clinical conclusions that can be drawn from them, once additional data have been received and fully evaluated.
As a result, the top-line or preliminary results reported may differ significantly from future results of the same or future studies, or different conclusions or considerations may qualify such results and/or limit the clinical significance and clinical conclusions that can be drawn from them, once additional data have been received and fully evaluated.
Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us or them alleging that we infringe their patents. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Clinical testing is very expensive, time-consuming, and subject to uncertainty. 28 Before the Pharmaceutical Companies can commence clinical trials for a product candidate, they must complete extensive nonclinical and preclinical studies that support their planned and future INDs in the United States.
Clinical testing is very expensive, time-consuming, and subject to uncertainty. Before the Pharmaceutical Companies can commence clinical trials for a product candidate, they must complete extensive nonclinical and preclinical studies that support their planned and future INDs in the United States.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand or lower pricing for the Pharmaceutical Companies’ product candidates, or additional pricing pressures.
We expect that additional state, federal and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal, state and foreign governments will pay for healthcare products and services, which could result in reduced demand or lower pricing for the Pharmaceutical Companies’ product candidates, or additional pricing pressures.
If that occurs, Rafael Medical Devices or its collaborators will not be able, or may be delayed in their efforts, to commercialize Rafael Medical Devices’ device candidates. Product liability lawsuits against Rafael Medical Devices or their collaborators or us could cause substantial liabilities and could limit commercialization of any medical devices that Rafael Medical Devices or their collaborators may develop.
If that occurs, Rafael Medical Devices or its collaborators will not be able, or may be delayed in their efforts, to commercialize Rafael Medical Devices’ device candidates. 61 Product liability lawsuits against Rafael Medical Devices or their collaborators or us could cause substantial liabilities and could limit commercialization of any medical devices that Rafael Medical Devices or their collaborators may develop.
Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations.
Efforts to ensure that our and their business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our or their business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations.
The degree of market acceptance of the Pharmaceutical Companies’ product candidates, if approved for commercial sale, will depend on a number of factors, including: ● the efficacy, safety profile, and any potential clinical advantages compared to alternative treatments; ● the approval, availability, market acceptance, and reimbursement for any companion diagnostic; ● the ability to offer the Pharmaceutical Companies’ medicines for sale at competitive prices; 38 ● convenience and ease of administration compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● ensuring uninterrupted product supply; ● the strength of marketing and distribution support; ● sufficient third-party coverage and reimbursement; and ● the prevalence and severity of any side effects.
The degree of market acceptance of the Pharmaceutical Companies’ product candidates, if approved for commercial sale, will depend on a number of factors, including: ● the efficacy, safety profile, and any potential clinical advantages compared to alternative treatments; ● the approval, availability, market acceptance, and reimbursement for any companion diagnostic; ● the ability to offer the Pharmaceutical Companies’ medicines for sale at competitive prices; ● convenience and ease of administration compared to alternative treatments; 43 ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● ensuring uninterrupted product supply; ● the strength of marketing and distribution support; ● sufficient third-party coverage and reimbursement; and ● the prevalence and severity of any side effects.
If these reports are not timely filed, regulators may impose sanctions, and sales of Rafael Medical Devices’ products may suffer, and they and we may be subject to product liability or regulatory enforcement actions, all of which could harm our business.
If these reports are not timely filed, regulators may impose sanctions, and sales of Rafael Medical Devices’ products may suffer, and they and we may be subject to product liability or regulatory enforcement actions, all of which could harm their and our business.
Further, if any of Rafael Medical Devices’ device candidates obtains regulatory approval or clearance, toxicities or other serious adverse events associated with such device candidates previously not seen during clinical testing may also develop after such approval and lead to a number of potentially significant negative consequences, including, but not limited to: ● Regulatory authorities may suspend, limit or withdraw approvals or clearances of such device, if any, or seek an injunction against its manufacture or distribution; ● regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; ● Rafael Medical Devices may be required to change the way the device is implanted or conduct additional clinical trials or post-approval studies; ● Rafael Medical Devices may be subject to fines, injunctions or the imposition of criminal penalties; ● we or Rafael Medical Devices could be sued and held liable for harm caused to patients; and ● our reputation may suffer.
Further, if any of Rafael Medical Devices’ device candidates obtains regulatory approval, marketing authorization or clearance, toxicities or other serious adverse events associated with such device candidates previously not seen during clinical testing may also develop after such approval, marketing authorization, or clearance and lead to a number of potentially significant negative consequences, including, but not limited to: ● Regulatory authorities may suspend, limit or withdraw approvals, marketing authorizations or clearances of such device, if any, or seek an injunction against its manufacture or distribution; ● regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; ● Rafael Medical Devices may be required to change the way the device is implanted or conduct additional clinical trials or post-approval studies; ● Rafael Medical Devices may be subject to fines, injunctions or the imposition of criminal penalties; ● we or Rafael Medical Devices could be sued and held liable for harm caused to patients; and ● Rafael Medical Devices and our reputation may suffer.
We may have limited control over the manner in which our licensors initiate, or support our efforts to initiate, an infringement proceeding against a third-party infringer of the intellectual property rights, or defend certain of the intellectual property that is licensed to us.
We may have limited control over the manner in which our licensors initiate, or support our efforts to initiate, an infringement proceeding against a third-party infringer of the intellectual property rights, or defend certain of the intellectual property that is licensed to us or them.
We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them prior to disclosing our proprietary information, such as our consultants and vendors, or our former or current employees.
We seek to protect our respective trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them prior to disclosing our proprietary information, such as our consultants and vendors, or our former or current employees.
The following examples are illustrative: ● others may be able to develop and/or practice technology that is similar to our technology or aspects of our technology, but that are not covered by the claims of the patents that we own or control, assuming such patents have issued or do issue; ● we or our licensors or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed; ● we or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions; 64 ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own or have exclusively licensed may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● third parties performing manufacturing or testing for us using our product candidates, including technologies could use the intellectual property of others without obtaining a proper license; ● parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; ● we may not develop or in-license additional proprietary technologies that are patentable; ● we may not be able to obtain and maintain necessary licenses on commercially reasonable terms, or at all; and ● the patents of others may have an adverse effect on our business.
The following examples are illustrative: ● others may be able to develop and/or practice processes or technologies that are similar to our processes or technologies or aspects of our processes or technologies, but that are not covered by the claims of the patents that we own or control, assuming such patents have issued or do issue; ● we or our licensors or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed; ● we or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions; ● others may independently develop similar or alternative processes or technologies or duplicate any of our processes or technologies without infringing our intellectual property rights; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own or have exclusively licensed may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● third parties performing manufacturing or testing for us using our product candidates or device candidates, including our processes and technologies, could use the intellectual property of others without obtaining a proper license; ● parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; ● we may not develop or in-license additional proprietary technologies that are patentable; ● we may not be able to obtain and maintain necessary licenses on commercially reasonable terms, or at all; and ● the patents of others may have an adverse effect on our business.
In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product shipment delays, or prohibit us from manufacturing, marketing or otherwise commercializing our products, services, and technology.
In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product shipment delays, or prohibit us or them from manufacturing, marketing or otherwise commercializing our products, services, and technology.
Moreover, we may not be able to locate suitable acquisition opportunities, and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business. Investors may suffer dilution.
Moreover, we may not be able to locate suitable acquisition opportunities, and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business. 95 Investors may suffer dilution.
As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Intellectual property rights do not necessarily address all potential threats to our business.
As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. 80 Intellectual property rights do not necessarily address all potential threats to our business.
Numerous third-party patents exist in the fields relating to our products and services, and it is difficult for industry participants, including us, to identify all third-party patent rights relevant to our product candidates, device candidates, services, and technologies.
Numerous third-party patents exist in the fields relating to our products and services, and it is difficult for industry participants, including us and them, to identify all third-party patent rights relevant to our product candidates, device candidates, services, and technologies.
LipoMedix faces competition from (i) other liposome and nanomedicine products in solid tumors (for example, Doxil (Janssen), Onivyde (Ipsen), and Abraxane (Celgene)); (ii) other non-liposomal chemotherapeutic drugs in gastrointestinal malignancies recently developed or under development (for example, TAS-102 (Taiho) in colorectal cancer); (iii) biological therapy (including small molecule kinase inhibitors) recently developed or under development for colon cancer (for example, Regorafenib (Bayer)); (iv) immunotherapy approaches in gastrointestinal malignancies (for example, Merck USA), antibodies and/or vaccinations; and (v) other companies such as Roche.
LipoMedix faces competition from, among others, (i) other liposome and nanomedicine products in solid tumors (for example, Doxil (Janssen), Onivyde (Ipsen), and Abraxane (Celgene)); (ii) other non-liposomal chemotherapeutic drugs in gastrointestinal malignancies recently developed or under development (for example, TAS-102 (Taiho) in colorectal cancer); (iii) biological therapy (including small molecule kinase inhibitors) recently developed or under development for colon cancer (for example, Regorafenib (Bayer)); (iv) immunotherapy approaches in gastrointestinal malignancies (for example, Merck USA), antibodies and/or vaccinations; and (v) other companies such as Roche.
In the future, we may in-license intellectual property from additional licensors. We may rely on certain of these licensors to file and prosecute patent applications and maintain, or assist us in the maintenance of, patents and otherwise protect the intellectual property we license from them.
In the future, we may in-license intellectual property from additional licensors. We may rely on certain of these licensors to file and prosecute patent applications and maintain, or assist us in the maintenance of, patents and otherwise protect the intellectual property we license from these licensors.
Section 505(b)(2), if applicable under the FFDCA, would allow an NDA submitted to the FDA to rely in part on data in the public domain and the FDA’s prior conclusions regarding the safety and effectiveness of a previously-approved product, which could expedite the development program for certain of the Pharmaceutical Companies’ product candidates by potentially decreasing the amount of nonclinical and preclinical and/or clinical data that they would need to generate in order to obtain FDA approval.
Section 505(b)(2), when applicable under the FFDCA, would allow an NDA submitted to the FDA to rely in part on data in the public domain and the FDA’s prior conclusions regarding the safety and effectiveness of a previously-approved product, which could expedite the development program for certain of the Pharmaceutical Companies’ product candidates by potentially decreasing the amount of nonclinical and preclinical and/or clinical data that they would need to generate in order to obtain FDA approval.
Regardless of merit or eventual outcome, liability claims may result in: ● decreased demand for any product candidates or medicines that the Pharmaceutical Companies may develop; ● injury to the Pharmaceutical Companies’ reputation and significant negative media attention; ● withdrawal of clinical trial participants; ● significant costs to defend the related litigation; ● substantial monetary awards to trial participants or patients; ● loss of revenue; 42 ● reduced resources of the Pharmaceutical Companies’ management to pursue the Pharmaceutical Companies’ business strategy; and diverted time and attention from executing on that strategy; and ● the inability to commercialize any medicines that the Pharmaceutical Companies may develop.
Regardless of merit or eventual outcome, liability claims may result in: ● decreased demand for any product candidates or medicines that the Pharmaceutical Companies may develop; ● injury to the Pharmaceutical Companies’ reputation and significant negative media attention; 49 ● withdrawal of clinical trial participants; ● significant costs to defend the related litigation; ● substantial monetary awards to trial participants or patients; ● loss of revenue; ● reduced resources of the Pharmaceutical Companies’ management to pursue the Pharmaceutical Companies’ business strategy, and diverted time and attention from executing on that strategy; and ● the inability to commercialize any medicines that the Pharmaceutical Companies may develop.
The Pharmaceutical Companies’ operations also produce hazardous waste products. The Pharmaceutical Companies generally contract with third parties for the disposal of these materials and wastes. The Pharmaceutical Companies cannot eliminate the risk of contamination or injury from these materials.
The Pharmaceutical Companies’ operations also produce hazardous waste products. The Pharmaceutical Companies generally contract with other third parties for the disposal of these materials and wastes. The Pharmaceutical Companies cannot eliminate the risk of contamination or injury from these materials.
Furthermore, we cannot guarantee that any patents will be issued from any pending or future owned or licensed patent applications, or that any current or future patents will be valid or enforceable or provide us with any meaningful protection or competitive advantage.
Furthermore, we cannot guarantee that any patents will be issued from any pending or future owned or licensed patent applications, or that any current or future patents will be valid or enforceable or provide us or them with any meaningful protection or competitive advantage.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business. 73 Item 1B. Unresolved Staff Comments. None.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business. Item 1B. Unresolved Staff Comments None.
If the interim, top-line, or preliminary data that we or Rafael Medical Devices report differs from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, Rafael Medical Devices’ ability to obtain approval or clearance for, and commercialize, their device candidates may be adversely affected, which could materially adversely affect our business, financial condition, and results of operations.
If the interim, top-line, or preliminary data that we or Rafael Medical Devices report differs from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, Rafael Medical Devices’ ability to obtain approval, marketing authorization or clearance for, and commercialize, their device candidates may be adversely affected, which could materially adversely affect our and Rafael Medical Devices’ business, financial condition, and results of operations.
Regulatory authorities enforce these GLP and GCP requirements through periodic inspections, both announced and unannounced, of trial sponsors, principal investigators, and trial sites, and the corresponding books and records of such parties.
Regulatory authorities enforce these GLP and GCP requirements through periodic inspections, both announced and unannounced, of trial sponsors, principal investigators, trial sites, and manufacturing sites, and the corresponding books and records of such parties.
Because we expect to rely on third parties to manufacture our product candidates, and we expect to continue to collaborate with third parties on the development of our product candidates, we must, at times, share trade secrets with them.
Because we expect to rely on third parties to manufacture our product candidates and device candidates, and we expect to continue to collaborate with third parties on the development of our product candidates and device candidates, we must, at times, share trade secrets with them.
The types of situations in which we may become a party to such litigation or proceedings include: ● we or our collaborators may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our product candidates, device candidates, or processes do not infringe those third parties’ patents; ● we or our collaborators may participate at substantial cost in International Trade Commission proceedings to abate importation of third-party products that would compete unfairly with our products; ● if our competitors file patent applications that claim technology also claimed by us or our licensors, we or our licensors may be required to participate in interference, derivation or opposition proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third party with a dominant patent position; ● if third parties initiate litigation claiming that our processes or product candidates, infringe their patent or other intellectual property rights, we and our collaborators will need to defend against such proceedings; ● if third parties initiate litigation or other proceedings, including inter partes reviews, oppositions or other similar agency proceedings, seeking to invalidate patents owned by or licensed to us or to obtain a declaratory judgment that their products, services, or technologies do not infringe our patents or patents licensed to us, we will need to defend against such proceedings; ● we may be subject to ownership disputes relating to intellectual property, including disputes arising from conflicting obligations of consultants or others who are involved in developing our product candidate; and ● if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or product candidates infringe or misappropriate its patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.
The types of situations in which we may become a party to such litigation or proceedings include: ● we and our collaborators may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our product candidates, device candidates, or processes do not infringe those third parties’ patents; ● we and our collaborators may participate at substantial cost in International Trade Commission proceedings to abate importation of third-party products that would compete unfairly with our products; ● if our competitors file patent applications that claim technology also claimed by us or our licensors, we or our licensors may be required to participate in interference, derivation or opposition proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third party with a dominant patent position; ● if third parties initiate litigation claiming that our processes or product candidates or those of the companies in which we hold interests, infringe their patent or other intellectual property rights, we, they and our collaborators will need to defend against such proceedings; ● if third parties initiate litigation or other proceedings, including inter partes reviews, oppositions or other similar agency proceedings, seeking to invalidate patents owned by or licensed to us or the companies in which we hold interests, or to obtain a declaratory judgment that their products, services, or technologies do not infringe our patents or patents licensed to us or them, we will need to defend against such proceedings; ● we may be subject to ownership disputes relating to intellectual property, including disputes arising from conflicting obligations of consultants or others who are involved in developing our product candidate; and ● if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or product candidates or those of the companies in which we hold interests infringe or misappropriate its patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.
Any regulatory approvals, marketing authorizations, or clearances that Rafael Medical Devices may receive for their device candidates will require the regular submission of reports to regulatory authorities and surveillance to monitor the safety and effectiveness of the medical device, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study requirements.
Any regulatory approvals, marketing authorizations, or clearances that Rafael Medical Devices may receive for their device candidates will require the regular submission of reports to regulatory authorities and surveillance to monitor the safety and effectiveness of the medical device, may contain significant limitations related to use restrictions for specified age groups or patient populations, warnings, precautions or contraindications, and may include burdensome post-approval study requirements.
Even if the Pharmaceutical Companies are allowed to pursue approval under the Section 505(b)(2) regulatory pathway, we cannot assure you that any product candidates the Pharmaceutical Companies develop will receive the requisite approval for commercialization. 35 In addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2), certain pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2).
Even if the Pharmaceutical Companies are allowed to pursue approval under the Section 505(b)(2) regulatory pathway, we cannot assure you that any product candidates the Pharmaceutical Companies develop will receive the requisite approval for commercialization. 39 In addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2), certain pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2).
Any regulatory approvals that the Pharmaceutical Companies may receive for their product candidates will require the regular submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements.
Any regulatory approvals that the Pharmaceutical Companies may receive for their product candidates will require the regular submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product, may contain significant limitations related to use restrictions for specified age groups or patient populations, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements.
If we are unable to secure and maintain freedom to operate, others could preclude us from commercializing our product candidates or device candidates. 56 The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.
If we are unable to secure and maintain freedom to operate, others could preclude us from commercializing our product candidates or device candidates. 72 The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.
Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, there may be applications now pending of which we are unaware and which may later result in issued patents that we may infringe by commercializing our product candidates or device candidates if they receive approval or clearance.
Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, there may be applications now pending of which we are unaware and which may later result in issued patents that we may infringe by commercializing our product candidates or device candidates if they receive approval or clearance or our services or technologies.
If any of our patents are challenged, invalidated, circumvented by third parties or otherwise limited or expire prior to the commercialization of our products, and if we do not own or have exclusive rights to other enforceable patents protecting our products or other technologies, competitors and other third parties could market products and use processes that are substantially similar, or superior, to ours, and our business would suffer.
If any of our patents are challenged, invalidated, or circumvented by third parties or otherwise limited or expire prior to the commercialization of our products, services or technologies, and if we do not own or have exclusive rights to other enforceable patents protecting our products, services or other technologies, competitors and other third parties could market products and use processes that are substantially similar, or superior, to ours and theirs, and our business would suffer.
For example, the requirements for patentability may differ in certain countries, particularly developing countries, and we may be unable to obtain issued patents that contain claims that adequately cover or protect our current or future product candidates or device candidates. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.
For example, the requirements for patentability may differ in certain countries, particularly developing countries, and we may be unable to obtain issued patents that contain claims that adequately cover or protect our current or future product candidates or device candidates, services or technologies. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.
If we do not adequately address these risks and difficulties or successfully make such a transition, our business will suffer, our future revenue potential may be impacted, and our ability to pursue our growth strategy and attain profitability could be compromised. We hold significant cash, cash equivalents, restricted cash and investments that are subject to various market risks.
If we do not adequately address these risks and difficulties or successfully make such a transition, our business will suffer, our future revenue potential may be impacted, and our ability to pursue our growth strategy and attain profitability could be compromised. 26 We hold significant cash, cash equivalents, and investments that are subject to various market risks.
Rafael Medical Devices, the FDA, other comparable regulatory authorities or an IRB may suspend clinical trials of a device candidate at any time for various reasons, including a belief that subjects in such trials are being exposed to inadequate clinical benefit and/or unacceptable health risks or adverse side effects.
Rafael Medical Devices, the FDA, other comparable regulatory authorities or an IRB or ethics committee may suspend clinical trials of a device candidate at any time for various reasons, including a belief that subjects in such trials are being exposed to inadequate clinical benefit and/or unacceptable health risks or adverse side effects.
Furthermore, we would be exposed to a threat of litigation. 59 From time to time, we may be party to, or threatened with, litigation or other proceedings with third parties, including non-practicing entities, who allege that our product candidates, components of our product candidates, device candidates, components of our device candidates, services, and/or proprietary technologies infringe, misappropriate or otherwise violate their intellectual property rights.
Furthermore, we would be exposed to a threat of litigation. 75 From time to time, we may be party to, or threatened with, litigation or other proceedings with third parties, including non-practicing entities, who allege that our or product candidates, components of our product candidates, device candidates, components of our device candidates, services, and/or proprietary technologies infringe, misappropriate or otherwise violate their intellectual property rights.
Any such claim could also force use to do one or more of the following: ● incur substantial monetary liability for infringement or other violations of intellectual property rights, which we may have to pay if a court decides that the product candidate, service, or technology at issue infringes or violates the third party’s rights, and if the court finds that the infringement was willful, we could be ordered to pay up to treble damages and the third party’s attorneys’ fees; ● pay substantial damages to our customers or end users to discontinue use or replace infringing technology with non-infringing technology; ● stop manufacturing, offering for sale, selling, using, importing, exporting or licensing the product or technology incorporating the allegedly infringing technology or stop incorporating the allegedly infringing technology into such product, service, or technology; ● obtain from the owner of the infringed intellectual property right a license, which may require us to pay substantial upfront fees or royalties to sell or use the relevant technology and which may not be available on commercially reasonable terms, or at all; ● redesign our product candidates, services, and technology so they do not infringe or violate the third party’s intellectual property rights, which may not be possible or may require substantial monetary expenditures and time; ● enter into cross-licenses with our competitors, which could weaken our overall intellectual property position; ● lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of our intellectual property against others; ● find alternative suppliers for non-infringing products and technologies, which could be costly and create significant delay; or ● relinquish rights associated with one or more of our patent claims, if our claims are held invalid or otherwise unenforceable 60 Some of our competitors may be able to sustain the costs of complex intellectual property litigation more effectively than we can because they have substantially greater resources.
Any such claim could also force us to do one or more of the following: ● incur substantial monetary liability for infringement or other violations of intellectual property rights, which we may have to pay if a court decides that the product candidate, service, or technology at issue infringes or violates the third party’s rights, and if the court finds that the infringement was willful, we could be ordered to pay up to treble damages and the third party’s attorneys’ fees; ● pay substantial damages to our customers or end users and those of the companies in which we hold interests to discontinue use or replace infringing technology with non-infringing technology; ● stop manufacturing, offering for sale, selling, using, importing, exporting or licensing the product or technology incorporating the allegedly infringing technology or stop incorporating the allegedly infringing technology into such product, service, or technology; ● obtain from the owner of the infringed intellectual property right a license, which may require us to pay substantial upfront fees or royalties to sell or use the relevant technology and which may not be available on commercially reasonable terms, or at all; ● redesign our product candidates, services, and technology and those of the companies in which we hold interests so they do not infringe or violate the third party’s intellectual property rights, which may not be possible or may require substantial monetary expenditures and time; 76 ● enter into cross-licenses with our competitors and those of the companies in which we hold interests, which could weaken our overall intellectual property position; ● lose the opportunity to license our technology that of the companies in which we hold interests to others or to collect royalty payments based upon successful protection and assertion of our intellectual property against others; ● find alternative suppliers for non-infringing products and technologies, which could be costly and create significant delay; or ● relinquish rights associated with one or more of our patent claims or those of the companies in which we hold interests, if those claims are held invalid or otherwise unenforceable Some of our competitors and those of the companies in which we hold interests may be able to sustain the costs of complex intellectual property litigation more effectively than we can because those competitors have substantially greater resources.
Many of the Pharmaceutical Companies’ competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than the Pharmaceutical Companies do. Mergers and acquisitions in the biopharmaceutical industries may result in even more resources being concentrated among a smaller number of the Pharmaceutical Companies’ competitors.
Many of the Pharmaceutical Companies’ competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than the Pharmaceutical Companies do. Mergers and acquisitions in the biopharmaceutical industry may result in even more resources being concentrated among a smaller number of the Pharmaceutical Companies’ competitors.
These claims may require us to initiate or defend protracted and costly litigation on behalf of our customers or distributors, regardless of the merits of these claims.
These claims may require us or them to initiate or defend protracted and costly litigation on behalf of our customers or distributors, regardless of the merits of these claims.
The commencement and rate of completion of nonclinical and preclinical studies and clinical trials for a product candidate may be delayed by many factors, including, for example: ● inability to generate sufficient nonclinical and preclinical or other in vivo or in vitro data to support the initiation of clinical studies; ● timely completion of nonclinical and preclinical laboratory tests, animal studies, and formulation studies in accordance with FDA’s good laboratory practice requirements and other applicable regulations; ● approval by an independent Institutional Review Board, or IRB, ethics committee at each clinical site before each trial may be initiated; ● delays in reaching a consensus with regulatory agencies on study design and obtaining regulatory authorization to commence clinical trials; ● delays in reaching agreement on acceptable contractual terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; ● delays in identifying, recruiting and training suitable clinical investigators; ● delays in recruiting eligible patients to participate in clinical trials; ● delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of product candidates for use in clinical trials; ● insufficient or inadequate supply or quality of product candidates or other materials necessary for use in clinical trials, or delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials; ● imposition of a temporary or permanent clinical hold by regulatory authorities; ● developments on trials conducted by competitors for related technology or medical products that raise FDA or foreign regulatory authority concerns about risk to patients of the technology broadly, or if the FDA or a foreign regulatory authority finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; ● delays in recruiting, screening and enrolling patients and delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; ● difficulty collaborating with patient groups and investigators; ● failure by CROs, other third parties or the Pharmaceutical Companies to adhere to clinical trial protocols; 29 ● failure by CROs, other third parties or the Pharmaceutical Companies to perform in accordance with the FDA’s or any other regulatory authority’s good laboratory practices, or GLPs, good clinical practice requirements, or GCP, or other applicable regulatory guidelines in other countries; ● occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits, or occurrence of adverse events in a clinical trial of the same class of agents conducted by other companies; changes to the clinical trial protocols; ● clinical sites deviating from trial protocols or dropping out of a trial; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; ● selection of clinical endpoints that require prolonged periods of observation or analyses of resulting data; ● the cost of clinical trials of the Pharmaceutical Companies’ product candidates being greater than anticipated; ● interruptions of and/or delays in the clinical trials of the Pharmaceutical Companies’ product candidates and the potential impact of such interruptions or delays on a product candidate’s development program and the validity of clinical data result from a product candidate’s development program; ● clinical trials of the Pharmaceutical Companies’ product candidates producing negative or inconclusive results, which may result in our or their deciding, or regulators requiring us, to conduct additional clinical trials or abandon development of such product candidates; ● transfer of manufacturing processes to larger-scale facilities operated by a contract manufacturing organization, or CMO, and delays or failure by CMOs or the Pharmaceutical Companies to make any necessary changes to such manufacturing processes; and ● third parties being unwilling or unable to satisfy their contractual obligations to us or the Pharmaceutical Companies.
The commencement and rate of completion of nonclinical and preclinical studies and clinical trials for a product candidate may be delayed by many factors, including, for example: ● inability to generate sufficient nonclinical and preclinical or other in vivo or in vitro data to support the initiation of clinical studies; ● timely completion of nonclinical and preclinical laboratory tests, animal studies, and formulation studies in accordance with FDA’s good laboratory practice requirements and other applicable regulations; ● approval by an independent Institutional Review Board, or IRB, or ethics committee at each clinical site before each trial may be initiated; ● delays in reaching a consensus with regulatory agencies on study design and obtaining regulatory authorization to commence clinical trials; ● delays in reaching agreement on acceptable contractual terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; ● delays in identifying, recruiting and training suitable clinical investigators; 29 ● delays in recruiting eligible patients to participate in clinical trials; ● delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of product candidates for use in clinical trials; ● insufficient or inadequate supply or quality of product candidates or other materials necessary for use in clinical trials, or delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials; ● imposition of a temporary or permanent clinical hold by regulatory authorities; ● developments on trials conducted by competitors for related technology or medical products that raise FDA or foreign regulatory authority concerns about risk to patients of the technology broadly, or if the FDA or a foreign regulatory authority finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; ● delays in recruiting, screening and enrolling patients and delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; ● difficulty collaborating with patient groups and investigators; ● failure by CROs, other third parties or the Pharmaceutical Companies to adhere to clinical trial protocols; ● failure by CROs, other third parties or the Pharmaceutical Companies to perform in accordance with the FDA’s or any other regulatory authority’s good laboratory practices, or GLPs, good clinical practice requirements, or GCP, or other applicable regulatory guidelines in other countries; ● occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits, or occurrence of adverse events in a clinical trial of the same class of agents conducted by other companies; ● changes to the clinical trial protocols; ● clinical sites deviating from trial protocols or dropping out of a trial; ● changes in regulatory requirements and guidance, or data from an ongoing or other studies, that require amending or submitting new clinical protocols; 30 ● changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; ● selection of inclusion and/or exclusion criteria that significantly inhibit the ability to recruit patients into clinical trials; ● selection of clinical endpoints that require prolonged periods of observation or analyses of resulting data; ● the cost of clinical trials of the Pharmaceutical Companies’ product candidates being greater than anticipated; ● interruptions of and/or delays in the clinical trials of the Pharmaceutical Companies’ product candidates and the potential impact of such interruptions or delays on a product candidate’s development program and the validity of clinical data result from a product candidate’s development program; ● clinical trials of the Pharmaceutical Companies’ product candidates producing negative or inconclusive results, which may result in our or their deciding, or regulators requiring us, to amend clinical trial protocols, conduct additional clinical trials or abandon development of such product candidates; ● transfer of manufacturing processes to larger-scale facilities operated by a contract manufacturing organization, or CMO, and delays or failure by CMOs or the Pharmaceutical Companies to properly implement or make any necessary changes to such manufacturing processes; and ● third parties being unwilling or unable to satisfy their contractual obligations to us or the Pharmaceutical Companies.
As a result, our financial results and commercial prospects would be adversely affected, our costs could increase, and our ability to generate revenue could be delayed.
As a result, their and our financial results and commercial prospects would be adversely affected, their and our costs could increase, and their and our ability to generate revenue could be delayed.
Such inspections also could occur, for other products being manufactured by contract manufacturers, before the Pharmaceutical Companies or Rafael Medical Devices submit an application to the FDA or other comparable foreign regulatory authorities, and any adverse regulatory findings from such inspections could adversely impact a contract manufacturer’s ability to be a contract manufacturer for the Investment Companies.
Such inspections also could occur, for other products being manufactured by contract manufacturers, before the Pharmaceutical Companies or Rafael Medical Devices submit an application to the FDA or other comparable foreign regulatory authorities, and any adverse regulatory findings from such inspections could adversely impact a contract manufacturer’s ability to be a contract manufacturer for the Portfolio Companies.
The market price for our Class B common stock may be influenced by many factors, including: ● actual or anticipated variations in quarterly operating results; ● changes in financial estimates by us or by any securities analysts who might cover our stock; ● conditions or trends in our industry; ● stock market price and volume fluctuations of other publicly traded companies and, in particular, those that operate in the real estate or healthcare industries; ● announcements by us or our competitors of the results of clinical trials, new product or service offerings, or significant acquisitions; ● strategic collaborations or divestitures; ● announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; ● capital commitments; ● additions or departures of key personnel; and ● sales of our common stock, including sales by our directors and officers or specific stockholders.
The market price for our Class B common stock may be influenced by many factors, including: ● actual or anticipated variations in quarterly operating results; ● changes in financial estimates by us or by any securities analysts who might cover our stock; ● conditions or trends in our industry; ● stock market price and volume fluctuations of other publicly traded companies and, in particular, those that operate in the real estate or healthcare industries; ● announcements by us or our competitors of preliminary or interim data from or the results of clinical trials, new product or service offerings, or significant acquisitions; ● strategic collaborations or divestitures; ● announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; ● capital commitments; ● additions or departures of key personnel; and ● sales of our common stock, including sales by our directors and officers or specific stockholders.
If significant adverse events or other side effects are observed in any of Rafael Medical Devices’ current or future clinical trials, Rafael Medical Devices may have difficulty recruiting patients to the clinical trials, patients may drop out of such trials, or they may be required to abandon the trials or our development efforts of a device candidate altogether.
If significant adverse events or other side effects are observed in any of Rafael Medical Devices’ current or future clinical trials, Rafael Medical Devices may have difficulty recruiting patients to the clinical trials, patients may drop out of such trials, or they may be required to abandon the trials or their development efforts of a device candidate altogether.
Further, others, including regulatory agencies, may not accept or agree with our or Rafael Medical Devices’ assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular device development program, the approvability or commercialization of the particular device candidate or device, and our company in general.
Further, others, including regulatory agencies, may not accept or agree with our or Rafael Medical Devices’ assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular device development program, the approvability or commercialization of the particular device candidate or device, and our and Rafael Medical Devices’ companies in general.
Other companies may also design around technologies we have patented, licensed or developed. In addition, the issuance of a patent does not give us the right to practice the patented invention. Third parties may have blocking patents that could prevent us from marketing our products or practicing our own patented technology.
Other companies may also design around technologies we have patented, licensed or developed. In addition, the issuance of a patent does not give us or them the right to practice the patented invention. Third parties may have blocking patents that could prevent us from marketing our products or practicing our patented technology.
If significant adverse events or other side effects are observed in any of the Pharmaceutical Companies’ current or future clinical trials, the Pharmaceutical Companies may have difficulty recruiting patients to the clinical trials, patients may drop out of such trials, or they may be required to abandon the trials or our development efforts of a product candidate altogether.
If significant adverse events or other side effects are observed in any of the Pharmaceutical Companies’ current or future clinical trials, the Pharmaceutical Companies may have difficulty recruiting patients to the clinical trials, patients may drop out of such trials, or they may be required to abandon the trials or their development efforts of a product candidate altogether.
These laws may impact, among other things, our clinical research program, as well as our proposed and future sales, marketing, and education programs. In particular, the promotion, sales, and marketing of healthcare items and services is subject to extensive laws and regulations designed to prevent fraud, kickbacks, self-dealing, and other abusive practices.
These laws may impact, among other things, their clinical research program, as well as their proposed and future sales, marketing, and education programs. In particular, the promotion, sales, and marketing of healthcare items and services is subject to extensive laws and regulations designed to prevent fraud, kickbacks, self-dealing, and other abusive practices.
Despite the time, effort, and cost, we cannot assure you that any particular device candidate will be approved or cleared by the FDA. Any delay or failure to obtain necessary regulatory approvals, marketing authorizations, or clearances could harm Rafael Medical Devices’ business.
Despite the time, effort, and cost, we and Rafael Medical Devices cannot assure you that any particular device candidate will be approved or cleared by the FDA. Any delay or failure to obtain necessary regulatory approvals, marketing authorizations, or clearances could harm our and Rafael Medical Devices’ business.
The facilities used by contract manufacturers to manufacture approved products must also be approved by the FDA or other comparable foreign regulatory authorities following inspections for any such approved products that generally will be conducted after the Pharmaceutical Companies or Rafael Medical Devices submit an application to the FDA or other comparable foreign regulatory authorities.
The facilities used by contract manufacturers to manufacture product candidates or approved products must also be approved by the FDA or other comparable foreign regulatory authorities following inspections for any such approved products that generally will be conducted after the Pharmaceutical Companies or Rafael Medical Devices submit an application to the FDA or other comparable foreign regulatory authorities.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive, and other business arrangements. The Investment Companies may also be subject to federal, state, and foreign laws governing the privacy and security of identifiable patient information.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive, and other business arrangements. The Portfolio Companies may also be subject to federal, state, and foreign laws governing the privacy and security of identifiable patient information.
Cornerstone has received ODD for CPI-613 (devimistat) for the treatment of pancreatic cancer, acute myeloid leukemia, myelodysplastic syndrome, Burkitt’s lymphoma, peripheral T-cell lymphomas, soft tissue sarcoma, and biliary cancer. Cyclo received orphan drug for the treatment of NPC by the FDA for its Trappsol® product.
Cornerstone has received ODD for CPI-613 (devimistat) for the treatment of pancreatic cancer, acute myeloid leukemia, myelodysplastic syndrome, Burkitt’s lymphoma, peripheral T-cell lymphomas, soft tissue sarcoma, and biliary cancer. Cyclo received orphan drug for the treatment of NPC1 by the FDA for its Trappsol ® product.
The Investment Companies will generally have to negotiate budgets and contracts with CROs, trial sites, and CMOs, and they may not be able to do so on favorable terms, if at all, which may result in delays to anticipated development timelines and increased costs.
The Portfolio Companies will generally have to negotiate budgets and contracts with CROs, trial sites, and CMOs, and they may not be able to do so on favorable terms, if at all, which may result in delays to anticipated development timelines and increased costs.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSee Item 1—“Real Estate” for a discussion of properties held by the Company for investment purposes and Item 8—“Financial Statements and Supplemental Data,” for a detailed listing of such facilities.
Biggest changeHowever, there can be no guarantees that Shaare Zedek will continue this agreement in the future. See Item 1—“Real Estate” for a discussion of properties held by the Company for investment purposes for a detailed listing of such facilities.
Removed
However, there can be no guarantees that Shaare Zedek will continue this agreement in the future. LipoMedix leased an administrative office in Giv’at Ram Hi-Tech Park from the Hebrew University. Rent was $3,600 annually, and the lease agreement ran through September 30, 2022.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough there can be no assurance in this regard, other than noted above, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition. Item 4. Mine Safety Disclosures. Not applicable. 74 Part II
Biggest changeAlthough there can be no assurance in this regard, other than noted above, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition. Item 4. Mine Safety Disclosures Not applicable. 98 Part II
Item 3. Legal Proceedings Legal proceedings disclosure is presented in Note 19 to our Consolidated Financial Statements and in Item 8 to Part II of this Annual Report. The Company may from time to time be subject to legal proceedings that may arise in the ordinary course of business.
Item 3. Legal Proceedings Legal proceedings disclosure is presented in Note 21 to our Consolidated Financial Statements included in Item 8 to Part II of this Annual Report. The Company may from time to time be subject to legal proceedings that may arise in the ordinary course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities PRICE RANGE OF COMMON STOCK Our Class B common stock trades on the New York Stock Exchange under the symbol “RFL.” Trading commenced on the NYSE American on March 27, 2018 and the Company uplisted and commenced trading on the New York Stock Exchange on November 21, 2019.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities PRICE RANGE OF COMMON STOCK Our Class B common stock trades on the New York Stock Exchange under the symbol “RFL.” Trading commenced on the NYSE American on March 27, 2018 and on the New York Stock Exchange on November 21, 2019.
We do not anticipate paying dividends on our common stock until we achieve sustainable profitability (after satisfying all of our operational needs) and retain certain minimum cash reserves. Distributions will be subject to the need to retain earnings for investment in growth opportunities or the acquisition of complementary assets.
We do not anticipate paying dividends on our common stock unless and until we achieve sustainable profitability (after satisfying all of our operational needs) and retain certain minimum cash reserves. Distributions will be subject to the need to retain earnings for investment in growth opportunities or the acquisition of complementary assets.
The information required by Item 201(d) of Regulation S-K will be contained in our Proxy Statement for our Annual Stockholders Meeting, which we will file with the Securities and Exchange Commission within 120 days after July 31, 2023, and which is incorporated by reference herein.
The information required by Item 201(d) of Regulation S-K will be contained in our Proxy Statement for our Annual Stockholders Meeting, which we will file with the Securities and Exchange Commission within 120 days after July 31, 2024, and which is incorporated by reference herein.
Performance Graph of Stock We are a smaller reporting company as defined by Rule 12b-2 of the Securities and Exchange Act of 1934 and are not required to provide the information under this item. Issuer Repurchases of Equity Securities None. Item 6. [Reserved]. 75
Performance Graph of Stock We are a smaller reporting company as defined by Rule 12b-2 of the Securities and Exchange Act of 1934 and are not required to provide the information under this item. Issuer Repurchases of Equity Securities None.
The number of holders of record of our Class B common stock does not include the number of persons whose shares are in nominee or in “street name” accounts through brokers. On October 27, 2023, the last sales price reported on the NYSE for the Class B common stock was $1.55 per share.
The number of holders of record of our Class B common stock does not include the number of persons whose shares are in nominee or in “street name” accounts through brokers. On November 5, 2024, the last sales price reported on the NYSE for the Class B common stock was $1.81 per share.
On October 27, 2023, there were 262 holders of record of our Class B common stock and one holder of record of our Class A common stock. Howard Jonas has voting and dispositive power over all shares of Class A common stock.
On November 5, 2024, there were 249 holders of record of our Class B common stock and one holder of record of our Class A common stock. Howard Jonas has voting and dispositive power over all shares of Class A common stock.

Item 7. Management's Discussion & Analysis

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

41 edited+57 added−51 removed21 unchanged
Biggest changeThe decrease in general and administrative expenses of approximately $22 thousand during the year ended July 31, 2023 compared to the year ended July 31, 2022 is primarily due to a decrease in professional fees. 79 Consolidated Operations Our consolidated income and expense line items below loss from operations were as follows: Year Ended July 31, Change 2023 2022 $ % (in thousands) Loss from continuing operations $ (15,043 ) $ (60,477 ) 45,434 75 % Interest expense — (6 ) 6 100 % Interest income 3,253 201 3,052 (1518 )% Impairment of investments - Other Pharmaceuticals (334 ) — (334 ) (100 )% Impairment of cost method investment - Cornerstone Pharmaceuticals — (79,141 ) 79,141 (100 )% Realized gain (loss) on available-for-sale securities 154 (45 ) 199 (442 )% Realized gain on investment in equity securities 309 — 309 (100 )% Unrealized gain on investment in equity securities 33 — 33 (100 )% Unrealized gain on investments - Cyclo Therapeutics Inc. 2,663 — 2,663 (100 )% Unrealized gain (loss) on investments - Hedge Funds 220 (504 ) 724 (144 )% Loss from continuing operations before income taxes (8,745 ) (139,972 ) 131,227 94 % Benefit from income taxes 255 — 255 (100 )% Equity in loss of Day Three Labs Inc.
Biggest changeConsolidated income (loss) and expenses for our Real Estate segment were as follows: Year Ended July 31, Change 2024 2023 $ % (in thousands) Rental – Third Party $ 174 $ 171 $ 3 2 % Rental – Related Party 108 108 — — % General and administrative (142 ) (138 ) (4 ) (3 )% Depreciation and amortization (60 ) (63 ) 3 5 % Income from operations $ 80 $ 78 $ 2 3 % 103 Consolidated Operations Our consolidated income and expense line items below loss from operations were as follows: Year Ended July 31, Change 2024 2023 $ % (in thousands) Loss from operations $ (102,627 ) $ (15,043 ) $ (87,584 ) (582 )% Interest income 2,383 3,253 (870 ) (27 )% Impairment of investments - Other Pharmaceuticals — (334 ) 334 100 % Loss on initial investment in Day Three upon acquisition (1,633 ) — (1,633 ) (100 )% Realized gain on available-for-sale securities 1,772 154 1,618 1051 % Realized gain (loss) on investment in equity securities (46 ) 309 (355 ) (115 )% Realized gain on investment - Cyclo 424 — 424 (100 )% Unrealized gain on equity securities — 33 (33 ) (100 )% Unrealized gain on investment - Cyclo 37 2,663 (2,626 ) 100 % Unrealized gain on convertible notes receivable, due from Cyclo 1,191 — 1,191 100 % Unrealized gain on investment - Hedge Funds 63 220 (157 ) (71 )% Recovery of receivables from Cornerstone 31,305 — 31,305 100 % Interest expense (248 ) — (248 ) (100 )% Other income 118 — 118 100 % Loss from continuing operations before income taxes (67,261 ) (8,745 ) (58,516 ) (669 )% Benefit from income taxes 2,680 255 2,425 951 % Equity in loss of Day Three (422 ) (203 ) (219 ) 108 % Consolidated net loss from continuing operations (65,003 ) (8,693 ) (56,310 ) (648 )% Income from discontinued operations related to 520 Property — 6,478 (6,478 ) 100 % Net loss attributable to noncontrolling interests (30,593 ) (339 ) (30,254 ) (8924 )% Net loss attributable to Rafael Holdings, Inc. $ (34,410 ) $ (1,876 ) $ (32,534 ) (1734 )% Interest income and realized gains on available-for-sale securities.
Unrealized gains and losses resulting from the change in fair value of these securities is included in unrealized (loss) gain on investments – Hedge Funds in the consolidated statements of operations and comprehensive loss. Hedge funds classified as Level 3 include investments and securities which may not be based on readily observable data inputs.
Unrealized gains and losses resulting from the change in fair value of these securities is included in unrealized (loss) gain on investments – Hedge Funds in the consolidated statements of operations and comprehensive loss. Hedge funds classified as Level 3 include investments and securities for which fair value may not be based on readily observable data inputs.
The Company expects its balance of cash and cash equivalents, and available-for-sale-securities, to be sufficient to meet our obligations for at least the 12 months from the filing of this Annual Report on Form 10-K.
The Company expects its balance of cash and cash equivalents, and available-for-sale securities, to be sufficient to meet our obligations for at least the next 12 months from the filing of this Annual Report on Form 10-K.
Corporate Bonds The Company’s marketable securities are considered to be available-for-sale as defined under ASC 320, Investments - Debt and Equity Securities , and are recorded at fair value based on the quoted price in active markets for similar assets and inputs that are observable for the asset. Unrealized gains or losses are included in accumulated other comprehensive income.
The Company’s marketable securities are also considered to be available-for-sale as defined under ASC 320, Investments - Debt and Equity Securities , and are recorded at fair value based on the quoted price in active markets for similar assets and inputs that are observable for the asset. Unrealized gains or losses are included in accumulated other comprehensive income.
On August 22, 2022, the Company received net proceeds of approximately $33 million in connection with the sale of the 520 Property (see Note 3 to our accompanying consolidated financial statements for further details).
On August 22, 2022, the Company received net proceeds of approximately $33 million in connection with the sale of the 520 Property (see Note 14 to our accompanying consolidated financial statements for further details).
Investing Activities Cash used in investing activities for the year ended July 31, 2023 was primarily due to purchases of available-for-sale securities of approximately $204.8 million, the investment in Day Three of $3.0 million, the purchase of investment in Cyclo of $2.1 million, the loan of $2.0 million to Cornerstone and the purchase of equity securities of $1.6 million.
Cash used in investing activities for the year ended July 31, 2023 was primarily due to purchases of available-for-sale securities of approximately $204.8 million, the investment in Day Three of $3.0 million, the purchase of investment in Cyclo common stock and warrants of $2.1 million, the loan of $2.0 million to Cornerstone and the purchase of equity securities of $1.6 million.
As of July 31, 2023, the Company recorded the funds received within prepaid expenses and other current assets and other liabilities of $825,000 within the consolidated balance sheets. General and administrative expenses . General and administrative expenses consist mainly of payroll, stock-based compensation expense, benefits, facilities, consulting and professional fees.
As of July 31, 2023, the Company recorded $825,000 of the funds received related to the sale within prepaid expenses and other current assets and other liabilities within the consolidated balance sheets. General and administrative expenses . General and administrative expenses consist mainly of payroll, stock-based compensation expense, benefits, facilities, consulting and professional fees.
We evaluate the performance of our Healthcare segment based primarily on research and development efforts and results of clinical trials, and our Real Estate segment based primarily on results of operations. Accordingly, the income and expense line items below loss from operations are only included in the discussion of consolidated results of operations.
We evaluate the performance of our Healthcare segment based primarily on research and development efforts and results of clinical trials, and our Infusion Technology and Real Estate segments based primarily on results of operations. Accordingly, the income and expense line items below loss from operations are only included in the discussion of consolidated results of operations.
The entirety of the expenses in the Healthcare segment relate to the activities of LipoMedix, Barer, Farber, and Rafael Medical Devices. As of July 31, 2023, we held a 100% interest in Barer, a 95% interest in LipoMedix, a 93% interest in Farber, and a 100% interest in Rafael Medical Devices.
The entirety of the expenses in the Healthcare segment relate to the activities of Barer, LipoMedix, Farber, Cornerstone, and Rafael Medical Devices. As of July 31, 2024, we held a 100% interest in Barer, a 95% interest in LipoMedix, a 93% interest in Farber, a 67% interest in Cornerstone, and a 68% interest in Rafael Medical Devices.
Operating, Financing, and Investing Activities of Discontinued Operations The cash flows from discontinued operations - 520 Property represents the net income excluding non-cash depreciation and amortization, as well as the proceeds from the sale of the 520 Property. For the year ended July 31, 2023, net cash used in operating activities of discontinued operations totaled $0.6 million.
Operating, Financing, and Investing Activities of Discontinued Operations The cash flows from discontinued operations - 520 Property for the year ended July 31, 2023 represent the net income excluding non-cash depreciation and amortization, as well as the net proceeds from the sale of the 520 Property.
Farber Partners, LLC (“Farber”) was formed to support agreements with Princeton University’s Office of Technology Licensing for technology from the laboratory of Professor Joshua Rabinowitz, in the Department of Chemistry, Princeton University, including an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program.
Barer’s majority owned subsidiary, Farber Partners, LLC (“Farber”), was formed around one such agreement with Princeton University’s Office of Technology Licensing (“Princeton”) for technology from the laboratory of Professor Joshua Rabinowitz, in the Department of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program.
On August 1, 2023, the Rafael Medical Devices closed on the sale of membership units in exchange of $925,000, and following that sale, the Company holds 53.4% (on a fully diluted basis) of the outstanding equity interests in Rafael Medical Devices, on a fully-diluted basis.
On August 1, 2023, Rafael Medical Devices closed on the sale of membership units in exchange for $925,000, and following that sale, the Company holds a 68% voting interest based on the outstanding equity interests in Rafael Medical Devices.
Subsequent changes in fair value are recorded in accumulated other comprehensive loss. The fair value of the Convertible Note Receivable is estimated using a scenario-based analysis based on the probability-weighted present value of future investment returns, considering each of the possible outcomes available to the Company, including cash repayment, equity conversion, and collateral transfer scenarios.
The fair value of these convertible note receivables are estimated using a scenario-based analysis based on the probability-weighted present value of future investment returns, considering each of the possible outcomes available to us, including cash repayment, equity conversion, and collateral transfer scenarios.
Historically, the Company owned real estate assets. In 2020, the Company sold an office building located in Piscataway, New Jersey and on August 22, 2022, the Company sold the building at 520 Broad Street in Newark, New Jersey and an associated public garage.
In 2020, the Company sold an office building located in Piscataway, New Jersey and, on August 22, 2022, the Company sold the building at 520 Broad Street in Newark, New Jersey that serves as headquarters for the Company and several tenants and an associated public garage (the “520 Property”).
Estimating the fair value of the Convertible Note Receivable requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. 83 Stock-based Compensation We record stock-based compensation for options granted and restricted stock units awarded to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period.
Stock-based Compensation We record stock-based compensation for options granted and restricted stock units awarded to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period.
The Company measured its initial investment in Cyclo at fair value and shall record all subsequent changes in fair value in earnings in the consolidated statement of operations. The Company believes the fair value option best reflects the underlying economics of the investment.
The fair value option is irrevocable once elected. We measure our investment in Cyclo at fair value and record all subsequent changes in fair value in earnings in the consolidated statement of operations. We believe the fair value option best reflects the underlying economics of the investment.
The decrease in general and administrative expenses during the year ended July 31, 2023 compared to the year ended July 31, 2022 is primarily due to a net decrease in severance expense of approximately $5.0 million, a decrease in payroll expense of approximately $3.4 million, a decrease in legal expense of approximately $1.1 million, a decrease in professional fees of approximately $1.2 million and a decrease in other general and administrative expenses of approximately $0.7 million, partially offset by a net increase in stock-based compensation expense of approximately $3.6 million due to a material forfeiture of granted equity interests in the year ended July 31, 2022. 78 Research and development expenses.
The decrease in general and administrative expenses during the year ended July 31, 2024 compared to the year ended July 31, 2023 is comprised of a decrease in insurance expense of approximately $0.9 million, a decrease in severance pay expense of approximately $0.4 million, a decrease in licenses and fees of approximately $0.3, and a decrease in payroll expenses of approximately $0.2 million, partially offset by a net increase in professional fees of approximately $1.1 million. 102 Research and development expenses.
The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our consolidated financial statements, or are the most sensitive to change from outside factors, are discussed below.
The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our consolidated financial statements, or are the most sensitive to change from outside factors, are discussed below. 106 Investments Measured at Fair Value We have elected the fair value option to account for our investment in and convertible notes due from Cyclo. over which we have significant influence.
We recorded a realized gain of approximately $309 thousand related to the sale of equity securities for the year ended July 31, 2023. Unrealized gain on investment - Cyclo. We recorded an unrealized gain of approximately $2.7 million related to the change in fair value in our investment in Cyclo for the year ended July 31, 2023.
We recorded an unrealized gain of $37 thousand and $2.7 million related to the change in fair value in our investment in Cyclo for the years ended July 31, 2024 and 2023, respectively. Unrealized gain on convertible notes receivable, due from Cyclo.
Barer was led by a team of scientists and academic advisors considered to be among the leading experts in cancer metabolism, chemistry, and drug development. In addition to its own internal discovery efforts, Barer pursued collaborative research agreements and in-licensing opportunities with leading scientists from top academic institutions.
In addition to its own internal discovery efforts, Barer pursued collaborative research agreements and in-licensing opportunities with leading scientists from top academic institutions.
Research and development expenses decreased for the year ended July 31, 2023 as compared to the corresponding period in fiscal 2022. Research and development expenses are derived from activity at Barer, LipoMedix, Farber, and Rafael Medical Devices. In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at the Barer Institute.
Research and development expenses decreased for the year ended July 31, 2024 as compared to the year ended July 31, 2023. Research and development expenses are derived from activity at Barer, LipoMedix, Farber, Cornerstone, Day Three, and Rafael Medical Devices.
(NYSE:RFL), (“Rafael Holdings”, “we” or the “Company”), a Delaware corporation, is a holding company with interests in clinical and early-stage pharmaceutical companies (the “Pharmaceutical Companies”), including an investment in Cornerstone Pharmaceuticals, Inc., formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company, a majority equity interest in LipoMedix Pharmaceuticals Ltd.
(“Rafael Holdings”, “Rafael”, “we” or the “Company”) is a holding company with interests in clinical and early-stage pharmaceutical companies (the “Pharmaceutical Companies”), including an investment in (and planned merger with) Cyclo Therapeutics Inc.
Net cash used in financing activities of discontinued operations of $15.0 million related to the payment of the Note Payable in connection with sale of the 520 Property. For the year ended July 31, 2022, net cash used in operating activities of discontinued operations totaled $41 thousand, and net cash used in investing activities of discontinued operations totaled $113 thousand.
Cash used in financing activities for the year ended July 31, 2023 was primarily related to repayment of the $15.0 million note payable in connection with the sale of 520 Property and for payment of taxes related to shares withheld for employee taxes on vesting of shares granted to employees.
See Note 9, “Investments,” in our accompanying consolidated financial statements for further details. 84 Off-Balance Sheet Arrangements We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations, that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
The IPR&D acquired as part of the Cornerstone Acquisition, accounted for as an asset acquisition, was expensed immediately as a component of in-process research and development expense in the consolidated statement of operations and comprehensive loss as it had no alternative future use. 108 Off-Balance Sheet Arrangements We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations, that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
We recorded a realized gain of approximately $154 thousand related to the sale of available-for-sale securities for the year ended July 31, 2023. We recorded a realized loss of approximately $45 thousand related to the sale of available-for-sale securities for the year ended July 31, 2022. Realized gain on investment in equity securities.
We recorded a realized gain of approximately $424 thousand related to the exercise of the May Warrants in connection with our October 2023 investment in Cyclo for the year ended July 31, 2024. Unrealized gain on investment - Cyclo.
Liquidity and Capital Resources As of July 31, Change 2023 2022 $ % (in thousands) Balance Sheet Data: Cash and cash equivalents $ 21,498 $ 26,537 (5,039 ) (19 )% Convertible note receivable, related party 1,921 — 1,921 100 % Working capital 80,796 87,321 (6,525 ) (7 )% Total assets 98,829 118,320 (19,491 ) (16 )% Note payable, net of debt issuance costs, held-for-sale — 15,000 (15,000 ) (100 )% Total equity attributable to Rafael Holdings, Inc. 100,293 100,515 (222 ) — % Noncontrolling interests (3,664 ) (3,309 ) (355 ) 11 % Total equity 96,629 97,206 (577 ) (1 )% For the Years Ended July 31, Change 2023 2022 $ % (in thousands) Cash flows (used in) provided by Operating activities of continuing operations $ (10,247 ) $ (26,038 ) 15,791 (61 )% Investing activities of continuing operations (26,960 ) (63,683 ) 36,723 (58 )% Financing activities of continuing operations (218 ) 103,864 (104,082 ) (100 )% Effect of exchange rates on cash and cash equivalents (146 ) (306 ) 160 (52 )% Operating, investing, and financing activities of discontinued operations 32,532 (154 ) 32,686 (21,224 )% (Decrease) increase in cash and cash equivalents $ (5,039 ) $ 13,683 (18,722 ) (137 )% 81 Capital Resources As of July 31, 2023, we held cash and cash equivalents of approximately $21.5 million, and available-for-sale securities valued at approximately $57.7 million.
Liquidity and Capital Resources As of July 31, Change 2024 2023 $ % (in thousands) Balance Sheet Data: Cash and cash equivalents $ 2,675 $ 21,498 $ (18,823 ) (88 )% Convertible note receivable, related party — 1,921 (1,921 ) (100 )% Convertible note receivable 1,146 — 1,146 100 % Installment note payable 1,700 — 1,700 100 % Working capital 64,988 80,796 (15,808 ) (20 )% Total assets 96,832 98,829 (1,997 ) (2 )% Total equity attributable to Rafael Holdings, Inc. 82,185 100,293 (18,108 ) (18 )% Noncontrolling interests 4,073 (3,664 ) 7,737 211 % Total equity 86,258 96,629 (10,371 ) (11 )% Year Ended July 31, Change 2024 2023 $ % (in thousands) Cash flows used in Operating activities of continuing operations $ (7,802 ) $ (10,247 ) $ 2,445 24 % Investing activities of continuing operations (10,820 ) (26,960 ) 16,140 60 % Financing activities of continuing operations (179 ) (218 ) 39 18 % Effect of exchange rates on cash and cash equivalents (22 ) (146 ) 124 85 % Operating, investing, and financing activities of discontinued operations — 32,532 (32,532 ) (100 )% Decrease in cash and cash equivalents $ (18,823 ) $ (5,039 ) (13,784 ) 274 % 105 Capital Resources As of July 31, 2024, we held cash and cash equivalents of approximately $2.7 million and available-for-sale securities valued at approximately $63.3 million.
(“Day Three”), a company which reimagines existing cannabis offerings with pharmaceutical-grade technology and innovation like Unlokt™ to bring to market better, cleaner, more precise and predictable products in the cannabis industry, and a majority interest in Rafael Medical Devices, LLC, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries (“Rafael Medical Devices” and Day Three Labs together with the Pharmaceutical Companies, represent our “Investment Companies”).
(“Day Three”), a company which empowers third-party manufacturers to reimagine their existing cannabis offerings enabling them to bring to market better, cleaner, more precise and predictable versions by utilizing Day Three’s pharmaceutical-grade technology and innovation like Unlokt™. Day Three and Rafael Medical Devices, together with the Pharmaceutical Companies, represent our “Portfolio Companies”).
In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer. The decision was taken to reduce spending as the Company focuses on exploring strategic opportunities. The Company’s primary focus is to expand our investment portfolio through opportunistic and strategic investments including therapeutics which address high unmet medical needs.
In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer. The decision was taken to reduce spending as the Company focuses on exploring strategic opportunities. Since then, the Company has sought partners for programs at Farber and has entered into a license agreement for one of its technologies.
This transaction is subject to a number of conditions which are beyond the Company’s control. In 2019, the Company established the Barer Institute Inc., an early-stage small molecule research operation focused on developing a pipeline of novel therapeutic compounds, including compounds to regulate cancer metabolism with potentially broader application in other indications beyond cancer.
In 2019, the Company established Barer, a preclinical cancer metabolism research operation, to focus on developing a pipeline of novel therapeutic compounds, including compounds designed to regulate cancer metabolism with potentially broader application in other indications beyond cancer. Barer has been comprised of scientists and academic advisors that are experts in cancer metabolism, chemistry, and drug development.
The fair value of these assets is estimated based on information provided by the fund managers or the general partners. Therefore, these assets are classified as Level 3. Investments – Cost Method We periodically evaluate our investments for impairment due to declines considered to be other than temporary.
The fair value of these assets is estimated based on information provided by the fund managers or the general partners. Therefore, these assets are classified as Level 3. Business Combinations Amounts paid for acquisitions are allocated to the assets acquired and liabilities assumed based on their estimated fair value at the date of acquisition.
Realized gains or losses are released from accumulated other comprehensive income and into earnings on the consolidated statements of operations and comprehensive loss. Convertible Note Receivable, Related Party The Convertible Note Receivable is classified as available-for-sale as defined under ASC 320, Investments - Debt and Equity Securities , and is recorded at fair value.
We hold convertible notes receivable that are classified as available-for-sale as defined under Accounting Standards Codification (“ASC”) 320, Investments - Debt and Equity Securities , and are recorded at fair value. Subsequent changes in fair value are recorded in accumulated other comprehensive income (loss).
Healthcare Segment Our consolidated expenses for our Healthcare segment were as follows: Year Ended July 31, Change 2023 2022 $ % (in thousands) General and administrative $ (8,794 ) $ (16,818 ) 8,024 48 % Research and development (6,312 ) (8,742 ) 2,430 28 % Depreciation (15 ) (3 ) (12 ) — % Provision for loss on receivable from Cornerstone Pharmaceuticals pursuant to line of credit — (25,000 ) 25,000 (100 )% Provision for losses on related party receivables — (10,095 ) 10,095 (100 )% Loss from operations $ (15,121 ) $ (60,658 ) 45,537 75 % To date, the Healthcare segment has not generated any revenues.
Healthcare Segment Our consolidated expenses for our Healthcare segment were as follows: Year Ended July 31, Change 2024 2023 $ % (in thousands) General and administrative $ (8,338 ) $ (8,794 ) $ 456 5 % Research and development (3,668 ) (6,312 ) 2,644 42 % IPR&D expense (89,861 ) — (89,861 ) 100 % Depreciation and amortization (165 ) (15 ) (150 ) (1000 )% Loss from operations $ (102,032 ) $ (15,121 ) $ (86,911 ) (575 )% To date, the Healthcare segment has not generated any revenues.
Equity in loss of Day Three Labs, Inc. We recognized a loss of approximately $203 thousand from our ownership interest in Day Three due to operating results for the year ended July 31, 2023. As of July 31, 2023, the equity method investment in Day Three on our balance sheet is approximately $2.8 million. Equity in loss of RP Finance.
We recognized a loss of approximately $422 and $203 thousand from our ownership interest in Day Three due to operating results for the years ended July 31, 2024 and 2023, respectively. As of January 2, 2024, Day Three is a majority-owned subsidiary which is consolidated. See Note 10 to our accompanying consolidated financial statements for further information regarding the acquisition.
Impairment of investments - Other Pharmaceuticals . We recorded an impairment loss of $334 thousand for the year ended July 31, 2023, related to an investment in securities in another entity using the measurement alternative. Impairment of cost method investment - Cornerstone Pharmaceuticals.
We recorded impairment losses of $0 and $334 thousand related to our investment in Nanovibronix using the measurement alternative for the years ended July 31, 2024 and 2023, respectively. Realized gain on investment - Cyclo.
Depreciation on the 520 Property ceased effective July 1, 2022, as a result of the 520 Property being classified as held-for-sale. See Note 3 to our accompanying consolidated financial statements for further information regarding discontinued operations. As of July 31, 2023, the Company’s commercial real estate holdings consisted of a portion of a commercial building in Israel.
The decrease in the net income attributable to discontinued operations for the year ended July 31, 2024 as compared to the year ended July 31, 2023 was due to a gain on the sale of the 520 Property of $6.8 million. See Note 14 to our accompanying consolidated financial statements for further information regarding discontinued operations.
Unrealized gain (loss) on investments - Hedge Fund s. We recorded unrealized gains of approximately $220 thousand and losses of approximately $504 thousand for the years ended July 31, 2023 and 2022, respectively. 80 Benefit from income taxes. Our benefit from income taxes was approximately $255 thousand and $0 for the years ended July 31, 2023 and 2022, respectively.
We recorded an unrealized gain of $1.2 million related to the convertible note receivable due from Cyclo for the year ended July 31, 2024. Unrealized gain on investment - Hedge Fund s. We recorded an unrealized gain of approximately $63 thousand and an unrealized gain of approximately $220 thousand for the years ended July 31, 2024 and 2023, respectively.
Interest income was $3.3 million and $201 thousand for the years ended July 31, 2023 and 2022, respectively. The increase is primarily due to the interest income earned and accretion of the discount on the face value of our investments in available-for-sale securities whose balance increased to $57.7 million at July 31, 2023 from $36.7 million at July 31, 2022.
Interest income was $2.4 million and $3.3 million for the years ended July 31, 2024 and 2023, respectively. The decrease is primarily due to maturity and sales activity which resulted in an increase of realized gains on available-for-sale securities of $1.6 million for the year ended July 31, 2024. Impairment of investments - Other Pharmaceuticals .
Cash provided by financing activities for the year ended July 31, 2022 was primarily related to proceeds of approximately $110 million related to the sale of our common stock to investors and a related party, partially offset by payment of transaction costs of $6.2 million.
Financing Activities Cash used in financing activities for the year ended July 31, 2024 was primarily related to a principal payment of $0.8 million on the installment note acquired during the Day Three Acquisition, partially offset by the proceeds from sale of RMD membership units of $0.9 million.
In addition, following a pre-specified interim analysis, the independent data monitoring committee for the ARMADA 2000 Phase 3 study for devimistat recommended the trial to be stopped due to a determination that it was unlikely to achieve the primary endpoint (the “Data Events”).
In October 2021, Cornerstone received negative results of its Avenger 500 Phase 3 study for Devimistat in pancreatic cancer as well as a recommendation to stop its ARMADA 2000 Phase 3 study due to a determination that the trial would unlikely achieve its primary endpoint (the “Data Events”).
Cash used in operating activities for the year ended July 31, 2022 was primarily related to the loss from continuing operations of $140.5 million and an increase in prepaid expenses and other current assets of $3.5 million, partially offset by the impact from noncash items included in the loss from operations, principally the impairment of the Company’s cost method investment in Cornerstone Pharmaceuticals of $79 million, the reserve on the amounts due the Company from Cornerstone Pharmaceuticals related to the Line of Credit Agreement of $25 million, the reserve on receivables due from Cornerstone Pharmaceuticals totaling $10.1 million, changes in other current liabilities of $3.6 million, as well as other changes in assets and liabilities.
Operating Activities Cash used in operating activities decreased by $2.4 million from cash used of $10.2 million for the year ended July 31, 2023 to cash used of $7.8 million for the year ended July 31, 2024, as the increase in the loss from continuing operations was more than offset by the impact from non-cash items, such as $89.9 million in in-process research and development expense, $31.3 million from the recovery of receivables from Cornerstone, and changes in assets and liabilities.
Currently, the Company holds a portion of a commercial building in Jerusalem, Israel as its remaining real estate asset. On July 1, 2022, the Company determined that the 520 Property met the held-for-sale criteria and the Company has therefore classified the 520 Property as held-for-sale in the consolidated balance sheet at July 31, 2022.
As of July 31, 2024, the Company holds a portion of a commercial building in Jerusalem, Israel as its remaining owned real estate asset. In May 2023, the Company first invested in Cyclo Therapeutics. Cyclo is a clinical-stage biotechnology company that develops cyclodextrin-based products for the potential treatment of neurodegenerative diseases.
Removed
(“LipoMedix”), a clinical stage pharmaceutical company, the Barer Institute Inc. (“Barer”), a wholly-owned preclinical cancer metabolism research operation, an investment in Cyclo Therapeutics, Inc.
Added
(Nasdaq: CYTH), (“Cyclo Therapeutics” or “Cyclo”), a clinical stage biotechnology company dedicated to developing Trappsol® Cyclo™, which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 (“NPC1”), a rare, fatal and progressive genetic disorder, a majority equity interest in LipoMedix Pharmaceuticals Ltd. (“LipoMedix”), a clinical stage pharmaceutical company, Barer Institute Inc.
Removed
(Nasdaq: CYTH) (“Cyclo Therapeutics” or “Cyclo), a clinical-stage biotechnology company dedicated to developing life-changing medicines for patients and families living with challenging diseases through its lead therapeutic asset, Trappsol ® Cyclo™ ., an investment in Day Three Labs, Inc.
Added
(“Barer”), a wholly-owned preclinical cancer metabolism research operation, and a majority interest in Cornerstone Pharmaceuticals, Inc. (“Cornerstone”), formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company. We also hold a majority interest in Rafael Medical Devices, LLC.
Removed
The Company holds debt and equity investments in Cornerstone, that include preferred and common equity interests and a warrant to purchase additional equity. On June 17, 2021, the Company entered into a merger agreement to acquire full ownership of Cornerstone in exchange for issuing Company Class B common stock to the other stockholders of Cornerstone (“Merger Agreement” or “Merger”).
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(“Rafael Medical Devices”), an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries, and a majority interest in Day Three Labs, Inc.
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On October 28, 2021, the Company announced that the AVENGER 500 Phase 3 clinical trial for CPI-613 ® (devimistat), Cornerstone’s lead product candidate, did not meet its primary endpoint of significant improvement in overall survival in patients with metastatic adenocarcinoma of the pancreas.
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The Company’s primary focus is to expand our investment portfolio through opportunistic and strategic investments including therapeutics, which address high unmet medical needs. Upon closing of the planned merger with Cyclo, the Company intends to focus its efforts on making Trappsol ® Cyclo™ its lead clinical program. 100 Historically, the Company owned real estate assets.
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In light of the Data Events, the Company concluded that the prospects for CPI-613 were uncertain and fully impaired in its financial statements for the year ended July 31, 2022, the value of its loans, receivables, and investment in Cornerstone based upon its valuation of Cornerstone.
Added
Cyclo’s lead drug candidate is Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin), a treatment for Niemann-Pick Disease, type C1 (“NPC1”). NPC1 is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC1.
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On September 24, 2021, the Company entered into a Line of Credit Loan Agreement (the “Line of Credit Agreement”) with Cornerstone under which Cornerstone borrowed $25 million from the Company. Due to the Data Events, the Company recorded a full reserve on the $25 million due the Company from Cornerstone.
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Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020 Cyclo announced Top Line data demonstrating Trappsol® Cyclo™ was well tolerated in this study. Cyclo is currently conducting a Phase III Clinical Trial Evaluating Trappsol ® Cyclo™ in Pediatric and Adult Patients with Niemann-Pick Disease, Type C1.
Removed
On February 2, 2022, the Company terminated the Merger Agreement with Cornerstone Pharmaceuticals, effective immediately, in accordance with its terms.
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See Notes 11 and 12 to the Consolidated Financial Statements for more information on the Company’s investments in Cyclo. As discussed in more detail below, on August 21, 2024, the Company entered into a merger agreement with Cyclo.
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Subsequently, on February 2, 2022, the Company withdrew its Registration Statement on Form S-4 related to the proposed Merger. 76 On March 21, 2023, the Company loaned $2.0 million to Cornerstone which debt is represented by a Promissory Note made by Cornerstone (the “Promissory Note” or “Note”).
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In the event the merger is consummated, the Company intends to fund the TransportNPC phase III clinical trial, evaluating Trappsol® Cyclo™ in Niemann Pick C, to its interim analysis in the middle of 2025 and focus its efforts on Trappsol ® Cyclo™ as its lead clinical program.
Removed
The Note, which bears interest at a rate of seven and one-half percent (7.5%) per annum, was originally due and payable on May 22, 2023.
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At that point, the Company will make a determination as to whether or not to file an NDA for Trappsol® Cyclo™. LipoMedix is a clinical stage Israeli company focused on the development of a product candidate that holds the potential to be an innovative, safe, and effective cancer therapy based on liposome delivery.
Removed
On May 22, 2023, the Promissory Note was amended to extend the maturity date to November 30, 2023 and to waive any increase in the interest rate provided for in the Note, provided that the entire principal amount and all accrued interest thereon is repaid in cash or converted into equity securities of Cornerstone no later than November 30, 2023.
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As of July 31, 2024, the Company’s ownership interest in LipoMedix was approximately 95%. LipoMedix has completed various clinical stages of Promitil® including Phase 1A (solid tumors) and 1B (as single agent and in combination with capecitabine and/or bevacizumab in colorectal cancer). Another phase 1B testing Promitil® as radiosensitizer is ongoing and near completion.
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Cornerstone is in the process of a comprehensive restructuring transaction including, an equity investment by the Company of $1.5 million with other stockholders having the right to invest amounts on the same terms to avoid dilution, the conversion and modification of other Cornerstone debt obligations, the extension of the Cornerstone debt held by RP Finance, a reverse stock split, the conversion of all outstanding preferred stock of Cornerstone into common stock and the adoption of certain governance measures.
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A total of 149 patients have been treated with Promitil® as a single agent, or in combination with other anticancer drugs or radiotherapy, under the framework of a phase 1A and two 1B clinical studies and under named patient approval for compassionate use.
Removed
The Company also holds a majority equity interest in LipoMedix, a clinical stage oncological pharmaceutical company based in Israel. In addition, the Company has invested in other early-stage pharmaceutical ventures. In 2016, the Company first invested in LipoMedix Pharmaceuticals Ltd. (“LipoMedix”), a clinical stage pharmaceutical company.
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In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer Institute. Since then, the Company has sought partners for Farber programs and has entered into a license agreement for one of its technologies.
Removed
On February 9, 2023, the Company entered into a Share Purchase Agreement with LipoMedix in which LipoMedix sold 70,000,000 ordinary shares to the Company at a price per share of $0.03 and an aggregate sale price of approximately $2.1 million. Subsequent to this transaction, the Company owns 95% of LipoMedix.
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The Company owns a 37.5% equity interest in RP Finance LLC (“RP Finance”), which was, until March 13, 2024 (the date of the RP Finance Consolidation, as described in Note 3 to the Consolidated Financial Statements), accounted for under the equity method.
Removed
On April 7, 2023, the Company entered into a Common Stock Purchase Agreement (the “Day Three Purchase Agreement”) with Day Three. Day Three is a cannabinoid ingredient manufacturer specializing in the development and commercialization of novel cannabis product solutions.
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RP Finance is an entity associated with members of the family of Howard Jonas (Executive Chairman, Chairman of the Board, and controlling stockholder of the Company) which holds 37.5% equity interest of RP Finance. RP Finance holds debt and equity investments in Cornerstone.
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Pursuant to the Day Three Purchase Agreement, the Company purchased 4,302,224 shares of common stock representing 38% of the outstanding shares of common stock of Day Three (33.333% on a fully diluted basis), for a purchase price of $3.0 million.
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Due to the Data Events, RP Finance fully impaired its then debt and equity investments in Cornerstone. 101 On March 13, 2024, Cornerstone consummated a restructuring of its outstanding debt and equity interests (the “Cornerstone Restructuring”).
Removed
The Company also received a warrant exercisable for 7,528,893 shares of common stock at an aggregate purchase price of $3.0 million, which expires five years from the date of issuance or earlier based on the occurrence of certain events as defined in the Day Three Purchase Agreement As of July 31, 2023, the Company had not exercised the warrant.
Added
As a result of the Cornerstone Restructuring, Rafael became a 67% owner of the issued and outstanding common stock of Cornerstone (the “Cornerstone Acquisition”), and Cornerstone became a consolidated subsidiary of Rafael. The Cornerstone Acquisition is accounted for as an acquisition of a variable interest entity that is not a business in accordance with U.S. GAAP.
Removed
Refer to Note 8 to our accompanying consolidated financial statements for further detail. On May 2, 2023, the Company entered into a Securities Purchase Agreement (the “Cyclo SPA”) with Cyclo.
Added
The Company was determined to be the accounting acquirer for financial reporting purposes. See Note 3 to the Consolidated Financial Statements for additional information regarding the transaction.
Removed
Cyclo is a clinical stage biotechnology company, whose common stock is listed on the Nasdaq Capital Market under the symbol CYTH, that develops cyclodextrin-based products for the treatment of neurodegenerative diseases.
Added
In conjunction with the Cornerstone Restructuring and Cornerstone Acquisition, the Company reassessed its relationship with RP Finance, and as a result determined that RP Finance is still a variable interest entity and that the Company became the primary beneficiary of RP Finance as the Company now holds the ability to control repayment of the RP Finance Line of Credit which directly impacts RP Finance’s economic performance.
Removed
The Company purchased from Cyclo (i) 2,514,970 common shares (the “Purchased Shares”) and (ii) a warrant to purchase 2,514,970 common shares with an exercise price of $0.71 per share (the “Cyclo Warrant”), at a combined purchase price equal to $0.835 per Purchased Share and Cyclo Warrant to purchase one share, for an aggregate purchase price of $2.1 million.
Added
Therefore, following the Cornerstone Restructuring and Cornerstone Acquisition, the Company consolidated RP Finance (the “RP Finance Consolidation”). See Note 3 to the Consolidated Financial Statements for additional information on the Consolidation. In May 2021, the Company formed Rafael Medical Devices, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries.
Removed
The Cyclo Warrant is exercisable for a period of seven years from the date of issuance. On August 1, 2023, the Company purchased an additional 4,000,000 shares of common stock (the “Cyclo II Shares”), and a warrant to purchase an additional 4,000,000 Shares (the “Cyclo II Warrant”), for an aggregate purchase price of $5,000,000.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeINVESTMENT RISK In addition to, but separate from our primary business, we will hold a portion of our assets in hedge funds and a passive investment in another entity. Investments in hedge funds carry a degree of risk and depend to a great extent on correct assessments of the future course of price movements of securities and other instruments.
Biggest changeINVESTMENT RISK In addition to, but separate from our primary business, we will hold a portion of our assets in hedge funds. Investments in hedge funds carry a degree of risk and depend to a great extent on correct assessments of the future course of price movements of securities and other instruments.
Item 7A. Quantitative and Qualitative Disclosures about Market Risks FOREIGN CURRENCY RISK Revenue from tenants located in Israel represented 53% and 7% of our consolidated revenues, inclusive of revenue from discontinued operations, for the years ended July 31, 2023 and 2022, respectively. The entirety of these revenues is in currencies other than the U.S. Dollar.
Item 7A. Quantitative and Qualitative Disclosures about Market Risks FOREIGN CURRENCY RISK Revenue from tenants located in Israel represented 44% and 53% of our consolidated revenues, inclusive of revenue from discontinued operations, for the years ended July 31, 2024 and 2023, respectively. The entirety of these revenues is in currencies other than the U.S. Dollar.

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