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What changed in SELLAS Life Sciences Group, Inc.'s 10-K — 2022 vs 2023

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

+1048 added−909 removedSource: 10-K (2024-03-28) vs 10-K (2023-03-16)

Top changes in SELLAS Life Sciences Group, Inc.'s 2023 10-K

1048 paragraphs added · 909 removed · 373 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

107 edited+70 added−426 removed118 unchanged
Biggest changeIf the REGAL study meets its primary endpoint for efficacy and the Chinese regulatory authorities determine that the REGAL data is sufficient for approval in China, GPS could potentially reach the market in Greater China much earlier than we and 3D Medicines had anticipated when we entered into the license agreement providing rights to 3D Medicines. 15 Table of Contents The key features and schema of this study are shown in the following graphic: Phase 1 clinical trial of 3D189 in China In January 2022, 3D Medicines submitted an IND application to initiate the first clinical trial in China for 3D189, also known as GPS.
Biggest changeSee Item 3. Legal Proceedings . 15 Table of Contents The key features and schema of this study are shown in the following graphic: Phase 1 clinical trial of 3D189 in China In January 2022, 3D Medicines submitted an Investigational New Drug, or IND, application to initiate the first clinical trial in China for 3D189, also known as GPS.
Final data, at a median follow-up of 30.8 months, showed a median OS of 21.0 months in patients receiving GPS therapy compared to 5.4 months in the AML CR2 patients treated with best standard care resulting in a statistically significant difference (p-value 14 Table of Contents Phase 3 REGAL Clinical Trial Building on the Phase 2 study in AML CR2 patients, which showed a median OS of 21.0 months, at a median follow-up of 30.8 months, in patients receiving GPS compared to 5.4 months in contemporaneously treated patients with best standard therapy, in January 2020, we commenced a Phase 3 pivotal registration-enabling study for GPS in AML patients in CR2, including those in complete remission with incomplete platelet recovery.
Final data, at a median follow-up of 30.8 months, showed a median OS of 21.0 months in patients receiving GPS therapy compared to 5.4 months in the AML CR2 patients treated with best standard care resulting in a statistically significant difference (p-value Phase 3 REGAL Clinical Trial Building on the Phase 2 study in AML CR2 patients, which showed a median OS of 21.0 months, at a median follow-up of 30.8 months, in patients receiving GPS compared to 5.4 months in contemporaneously treated patients 14 Table of Contents with best standard therapy, in January 2020, we commenced a Phase 3 pivotal registration-enabling study for GPS in AML patients in CR2, including those in complete remission with incomplete platelet recovery.
LSCs have been shown to be susceptible to targeting by cytotoxic T cells (CD8 and CD4 cells) stimulated against leukemia-associated antigens and we believe this will be the case for GPS; • the fact that WT1 has been associated with the actual development of leukemia; • the positive correlation between the level of expression of WT1 and the prognosis in AML; • the fact that the level of expression of WT1 can be followed over time in patients during and after therapy, including immunotherapy, as a method of monitoring for MRD; • early evidence from mouse models that vaccination with peptides against select WT1 antigenic epitopes leads to detection of immune response; • early evidence that human immunocytes sensitized ex-vivo to peptides contained in GPS were able to recognize naturally presented WT1 peptides on the surface of several leukemia cell lines; • early anecdotal (at the time) clinical data showing antileukemic activity of WT1 monovalent vaccines in the CR1 maintenance setting in the Japanese population (albeit restricted to HLA-A*2401 type), as well as a dendritic cell vaccine in the Netherlands (independent of HLA haplotype) in the same setting; • a predictive assumption of very low to negligible degree of clinical toxicity with a WT1-targeted immunotherapy such as GPS, due to the fact that WT1 in normal, non-cancerous, tissues is both expressed at extremely low levels and limited in number of organs and tissues, but also due to the fact that WT1 fragments, or peptide epitopes, in normal cells are presented to host APCs in a different manner than are WT1 fragments produced in cancer cells; of note, WT1 expression in normal tissues of adults is limited to the podocyte layer of the glomerulus (kidney), Sertoli cells (testis), granulosa cells (ovary), decidual cells (uterus), mesothelial cells (peritoneum, pleura), mammary duct and lobule (breast), and blood-forming (hematopoietic) progenitor cells (CD34+ cells in the bone marrow); • the advent of modern immunotherapeutics in cancer and the promise of an innovative, off-the-shelf potentially effective, low adverse event burden immunotherapy to prevent or delay relapse in patients once they achieve complete remission status in AML, a disease that has historically been associated with dearth of deep and sustained responses to checkpoint inhibitors; and • evidence from our completed Phase 1 and Phase 2 clinical trials that administration of GPS can lead to extended relapse free survival and overall survival especially in patients who demonstrated clear WT1 specific CD4 and/or CD8 immune response to GPS administration.
LSCs have been shown to be susceptible to targeting by cytotoxic T-cells (CD8 and CD4 cells) stimulated against leukemia-associated antigens and we believe this will be the case for GPS; • the fact that WT1 has been associated with the actual development of leukemia; • the positive correlation between the level of expression of WT1 and the prognosis in AML; • the fact that the level of expression of WT1 can be followed over time in patients during and after therapy, including immunotherapy, as a method of monitoring for MRD; • early evidence from mouse models that vaccination with peptides against select WT1 antigenic epitopes leads to detection of immune response; • early evidence that human immunocytes sensitized ex-vivo to peptides contained in GPS were able to recognize naturally presented WT1 peptides on the surface of several leukemia cell lines; • early anecdotal (at the time) clinical data showing antileukemic activity of WT1 monovalent vaccines in the CR1 maintenance setting in the Japanese population (albeit restricted to HLA-A*2401 type), as well as a dendritic cell vaccine in the Netherlands (independent of HLA haplotype) in the same setting; • a predictive assumption of very low to negligible degree of clinical toxicity with a WT1-targeted immunotherapy such as GPS, due to the fact that WT1 in normal, non-cancerous, tissues is both expressed at extremely low levels and limited in number of organs and tissues, but also due to the fact that WT1 fragments, or peptide epitopes, in normal cells are presented to host APCs in a different manner than are WT1 fragments produced in cancer cells; of note, WT1 expression in normal tissues of adults is limited to the podocyte layer of the glomerulus (kidney), Sertoli cells (testis), granulosa cells (ovary), decidual cells (uterus), mesothelial cells (peritoneum, pleura), mammary duct and lobule (breast), and blood-forming (hematopoietic) progenitor cells (CD34+ cells in the bone marrow); • the advent of modern immunotherapeutics in cancer and the promise of an innovative, off-the-shelf potentially effective, low adverse event burden immunotherapy to prevent or delay relapse in patients once they achieve complete remission status in AML, a disease that has historically been associated with dearth of deep and sustained responses to checkpoint inhibitors; and • evidence from our completed Phase 1 and Phase 2 clinical trials that administration of GPS can lead to extended relapse free survival and OS especially in patients who demonstrated clear WT1 specific CD4 and/or CD8 immune response to GPS administration.
Addressing the broadest possible candidate patient population GPS has activity across multiple HLA types that could allow treatment of a vast majority of global patient populations harboring WT1-positive malignancies. 9 Table of Contents Potential Key Differentiators GPS’ potential key differentiators as compared to other active immunization or vaccine-type approaches, as well as compared to immunotherapy approaches more generally, are as follows: • heteroclitic peptides may offer increased immune response and less potential for tolerance; • multivalent oligopeptide mixture potentially drives differentiated immunotherapeutic efficacy, targeting 25 key epitopes of WT1; • potentially applicable to 20 or more cancer types worldwide and the vast majority of HLA types; • CR or MRD status (after initial tumor debulking with preceding standard therapy) is the preferred setting for GPS monotherapy; • not directly competitive with current clinical standard of care therapies, but rather believed to complement them in the maintenance setting; • potential for combination approaches with other cancer immunotherapies, due to tolerable adverse event profile; • anticipated cost-effective manufacturing; allogeneic, “off-the-shelf,” vialed subcutaneously administered drug that is not patient-specific; and • positive Phase 2 clinical data on effectiveness (based on overall survival, or OS, in AML and PFS in MM) with good tolerability and a favorable safety profile. 10 Table of Contents Development Program for GPS GPS has the potential as a monotherapy or in combination with other immunotherapeutic agents to address a broad spectrum of hematologic, or blood, cancers and solid tumor indications.
Addressing the broadest possible candidate patient population GPS has activity across multiple HLA types that could allow treatment of a vast majority of global patient populations harboring WT1-positive malignancies. 9 Table of Contents Potential Key Differentiators GPS’ potential key differentiators as compared to other active immunization or vaccine-type approaches, as well as compared to immunotherapy approaches more generally, are as follows: • heteroclitic peptides may offer increased immune response and less potential for tolerance; • multivalent oligopeptide mixture potentially drives differentiated immunotherapeutic efficacy, targeting 25 key epitopes of WT1; • potentially applicable to 20 or more cancer types worldwide and the vast majority of HLA types; • CR or MRD status (after initial tumor debulking with preceding standard therapy) is the preferred setting for GPS monotherapy; • not directly competitive with current clinical standard of care therapies, but rather believed to complement them in the maintenance setting; • potential for combination approaches with other cancer immunotherapies, due to tolerable adverse event profile; • anticipated cost-effective manufacturing; allogeneic, “off-the-shelf,” vialed subcutaneously administered drug that is not patient-specific; and • positive Phase 2 clinical data on effectiveness (based on OS in AML and PFS in MM) with good tolerability and a favorable safety profile. 10 Table of Contents Development Program for GPS GPS has the potential as a monotherapy or in combination with other immunotherapeutic agents to address a broad spectrum of hematologic, or blood, cancers and solid tumor indications.
In partial consideration for the rights granted by us, 3D Medicines agreed to pay us (i) a one-time upfront cash payment of $7.5 million in order to reimburse us for certain expenses incurred with respect to the development of the GPS Licensed Products prior to execution of the 3DMed License Agreement, and (ii) milestone payments totaling up to $194.5 million in the aggregate upon the achievement of certain technology transfer, development and regulatory milestones, as well as certain net sales thresholds of GPS Licensed Products in the 3DMed Territory in a given calendar year. 3D Medicines also agreed to pay tiered royalties based upon a percentage of annual net sales of GPS Licensed Products in the 3DMed Territory ranging from the high single digits to the low double digits.
In partial consideration for the rights granted by us, 3D Medicines agreed to pay us (i) a one-time upfront cash payment of $7.5 million in order to reimburse us for certain expenses incurred with respect to the development of the GPS Licensed Products prior to execution of the 3D Medicines Agreement, and (ii) milestone payments totaling up to $194.5 million in the aggregate upon the achievement of certain technology transfer, development and regulatory milestones, as well as certain net sales thresholds of GPS Licensed Products in the 3DMed Territory in a given calendar year. 3D Medicines also agreed to pay tiered royalties based upon a percentage of annual net sales of GPS Licensed Products in the 3DMed Territory ranging from the high single digits to the low double digits.
The endpoints of the study were safety, immunobiological response, overall response rate (as measured by “response evaluation criteria in solid tumors”, or RECIST), progression free survival and overall survival and other analyses of interest. GPS has been designed as maintenance therapy in order to provide an overall survival benefit after patients reach MRD status or complete remission.
The endpoints of the study were safety, immunobiological response, overall response rate (as measured by “response evaluation criteria in solid tumors”, or RECIST), progression free survival and OS and other analyses of interest. GPS has been designed as maintenance therapy in order to provide an OS benefit after patients reach MRD status or complete remission.
The in vitro studies were conducted at an independent third-party contract research organization, and utilized the following cell lines based on their unique characteristics in combination with GFH009’s mechanism of action: RH30, a pediatric soft tissue sarcoma cell line that is a model for studying high-risk pediatric rhabdomyosarcoma, NCI-H209, a small cell lung cancer cell line characterized by the loss of function of two major tumor suppressor genes, RB1 and TP53, and which also expresses MCL-1, a major target of CDK9 inhibition, SKOV-3, an ovarian cancer cell line containing the wild type BRCA1 gene and highly expresses CDK9, and OCI-AML-2, an AML cell line that develops resistance to venetoclax.
The in vitro studies were conducted at an independent third-party contract research organization, and utilized the following cell lines based on their unique characteristics in combination with SLS009’s mechanism of action: RH30, a pediatric soft tissue sarcoma cell line that is a model for studying high-risk pediatric rhabdomyosarcoma, NCI-H209, a small cell lung cancer cell line characterized by the loss of function of two major tumor suppressor genes, RB1 and TP53, and which also expresses MCL-1, a major target of CDK9 inhibition, SKOV-3, an ovarian cancer cell line containing the wild type BRCA1 gene and highly expresses CDK9, and OCI-AML-2, an AML cell line that develops resistance to venetoclax.
The IND for the Phase 1 clinical trial, which is investigating safety, was accepted by China’s National Medical Products Administration NMPA and the trial commenced in mid-2022. 3D Medicines is responsible for all expenses related to executing the trial in China.
The IND for the Phase 1 clinical trial, which is investigating safety, was accepted by China’s National Medical Products Administration, or NMPA, and the trial commenced in mid-2022. 3D Medicines is responsible for all expenses related to executing the trial in China.
We have retained sole rights to GPS and GPS+ outside of Greater China. In November 2022, we announced that we have agreed with 3D Medicines for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20 patients from mainland China.
We have retained sole rights to GPS and GPS+ outside of Greater China. In November 2022, we announced that we had agreed with 3D Medicines for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20 patients from mainland China.
The 3DMed License Agreement will expire on a GPS Licensed Product-by-GPS Licensed Product and region-by-region basis on the date of the expiration of all of 3D Medicines’ payment obligations to us. Upon expiration of the 3DMed License Agreement, the license granted to 3D Medicines will become fully paid-up, perpetual and irrevocable.
The 3D Medicines Agreement will expire on a GPS Licensed Product-by-GPS Licensed Product and region-by-region basis on the date of the expiration of all of 3D Medicines’ payment obligations to us. Upon expiration of the 3D Medicines Agreement, the license granted to 3D Medicines will become fully paid-up, perpetual and irrevocable.
In December 2020, we, together with our wholly-owned subsidiary, SLSG Limited, LLC, entered into an Exclusive License Agreement (the “3DMed License Agreement”) with 3D Medicines pursuant to which we granted 3D Medicines a sublicensable, royalty-bearing license, under certain intellectual property owned or controlled by us, to develop, manufacture and have manufactured, and commercialize GPS and heptavalent GPS, or GPS-Plus, product candidates, or the GPS Licensed Products, for all therapeutic and other diagnostic uses in Greater China, or the 3DMed Territory.
In December 2020, we, together with our wholly-owned subsidiary, SLSG Limited, LLC, entered into an Exclusive License Agreement (the “3D Medicines Agreement”) with 3D Medicines pursuant to which we granted 3D Medicines a sublicensable, royalty-bearing license, under certain intellectual property owned or controlled by us, to develop, manufacture and have manufactured, and commercialize GPS and heptavalent GPS, or GPS-Plus, product candidates, or the GPS Licensed Products, for all therapeutic and other diagnostic uses in Greater China, or the 3DMed Territory.
We are currently exploring the potential role for GPS in both monotherapy and in combination therapy with checkpoint inhibitors such as PD-1 inhibitors as set forth in the table below: Program Status GPS Monotherapy • Registrational Phase 3 REGAL open-label randomized clinical trial in AML patients who have achieved hematologic complete remission, with or without thrombocytopenia (CR2/CRp2), after second-line antileukemic therapy and who are deemed ineligible for, or unable to undergo, allogeneic stem-cell transplantation Ongoing • Phase 1 clinical trial of 3D189 (GPS) in China (our licensee, 3D Medicines is the sponsor) Ongoing • Phase 1 clinical trial in patients with hematologic and thoracic malignancies with no demonstrable residual/recurrent disease after debulking therapy Completed; final data reported • Phase 2 clinical trial in patients with AML with first complete remission (CR1) patients Completed; final data reported • Phase 2 clinical trial in patients with high-risk MDS or AML patients with ≥2 lines of prior therapy (CR2) Completed; final data reported • Phase 2 clinical trial in MM patients Completed; final data reported • Phase 2 randomized, double-blind, placebo-controlled clinical trial in MPM patients Completed; final data reported GPS Combination Therapy • Phase 1/2 clinical trial of GPS in combination with the anti-PD-1 therapy pembrolizumab (Keytruda) in ovarian cancer (second or third line) in collaboration with a Merck & Co., Inc., Kenilworth, N.J., U.S. subsidiary (known as MSD outside the United States and Canada), or Merck Completed; final data to be reported in 1H2023 • Phase I open-label investigator-sponsored clinical trial of GPS, in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo), in patients with MPM who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy Enrollment completed; topline data expected 1H2023 • Phase 1/pilot open-label, non-randomized clinical trial of GPS in combination with nivolumab in patients with WT1-expressing, or WT1+, recurrent ovarian, fallopian tube or primary peritoneal cancer who were in second or greater clinical remission (after their successful first or subsequent “salvage” therapy) Completed; final data reported 11 Table of Contents Current AML Treatment Therapies AML is an aggressive and potentially lethal blood cancer characterized by the rapid growth of abnormal white blood cells that build up in the bone marrow and interfere with the production of normal blood cells.
We are currently exploring the potential role for GPS in both monotherapy and in combination therapy with checkpoint inhibitors such as PD-1 inhibitors as set forth in the table below: Program Status GPS Monotherapy • Registrational Phase 3 REGAL open-label randomized clinical trial in AML patients who have achieved hematologic complete remission, with or without thrombocytopenia (CR2/CRp2), after second-line antileukemic therapy and who are deemed ineligible for, or unable to undergo, allogeneic stem-cell transplantation Ongoing • Phase 1 clinical trial of 3D189 (GPS) in China (our licensee, 3D Medicines is the sponsor) Ongoing • Phase 1 clinical trial in patients with hematologic and thoracic malignancies with no demonstrable residual/recurrent disease after debulking therapy Completed; final data reported • Phase 2 clinical trial in patients with AML with first complete remission (CR1) patients Completed; final data reported • Phase 2 clinical trial in patients with high-risk MDS or AML patients with ≥2 lines of prior therapy (CR2) Completed; final data reported • Phase 2 clinical trial in MM patients Completed; final data reported • Phase 2 randomized, double-blind, placebo-controlled clinical trial in MPM patients Completed; final data reported GPS Combination Therapy • Phase 1/2 clinical trial of GPS in combination with the anti-PD-1 therapy pembrolizumab (Keytruda) in ovarian cancer (second or third line) in collaboration with a Merck & Co., Inc., Kenilworth, N.J., U.S. subsidiary (known as MSD outside the United States and Canada), or Merck Completed; final data reported • Phase 1 open-label investigator-sponsored clinical trial of GPS, in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo), in patients with MPM who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy Completed; final data reported • Phase 1/pilot open-label, non-randomized clinical trial of GPS in combination with nivolumab in patients with WT1-expressing, or WT1+, recurrent ovarian, fallopian tube or primary peritoneal cancer who were in second or greater clinical remission (after their successful first or subsequent “salvage” therapy) Completed; final data reported 11 Table of Contents Current AML Treatment Therapies AML is an aggressive and potentially lethal blood cancer characterized by the rapid growth of abnormal white blood cells that build up in the bone marrow and interfere with the production of normal blood cells.
GPS Combination Therapy with Checkpoint Inhibitors Phase 1/2 Clinical Trial of GPS in Combination with Pembrolizumab Given the potential immunobiologic and pharmacodynamic synergy between GPS and an immune check-point inhibitor (e.g., PD1 blocker), we entered into a Clinical Trial Collaboration and Supply Agreement with Merck (known as MSD outside the United States and Canada), to assess the efficacy and safety of GPS in combination with Merck’s anti-PD-1 therapy pembrolizumab with exploratory long-term follow-up for OS and safety.
GPS Combination Therapy with Checkpoint Inhibitors Phase 1/2 Clinical Trial of GPS in Combination with Pembrolizumab Given the potential immunobiologic and pharmacodynamic synergy between GPS and an immune check-point inhibitor (e.g., PD-1 inhibitor), we entered into a Clinical Trial Collaboration and Supply Agreement with Merck (known as MSD outside the United States and Canada), to assess the efficacy and safety of GPS in combination with Merck’s anti-PD-1 therapy pembrolizumab with exploratory long-term follow-up for OS and safety.
According to CD DiNardo (N Engl J Med 2018; 378:2386-2398) and D Verma (Leuk Lymphoma 2010 May;51(5):778-82), about 50% of patients in second-line achieve Complete Remission or CR2 (our Phase 3 REGAL patient population). These figures would substantiate a total of approximately 8,725 clinically appropriate patients for GPS in the referenced key markets.
According to CD DiNardo (N Engl J Med 2018; 378:2386-2398) and D Verma (Leuk Lymphoma 2010 May;51(5):778-82), about 50% of patients in second-line achieve complete remission, or CR2 (our Phase 3 REGAL patient population). These figures would substantiate a total of approximately 8,750 clinically appropriate patients for GPS in the referenced key markets.
AML as lead indication for GPS Program We chose AML, for which we have been granted Fast Track and Orphan Drug designations by the FDA, as our lead indication for GPS for the reasons outlined below: • AML presents a clinical setting in which complete remission status (specifically CR1 and/or CR2) can be achieved with standard antileukemic therapy; • the high degree of unmet medical need in recurrent/relapsed AML and the absence of an effective maintenance therapy over the decades after salvage re-induction until and immediately after achievement of CR2 status, especially considering that most patients in this clinical scenario are older than 60 years of age; • the almost universal expression of WT1 in leukemic blasts, which are AML’s replicating malignant cells, as well as leukemic stem cells, or LSCs, cells that are or become extremely resistant to standard 12 Table of Contents chemotherapy or targeted agent approaches and which can be realistically eradicated only with immunotherapy methods (including allo-HSCT).
AML as lead indication for GPS Program We chose AML, for which we have been granted Fast Track and ODD by the FDA, as our lead indication for GPS for the reasons outlined below: • AML presents a clinical setting in which complete remission status (specifically CR1 and/or CR2) can be achieved with standard antileukemic therapy; • the high degree of unmet medical need in recurrent/relapsed AML and the absence of an effective maintenance therapy over the decades after salvage re-induction until and immediately after achievement of CR2 status, especially considering that most patients in this clinical scenario are older than 60 years of age; 12 Table of Contents • the almost universal expression of WT1 in leukemic blasts, which are AML’s replicating malignant cells, as well as leukemic stem cells, or LSCs, cells that are or become extremely resistant to standard chemotherapy or targeted agent approaches and which can be realistically eradicated only with immunotherapy methods (including allo-HSCT).
ITEM 1. BUSINESS Overview We are a late-stage clinical biopharmaceutical company focused on the development of novel therapeutics for a broad range of cancer indications. Our product candidates currently include galinpepimut-S, or GPS, a peptide immunotherapy directed against the Wilms tumor 1, or WT1, antigen, and GFH009, a highly selective small molecule cyclin-dependent kinase 9, or CDK9, inhibitor.
ITEM 1. BUSINESS Overview We are a late-stage clinical biopharmaceutical company focused on the development of novel therapeutics for a broad range of cancer indications. Our product candidates currently include galinpepimut-S, or GPS, a peptide immunotherapy directed against the Wilms tumor 1, or WT1, antigen, and SLS009 (formerly, GFH009), a highly selective small molecule cyclin-dependent kinase 9, or CDK9, inhibitor.
With approximately 3,300 cases in the United States each year, accompanied by a rising incidence in developing countries, MPM is notoriously difficult to treat and can lead to poor clinical outcomes with respect to both overall survival and progression-free survival, especially for those patients with the sarcomatoid variant who show a median overall survival of approximately 4.0 to 5.0 months.
With approximately 3,300 cases in the United States each year, accompanied by a rising incidence in developing countries, MPM is notoriously difficult to treat and can lead to poor clinical outcomes with respect to both OS and progression-free survival, especially for those patients with the sarcomatoid variant who show a median OS of approximately 4.0 to 5.0 months.
Ovarian cancer was chosen as a target indication for the following reasons: • ovarian cancer presents a clinical setting whereby MRD status can be achieved with standard upfront therapy both immediately after first line therapy, but also after effective debulking of the “first relapse.” The latter subgroup of patients (after successful second line treatment/first salvage, lacking demonstrable macroscopic residual disease) would be optimal candidates for GPS therapy, as no standard maintenance therapy exists for such patients and the subsequent relapse patterns and metrics are known and predictable; • the high levels of expression of WT1 in ovarian cancer cells.
Ovarian cancer was chosen as a target indication for the following reasons: 16 Table of Contents • ovarian cancer presents a clinical setting whereby MRD status can be achieved with standard upfront therapy both immediately after first line therapy, but also after effective debulking of the “first relapse.” The latter subgroup of patients (after successful second line treatment/first salvage, lacking demonstrable macroscopic residual disease) would be optimal candidates for GPS therapy, as no standard maintenance therapy exists for such patients and the subsequent relapse patterns and metrics are known and predictable; • the high levels of expression of WT1 in ovarian cancer cells.
Products/Pipeline Galinpepimut-S (GPS) Overview GPS is a WT1-targeting peptide-based cancer immunotherapeutic being developed as a monotherapy and in combination with other therapeutic agents to treat different types of cancers that result from uninhibited tumor cell growth. GPS targets malignancies and tumors characterized by an overexpression of the WT1 protein.
Products/Pipeline Galinpepimut-S (GPS): Innovative WT1 Targeting Immunotherapy Overview GPS is a WT1-targeting peptide-based cancer immunotherapeutic being developed as a monotherapy and in combination with other therapeutic agents to treat different types of cancers that result from uninhibited tumor cell growth. GPS targets malignancies and tumors characterized by an overexpression of the WT1 protein.
Treatment with olaparib alone resulted in a 30.2% mean decrease in tumor growth. No significant toxicity or safety concerns were observed in any of the treatment groups. PIVOT Program In December 2022, we announced that GFH009 will be evaluated in pediatric solid tumors and leukemia models through the NCI Pediatric Preclinical in Vivo Testing, or PIVOT, program.
Treatment with olaparib alone resulted in a 30.2% mean decrease in tumor growth. No significant toxicity or safety concerns were observed in any of the treatment groups. PIVOT Program In December 2022, we announced that SLS009 will be evaluated in pediatric solid tumors and leukemia models through the NCI Pediatric Preclinical in Vivo Testing, or PIVOT, program.
The data shows that GFH009 demonstrated significant anti-tumor effects in the selected cell line at nanomolar concentrations and, in certain samples, complete growth inhibition with no viable cancer cells. Additionally, in December 2022, we announced results from a preclinical in vivo study for GFH009 that demonstrated robust inhibition of tumor growth in a mouse xenograft model of SCLC.
The data shows that SLS009 demonstrated significant anti-tumor effects in the selected cell line at nanomolar concentrations and, in certain samples, complete growth inhibition with no viable cancer cells. Additionally, in December 2022, we announced results from a preclinical in vivo study for SLS009 that demonstrated robust inhibition of tumor growth in a mouse xenograft model of SCLC.
Optimal T-cell engagement leading to cancer cell destruction Immune response data from the final analysis of the Phase I clinical study of GPS in MM in 12 evaluable patients that were presented at the 44th Annual Meeting of the European Society for Blood and Marrow Transplantation, or EBMT, in 2018 (Dr.
Optimal T-cell engagement leading to cancer cell destruction Immune response data from the final analysis of the Phase 1 clinical study of GPS in MM in 12 evaluable patients that were presented at the 44th Annual Meeting of the European Society for Blood and Marrow Transplantation, or EBMT, in 2018 (Dr.
In a checkpoint inhibitor single agent study in a similar platinum-resistant ovarian cancer patient population treated with a checkpoint inhibitor alone, the observed DCR was 37.2 percent, consistent with a DCR rate increase of approximately 45 percent in the GPS combination with pembrolizumab over that seen for checkpoint inhibitors alone. 18 Table of Contents • Survival and disease control benefits were observed in patients harboring tumors with any level of detectable PD-L1 expression, i.e., those with Combined Positive Score, or CPS, of 1 or higher.
In a checkpoint inhibitor single agent study in a similar platinum-resistant ovarian cancer patient population treated with a checkpoint inhibitor alone, the observed DCR was 37.2 percent, consistent with a DCR rate increase of approximately 45 percent in the GPS combination with pembrolizumab over that seen for checkpoint inhibitors alone. • Survival and disease control benefits were observed in patients harboring tumors with any level of detectable PD-L1 expression, i.e., those with Combined Positive Score, or CPS, of 1 or higher.
At higher dose levels, a pattern of drug induced decreases in two biomarkers commonly used for assessing pharmacodynamics of CDK9 inhibitors, MCL1 and MYC, is seen. These data are important in that we believe they demonstrate that GFH009 is translating CDK9 inhibition into a meaningful suppression of cancer associated proteins.
At higher dose levels, a pattern of drug induced decreases in two biomarkers commonly used for assessing pharmacodynamics of CDK9 inhibitors, MCL1 and MYC, is seen. These data are important in that we believe they demonstrate that SLS009 is translating CDK9 inhibition into a meaningful suppression of cancer associated proteins.
The data showed that GFH009 demonstrated significant anti-tumor effects in all four selected cell lines. In three out of the four cell lines, GFH009 inhibited cancer cell growth by 90 to 100 percent. In August, we announced results from a new preclinical in vitro study for GFH009 in neuroendocrine prostate cancer, or NEPC.
The data showed that SLS009 demonstrated significant anti-tumor effects in all four selected cell lines. In three out of the four cell lines, SLS009 inhibited cancer cell growth by 90 to 100 percent. In August, we announced results from a new preclinical in vitro study for SLS009 in neuroendocrine prostate cancer, or NEPC.
GFH009 treated mice exhibited a 40.4% decrease in mean tumor growth compared to the control group in this very aggressive cancer model which had a tenfold increase in average tumor volume over 20 days. Strongest effects were observed with GFH009 in combination with olaparib, with mean tumor growth decreased by 72.3%.
SLS009 treated mice exhibited a 40.4% decrease in mean tumor growth compared to the control group in this very aggressive cancer model which had a tenfold increase in average tumor volume over 20 days. Strongest effects were observed with SLS009 in combination with olaparib, with mean tumor growth decreased by 72.3%.
We are particularly focused on developing better treatments for AML, the lead indication for both GPS and GFH009, which will allow us to leverage our clinical development expertise in hematology/oncology and to build a single streamlined commercial infrastructure sufficient for both of our current product candidates.
We are particularly focused on developing better treatments for AML, the lead indication for both GPS and SLS009, which will allow us to leverage our clinical development expertise in hematology/oncology and to build a single streamlined commercial infrastructure sufficient for both of our current product candidates.
GPS Combination Therapy with Nivolumab for MPM A single-center, open-label, single-arm, non-randomized investigator-sponsored Phase 1 trial of concomitant administration of GPS in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo) was initiated in February 2020 at MSK in patients with MPM who have previously received treatment with pemetrexed-based chemotherapy and have measurable disease on imaging, either due to residual disease after prior treatment or recurrent disease.
GPS Combination Therapy with Nivolumab for MPM A single-center, open-label, single-arm, non-randomized investigator-sponsored Phase 1 trial of concomitant administration of GPS in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo) was initiated in February 2020 at MSK in patients with MPM who have previously received treatment with pemetrexed- 18 Table of Contents based chemotherapy and have measurable disease on imaging, either due to residual disease after prior treatment or recurrent disease.
Select patients could also undergo an allogeneic hematopoietic, or blood-forming, stem cell transplant, or allo-HSCT. One of the fundamental goals of therapy for AML, both in the upfront and salvage settings, is for the patient to achieve a state of complete remission.
Select patients could also undergo an allogeneic hematopoietic, or blood-forming, stem cell transplant, referred to as allo-HSCT. One of the fundamental goals of therapy for AML, both in the upfront and salvage settings, is for the patient to achieve a state of complete remission.
In the second line setting, i.e., in AML patients who have relapsed and are receiving salvage antileukemic therapy, we are not aware of any therapies, other than allo-HSCT, that have shown through rigorous blinded, randomized, controlled clinical trials to offer a meaningful long-term benefit (either relapse-free or overall survival) when used as maintenance after patients achieve a status of CR2.
In the second line setting, i.e., in AML patients who have relapsed and are receiving salvage antileukemic therapy, we are not aware of any therapies, other than allo-HSCT, that have shown through rigorous blinded, randomized, controlled clinical trials to offer a meaningful long-term benefit (either relapse-free or OS) when used as maintenance after patients achieve a status of CR2.
Similarly, patients who are ineligible for ASCT and are managed only with chemotherapy and long-term IMiD maintenance (with up to nine cycles of lenalidomide) who also achieve less than complete remission and remain MRD-positive demonstrate a three-year OS rate of only about 55%; these landmark 20 Table of Contents three-year OS rates decrease by approximately 40 to 50% in patients who also have high-risk cytogenetics at baseline.
Similarly, patients who are ineligible for ASCT and are managed only with chemotherapy and long-term IMiD maintenance (with up to nine cycles of lenalidomide) who also achieve less than complete remission and remain MRD-positive demonstrate a three-year OS rate of only about 55%; these landmark three-year OS rates decrease by approximately 40 to 50% in patients who also have high-risk cytogenetics at baseline.
The Phase 1/2 clinical trial was designed to explore the combination of GPS plus pembrolizumab in patients with WT1+ relapsed or refractory tumors in both solid tumor and hematological cancer indications and to assess the efficacy and safety of the combination, comparing overall response rates and immune response markers achieved 28 Table of Contents with the combination compared to prespecified rates based on those seen with pembrolizumab alone in comparable patient populations.
The Phase 1/2 clinical trial was designed to explore the combination of GPS plus pembrolizumab in patients with WT1+ relapsed or refractory tumors in both solid tumor and hematological cancer indications and to assess the efficacy and safety of the combination, comparing overall response rates and immune response markers achieved with the combination compared to prespecified rates based on those seen with pembrolizumab alone in comparable patient populations.
The royalty rate is subject to reduction under certain circumstances, including when generic competition for a GPS Licensed Product exists in a particular region. 3D Medicines is responsible for all costs related to developing, obtaining regulatory approval of and commercializing the GPS Licensed Products in the 3DMed Territory. 3D Medicines is required to use commercially reasonable best efforts to develop and obtain regulatory approval for, and upon receipt of regulatory approval, commercialize the GPS Licensed Products in the 3DMed Territory.
The royalty rate is subject to reduction under certain circumstances, including when generic competition for a GPS Licensed Product exists in a particular region. 3D Medicines is responsible for all costs related to developing, obtaining regulatory approval of and commercializing the GPS Licensed Products in the 3DMed Territory. 3D Medicines is required to use commercially reasonable best efforts to develop and obtain regulatory approval for, and upon receipt of regulatory approval, commercialize the 31 Table of Contents GPS Licensed Products in the 3DMed Territory.
Either party may terminate the 3DMed License Agreement for the other party’s material breach following a cure period or upon certain insolvency events. We may terminate the 3DMed License Agreement if 3D Medicines or its affiliates or sublicensees challenge the validity or enforceability of the licensed patents.
Either party may terminate the 3D Medicines Agreement for the other party’s material breach following a cure period or upon certain insolvency events. We may terminate the 3D Medicines Agreement if 3D Medicines or its affiliates or sublicensees challenge the validity or enforceability of the licensed patents.
After subcutaneous injection, the WT1 peptides within GPS disperse locally underneath the injection site and at local lymph nodes and are ingested by APCs. Digested peptide fragments are then presented on the surface of APCs to CD8 and CD4 lymphocytes while simultaneously associated on the cell membrane with major histocompatibility complexes, or MHC, human leukocyte antigen, or HLA, molecules.
After subcutaneous injection, the WT1 peptides within GPS disperse locally underneath the injection site and at local lymph nodes and are ingested by APCs. Digested peptide fragments are then presented on the surface of APCs to CD8 and CD4 T-cells while simultaneously associated on the cell membrane with major histocompatibility complexes, or MHC, human leukocyte antigen, or HLA, molecules.
Consequently, median survival can vary from up to at least 15 years in non-high-risk patients who achieve complete remission, as defined by the International Myeloma Working Group, or IMWG, criteria, to approximately three years (from time of initial treatment) in patients with MM who achieve less than partial response, or PR, after ASCT.
Consequently, median survival can vary from up to at least 15 years in non-high-risk patients who achieve complete remission, as defined by the International Myeloma Working Group, or IMWG, criteria, to 20 Table of Contents approximately three years (from time of initial treatment) in patients with MM who achieve less than partial response, or PR, after ASCT.
GFH009 was tested against NCI-H209 SCLC xenografts in athymic nude mice in four treatment groups of eight mice each (n=32) consisting of GFH009 alone, olaparib (a PARP inhibitor) alone, a combined regimen of GFH009 and olaparib, and a vehicle control.
SLS009 was tested against NCI-H209 SCLC xenografts in athymic nude mice in four treatment groups of eight mice each (n=32) consisting of SLS009 alone, olaparib (a PARP inhibitor) alone, a combined regimen of SLS009 and olaparib, and a vehicle control.
As of March 15, 2023, we have received an aggregate of $10.5 million in upfront and milestone payments under our license agreement with 3D Medicines and a total of $191.5 million in potential future development, regulatory and sales milestones, not including future royalties, remains under the license agreement, which milestones are variable in nature and not under our control.
As of March 15, 2024, we have received an aggregate of $10.5 million in upfront and milestone payments under our license agreement with 3D Medicines, or the 3D Medicines Agreement, and a total of $191.5 million in potential future development, regulatory and sales milestones, not including future royalties, remains under the license agreement, which milestones are variable in nature and not under our control.
The purpose of the trial is to determine if the administration of GPS in combination with nivolumab has the potential to demonstrate antitumor immune responses and meaningful clinical activity in the presence of macroscopic disease in MPM patients.
The purpose of the trial was to determine if the administration of GPS in combination with nivolumab has the potential to demonstrate antitumor immune responses and meaningful clinical activity in the presence of macroscopic disease in MPM patients.
If administered on its own, GPS would rapidly degrade and would not have the opportunity to activate the immune system. Therefore, GPS is mixed with Montanide™, a commercially available, non-specific immune adjuvant composed of a natural metabolizable oil and a very refined emulsifier, creating a dense emulsion.
If administered on its own, GPS would rapidly degrade and would not have the opportunity to activate the immune system. Therefore, GPS is mixed with Montanide™, a commercially available, non-specific immune adjuvant composed of a natural metabolizable oil and a very refined emulsifier, creating a water in oil emulsion.
We, together with Merck, determined to focus on 2nd or 3rd line WT1+ relapsed or refractory ovarian metastatic cancer as the primary indication for the study. 16 Table of Contents Ovarian cancer represents an intriguing opportunity to study both the clinical and immunologic effects of GPS in this solid tumor.
We, together with Merck, determined to focus on 2nd or 3rd line WT1+ relapsed or refractory ovarian metastatic cancer as the primary indication for the study. Ovarian cancer represents an intriguing opportunity to study both the clinical and immunologic effects of GPS in this solid tumor.
In relapsed and refractory patients who progressed after the first line standard of care pemetrexed, a similar patient population to that in the GPS nivolumab combination trial, the common treatment regimen is vinorelbine and overall survival in those patients is reported to be between 4.5 and 6.2 months.
In relapsed and refractory patients who progressed after the first line standard of care pemetrexed, a similar patient population to that in the GPS nivolumab combination trial, the common treatment regimen is vinorelbine and OS in those patients is reported to be between 4.5 and 6.2 months.
Next generation CDK9 inhibitors, including GFH009, have potential for higher specificity for CDK9 and lack of binding to other CDKs, potentially resulting in less toxicity and more consistent clinical activity.
Next generation CDK9 inhibitors, including SLS009, have potential for higher specificity for CDK9 and lack of binding to other CDKs, potentially resulting in less toxicity and more consistent clinical activity.
CDK9 activity has been shown to correlate negatively with overall survival in a number of cancer types, including hematologic cancers, such as AML and lymphomas, as well as solid cancers, such as osteosarcoma, pediatric soft tissue sarcomas, melanoma, endometrial, lung, prostate, breast and ovarian.
CDK9 activity has been shown to correlate negatively with OS in a number of cancer types, including hematologic cancers, such as AML and lymphomas, as well as solid cancers, such as osteosarcoma, pediatric soft tissue sarcomas, melanoma, endometrial, lung, prostate, breast and ovarian.
The negative influence of TME factors on the immune response is predicted to be mitigated by PD1 inhibition (by pembrolizumab), thus allowing the patient's own immune cells to invade and destroy cancerous 17 Table of Contents growth deposits specifically sensitized against WT1 (by concomitantly-administered GPS).
The negative influence of TME factors on the immune response is predicted to be mitigated by PD1 inhibition (by pembrolizumab), thus allowing the patient's own immune cells to invade and destroy cancerous growth deposits specifically sensitized against WT1 (by concomitantly-administered GPS).
Clinical Trial Collaboration and Supply Agreement In September 2017, we entered into a clinical trial collaboration and supply agreement through a Merck subsidiary, whereby we agreed with the Merck subsidiary to collaborate on a clinical program to evaluate GPS as it is administered in combination with their PD1 blocker pembrolizumab in a Phase 1/2 clinical trial enrolling patients in up to five cancer indications, including both hematologic malignancies and solid tumors.
Clinical Trial Collaboration and Supply Agreement In September 2017, we entered into a clinical trial collaboration and supply agreement through a Merck subsidiary, whereby we agreed with the Merck subsidiary to collaborate on a clinical program to evaluate GPS as it is administered in combination with their PD-1 inhibitor pembrolizumab in a Phase 1/2 clinical trial enrolling patients in up to five cancer indications, including both hematologic malignancies and solid tumors.
Dose limiting toxicity was observed in one patient, following the 21 Table of Contents second dose of the combination. No additional adverse event burden was observed for the combination as compared to nivolumab monotherapy. The combination induced a high frequency of T- and B-cell immune responses.
Dose limiting toxicity was observed in one patient, following the second dose of the combination. No additional adverse event burden was observed for the combination as compared to nivolumab monotherapy. The combination induced a high frequency of T- and B-cell immune responses.
At any time 29 Table of Contents following the two-year anniversary of the effective date, 3D Medicines has the right to terminate the 3DMed License Agreement for convenience, subject to certain requirements. 3D Medicines may terminate the 3DMed License Agreement upon prior notice to us if the grant of the license to 3D Medicines is prohibited or delayed for a period of time due to a change of U.S. export laws and regulations.
At any time following the two-year anniversary of the effective date, 3D Medicines has the right to terminate the 3D Medicines Agreement for convenience, subject to certain requirements. 3D Medicines may terminate the 3D Medicines Agreement upon prior notice to us if the grant of the license to 3D Medicines is prohibited or delayed for a period of time due to a change of U.S. export laws and regulations.
Under the 3DMed License Agreement, we achieved regulatory milestones relating to agreement upon and completion of a technology transfer plan in March 2021 and June 2021, respectively, for $1 million each and upon approval by the NMPA in March 2022 of an IND for a Phase 1 study, which triggered a $1.0 million milestone payment to us.
Under the 3D Medicines Agreement, we achieved regulatory milestones relating to agreement upon and completion of a technology transfer plan in March 2021 and June 2021, respectively, for $1.0 million each and upon approval by the NMPA in March 2022 of an IND for a Phase 1 study, which triggered a $1.0 million milestone payment to us.
Across multiple cancer cell line histologies, a smaller concentration of GFH009 is needed to achieve the same inhibitory effect as compared to the exact molecular copy of VIP152. In a mouse AML xenograft model, the lowest tumor growth and the highest AML cell killing was achieved by GHF009.
Across multiple cancer cell line histologies, a smaller concentration of SLS009 is needed to achieve the same inhibitory effect as compared to the exact molecular copy of enitociclib (VIP152). In a mouse AML xenograft model, the lowest tumor growth and the highest AML cell killing was achieved by SLS009.
Many patients will achieve a CR2 clinical response with additional chemotherapy. However, almost all patients will relapse after a short remission interval of nine to 11 months, with median overall survival of nine to 12 months.
Many patients will achieve a CR2 clinical response with additional chemotherapy. However, almost all patients will relapse after a short remission interval of nine to 11 months, with median OS of nine to 12 months.
The secondary endpoint of the study was immune response, and the exploratory endpoints included landmark one-year PFS rate compared to historical controls and correlative analyses between clinical and immune responses.
The secondary endpoint of the study was immune response, and the exploratory endpoints included landmark one-year PFS rate compared to historical controls and correlative analyses between clinical and 21 Table of Contents immune responses.
Montanide is co-administered with GPS by subcutaneous injection to optimally activate cellular and humoral immune responses in vaccinated patients. Additionally, prior to the administration of GPS, patients receive another immune adjuvant, granulocyte-macrophage colony-stimulating factor, or GM-CSF, to non-specifically stimulate and activate antigen-presenting cells, or APCs, in the vicinity of the subcutaneous injection of GPS.
The GPS and Montanide emulsion is administered by subcutaneous injection to optimally activate cellular and humoral immune responses in vaccinated patients. Additionally, prior to the administration of GPS, patients receive another immune adjuvant, granulocyte-macrophage colony-stimulating factor, or GM-CSF, to non-specifically stimulate and activate antigen-presenting cells, or APCs, in the vicinity of the subcutaneously injected GPS.
Under the terms of the agreement, we achieved a clinical development milestone at the end of the fourth quarter of 2018, triggering a $0.5 million payment in the first quarter of 2019.
Under the terms of the agreement, we achieved a clinical 30 Table of Contents development milestone at the end of the fourth quarter of 2018, triggering a $0.5 million payment in the first quarter of 2019.
Under our current assumptions with respect to completion of enrollment and the estimated survival times for both the treated and control groups in the study, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 60 events (deaths) per the protocol will occur by the end of 2023 or early 2024 and the final analysis after 80 events will occur by the end of 2024.
Under our current assumptions with respect to enrollment and the estimated survival times for both the treated and control groups in the study, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 60 events (deaths) per the protocol will occur in the first half of 2024 and the final analysis after 80 events will occur by the end of 2024.
Based upon our current assumptions with respect to completion of enrollment and the estimated survival times for both the treated and control groups, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 60 events per the protocol will occur by the end of 2023 or early 2024 and that the final analysis after 80 events will occur by the end of 2024.
Based upon our current assumptions with respect to completion of enrollment and the estimated survival times for both the treated and control groups, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 60 events per the protocol will occur in the first half of 2024 and that the final analysis after 80 events will occur by the end of 2024.
Key Attributes Higher selectivity : In preclinical studies, GFH009 has demonstrated higher selectivity for CDK9 than other members of the human kinome when compared to other non-oral CDK9 inhibitors currently in active clinical development in the United States for hematological cancers, including AZD-4573 being developed by AstraZeneca and BAY-1251152 (now VIP152) being developed by Vincerx Pharma.
Key Attributes Higher selectivity : In preclinical studies, SLS009 has demonstrated higher selectivity for CDK9 than other members of the human kinome when compared to other non-oral CDK9 inhibitors currently in active clinical development in the United States for hematological cancers, including AZD-4573 being developed by AstraZeneca and enitociclib (VIP152) being developed by Vincerx Pharma.
In patients treated with other chemotherapy regimens, such as carboplatin and irinotecan, median overall survival is reported to be approximately 7.0 months.
In patients treated with other chemotherapy regimens, such as carboplatin and irinotecan, median OS is reported to be approximately 7.0 months.
Because these analyses are event driven, they may become available at different times than currently expected. We have agreed with our partner in China, 3D Medicines, for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20 patients from mainland China.
Because these analyses are event driven, they are difficult to predict with any certainty and may become available at different times than currently expected. We have agreed with our partner in China, 3D Medicines, for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20-25 patients from mainland China.
GPS was granted Orphan Drug Product Designations from the FDA, as well as Orphan Medicinal Product Designations from the European Medicines Agency, or EMA, for GPS in AML, MPM, and multiple myeloma, or MM, as well as Fast Track Designation for AML, MPM, and MM from the FDA.
GPS was granted Orphan Drug Designations, or ODD, from the FDA, as well as orphan medicines designations from the European Medicines Agency, or EMA, for GPS in AML, MPM, and multiple myeloma, or MM, as well as Fast Track designations for AML, MPM, and MM from the FDA.
The study will also investigate the tolerability of the combination, evaluate the immunogenicity of the two agents administered together, by CD4+ and CD8+ T-lymphocytes (both peripherally and at the tumor site), and gauge the degree of clinical benefit by assessment of the overall response rate with the combination in comparison with that reported with nivolumab alone in historical comparable patient populations.
The study also investigated the tolerability of the combination, evaluated the immunogenicity of the two agents administered together, by CD4+ and CD8+ T-lymphocytes (both peripherally and at the tumor site), and gauged the degree of clinical benefit by assessment of the overall response rate with the combination in comparison with that reported with nivolumab alone in historical comparable patient populations.
This process activates the CD4 and CD8 cells and sensitizes them to the key 25 epitopes of WT1, thus initiating the process of short- and long-term T-cell-mediated immunity against WT1. 8 Table of Contents Key Features The following table summarizes the key features of GPS: Key features of an Optimal Cancer Active Immunizer Therapeutic GPS Properties and Clinical Strategy Selecting the right target antigen and epitopes within that antigen Four peptides and 25 epitopes selected optimally with the objective of ensuring: - optimal MHC complex presentation; - specificity across different HLA types; - production of both CD4 and CD8 activated cells; and - the ability to apply the heteroclitic principle, as described above, to overcome tolerance.
This process activates the CD4 and CD8 cells and sensitizes them to the key 25 epitopes of WT1, thus initiating the process of short- and long-term T-cell-mediated immunity against WT1. 8 Table of Contents Key Features The following table summarizes the key features of GPS: Key features of an Optimal Cancer Active Immunizer Therapeutic GPS Properties and Clinical Strategy Selecting the right target antigen and epitopes within that antigen Four peptides and 25 epitopes selected optimally with the objective of ensuring: - optimal MHC complex presentation; - specificity across different HLA types; - activation of both CD4 and CD8 T-cells; and - enhancing immune response and overcoming tolerance (the heteroclitic principle).
The primary endpoint of the REGAL study is overall survival. We plan to enroll approximately 125 to 140 patients at approximately 95 clinical sites in North America, Europe and Asia with a planned interim safety, efficacy and futility analysis after 60 events (deaths).
The primary endpoint of the REGAL study is overall survival, or OS. We planned to enroll approximately 125 to 140 patients at approximately 95 clinical sites in North America, Europe and Asia with a planned interim safety, efficacy and futility analysis after 60 events (deaths). In March 2024, we announced the completion of enrollment.
We expect this study will be used as the basis for a BLA submission, subject to a statistically significant and clinically meaningful data outcome and agreement with the FDA. The REGAL study is expected to enroll approximately 125 to 140 patients at approximately 95 clinical sites in North America, Europe and Asia.
We expect this study will be used as the basis for a BLA submission, subject to a statistically significant and clinically meaningful data outcome and agreement with the FDA. The REGAL study was expected to enroll approximately 125 to 140 patients (not including potentially 20-25 patients from mainland China) at approximately 95 clinical sites in North America, Europe and Asia.
We believe that the activation of CD8 cells by GPS could lead to direct cancer cell killing, or cytotoxicity, and the eventual establishment of immunologic memory against a WT1-expressing cancer.
GPS is designed to elicit both CD4 and CD8 cell immune responses. We believe that the activation of CD8 cells by GPS could lead to direct cancer cell killing, or cytotoxicity, and the eventual establishment of immunologic memory against a WT1-expressing cancer.
The 3DMed License Agreement includes customary representations and warranties, covenants and indemnification obligations for a transaction of this nature.
The 3D Medicines Agreement includes customary representations and warranties, covenants and indemnification obligations for a transaction of this nature.
In the second quarter of 2022, we received a $1.0 million milestone payment which was triggered by the NMPA’s approval of the IND.
In the second quarter of 2022, we received a $1.0 million milestone payment which was triggered by the NMPA’s approval of the IND. Enrollment in this study has been completed.
CDK9, together with cyclin T1, forms positive transcription elongation factor b, or P-TEFb, which plays an important role in allowing long RNA strands to be quickly transcribed.
Mechanism of Action CDK9 is a major cancer target. CDK9, together with cyclin T1, forms positive transcription elongation factor b, or P-TEFb, which plays an important role in allowing long RNA strands to be quickly transcribed.
No new serious adverse events were noted during the longer follow-up period. GFH009 Overview GFH009 is a next generation highly selective CDK9 inhibitor which we in-licensed from GenFleet in March 2022. We have worldwide development and commercialization rights, except for Greater China. See Strategic Collaborations and License Agreements - Exclusive License Agreement with GenFleet Therapeutics (Shanghai), Inc.
No new serious adverse events were noted during the longer follow-up period. SLS009: Highly Selective Next Generation CDK9 Inhibitor Overview SLS009 is a next generation highly selective CDK9 inhibitor which we in-licensed from GenFleet in March 2022. We have worldwide development and commercialization rights, except for Greater China.
In November 2022, we reported topline clinical and initial immune response data from this study, which showed that treatment with the combination of GPS and pembrolizumab compared favorably to treatment with anti-PD-1 therapy alone in a similar patient population. We plan to present final data from this study at a medical conference in the first half of 2023.
In November 2022, we reported topline clinical and initial immune response data from this study, which showed that treatment with the combination of GPS and pembrolizumab compared favorably to treatment with anti-PD-1 therapy alone in a similar patient population and presented final data from this study at the International Gynecologic Cancer Society 2023 Annual Global Meeting in November 2023.
These models utilize patient derived xenografts, many of which are refractory to current standard of care treatments, from high-risk childhood cancers and have undergone comprehensive genomic characterization to demonstrate close resemblance to genetic alterations seen in the respective human cancers.
Each PIVOT principal investigator has expertise in preclinical testing of childhood cancer in vivo models. These models utilize patient derived xenografts, many of which are refractory to current standard of care treatments, from 29 Table of Contents high-risk childhood cancers and have undergone comprehensive genomic characterization to demonstrate close resemblance to genetic alterations seen in the respective human cancers.
GFH009 On March 31, 2022, we entered into an exclusive license agreement, or the GFH009 Agreement, with GenFleet that grants rights to us for the development and commercialization of GFH009, a highly selective small molecule CDK9 inhibitor, across all therapeutic and diagnostic uses worldwide, except for Greater China.
SLS009 On March 31, 2022, we entered into an exclusive license agreement, or the GenFleet Agreement, with GenFleet Therapeutics (Shanghai), Inc., or GenFleet, a clinical-stage biotechnology company developing cutting-edge therapeutics in oncology and immunology, that grants rights to us for the development and commercialization of SLS009, a highly selective small molecule CDK9 inhibitor, across all therapeutic and diagnostic uses worldwide, except for Greater China.
We are providing GPS and Bristol-Myers Squibb is providing nivolumab for this study. The principal investigator for the study is Dr. Marjorie G. Zauderer, MD, Co-Director, Mesothelioma Program and Associate Attending Physician in the Thoracic Oncology Service, Department of Medicine at MSK. The IST is planned to accrue a minimum of 10 patients.
We provided GPS and Bristol-Myers Squibb provided nivolumab for this study. The principal investigator for the study was Dr. Marjorie G. Zauderer, MD, Co-Director, Mesothelioma Program and Associate Attending Physician in the Thoracic Oncology Service, Department of Medicine at MSK.
The final topline data from this study demonstrated that the combination of GPS and pembrolizumab could halt or slow down the progression in highly active disease refractory to other therapies.
The final topline data from this study demonstrated that the combination of GPS and pembrolizumab could halt or slow down the progression in highly active disease refractory to other therapies. 17 Table of Contents On February 1, 2022, we announced the completion of enrollment in the study.
We plan to report final data from this study at a medical conference in the first half of 2023. • Median OS was 18.4 months compared to 13.8 months with pembrolizumab alone in a in a checkpoint inhibitor single agent study in a similar patient population treated with checkpoint inhibitor alone. • Median progression-free survival, or PFS, was 12 weeks compared to 8 weeks in a checkpoint inhibitor single agent study in a similar patient population treated with checkpoint inhibitor alone. • The overall response rate of the trial was 6.3 percent with a DCR of 50.1 percent at a median follow-up of 14.4 months.
On November 10, 2022, we reported the following confirmatory topline data from 17 evaluable patients in the study. • Median OS was 18.4 months compared to 13.8 months with pembrolizumab alone in a in a checkpoint inhibitor single agent study in a similar patient population treated with checkpoint inhibitor alone. • Median progression-free survival, or PFS, was 12 weeks compared to 8 weeks in a checkpoint inhibitor single agent study in a similar patient population treated with checkpoint inhibitor alone. • The overall response rate of the trial was 6.3 percent with a DCR of 50.1 percent at a median follow-up of 14.4 months.
We plan to present final data from this study at a medical conference in the first half of 2023. 4 Table of Contents In February 2020, a Phase I open-label investigator-sponsored clinical trial of GPS, in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo ® ), in patients with malignant pleural mesothelioma, or MPM, who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy was commenced at MSK.
In February 2020, a Phase 1 open-label investigator-sponsored clinical trial of GPS, in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo ® ), in patients with malignant pleural mesothelioma, or MPM, who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy was commenced at MSK.
GFH009 has been shown to block activity of fewer kinases, other than CDK9, than these competing development candidates, as. The human kinome is a set of all 538 kinases, which are enzymes that play essential functions by catalyzing protein phosphorylation.
The human kinome is a set of all 538 kinases, which are enzymes that play essential functions by catalyzing protein phosphorylation. SLS009 has been shown to block activity of fewer kinases, other than CDK9, than these competing development candidates which, as demonstrated in clinical trials, has resulted in a better safety profile with fewer treatment related adverse events.
GFH009 testing through the program involves a two-phase research plan for PK and efficacy in pediatric tumors. In the first phase, PIVOT principal investigators will conduct PK experiments to confirm the appropriate dose and route administration for GFH009. In the second phase, monotherapy in vivo efficacy testing for GFH009 will be performed by PIVOT investigators.
SLS009 testing through the program involves a three-phase research plan for PK, tolerability, and efficacy in pediatric tumors. In the first phase, PIVOT principal investigators will conduct PK experiments to confirm the appropriate dose and route administration for SLS009. In the second phase, tolerability of the dose and route of administration selected from the PK phase will be determined.
In this mouse model, there was significantly more toxicity, including weight loss, observed with VIP152 treated mice. 22 Table of Contents Cell lines GFH009 IC50 (72h) VIP152 IC50 (72h) AML 4.8 ~33 nM 15.9 ~136 nM Lymphoma 10.6~77.9 nM 16.6 ~138 nM MM 33.6 ~151 nM 51.4 ~397 nM ALL 13.4~35.7 nM 42.3 ~68.6 nM CLL 25 nM 40.7 nM 23 Table of Contents Pharmacokinetic, or PK, Data: Initial PK data observed from the ongoing Phase 1 trial are shown below.
Cell lines SLS009 IC50 (72h) VIP152 IC50 (72h) AML 4.8 ~33 nM 15.9 ~136 nM Lymphoma 10.6~77.9 nM 16.6 ~138 nM MM 33.6 ~151 nM 51.4 ~397 nM ALL 13.4~35.7 nM 42.3 ~68.6 nM CLL 25 nM 40.7 nM 23 Table of Contents Pharmacokinetic, or PK, Data: PK data observed from the completed Phase 1 trial are shown below.
Because these analyses are event driven, they may occur at a different time than currently expected.
Because these analyses are event driven, they are difficult to predict with any certainty and may occur at a different time than currently expected.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

199 edited+167 added−67 removed351 unchanged
Biggest changeAdditionally, the process of manufacturing our product candidates is complex, highly regulated and subject to several risks, including but not limited to: • product loss due to contamination, equipment failure or improper installation or operation of equipment, or vendor or operator error; • product loss or manufacturing failure due to failure of temperature controls in production, storage or transit; • product loss, which may not be covered by insurance, due to global conflict and unrest, including related inoperability of shipping lanes; • reduced production yields, product defects, and other supply disruptions due to deviations, even minor, from normal manufacturing and distribution processes; • unexpected product defects; • microbial, viral, or other contaminations in our product candidates or in the manufacturing facilities in which our product candidates are made, which may result in the closure of such manufacturing facilities for an extended period of time to allow for the investigation and remediation of the contamination; • adverse impact on the active ingredient of GPS as a result of potential contamination from the presence of heavy metals which can lead to higher than acceptable rates of impurities resulting in the active ingredient being unacceptable for use; and • adverse impact on the manufacturing of GPS as a result of potential contamination from excess water and oxygen which can lead to higher than acceptable levels of impurities resulting in the drug product being unacceptable for use. 73 Table of Contents Any adverse developments affecting manufacturing operations for our product candidates may result in shipment delays, inventory shortages, lot failures, withdrawals or recalls or other interruptions in the supply of our drug substance and drug product, which could delay the development of our product candidates.
Biggest changeAdditionally, the process of manufacturing our product candidates is complex, highly regulated and subject to several risks, including but not limited to: • product loss due to contamination, equipment failure or improper installation or operation of equipment, or vendor or operator error; • product loss or manufacturing failure due to failure of temperature controls in production, storage or transit; • product loss, which may not be covered by insurance, due to global conflict and unrest, including related inoperability of shipping lanes; • reduced production yields, product defects, and other supply disruptions due to deviations, even minor, from normal manufacturing and distribution processes; • inability to procure or delay in procuring raw materials and reagents for manufacturing products; • unexpected product defects; 78 Table of Contents • microbial, viral, or other contaminations in our product candidates or in the manufacturing facilities in which our product candidates are made, which may result in the closure of such manufacturing facilities for an extended period of time to allow for the investigation and remediation of the contamination; • adverse impact on the active ingredient of GPS as a result of potential contamination from the presence of heavy metals which can lead to higher than acceptable rates of impurities resulting in the active ingredient being unacceptable for use; and • adverse impact on the manufacturing of GPS as a result of potential contamination from excess humidity and oxygen which can lead to higher than acceptable levels of impurities resulting in the drug product being unacceptable for use.
In addition, Orphan Drug Product exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.
In addition, Orphan product exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.
In addition, our clinical trials insurance coverage has exclusions for global conflict and unrest or the type currently ongoing in Ukraine. We may be unable to meet our requirements for our product candidates if there were a catastrophic event or failure of our current manufacturing facility or processes.
In addition, our clinical trials insurance coverage has exclusions for global conflict and unrest of the type currently ongoing in Ukraine. We may be unable to meet our requirements for our product candidates if there were a catastrophic event or failure of our current manufacturing facility or processes.
Although we have taken steps to protect our trade secrets and unpatented know-how, by entering into confidentiality agreements with third parties, and proprietary information and invention agreements with certain employees, consultants and advisors, third parties may still obtain this information or we may be unable to protect our rights.
Although we have taken steps to protect our trade secrets and unpatented know-how by entering into confidentiality agreements with third parties and proprietary information and invention agreements with our employees and certain consultants and advisors, third parties may still obtain this information or we may be unable to protect our rights.
In addition, the issuance of such a significant number of shares of our may cause a decrease in the trading price of our common stock. Anti-takeover provisions of our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws and provisions of Delaware law could delay or prevent a change of control.
In addition, the issuance of such a significant number of shares of our common stock may cause a decrease in the trading price of our common stock. Anti-takeover provisions of our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws and provisions of Delaware law could delay or prevent a change of control.
Additionally, if any of our product candidates receives regulatory approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including that: • we may be forced to suspend marketing of such product; • regulatory authorities may withdraw their approvals of such product; • regulatory authorities may require additional warnings on the label that could diminish the usage or otherwise limit the commercial success of such products; • we may be required to conduct post-marketing studies; • we may be required to change or the health care setting in which the way the product is administered; • we could be sued and held liable for harm caused to subjects or patients; and • our reputation may suffer.
Additionally, if any of our product candidates receives regulatory approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including that: • we may be forced to suspend marketing of such product; • regulatory authorities may withdraw their approvals of such product; • regulatory authorities may require additional warnings on the label that could diminish the usage or otherwise limit the commercial success of such product; • we may be required to conduct post-marketing studies; • we may be required to change or the health care setting in which the way the product is administered; • we could be sued and held liable for harm caused to subjects or patients; and • our reputation may suffer.
If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with applicable regulatory requirements, a regulatory agency may take the following actions, any of which could significantly and adversely affect supplies of our products: • issue Form 483 notices of observations, warning letters or untitled letters; • mandate modifications to promotional materials or require us to provide corrective information to health care practitioners; • require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance; 71 Table of Contents • seek an injunction or impose civil or criminal penalties or monetary fines; • suspend or withdraw regulatory approval; • suspend any ongoing clinical trials; • refuse to approve pending applications or supplements to applications filed by us; • suspend or impose restrictions on operations, including costly new manufacturing requirements; or • seize or detain products, refuse to permit the import or export of products, or require us to initiate a product recall.
If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with applicable regulatory requirements, a regulatory agency may take the following actions, any of which could significantly and adversely affect supplies of our products: • issue Form 483 notices of observations, warning letters or untitled letters; 76 Table of Contents • mandate modifications to promotional materials or require us to provide corrective information to health care practitioners; • require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance; • seek an injunction or impose civil or criminal penalties or monetary fines; • suspend or withdraw regulatory approval; • suspend any ongoing clinical trials; • refuse to approve pending applications or supplements to applications filed by us; • suspend or impose restrictions on operations, including costly new manufacturing requirements; or • seize or detain products, refuse to permit the import or export of products, or require us to initiate a product recall.
Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
Such scrutiny has resulted in several congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
Because this program represents a new approach to cancer immunotherapy for the treatment of cancer and other diseases, developing and commercializing GPS subjects us to a number of challenges, including: 61 Table of Contents • obtaining regulatory approval from the FDA and other regulatory authorities, which have very limited experience with the development and commercialization of WT1 cancer immunotherapies; • obtaining the components required for the administration of GPS (i.e., GPS, GM-CSF, and Montanide) from three separate sources, the subsequent separate storage requirements for each of these components and the separate delivery of these components to the administration location; • utilizing GPS in combination with other therapies, which may increase the risk of adverse side effects; • sourcing clinical and, if approved, commercial supplies for the materials used to manufacture and process GPS; • developing a manufacturing process used in connection with GPS that will yield a satisfactory product that is safe, effective, scalable and profitable; • establishing sales and marketing capabilities after obtaining any regulatory approval to gain market acceptance; and • obtaining coverage and adequate reimbursement from third-party payors and government authorities.
Because this program represents a new approach to cancer immunotherapy for the treatment of cancer and other diseases, developing and commercializing GPS subjects us to a number of challenges, including: • obtaining regulatory approval from the FDA and other regulatory authorities, which have very limited experience with the development and commercialization of WT1 cancer immunotherapies; • obtaining the components required for the administration of GPS (i.e., GPS, GM-CSF, and Montanide) from three separate sources, the subsequent separate storage requirements for each of these components and the separate delivery of these components to the administration location; • utilizing GPS in combination with other therapies, which may increase the risk of adverse side effects; • sourcing clinical and, if approved, commercial supplies for the materials used to manufacture and process GPS; • developing a manufacturing process used in connection with GPS that will yield a satisfactory product that is safe, effective, scalable and profitable; • establishing sales and marketing capabilities after obtaining any regulatory approval to gain market acceptance; and • obtaining coverage and adequate reimbursement from third-party payors and government authorities.
Clinical trials may be delayed, suspended or prematurely terminated for a variety of reasons, such as: • delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a clinical trial design that we are able to execute; • delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a trial; • delay or failure in reaching agreement on acceptable 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 trial sites; • delay or failure in obtaining IRB approval or the approval of other reviewing entities, including comparable foreign regulatory authorities, to conduct a clinical trial at each site; • withdrawal of clinical trial sites from our clinical trials or the ineligibility of a site to participate in our clinical trials; • the impact of COVID-19 on the operations of clinical sites; • clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial; • inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication; 65 Table of Contents • failure of our third-party clinical trial managers, CROs, clinical trial sites, contracted laboratories or other third-party vendors to satisfy their contractual duties, meet expected deadlines or return trustworthy data; • delay or failure in adding new trial sites; • delay or failure in recruiting and enrolling suitable subjects to participate in a trial; • delay or failure in subjects completing a trial or returning for post-treatment follow-up; • interim results or data that are ambiguous or negative or are inconsistent with earlier results or data; • alteration of trial design necessitated by re-evaluation of design assumptions based upon observed data; • feedback from the FDA, the IRB, DSMB or a comparable foreign regulatory authority, or results from earlier stage or concurrent preclinical studies and clinical trials, that might require modification to the protocol for a trial; • a decision by the FDA, the IRB, a comparable foreign regulatory authority, or us, or a recommendation by a DSMB or comparable foreign regulatory authority, to suspend or terminate clinical trials at any time for safety issues or for any other reason; • unacceptable risk-benefit profile, unforeseen safety issues or adverse side effects; • failure to demonstrate a benefit from using a product candidate; • difficulties in manufacturing or obtaining from third parties sufficient quantities of a product candidate to start or to use in clinical trials; • lack of adequate funding to continue a trial, including the incurrence of unforeseen costs due to enrollment delays, requirements to conduct additional studies or increased expenses associated with the services of our CROs and other third parties; or • changes in governmental regulations or administrative actions or lack of adequate funding to continue a clinical trial.
Clinical trials may be delayed, suspended or prematurely terminated for a variety of reasons, such as: • delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a clinical trial design that we are able to execute; • delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a trial; • delay or failure in reaching agreement on acceptable 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 trial sites; • delay or failure in obtaining IRB approval or the approval of other reviewing entities, including comparable foreign regulatory authorities, to conduct a clinical trial at each site; • withdrawal of clinical trial sites from our clinical trials or the ineligibility of a site to participate in our clinical trials; • clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial; • inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication; • failure of our third-party clinical trial managers, CROs, clinical trial sites, contracted laboratories or other third-party vendors to satisfy their contractual duties, meet expected deadlines or return trustworthy data; • delay or failure in adding new trial sites; • delay or failure in recruiting and enrolling suitable subjects to participate in a trial; • delay or failure in subjects completing a trial or returning for post-treatment follow-up; • interim results or data that are ambiguous or negative or are inconsistent with earlier results or data; • alteration of trial design necessitated by re-evaluation of design assumptions based upon observed data; • feedback from the FDA, or foreign regulatory authority, the IRB, or DSMB, or results from earlier stage or concurrent preclinical studies and clinical trials, that might require modification to the protocol for a trial; • a decision by the FDA or foreign regulatory authority, the IRB, or us, or a recommendation by a DSMB or comparable foreign regulatory authority, to suspend or terminate clinical trials at any time for safety issues or for any other reason; • unacceptable risk-benefit profile, unforeseen safety issues or adverse side effects; 69 Table of Contents • failure to demonstrate a benefit from using a product candidate; • difficulties in manufacturing or obtaining from third parties sufficient quantities of a product candidate to start or to use in clinical trials; • lack of adequate funding to continue a trial, including the incurrence of unforeseen costs due to enrollment delays, requirements to conduct additional studies or increased expenses associated with the services of our CROs and other third parties; or • changes in governmental regulations or administrative actions or lack of adequate funding to continue a clinical trial.
If the contracted manufacturing source is unreliable or unavailable, we may not be able to manufacture clinical drug supplies of our product candidates, and our preclinical and clinical testing programs may not be able to move forward and our entire business plan could fail.
If the contracted manufacturing source is unreliable or unavailable, we may not be able to manufacture clinical supplies of our product candidates, and our preclinical and clinical testing programs may not be able to move forward and our entire business plan could fail.
Upon inspection by a given regulatory authority, such regulatory authority could determine that any of our clinical trials are not in compliance with applicable requirements. In addition, our clinical trials must be conducted with product produced under cGMP and other requirements.
Upon inspection by a given regulatory authority, such regulatory authority could determine that any of our clinical trials are not in compliance with applicable requirements. In addition, our clinical trials must be conducted with product candidates produced under cGMP and other requirements.
Many factors may affect our ability to identify, enroll and maintain qualified patients, including the following: • shortages of personnel at our clinical sites; • eligibility criteria of our ongoing and planned clinical trials with specific characteristics appropriate for inclusion in our clinical trials; • design of the clinical trial; • size and nature of the patient population; • patients’ perceptions as to risks and benefits of the product candidate under study and the participation in a clinical trial generally in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • the availability and efficacy of competing therapies and clinical trials; 62 Table of Contents • pendency of other trials underway in the same patient population; • willingness of physicians to participate in our planned clinical trials; • severity of the disease under investigation; • proximity of patients to clinical sites; • patients who do not complete the trials for personal reasons; and • issues with contract research organizations, or CROs, and/or with other vendors that handle our clinical trials.
Many factors may affect our ability to identify, enroll and maintain qualified patients, including the following: • shortages of personnel at our clinical sites; • eligibility criteria of our ongoing and planned clinical trials with specific characteristics appropriate for inclusion in our clinical trials; • design of the clinical trial; • size and nature of the patient population; • patients’ perceptions as to risks and benefits of the product candidate under study and the participation in a clinical trial generally in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • the availability and efficacy of competing therapies and clinical trials; • pendency of other trials underway in the same patient population; • willingness of physicians to participate in our planned clinical trials; • severity of the disease under investigation; • proximity of patients to clinical sites; • patients who do not complete the trials for personal reasons; and • issues with contract research organizations, or CROs, and/or with other vendors that handle our clinical trials.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of health care services to contain or reduce costs of health care and/or impose price controls may adversely affect: • the demand for our product candidates, if we obtain regulatory approval; • our ability to receive or set a price that we believe is fair for our products; • our ability to generate revenue and achieve or maintain profitability; • our ability to enjoy or maintain market exclusivity; • the level of taxes that we are required to pay; and 89 Table of Contents • the availability of capital.
The continuing efforts of the government, insurance 96 Table of Contents companies, managed care organizations and other payors of health care services to contain or reduce costs of health care and/or impose price controls may adversely affect: • the demand for our product candidates, if we obtain regulatory approval; • our ability to receive or set a price that we believe is fair for our products; • our ability to generate revenue and achieve or maintain profitability; • our ability to enjoy or maintain market exclusivity; • the level of taxes that we are required to pay; and • the availability of capital.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for any product candidates or products that we may develop; • termination of clinical trial sites or entire clinical trial programs; • injury to our reputation and significant negative media attention; • withdrawal of clinical trial participants; • significant costs to defend the related litigation; • substantial monetary awards to trial subjects or patients; 92 Table of Contents • loss of revenue; • diversion of management and scientific resources from our business operations; and • the inability to commercialize any products that we may develop.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for any product candidates or products that we may develop; • termination of clinical trial sites or entire clinical trial programs; • injury to our reputation and significant negative media attention; • withdrawal of clinical trial participants; • significant costs to defend the related litigation; 102 Table of Contents • substantial monetary awards to trial subjects or patients; • loss of revenue; • diversion of management and scientific resources from our business operations; and • the inability to commercialize any products that we may develop.
Risks associated with conducting operations in foreign countries include: • differing regulatory requirements for drug approvals and regulation of approved drugs in foreign countries; more stringent privacy requirements for data to be supplied to our operations in the United States, e.g. , GDPR the in the European Union; • unexpected changes in tariffs, trade barriers and regulatory requirements; economic weakness, including inflation, or political instability in particular foreign economies and markets; compliance with tax, 66 Table of Contents employment, immigration and labor laws for employees living or traveling abroad; foreign taxes, including withholding of payroll taxes; • differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls; • foreign currency fluctuations, which could result in increased operating expenses or reduced revenues, and other obligations incident to doing business or operating in another country; • workforce uncertainty in countries where labor unrest is more common than in the United States; • continued uncertainties related to the withdrawal of the United Kingdom from the European Union (known as "Brexit") and its financial, trade, regulatory and legal implications, which could lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which EU laws to replace or replicate, and which may further create global economic uncertainty, which could materially adversely affect our business, business opportunities, results of operations, financial condition, and cash flows; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad, including those that may result from the recent coronavirus outbreak; and • business interruptions resulting from geopolitical actions, including war and terrorism.
Risks associated with conducting operations in foreign countries include: • differing regulatory requirements for drug approvals and regulation of approved drugs in foreign countries; more stringent privacy requirements for data to be supplied to our operations in the United States, e.g. , GDPR in the EU; • unexpected changes in tariffs, trade barriers and regulatory requirements; economic weakness, including inflation, or political instability in particular foreign economies and markets; compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; foreign taxes, including withholding of payroll taxes; • differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls; • foreign currency fluctuations, which could result in increased operating expenses or reduced revenues, and other obligations incident to doing business or operating in another country; • workforce uncertainty in countries where labor unrest is more common than in the United States; • continued uncertainties related to the withdrawal of the United Kingdom from the EU (known as "Brexit") and its financial, trade, regulatory and legal implications, which could lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which EU laws to replace or replicate, and which may further create global economic uncertainty, which could materially adversely affect our business, business opportunities, results of operations, financial condition, and cash flows; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad, including those that may result from the recent coronavirus outbreak; and • business interruptions resulting from geopolitical actions, including war and terrorism.
Additionally, starting in payment year 2026, CMS will negotiate drug prices annually for a select number of single source Part D drugs without generic or biosimilar competition. CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.
Additionally, starting for payment year 2026, CMS will negotiate drug prices annually for a select number of single source Part D drugs without generic or biosimilar competition. CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.
The market price of shares of our common stock could continue to fluctuate significantly for many reasons, including the following factors: • reports of the results of our clinical trials regarding the safety or efficacy of our product candidates and surrogate markers; • announcements of regulatory developments or technological innovations by us or our competitors; • announcements of business or strategic transactions or our success in finalizing such a transaction; • announcements of legal or regulatory actions against us or any adverse outcome of any such actions; • changes in our relationships with our licensors, licensees and other strategic partners; • low volume in the number of shares of our common stock traded on Nasdaq; • our quarterly operating results; 98 Table of Contents • announcements of dilutive financing; • announcements of additional potential reverse stock split; • developments in patent or other technology ownership rights; • additional funds may not be available on terms that are favorable to us and, in the case of equity financings, may result in dilution to our stockholders; • government regulation of drug pricing; and • general market conditions and other factors unrelated to our operating performance or the operating performance of our competitors, including deteriorating market conditions due to investor concerns regarding inflation and hostilities between Russia and Ukraine.
The market price of shares of our common stock could continue to fluctuate significantly for many reasons, including the following factors: • reports of the results of our clinical trials regarding the safety or efficacy of our product candidates and surrogate markers; • announcements of regulatory developments or technological innovations by us or our competitors; • announcements of business or strategic transactions or our success in finalizing such a transaction; • announcements of legal or regulatory actions against us or any adverse outcome of any such actions; • changes in our relationships with our licensors, licensees and other strategic partners; • low volume in the number of shares of our common stock traded on Nasdaq; • our quarterly operating results; • announcements of dilutive financing; • announcements of additional potential reverse stock split; 108 Table of Contents • developments in patent or other technology ownership rights; • additional funds may not be available on terms that are favorable to us and, in the case of equity financings, may result in dilution to our stockholders; • government regulation of drug pricing; and • general market conditions and other factors unrelated to our operating performance or the operating performance of our competitors, including deteriorating market conditions due to investor concerns regarding inflation and hostilities between Russia and Ukraine and Israel and Hamas.
Even if any of our product candidates were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA, EMA or other comparable foreign regulatory authorities could revoke approval of the therapy used in combination with any of our product candidates, or safely, efficacy, manufacturing or supply issues could arise with these existing therapies.
Even if any of our product candidates were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA, EMA or other comparable foreign regulatory authorities could revoke approval of the therapy used in combination with any of our product candidates, or safety, efficacy, manufacturing or supply issues could arise with these existing therapies.
Our third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside of the United States.
Our third-party manufacturers may not be able to comply with applicable cGMP regulations or similar regulatory requirements outside of the United States.
Section 203 could operate to delay or prevent a change of control of us. 100 Table of Contents If our common stock becomes subject to the penny stock rules, it may be more difficult to sell our common stock. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
Section 203 could operate to delay or prevent a change of control of us. If our common stock becomes subject to the penny stock rules, it may be more difficult to sell our common stock. 110 Table of Contents The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts. We expect to expend substantial resources for the foreseeable future to continue the clinical development and manufacturing of GPS, in particular the Phase 3 study of GPS in AML, and GFH009.
If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts. We expect to expend substantial resources for the foreseeable future to continue the clinical development and manufacturing of GPS, in particular the Phase 3 study of GPS in AML, and SLS009.
Any such regulatory approvals would be subject to ongoing requirements by the FDA and comparable foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, adverse event reporting, safety surveillance, import, export, advertising, promotion, recordkeeping and reporting of safety and other post-marketing information.
In addition, any such regulatory approvals would be subject to ongoing requirements by the FDA and comparable foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, adverse event reporting, safety surveillance, import, export, advertising, promotion, recordkeeping and reporting of safety and other post-marketing information.
Regardless of whether or not the ACA is changed or modified by Congress or the Supreme Court, we expect both government and private health plans to continue to require health care providers, including health care providers that may one day purchase our products, to contain costs and demonstrate the value of the therapies they provide.
Regardless of whether or not the ACA is changed or modified by Congress or the U.S. Supreme Court, we expect both government and private health plans to continue to require health care providers, including health care providers that may one day purchase our products, to contain costs and demonstrate the value of the therapies they provide.
For a further discussion of the safety risks in our trials, see the risk factor herein entitled "Our current and future product candidates, the methods used to deliver them or their dosage levels may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following any regulatory approval." Clinical trials also require the review and oversight of an IRB.
For a further discussion of the safety risks in our trials, see the risk factor herein entitled "Our current and future product candidates, the methods used to deliver them or their dosage levels may cause undesirable side effects or have other properties that could delay or 68 Table of Contents prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following any regulatory approval." Clinical trials also require the review and oversight of an IRB.
If such a suit is filed within the 45-day period following receipt of the Paragraph IV Notice Letter, the Hatch-Waxman Act provides for a 30-month stay on FDA’s ability to grant final approval of the proposed generic product. The 30-month stay generally runs from the date the Paragraph IV Notice Letter is received.
If such a suit is filed within the 45-day period following receipt of the Paragraph IV Notice Letter, the Hatch-Waxman Act provides for a 30-month stay on FDA’s ability to grant final approval of the proposed follow-on product. The 30-month stay generally runs from the date the Paragraph IV Notice Letter is received.
Similarly, the report of our independent registered public accounting firm on our consolidated financial statements as of and for the year ended December 31, 2022 includes an Emphasis of Matter paragraph indicating that there is substantial doubt about our ability to continue as a going concern.
Similarly, the report of our independent registered public accounting firm on our consolidated financial statements as of and for the year ended December 31, 2023 includes an Emphasis of Matter paragraph indicating that there is substantial doubt about our ability to continue as a going concern.
Any interruption or breach in our systems could adversely affect our business operations and/or result in the loss of critical or sensitive confidential information or intellectual property, and could result in financial, legal, business and reputational harm to us or allow third parties to gain material, inside information that they use to trade in our securities.
Any such interruption or breach could adversely affect our business operations and/or result in the loss of critical or sensitive confidential information or intellectual property, and could result in financial, legal, business and reputational harm to us or allow third parties to gain material, inside information that they use to trade in our securities.
Even after an Orphan Drug Product is approved, the FDA can subsequently approve another drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.
Even after an Orphan Drug Product is approved, the FDA can subsequently approve another drug or biologic for the same disease or condition if the FDA concludes that the later product is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.
Any regulatory approvals we receive for any of our product candidates may be subject to limitations on the approved indicated uses for which the product candidate may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials. In addition.
Any regulatory approvals we receive for any of our product candidates may be subject to limitations on the approved indicated uses for which the product candidate may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials.
A biosimilar is a biological product that is demonstrated to be “highly similar” (i.e., biosimilar), but not identical, to an FDA-licensed biological product (i.e., the reference product). The BPCIA also establishes periods of exclusivity for a brand-name biologic (the reference product), one with a duration of 4 years and the other with a duration of 12 years.
A biosimilar is a biological product that is demonstrated to be “highly similar” (i.e., biosimilar), but not identical, to an FDA-licensed biological product (i.e., the reference product). The BPCIA also establishes periods of exclusivity for a brand-name biologic (the reference product), one with a duration of four years and the other with a duration of 12 years.
The regulations that govern marketing approvals, pricing and reimbursement for new drug products vary widely from country to country. In the United States, recently passed legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals.
The regulations that govern marketing approvals, pricing and reimbursement (public and private) for new drug products vary widely from country to country. In the United States, recently passed legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant civil, criminal and administrative penalties, damages, 91 Table of Contents fines, imprisonment, exclusion from government funded health care programs, such as Medicare and Medicaid, and integrity oversight and reporting obligations.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from government funded health care programs, such as Medicare and Medicaid, and integrity oversight and reporting obligations.
Restrictions under applicable federal and state health care laws and regulations that may affect our ability to operate include the following: • the federal health care Anti-Kickback Statute which prohibits, among other things, individuals and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal health care program such as Medicare or Medicaid; • federal civil and criminal false claims laws, including the federal False Claims Act that can be enforced through civil whistleblower or qui tam actions, and civil monetary penalty laws, prohibit individuals or entities from knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment or approval that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any health care benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for health care benefits, items or services, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, which imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information 90 Table of Contents on entities subject to the law, such as certain health care providers, health plans, and health care clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information; • the federal physician sunshine requirements under the ACA which requires certain manufacturers of drugs, devices, biologics and medical supplies, with certain exceptions, to report annually to HHS information related to payments and other transfers of value to physicians, certain non-physician health care practitioners, and teaching hospitals, and ownership and investment interests held by physicians and other health care providers and their immediate family members and applicable group purchasing organizations; • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving health care items or services reimbursed by non-governmental third-party payors, including private insurers; some state laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers, marketing expenditures or pricing information; and certain state and local laws which require the registration of pharmaceutical sales representatives; and • state and foreign laws govern the privacy and security of health information in specified circumstances, including the GDPR, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Restrictions under applicable federal and state health care laws and regulations that may affect our ability to operate include the following: 97 Table of Contents • the federal health care Anti-Kickback Statute which prohibits, among other things, individuals and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal health care program such as Medicare or Medicaid; • federal civil and criminal false claims laws, including the FCA that can be enforced through civil whistleblower or qui tam actions, and civil monetary penalty laws, prohibit individuals or entities from knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment or approval that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any health care benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for health care benefits, items or services, and further, as amended by HITECH, imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information on entities subject to the law, such as certain health care providers, health plans, and health care clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information; • the federal physician sunshine requirements under the ACA which requires certain manufacturers of drugs, devices, biologics and medical supplies, with certain exceptions, to report annually to HHS information related to payments and other transfers of value to physicians, certain advanced non-physician health care practitioners, and teaching hospitals, and ownership and investment interests held by physicians and other health care providers and their immediate family members and applicable group purchasing organizations; • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving health care items or services reimbursed by non-governmental third-party payors, including private insurers; some state laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers, marketing expenditures or pricing information; and certain state and local laws which require the registration of pharmaceutical sales representatives; and • state and foreign laws govern the privacy and security of health information in specified circumstances, including the GDPR, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
We also have limited control over the protection of trade secrets used by our licensors, collaborators and suppliers.
We have limited control over the protection of trade secrets used by our licensors, collaborators and suppliers.
Third-party payors often follow CMS coverage policy and payment limitations in setting their own reimbursement policies.
Third-party commercial payors often follow CMS coverage policy and payment limitations in setting their own reimbursement policies.
Other risks and uncertainties, including those that we do not currently consider material, may impair our business. If any of the risks discussed below actually occur, our business, financial condition, operating results or cash flows could be materially adversely affected. This annual report on Form 10-K also contains forward-looking statements that involve risks and uncertainties.
Other risks and uncertainties, including those that we do not currently consider material, may impair our business. 59 Table of Contents If any of the risks discussed below actually occur, our business, financial condition, operating results or cash flows could be materially adversely affected. This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties.
If adequate funds are not available to us on a timely basis, we may not be able to continue as a going concern or we may be required to 58 Table of Contents delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for one or more of our product candidates or target indications, or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates.
If adequate funds are not available to us on a timely basis, we may not be able to continue as a going concern or we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for one or more of our product candidates or target indications, or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates.
The FDA or a comparable foreign regulatory authority may require more information, including additional preclinical or clinical data to support approval or additional studies, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development program.
The FDA or a comparable foreign regulatory authority may require more information, including additional preclinical or clinical data to support approval or additional studies, to support a marketing approval decision, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development program.
Competition that our products could face from generic versions of our products could materially and adversely affect our future revenue, profitability and cash flows and substantially limit our ability to obtain a return on the investments we have made in those products.
Competition that our products could face from follow-on versions of our products could materially and adversely affect our future revenue, profitability and cash flows and substantially limit our ability to obtain a return on the investments we have made in those products.
In addition, some of our CROs, third-party vendors and contractors have an ability to terminate their respective agreements with us if it can be reasonably demonstrated that the safety of the subjects participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated.
In addition, some of our CROs, third-party vendors and contractors have an ability to terminate their respective agreements with us if it can be reasonably demonstrated that the safety of the subjects 80 Table of Contents participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated.
We cannot guarantee that we will be able to successfully negotiate agreements for or maintain relationships with collaborators, partners, licensees, clinical investigators, vendors and other third parties on favorable terms, if at all.
Additionally, we cannot guarantee that we will be able to successfully negotiate future agreements for or maintain relationships with collaborators, partners, licensees, clinical investigators, vendors and other third parties on favorable terms, if at all.
Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures. Failure to obtain regulatory approval in international jurisdictions would prevent our product candidates from being marketed abroad.
Fast Track designation alone does not guarantee qualification for the FDA’s accelerated approval or priority review procedures. Failure to obtain regulatory approval in international jurisdictions would prevent our product candidates from being marketed abroad.
However, when a Paragraph IV certification is received during the five-year period of NCE exclusivity following the date of first NDA approval, the thirty-month stay extends from five years after the date that product was first approved.
However, when a Paragraph IV certification is received during the five-year period of NCE exclusivity following the date of first NDA approval, the 30-month stay extends from five years after the date that product was first approved.
Such competitive products may be able to immediately compete with us in each indication for which our therapeutic candidates may have received approval. 81 Table of Contents If we are sued for infringing the intellectual property rights of third parties, such litigation could be costly and time-consuming and could prevent or delay our development and commercialization efforts.
Such competitive products may be able to immediately compete with us in each indication for which our therapeutic candidates may have received approval. If we are sued for infringing the intellectual property rights of third parties, such litigation could be costly and time-consuming and could prevent or delay our development and commercialization efforts.
Our expenses will further increase as we: • conduct additional clinical trials of our lead product, GPS, including the Phase 3 clinical trial evaluating GPS for AML, and our second clinical candidate, GFH009; • hire additional personnel, including clinical, manufacturing, quality control, quality assurance and other scientific personnel, sales and marketing personnel and general and administrative personnel; • seek marketing approval for any of our product candidates that successfully complete clinical trials; 56 Table of Contents • develop our outsourced manufacturing activities and establish sales, marketing and distribution capabilities, if we receive, or expect to receive, marketing approval for any product candidates; • in-license or acquire the rights to, and pursue development of, other products, product candidates or technologies; • maintain, expand and protect our intellectual property portfolio; and • add operational, financial and management information systems and personnel.
Our expenses will further increase as we: • conduct additional clinical trials of our lead product, GPS, including the Phase 3 clinical trial evaluating GPS for AML, and our second clinical candidate, SLS009; • seek marketing approval for any of our product candidates that successfully complete clinical trials; • develop our outsourced manufacturing activities and establish sales, marketing and distribution capabilities, if we receive, or expect to receive, marketing approval for any product candidates; • in-license or acquire the rights to, and pursue development of, other products, product candidates or technologies; • maintain, expand and protect our intellectual property portfolio; • hire additional personnel, including clinical, manufacturing, quality control, quality assurance and other scientific personnel, sales and marketing personnel and general and administrative personnel; and • add operational, financial and management information systems and personnel.
Once the nature and scope of additional indications and their commensurate drug product demands are established, we will seek secondary suppliers of both the active pharmaceutical ingredient and drug product for our product candidates, but we cannot assure that such secondary suppliers will be found on terms acceptable to us, or in a timely manner, or at all.
Once the nature and scope of additional indications and their commensurate drug product demands are established, we will seek secondary suppliers of both the active pharmaceutical ingredients and drug products for our product candidates, but we cannot assure that such secondary suppliers will be found on terms acceptable to us, or in a timely manner, or at all.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, or if we lose any of our CROs or other key third-party vendors, we may not be able to obtain regulatory approval for or commercialize our current or future product candidates on a timely basis, if at all.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, or if we lose any of our CROs or 79 Table of Contents other key third-party vendors, we may not be able to obtain regulatory approval for or commercialize our current or future product candidates on a timely basis, if at all.
Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2022. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not.
Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not.
If we are unable to obtain approval of any of our current or future product candidates by regulatory authorities in the European Union, United Kingdom, Asia or elsewhere, the commercial prospects of that product candidate may be significantly diminished, our business prospects could decline and this could materially adversely affect our business, results of operations and financial condition.
If we are unable to obtain approval of any of our current or future product candidates by regulatory authorities in the EU, United Kingdom, Asia or elsewhere, the commercial prospects of that product candidate may be significantly diminished, our business prospects could decline and this could materially adversely affect our business, results of operations and financial condition.
Congress 80 Table of Contents could amend the BPCIA to shorten the 12-year market exclusivity period or that the FDA will not consider our product candidates to be reference biological products pursuant to its interpretation of the exclusivity provisions of the BPCIA for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated after the expiration of our patent protection.
Congress could amend the BPCIA to shorten the 12-year market exclusivity period or that the FDA will not consider our product candidates to be reference biological products pursuant to its interpretation of the exclusivity provisions of the BPCIA for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated after the expiration of our patent protection.
Price controls may be imposed in foreign markets, which may adversely affect our future profitability. In some countries, particularly member states of the European Union, the pricing of prescription drugs is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of regulatory approval for a product.
Price controls may be imposed in foreign markets, which may adversely affect our future profitability. In some countries, particularly member states of the EU, the pricing of prescription drugs is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of regulatory approval for a product.
We and our licensors’ patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications, and then only to the extent the issued claims cover the technology.
We and our licensors’ patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent is issued from such applications, and then only to the extent the issued claims cover the technology.
We cannot necessarily control the amount or timing of resources that our contract partners, including 3D Medicines, will devote to our research and development programs, product candidates or potential product candidates, and we cannot guarantee that these parties will fulfill their obligations to us under these arrangements in a timely fashion, if at all.
We cannot necessarily control the amount or timing of resources that our contract partners, including 3D Medicines, will devote to our research and development programs, product candidates or potential product candidates, and we cannot 82 Table of Contents guarantee that these parties will fulfill their obligations to us under these arrangements in a timely fashion, if at all.
For example, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver. Similarly, on March 12, 2023, 59 Table of Contents Signature Bank and Silvergate Capital Corp. were each swept into receivership.
For example, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership.
If the number 57 Table of Contents of our addressable disease patients is not as significant as our estimates, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenues from sales of such products, even if approved.
If the number of our addressable disease patients is not as significant as our estimates, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenues from sales of such products, even if approved.
In addition, there is a natural transition period when a new CRO, third-party vendor or contractor commences work and the new CRO, third-party vendor or contractor may not provide the same type or level of services as the original provider. 75 Table of Contents We have in-licensed a significant portion of our intellectual property from MSK.
In addition, there is a natural transition period when a new CRO, third-party vendor or contractor commences work and the new CRO, third-party vendor or contractor may not provide the same type or level of services as the original provider. We have in-licensed a significant portion of our intellectual property from MSK.
Our ability to generate revenues and achieve profitability also depends on a number of additional factors, including our ability to: • successfully complete development activities, including the necessary clinical trials; • complete and submit BLAs and NDAs to the FDA and obtain U.S. regulatory approval for indications for which there is a commercial market; • complete and submit applications to foreign regulatory authorities in Europe, Asia and other jurisdictions; • obtain regulatory approval in territories with viable market sizes; • obtain coverage and adequate reimbursement from third parties, including government and private payors; • set commercially viable prices for our products, if any; • establish and maintain supply and manufacturing relationships with reliable third parties and/or build our own manufacturing facility and ensure adequate, legally globally compliant manufacturing of bulk drug substances and drug products to maintain that supply; • develop distribution processes for our product candidates; • develop commercial quantities of our product candidates, once approved, at acceptable cost levels; • obtain additional funding, if required to develop and commercialize our product candidates; • develop a commercial organization capable of sales, marketing and distribution for any products we intend to sell ourselves, in the markets in which we choose to commercialize on our own; • achieve market acceptance of our products; • attract, hire and retain qualified personnel; and • protect our rights in our intellectual property portfolio.
Our ability to generate revenues and achieve profitability also depends on a number of additional factors, including our ability to: 60 Table of Contents • successfully complete development activities, including the necessary clinical trials; • complete and submit BLAs and NDAs to the FDA and obtain U.S. regulatory approval for indications for which there is a commercial market; • complete and submit applications to foreign regulatory authorities in Europe, Asia and other jurisdictions; • obtain regulatory approval in territories with viable market sizes; • obtain coverage and adequate reimbursement from third parties, including government and private payors; • set commercially viable prices for our products, if any; • establish and maintain supply and manufacturing relationships with reliable third parties and/or build our own manufacturing facility and ensure adequate, legally globally compliant manufacturing of bulk drug substances and drug products to maintain that supply; • develop distribution processes for our product candidates; • develop commercial quantities of our product candidates, once approved, at acceptable cost levels; • obtain additional funding, if required to develop and commercialize our product candidates; • develop a commercial organization capable of sales, marketing and distribution for any products we intend to sell ourselves, in the markets in which we choose to commercialize on our own, and successfully enter into arrangements with third parties to sell, market, and distribute our products in markets where we choose not to commercialize on our own; • achieve market acceptance of our products; • attract, hire and retain qualified personnel; and • protect our rights in our intellectual property portfolio.
We rely on a license agreement with GenFleet for the development of GFH009, and if this license is breached or otherwise terminated, we could lose the ability to continue the development and potential commercialization of GFH009.
We rely on a license agreement with GenFleet for the development of SLS009, and if this license is breached or otherwise terminated, we could lose the ability to continue the development and potential commercialization of SLS009.
We have entered into a license agreement with GenFleet under which we have an exclusive license to develop and commercialize GFH009 worldwide, other than in mainland China, Hong Kong, Macau and Taiwan.
We have entered into a license agreement with GenFleet under which we have an exclusive license to develop and commercialize SLS009 worldwide, other than in mainland China, Hong Kong, Macau and Taiwan.
These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.
These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial 63 Table of Contents services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.
If either we or the CMOs we rely on fail to comply with these requirements, our 72 Table of Contents ability to develop and commercialize our product candidates could suffer significant interruptions, and we may be subject to regulatory enforcement action, including the seizure of products and shutting down of production.
If either we or the CMOs we rely on fail to comply with these requirements, our ability to develop and commercialize our product candidates could suffer significant interruptions, and we may be subject to regulatory enforcement action, including the seizure of products and shutting down of production.
These factors could also make it more difficult for us to attract and retain qualified members of our board of directors and qualified executive officers. Our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel. We are highly dependent upon our personnel, including Dr. Angelos M.
These factors could also make it more difficult for us to attract and retain qualified members of our board of directors and qualified executive officers. 106 Table of Contents Our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel. We are highly dependent upon our personnel, including Dr. Angelos M.
As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of potential gain for the foreseeable future. 101 Table of Contents
As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of potential gain for the foreseeable future. 112 Table of Contents
We currently rely on and plan to continue to rely on a CRO for our Phase 3 trial for GPS in AML and well as all of our ongoing and contemplated clinical studies, with services to be rendered by such CROs and vendors ranging from specific and need-tailored ( e.g. , data management and biostatistics) only to, in the case of our Phase 3 trial for GPS in AML, all- 74 Table of Contents encompassing.
We currently rely on and plan to continue to rely on a CRO for our Phase 3 trial for GPS in AML and well as all of our ongoing and contemplated clinical studies, with services to be rendered by such CROs and vendors ranging from specific and need-tailored ( e.g. , data management and biostatistics) to, in the case of our Phase 3 trial for GPS in AML, all-encompassing.
In 83 Table of Contents addition, if the breadth or strength of protection provided by our or our licensor’s patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current and future product candidates.
In addition, if the breadth or strength of protection provided by our or our licensor’s patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current and future product candidates.
Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services.
Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on 94 Table of Contents reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services.
Health care policy changes may have a material adverse effect on our business and results of operations. 87 Table of Contents Our business may be affected by the efforts of government and third-party payors to contain or reduce the cost of health care through various means.
Health care policy changes may have a material adverse effect on our business and results of operations. Our business may be affected by the efforts of government and third-party payors to contain or reduce the cost of health care through various means.
In addition, the Federal Trade Commission in mid-2022 also launched sweeping investigations into the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements.
In addition, the FTC in mid-2022 also launched sweeping investigations into the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements.
Debt financing, if available, could include covenants limiting or restricting our ability to take certain actions, such as incurring additional debt, making capital expenditures, entering into licensing arrangements, or declaring dividends, and may require us to grant security interests in our assets, including our intellectual property and for our subsidiaries to guarantee our obligations.
Debt financing, if available, could include covenants limiting or restricting our ability to take certain actions, such as incurring additional debt, making capital expenditures, entering into licensing arrangements, or declaring dividends and may require us to grant security interests in our assets, including our 62 Table of Contents intellectual property, and for our subsidiaries to guarantee our obligations.
Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control biopharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In December 2020, the U.S.
Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control biopharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
We expect our existing cash and cash equivalents balance as of December 31, 2022, will be insufficient to fund current planned operations for at least the next twelve months from the date of issuance of our consolidated financial statements for the year ended December 31, 2022, and that we will need to raise additional capital in order to continue our operations as currently planned.
We expect our existing cash and cash equivalents balance as of December 31, 2023, will be insufficient to fund current planned operations for at least the next 12 months from the date of issuance of our consolidated financial statements for the year ended December 31, 2023, and that we will need to raise additional capital in order to continue our operations as currently planned.
Our reliance on third parties for the manufacture of our active pharmaceutical ingredient and drug product and, in the future, any approved products, creates a dependency that could severely disrupt our research and development, our clinical testing, and ultimately our sales and marketing efforts if the source of such supply proves to be unreliable or unavailable.
Our reliance on third parties for the manufacture of our active pharmaceutical ingredients and investigational drug products and, in the future, any approved products, creates a dependency that could severely disrupt our research and development, our clinical testing, and ultimately our sales and marketing efforts if the source of such supply proves to be unreliable or unavailable.
Competitors may use our and our licensors’ technologies in jurisdictions where we have not obtained patent protection or where we do not have exclusive rights under the relevant patent(s) to develop their own products and, further, may export otherwise infringing products to territories where we and our licensors have patent protection but where enforcement is not as 82 Table of Contents strong as that in the United States.
Competitors may use our and our licensors’ technologies in jurisdictions where we have not obtained patent protection or where we do not have exclusive rights under the relevant patent(s) to develop their own products and, further, may export otherwise infringing products to territories where we and our licensors have patent protection but where enforcement is not as strong as that in the United States.
Our future growth and success depends not only on our ability to retain, manage and motivate our employees but also on our ability to recruit new employees which is key to our growth.
Our future growth and success depend not only on our ability to retain, manage and motivate our employees but also on our ability to recruit new employees which is key to our growth.
The third-party manufacturers we rely on for manufacture of our product candidates are subject to inspection and approval by regulatory authorities before we can commence the manufacture and sale of any of our product candidates, and thereafter are subject to ongoing inspection from time to time.
The third-party manufacturers we rely on for the manufacture of our product candidates are subject to inspection and approval by regulatory authorities before we can commence the manufacture and sale of any of our product 77 Table of Contents candidates, and thereafter are subject to ongoing inspection from time to time.
Being a public company that is subject to these rules and regulations also makes it more expensive for us to obtain and retain director and officer liability insurance, and we may in the future be required to accept reduced coverage or 96 Table of Contents incur substantially higher costs to obtain or retain adequate coverage.
Being a public company that is subject to these rules and regulations also makes it more expensive for us to obtain and retain director and officer liability insurance, and we may in the future be required to accept reduced coverage or incur substantially higher costs to obtain or retain adequate coverage.
In addition to regulations in the United States, to market and sell our product candidates in the European Union, United Kingdom, many Asian countries and other jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements.
In addition to regulations in the United States, to market and sell our product candidates in the EU, United Kingdom, many Asian countries and other jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements.
If a third-party’s patents were found to cover our commercial product and product candidates, proprietary technologies, or our uses, we or our collaborators could be enjoined by a court and required to pay damages and could be unable to continue to commercialize our products or use our proprietary technologies unless we or such collaborators obtained a license to the patent.
If a third-party’s patents were found to 84 Table of Contents cover our commercial product and product candidates, proprietary technologies, or our uses, we or our collaborators could be enjoined by a court and required to pay damages and could be unable to continue to commercialize our products or use our proprietary technologies unless we or such collaborators obtained a license to the patent.
Risks Related to the Development and Regulatory Approval of Our Product Candidates 60 Table of Contents Clinical-stage biopharmaceutical companies with product candidates in clinical development face a wide range of challenging activities which may entail substantial risk.
Risks Related to the Development and Regulatory Approval of Our Product Candidates Clinical-stage biopharmaceutical companies with product candidates in clinical development face a wide range of challenging activities which may entail substantial risk.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We lease our headquarters in New York, New York. The lease covers approximately 8,455 square feet of office space, which includes additional space beginning on February 22, 2022, and expires in December 2024. We believe that our facility is adequate for our current needs.
Biggest changeITEM 2. PROPERTIES We lease our headquarters in New York, New York. The lease covers approximately 8,455 square feet of office space, which includes additional space beginning on February 22, 2022, and expires in September 2025. We believe that our facility is adequate for our current needs. ITEM 3. LEGAL PROCEEDINGS In December 2020, we entered into 3D Medicines Agreement.
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In November 2022, we announced that we had agreed with 3D Medicines for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20 patients from mainland China.
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In accordance with the terms of the 3D Medicines Agreement and the Side Letter, we had expected that 3D Medicines would begin enrolling patients in mainland China in the REGAL study in the second half of 2023 and subsequently make two development milestone payments totaling $13.0 million.
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Patients were enrolled in the REGAL study in Taiwan, which is part of the 3DMed Territory, prior to the second half of 2023.
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On December 20, 2023, we commenced a binding arbitration proceeding against 3D Medicines, administered by the Hong Kong International Arbitration Centre and governed by New York State law as per the 3D Medicines 114 Table of Contents Agreement.
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The arbitration proceeding involves, among other things, the trigger and payment of the relevant milestone payments due to us as well as 3D Medicines’ failure to use commercially reasonable best efforts to develop GPS in the 3DMed Territory, and particularly in mainland China.
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We have engaged an international law firm with expertise in mainland China to assist us with the arbitration proceeding.
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While we are unable at this time to predict with certainty the outcome of the arbitration proceeding, or the timing of the receipt of any milestone payments and other damages it is seeking in the arbitration proceeding, if at all, we believe that our claims are meritorious.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. LEGAL PROCEEDINGS From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any legal proceedings and are not aware of any pending or threatened legal proceedings against us that we believe could have a material adverse effect on our business, operating results or financial condition.
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Item 3. Legal Proceedings . Exclusive License Agreement with GenFleet Therapeutics (Shanghai), Inc.
Added
On March 31, 2022, or the GenFleet Agreement Effective Date, we entered into a License Agreement, or the GenFleet Agreement, with GenFleet pursuant to which GenFleet granted to us a sublicensable, royalty-bearing license, under certain of its intellectual property, to develop, manufacture and have manufactured, and commercialize a small molecule CDK9 inhibitor, or the CDK9 Licensed Product, for the treatment, diagnosis or prevention of disease in humans and animals in all territories other than Greater China, or the SLS009 Territory.
Added
The CDK9 inhibitor, known as SLS009, is currently in a Phase 1 clinical trial in the United States and China.
Added
In consideration for these rights, we agreed to pay to GenFleet (i) an initial payment of $10.0 million as an upfront license fee and for a technology transfer, $4.5 million of which was paid within 30 days of the GenFleet Agreement Effective Date and $5.5 million of which is due upon the first day of the 15th calendar month following the GenFleet Agreement Effective Date, (ii) development and regulatory milestone payments for up to three indications totaling up to $48.0 million in the aggregate, and (iii) milestone payments totaling up to $92.0 million in the aggregate upon the achievement of certain net sales thresholds of CDK9 Licensed Products in the SLS009 Territory in a given calendar year. 32 Table of Contents We also agreed to pay GenFleet tiered royalties based upon a percentage of annual net sales of CDK9 Licensed Products in the SLS009 Territory ranging from the low to high single digits.
Added
The royalties are payable on a CDK9 Licensed Product-by-CDK9 Licensed Product and region-by-region basis commencing on the first commercial sale of a CDK9 Licensed Product in a region and continuing until the later of (i) the date that is 10 years following the date of first commercial sale for such CDK9 Licensed Product in such region and (ii) the date of the expiration of the last valid claim of a licensed patent covering or claiming such CDK9 Licensed Product in such region.
Added
The royalty rate is subject to reduction under certain circumstances, including when generic competition for a CDK9 Licensed Product exists in a particular region.
Added
We are responsible for all costs related to developing, obtaining regulatory approval of and commercializing the CDK9 Licensed Products in the SLS009 Territory and we are required to use commercially reasonable efforts to develop and obtain regulatory approval for, and upon receipt of regulatory approval, commercialize the CDK9 Licensed Products in the SLS009 Territory.
Added
We and GenFleet have established a joint steering committee to coordinate and review the development, manufacturing and commercialization plans with respect to the CDK9 Licensed Products in the SLS009 Territory.
Added
We and GenFleet also have entered into a supply agreement and related quality agreement pursuant to which GenFleet is manufacturing, or having manufactured, and supplying us with all quantities of the CDK9 Licensed Product necessary for us to develop and commercialize the CDK9 Licensed Products in the SLS009 Territory.
Added
The GenFleet Agreement will expire on a CDK9 Licensed Product-by-CDK9 Licensed Product and region-by-region basis on the date of the expiration of all of our payment obligations to GenFleet. Upon expiration of the GenFleet Agreement, the license granted to us will become fully paid-up, perpetual and irrevocable.
Added
Either party may terminate the GenFleet Agreement for the other party’s material breach following a cure period or upon certain insolvency events.
Added
During the period from the first anniversary of the GenFleet Agreement Effective Date until the first regulatory approval of a CDK9 Licensed Product in any country within the SLS009 Territory, we will have the right to terminate the GenFleet Agreement upon 180 days’ prior written notice to GenFleet if a clinical failure, as described in the GenFleet Agreement, occurs.
Added
If we terminate the GenFleet Agreement before the first day of the 15th calendar month following the GenFleet Agreement Effective Date, then we will be required to pay to GenFleet the remainder of the $10 million initial payment upon the first day of the 15th calendar month following the GenFleet Agreement Effective Date.
Added
Upon receipt of the first regulatory approval of a CDK9 Licensed Product and continuing throughout the term of the GenFleet Agreement, we will have the right to terminate the GenFleet Agreement upon one year’s prior written notice to GenFleet.
Added
In addition, we may terminate the GenFleet Agreement upon 90 days’ notice to GenFleet upon the occurrence of certain safety events described in the GenFleet Agreement.
Added
GenFleet may terminate the GenFleet Agreement upon notice to us if we become in arrears in any payments due pursuant to the GenFleet Agreement and we fail to make the required payment within 60 days after the delivery of written notice from GenFleet.
Added
In addition, if we fail to meet the deadline for a diligence milestone event (as described in the GenFleet Agreement), GenFleet may treat such failure as a material breach which has not been cured and GenFleet will be entitled to terminate the GenFleet Agreement if such material breach is not cured within 90 days of receiving notice of such material breach.
Added
At GenFleet’s request within 30 days of termination of the GenFleet Agreement, other than termination by us for GenFleet’s material breach following a cure period, we will grant GenFleet an option to enter into negotiations with us with respect to a license agreement pursuant to which we would grant GenFleet a non-exclusive, royalty-bearing, worldwide license for certain of our intellectual property that is necessary and used to develop, commercialize and manufacture the terminated products.
Added
Manufacturing We do not own or operate manufacturing facilities for the production of our product candidates, nor do we have plans to develop our own manufacturing operations in the foreseeable future. We currently depend on third-party contract manufacturers for all of our required raw materials, active pharmaceutical ingredients, and finished product candidate for our clinical trials.
Added
We do not have any current contractual arrangements for the manufacture of commercial supplies of any product candidates. We currently employ internal resources and third-party consultants to manage our manufacturing contractors. 33 Table of Contents GPS Our sole CMO for GPS drug substance peptides is Polypeptide Group.
Added
Our sole CMO for GPS drug product is Lyophilization Services of New England, Inc., or LSNE. Our CMOs comply with cGMP requirements and manufacture product batches used in ongoing clinical trials. We anticipate the same CMOs to manufacture commercial batches. All batches for clinical trials meet release criteria and are monitored for long-term and accelerated stability.
Added
We have significantly advanced the chemistry, manufacturing, and controls, or CMC, objectives in support of the GPS clinical development program and for licensure, including: • Manufacturing lyophilized clinical GMP batches; • Qualifying processes; • Validating analytical methods; and • Monitoring the stability program.
Added
In the third quarter of 2023, based upon this work, we concluded a Type C meeting with the FDA regarding the CMC sections in a potential BLA for GPS. We had submitted a briefing package to FDA which provided an up-to-date overview of the extensive work we have completed for the GPS CMC program, including commercial manufacturing and regulatory plans.
Added
Following review of the package and accompanying questions to FDA, the FDA responded with positive guidance, including agreement on our proposed potency assay and manufacturing processes validation and our stability data generation plan for the commercial presentation of GPS.
Added
The current storage condition of GPS drug product is -20°C and we are collecting stability data to allow GPS to be stored in 2-8°C (36° – 46°F), which would be more optimal for supply chain logistics and would make it more accessible for end-users.
Added
SLS009 In October 2022, we entered into a Clinical Supply Agreement with GenFleet pursuant to which GenFleet will manufacture and/or have manufactured through third parties (with which GenFleet entered into agreements and to which we have access, as necessary), and supply SLS009 and any back-up molecule or intermediary related to SLS009 (including all methods, forms, presentations, dosage strengths, dosage forms, and formulations), for our use in all research and development activities necessary to obtain, maintain or expand regulatory approval worldwide, except Greater China.
Added
Sales and Marketing The infrastructure required to commercialize oncology products is market and product dependent. For a rare disease, such as AML, a relatively focused infrastructure may be sufficient which would make it cost-effective for us to internally develop a marketing, access and reimbursement function, and field-based sales force.
Added
We will potentially build the infrastructure to commercialize our product candidates in North America and, possibly, Europe, if GPS or our other product candidates are approved by the FDA and other regulatory authorities. However, we will remain opportunistic in seeking strategic partnerships in these and other markets when advantageous and increase shareholder value.
Added
The commercial infrastructure of specialty oncology products typically consists of a targeted, specialty sales force that calls on a limited and focused group of physicians supported by sales management, internal sales support, an internal marketing group, and distribution support.
Added
As GPS and our other product candidates may initially be developed for orphan indications with a relatively small number of treating physicians, we anticipate that a reduced infrastructure, including a small, targeted sales force, will be sufficient to support our sales and marketing objectives.
Added
We continue to assess the infrastructure and resources needed to establish our commercial operations and support other relevant commercial matters, such as pricing and market access.
Added
We may elect in the future to utilize strategic partners, distributors, or contract sales forces and clinical nurse educators to assist in the commercialization of our products. 34 Table of Contents In December 2020, we entered into the 3D Medicines Agreement for the development and commercialization of GPS, as well as the Company’s next generation heptavalent immunotherapeutic GPS+, which is at preclinical stage, across all therapeutic and diagnostic uses in Greater China.
Added
We have retained sole rights to GPS and GPS+ outside of Greater China. See Strategic Collaborations and License Agreements .
Added
Intellectual Property Our commercial success depends in part on our ability to avoid infringing the proprietary rights of third parties, our ability to obtain and maintain proprietary protection for our product candidates, technologies and know-how, and our ability to prevent others from infringing our proprietary rights.
Added
We seek to protect our proprietary position by, among other methods, evaluating relevant patents, establishing defensive positions, monitoring European Union, or EU, oppositions and pending intellectual property rights, preparing litigation strategies in view of the U.S. legislative framework, filing U.S. and international patent applications on technologies, inventions and improvements that are important to our business and maintaining our issued patents.
Added
We also include restrictions regarding use and disclosure of our proprietary information in our contracts with third parties, and utilize customary confidentiality and invention assignment agreements with our employees, consultants, clinical investigators and scientific advisors to protect our confidential information and know-how.
Added
Together with our licensors, we also rely on trade secrets to protect our combined technology especially where we do not believe patent protection is appropriate or obtainable. It is our policy to operate without knowingly infringing on, or misappropriating, the proprietary rights of others.
Added
The term of individual patents depends upon the legal term of the patents in countries in which they are obtained. In most countries, including the United States, the patent term is generally 20 years from the earliest date of filing a non-provisional patent application in the applicable country.
Added
In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S.
Added
Patent and Trademark Office in examining and granting a patent or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date.
Added
The patent term of a patent that covers an FDA-approved drug may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process.
Added
The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review.
Added
Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only one patent applicable to an approved drug may be extended. Similar provisions are available in the EU and certain other foreign jurisdictions to extend the term of a patent that covers an approved drug.
Added
In the future, if and when our product candidates receive approval by the FDA or foreign regulatory authorities, we expect to apply for patent term extensions on issued patents covering those products, depending upon the length of the clinical trials for each drug and other factors.
Added
Our patent portfolio includes the following: Patents and patent applications covering GPS and WT1-targeting peptides: • Patent application co-owned by us and MSK: ◦ Patent applications covering a heptavalent (7-peptide) immunotherapy composition and methods of use for treating, reducing the incidence of, or inducing an immune response against a WT1-expressing cancer pending in the United States, Australia, Canada, China, Europe, Hong Kong, India, Israel, Japan, South Korea, Mexico and Russia, which, if granted, are expected to expire in 2040. • Patents and patent applications in-licensed from MSK: ◦ Composition-of-matter patents covering certain WT1-targeting peptides and methods of use in the United States, which are expected to expire in 2034; and a composition-of-matter patent covering 35 Table of Contents additional WT1-targeting peptides and methods of use in the United States, which is expected to expire in 2035; ◦ Composition-of-matter patents covering certain WT1-targeting peptides and methods of use in Australia, China, Hong Kong, several countries of the EU and Japan, which are expected to expire in 2034; ◦ Patent applications covering certain WT1-targeting peptides and methods of use pending in the United States, Australia, EU, Canada, China, Hong Kong, and Japan, which, if granted, are expected to expire in 2034; ◦ Patents covering methods for treating, reducing the incidence of, or inducing an immune response against a WT1-expressing cancer, using the peptides of GPS in combination with anti-PD-1 antibody checkpoint inhibitors in the United States, Australia, China, Hong Kong, several countries in the EU and Japan, which are expected to expire in 2037 (United States) and 2036 (Australia, China, Hong Kong, EU and Japan); ◦ Patent applications covering methods for treating, reducing the incidence of, or inducing an immune response against a WT1-expressing cancer, using the peptides of GPS in combination with immune checkpoint inhibitors pending in the United States, Australia, Canada, China, Hong Kong, EU, South Korea, and Japan, which, if granted, are expected to expire in 2036; ◦ Composition-of-matter patents covering the WT1-A1 peptide of GPS in the United States, Canada, Australia, and several countries of the EU, which are expected to expire in the United States in 2026 and elsewhere in 2024; ◦ Composition-of-matter patent covering the WT1-427 long and WT1-331 long peptides of GPS issued in the United States, which is expected to expire in 2031, and patents covering the methods of use in the United States, which are expected to expire in 2026; a patent covering peptide conjugates of the WT1-427 long peptide or WT1-331 long peptide in the United States, which is expected to expire in 2027; and a patent application covering peptide conjugates of the WT1-427 long peptide or WT1-331 long peptide pending in the United States, which, if granted, is expected to expire in 2026; ◦ Composition-of-matter patents covering the WT1-427 long peptide of GPS and WT1-331 long peptide of GPS, and methods of use, in Australia and several countries of the EU, which are expected to expire in 2026; composition-of-matter patent covering the WT1-427 long peptide of GPS and method of use in Canada, which is expected to expire in 2026; ◦ Composition-of-matter patent application covering the WT1-331 long peptide of GPS and the WT1-427 long peptide of GPS and method of use pending in Canada, which, if granted, is expected to expire in 2026; ◦ Composition-of-matter patent covering a WT1-specific peptide in the United States, which is expected to expire in 2026; ◦ Composition-of-matter patent covering the WT1-122A1 long peptide of GPS in the United States which is expected to expire in 2033; patent covering the WT1-122A1 long peptide of GPS and methods of use in the United States, which is expected to expire in 2029; and patent application covering the WT1-122A1 long peptide of GPS and methods of use pending in the United States, which, if granted, is expected to expire in 2027; and ◦ Composition-of-matter patent covering the WT1-122A1 long peptide of GPS and methods of use in several countries of the EU, which is expected to expire in 2027, and patent applications covering the WT1-122A1 long peptide of GPS and methods of use pending in the EU, Hong Kong and Canada, which, if granted, are expected to expire in 2027. 36 Table of Contents Patents and patent applications covering SLS009: • Patents and patent applications in-licensed from GenFleet: ◦ Composition-of-matter patents covering SLS009 and use thereof in the treatment or amelioration of cancer in the United States, Australia, Canada, Japan, Russia, South Korea, the United Kingdom, and several countries of the EU, which are expected to expire in 2038; and a patent application covering SLS009 and use thereof in the treatment or amelioration of cancer pending in Brazil, which, if granted, is expected to expire in 2038; and ◦ Patents covering maleate and fumarate crystal salts and polymorphs of SLS009, syntheses thereof, and use thereof in prevention or treatment of CDK9-related diseases, including cancer, in Australia and Japan, which are expected to expire in 2040; patent applications covering maleate and fumarate salt forms and polymorphs of SLS009, syntheses thereof, and use thereof in prevention or treatment of CDK9-related diseases, including cancer, pending in the United States, Brazil, Canada, South Korea, the United Kingdom and the EU (via the European Patent Office), and several former Soviet bloc countries, including Russia (via the Eurasian Patent Office), which, if granted, are expected to expire in 2040.
Added
Competition Oncology in general, and specifically, cancer immunotherapy, is a significant growth area for the biopharmaceutical industry, attracting large pharmaceutical companies as well as small niche players.
Added
While we believe that our scientific knowledge, assets, development experience and ability to attract experienced commercial professionals provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, which either alone or together with their collaborative partners, have substantially greater resources than we have.
Added
Generally, our competitors in the oncology therapeutic market are large and mid-sized companies with approved oncology therapeutic products and companies currently engaged in clinical development of such products. Any product candidates that we successfully develop and commercialize may compete with these existing therapies and new therapies that may become available in the future.
Added
Companies developing novel products with similar indications to those we are pursuing and may pursue are expected to influence our ability to penetrate and maintain market share. Principal competitors for AML broadly include companies with currently marketed products, such as AbbVie/Genentech (Venclexta), Pfizer (Mylotarg), Daiichi-Sankyo (Vanflyta), Rigel Pharmaceuticals (Rezlidhia) and Bristol Myers Squibb (Vidaza), among others.
Added
There are also companies developing therapies to treat AML in the r/r setting, which are in earlier stages of clinical development, including emavusertib, which is in a Phase 1/2 trial in AML and being developed by Curis, and later-stage clinical development candidates which may enter the market before our potential products, such as GlycoMimetics (uproleselan), Delta-Fly Pharma (DFP-10917), and AROG Pharmaceuticals (crenolanib).
Added
Actinium Pharmaceuticals, which announced in late 2022 / early 2023 positive results in its Phase 3 trial of Iomab-B in adults aged 55 and above with r/r AML, may be a key competitor. With respect to WT1-targeting therapies, we do not believe GPS has direct competition in AML in the maintenance setting after CR2 at this time.
Added
While there are companies engaged in the clinical development of WT-1 targeting therapies including Astellas (ASP7517) and Cue Biopharma (CUE-102), they are not currently focused on AML. With respect to SLS009, we anticipate competition from companies who are currently engaged in the clinical development of selective CKD9-targeting therapies.
Added
MEI Pharma is in Phase 1 clinical development for voruciclib alone and in combination with venetoclax for adults with r/r AML. Vincerx Pharma may also be a potential competitor in our other indication, PTCL, with enitociclib, its CDK9 inhibitor, as a monotherapy and in combination with venetoclax.
Added
There are other companies which are in early development stages for their CDK9 inhibitors and targeting other hematologic malignancies or solid tumors, including Kronos Bio (KB-0742), Sumitomo Dainippon Pharma (TP-1287), Adastra Pharmaceuticals (zotiraciclib) and Prelude Therapeutics (PRT2527). 37 Table of Contents With regard to both GPS and SLS009, many of our competitors, either alone or with their strategic partners, have substantially greater resources and expertise in research and development, manufacturing, preclinical testing, obtaining regulatory approvals, and marketing approved products than we have.
Added
Mergers and acquisitions in the biotechnology, pharmaceutical and diagnostics industries may result in even more resources being concentrated among a smaller number of our competitors.
Added
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, the ability to work with specific clinical contract organizations due to conflict of interest, and also the conduct of trials in the ability to recruit clinical trial sites and subjects for our clinical trials.
Added
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These activities may lead to consolidated efforts that allow for more rapid development of cancer immunotherapy product candidates.
Added
We expect the key competitive factors that could affect the success of any products that we develop and commercialize are likely to be efficacy, safety, price, level of generic competition, placement (or lack thereof) in clinical treatment guidelines and the availability of reimbursement from government and other third-party payors.
Added
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are viewed as safer, more convenient or less expensive than any products that we may develop.
Added
Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for our current product candidates or any other future product candidate, which could result in our competitors establishing a strong market position before we are able to enter the market.
Added
In addition, our ability to complete may be affected by insurers or other third-party payors seeking to encourage the use of generic or biosimilar products. If our therapeutic product candidates are approved, we believe that they would be priced at a premium over competitive generic products.
Added
Employees and Human Capital We have assembled a management team of biopharmaceutical experts with extensive experience in building and operating organizations that develop and deliver innovative medicines to patients with cancer. Our management team has broad expertise and successful track records in clinical development and approval of cancer therapies. As of March 1, 2024, we had 16 full time employees.
Added
In addition to our full-time employees, we engage various independent consultants and advisors to support key areas of our business. None of our employees are represented by a labor union or covered by collective bargaining agreements. We believe our relationship with our employees is good.
Added
We are committed to creating and maintaining a diverse, inclusive and safe work environment which encourages collaboration and integrity and inspires high performance and achievement. Our employees have various backgrounds, experience and perspectives. For example, as of March 1, 2024, of our 16 employees, 56% self-identify as women, 25% self-identify as racial or ethnic minorities and 62% have advanced degrees.
Added
In addition, two of our six Board of Director members self-identify as women, including the Chair. We believe we have built and continue to build a strong culture of cooperation, respect and acceptance.
Added
We also invest in our employees and are able to recruit talented individuals through our competitive benefits, compensation packages and health and wellness initiatives, which are based on peer company benchmarks.
Added
Government Regulation The FDA and other regulatory authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of drugs and biologics such as those we are developing.
Added
Along with our third-party contractors, we will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of its current or future product candidates.
Added
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local, and foreign statutes and regulations require the expenditure of substantial time and financial resources.
Added
A company can make 38 Table of Contents only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. A biologic candidate is licensed by the FDA through approval of a biologics license application, or BLA.
Added
Assuming we receive positive data from our REGAL clinical trial of GPS for monotherapy in patients with AML, we will submit a BLA to the FDA. A drug candidate must be approved by the FDA through a new drug application, or NDA. For SLS009, we will seek marketing approval through the submission of an NDA to the FDA.
Added
The process required by the FDA before drug or biological product candidates may be marketed in the United States generally involves the following: • completion of extensive nonclinical laboratory tests and animal studies performed in accordance with the FDA’s current good laboratory practice, or GLP, regulations and other applicable regulations; • submission to the FDA of an IND application, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made; • approval by an institutional review board, or IRB, or ethics committee at each clinical site before the trial is initiated at such sites; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, and other clinical-trial related regulations to establish the safety and efficacy of the investigational product candidate for its proposed indication; • preparation of and submission to the FDA of an NDA or BLA, after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current good manufacturing practice, or cGMP, regulations and to assure that the facilities, methods and controls are adequate to preserve the product’s continued identity, strength, quality and purity for a drug and safety, purity and potency for a biologic; • potential audit of selected clinical trial sites to assess compliance with GCP and the integrity of the clinical data submitted in support of the NDA or BLA; and • FDA review and approval of the NDA or BLA to permit commercial marketing of the product for particular indications for use in the United States.
Added
The testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our current or future product candidates will be granted on a timely basis, if at all.
Added
Preclinical testing Before testing any drug or biological product candidate, including our product candidates, in humans, the product candidate must undergo rigorous preclinical testing.
Added
Nonclinical studies during the preclinical development stage include laboratory evaluation of product chemistry and formulation and typically include in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for therapeutic use.
Added
The 39 Table of Contents Consolidated Appropriations Act for 2023, signed into law on December 29, 2022, (P.L. 117-328) amended the Food, Drug, and Cosmetic Act, or the FDCA, and the Public Health Service Act to specify that nonclinical testing for drugs and biologics may, but is not required to, include in vivo animal testing.
Added
According to the amended language, a sponsor may fulfill nonclinical testing requirements by completing various in vitro assays (e.g., cell-based assays, organ chips, or microphysiological systems), in silico studies (i.e., computer modeling), other human or nonhuman biology-based tests (e.g., bioprinting), or in vivo animal tests.
Added
The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies. Some long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may continue after an IND for an investigational drug or biologic candidate is submitted to the FDA and human clinical trials have been initiated.
Added
Prior to beginning the first clinical trial with a product candidate, we must submit an IND to the FDA. An IND is a request for authorization from the FDA to administer an investigational new drug product to humans. The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed5 unchanged
Biggest changeOur Board of Directors has not authorized any repurchase plan or program for the purchase of shares of our common stock or other securities on the open market or otherwise. 103 Table of Contents Equity Compensation Plan Information The following table provides information regarding the status of our existing equity compensation plans as of December 31, 2022: Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Previous Columns) Equity compensation plans approved by security holders 2017 Equity Incentive Plan 21,520 $ 112.85 — 2019 Equity Incentive Plan 1,017,963 $ 5.35 640,961 Restricted Stock Units 255,136 N/A — 2021 Employee Stock Purchase Plan — N/A 274,911 Equity compensation plans not approved by security holders None — — — Total 1,294,619 $ 7.58 915,872
Biggest changeOur Board of Directors has not authorized any repurchase plan or program for the purchase of shares of our common stock or other securities on the open market or otherwise. 116 Table of Contents Equity Compensation Plan Information The following table provides information regarding the status of our existing equity compensation plans as of December 31, 2023: Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Previous Columns) Equity compensation plans approved by security holders 2017 Equity Incentive Plan 21,520 $ 112.85 — 2023 Amended and Restated Equity Incentive Plan 1,585,283 $ 4.47 3,950,528 Restricted Stock Units 338,141 N/A — 2021 Employee Stock Purchase Plan — N/A 183,457 Equity compensation plans not approved by security holders None — — — Total 1,944,944 $ 5.92 4,133,985
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on The Nasdaq Capital Market under the symbol SLS. Holders As of March 15, 2023, there were approximately 27 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on The Nasdaq Capital Market under the symbol SLS. Holders As of March 27, 2024, there were approximately 35 holders of record of our common stock.
Purchases of Equity Securities During the year ended December 31, 2022, we did not purchase any of our equity securities.
Purchases of Equity Securities During the year ended December 31, 2023, we did not purchase any of our equity securities.

Item 7. Management's Discussion & Analysis

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

62 edited+35 added−42 removed59 unchanged
Biggest changeInterest income primarily reflects the interest earned from our cash and cash equivalents. 108 Table of Contents Results of Operations for the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations for the years ended December 31, 2022 and 2021 (amounts in thousands): Year ended December 31, 2022 2021 Change License revenue $ 1,000 $ 7,600 $ (6,600) Operating expenses: Cost of revenue 100 200 (100) Research and development 20,268 15,674 4,594 General and administrative 12,582 11,320 1,262 Acquired in-process research and development 10,000 — 10,000 In-process research and development charge — 5,700 (5,700) Total operating expenses 42,950 32,894 10,056 Loss from operations (41,950) (25,294) (16,656) Non-operating income 649 4,358 (3,709) Loss before income taxes (41,301) (20,936) (20,365) Income tax benefit — 237 (237) Net loss $ (41,301) $ (20,699) (20,602) For the year ended December 31, 2022, our net loss was $41.3 million compared with a net loss of $20.7 million for the year ended December 31, 2021 .
Biggest changeResults of Operations for the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022 (amounts in thousands): Year ended December 31, 2023 2022 Change Licensing revenue $ — $ 1,000 $ (1,000) Operating expenses: Cost of licensing revenue — 100 (100) Research and development 24,007 20,268 3,739 General and administrative 13,862 12,582 1,280 Acquired in-process research and development — 10,000 (10,000) Total operating expenses 37,869 42,950 (5,081) Loss from operations (37,869) (41,950) 4,081 Non-operating income 529 649 (120) Net loss $ (37,340) $ (41,301) 3,961 Further analysis of the changes and trends in our operating results are discussed below.
Patients are randomized to receive either GPS or best available treatment, or BAT. We expect this study will be used as the basis for submission of a Biologics License Application, or BLA, subject to a statistically significant and clinically meaningful data outcome and agreement with the U.S. Food and Drug Administration, or the FDA.
Patients are randomized (1:1) to receive either GPS or best available treatment, or BAT. We expect this study will be used as the basis for submission of a Biologics License Application, or BLA, subject to a statistically significant and clinically meaningful data outcome and agreement with the U.S. Food and Drug Administration, or the FDA.
Net Cash Flow from Financing Activities We generated $24.1 million of net cash from financing activities for the year ended December 31, 2022, which was due to $23.0 million in aggregate net proceeds received from our underwritten public offering, which closed in April 2022, $1.0 million in aggregate net proceeds received from the issuance of common stock under the Sales Agreement, and $0.1 million in aggregate net proceeds received from the issuance of common stock under our employee stock purchase plan.
We generated $24.1 million of net cash from financing activities for the year ended December 31, 2022, which was due to $23.0 million in aggregate net proceeds received from our underwritten public offering, which closed in April 2022, $1.0 million in aggregate net proceeds received from the issuance of common stock under the Sales Agreement, and $0.1 million in aggregate net proceeds received from the issuance of common stock under our employee stock purchase plan.
We have retained sole rights to GPS and GPS+ outside of Greater China. In November 2022, we announced that we have agreed with 3D Medicines for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20 patients from mainland China.
We have retained sole rights to GPS and GPS+ outside of Greater China. In November 2022, we announced that we had agreed with 3D Medicines for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20 patients from mainland China.
In December 2020, we entered into an exclusive license agreement, or 3DMed License Agreement, with 3D Medicines Inc., or 3D Medicines, a China-based biopharmaceutical company developing next-generation immuno-oncology drugs, for the development and commercialization of GPS, as well as the Company’s next generation heptavalent immunotherapeutic GPS+, which is at preclinical stage, across all therapeutic and diagnostic uses in mainland China, Hong Kong, Macau and Taiwan, which we refer to as Greater China.
In December 2020, we entered into an exclusive license agreement, or 3D Medicines Agreement, with 3D Medicines Inc., or 3D Medicines, a China-based biopharmaceutical company developing next-generation immuno-oncology drugs, for the development and commercialization of GPS, as well as the Company’s next generation heptavalent immunotherapeutic GPS+, which is at preclinical stage, across all therapeutic and diagnostic uses in mainland China, Hong Kong, Macau and Taiwan, which we collectively refer to as Greater China, or the 3DMed Territory.
GFH009: Highly Selective Next Generation CDK9 Inhibitor On March 31, 2022, we entered into an exclusive license agreement, or the GFH009 Agreement, with GenFleet Therapeutics (Shanghai), Inc., or GenFleet, a clinical-stage biotechnology company developing cutting-edge therapeutics in oncology and immunology, that grants rights to us for the development and commercialization of GFH009, a highly selective small molecule CDK9 inhibitor, across all therapeutic and diagnostic uses worldwide, except for Greater China.
SLS009: Highly Selective Next Generation CDK9 Inhibitor On March 31, 2022, we entered into an exclusive license agreement, or the GenFleet Agreement, with GenFleet Therapeutics (Shanghai), Inc., or GenFleet, a clinical-stage biotechnology company developing cutting-edge therapeutics in oncology and immunology, that grants rights to us for the development and commercialization of SLS009, a highly selective small molecule CDK9 inhibitor, across all therapeutic and diagnostic uses worldwide, except for Greater China.
Overview We are a late-stage clinical biopharmaceutical company focused on the development of novel therapeutics for a broad range of cancer indications. Our product candidates currently include galinpepimut-S, or GPS, a peptide immunotherapy directed against the Wilms tumor 1, or WT1, antigen, and GFH009, a highly selective small molecule cyclin-dependent kinase 9, or CDK9, inhibitor.
Overview We are a late-stage clinical biopharmaceutical company focused on the development of novel therapeutics for a broad range of cancer indications. Our product candidates currently include galinpepimut-S, or GPS, a peptide immunotherapy directed against the Wilms tumor 1, or WT1, antigen, and SLS009 (formerly GFH009), a highly selective small molecule cyclin-dependent kinase 9, or CDK9, inhibitor.
This going concern assumption is based on management’s assessment of the sufficiency of our current and future sources of liquidity considering whether or not it is probable we will be able to meet our obligations as they become due for at least one year from the date our consolidated financial statements are available to be issued, and if not, whether our liquidation is imminent.
This going concern assumption is based on management’s assessment of the sufficiency of our current and future sources of liquidity and whether it is probable we will be able to meet our obligations as they become due for at least one year from the date our consolidated financial statements are available to be issued, and if not, whether our liquidation is imminent.
This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of our clinical trials, which vary significantly over the life of a project as a result of many factors, including: • the number and geographical location of clinical sites included in the trials; • the length of time required to enroll suitable patients; • the number and geographical location of patients that ultimately participate in the trials; • the number of doses patients receive; • the duration of patient follow-up; • the results of clinical trials; • the expenses associated with manufacturing and clinical drug supply; 107 Table of Contents • the receipt of marketing approvals; and • the commercialization of current and future product candidates.
This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of our clinical trials, which vary significantly over the life of a project as a result of many factors, including: • the number and geographical location of clinical sites included in the trials; • the length of time required to enroll suitable patients; • the number and geographical location of patients that ultimately participate in the trials; • the number of doses patients receive; • the duration of patient follow-up; • the results of clinical trials; • the expenses associated with manufacturing and clinical drug supply; • the receipt of marketing approvals; and • the commercialization of current and future product candidates.
To date, we have not recognized any royalty revenue resulting from any of our licensing arrangements. 116 Table of Contents Goodwill Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized but is subject to an annual impairment test.
To date, we have not recognized any royalty revenue resulting from any of our licensing arrangements. 128 Table of Contents Goodwill Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized but is subject to an annual impairment test.
These payments have not been included separately within these contractual and other obligations disclosures. 115 Table of Contents Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.
These payments have not been included separately within these contractual and other obligations disclosures. 127 Table of Contents Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.
Shares of common stock sold under the Sales Agreement are offered and sold pursuant to our registration statement on Form S-3, which was filed with the SEC on April 16, 2021 and declared effective on April 29, 2021.
Shares of common stock sold under the Sales Agreement were offered and sold pursuant to our registration statement on Form S-3, which was filed with the SEC on April 16, 2021 and declared effective on April 29, 2021.
Given our limited history as a publicly traded company following the Merger on December 29, 2017, we did not have sufficient trading data to calculate volatility based on our own common stock, and the expected volatility was calculated as of each grant date based on our own implied volatility in combination with a peer group of publicly traded companies.
Given our limited history as a publicly traded company following the Merger on December 29, 2017, we did not have sufficient trading data to calculate volatility based on our own common stock, and the expected volatility was calculated as of each grant date based on our own implied volatility in combination with a peer group of publicly 129 Table of Contents traded companies.
We anticipate that our research and development expenses will increase in the future as we continue to advance the development of GPS, including our Phase 3 REGAL clinical trial of GPS in AML, and the ongoing and planned clinical trials of GFH009.
We anticipate that our research and development expenses will increase in the future as we continue to advance the development of GPS and SLS009, including our Phase 3 REGAL clinical trial of GPS in AML and the ongoing and planned clinical trials of SLS009.
GPS was granted Orphan Drug Product Designations from the FDA, as well as Orphan Medicinal Product Designations from the European Medicines Agency, or EMA, for GPS in AML, MPM, and multiple myeloma, or MM, as well as Fast Track Designation for AML, MPM, and MM from the FDA.
GPS was granted Orphan Drug Product Designations, or ODD, from the FDA, as well as orphan medicines designations from the European Medicines Agency, or EMA, for GPS in AML, MPM, and multiple myeloma, or MM, as well as Fast Track designation for AML, MPM, and MM from the FDA.
If and when we believe that regulatory approval of a product candidate appears likely, we anticipate that an increase in general and administrative expenses will occur as a result of our preparation for commercial operations, particularly as it relates to the sales and marketing of such product candidate.
If and when we believe that regulatory approval of a product candidate appears likely, we anticipate that an increase in general and administrative expenses will occur as a result of our preparation for commercial operations, 121 Table of Contents particularly as it relates to the sales and marketing of such product candidate.
The expense relating to RSUs that contain both a service and a performance condition is estimated and adjusted on a quarterly basis based upon our assessment of the probability that the performance condition would be met. As a result, if we revise such assessment, our stock-based compensation expense could change. 118 Table of Contents
The expense relating to RSUs that contain both a service and a performance condition is estimated and adjusted on a quarterly basis based upon our assessment of the probability that the performance condition would be met. As a result, if we revise such assessment, our stock-based compensation expense could change.
These expenses include: • expenses incurred under agreements with CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials; • manufacturing and clinical drug supply expenses; • outsourced professional scientific development services; • employee-related expenses, which include salaries, benefits and stock-based compensation; • payments made under our license agreements, under which we acquired certain intellectual property; • expenses relating to certain regulatory activities, including filing fees paid to regulatory agencies; • laboratory materials and supplies used to support our research activities; and • allocated expenses, utilities and other facility-related costs.
These expenses include: • expenses incurred under agreements with clinical research organizations, or CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials; • manufacturing and clinical drug supply expenses; • outsourced professional scientific development services; 120 Table of Contents • employee-related expenses, which include salaries, benefits and stock-based compensation; • payments made under our license agreements, under which we acquired certain intellectual property; • expenses relating to certain regulatory activities, including filing fees paid to regulatory agencies; • laboratory materials and supplies used to support our research activities; and • allocated expenses, utilities and other facility-related costs.
We enter into contracts in the normal course of business with various third parties for clinical trials, manufacturing, and other services and products for operating purposes. These contracts provide for termination 114 Table of Contents upon notice.
We enter into contracts in the normal course of business with various third parties for clinical trials, manufacturing, and other services and products for operating purposes. These contracts provide for termination upon notice.
Under our current assumptions with respect to completion of enrollment and the estimated survival times for both the treated and control groups in the study, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 60 events (deaths) per the protocol will occur by the end of 2023 or early 2024 and the final analysis after 80 events will occur by the end of 2024.
Under our current assumptions with respect to enrollment and the estimated survival times for both the treated and control groups in the study, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 60 events (deaths) per the protocol will occur in the first half of 2024 and the final analysis after 80 events will occur by the end of 2024.
Components of Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents The following table provides a reconciliation of the components of cash, cash equivalents, restricted cash, and restricted cash equivalents reported in our consolidated balance sheets to the total of the amount presented in the consolidated statements of cash flows (in thousands): December 31, 2022 2021 Cash and cash equivalents $ 17,125 $ 21,355 Restricted cash and cash equivalents 100 100 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 17,225 $ 21,455 Restricted cash and cash equivalents of $0.1 million as of December 31, 2022 and 2021 related to certificates of deposit maintained on hand with our financial institutions as collateral for our corporate credit cards.
Components of Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents The following table provides a reconciliation of the components of cash, cash equivalents, restricted cash, and restricted cash equivalents reported in our consolidated balance sheets to the total of the amount presented in the consolidated statements of cash flows (in thousands): December 31, 2023 2022 Cash and cash equivalents $ 2,530 $ 17,125 Restricted cash and cash equivalents 100 100 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 2,630 $ 17,225 Restricted cash and cash equivalents of $0.1 million as of December 31, 2023 and 2022 relates to certificates of deposit maintained on hand with our financial institutions as collateral for our corporate credit cards.
We expect our research and development expenses to increase for the foreseeable future as we conduct and complete our ongoing early and late-stage clinical trials and initiate additional clinical trials. Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals.
We expect our research and development expenses to increase for the foreseeable future as we conduct and complete our ongoing early and late-stage clinical trials, initiate additional clinical trials, and expand regulatory activities associated with the preparation and submission of regulatory filings. Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals.
The $1.3 million increase was primarily driven by a $1.9 million increase in personnel related expenses due to increased headcount including a $0.6 million increase in non-cash stock-based compensation, a $0.7 million increase in outside services and public company costs, and a $0.2 million increase in office and other general and administrative costs.
The $1.3 million increase was primarily driven by a $0.5 million increase in personnel related expenses primarily due to increased headcount, including a $0.3 million increase in non-cash stock-based compensation, a $0.6 million increase in intellectual property fees, a $0.1 million increase in outside services and public company costs, and a $0.1 million increase in other general and administrative costs.
The primary endpoint of the clinical trial is overall survival. We plan to enroll approximately 125 to 140 patients at approximately 95 clinical sites in North America, Europe and Asia with a planned interim safety, efficacy and futility analysis after 60 events (deaths).
The primary endpoint of the REGAL study is overall survival. We planned to enroll approximately 125 to 140 patients at approximately 95 clinical sites in North America, Europe and Asia with a planned interim safety, efficacy and futility analysis after 60 events (deaths). In March 2024, we announced the completion of enrollment.
Net Cash Used in Investing Activities Net cash used in investing activities of $4.5 million during the year ended December 31, 2022 related to license payments made for the acquisition of in-process research and development under the GFH009 Agreement. There was no cash used in investing activities during the year ended December 31, 2021.
Net Cash Used in Investing Activities Net cash used in investing activities of $5.5 million and $4.5 million during the years ended December 31, 2023 and 2022, respectively, was related to license payments made for the acquisition of in-process research and development under the GenFleet Agreement.
In 2020, we, together with Merck, determined to focus on ovarian cancer (second or third line). In November 2022, we reported topline clinical and initial immune response data from this study, which showed that treatment with the combination of GPS and pembrolizumab compared favorably to treatment with anti-PD-1 therapy alone in a similar patient population.
In November 2022, we reported topline clinical and initial immune response data from this study, which showed that treatment with the combination of GPS and pembrolizumab compared favorably to treatment with anti-PD-1 therapy alone in a similar patient population.
We expect that our cash and cash equivalents will not be sufficient to fund our current planned operations for at least the next twelve months from the date of issuance of these financial statements.
We expect that our cash and cash equivalents, together with the net proceeds from the January 2024 Offering and March 2024 Registered Direct Offering, will not be sufficient to fund our current planned operations for at least the next twelve months from the date of issuance of these financial statements.
General and Administrative General and administrative expenses were $12.6 million for the year ended December 31, 2022 compared to $11.3 million for the year ended December 31, 2021.
General and Administrative General and administrative expenses were $13.9 million for the year ended December 31, 2023 compared to $12.6 million for the year ended December 31, 2022.
Cash Flows The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2022 and 2021 (in thousands): Year ended December 31, 2022 2021 Net cash (used in) provided by: Operating activities $ (23,809) $ (26,021) Investing activities (4,500) — Financing activities 24,079 12,074 Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents $ (4,230) $ (13,947) Net Cash Flow from Operating Activities Net cash used in operating activities of $23.8 million during the year ended December 31, 2022 was primarily attributable to our net loss of $41.3 million, and partially offset by various net non-cash charges of $11.9 million, and a change in our operating assets and liabilities of $5.6 million.
Cash Flows The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2023 and 2022 (in thousands): 125 Table of Contents Year ended December 31, 2023 2022 Net cash (used in) provided by: Operating activities $ (31,410) $ (23,809) Investing activities (5,500) (4,500) Financing activities 22,315 24,079 Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents $ (14,595) $ (4,230) Net Cash Flow from Operating Activities Net cash used in operating activities of $31.4 million during the year ended December 31, 2023 was primarily attributable to our net loss of $37.3 million, and partially offset by a change in our operating assets and liabilities of $3.3 million and various net non-cash charges of $2.6 million.
As compared to the prior period, the $4.6 million increase in research and development expenses was primarily attributable to a $2.6 million increase in clinical trial expenses primarily related to our ongoing Phase 3 REGAL clinical trial of GPS in AML, a $1.4 million increase in personnel related expenses due to increased headcount, a $0.8 million increase in clinical and regulatory consulting expenses, and a $0.2 million increase in other research and development expenses.
As compared to the prior period, the $3.7 million increase in research and development expenses was primarily attributable to a $1.9 million increase in clinical trial expenses primarily related to our ongoing Phase 3 REGAL clinical trial of GPS in AML and our Phase 2a and Phase 1 clinical trials of SLS009, a $1.3 million increase in clinical and regulatory consulting expenses due to the advancement of our clinical programs, and a $1.1 million increase in personnel related expenses primarily due to increased headcount.
The common stock warrants are exercisable immediately and will expire on April 5, 2027, five years from the date of issuance. The net proceeds to us from the April 2022 Offering, after deducting the underwriting discounts and commissions and other offering expenses, and excluding the exercise of any warrants, were approximately $23.0 million.
The common stock warrants are exercisable immediately and will expire on February 28, 2028, five years from the date of issuance. The net proceeds from the February 2023 Offering were approximately $18.5 million, after deducting underwriting discounts and commissions and estimated offering expenses, and excluding the exercise of any warrants.
From time to time during the term of the Sales Agreement, we may offer and sell shares of common stock having an aggregate offering price up to a total of $50.0 million in gross proceeds. The Agent will collect a fee equal to 3% of the gross sales price of all shares of common stock sold.
From time to time during the term of the Sales Agreement, subject to certain restrictions, we could offer and sell shares of common stock having an aggregate offering price up to a total of $50.0 million in gross proceeds.
Because these analyses are event driven, they may occur at a different time than currently expected.
Because these analyses are event driven, they are difficult to predict with any certainty and may occur at a different time than currently expected.
Non-Operating Income Non-operating income consists of changes in fair value of our warrant liability, changes in fair value of our contingent consideration, and interest income.
Non-Operating Income Non-operating income consists of changes in fair value of our warrant liability, changes in fair value of our contingent consideration, and interest income. Interest income primarily reflects the interest earned from our cash and cash equivalents.
Through December 31, 2022, we have only generated licensing revenue from the 3DMed License Agreement. Since inception, we have incurred net losses, used net cash in our operations, and have funded substantially all of our operations through proceeds of the sale of equity securities and convertible notes.
Since inception, we have incurred net losses, used net cash in our operations, and have funded substantially all of our operations through proceeds of the sale of equity securities and convertible notes.
As demonstrated in preclinical and clinical data, to date, GFH009’s high selectivity has the potential to reduce toxicity as compared to older CDK9 inhibitors and other next-generation CDK9 inhibitors currently in clinical development and to potentially be more efficacious. GFH009 is currently in a Phase 1 dose-escalating clinical trial in the United States and China.
As demonstrated in preclinical and clinical data, to date, SLS009’s high selectivity has the potential to reduce toxicity as compared to older CDK9 inhibitors and other next-generation CDK9 inhibitors currently in clinical development and to potentially be more efficacious.
Non-Operating Income Non-operating income for the years ended December 31, 2022 and 2021, respectively, was as follows (in thousands): Year ended December 31, 2022 2021 Change Change in fair value of warrant liability $ 36 $ 15 $ 21 Change in fair value of contingent consideration 296 4,337 (4,041) Interest income 317 6 311 Total non-operating income $ 649 $ 4,358 $ (3,709) 110 Table of Contents The decrease in our non-operating income during the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily due to a $4.0 million decrease in the change in fair value of contingent consideration, partially offset by a $0.3 million increase in interest income earned from our cash and cash equivalents.
Non-Operating Income Non-operating income for the years ended December 31, 2023 and 2022 was as follows (in thousands): Year ended December 31, 2023 2022 Change Change in fair value of warrant liability $ 4 $ 36 $ (32) Change in fair value of contingent consideration — 296 (296) Interest income 525 317 208 Total non-operating income $ 529 $ 649 $ (120) The decrease in our non-operating income during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to a $0.3 million decrease in the change in fair value of contingent consideration in the prior period, partially offset by a $0.2 million increase in interest income earned from our cash and cash equivalents primarily due to higher interest rates.
A total of $191.5 million in potential future development, regulatory, and sales milestones, not including future royalties, remains under the 3DMed License Agreement as of December 31, 2022, which milestones are all variable in nature and not under the Company's control.
A total of $191.5 million in potential future development, regulatory, and sales milestones, not including future 124 Table of Contents royalties, remains under the 3D Medicines Agreement, which milestones are all variable in nature and not under our control.
Stock-Based Compensation We account for stock-based compensation by estimating the fair value of each stock option on the date of grant using the Black-Scholes model. We recognize stock-based compensation expense on a straight-line basis over the vesting term.
To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses. Stock-Based Compensation We account for stock-based compensation by estimating the fair value of each stock option on the date of grant using the Black-Scholes model. We recognize stock-based compensation expense on a straight-line basis over the vesting term.
Cost of License Revenue We incurred $0.1 million and $0.2 million of sublicensing fees payable under our license from MSK in connection with the 3DMed License Agreement during the years ended December 31, 2022 and 2021, respectively. 109 Table of Contents Research and Development Research and development expenses were $20.3 million for the year ended December 31, 2022 compared to $15.7 million for the year ended December 31, 2021.
Cost of Licensing Revenue There was no cost of licensing revenue recognized during the year ended December 31, 2023, and $0.1 million of sublicensing fees payable under our license from MSK in connection with the 3D Medicines Agreement during the year ended December 31, 2022. 122 Table of Contents Research and Development Research and development expenses were $24.0 million for the year ended December 31, 2023 compared to $20.3 million for the year ended December 31, 2022.
The net change in our operating assets and liabilities is due to an increase in accrued expenses and other current liabilities of $3.6 million, an increase in accounts payable of $1.2 million and a decrease in prepaid expenses and other current assets of $1.3 million, which was partially offset by a decrease in operating lease liabilities of $0.5 million. 113 Table of Contents Net cash used in operating activities of $26.0 million during the year ended December 31, 2021 was primarily attributable to our net loss of $20.7 million and a change in our operating assets and liabilities of $7.6 million, which was partially offset by various net non-cash charges of $2.3 million.
The net change in our operating assets and liabilities is due to an increase in accrued expenses and other current liabilities of $3.6 million, an increase in accounts payable of $1.2 million and a decrease in prepaid expenses and other current assets of $1.3 million, which was partially offset by a decrease in operating lease liabilities of $0.5 million.
If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit’s goodwill is less than the carrying value of the reporting unit’s goodwill. We did not recognize any impairment of goodwill during the years ended December 31, 2022 and 2021.
If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit’s goodwill is less than the carrying value of the reporting unit’s goodwill.
These strategies may include utilizing the Sales Agreement, public and private placements of equity and/or debt securities and payments from potential strategic research and development collaborations. Additionally, we continue to pursue discussions with global and regional pharmaceutical companies for licensing and/or co-development rights to our product candidates. There can be no assurance that these future funding efforts will be successful.
Additionally, we continue to pursue discussions with global and regional pharmaceutical companies for licensing and/or co-development rights to our product candidates. There can be no assurance that these future funding efforts will be successful.
If we are unable to obtain additional funding on a timely basis, we will be required to scale back our plans and place certain activities on hold. Other than the Sales Agreement, we currently do not have any commitments to obtain additional funds. Our management continues to evaluate different strategies to obtain the required funding for future operations.
We will require substantial additional financing to develop any current or future product candidates. If we are unable to obtain additional funding on a timely basis, we will be required to scale back our plans and place certain activities on hold. We currently do not have any commitments to obtain additional funds.
Further analysis of the changes and trends in our operating results are discussed below. License Revenue License revenue for the year ended December 31, 2022 was $1.0 million and related to approval by China's NMPA of an IND application filed by 3D Medicines for a small Phase 1 clinical trial investigating safety of GPS in China.
Licensing Revenue There was no licensing revenue for the year ended December 31, 2023 and $1.0 million in licensing revenue for the year ended December 31, 2022 related to approval by China's National Medical Products Administration, or NMPA, of an Investigational New Drug, or IND, application filed by 3D Medicines for a small Phase 1 clinical trial investigating safety of GPS in China.
These increases were partially offset by a $0.4 million decrease in manufacturing and clinical drug supply costs due to the timing of registration batches and a technology transfer in the prior period.
These increases were partially offset by a $0.5 million decrease in manufacturing and clinical drug supply costs due to the timing of the manufacture of drug substance and drug product batches, and a $0.1 million decrease in licensing and other research and development costs.
During the year ended December 31, 2022, we sold 415,005 shares of common stock pursuant to the Sales Agreement at an average price of $2.60 per share for aggregate net proceeds of approximately $1.0 million.
During the year ended December 31, 2023, we sold a total of 92,882 shares of common stock pursuant to the Sales Agreement at an average price of $3.21 per share for aggregate net proceeds of approximately $0.3 million. On January 2, 2024, we mutually agreed with the Agent to terminate the Sales Agreement.
Our consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Our consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of any current or future product candidates in development.
Components of Results of Operations License Revenue License revenue consists of revenue recognized pursuant to the 3DMed License Agreement. In the future, we may generate revenue from a combination of regulatory, development, and sales milestone payments and royalties in connection with the 3DMed License Agreement.
In the future, we may generate revenue from a combination of regulatory, development, and sales milestone payments and royalties in connection with the 3D Medicines Agreement. Cost of Licensing Revenue Cost of licensing revenue consists of sublicensing fees incurred under our license from MSK in connection with the 3D Medicines Agreement.
We generated $12.1 million of net cash from financing activities for the year ended December 31, 2021, which was primarily attributable to $9.0 million in net proceeds from the issuance of common stock under the Sales Agreement and $3.1 million in net proceeds from the exercise of warrants to acquire shares of common stock.
Net Cash Flow from Financing Activities We generated $22.3 million of net cash from financing activities for the year ended December 31, 2023, which was due to $21.9 million in aggregate net proceeds received from the February 2023 Offering and the November 2023 Offering, $0.3 million in aggregate net proceeds received from the issuance of common stock under the Sales Agreement, and a $0.1 million in aggregate net proceeds received from the issuance of common stock under our employee stock purchase plan.
Enrollment of a target total of 10 evaluable patients was completed at the end of 2022. We expect to report topline data from this study in the first half of 2023.
Enrollment of a target total of 10 evaluable patients was completed at the end of 2022. We reported positive topline safety and efficacy data from this study in June 2023 and positive follow-up immune response and survival data in December 2023.
As of March 15, 2023, we have received an aggregate of $10.5 million in upfront and milestone payments under our license agreement with 3D Medicines and a total of $191.5 million in potential future development, regulatory and sales milestones, not including future royalties, remains under the license agreement, which milestones are variable in nature and not under our control. 105 Table of Contents In December 2018, pursuant to a Clinical Trial Collaboration and Supply Agreement, we initiated a Phase 1/2 multi-arm "basket" type clinical study of GPS in combination with Merck & Co., Inc.’s anti-PD-1 therapy, pembrolizumab (Keytruda).
As of December 31, 2023, we have received an aggregate of $10.5 million in upfront and milestone payments under the 3D Medicines Agreement and a total of $191.5 million in potential future development, regulatory and sales milestones, not including future royalties, remains under the license agreement, which milestones are variable in nature and not under our control.
As of December 31, 2022, our contractual commitment for our lease was $1.1 million, which will be paid over the remaining term of the lease. For additional information on our leases and timing of future payments, please read Note 8, Leases, to the consolidated financial statements included in this Form 10-K.
For additional information on our leases and 126 Table of Contents timing of future payments, please read Note 7, Leases, to the consolidated financial statements included in this Form 10-K.
The net change in our operating assets and liabilities was primarily attributable to a decrease in deferred revenue of $5.6 million, a decrease in accounts payable and accrued expenses and other current liabilities of $1.8 million, a $1.1 million increase in prepaid expenses and other assets primarily for clinical trial costs, and a $0.2 million decrease in operating lease liabilities, which were partially offset by a $1.1 million decrease in contract acquisition costs related to the out-licensing of intellectual property rights and transfer of technical know-how associated with the 3DMed License Agreement.
The net change in our operating assets and liabilities is due to an increase in accounts payable of $2.3 million, an increase in accrued expenses and other current liabilities of $1.4 million, and a decrease in prepaid expenses and other assets of $0.1 million, which was partially offset by a decrease in operating lease liabilities of $0.5 million.
Contractual Obligations and Other Commitments Leases Our lease commitments reflect payments due under our lease agreement for our office space in New York, New York that expires in December 2024, including additional space which began in February 2022.
Contractual Obligations and Other Commitments Leases Our lease commitments reflect payments due under our lease agreement for our office space in New York, New York that expires in September 2025. As of December 31, 2023, our contractual commitment for our lease was $1.0 million, which will be paid over the remaining term of the lease.
Acquired In-Process Research and Development During the year ended December 31, 2022, we recognized $10.0 million for the acquisition of in-process research and development related to the in-licensing of GFH009, a highly selective next generation CDK9 inhibitor, $4.5 million of which was paid in April 2022 and the remaining $5.5 million which is deemed probable to occur and expected to be paid by the end of the second quarter of 2023.
Acquired In-Process Research and Development There was no acquired in-process research and development expense during the year ended December 31, 2023. During the year ended December 31, 2022, we recognized $10.0 million for the acquisition of in-process research and development related to the in-licensing of SLS009.
Following completion of the Phase 1 clinical trial and determination of the recommended Phase 2 dose, we intend to commence a Phase 2a clinical trial of GFH009 in combination with venetoclax and azacitidine in AML patients who failed or did not respond to treatment with venetoclax and azacitidine.
In the second quarter of 2023, we commenced an open label, single arm, multi-center Phase 2a clinical trial with SLS009 in combination with venetoclax and azacitidine, or aza/ven, in patients with AML who failed or did not respond to treatment with venetoclax-based therapies.
The shares of common stock and accompanying common stock warrants were sold at a combined price of $5.40 per share and accompanying common stock warrant. Each common stock warrant sold with the shares of common stock represents the right to purchase one share of our common stock at an exercise price of $5.40 per share.
Each share of common stock and accompanying warrant were sold together at a combined purchase price of $1.0952 and each pre-funded warrant and accompanying warrant were sold together at a combined purchase price of $1.0951.
Sources of Liquidity To date, we have received $10.5 million in upfront payments and certain technology transfer and regulatory milestones from 3DMed, pursuant to its Exclusive License Agreement for GPS.
As of December 31, 2023, we have received an aggregate of $10.5 million in upfront payments and certain technology transfer and regulatory milestone payments under our license agreement with 3D Medicines.
The changes in fair value of warrant liability and changes in fair value of contingent consideration are all non-cash in nature. Income Tax Benefit There was no income tax benefit recognized for the year ended December 31, 2022.
The changes in fair value of warrant liability and changes in fair value of contingent consideration are all non-cash in nature. Liquidity and Capital Resources We did not generate any revenue from product sales in the years ended December 31, 2023 and 2022. Through December 31, 2023, we have only generated licensing revenue from the 3D Medicines Agreement.
On March 31, 2022, or the effective date of the GFH009 Agreement, we entered into the GFH009 Agreement with GenFleet pursuant to which GenFleet granted to us a sublicensable, royalty-bearing license to certain of its intellectual property to develop, manufacture, and commercialize GFH009 for the treatment, diagnosis or prevention of disease in humans and animals in all countries and territories of the world other than Greater China, or the GFH009 Territory.
In December 2020, together with our wholly-owned subsidiary, SLSG Limited, LLC, we entered into the 3D Medicines Agreement pursuant to which we granted 3D Medicines a sublicensable royalty-bearing license under certain intellectual property owned or controlled by us, to develop, manufacture and have manufactured, and commercialize GPS and heptavalent GPS product candidates for all therapeutic and other diagnostic uses in the 3DMed Territory.
The $13.0 million of development milestone payments to us triggered by 3DMed's participation in the REGAL study are variable in nature and not under our control, and therefore are not included in our going concern assumption. These conditions give rise to a substantial doubt over our ability to continue as a going concern.
These conditions give rise to a substantial doubt over our ability to continue as a going concern.
Removed
Such participation by 3D Medicines will trigger two development milestone payments totaling $13.0 million, which we expect to receive in the first half of 2023.
Added
Although the REGAL study has completed enrollment as announced in March 2024, in accordance with the predetermined statistical analysis plan, 3D Medicines may still enroll patients in mainland China. The timing of such participation and patient enrollment by 3D Medicines, if at all, cannot be predicted with certainty.
Removed
If the REGAL study meets its primary endpoint for efficacy and the Chinese regulatory authorities determine that the REGAL data is sufficient for approval in China, GPS could potentially reach the market in Greater China much earlier than we and 3D Medicines had anticipated when we entered into the license agreement in December 2020.
Added
In December 2023, we commenced an arbitration proceeding against 3D Medicines regarding, among other things, t he trigger and payment of $13.0 million in milestone payments due to us. See Item 3.
Removed
We plan to present final data from this study at a medical conference in the first half of 2023.
Added
Legal Proceedings . 118 Table of Contents In December 2018, pursuant to a Clinical Trial Collaboration and Supply Agreement, we initiated a Phase 1/2 multi-arm "basket" type clinical study of GPS in combination with Merck & Co., Inc.’s anti-PD-1 therapy, pembrolizumab (Keytruda®). In 2020, we, together with Merck, determined to focus on ovarian cancer (second or third line).
Removed
We are evaluating both twice-a-week and once-a-week dosing, and the indications are relapsed/refractory AML, chronic lymphocytic leukemia, or CLL, small lymphocytic leukemia, or SLL, and lymphoma. The primary goal of the trial is to establish the recommended Phase 2 dose and to assess safety.
Added
In November 2023, additional immunobiological and clinical data from the study was presented at the International Gynecologic Cancer Society 2023 Annual Global Meeting which showed a correlation between immune response and PFS.
Removed
We expect enrollment in this study to be completed in the first quarter of 2023 and we expect to determine the recommended Phase 2 dose and report analyzed data from the study early in the second quarter of 2023.
Added
We completed a Phase 1 dose-escalating clinical trial in the United States and China for SLS009 in mid-2023 and reported positive safety and efficacy data for both patient cohorts, that is relapsed and/or refractory AML and refractory lymphoma.
Removed
The primary endpoint of the Phase 2a clinical trial, which we expect to initiate during the second quarter of 2023, will likely be complete remission, or CR, rate and secondary endpoints will likely include progression free survival, OS and proportion of patients proceeding to transplant.
Added
We also established in the trial a recommended Phase 2 dose, or RP2D, of 60 mg for AML and 100 mg for lymphomas.
Removed
We are also planning to potentially commence a Phase 2 clinical trial of GFH009 in certain solid tumors and/or lymphoma in the third quarter of 2023 and are exploring various options with respect to clinical development for GFH009 in several pediatric indications. 106 Table of Contents Impact of COVID-19 Public health crises such as pandemics or similar outbreaks could adversely impact our business.
Added
The trial is evaluating safety, tolerability, and efficacy at two dose levels of SLS009, 45 mg once weekly, and 60 mg once weekly or 30 mg twice a week, in combination with aza/ven. In addition to safety and tolerability of SLS009 in combination with aza/ven, the primary endpoints are complete response composite rate and duration of response.
Removed
The extent to which COVID-19 impacts our operations or those of our collaborators, contractors, suppliers, CROs, clinical sites, CMOs and other material business relations and governmental agencies will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the ultimate duration of the outbreak, new information that will emerge concerning the severity of the virus and the actions to contain it or treat its impact, among others.
Added
Additional endpoints include event free survival, overall survival, and pharmacokinetic and pharmacodynamic assessments. The trial includes several sites in the United States, will enroll a minimum of 20 patients and, based on initial results, may be expanded into a registrational trial.
Removed
Previously, our clinical trial operations were directly and indirectly adversely impacted, and could continue to be directly and indirectly adversely impacted, by the COVID-19 pandemic.
Added
In the fourth quarter of 2023, we completed enrollment in the 45 mg (safety) dose cohort in the Phase 2a study and reported positive initial topline data. We also commenced enrollment in the 60 mg dose cohort with patients randomized to one of two groups, 60 mg fixed dose once weekly or 30 mg fixed twice weekly.

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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 changeSuch losses have not been significant to date. 119 Table of Contents
Biggest changeSuch losses have not been significant to date. 131 Table of Contents